ACIT, MEERUT vs. SHRI MUKESH JOSHI, NOIDA

decided by a common order for the sake of convenience, as the issues raised therein all inter-linked.

During the course of the search operation, the following cash and jewellery were found:-

I.T.A .No.-3150 to 3152/Del/2011 Cash at residence No.P-2/18, Kailash Dham Society, Sec-50, NOIDA Rs.7,56,000/- Cash from locker No.234, Axis Bank, Sec-18, NOIDA Rs.10,00,000/- Jewellery at residence No.P-2/18, Kailash Dham Society, Sec-50, NOIDA Rs.6,01,197/- Jewellery from locker No.270, Axis Bank, Sec-18, NOIDA Rs.5,29,385/-

“1. That the order of CIT(A) is erroneous in Jaw and on facts as he has accepted the additional evidences submitted by the appellant in contravention to rule 46-A of the I.T.Rules without giving proper opportunity to the A.O. to rebutt the appellant's claim.

2. That the C1T{A) erred in law In deleting the addition of Rs, 2,50,OQQ/- and Rs. 60,000/- on account of unexplained cash deposited in bank without appreciating the fact and without any basis ignoring the facts brought on records by the A.O. and by substituting his own satisfaction in place of A.O.'s satisfaction.

3. That the CIT(A) erred in deleting the addition of Rs 85,00,000/- being the amount received in cash from M/s Sanraj Health (P.) Limited without appreciating the facts that this addition was made on the basis of seized document at Annexure LP-3 which constituted an evidence in terms of section 132 of the IT. Act.

4. That the CIT (A) erred in deleting the addition of Rs.40,93,200/- on account of cash payment for land transactions without appreciating the fact this addition was made on the basis of seized document at Annexure A-1 which constituted an evidence in terms of section 132 of the I.T. Act.

5. That the order of the CIT (A) being erroneous in law and on facts needs to be vacated and the order of the AO. be restored.

6. That the appellant craves leave to add or amend any one or more of the ground of the appeal as stated above as and when need for doing so may arise.”

On query it was conceded that a Remand Report has been obtained from the AO by the CIT(A). Thus the Ld.CIT DR was required to show how Rule 46A was stated to be contravened. However, no further arguments despite a query were advanced.

6. The Ld. AR heavily relying upon the submission advanced before the CIT(A) for admission of fresh evidences submitted that lack of opportunity, before the AO was borne out from the record. This fact has not been assailed by the CIT DR. Referring to the same it was submitted that the photocopies of the seized material supplied by the Investigation Wing, Ghaziabad were admittedly not legible and a written request was made vide letter dated 13/04/2009 to supply the same. After repeated requests finally legible photocopies were made available on 12.11.2009 for each of the years. Thus, after re-fixing the hearing finally time only upto 15.12.2009 was provided to the assessee and the assessment was concluded on 23.12.2009. The third party independent supporting evidences of deposits in the bank accounts it was submitted could not be gathered in the time available. Thus, the evidence in the form of confirmation from creditors and payees were filed as fresh evidences and considering the Remand Report finally filed and independent verification and recording of statements of deponents by the CIT(A) himself, the order has been passed. Accordingly it was his submission that more than adequate opportunity has been given to the Revenue by the CIT(A) to place its objections to the fresh evidences placed on record and thus relying upon the finding of the CIT(A), it was submitted that on facts there is no violation of Rule 46A and I.T.A .No.-3150 to 3152/Del/2011 infact the AO has repeatedly been most reluctant for reasons best left unaddressed to place a Remand Report on record.

“4. I am convinced that the reasonable/sufficient time was not granted to the assessee to file the impugned evidences during the assessment proceedings and these evidences furnished now must be I.T.A .No.-3150 to 3152/Del/2011 admitted since they go to the very root of the matter. Accordingly, to meet the ends of justice, the said ‘fresh’/additional evidences along with the written submissions dated 12-02-10 of the appellant were sent to the AO on 17-02-10 for his verification and a direction was issued to file his comments thereon latest by 05- 03-10. On this date the AO sought further time, which was granted to him till 10-04-10. However, no report was still filed by the AO on the verifications sought from him rather a request was made by the Addl. CIT, Central, Meerut on 15-04-10 urging further time for compliance by the AO, which was yet again granted up to 30-04-10 but with the clear directions that no further time shall be allowed. The AO did not submit his remand report even up to 30-04-10. The AO and the Addl. CIT did not even make compliance to the directions of the CIT, Central, Kanpur to submit report by return of post which was conveyed to them vide his letter no. 165 dated 27-04-10. Further reminders were sent to the AO on 03-05-10 and 13-07-10, but no compliance was made by the AO. Finally, on 31-01-11 last opportunity was provided to the AO to file his comments by 15-02-11 with the directions that in the event of failure to do so, the matter would be decided exparte. Since the powers of the appellate authority are co- terminus with that of the assessing authority, the appellate proceedings were resumed on 22-02-11 and the verification of the additional evidences was undertaken by this office itself and the AR was asked to produce the assessee and the witnesses for their personal deposition on 25-02-11. However, in the meanwhile, remand report of the AO was ultimately received on 24.02.11 in my office, and the appellant and witnesses also appeared in person for deposition on 25-02-11, as directed by me, who furnished their affidavits and whose statements were recorded on oath. The remand report, in the interest of justice, was taken on record and a copy of the AO’s Remand Report was supplied to the AR on 25-02-11 against which a rejoinder was submitted on 28-02- 11.”

8. Addressing Ground No. 2 it was submitted by the Ld. CIT DR that the facts are found addressed in the un-numbered pages 2 and 3 of the assessment order. The assessee it was submitted was required to explain the deposits totaling to Rs.2,29,500/-in S.B. Account No. 16456 maintained with the Canara Bank and a few more deposits totaling Rs.21,000/- in S.B. Account No.12485 also maintained with the Canara Bank. The assessee failed to explain the same leading to the addition of Rs. 2,50,500/-.

8.1. Apart from these deposition it was submitted the assessee had deposited (20,000/- + Rs.10,000/- + Rs.10,000/- + Rs.20,000/-) on four different dates in the S.B. Account of 12485, totaling to Rs.60,000/-. Herein also no satisfactory explanation could be offered apart from claiming that three of the deposits were I.T.A .No.-3150 to 3152/Del/2011 loans from his mother-in-law, Smt.Kaushlaya Sehgal. Despite an opportunity, confirmations from these creditors was not filed leading to the addition of Rs.60,000/-.

8.2. Carrying us through the observations made by the AO it was her submission that the additions have been deleted by the CIT(A) without caring to address full facts properly. Accordingly relying upon the assessment order, it was her submission that the additions may be sustained or the matter be remanded back to the AO for fresh consideration

9.1. Similarly addressing the addition of Rs.21,000/- deleted it was submitted the raising of the ground by the AO was wrong as this issue also had been given up by the AO himself as per para 6.3 of the impugned order. Accordingly heavy reliance was placed thereon.

9.2. Addressing the remaining amount of Rs.2,29,500/- it was submitted that all along the assessee has been claiming that these deposits represented undisclosed income of M/s Lumen Alchemy Exim P. Ltd. which had introduced, the amount back in its business from routing through the bank account of the assessee and most important it has been admitted as undisclosed income of I.T.A .No.-3150 to 3152/Del/2011 that company. This claim was supported by an assessment order passed u/s 143(3) for 2006-07 AY in the case of that assessee. The AO in the facts of the present case in un-numbered page 2 also takes note of the following fact:-

“During the year assessee has shown income from salary at Rs.2,78,400/- received from M/s Lumen Alchemy Exim P.Ltd. in which he is a director and shareholder. Besides, loss from house property amounting to Rs.76,645/- as interest paid on housing loan in respect of Self-Occupied Property, business income of Rs.64,700/- from consultancy and income from other sources consisting of interest on term deposit and saving accounts have also been declared. ”

“6.5(i) For depositing sums in cash into SB A/c # 12485 with Canara Bank- Rs.21,000/- I have perused the facts of the case and documents furnished by the appellant. Two sums of Rs.10,000/- and Rs.11,000/- were found deposited in cash on 20.09.05 and 21.09.05 respectively int eh bank account of the appellant. It was explained by the appellant that he had received consultancy income in cash of the equivalent amounts on the said two dates, which were deposited in his bank account by him. However, since a combined cash flow statement for all cash and bank transactions had been furnished before the assessing authority, the entire consultancy income aggregating to Rs.64,700/- received in cash and through cheques was shown at one place therein. The details of I.T.A .No.-3150 to 3152/Del/2011 consultancy receipt furnished by the appellant show the total receipt of Rs.26,250/- through cheques and the balance sum of Rs.38,450/- in cash. The said details of total consultancy receipts of Rs.64,700/- submitted by the appellant was verified from the cash account and bank accounts & passbooks of the appellant and it was found that the impugned sums aggregating to Rs.21,000/- had been duly shown as received in cash on the said dates and also shown as deposited in the bank account on the same dates. Thus, the sum of Rs.21,000/- undisputedly forms part of the total consultancy receipt of Rs.64,700/- which was declared as income by the appellant in his return of income and also admitted as such by the AO int eh assessment order. Even the AO in his remand report has accepted the explanation of the appellant in this regard after verification. Accordingly, the source of impugned cash deposits of Rs.21,000/- stands fully explained and the addition so made u/s 69 of the Act is deleted.” ii. For depositing sums totaling to Rs. 2,29,500/- in cash into SB A/c # 6456 with Canara Bank I have perused the facts of the case and documents furnished by the appellant. There is no dispute that the said sums had been deposited in cash by the appellant in his bank account during the relevant previous year and that he was a director in that company. There is also no dispute that the said sums were further given to M/s Lumen Alchemy Exim (P) Ltd. from the bank account of the appellant. The assessment order dated 15-12-08 u/s 143(3) of the ITO, Ward 4(4), New Delhi for the AY 2006-07 in the case of M/s Lumen Alchemy Exim (P) Ltd. clearly reveals that the addition of the impugned sum of Rs. 2,29,500/- was made in the hands of that company u/s 68 of the Act as its income. Hence, it is my considered view that the said amounts of cash totaling to Rs. 2,29,500/- had been earned from undisclosed sources by that company, as has already been assessed and also admitted by that company, but routed back into its books through the bank account of the appellant. Accordingly, the sum of Rs. 2,29,500/- cannot be taxed again in the hands of the appellant his income now and the addition so made is, therefore, deleted. (emphasis provided)

10.1. The remaining amount of the Rs.60,000/-, it is seen also has been given up by the Assessing Officer himself in his Remand Report. In the circumstances we are surprised how the AO can be said to be aggrieved. For ready reference para 7.3 of the impugned order is reproduced hereunder:-

7.3 Decision and reasons therefor: i. For Consultancy Receipt - Rs. 20,000/- It was explained by the appellant that the sum of Rs. 20,000/- found credited in the bank account on 02-07-05 was the receipt against consultancy income declared by him in the return of income. I have perused the facts of the case and documents furnished by the appellant. The details of consultancy income totaling to Rs. 64,700/- have already been verified and examined in ground no. 1 herein above and it is seen

I.T.A .No.-3150 to 3152/Del/2011 that the impugned credit of Rs. 20,000/- forms part of the total receipt declared by the appellant and also accepted as such in the assessment of income by the AO. Even the AO in his remand report has accepted the explanation of the appellant in this regard after verification. Accordingly, the said deposit of Rs. 20,000/- stands fully explained and the addition so made u/s 68 of the Act is deleted. ii. For Gifts received from Mrs. Kaushalya Sehgal - Rs. 40,000/ I have perused the facts of the case and documents furnished by the appellant. The appellant was asked to produce Mr. K.K. Sehgal, husband of Late Mrs. Kaushalya Sehgal, for examination and verification of facts. Mr. K.K. Sehgal appeared and his statement was recorded under oath on 25-2-11. He is the father-in-law of the appellant, who retired as the Section Officer from AFHO, Govt, of India on 31/1/06 and his now deceased wife, Mrs. Kaushalya Sehgal, retired from MTNL as Sr. TOA(G) on 30/11/05. Mr. K.K. Sehgal admitted that the impugned gifts and advances were given in cash and through bank accounts to the appellant by him as well as his deceased wife during the check period covered in the search proceedings. He submitted the year-wise summary statements of the said transactions with the appellant for himself and his wife and also produced the original copies of the relevant bank passbooks for verification from where the said payments had been made by them. The above gifts totaling to Rs. 40,000/- were found to have been given to the appellant from her bank account on three occasions. In fact, even the bank passbooks of Mrs. Kaushalya Sehgal clearly revealed that the impugned cheques were cleared to the credit of the appellant’s SB a/c # 12485. Even the AO in his remand report has accepted the explanation of the appellant in this regard after verification. Accordingly, the said deposits totaling to Rs. 40,000/- stands fully explained and the addition so made u/s 68 of the Act is deleted. (emphasis provided)

I.T.A .No.-3150 to 3152/Del/2011 Services. However, seized document No. 57 of Annexure LP-3 which was a payment receipt dated 10.10.2005 signed by the assessee acknowledged the receipt of Rs.1.85 crore till 10/10/2005 from Sh. Sanjeev Sethi on behalf of M/s Sanraj Health Services Private Limited where part of it i.e Rs.1 crore was received by cheque No. 048363 dated 10.10.2005 and Rs.75 lakhs was shown to have been received in cash from Mr. Sanjeev Sethi over and above Rs.10 lacs received alongwith Sh. Vijendra Singh and Sh. Arvind Kaushik. Considering the explanation offered by the assessee as unsatisfactorily addition of Rs.85 lacs was made by the AO.

11.1. In appeal before the CIT(A), it was her submission general arguments in regards to the nature of assessee’s work and other general submissions addressing modus operandi of such work have been accepted. The fact that Remand Report was called was not disputed, but, it was submitted that the AO had not accepted the evidences relied upon. It was her submission that in the absence of any clear-cut evidences and facts on record the issue may be remanded back to the file of the AO for a re-consideration on merit, as admittedly the assessee has canvassed that time available to it before the AO was not sufficient. It was also her argument that the CIT(A) has merely accepted the assessee’s submission and has not considered the facts in the proper perspective.

I.T.A .No.-3150 to 3152/Del/2011

“During the course of search operation and post search investigation, it was admitted by the assessee that he is mainly facilitator/arranger helping in consolidation purchase/sale of lands at various places working for others and earning income therefrom, for which a surrender of Rs. 75 lacs was made by him for these activities for the A.Y. 08-09.”

12.1. Accordingly the request of the Revenue that the issues be restored back to the AO was strongly opposed. It was his submission that in order to canvass for the said relief it is first necessary for the Revenue to justify the prayer. The request for a remand it was submitted cannot be made on ipse dixit of the Revenue. The evidences stand addressed by the assessee the arguments are recorded in the order under challenge. The finding of the CIT(A) is a speaking finding. The evidences relied upon by the assessee have been made available to the AO. More than a year’s time has been given to the AO to consider the same.

The CIT(A) has also independently examined the evidences and also the deponents statements on oath have been recorded. These facts it was submitted were evident from Para 4 of the CIT(A) and the said Ground of the Revenue has already been addressed. It was further stated that all these evidences are available in the Paper Bok filed for each of the years and copy of the Remand Report was also filed in the Court. Accordingly it was his submission that the issues have been examined by the CIT(A) at his own level as the assessing officer has been reluctant to forward a remand report despite repeated requests. The remand report has been obtained it has been considered. In the circumstances the arguments of the Ld. CIT DR do not address any reason for making the request as merely reiterating the observations of the assessing officer as the facts were considered by him at the I.T.A .No.-3150 to 3152/Del/2011 assessment stage, no way can be said to be a justification for the prayer of Remand.

Further, during the course of search operation, certain documents were found and seized from the residence of the assessee. As per documents seized and mentioned at Page 50 to 59 of Annexure LP-3 and Page 22 of Annexure LP-5, it was noticed that assessee has made some agreements for sale of lands to Sh. Sanjeev Sethi C/o M/s Sanraj Health Services Pvt. Ltd. and has also entered into buy back agreements with Sh. Sanjeev Sethi (for M/s Sanraj Health Services (P) Ltd.) and Sh. Ajay Joshi. From seized documents No. 57 of Annexure LP-3, which is a payment receipt dated 10-10-05 signed by Sh. Mukesh Joshi, Assessee, it is noticed that assessee has acknowledged to have received total payment of Rs.1.85 Crores till 10-10-05 from Sh, Sanjeev Sethi on behalf of M/s Sanraj Health Services Pvt. Ltd. including payment of Rs.1 Crore vide cheque no. 048363 dated 10-10-05. From another seized documents No. 59 of Annexure LP-3, which is another payment receipt dated 10-10- 05 signed and acknowledged by the assessee to the effect that Rs. 75 Lacs has been received by him on 10-10-05 in cash from Sh. Sanjeev Sethi on behalf of M/s Sanraj Health Services Pvt. Ltd. Also, from the seized document No. 55 of Annexure LP-3, it is noticed that the assessee alongwith two other persons namely Sh. Vijender Singh and Sh. Arvind Kaushik have received Rs. 10 Lacs in cash from Sh. Sanjeev Sethi. From the above seized documents including payment receipts, it is noticed that these payments (cheques as well as cash) have been received by the assessee from Sh. Sanjeev Sethi on behalf of M/s Sanjraj Health

I.T.A .No.-3150 to 3152/Del/2011 Services Pvt. Ltd. with reference to agreement to sell signed on 27-07-05 (out of which part payment was received by the assessee 05-10-05) towards the sale proceed for the sale of land measuring 350 Bigha to Sh. Sanjeev Sethi. From the perusal of all these seized documents, it is clear that till October, 2005, total amount of Rs. 1.85 Crores (as mentioned in payment receipt dated 10-10-05 on Page-57 of Annexure LP-3) was received by the assessee for sale of land to Sh. Sanjeev Sethi. However, in the confirmed copy of account filed by M/s Sanraj Health Services Pvt. Ltd. the amount paid by the said company to Sh. Mukesh Joshi till October 2005 has been shown at Rs. 1 Crore only (which has been paid through cheque). It is also clearly mentioned on Page 57 of the seized document mentioned above that actual payment received by the assessee upto 10-10-05 was Rs. 1.85 Crore which is supported from seized document No. 59 and 55 of Annexure LP-3 in which the assessee has acknowledged that for the said land deal, he has received Rs. 75 Lacs and Rs. 10 Lacs respectively totaling Rs. 85 Lacs in cash.

All these facts were brought to the notice of the assessee and he was asked to explain the above transactions including cash received by him for Rs. 85 Lacs which has not been declared by the assessee. In response, it was stated by the assessee that he had received advance for purchase of land on behalf of M/s Sanraj Health Services Pvt. Ltd. by cheque and by cash. It was further submitted that the deals did not materialize and so the cash received was returned subsequently and the cheque amount is yet to be returned by him.

Thus, from all the above discussion, it is clear that assessee has taken total amount of Rs. 1.85 Crore upto 10-10-05 from Sh. Sanjeev Sethi on behalf of M/s Sanraj Health Services Pvt. Ltd. for sale of land out of which only Rs. 1 Crore has been shown in the books of accounts upto 10-10-05, as reflected from statement of affair by the assessee, and as admitted by the assessee himself that the balance amount of Rs. 85 Lacs was taken by him in cash. The assessee could not furnish any evidence in support of his contention that the cash portion was returned by him to the said company which means that the cash received of Rs. 85 Lacs in terms of above land deal was retained by him and the same was not declared by him in his books of accounts, statement of affair and return of income. Since, the above cash received of Rs. 85 Lacs is in the nature of income of the assessee, which has not been declared at all by him, and accordingly, this sum of Rs. 85 Lacs is hereby added to the total income of the assessee.

During the course of search operation and post search investigation, it was admitted by the assessee that he is mainly facilitator/arranger helping in .consolidation purchase/sale of lands at various places working for others and earning income therefrom, for which a surrender of Rs.75 Lacs was made by him for these activities for the A.Y.08-09.”

13.1. Since the Revenue has made a prayer for Remand on the ground that the submissions advanced on behalf of the assessee were general submissions and not submission addressing the specific seized documents found during the I.T.A .No.-3150 to 3152/Del/2011 search, it is deemed appropriate to reproduce the submissions taken on record by the CIT(A). These are reproduced hereunder for ready-reference:-

8.2. It was averred by the assessing authority that on confronting the assessee with the seized documents showing receipt of Rs. 85 lacs in cash in addition to cheques aggregating to Rs. 3.50 crores received from M/s Sanraj Health Services (P) Ltd., the assessee explained that since the deals did not materialize, the cash was returned to the party subsequently. However, as per the assessing authority since no evidence for returning cash could be furnished by the assessee, it meant that the cash receipt of Rs. 85 lacs had been retained by him; and also since the assessee had surrendered a sum of Rs. 75 lacs as his undisclosed income from facilitation / arrangement activities of land consolidation in the AY 2008-09; therefore, an addition of Rs. 85 lacs was made in the AY 2006-07 as undisclosed income from such sources.

In this regard it is important to first look into the history of the deal made with M/s Sanraj Health Services Pvt. Ltd. of Delhi (Sanraj) vis-a-vis the appellant for proper appreciation of the facts and the transactions undertaken during the relevant previous year. The same is given as under:

The property market in India had staged a come back in the year 2003 and many people started showing interest in buying properties in the hilly areas and particularly Uttrakhand, which was an upcoming State then. Since the appellant was a native of Uttrakhand, his business contacts in Delhi and Noida started approaching him for buying plots of land in Dehradun, whom the appellant started referring to one of his close friends, Mr. Sachin Upadhaya, who knew quite a few land-owners in and around Dehradun since he was settled there.

Gradually the appellant himself noticed potential in the real estate business and in the FY 2004-05 he decided to venture into this business along with Mr. Sachin Upadhaya. They struck a deal with RPS group of Faridabad. Later, during the previous year under consideration, the appellant also started rendering consultancy services facilitating people in the purchase / sale of land in Uttrakhand.

Somewhere around the month of June, 2005, M/s Sanraj Health Services Pvt. Ltd., through its director, Mr. Sanjeev Sethi, contacted the appellant and showed its interest in buying some land in and around Dehradun. It must be appreciated that there is a standard practice adopted by the builders of not disclosing their identity before the land owners. The reason is that if their name gets disclosed to the land owners in the beginning, their aspirations go up and they start demanding higher land rates. Thus, even Sanraj did not disclose its identity in the beginning. Accordingly, it was agreed that the appellant would first enter into agreements to sell with the land owners in his own name and then finally get the sales deeds registered in Sanraj’s name directly from those land owners. A similar arrangement was also made by Sanraj with Mr. Sachin Upadhaya, not as the appellant’s associates, but in his own individual capacity.

I.T.A .No.-3150 to 3152/Del/2011 Since the appellant knew two influential local property dealers, namely, (i) Mr. Arvind Kaushik and (ii) Mr. Vijendra Singh, who could obtain the desired pieces of land for Sanraj, they formed a consortium together arid approached the land owners as buyers and entered into some agreements to sell in July, 2005 with them proposing to buy their lands with the stipulation that the final sale deeds would be executed up to the end of December, 2005; having already reached a back-to-back understanding with Sanraj in this regard that all token advance payments to be made to the land owners would be provided by Sanraj directly.

Likewise, Sanraj did not disclose its identity even to the said two property dealers and made the appellant obtain GPA from the said persons in his own favour to act on their behalf to facilitate back-to-back registration of the said pieces of land directly in favour of Sanraj ultimately.

In this manner, the appellant’s consortium started entering into agreements to sell with different land owners in order to consolidated one large chunk of land of about 350 bighas for Sanraj.

Finally when most of the agreements to sell had been executed with the land owners by the said consortium, their understanding was formalized and reduced to writing with Sanraj in October, 2005. Sanraj gave a sum of Rs. 3.50 crores through cheques and also total sum of Rs. 1.85 crores in cash to the appellant, which were to be applied by the appellant for the purpose of the land deals and / or to be disbursed for and on behalf of Sanraj. The terms and conditions regarding remuneration due to the appellant from the deal were also spelt out in the land-wise buy-back agreements dated 6/10/05, as per which the appellant’s interest (or factually the interest of the said consortium) in the deal was outlined as limited to the earning of commission depending upon the increase in the land value over a stipulated period of time while the ownership of the lands in question would be vested in Sanraj.

However, due to some delays on part of Sanraj, most of the land deals fell through and the disputes are still pending unresolved in many such cases. While the advance of Rs. 3.50 crores still remains with the appellant to be returned to Sanraj after settlement of those disputes, the cash component of Rs. 1.85 crores was fully utilized for buying lands or disbursed for and on behalf of Sanraj during the relevant previous year itself by the appellant. The relevant documents seized from the appellant during the course of search are listed as under and photocopies of the same are also enclosed for your ready perusal: a) Pages no. 50 & 51 of Annexure LP-3 GPA dated 05/10/05 of (i) Mr. Vijendra Singh and (ii) Mr. Arvind Kaushik in favour of Mr. Mukesh Joshi. b) Page no. 52 of Annexure LP-3 GPA dated 05/10/05 of (i) Mr. Vijendra Singh and (ii) Mr. Arvind Kaushik in favour of Mr. Mukesh Joshi. b) Page no. 53 of Annexure LP-3 Buy Back Agreement dated 06/10/05 amongst (i) Mr. Sanjeev Sethi of Sanraj, (ii) Mr. Mukesh Joshi, and (iii) Mr. Ajay Joshi containing terms

I.T.A .No.-3150 to 3152/Del/2011 regarding remuneration of the appellant to arise from the land deals for Sanraj based on the minimum land rate of Rs. 9,89,900/- per Bigha. d) Page no. 54 of Annexure LP-3 Agreement to sell dated 27/05/05 between the consortium comprising of (i) Mr. Mukesh Joshi, (ii) Mr. Vijendra Singh and (iii) Mr. Arvind Kaushik with different land owners as another group for Dehradun land being acquired for Sanraj. e) Page no. 55 of Annexure LP-3 Receipt dated 05/10/05 regarding Rs. 10 lacs paid to the land owners through the appellant by Mr. Sanjeev Sethi of Sanraj. f) Page no. 56 of Annexure LP-3 Buy Back Agreement dated 06/10/05 amongst (i) Mr. Sanjeev Sethi of Sanraj, (ii) Mr. Mukesh Joshi, and (iii) Mr. Ajay Joshi containing terms regarding remuneration of the appellant to arise from the land deals for Sanraj based on the minimum land rate of Rs. 9,89,900/- per Bigha. g) Page no. 57 of Annexure LP-3 Receipt dated 10/10/05 for payment of Rs. 1 crore by Sanraj to the appellant by cheque and also mentioning total payment of Rs. 1.85 crore made by Sanraj to the appellant till that date. h) Page no. 58 of Annexure LP-3 Buy Back Agreement dated 06/10/05 amongst (i) Mr. Sanjeev Sethi of Sanraj, (ii) Mr. Mukesh Joshi, and (iii) Mr. Ajay Joshi containing terms regarding remuneration of the appellant to arise from the land deals for Sanraj based on the minimum land rate of Rs. 11,00,000/- per Bigha. i) Page no. 59 of Annexure LP-3 Receipt dated 10/10/05 for payment of Rs. 75 lacs by Sanraj to the appellant in cash and also referring to the receipt dated 05/10/05 therein, j) j)Page no. 22 of Annexure LP-5 Supplementary Agreement to Sell dated 12/11/05 between the appellant and Sanraj. k) Page no. 23 of Annexure LP-5

Land Imprest Account summary of the receipts from Sanraj and payments made for and on its behalf by the appellant till 06/11/05.

On the basis of some payment receipts dated 05/10/05 and 10/10/05, seized as pages 55, 57 & 59 of Annexure LP-3, the assessing authority noticed that a sum of Rs. 85 lacs had been received in cash from Sanraj by the appellant besides Rs. 1 crore by cheque till 10/10/05. It has also been mentioned in the assessment order that two cheques of Rs. 1.50 crore and Rs. 1 crore were further given by Sanraj on 16/11/05 and 15/12/05 respectively to the appellant. Thus, as per the assessing authority whereas a total sum of Rs. 3.50 crores by cheques and an additional sum of Rs. 85 lacs in cash had actually been received by the appellant from 05/10/05 till 15/12/05 from Sanraj, that the appellant had just declared Rs. crores as due to Sanraj in his personal statement of affairs as at 31/3/06 furnished during the course of the assessment proceedings; and also that the confirmation furnished by Sanraj acknowledged the cheque-wise payments aggregating to Rs. 3.50 crores only. It has been further averred by the assessing authority that the appellant acknowledged the receipt of payments by cheque and also in cash from Sanraj for purchase of land, but stated that the cash was returned back to that company since the deals did not materialize. As per the assessing authority since no evidence for returning cash to Sanraj was produced by I.T.A .No.-3150 to 3152/Del/2011 the appellant, it was presumed that the cash of Rs. 85 lacs had been retained by the appellant and also since the appellant did not show it as his liability in his personal statement of affairs as at 31/3/06, the same was admittedly his income. Thus, the addition of Rs. 85 lacs was made for the same. In this regard it is submitted that the assertion of the assessing authority in respect of receipt of Rs. 85 lacs in cash upto 10/10/05 from Sanraj is just partially correct. Factually, a sum of Rs. 1.85 crore had been received by the appellant from Sanraj in cash upto 06/11/05 as Imprest for purchase of land or to make other disbursement for and on its behalf.

Whereas Rs. 10 lacs and Rs. 75 lacs had been received on 05/10/05 and 10/10/05 as per the seized documents as stated in the assessment order, further cash of Rs. 1 crore was also received from Sanraj in two equal installments of Rs. 50 lacs each between 10/10/05 and 06/11/05, which is abundantly clear from the paper seized as page 23 of Annexure LP-5 from the appellant. On the top left hand side of this paper it is clearly written that the following sums aggregating to Rs. 2.75 crores had been received: Rs. 75 Lacs Cash 50 Lacs Cash 50 Lacs Cash 1.75 1.00 Cr. Bank 2.75

While on the right hand side of the same paper, utilization / disbursement of Rs. 1.35 crores has further been clearly written and the date of 06/11/05 is also written therein.

In fact, the said paper has been discussed at length in the assessment order for the AY 2008-09 of the appellant by the assessing authority, on the basis of which he made an addition of Rs. 1.75 crore for the cash component out of the total receipt of Rs. 2.75 crore, though holding it as unexplained investment, but while choosing to ignore or rather choosing not to address the following material facts to suit his own convenience for making the said addition in the AY 2008-09: a) That the said paper contained the date of 06/11/05 written quite clearly therein on the right hand side. Therefore, whereas it was not an undated paper which could be considered for addition in the year of search only, i.e., in the AY 2008-09, rather the said date suggested the same should have been considered in the AY 2006-07 by the assessing authority since it pertained to that year. b) That from whom had the last amount of Rs. 1 crore been received by the appellant and on which date & bank account of the appellant had that amount been deposited during the previous year relevant to the AY 2008-09. [Or since the cash component of Rs. 1.75 crores was held by the AO as unexplained investment in AY 2008-09, following the same corollary, the question would be: to whom, when & from which bank account had Rs. 1 crore been paid.] Since no addition for the same was made by the assessing authority, though it was incumbent upon him to mention how the same had been declared by the appellant before him and why it

I.T.A .No.-3150 to 3152/Del/2011 had not been considered as undisclosed income of the appellant for the AY 2008-09. c) That the right hand side of the same paper clearly showed an outflow of Rs. crores out of the said receipt, but no mention of the same was made by the assessing authority. In fact, the said sums had been received from Sanraj by the appellant and also disbursed to the extent of Rs. 1.35 crores in cash for and on its behalf. This is squarely verifiable from the fact that it contained an account of some party around 06/11/05 and the only party that the appellant was dealing with around that time was Sanraj. Moreover, the said sum of “Rs. 1 Cr. Bank” was received from Sanraj by cheque on 10/10/05 and deposited in the SB A/c # 16456 of the appellant with Canara Bank, which was also so stated on the seized page no. 57 of Annexure LP-3 and also so admitted by the assessing authority in the assessment order of the AY 2006-07. Thus, undisputedly the said account contained the receipt of Rs. 1 crore by cheque and that of Rs. 1.75 crore in cash from Sanraj only during the period from 10/10/05 to 06/11/05 and also contained the disbursements made in cash out of the same during that period.

However, the sum of Rs. 10 lacs paid in cash by Sanraj on 05/10/05 was not mentioned therein since it had been given directly to the land owners by Sanraj though through the appellant as its intermediary. Undisputedly, this fact stands acknowledged by the income-tax department since an addition of Rs. 85 lacs has been made in the AY 2006-07 for cash receipts of Rs. 10 lacs on 05/10/05 and Rs. 75 lacs on 10/10/05 from Sanraj by the appellant. Thus, in all Rs. 3.50 crores had been received by cheques and an additional sum of Rs. 1.85 crore had been received in cash from Sanraj by the appellant between 05/10/05 and 06/11/05 for the purpose of acquiring lands and making disbursements on its behalf.

Against the said sum of Rs. 1.85 crore received from Sanraj as Imprest, the following payments / disbursements were made by the appellant for and on behalf of Sanraj:

Date Amount(Rs.) Explanation 05/10/05 10 lacs Paid to the land owners as per receipt dated 05/10/05 (Page 55 of Annexure LP-3) 06/11/05 135 lacs Disbursed to various persons for and on behalf of Sanraj (Page; 23 of Annexure LP-5)

03/01/06 12.5 lacs Advance for land given to Ishwar (land owner) by cheque issued from SB A/c # 16456 Canara Bank by the appellant on behalf of Sanraj (Clearly stated so in the statement of affairs as on 31/3/06 referred to by the assessing authority) 12/01/06 12.5 lacs Advance for land given to Deepak (land owner) by cheque issued from SB A/c #

I.T.A .No.-3150 to 3152/Del/2011 16456 Canara Bank by the appellant on behalf of Sanraj (Clearly stated so in the statement of affairs as on 31/3/06 referred to by the assessing authority) 18/01/06 15 lacs Advance for land given to Ratan (land owner) by cheque issued from SB A/c # 16456 Canara Bank by the appellant or behalf of Sanraj (Clearly stated so in the statement of affairs as on 31/3/06 referred to by the assessing authority) 185 lacs Total Payment made

A date-wise chart of inflow and outflow of Land Imprest moneys received by the appellant both in cash and by cheques during the relevant previous year from Sanraj is enclosed for your kind perusal and appreciation of the facts stated above. It is categorically stated that the said chart has been prepared on the basis of seized material and corroborative evidences only.

The seized paper (page no. 23 of LP-5) showing payments of Rs. 1.35 crores also includes payments of Rs. 82 lacs made to Mr. Sachin Upadhaya by the appellant. In this regard it is explained that the appellant and Mr. Sachin Upadhaya were both working , in their individual capacities in arranging land for Sanraj and making payments to the different land owners for and on behalf of Sanraj. It must be appreciated that in none of the agreements of the appellant with Sanraj, Mr. Sachin Upadhaya was a party, but he was only a witness to those agreements. Thus, he was acting in his own individual capacity in dealing with Sanraj and not as an associate of the appellant. Therefore, they were individually accountable to Sanraj for utilization of the land imprest money received by them, and since the appellant had remitted the sum of Rs. 82 lacs further to Mr. Sachin Upadhaya at the behest of Sanraj out of its Imprest, Mr. Sachin Upadhaya alone was accountable to satisfy Sanraj as to its utilization and not the appellant; and as far as the appellant is concerned, he had disbursed the said sum for and on behalf of Sanraj. Similarly all other payments listed in the said seized document had also been disbursed by the appellant to Sanraj’s local staff and its other associates for and on behalf of Sanraj till 06/11/05. Rs. 25 lacs and Rs. 17 lacs were given to Mr. Govind and Mr. Sharad respectively, who were both associates of Sanraj in Dehradun and Rs. 11.585 lacs to Sanraj’s staff temporarily posted in Dehradun for miscellaneous items as listed in the impugned seized document.

Thus, the entire sum of Rs. 1.85 crore received in cash from Sanraj was paid / disbursed by the appellant before 31/3/06 while the cheques totaling to Rs. 3.50 crores remained unspent till then, the appellant declared the net liability of Rs.crores due to Sanraj in his personal statement of affairs as on that date. It must be appreciated that it is not material whether the said payments also included payments of Rs. 40 lacs made by cheques by the appellant. The crux of the matter is that the entire receipt of Rs. 1.85 crore from Sanraj had been used for and on behalf of that party by the appellant. Therefore, the basic charge of the assessing authority that the returning / utilization of Rs. 85 lacs had not been shown with evidence by the appellant and hence the same must have been retained by him as income, has no legs to stand.

I.T.A .No.-3150 to 3152/Del/2011 In fact, it was within the clear knowledge of the assessing authority that the paper seized as page no. 23 at Annexure LP-5 contained the account of this very receipt from Sanraj and also its outflow for it. Therefore, the same was deliberately treated as undated paper by him and without referring to the utilization part of it, while suppressing the date mentioned therein and also while considering the sum of Rs. 1 crore in Bank as declared even without confronting the appellant as to its source, he proceeded to make an addition of Rs. 1.75 crore for unexplained cash investment in the AY 2008-09 and making a simultaneous addition of Rs. 85 lacs as unexplained cash receipt in the AY 2006-07 for a portion of it.

Moreover, the assessing authority has not disputed that the entire money both by cheque and in cash had been paid by Sanraj to the appellant. In fact, the confirmation of Sanraj also goes on to prove of the existence of the source being Sanraj even in respect of the cash transactions involved, and if once the source is proved the same cannot be presumed as income of the appellant especially when the said amount had been fully utilized for and on behalf of that party only.

The assertion of the assessing authority is that since the appellant did not prove the returning of Rs. 85 lacs received in cash from Sanraj, the same must have been retained by him and accordingly it was assessed as his income. But in that case, even the sum of Rs. 3.50 crores received by cheques had neither been returned nor utilized by the appellant for and on behalf of Sanraj. Therefore, a pertinent question arises as to why was the same not assessed as the appellant’s undisclosed income also. The answer of the assessing authority could be that Sanraj had confirmed having given Rs. 3.50 crores by cheques to the appellant but it did not confirm any payment in cash to him, therefore, the addition for cash alone had been made. But in that case, the situation would become even more anomalous since the assessing authority has himself relied upon the receipts dated’ A 05/10/05 and 10/10/05 for payment of Rs. 85 lacs made in cash by Sanraj to the appellant, thus, actually admitting that Sanraj was the source of cash payments made to the appellant. Moreover, it is not understood why the assessing authority did not issue summons to Sanraj to confront the payment made in cash by. it which were not disclosed in the confirmation issued by it while the impugned seized receipts indicated otherwise; or if in case the summons were issued, then what was the outcome of the same is not known since the assessment order is completely silent in this regard.

It must be appreciated that the impugned confirmation of Sanraj just proves the source of the moneys received by the appellant but it does not reflect its utilization, which is the moot point under debate here and which must be addressed to arrive at the proper conclusion as to the assessability of Rs. 1.85 crores received in cash from Sanraj by the appellant. As explained above, the entire sum of Rs. 1.85 crores had definitely been used up for and on behalf of Sanraj only through the appellant so nothing remained to be returned to Sanraj out of the same. Thus, no addition in respect of the said Rs. 1.85 crores could be made in any manner in any assessment year since its source as well as its utilization stand fully explained.

I.T.A .No.-3150 to 3152/Del/2011 Thus, the presumption of the assessing authority that the cash receipts had been retained by the appellant gets squarely rebutted. Accordingly, the addition of Rs. 85 lacs for cash receipt should be deleted.” (emphasis provided by the Bench)

13.1. On consideration of the above, we find that the arguments advanced on behalf of the Revenue that general submissions were advanced and not fact specific submission is an incorrect argument borne out from the record. We further find that these submissions were made available to the Assessing Officer as is evident from para 4 of the impugned order extracted earlier in this order and find that more than a year’s time was made available to the AO in the remand proceedings. The remand report has been reproduced in para 8.3 by the CIT(A). For ready reference it is reproduced hereunder:-

8.3 AO’s remand report: “I have gone through the explanations of the assessee, the relevant seized material and also the documents furnished by the assessee in the appellate proceedings. There is no doubt that Rs. 10 lacs and Rs. 75 lacs had been received by the assessee from M/s Sanraj on 05/10/2005 and 10/10/2005 as per the seized documents and as also stated in the assessment order. Further, there is no doubt also that cash of Rs. 1 crore was also received from M/s Sanraj in two equal installments of Rs. 50 lacs each between 10/10/2005 and 06/11/2005, which is clear from the seized page no. 23 of Annexure LP-5. It is clearly written on the top left hand side of this paper that the following sums aggregating to Rs. 2.75 crores had been received: Rs. 75 Lacs Cash 50 Lacs Cash 50 Lacs Cash 1.75 1.00 Cr. Bank

While on the right hand side of the same paper, utilization / disbursement of Rs. 1.35 crores has further been clearly written and the date of 06/11/2005 is also found written therein. Thus, not just Rs. 85 lacs was received in cash upto i 10/10/2005 from Sanraj, rather total sum of Rs. 1.85 crore had been received by1 the assessee from Sanraj in cash upto 06/11/2005. In fact, the said paper has been discussed at length in the assessment order for the AY 2008-09 of the assessee by the AO and on the basis of which he made an addition of Rs. 1.75 crore for the cash component out of the total receipt of Rs. 2.75 crores, holding it as unexplained investment in that year, i.e., the year of search, by considering the said paper as undated.

The assessee had received total sum of Rs. 5.35 crores as advance from M/s Sanraj out of which Rs. 3.50 crores had been received by cheques and the balance sum of Rs. 1.85 crores was received in cash. It is I.T.A .No.-3150 to 3152/Del/2011 verifiable from the seized material, personal balance sheet and cash & bank flow statement of the assessee submitted in the assessment proceedings that a sum of Rs. 40 lacs had been advanced from his bank account to the land-owners on behalf of M/s Sanraj by the assessee and clearly stated as such in his balance sheet as at 31/03/2006. Further, the seized page no. 55 of Annexure LP-3 reveals that a sum of Rs. 10 lacs had been advanced in cash to the land-owners by the assessee on behalf of M/s Sanraj. Finally, I have also verified that the seized page no. 23 of Annexure LP-5 clearly shows that an aggregate sum of Rs. 1.35 crore had further been disbursed by the assessee in cash on behalf of M/s Sanraj. Thus, total sum of Rs. 1.85 crores was disbursed on behalf of M/s Sanraj by the assessee out of total sum of Rs. 5.35 crores received from that company during this year, thus, leaving a balance sum of Rs. 3.50 crores with him as advance as on 31/03/2006, which was duly declared in his personal balance sheet as on that date by the assessee as per the assessment record. The assessee also furnished a date-wise chart of inflow and outflow of Land Imprest moneys received by him both in cash and by cheques from M/s Sanraj as well as from all other parties during the search period, compiled on the basis of seized material and corroborative evidences. It is also pleaded that said addition was made probably due to oversight by AO of “06/11/2005” date written on the seized page no 23 of Annexure LP-5. As regards the advances given or taken for purchase or sale of it must be in furtherance of registered agreement otherwise the transaction can not be accepted as valid evidences particularly when the transactions of advances have been made in cash. The explanation of the assessee that the deal did not materialized and the cash received was returned subsequently and the cheque amount was yet to be returned is not expectable at all particularly amount received, paid or returned in cash. In view of these facts additions of Rs.85 lacs made by the Assessing officer in this regard should be sustained.” (emphasis supplied)

13.2. The record also shows that the following re-joinder was filed on behalf of the assessee and is extracted hereunder for the sake of completeness :-

AR’s rejoinder: “Whereas after carrying out his verification of the documents produced and also the relevant seized material the AO has unequivocally admitted that the advance of Rs.85 lacs was given in cash by M/s Sanraj Healthcare Services (P) Ltd. to the assessee, yet for the reasons best known to him he has justified the said addition on the ground that in case of unregistered agreements cash transactions do not stand validly evidenced. It is not understood how registration or non-registration of the sale agreement can be material in this case when the seized material unambiguously show that Sanraj had paid the impugned sum of Rs. 85 lacs in cash to the assessee. Thus, the addition so made must be deleted.”

13.3. Considering these facts and submissions the CIT(A it is seen has come to a detailed conclusion. On consideration thereof we find that the prayer of the I.T.A .No.-3150 to 3152/Del/2011 Ld.CIT DR has no legs to stand as no fact has been rebutted by the Revenue, no conclusion has been shown to be an incorrect conclusion on the facts as they stand. We find that the nature of the evidences placed by the assessee on record in the Paper Book today before us consisting of documents before the AO and the CIT(A) also has not been shown to either be incorrect or insufficient.

We find that no effort to rebut any evidence has been made by the Revenue. As would be evident from para 4 of the impugned order reproduced in the earlier part of this order. Thus where we find that more than sufficient opportunity was available to the AO to consider the evidences which have been further considered in the peculiar facts of the present case by the CIT(A) himself who has also considered the Remand Report filed. Accordingly in the facts as they stand, we find no procedural violation and considering the facts as they stand and in the absence of any cogent argument justifying the request for remand we reject the same. Being satisfied with the reasoning and the conclusion on the facts as they stand we find ourselves in agreement with the finding arrived at by the CIT(A). The same is reproduced hereunder :-

8.5 Decision and reasons therefor: I have perused the facts of the case and documents furnished by the appellant. In his remand report the AO has accepted after verifying the seized material that “There is no doubt that Rs.10 lacs and Rs. 75 lacs had been received by the assessee from M/s Sanraj on 05/10/2005 and 10/10/2005 as per the seized documents and as also stated in the assessment order. Further, there is no doubt also that cash of Rs. 1 crore was also received from M/s Sanraj in two equal installments of Rs. 50 lacs each between 10/10/2005 and 06/11/2005, which is clear from the seized page no. 23 of Annexure LP- 5.” Further the AO has also accepted after verifying the seized material that “It is verifiable from the seized material, personal balance sheet and cash & bank flow statement of the assessee submitted in the assessment proceedings that a sum of Rs. 40 lacs had been advanced from his bank account to the land-owners on behalf of M/s Sanraj by the assessee and clearly stated as such in his balance sheet as at 31/03/2006. Further, the seized page no. 55 of Annexure LP-3 reveals that a sum of Rs. 10 lacs had been advanced in cash to the land-owners by the assessee on behalf of M/s Sanraj. Finally, I have also verified that the seized page no. 23 of Annexure LP-5 clearly shows that an I.T.A .No.-3150 to 3152/Del/2011 aggregate sum of Rs. 1.35 crore had further been disbursed by the assessee in cash on behalf of M/s Sanraj. Thus, total sum of Rs. 1.85 crores was disbursed on behalf of M/s Sanraj by the assessee out of total sum of Rs. 5.35 crores received from that company during this year, thus, leaving a balance sum of Rs. 3.50 crores with him as advance as on 31/03/2006, which was duly declared in his personal balance sheet as on that date by the assessee as per the assessment record.”

The only contention raised by the AO in his remand report justifying the said addition of Rs. 85 lacs is that unless an agreement for sale / purchase of land is registered, cash advances cannot be accepted as validly evidenced. On consideration of all these facts it is seen that it is undisputed that Sanraj paid certain sums of money to the appellant by cheques and also in cash as advance for procurement of land in and around Dehradun. It is also undisputed that the assessee was only rendering facilitation or mediator services for sale / purchase of land for other parties. Now the moot points for my consideration are as under and given below each of which are my findings on those issues:

Whether the paper found from the possession of the appellant and seized at page no. 23 of Annexure LP-5 pertained to the AY 2006-07 or AY 2008-09?

I have gone through the assessment order dated 23-12-2009 of the AO for the AY 2008-09 in the case of the same assessee, i.e., the appellant, and find that the AO has only considered the contents on the left hand side (LHS) of the seized page no. 23 of the Annexure LP-5 and ignored the right hand side (RHS) portion all together which actually contains the date 06-11-05 written therein. Moreover, even the transactions of ‘Rs. 75 lacs Cash’ and of ‘Rs.l Cr. Bank’ recorded on LHS match with the receipts of the said sums on 10-10-05 from M/s Sanraj Heath Services (P) Ltd. as per the seized receipts dated 10-10-05 at page nos. 59 and 57 of the Annexure LP-3 respectively and also admitted as such by the AO in the assessment order for the AY 2006-07. Thus, there remains no doubt in my mind that the said documents pertains to the previous year 2005- 06, i.e., the AY 2006-07 and not the AY 2008-09, and must be considered for assessment in the AY 2006-07 only.

Whether the paper found from the possession of the appellant and seized at page no. 23 of the Annexure LP-5 pertained to the transactions with M/s Sanraj Health Services (P) Ltd. vis-a-vis the assessee?

In order to prove his point that the said paper contains his transactions undertaken with Sanraj, the appellant has stated that the LHS contains receipts of moneys in cash and by cheques from Sanraj and the RHS contains payments made for and on behalf of Sanraj. Since the receipts of ‘Rs. 75 lacs Cash’ and of ‘Rs. 1 Cr. Bank’ recorded on LHS match with the receipts of the said sums on 10-10-05 from M/s Sanraj Heath Services (P) Ltd. as per the seized receipts dated 10-10-05 at page nos. 59 and 57 of the Annexure LP- 3 respectively and also admitted as such by the AO in the assessment order for the AY 2006-07; the preponderance of probabilities weighs strongly in favour of the appellant that all other transactions recorded on the impugned paper also must pertain to Sanraj, only unless proved otherwise. It is not permitted to I.T.A .No.-3150 to 3152/Del/2011 ignore a part of the transactions recorded on a paper which has to be considered in totality.

In respect of the payments recorded on the RHS of the said paper, it has been explained by the appellant that all these payments were made for and on behalf of Sanraj to its staff and associates stationed at Dehradun for their various needs. With regard to the payments of Rs. 82 lacs made to Mr. Sachin Upadhaya, as recorded therein, it was explained by the appellant that although the said person was also working in capacity of an associate of the appellant in other such land deals, but in the case of land deals with Sanraj, both of them were working independently and in their own individual capacities in arranging plots of land for Sanraj and making payments to the different land owners for and on behalf of Sanraj. My attention was particularly drawn to the seized GPAs at page nos. 50 to 52 of Annexure LP-3, where Mr. Sachin Upadhaya was not a party, but he was just a witness to those documents. Thus, he was acting in his own individual capacity in dealing with Sanraj and not as an associate of the appellant. Therefore, they were individually accountable to Sanraj for utilization of the land imprest money received by them, and since the appellant had handed over a sum of Rs. 82 lacs further to Mr. Sachin Upadhaya at the behest of Sanraj out of its Imprest with the appellant, Mr. Sachin Upadhaya alone was accountable to satisfy Sanraj as to its utilization and not the appellant; and as far as the appellant is concerned, he had disbursed the said sum for and on behalf of Sanraj.

It was further explained by the appellant that similarly all other payments noted in the said seized document had also been disbursed by the appellant to Sanraj’s local staff and its other associates for and on behalf of Sanraj till 06-11-05. Rs. 25 lacs and Rs. 17 lacs were given to Mr. Govind and Mr. Sharad respectively, who were both associates of Sanraj in Dehradun and Rs. 11.585 lacs to Sanraj’s staff temporarily posted in Dehradun for miscellaneous items as listed in the impugned seized document.

I find substance in the explanations and arguments of the appellant and also notice that the AO chose to ignore the contents written on RHS of the impugned seized document all together. Thus, there remains no doubt in my mind that all transactions noted down on the said paper pertained to Sanraj only as nothing contrary has been brought on record by the AO. In fact, even the AO in his remand report has accepted, after carrying out his verification of the seized material, that Rs. 1.85 crore had been received in cash by the appellant from Sanraj and also that disbursement to the tune of Rs. 1.35 crore was made out of it by the appellant on behalf of Sanraj only.

Whether the actual sum received in cash from Sanraj during the AY 2006-07 was Rs. 85 lacs or Rs. 1.85 crore?

It has already been held by me that all transactions recorded on the paper seized at page no.23 of the Annexure LP-5 pertained to Sanraj. Accordingly, even the sums of Rs.50 lacs cash noted down twice on the receipts side (LHS) were also received from Sanraj undoubtedly. Although this paper contains reference to Rs.1.75 crore received in cash from Sanraj, but as mentioned by the AO in the assessment order and as also admitted by the appellant, Rs.10 lacs had also been received in I.T.A .No.-3150 to 3152/Del/2011 cash from Sanraj by way direct payments made to the land owners against agreements to sell. Thus, the total receipts in cash from Sanraj was indeed Rs.1.85 crore and not just the sum of Rs.85 lacs. Even the AO in his remand report has accepted, after carrying out his verification of the seized material, that total sum of Rs.1.85 crore had been received in cash by the appellant from Sanraj.”

Whether the appellant signed agreements to sell for purchase of plots of land in his—v name for his own use and purpose or did he act as the agent or front of Sanraj as explained by him?

From the seized record it is noticed that the receipt dated 05-10-05 for Rs. 10 lacs seized as page no. 55 of the Annexure LP-3 clearly refers to the agreements to sell dated 27-07-05 of the appellant entered with the land owners and also the factum of payment of Rs. 10 lacs to the land owners through the appellant by Mr. Sanjeev Sethi of Sanraj. This receipt clearly states that 150 bigha of land at Village Khirshali, Dehradun was being sold to Mr. Sanjeev Sethi at the rate of Rs. 9,89,900/- per bigha for which a part payment of Rs. 10 lacs was made by Mr. Sanjeev Sethi and the sale deeds for which were to be executed by 10-10-05.

Further, the buy-back agreement dated 06-10-05 seized at page no. 56 of the Annexure LP-3 also reveals that a minimum guarantee of 25% increase within next 6 months on the agreed purchase price of Rs. 9,89,900/- per bigha had been given to Mr. Sanjeev Sethi (1st party) by the appellant, Mr. Mukesh Joshi (2nd party) and Mr. Ajay Joshi (3rd party) failing which the 1st party was to pay the commission @ 2% only to the 3 rd party. It was further stipulated therein that in case the land prices increased between 25% to 50% within next 6 months, then the 1st party will get 25% as minimum guarantee and the appellant (2nd party) shall be entitled to the balance increased sum, whereas both parties agreed to give 2% commission to the 3rd party from their respective shares. Further, it was stipulated that in case the land prices increased by more than 50% within the next 6 months, then the increase over 50% shall be shared equally by the three parties but the 3rd party shall get his due commission or l/3rd share so determined, whichever is higher.

Thus, parties no. 1 and 2 to this buy-back agreement, being Mr. Sanjeev Sethi of Sanraj and Mr. Mukesh Joshi, the appellant, were the buyers of land together and Mr. Ajay Joshi, the 3rd party, was to receive commission from the said land deals. Therefore, it is clear that the appellant was working alongside Mr. Sanjeev Sethi of Sanraj in procuring the said plots of land on his behalf and not as an independent buyer.

In other words, the appellant had signed the agreements to sell in July 2005 for purchase of plots of land for and on behalf of Sanraj, though in his own name, but acting as the agent or the front man of Sanraj.

Whether the appellant was to receive any remuneration from Sanraj at the time of entering into agreements to sell with the land owners?

As per the said buy-back agreement of the appellant with Sanraj, the appellant was to receive his remuneration after execution of the sale deeds, though based on the future increase in the land prices. There is I.T.A .No.-3150 to 3152/Del/2011 no evidence on record indicating any remuneration payable to the appellant by Sanraj for or at the time of entering into agreements to sell with the land owners.

Whether the appellant sold any of his own land to Sanraj for which he could have^A received sale price from Sanraj in cash or was he merely acting as a facilitator in the land deals for Sanraj?

In this regard it was further explained by the appellant that the plots of land in question were agreed to be procured from the various land owners at the rate of Rs. 9,89,900/- per bigha on behalf of Mr. Sanjeev Sethi of Sanraj though entered into in his own name by the appellant but the final conveyance deeds were to be made directly by Sanraj with the land owners. Under this understanding the so-called buy-back agreement was also got signed by Mr. Sanjeev Sethi to safeguard his interest because he had made the total investment for purchase of the said plots of land. Moreover, since hot even a single copy of the agreements to sell and the sale deeds pertaining to the said plots of land was found from the possession of the appellant during the search also bears testimony to the fact that all those documents had been kept by Mr. Sanjeev Sethi in his own custody since he was the actual buyer and the appellant was just his agent or front for procuring the said plots of land for Sanraj.

I find force in the arguments of the appellant. As per the said buy-back agreement, the appellant was to receive his remuneration eventually, though based on the future increase in the land prices. This cannot be understood as profit on sale of land accruing to him, but it was the remuneration due to him for rendering land procurement services to Sanraj. If the appellant is held to be the actually purchaser of the said land who eventually sold it to Mr. Sanjeev Sethi, then some payments would certainly have been made by him at the time of purchase, but neither any such documents were found during the search nor any such finding has been given by the AO in this regard. Thus, the said land was indeed purchased by the appellant for and on behalf of Sanraj and the question of its subsequent sale to Sanraj by him does not arise and, therefore, the appellant was merely acting as a facilitator in the said land deals for Sanraj.

Whether the receipt of Rs. 85 lacs or Rs. 1.85 crore in cash from Sanraj an advance or income of the appellant?

The buy-back agreements seized in search clearly reveal that the appellant was to receive his remuneration only after 6 months from the registration of the said plots of land in the name of Sanraj. As per the seized record examined by me in this regard, the said sale deeds were due to be executed from 10-10-05 till the end of December, 2005. Accordingly, the remuneration of the appellant fell due only after 6 months therefrom, while the said cash of Rs. 1.85 crore had clearly been received by him much before. Thus, the receipt of Rs. 1.85 crore in cash from Sanraj was in nature of advance for land procurement and which even was disbursed by the appellant for and on behalf of Sanraj by the appellant as under:

I.T.A .No.-3150 to 3152/Del/2011

Date Amount(Rs.) Explanation 05/10/05 10.00 lacs Paid to the land owners as per receipt dated 05/10/05 (Page 55 of Annexure LP-3) 06/11/05 135.00 lacs Disbursed to various persons for and on behalf of Sanraj (Page 23 of Annexure LP-5) 03/01/06 12.50lacs Advance for land given to Ishwar (land owner) by cheque issued from SB A/c # 16456 Canara Bank by the appellant on behalf of Sanraj (Clearly stated so in the statement of affairs as on 31/3/06 referred to by the assessing authority) 12/01/0612.50 lacs Advance for land given to Deepak (land owner) by cheque A issued from SB A/c # 16456 Canara Bank by the appellant on behalf of Sanraj (Clearly stated so in the statement of affairs as on 31/3/06 referred to by the assessing authority) 18/01/06 15.00 lacs Advance for land given to Ratan (land owner) by cheque issued from SB A/c # 16456 Canara Bank by the appellant on behalf of Sanraj (Clearly stated so in the statement of affairs as on 31/3/06 referred to by the assessing authority) lacs Total Payment made Thus, no part of the said cash receipt totaling to Rs. 185 lacs remained with the appellant and no part of it can be held as his income by any stretch of imagination.

Whether the appellant paid / disbursed Rs. 1.85 crore for and on behalf of Sanraj?

I have already held herein above that the evidence seized from the possession of the appellant clearly reveals that Rs. 1.35 crore had been disbursed by him in cash for and on behalf of Sanraj and besides this, Rs. 40 lacs had been been advanced to some land owners for purchase of land by cheques for and on behalf of Sanraj. The remaining Rs 10 lacs were also paid to the plot owners in cash. Thus, the appellant had undoubtedly paid / disbursed Rs. 1.85 crore for and on behalf of Sanraj. Even the AO in his remand report has accepted, after carrying out his verification of the seized material, that Rs. 1.85 crore had been disbursed for and on behalf of Sanraj.

I.T.A .No.-3150 to 3152/Del/2011 Whether the AO was justified in making the said addition for cash receipt since only the cheque payments had been confirmed by Sanraj before him? It is my considered view that merely because M/s Sanraj Health Services (P) Ltd. only confirmed payment of Rs. 3.50 crores by cheques to the appellant, it cannot be concluded that no cash payments had been made by the said company to the appellant for procurement of land, especially because the seized documents clearly revealed that payment of Rs. 1.85 crores was also made in cash by Sanraj to the appellant. Thus, in my opinion the AO was not justified in making the said addition for cash receipt since only the cheque payments had been confirmed by Sanraj before him. In view of the discussion above and considering all facts, aspects and circumstances of the issue involved, the addition of Rs. 85 lacs made by the AO is hereby deleted.

13.4. Considering the above in the context of the reply of the assessee placed on record and juxtaposed with the remand report of the AO, (also reproduced above) which has been heavily relied upon by the Ld. CIT DR before us we find that when these read alongwith the submissions advanced we are of the view that by relying upon the assessment and the remand report, the revenue can at best arouse suspicion which by itself cannot be said to be sufficient reason to justify the demand for a remand. No doubt ITAT has the power to remand the issue, however the said request cannot be requested for on ipse dixit of the parties; it has to be supported on the basis of some cogent and relevant facts which can be said to have been either not considered or considered incorrectly.

For the said purposes the necessary exercise has not been done by the Revenue.

We find from the record that the assessee has addressed the seized Annexure’s and documents relied upon by the AO and the detailed explanation on these seized Annexure’s and documents has been made available to the assessing officer. It is seen that the assessing officer has repeatedly been reminded to place its remand report on record and since despite reminders when it was not been placed on record the CIT(A) has proceeded to examine the documents and I.T.A .No.-3150 to 3152/Del/2011 called for the witnesses and had already started the process of recording their statements by which time the assessing officer finally also placed its remand report on record. We have taken into consideration the contents of the remand report relied upon by the Revenue. A perusal of the same shows that the basic claim on facts is agreed to by him and after that on selective reasoning has proceeded to address the evidences which are not disputed. The objection is only on the reasoning that Registered documents can only be considered. The role of the assessee as a facilitator as per the assessing officer himself for consolidating purchase/sale of lands on behalf of other parties stands accepted the documents stand addressed thus in the peculiar facts and circumstances of the case In the absence of any infirmity pointed out in the order we find no good reason to interfere with the finding arrived at. Accordingly ground No. 3 of the revenue is dismissed.

It was his submission that whatever the department could find against the assessee has been found in the search. The evidence in support of its case has been confronted to the AO. More than adequate time has been made available to him to consider the same and at the cost of reiteration it was submitted no argument has been advanced to justify the request. The fact that the evidences have been independently verified by the CIT(A) himself and speaking finding has been given has been left unaddressed. Thus in the absence of any infirmity in the order the request for Remand was strongly opposed. Addressing the fact that the transactions are recorded in the laptop, it was submitted does not make the assessee a liar as the explanation offered at the stage of assessment that the laptops were used by the family for education and recreational purposes was also correct and the assessee stands by it. The said claim was correct and merely because some transactions were also recorded at a point of time is a fact. The fact that the assessee can explain what was recorded therein and has successfully demonstrated that these were details of the transactions recorded for some calculation purposes and explained that the payment

I.T.A .No.-3150 to 3152/Del/2011 recorded as coded “M” in the seized document match with the bank entries for Mr Mukesh Joshi and the one recorded for “S” tallied with the bank accounts of Mr Sachin Upadhyay. It was his submission that the assessee has never claimed that Mr Sachin Upadhyay and he were acting in a joint venture for procuring land for and on behalf of Mrs Prateek Resorts and Builders a group company of ATS. What has been claimed, it was submitted is that both of them were working in their individual capacity for this purpose. They were working with a common goal. They were accountable to the company for the money given to them for procurement of land through them which were recorded in the impugned sheet found from the seized laptop. It was submitted that this explanation of the assessee and the rejoinder to the Remand Report of the assessing officer when read along with the detailed submissions advanced before the CIT(A) to explain the nature of assessee’s business would show and explain how the assessee has been functioning over the years for consolidation of land and facilitating purchases in the area of Dehradun for and on behalf of M/s Sanraj Health Services; for and on behalf of the ATS group; RPS Group of Faridabad; and Prateek Resorts etc. at a different points of time. The assessee’s explanation, it was submitted is well knitted with each and every transaction on each and every document found. This evidence it was submitted has not been assailed by the Revenue whatsoever. Accordingly it was his submission that the plea made at this stage for a Remand based on no evidence and assailing no evidence and leading no fresh evidence on fact should not be accepted.

I.T.A .No.-3150 to 3152/Del/2011 S.No. Date Cheque Cash Name of Amount Amount person 1. 09/03/06 5,00,000/- 13,75,000/- Suganchand 2. 09/03/06 3,50,000/- 8,81,500/- Elizabeth 3. 17/03/06 5,00,000/- 4,42,400/- Kamlesh Chauhan 4. 02/-03/06 4,82,000/- 13,94,300/- Sanjeev Virmani Total 40,93,200/- 16.1. It is seen that following submissions on facts have been advanced before the CIT(A: –

9.2. AR’s submission AR made the following submissions:- “The last ground of appeal is to challenge the action of the assessing authority in making an addition of Rs.40,93,200/-for cash payments made on account of land transactions of third parties.

It was averred by the assessing authority that one of the files found in the laptop computer of the assessee seized vide Annexure A-l, contained certain data of financial transactions in respect of purchase / sale of land. It was asserted by the assessing authority that the fact that the said data pertained to the assessee was evident since some of the payments recorded therein had been made by the assessee through cheques to various persons on various dates, which tallied with the bank statements of the assessee. Further, it was averred that certain cash payments made by the assessee were also found recorded therein besides the said cheque payments, but the same were neither found recorded in the cash flow statement submitted by the assessee nor its sources were explained. Accordingly, an addition was made by the assessing authority for cash payments totaling to Rs. 40,93,200/- for the relevant previous year recorded therein as expenditure made from undisclosed sources.

In this regard it is important to first look into the history of the deal made with the ATS group (ATS) vis-a-vis the appellant for proper appreciation of the facts and the transactions undertaken during the relevant previous year. The same is given as under:

It has been explained above how the appellant saw potential in the real estate business and ventured into the same. In December, 2004, he along with Mr. Sachin Upadhaya, his close friend and associate, acquired 100% shares of an existing company, M/s Prateek Resorts & Builders Pvt. Ltd. in equal proportion for carrying out real estate activities in Dehradun.

In the meanwhile, around the months of October-November, 2004, RPS group of builders, based in Faridabad, were looking around for cheap land for their proposed housing project in Dehradun and came in contact with the appellant and Mr. Sachin Upadhaya, who were in a position to facilitate acquisition of some land situated in some prime area in Dehradun for them. An understanding was reached with them in December, 2004 and M/s Prateek Resorts & Builders Pvt. Ltd. (Prateek) started buying land thereafter at the behest of M/s RPS Associates (RPS). As explained above, it is a standard practice with I.T.A .No.-3150 to 3152/Del/2011 builders that they do not come in the fore front in the initial stages of land acquisition since the sellers of land start demanding excessive prices from them. Hence, Prateek’s name was used by RPS. Around 155 bighas of land got acquired for RPS ultimately by Prateek for development of a residential colony by RPS. In fact, the entire funding required for the acquisition of land was provided by RPS by way of advancing loan to the said company in December, 2004 itself. But in order to protect its interest, RPS nominated its own persons as directors in the Board of the said company and subsequently removed the existing directors from its Board, thus, wielding 100% control over its Board; while the shares in that company continued to remain in the names of the appellant and Mr. Sachin Upadhaya, who factually were merely acting as the facilitators / mediators for acquiring land for RPS and their remuneration was agreed to be given by RPS as part of purchase consideration for the shares of Prateek held by them, which were to be sold to RPS just before the construction activity was to be commenced on that piece of land.

However, RPS later decided to withdraw from the project in January, 2006 and roped in the ATS group to take it over from them. Accordingly, it was decided in February, 2006 that ATS shall takeover the ownership, management and control of M/s Prateek Resorts & Builders Pvt. Ltd. by purchasing its shares held by the appellant and Mr. Sachin Upadhaya. In this manner the appellant and Mr. Sachin Upadhaya came in the contact with the ATS group for the first time.

Since ATS was a large group of builders and colonizers, they wanted a bigger chunk of land having an area of around 250 bighas for achieving the financial viability of their housing project in Dehradun, and since the appellant and his associate were in a position to obtain the adjoining pieces of the said land as well, their services were requisitioned for further consolidation of the desired adjoining areas by ATS.

However, in order that the appellant and his associate do not back out from their commitment, ATS made them the directors of M/s Prateek Resorts & Builders Pvt. Ltd. and also nominated two more directors to its Board subsequently while removing all other existing directors of RPS in the process of acquisition of that company. Whereas the true control and management of the said company fully vested in the two directors of ATS now for all practical purposes and the appellant and his associate were just positioned as dormant directors in the Board. Thus, the appellant and Mr. Sachin Upadhaya had only lent their names and were in no manner controlling the affairs of that company. Not only this, ATS further ensured their continued assistance to the company for acquisition of the adjoining land by making them agree to sell their shares of M/s Prateek Resorts & BuildersPvt. Ltd. to ATS in a phased manner spread over a period of time, though the total price of those shares was pre-fixed in February, 2006 itself based on the valuation of land prevailing at that point of time. The said shares were subsequently transferred in parts by the appellant and Mr. Sachin Upadhaya as detailed herein below: Number of Shares Date of Mukesh Sachin Total (Number & Transfer Joshi Upadhaya Percentage) 21/08/06 2,000 2,000 4,000 40% Page 35

I.T.A .No.-3150 to 3152/Del/2011 20/10/06 500 1,000 1,500 15% 14/11/07 1,000 1,000 2,000 20% 08/12/08 1.500 1.000 2.500 25% 5.000 5.000 10.000 100% Total

During this period, adjacent pieces of land totaling to around 100 Bighas were further acquired for the said company through the efforts of the appellant and Mr. Sachin Upadhaya and the final lot of shares was got transferred by ATS in its favour. Also, the appellant and Mr. Sachin Upadhaya were allowed to resign from the directorship of the said company in December, 2008 after they had fully rendered their committed services to ATS. Under this background, it is submitted that the said data contained the payments made to purchase land on behalf of M/s Prateek Resorts & Builders Pvt. Ltd. by the appellant and his associate, Mr. Sachin Upadhaya. However, the assessing authority once again picked and chose the contents of the said data to suit his own convenience in order to make the said addition. The cash payments recorded for the FY 2005- 06 out the said data, for which the addition was made, have been mentioned in the assessment order as under by the assessing authority: Date Cheaue Amt Cash Amount Name of person 09/03/06 5,00,000 13,75,000 Sugan 09/03/06 3,50,000 8,81,500 Elizabeth 17/03/06 5,00,000 4,42,400 Kamlesh 02/03/06 4,82,000 13.94.300 Sanjeev Virmani Total: 40.93.200

A photocopy of the print-out of the said data supplied by the assessing authority is enclosed. This data contains the financial transactions spread over in two financial years, i.e., FYs 2005-06 *& 2006-07 and also states the Account holder’s name in the last column as ‘S’ and ‘M’ against each row. This clearly shows that the respective payments by cheque or in cash were made by the said account holders. It is not very difficult to decipher what ‘S’ and ‘M’ stand for. Whereas ‘M’ stood for Mukesh Joshi, the appellant, ‘S’ stood for Sachin Upadhaya, his associate, who made the stated payments by cheques or in cash as recorded against their respective names. But the assessing authority simply chose to ignore this vital piece of information recorded therein and simply attributed all payments as made by the appellant. The fact that the corresponding payments had indeed been made by the appellant and Mr. Sachin Upadhaya can be easily ascertained from their respective bank accounts. A photocopy of the bank statement of SB A/c No. 016401521868 with ICICI Bank, Dehradun of Mr. Sachin Upadhaya available with the appellant is enclosed, wherein the above said cheque payments made to the said parties, except Elizabeth, are duly recorded. Payment to Elizabeth on 09/03/06 may have been made by Mr. Sachin Upadhaya from his some other bank account which is not available with the appellant, but it can be verified that the same has not been made by the appellant from any of his bank accounts in the FY 2005-06.

I.T.A .No.-3150 to 3152/Del/2011 Photocopies of the passbooks / statements of all bank accounts for the year of the appellant have already been furnished vide para no. 2.2.1 herein above. Thus, undisputedly the impugned cheques were paid by Mr. Sachin Upadhaya and even the cash payments recorded against his name were made by him only and not the appellant.

It is not understood how the assessing authority has averred that the cheque payments had been verified as made from the appellant’s bank account, when not a single cheque payment during the FY 2005-06 was made from his bank accounts by the appellant and when the said payments on the stated dates had factually been made by Mr. Sachin Upadhaya from his own bank account(s). Thus, there is no merit in the said averment of the assessing authority who, for the reasons best known to him, simply presumed the entire cash payment as made by the appellant without even confronting Mr. Sachin Upadhay in this regard or even without bringing on record the outcome of such confrontation, if any made. Moreover, factually all payments made by the appellant against the entries recorded in his name in the impugned financial data pertain to the next financial year 2006-07 and not the previous year under consideration at all.

Thus, none of the said cash payments was made by the appellant and the question of explaining its source by the appellant could not arise. It must be appreciated that Mr. Sachin Upadhaya was also covered in the said search on ATS group and the pertinent questions of the source of the said cash payments should have been directed at him and not the appellant, who is answerable for his own transactions and not those undertaken by any other person(s). Accordingly, if at all any addition was to be made for the above unexplained cash payments, it could only be made in the hands of Mr. Sachin Upadhaya in this case, who had been simultaneously assessed u/s 153A by the same Assessing Officer and not in the hands of the appellant. Thus, the addition of Rs. 40,93,200/- so made should be deleted.” (emphasis provided)

16.2. We find that the arguments of the CIT DR that generalistic non-factual arguments were advanced before the CIT(A) on fats is a wrong and incorrect submission and we find on considering the same that it cannot be accepted.

The arguments are fact specific and also address the overall claim on the issues.

We find from a reading of the following Remand Report of the AO that the claims are disputed on the ground that Registered Deeds were not filed. The fact that the land consolidation process set in motion by the activities of the assessee based on the documents seized have been addressed alongwith the copies of the bank accounts of the various parties proving the assessee’s claim, we find this I.T.A .No.-3150 to 3152/Del/2011 finding based on the evidences on record has not been assailed. The Remand Report extracted in para 9.3 is reproduced hereunder:-

9.3. AO’s remand report:

“There is no valid evidence that assessee and Shri Sachin Upadhaya were jointly as associates for procuring land in Dehradun for M/s. Prateek Resorts. There is no such agreement or joint venture in this regard between the assessee and Shri Sachin Upadhaya. Behaviors of private parties cannot over rule the provision of law. So far the receipt and payment of advances for purchase or sale of land are concerned it must be in furtherance of registered agreement otherwise the same may are not acceptable as valid evidence particularly when the transactions have been made in cash. Therefore, explanation and evidence furnished by the assessee regarding the addition of Rs. 40,93,200/- may be rejected and addition made by the Assessing Officer should be sustained.” (emphasis supplied)

16.3. The assessee’s rejoinder thereto in para 9.4 again at page 42 of the impugned order is also extracted for the sake of completeness: –

9.4. AR’s rejoinder: “It is trite that the conduct or behaviour of the parties involved should not be ignored in arriving at justice. The assessee has never claimed that he and Mr. Sachin Upadhaya were working in a joint venture for procuring land for and on behalf of M/s Prateek Resorts & Builders (P) Ltd., a group company of ATS. They were admittedly working in their individual capacity for this purpose, but working with a common goal of earning remuneration for their said services to the said ATS group company. Accordingly, they were accountable to that company for the moneys given to them for procurement of land through them, which was recorded together on the impugned sheet found from the seized laptop.

Further, it is not understood how the question of on-money premium paid in cash to the land owners towards purchase of land in and around Dehradun for and on behalf of M/s Prateek Resorts & Builders (P) Ltd. by the assessee and his associate Mr. Sachin Upadhaya can be evidenced from the registered sale deeds. Admittedly the said sums were received in cash from the ATS group for advancing the same as on- money premium to the land owner against purchase of their land. Whatever sums were paid in cash and by cheques by Mr. Sachin Upadhaya were written in coded letter “S” and similarly sums paid by the appellant, Mr. Mukesh Joshi were coded as “M” in the seized sheet. Each cheque payment recorded in that sheet against “M” squarely matches from the bank accounts of the appellant and those recorded against “S” tallies from the bank accounts of Mr. Sachin Upadhaya. Thus, even the impugned cash payments must necessarily have been made by the said persons in the same manner. Thus, the addition so made should be deleted.” (emphasis supplied)

I.T.A .No.-3150 to 3152/Del/2011 16.4. In the face of the facts remaining unrebutted on record and considering the evidence relied upon by the assessee, which admittedly has been confronted to the AO, and also has been independently examined by the CIT(A), we find in these peculiar facts and circumstances the following finding arrived at in the impugned order deserves to be upheld. As observed in order to justify a remand the Revenue must make out a case in support of the claim. In the absence of any argument assailing the facts or the correctness of the conclusion or leading any argument on insufficiency of the evidences or furnishing any fresh fact on record or canvassing that a crucial evidence, has been ignored. The request casually made cannot be accepted. As we have observed the evidences have been available in the Paper Book and nothing before us also has been referred to therein by the Revenue to demolish the conclusion drawn by the CIT(A).

Being satisfied by the reasoning and conclusion arrived at the following finding the same is upheld by us:-

9.5. Decision and reasons therefor: “I have perused the facts of the case and documents furnished by the appellant. It is seen from the sheet, a print-out of the data retrieved from the laptop of the appellant, that it contains the financial transactions spread over in two financial years, i.e., FYs 2005-06 & 2006-07 and also states the Account holder’s name in the last column as ‘S’ and ‘M’ against each row. It was explained that ‘M’ stood for Mukesh Joshi, the appellant, ‘S’ stood for Sachin Upadhaya, his associate; and that the respective payments by cheque or in cash were made by the said account holders. The AO has stated in the assessment order that the cheque payments had been verified as made from the appellant’s bank account and accordingly he logically concluded that even the cash payments recorded on that seized sheet must have been made by the assessee. In my view it is lawful to presume, as was effectively so done by the AO, that whoever made the cheque payments must have made the payments in cash also, unless it is rebutted otherwise with some direct evidence. However, on verification of all bank accounts of the appellant for the relevant previous year, no payment was found to have been made from the same. But the photocopy of the bank statement of SB A/c No. 016401521868 with ICICI Bank, Dehradun of Mr. Sachin Upadhaya, provided by the appellant, revealed that the impugned cheque payments made to the said parties, except Elizabeth, were duly recorded therein. In I.T.A .No.-3150 to 3152/Del/2011 respect of the payment made to Elizabeth on 09-03-06, it was explained by the appellant that the same may have been made by Mr. Sachin Upadhaya from some other bank account of his which was not readily available with the appellant, but it can certainly be verified that the said payment had not been made by the appellant from any of his bank accounts in the FY 2005-06 as alleged by the AO.' Moreover, it was also pleaded that Mr. Sachin Upadhaya was also covered in the same search and the said facts could well have been ascertained from his bank accounts by the AO, who happened to be the same officer.

On verification of the above facts it is seen that undisputedly three out of the four impugned cheques recorded in the data sheet in the row against Account Holder’s Name of ‘S’ had indeed been paid by Mr. Sachin Upadhaya and none of the impugned cheques payments had been made from the bank accounts of the appellant. Thus, it can be safely concluded that even the cash payments recorded against his name were made by Mr. Sachin Upadhaya only and not the appellant.

Further, it was seen from the impugned financial data sheet that all payments recorded against the entries marked ‘M’ under the column Account holder’s name pertained to the succeeding FY 2006-07 and not the previous year under consideration at all.

Thus, there is no merit in the said averment of the assessing authority who simply presumed the entire cash payment as made by the appellant without even confronting Mr. Sachin Upadhaya in this regard or even without bringing on record the outcome of such confrontation, if any made. Furthermore, the question of on-money paid in cash involved here cannot be evidenced from the registered sale deeds in any manner as asserted by the AO in his remand report. In my opinion the corroborative evidence in respect of “M” (standing for Mukesh) and “S” (standing for Sachin) demonstrated by the appellant through their respective bank statements vis-a-vis each payment found recorded for the FYs 205-06 and 2006-07 in the impugned seized sheet leaves no further doubt about the correctness of the said explanation. It is trite that the conduct or behaviour of the parties involved should not be ignored in reaching justice. In this case, there are ample evidences by way of seized record and the bank statements to demonstrate that the said persons, namely, Mr. Sachin Upadhaya and the appellant were undoubtedly operating with the common interest but independently for procuring lands in and around Dehradun for M/s Prateek Resorts & Builders (P) Ltd., a group company of ATS. Therefore, it was but logical for them to make a common sheet to account for the moneys incurred for land' acquisition on behalf of M/s Prateek to that company.

Accordingly, it is held that none of the impugned cash payments had been made by the appellant and the question of explaining its source by the appellant could not arise and the addition of Rs. 40,93,200/- so made is deleted.

However, as it has been reported by the AO that the books of account of the ATS group companies including that of M/s Prateek Resorts & Builders (P) Ltd. have been referred to the special audit u/s 142(2A) of the Act for the entire search period and the assessments u/s 153 A of that group are yet to be completed by him. Therefore, in order to protect the interest of revenue the AO is directed to examine the source of the I.T.A .No.-3150 to 3152/Del/2011 said sum of Rs. 40,93,200/- paid in cash by that group for the purpose of purchasing land in Dehradun during the assessment proceedings of the concerned ATS group companies and if not found satisfactory, the said sum should be added as undisclosed income of the relevant ATS group company.

20.1. Considering the credit entry of Rs.1 Lac on 21.04.2006 with the nomenclature of “advance taken for land TBV”” in S.B. A/c No.DD016401521848 in ICICI Bank; and two credit entries of Rs.25,000/- and Rs.35,000/- and also loans claimed to have been taken from Sh. Sachin Upadhaya on different dates totaling Rs.2.20 crores and noting that after payment of Rs.17 Lacs to him on various dates the unsecured loans outstanding net balance of Rs.2.03 crores existed on 31.03.2007 in the name of Sh. Sachin Upadhaya. The assessee accordingly was required to be explain Page 41

I.T.A .No.-3150 to 3152/Del/2011 and also file confirmations from the parties. In the absence of any confirmation from Smt. Kaushlya Sehgal and Sh. Sachin Upadhaya, the amount of Rs.2,21,600/- was added in the hands of the assessee.

20.2. The AO also required the assessee to explain the investment of Rs.3,32,000/- consisting of Rs.1 Lac invested on 10.10.2006, another Rs.1 Lac on 17.02.2007; Rs.32,000/- on 25.10.2006 and Rs.1 Lac on 10.10.2006 in the shares of GMS Builders, SMP Developers, SM Hospitality and TG Buildtech.

Rejecting the explanation offered addition of the said amount was made.

20.3. Also considering the following details of the land transactions as per details from the seized laptops, the following evidence was confronted to the assessee:-

S.No. Date Cheque amount Cash amount Name of person 1. 17/05/06 4,50,000 7,48,000 Ishak Lal 2. 17/05/06 5,25,000 6,35,780 Radhye Shyam/Kapil 3. 17/05/06 5,00,000 3,75,400 Meenakshi Bharadwaj 4. 5/6/2006 15,00,000 40,61,900 Devendar Kuamr 5. 11/8/2006 19,22,000 98,03,000 Sushila Devi, Naresh, Yadavchand, Devendar & others 6. 18/08/06 6,20,000 15,88,000 Anwar Ali 7. 18/07/06 10,00,000 18,00,000 Anand Swaroop 8. 19/07/06 10,00,000 30,00,000 Sanjay Mohan Uniyal Total 2,20,12,080 20.3.1. The explanation of the assessee was rejected and an addition of Rs. 2,20,12,080/- was also made.

1. “That the order of CIT(A) is erroneous in law and on facts as he has accepted the additional evidences submitted by the appellant I.T.A .No.-3150 to 3152/Del/2011 in contravention to rule 46-A of the I.T.Rules without giving proper opportunity to the A.O. to rebut the appellant’s claim.

2. That the CIT(A erred in law in deleting the addition of Rs.32,49,000/- and Rs.1,60,000/- on account of unexplained cash deposited in bank without appropriating the fact and without any basis ignoring the facts brought on records by the A.O. and by substituting his own satisfaction in place of AO’s satisfaction.

3. That the CIT(A) erred in deleting the addition of Rs.2,20,00,000/- on account of unexplained cash credit without appreciating the fact and without any basis ignoring the facts brought on records by the A.O as the assessee was not able to discharge its onus as provided in Section 68 of the I.T.Act to the satisfaction of the A.O.

4. That the CIT(A) erred in deleting the addition of Rs.3,32,000/- on account of purchase of shares on wrong appreciating of facts and law without appreciating the fact that the investment in shares were from outside the books of account and onus as provided in section 69 of the I.T.Act was not discharged by the assessee to the satisfaction of the A.O as required under the law.

5. That the CIT(A) erred in deleting the addition of Rs.2,20,12,080/- on account of cash payment for land transactions without appreciating the fact this addition was made on the basis of seized document at Annexure A-1 and the assessee was not able to substantiate the genuineness of these cash payments. The Annexure A-1 during the course of search could not have been ignored as it constituted an evidence as provided u/s 132 of the I.T.Act.

6. That the order of the CIT(A) being erroneous in law and on facts needs to be vacated and the order of the A.O. be restored.

7. That the appellant craves leave to add or amend any one or more of the ground of the appeal as stated above as and when need for doing so may arise. ”

22. It was a common stand of the parties before the Bench that the facts & circumstances qua Ground No.1 continue to remain the same as in ITA No.3150/Del/2011. Accordingly it has been argued that nothing further is required to be addressed. The submissions of the parties are found to be correct. Following the view taken in and taking into consideration the identical finding arrived at by the CIT(A) in para 4 of the impugned order in the present proceedings the department’s Ground No.1 is dismissed.

23. Addressing Ground No.-2 it was submitted by the Ld.CIT DR that the cash flow statement was never filed by the assessee before the AO. Inviting

I.T.A .No.-3150 to 3152/Del/2011 attention to the impugned order it was submitted that no out-flow of cash has been filed by the assessee and since the source is from outside books of accounts, the arguments advanced before the CIT(A) that these were advances from the builders it was submitted should not have been accepted. Accordingly heavy reliance was placed upon the assessment order and a prayer was made that the matter be remanded. These arguments it was submitted would also address the addition of Rs.1,60,000/- and have been addressed at page 2 and 3 of the Assessment order. Herein also it was submitted confirmed copies from the parties were never filed by the assessee despite an opportunity.

“During the year, assessee has decalred income from capital gain on sale of shares of M/s Prateek Resorts & Builders P.LTd. and income from other sources consisting of interest on FDRs and saving accounts.” 24.1. Inviting attention to the detailed written submissions advanced before the CIT(A) which were confronted to the AO and are recorded at pages 6 -12 of the impugned order it was submitted that the cash flow for the year under consideration was filed before the AO and it consists of summary of all cash and bank account transactions together and was placed before the AO during the assessment proceedings. All receipts and payments for the year under consideration it was submitted were reflected therein. It was submitted whenever cash or cheque was received or issued, it was reflected in the flow of I.T.A .No.-3150 to 3152/Del/2011 the said statement explaining its source. Pointing to the same it was submitted whenever a payment was made it was reflected in the out flow. However, since due to the inflow or out flow of funds from the bank deposits to the cash book and a withdrawal or deposit from the cash book to the bank did not ultimately impact the overall availability of funds there was no impact in the summary filed. It was elaborated that as the cash balance stood reduced by the corresponding increase reflected in the bank balance and vice versa the overall position remained the same. Thus the assertions of the Ld. CIT DR that no cash flow statement was filed before the AO, it was submitted is incorrect. This explanation it was submitted has been given before the CIT(A) confronted to the AO and foms part of the finding and without pointing out any incorrectness in the same merely relying upon assessment order it was submitted cannot lead to the conclusion that a remand is necessitated. It was submitted it is the very same cash flow statement filed before the AO which was further amplified relying upon the seized evidence considered by the AO. The fresh evidence confronted to the AO referring to the impugned order it was submitted was as under:-

Copies of the following working papers prepared for making the cash flow statement :- a) A copy of the Cash & Bank Flow Statement (Expanded) for the year ended on 31/3/07 reflecting the contra entries in respect of cash deposits and therein. b) Copies of the summaries for the year in respect of all cash and bank Account(s) transactions. c) Copies of the Cash (General), Cash (Land Imprest) and Bank Accounts for the year showing date wise transactions. d) Photocopies of the passbooks I statements of all bank accounts operated by the appellant during the year are enclosed.

24.2. It was submitted that the assessee addressed the entire history of the manner in which he has been functioning, setting out the role of facilitator for consolidating land holdings performed by him for ATS Group prior to that RPS

I.T.A .No.-3150 to 3152/Del/2011 Group of Faridabad, etc. Mr. Sachin Upadhaya was also similarly acting as a facilitator in his own capacity. The understanding reached with M/s Prateek Resorts & Builders Pvt. Ltd. etc. where the initial land acquisition for RPS Group of 155 bighas was considered insufficient by ATS a bigger builder. It was submitted that the assessee has explained how RPS nominated its own persons as Directors on the Board to watch out for its interest of the said company and subsequently removed the existing Directors from the Board so as to maintain 100% control over the Board. The assessee and Mr. Sachin Upadhaya it was submitted merely acted as facilitators/mediators. Despite the facts that the shares continued to remain in their names. The explanation that how, the ownership, management and control of RPS Group was taken over by Prateek Group by purchasing its shares held by the assessee and Mr. Sachin Upadhaya and it was this event which lead the assessee to come in contact with the ATS Group. Referring to page 8 of the impugned order it was submitted that on behalf of the assessee it was submitted that the ATS Group of Builders and Colonizers being a large group wanted a bigger chunk of land having an area of around 250 bighas for achieving the financial viability of their housing project in Dehradun. The services of the assessee and Mr. Sachin Upadhaya accordingly were requisitioned by ATS in order to facilitate land consolidation. To ensure the compliance and control of the assessee and Mr.Sachin Upadhaya that they should not back out from the commitment, ATS made them the Directors of Prateek and also nominated two more Directors to its Board and removed all the other existing Directors of RPS in the process of acquisition of that company. As a result of this it was submitted that the assessee had stated before the CIT(A) that effective control for all practical practices in regard to the management of the company was with the two Directors of the ATS and the assessee and his

I.T.A .No.-3150 to 3152/Del/2011 associates Mr. Sachin Upadhaya were dormant Directors on the Board and merely lent their names. It was submitted that they were made to sell their shares of Prateek Group to ATS in a phased manner spread over a period of time, although the total price of all those shares was pre-fixed in February 2006 itself based on the valuation of land prevailing at that point of time. The following chart placed at pages 9 of the impugned order it was submitted reflects the position:-

Number of Shares Date of Mukesh Sachin Total (Number & Percentage-) Transfer Joshi Upadhaya 21/08/06 2,000 2,000 4,000 20/10/06 500 1,000 1,500 15% 14/11/07 1,000 1,000 2,000 20% 08/12/08 1.500 1.000 2.500 25% Total: 5.000 5.000 10.000 100% 24.3. During this period it was submitted the assessee and Mr. Sachin Updhaya were advanced amounts by cheques in their individual names as well as in cash by the ATS Group of companies to buy the adjacent pieces of land totaling to around 100 bighas which was ultimately acquired for the said company and by this time the final lot of shares also were transferred by ATS in its favour at the pre-agreed price. The assessee and Mr. Sachin Upadhaya it was submitted were allowed to resign from the directorship of the said company in December, 2008 after they had fully rendered their committed services to ATS. Date-wise details of these receipts it was submitted have been extracted at pages 9 to 11 of the impugned order. For ready-reference, we reproduce the relevant extract hereunder:-

Under this background, it is submitted that the appellant and his associate were just acting as the facilitators I mediators in the said RPS- ATS colonization deal and their names had been used by the said two groups as the shareholders I directors with a view to arrest the artificial rise in the land prices under purchase by them as explained above and also to bind them to get the consolidation of the additional adjoining Page 47

I.T.A .No.-3150 to 3152/Del/2011 pieces of land for them. The requisite finances were given both by cheques and in cash to them from time to time by the said two builder groups, but by A TS alone during the relevant previous year since RPS had withdrawn in the preceding year itself. Besides the advances received from ATS group in the immediately preceding year, during the year under consideration, the appellant further received a total sum of Rs. 627.50 lacs from ATS group companies as Imprest for the purpose of buying further 100 Bighas of land for them; being Rs. 48 lacs in cash and Rs. 87.50 lacs by cheques received from M/s ATS Infrastructure Ltd. and Rs. 492 lacs by cheques received from M/s Prateek Resorts & Builders Pvt. Ltd. Date-wise details of the same with explanations are given a under: a. Receipts from ATS Infrastructure Ltd, in Cash Date Amount Explanation 18/07/06 15,51,000 Cash reed from ATS for paying Anand Swaroop 14/11/06 2,50,000 Cash-Direct deposit in Axis Bank #12272 by ATS 17/11/06 5,00,000 Cash-Direct deposit in Axis Bank #12272 by ATS 21/11/06 1,99,500 Cash-Direct deposit in Axis Bank #12272 by ATS 01/12/06 7,99,500 Cash-Direct deposit in Axis Bank #12272 by ATS 05/12/06 9,90,000 Cash-Direct deposit in Axis Bank #12272 by ATS 12/12/06 5.10,000 Cash-Direct deposit in Axis Bank #12272 by ATS 48.00.000 Total receipt towards Land Purchase Imprest b. Receipts from ATS Infrastructure Ltd, by Cheques Date Amount (Rs) Explanation 19/05/06 2,00,00,000 Cheque deposited in ICICI Bank # 21848 21/08/06 (-) 1,10,00,000 Adjusted against sale of Prateek's shares 19/10/06 (-) 27,50,000 Adjusted against sale of Prateek's shares 26/10/06 25.00.000 Cheque deposited in ICICI Bank #21848 87,50.000 Net receipt towards Land Purchase Imprest c. Receipts from Prateek Resorts & Builders Pvt. Ltd, by Cheques Date Amount (Rs) Explanation 31/08/06 1,00,00,000 Cheque deposited in 1CICI Bank # 21848 23/10/06 15,00,000 Cheque deposited in Axis Bank # 12272 02/11/06 2,00,000 Cheque deposited in HSBC Bank # 51006 17/11/06 2,00,00,000 Cheque deposited in Axis Bank # 12272 02/12/06 1,00,00,000 Cheque deposited in ICICI Bank #21848 12/02/07 75.00,000 Cheque deposited in Axis Bank # 12272 4.92.00.000 Total receipt towards Land Purchase Imprest 24.4. Relying upon the details before the CIT(A) supported by relevant documents in Paper Book in each of these years filed, it was his submission that in the face of the detailed submissions on facts available on record the Revenue without pointing out any error in facts or assailing its correctness is only trying to rake up an issue which has already been decided. Relying upon CIT vs

I.T.A .No.-3150 to 3152/Del/2011 Kamla Ben Tax Appeal 70 of 2014 order dated 17.02.2014 of the Hon’ble Gujarat High Court, it was his submission that there is no breach of Rule 46A when the interest of Revenue was safeguarded by calling for a Remand Report and the evidences have been confronted to the AO to comment upon such additional evidence. In the facts of the present case it was his submission that the glaring fact available from the record is that more than adequate opportunity have been granted to the AO, the Remand Reports have been considered and is reproduced on the issues in each of the years. Copies of the Remand Reports for each of the years have been filed in the Court by the assessee. The detailed Paper Book addressing the issues considered by the CIT(A) which were not only confronted to the AO but have also been verified independently by the CIT(A) as the AO for a long time dilly-dallied in forwarding a Remand Report. As a result of which independent inquiry was done by the CIT(A) himself calling forth the deponents of the affidavits filed and the witnesses for an examination on oath and verifying the correctness of the documents filed. Thus if the Revenue wants to now argue its case for a Remand an effort atleast to demolish the evidence should be done and merely repeating what the AO has observed it was submitted is not sufficient. It is the duty of the Revenue it was argued to address where the Commissioner has erred which fact has been left unaddressed which now needs to be addressed. This effort it was argued has to be done. In the absence of the same it was submitted the prayer made may be rejected. In support of the impugned order, apart from relying upon the complete submission on facts specific emphasis was placed on the following detailed submissions recorded at page 11 & 12 extracted in the impugned order. For ready-reference these are reproduced hereunder:-

I.T.A .No.-3150 to 3152/Del/2011 “Whereas the above receipt of cheques is squarely verifiable from the copies of the bank statements of the appellant already furnished vide para no. 2.3 herein above, in respect of cash receipts it is submitted that the lands in question were being purchased by ATS group in the name of M/s Prateek Resorts & Builders Pvt. Ltd. through the appellant, therefore, the only presumption can be that all funds were given by the ATS group only whether by cheque or in cash. The appellant merely utilized the said funds for acquiring lands for .the group and made payments for that purpose whether by issuing cheques from his bank accounts or in cash according to the funds available with him in the said bank accounts or in cash. It must be appreciated that when the source and purpose of the said cheques received from the ATS group has not been disputed by the assessing authority for which no other evidence is on record except that the same were recorded in the bank statements of the appellant, it is not understood how any doubt can be cast on the receipt of funds in cash from the same source which undisputedly was utilized for the same purpose of purchase of lands for that group. Thus, the entire funds required for land purchase were given by ATS group by cheques as well as in cash to the appellant. Further, more particularly in respect of the impugned cash deposits aggregating to Rs. 32,49,000/- made in the SB A/c # 12272 with Axis Bank of the appellant, it is submitted that the appellant had paid Rs. 48 lacs in cash to two sellers of land, namely, Mr. Anand Swaroop and Mr. Sanjay Mohan Uniyal, on behalf of ATS in July, 2006 for which Rs. 15.51 lacs were given by ATS in cash on 18/7/06 at Dehradun and the balance sum of Rs. 32.49 lacs was subsequently deposited in cash in the said SB A/c # 12272 of the appellant with Axis Bank, Noida directly by ATS. It must be appreciated that the pieces of land under purchase by ATS through the appellant were situated in Dehradun and A TS was based in Noida. The balance impugned sum of Rs. 32.49 lacs was required to be sent in cash by A TS from Noida to the appellant in Dehradun. In order to avoid the risk involved in physical movement of cash from Noida to Dehradun, A TS got a new bank account of the appellant opened on 23/09/06 with the Axis Bank having its branch at K-21,22, Sector-IS, Noida, since it was in the immediate vicinity of ATS's office at K-19, Sector-18, Noida. In this manner, ATS was able to avoid the risk of physically moving the cash to Dehradun by directly depositing the same in the said bank account of the appellant as and when cash was available with it. Thus, even the circumstantial I corroborative evidence unmistakably establishes that the impugned cash amounts aggregating to Rs. 32,49,0001- were indeed deposited by A TS directly into the SB Ale # 12272 of the appellant with Axis Bank, Noida. Therefore, it is beyond doubt that the source of receipt I deposit of the said cash in Axis Bank was ATS only. Accordingly, the addition so made should be deleted."

24.6. Referring to the following Remand Report available on record and on the issue addressed in para 6.3 it was submitted that it cannot be said that the evidences can be said to have been assailed by the AO by any stretch of I.T.A .No.-3150 to 3152/Del/2011 imagination. The AO it was submitted has not disputed the claim and has merely instead diverted the issue holding that Registered Agreements only can be considered. The para addressing the Remand Report relied upon by the Ld. CIT DR and stated to be non speaking by the Ld.AR is reproduced hereunder:-

6.3. AO's remand report: "The assessee is trying to explain that above receipt of cheques are verifiable from the copies of the bank statements of the assessee and find them tallying. So the entries of cash deposit in bank account are also explained, In respect of cash deposits assessee has explained that the land in question were being purchased by A TS group in the name of Mls Prateek Resorts and Builders (P) Ltd. through him, therefore, the only presumption can that all funds were given by the ATS group only whether by cheque or in cash and he merely utilized the said funds for acquiring lands for the group and made payments for the purpose whether by issuing cheques from his bank accounts or in cash according to the funds availability with him in the said bank account or in cash. The argument of the assessee is not acceptable and it has not been proved in any order of certainty that if the cheques have been received from A TS group then cash have also been received from the A TS. Any transaction of property made in the name of a person for which payments have been made by another person is punishable by law. Unless there is a registered agreement for transaction of land payments for advance received or paid in respect of land are not acceptable as valid evidence. Therefore, explanation given by the assessee may be rejected and addition of Rs. 32,49,0001- made by Assessing officer in this regard should be sustained."

24.7. The re-joinder filed on behalf of the assessee and also extracted in para 6.4 of the order was heavily relied upon. It was submitted the Department accepts the fact that the assessee was facilitating procurement of land for the said company. The fact that payment by cheques have been paid by ATS Group is also an evidence which the Department agrees with. Thus the reluctance to consider that the on money premium for the acquisition of these plots was also provided by the ATS Group it was submitted is surprising. No where has the department built a case that the assessee was himself indulging in land acquisition for his own purposes. The detailed fund rotation chart, it was submitted has established that funds were received from the ATS Group which funds were deposited in the bank accounts of the assessee. The fact that while

I.T.A .No.-3150 to 3152/Del/2011 finalizing the land deals the assessee has withdrawn cash out of those ATS Bank fund or utilized the cheque amount also available with it from the deposits of Sanraj Health Services Pvt. Ltd. also lying with him and shown as outstanding is a fact on record. It was argued that it is immaterial, at the time of action, which finds are being spent as the endeavour for a man on the ground was to seal the deals as fast as possible and at as low a price as possible. The approach of “Heads I win, tails you lose.” of the Revenue in selectively disagreeing was questioned. It was submitted the attitude was questionable as argued it only shows the reluctance of the revenue to face the facts and does not assail the fact in any manner. For ready-reference, the same is reproduced hereunder:-

6.4. AR's rejoinder: "In this regard it is submitted that in respect of the addition of Rs. 40,93,200/-made in the AY 2006-07 (Ground No. 4 in Appeal No. 196/09-10) and of Rs. 2,20,12,080/- made in the AY 2007-08 (Ground No. 4 herein below), the AO has stated in the respective assessment orders that the cheque payments in that case had been verified as made from the appellant's bank account and accordingly he logically concluded that even the cash payments recorded on that seized sheet must have been made by the assessee. Thus, it was effectively presumed by the AO that whoever made the cheque payments must have made the payments in cash also, unless rebutted otherwise with some direct evidence. The benefit of the same analogy cannot be denied to the appellant. Revenue cannot be allowed to toss the coin and call "Heads I win, tails you lose". Undisputedly, the land registries of the plots recorded on the sheet found in the seized laptop were made in the name of M7s Prateek Resorts & Builders (P) Ltd. There is ample evidence to show that the appellant and Mr. Sachin Upadhaya were facilitating procurement of land in Dehradun for that company. It is also undisputed that huge sums were paid through cheques by the ATS group to the appellant and Mr. Sachin Upadhaya for that purpose. Therefore, it is logical to conclude that even the cash for paying on- money premiums for the acquisition of those plots of land must also have been provided by the ATS group only.

Moreover, it is also clear from the fund rotation chart that sufficient funds received from ATS group were lying in the bank account of the appellant at the time of making the cash payments aggregating to Rs. 48 lacs to the land owners. Therefore, it makes no difference whether the appellant would have withdrawn cash out of the ATS funds lying in his bank account to pay the said land owners in cash or chose to utilize the cash of Sanraj lying with him instead. In any case, the application of Rs. 48 lacs in cash was made out of total funds received from ATS only,

I.T.A .No.-3150 to 3152/Del/2011 whether received in cash or through cheques, but the said sum was definitely received back in cash from ATS first as advance Rs. 15.51 lacs and then by way of cash deposits aggregating to Rs. 32.49 lacs subsequently in the Axis Bank account of the assessee in Noida as explained. Thus, the source of cash deposits of Rs. 32.49 lacs stands fully explained and the addition so made must be deleted." 24.8. Accordingly it was submitted that the order deserves to be upheld and Remand may not be directed as it is an attempt to unnecessarily harass the assessee.

We also find that the detailed submissions on facts; the fund rotation chart; expanded cash flow statement, the nature of services admittedly rendered by the assessee to the different players in the field at different point of time are all facts which are admitted facts and have not been assailed. The only objection posed to the seized documents reflecting transactions where on money did pass is that the AO naively notes that it is punishable thus the fact that it has been indulged in was refused to be considerd. The plea that in performance of his role of facilitator the cash payments for finalizing the deals also flowed from the same source from where cheque amounts were transferred in Bank Accounts was made and the occasion to refuse to consider the same does not arise. Even today the Paper Book containing these evidences have not been rebutted by the revenue or commented upon so as to canvass a contrary view thereon. In the face of the speaking order available on record the only argument is repetition of the observations made in the AO. We find that no effort to show any error in the order under challenge has been made. In the absence of any argument

I.T.A .No.-3150 to 3152/Del/2011 justifying a remand of the order, we hold that the remand cannot be directed at the whims and fancies of a party. Finding ourselves in agreement with the conclusive arrived at. We dismiss the departmental ground to the extent it addresses the addition of Rs.32,49,000/- For ready-reference, the same relevant finding which is upheld by us is reproduced hereunder:-

Page 6.5 Decision and reasons therefore : I have perused the facts of the case and documents furnished by the appellant. During the assessment proceedings the appellant had furnished a cash flow statement showing sources of funds and applications thereof for all bank and cash transactions undertaken by him during the relevant previous year. In order to prove his explanation that cash deposit into the bank account or cash withdrawal made from the same did not affect the overall fund position of the appellant since the said cash flow statement was a I combined statement for both cash and bank transactions considered together, the appellant has further supplied the independent summaries of all bank accounts and cash account for the year and also an expanded cash flow statement carrying the cash deposit and withdrawal transactions as well therein. During the appellate proceedings, all transactions recorded therein were verified and tallied with the original cash flow statement submitted in the assessment proceedings as well as bank statements I passbooks of the appellant for the year. No discrepancy of any kind was found therein and the cash deposits were also verified as fund applications in cash resulting into corresponding fund accruals in the bank accounts.

The appellant also produced a fund rotation chart from 01-04- 05 to 31-03:-08 containing all cash and bank transactions undertaken by him on behalf of various builders on account of imprest given by them for procurement of land on their behalf. The same was verified from his bank statements I passbooks and cash account in respect of each transaction recorded therein and it was found that there was sufficient cash balance available on all dates during the said three year period with the appellant whenever any cash payment had been made.

I have held in Ground No. 3 in Appeal No. 196/09-10 in the case of the same assessee for the AY 2006-07 in my order of date that the assessee was left with a cash balance of Rs. 39.41 lacs out of Rs. 1.85 crores received by him from Mls Sanraj Health Services (P) Ltd. since he had advanced a sum of Rs. 40 lacs by cheques from his personal bank accounts to the land owners for and on behalf of that builder company. Thus, this sum of Rs. 39.41 lacs was available with him on 01-04-06, out of which the utilized a sum of Rs. 4.01 lacs for his other personal use. The said cash rotation chart clearly reveals the same. Further, as per the said cash rotation chart, the appellant received a sum of Rs. 15.51 lacs in cash from ATS on 18-07-06, thus, the appellant had a cash in hand of Rs. 50.91 lacs with him as on that date out of which he advanced Rs. 48 lacs to the land owners for and I.T.A .No.-3150 to 3152/Del/2011 on behalf of A TS thereafter. Thus, an excess sum of Rs.32.49 lacs had been spent in cash by the appellant up to 12-12-06 for and on behalf of ATS, which was subsequently reimbursed to him by ATS by directly depositing cash in the Axis Bank savings account of the appellant between 14-11-06 and 12-12-06 as listed by the AO in the assessment order.

Thus, it is observed that even if the impugned cash deposits in bank were not reflected in the combined cash flow statement separately, no adverse cognizance of the same can be taken since otherwise also the source of the said cash deposit made stands duly explained from the cash rotation chart.

In the cash rotation chart, the appellant showed the impugned cash deposits as directly made by ATS into the SB A/c # 12272 with Axis Bank of the appellant on the many dates aggregating to Rs. 32,49,000/- with the explanation that the said moneys were given by A TS for procurement of land at Dehradun for them and that the circumstantial / corroborative evidence unmistakably points at the source of the impugned receipt from ATS only. In this regard, the explanation of the appellant is summarized as under: a. That the appellant and his associate, Mr. Sachin Upadhaya, were engaged by ATS to arrange procurement of around 250 bigha land in Dehradun for their colonization project. A TS had taken over the said project from RPS Associates, which had already procured around 155 bigha land at Dehradun through the efforts of the appellant and Mr. Sachin Upadhaya in the name of a company, M/s Prateek Resorts and Builders Pvt. Ltd. (in short Prateek). RPS wanted to use the appellant and Mr. Sachin Upadhaya as its 'front' persons to procure the land at Dehradun and made them as shareholders in Prateek. A TS took over Prateek and continued with the services of the appellant and Mr. Sachin Upadhaya in the same manner since it wanted another 100 bighas of land to be acquired in the same vicinity. ATS made the appellant and Mr. Sachin Upadhaya directors in Prateek along with its other nominees. Whereas the appellant and Mr. Sachin Upadhaya were directly dealing with the land owners as directors of Prateek, the financial and administrative management & control of that company completely vested in the other - A TS directors. It was also decided by A TS that the remuneration due to the appellant and Mr. Sachin Upadhaya for their land procurement services would be paid by purchasing the shares held by them in Prateek at a pre- determined price based on the valuation of existing land prevailing at that point of time. The said shares were subsequently transferred in parts by the appellant and Mr. Sachin Upadhaya as detailed herein below:

Date Mukesh Sachin Total Number & of Transfer Joshi Upadhaya Percentage 21.08.06 2,000 2,000 4,000 40% 20.10.06 500 1,000 1,500 15% 14.11.07 1,000 1,000 2,000 20% 08.12.08 1,500 1,000 2,500 25% Total 5,000 5,000 10,000 100%

I.T.A .No.-3150 to 3152/Del/2011 b. That for the purpose of procuring the desired land at Dehradun, ATS group companies provided funds by cheques and also in cash to the appellant and Mr. Sachin Upadhaya in their individual names. Finally, in December, 2008, after the desired land had been procured for A TS by the appellant and Mr. Sachin Upadhaya and their shares in Prateek were transferred in its favour by ATS and its nominees, they were allowed to resign from the directorship of Prateek. c. That the appellant and Mr. Sachin Upadhaya were just acting as the facilitators / mediators in the said RPS-ATS colonization deal and their names had been used by the said two groups as the shareholders / directors with a view to arrest the artificial rise in the land prices under purchase by them as it is the usual trade practice followed by large builders and also to bind them to get the consolidation of the additional adjoining plots of land for them. Moreover as per ceiling on agricultural land holding area in every state in one name, it is imperative for any colonisor that plots of agricultural land are held by him in different names within the ceiling of the holding limit in each name till the land use is changed as non agricultural as only thereafter he can hold the entire area of land in his name. The requisite finances were given both by cheques and in cash to them from time to time by the said two builder groups, but by A TS alone during the relevant previous year since RPS had withdrawn in the preceding year itself. d. That besides the advances received from A TS group in the immediately preceding year, the appellant, during the year under consideration, further received a total sum ofRs. 627.50 lacs from ATS group companies as Imprest for the purpose of buying further 100 Bighas of land for them; being Rs. 48 lacs in cash and Rs. 87.50 lacs by cheques received from Mls ATS Infrastructure Ltd. and Rs. 492lacs by cheques received from M/s Prateek Resorts & Builders Pvt. Ltd. Date-wise details of the same were provided, which were verified from the bank account of the appellant and also from the fund rotation chart during the appellate proceedings. These details included the impugned sums totaling to Rs. 32.49 lacs stated to have been deposited in cash in the SB A/c of the appellant with Axis Bank directly by ATS and another sum of Rs. 15.51 lacs also in cash stated to have been received from A TS for paying the same to a land owner, Mr. Anand Swaroop. Thus, total cash receipt from A TS during the relevant previous year came to Rs. 48 lacs. e. That since the plots of land in question were being purchased by A TS group in the name of M/s Prateek Resorts & Builders Pvt. Ltd. through the efforts of the appellant, therefore, the only presumption can be that all funds were given by the A TS group only whether by cheque or in cash. The appellant merely utilized the said funds for acquiring plots of land for the group and made payments for that purpose whether by issuing cheques from his bank accounts or in cash according to the funds available with him in the said bank accounts or in cash. f. That when the source and purpose of the cheques received from the ATS group had not been disputed by the AO for which no direct evidence is available on record except that the same were recorded in the bank statements of the appellant, how can the receipt of funds in cash from the same source be doubted, which were undisputedly, as per the I.T.A .No.-3150 to 3152/Del/2011 seized material, utilized for the same purpose of purchasing plots of land for that group. Thus, it is my considered view that the entire funds required for land purchase were given by A TS group by cheques as well as in cash to the appellant. Further there' is no reason otherwise also to presume that the appellant would have used his own money for acquiring plots of land in his capacity as the agent of A TS, especially when A TS had been providing moneys in advance to the appellant to acquire plots of land for it. g. That more particularly in respect of the impugned cash deposits aggregating to Rs.32,49,0001- made in the SB A/c # 12272 with Axis Bank of the appellant, it was explained by the appellant that he had paid Rs. 48 lacs in cash to two sellers of land, namely, Mr. Anand Swaroop and Mr. Sanjay Mohan Uniyal, on behalf of ATS in July, 2006 for which Rs. 15.51 lacs were given by ATS in cash on 18-07- 06 at Dehradun and the balance sum of Rs. 32.49 lacs was subsequently deposited in cash in the said SB A/c # 12272 of the appellant with Axis Bank, Noida directly by ATS. h. That since the plots of land under purchase by ATS through the appellant were situated in Dehradun and A TS was based in Noida, the said bank account was opened by the appellant at the request and instance of A TS on 23-09-06 with Axis Bank having its branch at K-2I ,22, Sector-I 8, Noida because it was situated in the immediate vicinity of ATS's office at K-I9, Sector-I 8, Noida and also since in this manner A TS would be able to avoid the risk of physically moving the cash to Dehradun by directly depositing the same in the said bank account of the appellant as and when cash was available with it. i. That, therefore, the circumstantial 1 corroborative evidence establishes that the impugned cash amounts aggregating to Rs. 32,49,000/- were indeed deposited by ATS directly into the SB Ale # 12272 of the appellant with Axis Bank, Noida; and therefore, the addition so made should be deleted.

After considering the facts and circumstances of the issue involved, it is my considered view that it was A TS which had undertaken the colonization project through Mls Prateek Resorts & Builders (P) Ltd. The fact that the appellant and Mr. Sachin Upadhaya periodically sold theirs shares in Prateek to ATS and their nominees at a pre- determined price goes on to prove that the appellant and Mr. Sachin Upadhaya were not involved in the construction or development of the colony at Dehradun and make profit from that business, rather their interest was limited to receiving remuneration from land procurement facilitation services rendered by them, which they received from selling shares of Prateek to ATS ultimately. Further, appointment of its own directors on the board of Prateek by A TS further supports the cause of the appellant that they were made directors in Prateek only with the aim of using their names as 'front' persons and also in order to bind them for procuring further adjacent plots of land for their colonization project. Thus, the appellant and Mr. Sachin Upadhaya only rendered procurement services while the land was being procured by A TS through them.

I.T.A .No.-3150 to 3152/Del/2011 In respect of the addition of Rs. 40,93,200/- made in the AY 2006- 07 (Ground No. 4 in Appeal No. 196/09-10) and of Rs. 2,20,12,080/- made in the AY 2007-08(Ground No. 4 herein below), the AO has stated in the respective assessment orders that the cheque payments had been verified as made from the appellant's bank account and accordingly he logically concluded that even the cash payments recorded on that seized sheet must have been made by the assessee. In my view it is lawful to presume as was effectively so done by the AD, that whoever made the cheque payments must have made the payments in cash also, unless it is rebutted otherwise with some direct evidence. the benefit of the same analogy cannot be denied to the appellant. Revenue cannot be allowed to toss the coin and call "Heads I win, tails you lose". Undisputedly, the land registries of the plots recorded on the sheet found in the seized laptop were made in the name of M/s Prateek Resorts & Builders (P) Ltd. There is ample evidence to show that the appellant and Mr. Sachin Upadhaya were facilitating procurement of land In Dehradun for that company. It is also undisputed that huge sums were paid through cheques by the A TS group to the appellant and Mr. Sachin Upadhaya for that purpose.

Therefore, it is logical to conclude that even the cash for paying on-moneypremiums.for the acquisition of those plots of land must also have been provided by the ATS group only.

Moreover, it is also clear from the fund rotation chart that sufficient funds received from ATS group were lying in the bank account of the appellant at the time of making the cash payments aggregating to Rs. 48 lacs to the landowners. Therefore; it is my considered view that it makes no difference whether the appellant would have withdrawn cash out of the A TS funds lying in his bank account to pay the said land owners in cash or chose to utilize the cash of Sanraj lying with him instead. In any case, the application of Rs. 48 lacs in cash was made out of total funds received from ATS only, whether received in cash or through cheques, but the said sum must have been received back from ATS first as advance Rs. 15.51 lacs in cash and then by way of cash deposits aggregating to Rs. 32.49 lacs subsequently in the Axis Bank account of the assessee in Noida.

Thus, it cannot be doubted that the necessary funds both by cheques and in cash required for land procurement must have been provided by A TS only from time to time. Even the test of human probabilities supports the contention-of the appellant that the cash of Rs. 48 lacs had indeed been paid by A TS only to the appellant for procuring plots of land on its behalf because it is unheard of that anyone providing services would invest his own funds for the Builders and not be reimbursed by them. Furthermore, the situation of the impugned bank in the close proximity of A TS's office in Noida is another strong pointer in favour of the appellant that the moneys due to him against cash advanced by him towards land procurement for A TS must have been deposited in cash by ATS only in the said bank account. Thus, even though no direct documentary evidence in this regard could be produced by the appellant, yet there are enough circumstantial/corroborative evidences unmistakably pointing at the source of the impugned receipt in cash from ATS only. Accordingly, the addition of Rs. 32,49,000/- so made is deleted.

I.T.A .No.-3150 to 3152/Del/2011

(emphasis provided) 26. Addressing Ground No.3 it was submitted by the Ld. CIT DR that she would simultaneously address the deletion of the addition of Rs.1.60 lacs agitated in Ground No.2 and the addition of Rs.2.20 crores deleted by the CIT(A) agitated in Ground No.3 by the Revenue. Inviting attention to the same it was submitted various credit entries were found in the bank account of the assessee and despite an opportunity the assessee failed to file confirmed copies from the said parties. The CIT(A) it was submitted considering the submissions recorded in page 22 to 26, ignoring the Remand Report of the AO that the evidence be not accepted has accepted the assessee’s version. Referring to the same it was submitted that the additions have been made on the basis of the deposits in the specific bank accounts and the submissions of the assessee have been considered by the AO while making the addition and the same is self- explanatory. It was her submission that no doubt the Remand Report has been obtained and to the extent of the deposits from Mrs. Kaushalya Sehgal the mother-in-law of the assessee which issue has been given up by the AO himself in 2007-08 assessment year the same may be followed but for the remaining amount which is agitated in Ground No.3 the issue it was submitted may be restored to the AO for reconsideration on merits.

Inviting attention to the specific objection in the Remand Report which is extracted in para 7.3 it was his submission that the same has been addressed by the assessee in para 7.4 and carrying us through these specific paras alongwith the written submissions extracted in the order it was his submission that the departmental request may be dismissed.

I.T.A .No.-3150 to 3152/Del/2011 27.1. It was his submission that “TBV” it has been explained referred to “To Be verified”. It was submitted that at the time of recording the transactions where the process is under way with various people, for various land deals which are proposed or are in the process the event at time is recorded as it was in the process of being finalized. The said recording on the part of the assessee does not lead to any incriminating material or evidence. The event has been verified and explained. Referring to the bank accounts maintained at Dehradun it was submitted that Ms. Elizabeth despite agreeing for a specific price realizing the location of her land was pushing for more payment thus originally P.O.s of the agreed amounts were made from the specific Bank A/c and by way of abundant caution one more P.O of Rs. 1 lac was got ready in order to deal with the eventuality of that lady still insisted in hiking up the price. Since the assessee was able to push for sale at the same originally agreed to price on behalf of Prateek Group the Rs.1 lac P.O was got cancelled. It was submitted that while negotiating and finalizing the deal both sides try to push for maximum and the bluff has to be carried through and at times given up. The debits in the bank accounts comprising of Postal Orders of Rs.3.50 Lacs and Rs. 1 Lac accordingly stood fully explained. Similarly the two amounts of Rs.25,000/- and Rs.35,000/- again found credited in the bank account stood explained as Rs.35,000/- as receipt from his late mother-in-law, Mrs. Kaushlya Sehgal which has been accepted by the AO in the Remand Report itself and Rs.25,000/- as transferred from SB A/c12485 also maintained in the same Branch of the same Bank i.e Canara Bank duly reflected in the cash flow statement as well as the statement of affairs as on 31.03.2007.

27.2. Addressing the remaining portion which is the major portion i.e unsecured loan from Mr. Sachin Upadhaya of Rs.2.20 crores the detailed

I.T.A .No.-3150 to 3152/Del/2011 finding available in the order under challenge which has not been assailed by the Revenue were relied upon. It was submitted that the detailed submissions addressing seized document entry-wise has been addressed and explained and is found to be supported by the bank account statements of both the assessee and Mr. Sachin Upadhaya and the evidence on record considered has not been rebutted by the Revenue. It was submitted that full facts have been explained and after considering the same, the finding has been arrived at. Accordingly, it was heavily relied upon.

7.5. Decision and reasons therefor: i. For sum credited on 21-04-06 in SB A/c # 21848 with ICICI Bank - Rs.l,00,000/-. I have perused the facts of the case and documents furnished by the appellant. The appellant was asked to reveal what 'TBV' stood for. It was explained that at the time of preparing his accounts on computer for the purpose of assessment proceedings, the accountant recorded the impugned credit of Rs. 1 lac as cancellation of Bank PO but in order to verify the name of the person in whose name the said PO was originally got made, he wrote the word TBV in the narration meaning 'To Be Verified' from the assessee. Thus, TBV did not refer to any person or party as misconstrued by the AO and it was argued that no adverse cognizance of the same should be taken. The bank statement of the SB A/c # 21848 of the appellant with ICICI Bank, Dehradun reveals that a PO for Rs. 4.50 lacs was got made on 19-04-06 from that account and further PO # 110778 of Rs. 1 lac was got cancelled on 21-04-06 from the said bank account by the appellant. It was explained by the appellant that two POs bearing nos. 110777 and 11 0778 for Rs. 3.50 lacs and 1 lac respectively were got made vide cheque no. 006302 in favour of Ms. Elizabeth on 19-04-06 towards purchase of her land for ATS group and out of which one PO bearing no. 110778 of Rs. 1 lac was got cancelled subsequently on 21-04-06. It has I.T.A .No.-3150 to 3152/Del/2011 also been verified from the statement of affairs as at 31- 03-07 of the appellant filed during the course of the assessment proceedings that amount of Rs. 3.50 lacs was shown under the head 'loans and advances' as advance given to Ms. Elizabeth for Prateek of A TS group. Moreover, a copy of the sale deed dated 19-04-06 for purchase of land at Dehradun by M/s Prateek Resorts & Builders (P) Ltd. from Ms. Elizabeth was also furnished by the appellant, where it was found that the payment of Rs.3.50 lacs had been categorically stated as made vide PO # 110777 dated 19-04-06 of ICICI Bank, Dehradun. Thus, the fact that the sum of Rs. 4.50 lacs debited on 19-04-06 in the SB ale of the appellant with ICICI Bank comprised of the two POs ofRs. 3.50 lacs and Rs. 1 lac as explained by the appellant gets fully verified. Even the AO in his remand report has accepted the explanation of the appellant in this regard after verification.

Thus, the explanation of the appellant stands verified as correct and the source of credit of Rs. 1 lac also stands fully explained. Accordingly, the addition of Rs. 1 lac so made is deleted. ii. For credit entries in SB Ale # 12485 with Canara Bank - Rs. 60,000/- I have perused the facts of the case and documents furnished by the appellant. The aid sum of Rs. 60,000/- comprised of the following credit entries:

Date of Credit Amount (Rs.) 12/07/06 25,000 24/02/07 35,000 ___________ Total: 60,000 ___________

It was verified from the two bank accounts of the appellant that the sum of Rs. 25,000/- credited on 12-07-06 in the SB A/c # 12485 with Canara Bank was received as transfer from the appellant's other SB A/c # 16456 with Canara Bank vide cheque no. 549276 on the same date. All transactions of the said two bank accounts were found incorporated in the cash flow statement for the relevant previous year as well as the statement of affairs as at 31-03-07 of the appellant furnished by him during the course of the assessment proceedings. Accordingly, the source of deposit of Rs. 25,0001- stands duly explained and the addition so made is deleted. Even the AO in his remand report has accepted the explanation of the appellant in this regard after verification.

In respect of the deposit of Rs. 35,0001- stated to have been received through Late Mrs. Kaushalya Sehgal, the mother-in-law of the appellant, the appellant could not provide the name of the person who gave the said sum or produce any evidence in support thereof. It is not understood how and on what basis has the AD in his remand report got satisfied about the same. Accordingly, the said addition is confirmed.

Thus, in the net result, out of total credits of Rs. 60,0001-, addition for the sum of 25,000/- is deleted, while addition made for the balance sum of Rs. 35,0001- is confirmed.”

I.T.A .No.-3150 to 3152/Del/2011 28.1. Considering the arguments addressing specific Ground No.3, we find that the reasoning arrived at by the CIT(A) in para 7.5 (iii) at pages 28-30 which reiterates the factual background of the assessee having acted as facilitator for consolidating land at different stages for different parties when read alongwith the evidences on record, we find that in the absence of any specific reasoning justifying the request for a remand the request has to be rejected. We note that in each of these years, the assessee had filed detailed Paper Book consisting of all the evidences relied upon by the CIT(A), these have been confronted to the AO and examined by the Ld. CIT(A) and after considering the submissions advanced in writing extracted in the impugned order in order the conclusion has been arrived at. Addressing these issues in the overall factual matrix which stands un-assailed and finding ourselves in agreement with the reasoning and conclusions arrived at the following finding of facts is upheld by us:- iii. For unsecured loan taken from Mr. Sacbin Upadbaya - Rs. 2.20 crore.

I have perused the facts of the case and documents furnished by the appellant. The details of moneys received from Mr. Sachin Upadhaya, who was a business associate of the appellant, revealed that certain sums totaling to Rs. 15 lacs received from him had been deposited into his bank account by the appellant whereas the balance sum of Rs. 2.05 crores had been paid directly to M/s Guru Ram Dass Education Trust (GRD) on behalf of the appellant by Mr. Sachin Upadhaya for purchase of land from it by the appellant.

The above payments totaling to Rs. 2.20 crores made by Mr. Sachin Upadhaya were verified from the copies of the bank accounts of Mr. Sachin Upadhaya furnished by appellant during the course of the appellant proceedings and cross checked with the statement of the appellant for Rs. 15 lacs deposited therein and also from the copy sale deed dated 07-03-07 in respect payment of Rs. 2.05 crores made by Mr. Sachin Upadhaya of the purchase of land by the appellant from GRD which contained the cheque-wise payment details therein.

From the assessment order it is noted that the AO made the addition of Rs. 2.20 crores in the hands of the appellant under the averment that the appellant could not furnish a confirmation of loan from Mr. Sachin Upadhaya along with his bank statement and the relevant income-tax return to prove identity, genuineness and creditworthiness of the said creditor. Whereas, it is seen from the copy of the assessment

I.T.A .No.-3150 to 3152/Del/2011 order dated 23-12- 09 for the AY 2007-08 framed u/s 153C of the said creditor, Mr. Sachin Upadhaya, as provided by the appellant that it has been framed by the same Assessing Officer on the same date, i.e., on 23-12-09 assessing his total income at Rs. 12.27 crores. Thus, the identity and creditworthiness of the said creditor cannot be disputed. Also, it is clear from the assessment orders of the appellant and Mr. Sachin Upadhaya that they were close business associates who were carrying out the land consolidation work for Prateek of A TS group as facilitators together and they had earned considerable amount from sale of Prateek's share to ATS during the relevant previous year. Thus, even the source of advancing Rs. 2.20 crores by Mr. Sachin Upadhaya to and on behalf of the appellant cannot be doubted.

Further, it is noticed that the AO in his remand report has not controverted the payments to the tune of Rs. 2.20 crores made by Mr. Sachin Upadhaya directly to the seller on behalf of the appellant; but has rejected the explanation on the ground that there is no mention of the fact in the conveyance deed that the said payments were made by Mr. Sachin Upadhaya on behalf of the assessee and, therefore, the said transaction is a benami transaction. It is a strange assertion made by the AO. I agree with the appellant that there is no legal requirement that the name of the lender must be compulsorily mentioned on the sale deed, or that the fact that the lender made any direct payments to the seller on behalf of the buyer should be stated in the sale deed. It is well known that in the case of home loans, banks insist upon making the direct payment to the seller, but neither the fact of payment nor the name of the bank as lender are recorded in the sale deed. Moreover, I also find that the appellant had declared the same as loan taken from Mr. Sachin Upadhaya in his personal statement of affairs furnished during the assessment proceedings, thus, question of this being a benami transaction does not arises as alleged by the AD. Thus, the said payments stand duly verified in respect of its source.

Accordingly, the identity, genuineness and creditworthiness of the said creditor for advancing loan of Rs. 2.20 crores to the appellant stand proved, and the addition made u/s 68 of the Act is deleted.

In the net result out of total addition of Rs. 2,21,60,0001- made for the sums found credited in the bank accounts of the appellant, sources of deposits for sums totaling to Rs. 2,21,25,000/- stand adequately explained and the addition so made u/s 68 to that extent is deleted, while the sources of deposit for the balance sum of Rs. 35,0001- remains unexplained and addition to that extent is hereby confirmed.”

I.T.A .No.-3150 to 3152/Del/2011 was not justified. The Remand Report of the AO also it was submitted addresses the fact that since no explanation was offered at the stage of assessment proceedings the explanation now offered should be dismissed as an after thought.

8.2. AR's submissions: “The AR made the following submissions:

"The third ground of appeal is to challenge the action of the assessing authority in making an addition of Rs. 3,32,000/- for purchase of shares of some companies in cash.

It was averred by the assessing authority that from the details of investments made by the assessee, it was noticed shares of some companies had been bought for Rs. 3,32,000/- in cash, but for which there was no cash outflow shown in the cash flow statement. Hence, the same was added as income from undisclosed sources.

In this regard it is submitted that the appellant had furnished a cash flow statement for the relevant previous year containing the summary of all cash and bank transactions, photocopy of which has already been furnished vide para no. 2.3 herein above, where the said investments were clearly shown as outflow in Schedule 'C' of Investments attached thereto. Thus, it is not understood how the same has been averred by the assessing authority and the addition made.

Further, a date-wise chart of inflow and outflow of Land Imprest moneys received by the appellant both in cash and by cheques for 3 years during the period from 01/04/05 to 31/03/08 from Sanraj and ATS is enclosed for your kind perusal. The said availability of cash balance has been explained at length in respect of Ground No. 3 taken for the AY 2006-07, which also may kindly be referred to. Further, it is categorically stated that the said chart has been prepared on the basis of seized material, bank statements and corroborative evidences only. A perusal of the said chart shows that a sum of Rs. 4,01,000/- had been withdrawn for Page 65

I.T.A .No.-3150 to 3152/Del/2011 personal utilization out of the opening cash balance of Rs. 40 lacs approx. as on 1/4/06. The above investments in shares were made from the said sum of Rs. 4,01,000/- subsequently by the appellant as under: Date Amount (Rs.) Company's Name 10/10/06 1,00,000 GMS Builders 10/10/06 1,00,000 TG Buildtech 25/10/06 32,000 SM Hospitality 17/02/07 1,00,000 SMP Developers 3,32,000 Total

Hence, the appellant had sufficient funds available in cash for making the said investments and the addition so made should be deleted.”

30.1. Inviting attention to the re-joinder of the Remand Report it was submitted that the AO’s version was assailed and it had been submitted that the explanation was offered at the assessment stage and the statement of affairs filed before the AO duly explained and in the Remand proceedings also these were again got verified by the AO. It was submitted that for some reason known to the AO himself he now does not want to now refer to them. Reliance was placed upon the impugned order .

8.4. AR's rejoinder: "It is an incorrect assertion of the AO that no explanation was given in the assessment proceedings. The said investments were duly declared in the statement of affairs and explained to the AO from the fund flow statement. Moreover, the sources of the same were again got verified from the AO during the remand proceedings with the extended cash flow statement. Thus, the said addition must be deleted."

I.T.A .No.-3150 to 3152/Del/2011 31.1. The extended cash flow statement has been explained as amplification of details already available on record by way of seized documents. In the absence of any rebuttal on facts and finding ourselves in agreement with the conclusion and the reasoning, the following finding in para 8.5 of CIT(A) is upheld. The same is reproduced hereunder for ready-reference:-

8.5. Decision and reasons therefor: “I have perused the facts of the case and documents furnished by the appellant. During the assessment proceedings the appellant had furnished a cash flow statement showing sources of funds and applications thereof for all bank and cash transactions undertaken by him during the relevant previous year. In order to prove his explanation that cash deposit into the bank account or cash withdrawal made from the same did not affect the overall fund position of the appellant since the said cash flow statement was a combined statement for both cash and bank transactions considered together, the appellant has further supplied the independent summaries of all bank accounts and cash account for the year and also an expanded cash flow statement carrying the cash deposit and withdrawal transactions as well therein. During the appellate proceedings, all transactions recorded therein were verified and tallied with the original cash flow statement submitted in the assessment proceedings as well as bank statements / passbooks of the appellant for the year. No discrepancy of any kind was found therein and the cash deposits were also verified as fund applications in cash resulting into corresponding fund accruals in the bank accounts.

The appellant also produced a fund rotation chart from 01-04-05 to 31- 03-08 containing all cash and bank transactions undertaken by him on behalf of various builders on account of imprest given by them for procurement of land on their behalf. The same was verified from his bank statements / passbooks and cash account in respect of each transaction recorded therein and it was found that there was sufficient cash balance available on all dates during the said three year period with the appellant whenever any cash payment had been made. A perusal of the same further revealed that the appellant had cash availability of Rs. 39.41 lacs as on 31-03-06 out of the cash of Rs. 1.85 crores received from M/s Sanraj Health Services (P) Ltd., out of which a sum of Rs. 4.01 lacs was withdrawn in cash on 01-04-06 for self utilization from which the said investments totaling to Rs. 3.32 lacs during the FY 2006-07. Moreover, the statement of affairs as on 31-03-07 of the appellant also showed the said investments in shares of the companies totaling to Rs. 3.32 lacs. Accordingly, the source of investment in shares of Rs. 3.32 lacs stands fully explained and the addition so made u/s 69 of the Act is deleted.”

I.T.A .No.-3150 to 3152/Del/2011 Relying upon the assessment order it was her submission that since these pertained to transactions not found recorded in the books of accounts, the addition on facts was justified. The explanation offered before the CIT(A) it was submitted has correctly been treated by the AO as an after thought. It was her argument that the facts and the submissions may need to be verified and the issue may be restored back.

Accordingly the explanation of the assessee, addressing the seized documents, recordings in the bank statements and other supporting evidences available on record cannot all be ignored by the Revenue and merely explained away as an after thought. The infirmity if any in the evidences has to be argued and demonstrated. In the facts where admittedly the AO has been given more than adequate time and even today these evidences are available in the Paper Book filed the reluctance of the Revenue to point out any infirmity and merely argue

I.T.A .No.-3150 to 3152/Del/2011 that more time is required was strongly opposed by him. It was submitted that if a Remand is directed it would amount to making a farce of justice. The Re- joinder of the assessee available in para 9.4 and the submissions advanced which have been extracted in para 9.2 were heavily relied upon in support of the finding arrived at in para 9.5. For ready-reference, para 9.2 to 9.4 are reproduced hereunder:-

9.2. AR's submissions: The AR made the following submissions: "The next ground of appeal is to challenge the action of the assessing authority in making an addition of Rs. 2,20,12,080/- for cash payments made on account of land transactions of third parties.

It was averred by the assessing authority that one of the files found in the laptop computer of the assessee seized vide Annexure A-I, contained certain data of financial transactions in respect of purchase / sale of land. It was asserted by the assessing authority that the fact that the said data pertained to the assessee was evident since some of the payments recorded therein had been made by the assessee through cheques to various persons on various dates, which tallied with the bank statements of the assessee. Further, it was averred that certain cash payments made by the assessee were also found recorded therein besides the said cheque payments, but the same were neither found recorded in the cash flow statement submitted by the assessee nor its sources were explained. Accordingly, an addition was made by the assessing authority for cash payments totaling to Rs. 2,20,12,080/- for the relevant previous year recorded therein as expenditure made from undisclosed sources.

In this regard a history in brief of the appellant and the deal with the A TS group (ATS) vis-a-vis the appellant is stated at an outset as under for proper appreciation of facts and the said financial transactions undertaken:

In December, 2004, the appellant along with Mr. Sachin Upadhaya, his close friend and associate, acquired 100% shares of an existing company, Mls Prateek Resorts & Builders Pvt. Ltd. in equal proportion for carrying out real estate activities in Dehradun.

In the meanwhile, around the months of October-November, 2004, RPS group of builders, based in Faridabad, were looking around for cheap land for their proposed housing project in Dehradun and came in contact with the appellant and Mr. Sachin Upadhaya, who were in a position to facilitate acquisition of some land situated in some prime area in Dehradun for them. An understanding was reached with them in December, 2004 and Mls Prateek Resorts & Builders Pvt. Ltd. (Prateek) started buying land thereafter at the behest of Mls RPS Associates (RPS). As explained above, it is a standard practice with builders that they do not come in the fore front in the initial stages of land acquisition since the sellers of land start demanding excessive prices from them. Hence,

I.T.A .No.-3150 to 3152/Del/2011 Prateek's name was used by RPS. Around 155 bighas of land got acquired for RPS ultimately by Prateek for development of a residential colony by RPS. In fact, the entire funding required for the acquisition of land was provided by RPS by way of advancing loan to the said company in December, 2004 itself. But in order to protect its interest, RPS nominated its own persons as directors in the Board of the said company and subsequently removed the existing directors from its Board, thus, wielding 100% control over its Board; while the shares in that company continued to remain in the names of the appellant and Mr. Sachin Upadhaya, who factually were merely acting as the facilitators I mediators for acquiring land for RPS and their remuneration was agreed to be given by RPS as part of purchase consideration for the shares of Prateek held by them, which were to be sold to RPS just before the construction activity was to be commenced on that piece of land.

However, RPS later decided to withdraw from the project in January, 2006 and roped in the ATS group instead to take it over from them. Accordingly, it was decided in February, 2006 that A TS shall takeover the ownership, management and control of Mls Prateek Resorts & Builders Pvt. Ltd. by purchasing its shares held by the appellant and Mr. Sachin Upadhaya. In this manner the appellant and Mr. Sachin Upadhaya came in the contact with the A TS group for the first time. Since ATS was a large group of builders and eo Ionizers, they wanted a bigger chunk of land having an area of around 250 bighas for achieving the financial viability of their housing project in Dehradun, and since the appellant and his associate were in a position to obtain the adjoining pieces of the said land as well, their services were requisitioned for further consolidation of the desired adjoining areas by ATS.

However, in order that the appellant and his associate do not back out from their commitment, A TS made them the directors of Mzs Prateek Resorts & Builders Pvt. Ltd. and also nominated two more directors to its Board subsequently while removing all other existing directors of RPS in the process of acquisition of that company. Whereas the true control and management of the said company fully vested in the two directors of A TS now for all practical purposes and the appellant and his associate were just positioned as dormant directors in the Board. Thus, the appellant and Mr. Sachin Upadhaya had only lent their names and were in no manner controlling the affairs of that company. Not only this, ATS further ensured their continued assistance to the company for acquisition of the adjoining land by making them agree to sell their shares of Mls Prateek Resorts & Builders Pvt. Ltd. to A TS in a phased manner spread over a period of time, though the total price of those shares was pre-fixed in February, 2006 itself based on the valuation of land prevailing at that point of time. The said shares were subsequently transferred in parts by the appellant and Mr. Sachin Upadhaya as detailed herein below:

Number of Shares Date of Mukesh Sachin Total (Number & Percentage) Transfer Joshi Upadhaya 21/08/06 2,000 2,000 4,000 40%

I.T.A .No.-3150 to 3152/Del/2011 20110106 500 1,000 1,500 15% 14/11/07 1,000 1,000 2,000 20% 08/12/08 1,500 1,000 2,500 25% _______ ________ ________ ________ Total: 5,000 5,000 10,000 100% _______ ________ ________ ________ During this period, adjacent pieces of land totaling to around 100 Bighas were further acquired for the said company through the efforts of the appellant and Mr. Sachin Upadhaya and the final lot of shares was got transferred by ATS in its favour. Also, the appellant and Mr. Sachin Upadhaya were allowed to resign from the directorship of the said company in December, 2008 after they had fully rendered their committed services to ATS. Under this background, it is submitted that the said data contained the payments made to purchase land on behalf of Mls Prateek Resorts & Builders Pvt. Ltd. by the appellant and his associate, Mr. Sachin Upadhaya. However, the assessing authority picked and chose the contents of the said data to suit his own convenience in order to make the said addition. The cash payments recorded for the FY 2006-07 out the said data, for which the addition was made, have been mentioned in the assessment order as under by the assessing authority, except for the last column, which was deliberately ignored by him, but has been reproduced from the said seized document: S. Chque Cash A/c No. Date Amount Amount Name of Person Holder 1. 17/05/06 4,50,000 7,48,000 Ishak Lal S 2. 17/05/06 5,25,000 6,35,780 Radhey Shyam /Kapil S 3. 17/05/06 4,00,000 3,75,400 Meenakashi Bhardwaj S 4. 05/06/06 15,00,000 40,61,900 Devender Kumar S 5. 11/08/06 19,22,000 98,03,000 Sushila Devi, Naresh, S Yadavchand, Devendar & Others 6. 18/08/06 6,20,000 15,88,000 Anwar Ali S 7. 18/07/06 10,00,000 18,00,000 Anand Swaroop M 8. 19/07/06 10,00.000 30,00,000 Sanjay Mohan Uniyal M _________ Total 2,20,12,080 __________ A photocopy of the print-out of the said data supplied by the assessing authority is enclosed. This data contains the financial transactions spread over in two financial years, i.e., FYs 2005-06 & 2006-07 and also states the Account holder's name in the last column as 'S' and 'M' against each row. This clearly shows that the respective payments by cheque or in cash were made by the said account holders. It is not very difficult to decipher what 'S' and 'M' stand for. Whereas 'M' stood for Mukesh Joshi, the appellant, 'S' stood for Sachin Upadhaya, his associate, who made the stated payments by cheques or in cash as recorded against their respective names. But the assessing authority simply chose to ignore this vital piece of information recorded therein and simply attributed all payments as made by the appellant.

The fact that the corresponding payments had indeed been made by the appellant and Mr. Sachin Upadhaya can be easily ascertained from their respective bank accounts. A photocopy of the bank statement of SB A/c No. 016401521868 with ICICI Bank, Dehradun of Mr. Sachin Upadhaya available with the appellant is enclosed, wherein all of the above said cheque payments made to the said parties at serial numbers 1 to 6 are duly recorded. Moreover, it can be verified that the said payments had I.T.A .No.-3150 to 3152/Del/2011 not been made by the appellant from any of his bank accounts. Photocopies of the passbooks I statements of all bank accounts for the year of the appellant have already been furnished vide para no. 2.3 herein above. Thus, undisputedly the impugned cheques were paid by Mr. Sachin Upadhaya and even the cash payments recorded against his name were made by him only and not the appellant.

It is not understood how the assessing authority has averred that the cheque payments had been verified as made from the appellant's bank account, when not a single cheque payment noted by him at serial numbers 1 to 6 above was made from the bank accounts of the appellant and especially when all payments on the stated dates in respect of the said parties had factually been made by Mr. Sachin Upadhaya from his own bank account. Thus, there is no merit in the said averment of the assessing authority who, for the reasons best known to him, simply presumed that the entire cash payment was made by the appellant without even confronting Mr. Sachin Upadhay in this regard or even without bringing on record the outcome of such confrontation, if any made.

In respect of the payments made to the parties at serial numbers 7 & 8 above, against which 'M', i.e the name of the appellant is recorded, it is submitted that the same had indeed been made by the appellant. The stated cheques to the said parties were issued from the SB A/c # 21848 with ICICI Bank, Dehradun of the appellant and so were the stated sums of Rs. 18 lacs on 18/07/06 and Rs. 30 lacs on 19107/06 paid in cash to Anand Swaroop and Sanjay Mohan Uniyal respectively by the appellant.

A sum of Rs. 15.51 lac was given by ATS in cash on 1817/06 at Dehradun for the purpose of paying the said sum of Rs. 48 lacs in cash to the said land sellers and the balance sum of Rs. 32.49 lacs was paid by the appellant out of the balance of nearly Rs. 40 lacs left in cash from land purchase imprest received from Sanraj Health Services (P) Ltd. last year. In fact, the balance sum of Rs. 32.49 lacs was later deposited in cash by A TS in the Axis Bank account of the appellant, hence, squaring up its cash imprest account with the appellant.

A date-wise chart of inflow and outflow of Land Imprest moneys received by the appellant both in cash and by cheques for 3 years during the period from 01/04/05 to 31103/08 from Sanraj and A TS has already been furnished vide para no. 4.3 herein above for your kind perusal and appreciation of the facts stated above.

A perusal of the same reveals that the appellant had land imprest cash balance of Rs. 35,40,5001- on 1817/06 and another sum of Rs. 15,51,0001- was further received on 1817/06 in cash from A TS, from which the cash payment of Rs. 18 lacs on 1817/06 to Mr. Anand Swaroop and Rs. 30 lacs on 1917/06 to Mr. Sanjay Mohan Uniyal were made by the appellant.

The assessing authority has asserted that the said financial data pertained to the appellant since some transactions mentioned therein as payments made by the appellant through cheques to various persons on various dates tallied with the bank statements. Accordingly, it was understood by the assessing authority that the cash payments

I.T.A .No.-3150 to 3152/Del/2011 mentioned therein had also been made by the appellant. In this regard it is submitted that indeed the said presumption of the assessing authority that 'whoever paid by cheques must have paid in cash as well' appears to be justified. But its application or its corollaries in favour of the appellant should not have been ignored by the assessing authority. If the said logic is to be applied then there should be no hesitation in admitting the plea of the appellant that cases where cheque payments had been made by Mr. Sachin Upadhaya, even the cash payments must have been made by him alone. Also, applying the same logic, when undisputedly A TS had provided funds by cheques to the appellant for purchase of lands, then even cash required for the said purpose must have been given to the appellant by A TS alone. Thus, the said receipt of Rs. 15.51 lacs in cash on 18/7/06 and deposit of the balance sum of Rs. 32.49 lac (as per Ground No. 1 above) in cash by A TS subsequently must be accepted on the basis of this circumstantial I corroborative evidence.

Thus, to sum up, it is stated that only a sum of Rs. 48 lacs had been paid in cash by the appellant to the parties listed in the said seized documents from laptop and not the sum of Rs. 2,20,12.0801- as alleged by the assessing authority. Whereas all other remaining payments in cash or by cheque were made by Mr. Sachin Upadhaya as explained above. Moreover, there was sufficient cash balance available with the appellant as explained for making payments of Rs. 48 lacs to the above said two parties, thus, even the source for paying the same stand fully explained. Therefore, the addition of Rs. 2,20,12,080/- should be deleted”.

I.T.A .No.-3150 to 3152/Del/2011 34.1. Accordingly on a consideration of the entirety of the facts and circumstances of the case and considering the evidence on record we find ourselves in agreement with the following detailed finding on facts by the CIT(A).

Thus in the absence of any infirmity pointed out by the Revenue the same is upheld:-

9.5 Decision and reasons therefor :

I have perused the facts of the case and documents furnished by the appellant. It is seen from the data in the print-out of the data retrieved from the laptop of the appellant that it contains the financial transactions spread over in two financial years, i.e., FY s 2005-06 & 2006-07 and also states the Account holder's name in the last column as'S' and 'M' against each row. It was explained that 'M' stood for Mukesh Joshi, the appellant, 'S' stood for Sachin Upadhaya, his associate; and that the respective payments by cheque or in cash were made by the said account holders. The AO has stated in the assessment order that the cheque payments had been verified as made from the appellant's bank account. On verification of the bank accounts of the appellant for the relevant previous year, it was seen that the impugned cheque payments listed at sI. nos. 7 & 8 in the assessment order had been made from the bank account of the appellant; and the photocopy of the bank statement of SB A/c No.016401521868 with ICICI Bank, Dehradun of Mr. Sachin Upadhaya, provided by the appellant, further revealed that the cheque payments listed at sI. nos. 1 to 6 in the assessment order had been made by Mr. Sachin Upadhaya from his bank account.

Further on verification of the above facts from the impugned data sheet it is seen that in the last column under the head "Account holder" S' had been distinctly typed against payments listed at sl. Nos. 7 & & 8 by the AO in his assessment order. Thus, the contention of the appellant that he was accountable only for the payments listed against his own name in the impugned data sheet since only those payments had been made by him has a lot of force because the same gets squarely verified from the bank accounts of the appellant and Mr. Sachin Upadhaya. Furthermore, I also find force in the argument of the appellant that Mr. Sachin Upadhaya was also covered in the same search and the said facts could well have been ascertained from his bank accounts by the AO, who happened to be the same officer as in the case of the appellant; and whose assessments were also completed u/s 153A of the Act for the same search period on the same date; but nothing in this regard was stated in the relevant assessment order of the appellant by the AO. In view of the above verification of record, there remains no doubt in my mind that only the last two impugned payments out of the eight listed by the AO in the assessment order had been made from the bank accounts of the appellant in respect of the cheque amounts and, thus, it can be safely concluded that even the cash payments recorded against his name were made by the appellant, whereas the first six listed

I.T.A .No.-3150 to 3152/Del/2011 payments by cheques as well as in cash had been made by Mr. Sachin Upadhaya only and not the appellant.

Thus, there is no merit in the averment of the assessing authority that all impugned cash payments had been made by the appellant; without confronting Mr. Sachin Upadhay in this regard or bringing on record the outcome of such confrontation made, if any.

Accordingly, it is held that only two cash payments of Rs. 18 lacs to Mr. Anand Swaroop on 18-07-06 and Rs. 30 lacs to Mr. Sanjay Mohan Uniyal on 19-07-06 had been made by the appellant out of the total payment of Rs. 2,20,12,080/- listed by the AO in the assessment order; and the appellant was answerable to prove the source of payment only in respect of Rs. 48 lacs paid in cash.

In respect of the source of payment of Rs. 48 lacs paid in cash, it was explained by the appellant that the said sum had been paid to the two land owners against purchase of land for and on behalf of M/s Prateek Resorts & Builders (P) Ltd. of ATS group for which Rs. 15.51 lacs was given by ATS in cash on 18-07-06 at Dehradun and the balance sum of Rs. 39.41 lacs left in cash from land purchase imprest received from Sanraj Health Services (P) Ltd. last year. The appellant furnished a cash rotation chart from 01-04-05 to 31-03-08 in respect of the imprest /advance received for procurement of land at Dehradun for different builders for verification of the above facts. I have already held in Ground No. 1 for the AY 2007-08 of the assessee herein above that cash payments for procurement of land must have been provided by the ATS only since the plots of land were undisputedly being acquired by the appellant for and the test of human probabilities supports the contention of the appellant that the - of Rs. 48 lacs had been paid by A TS only to the appellant for procuring plots of land its behalf because it is unheard of that anyone providing services would invest his own funds for the Builders and not be paid I reimbursed by them.

Further, I have also held in ground no. 3 in Appeal No. 196/09-10 in the case of the same assessee for the AY 2006-07 that the assessee was left with a cash balance of Rs. 39.41 lacs out of Rs. 1.85 crores received by him from M/s Sanraj Health Services (P) Ltd., since he had advanced a sum of Rs. 40 lacs from his bank accounts to the land owners for and on behalf of that builder company. Thus, this sum of Rs. 39.41 lacs was available with him on 01-04-06, out of which the appellant utilized a sum of Rs. 4.01 lacs for his other personal use. The said cash rotation chart clearly reveals the same. Further, as per the said cash rotation chart, the appellant received a sum of Rs. 15.-51 lacs in cash from ATS on 18-07-06, thus, the appellant had a cash in hand of Rs. 50.91 lacs with him as on that date out of which he advanced a total sum of Rs. 48 lacs to the land owners for and on behalf of ATS on 18- 07-06 & 19-07-06. Thus, an excess sum of Rs. 32.49 lacs had been spent in cash by the appellant up to 12-12-06 for and on behalf of A TS, which was subsequently reimbursed to him by ATS by directly depositing cash in the Axis Bank savings account of the appellant between 14-11-06 and 12-12-06 as already held by me in Ground No. 1 for the A.Y 2007 -08 of the assessee herein above. Moreover, it is also clear from the fund rotation chart that sufficient funds received from ATS group were lying in the bank account

I.T.A .No.-3150 to 3152/Del/2011 of the appellant at the time of making the cash payments aggregating to Rs. 48 lacs to the land owners. In my opinion whether the appellant would have withdrawn cash out of the ATS funds lying in his bank account to pay the said land owners in cash or chose to utilize the cash of Sanraj lying with him instead. In any case, the application of Rs. 48 lacs in cash was made out of total funds received from ATS only, whether received in cash or through cheques. Accordingly, sources for paying Rs. 48 lacs in cash, i.e., Rs. 18 lacs to Mr. Anand Swaroop on 18-07-06 and Rs. 30 lacs to Mr. Sanjay Mohan Uniyal on 19-07-06, stand fully explained.

In the nutshell, it is held that out of Rs. 2,20,12,080/-, total sum of Rs. 1 72,12,080/- had been paid in cash by Mr. Sachin Upadhaya, the source of which is directly explainable by that person only vis-a-vis M/s Prateek Resorts & Builders (P) Ltd. of the ATS group and no addition for the same can be made in the hands of the appellant at all; and further since the sources in respect of the balance sum of Rs. 48 lacs paid by the appellant in cash stands fully explained, the addition of the entire sum of Rs. 2,20,12,080/- is deleted.

However, as it has been reported by the AO that the books of account of the ATS group companies including that of M/s Prateek Resorts & Builders (P) Ltd. have been referred to the special audit u/s 142(2A) of the Act for the entire search period and the assessments u/s 153A of that group are yet to be completed by him. Therefore, in order to protect the interest of revenue the A 0 is directed to examine the source of the said sum of Rs. Rs. 2,20,12,0801- paid in cash by that group for the purpose of purchasing land in Dehradun during the assessment proceedings of the concerned ATS group companies and if not found satisfactory, the said sum should be added as undisclosed income of the relevant A TS group company.”

“Cash at residence No.P-2/18, Kailash Dham Society, Sec-50, NOIDA Rs.7,56,000/- Cash from locker No.234, Axis Bank, Sec-18, NOIDA Rs.10,00,000/- Jewellery at residence No.P-2/18, Kailash Dham Society, Sec-50, NOIDA Rs.6,01,197/- Jewellery from locker No.270, Axis Bank, Sec-18, NOIDA Rs.5,29,385/-

I.T.A .No.-3150 to 3152/Del/2011 38. In response to the notice issued the assessee returned an income of Rs.1,75,94,790/-. The returned income consisted of income from Capital Gain on sale of shares of M/s Prateek Resorts & Builders P.Ltd. apart from “Income from other sources” consisting of interest on FDRs and S.B.A/c. Over and above this, a surrender of Rs.75 lacs towards miscellaneous income was made by the assessee.

Apart from that an addition of Rs.4,44,106/- was made on account of jewellery found from Locker No.270 in Axis Bank, Sector-18, Noida held by him and his wife and also from his residence. Addition of Rs.9,25,000/- was made as unexplained expenditure on account of valuable assets found at his residence these have been mentioned in un-numbered page 3 of the assessment order.

Inventurised and valued as per Annexure-A. Addition of Rs.1.75 crore was made on the basis of seized documents page 23 of LP-5 which reflected certain cash transactions. Apart from these, addition of Rs.1,01,25,000/- was also made on account of loans stated to have been taken from Mrs. Kaushlya Sehgal and from Mr.Sachin Upadhaya from whom despite opportunity confirmations were not filed.

I.T.A .No.-3150 to 3152/Del/2011 “1. That the order of CIT(A) is erroneous in law and on facts as he has accepted the additional evidences submitted by the appellant in contravention to rule 46-A of the I.T.Rules without giving proper opportunity to the A.O. to rebutt the appellant's claim.

2. That the C1T{A) erred in law In deleting the addition of Rs, 31,25,106/- towards unexplained assets and cash found during the course of search & seizure operation on a wrong application of facts and law and by substituting his own satisfaction in place of AO’s satisfaction by admitting that the surrender of Rs.75,00,000/- included the unexplained assets and cash found at the time of search operation. In doing so, CIT(A) also ignored the facts brought on record by the A.O.on this issue.

3. That the CIT(A) erred in deleting the addition of Rs 1,75,00,000/- on account of land without appreciating the fact that this addition was made on the basis of the seized documents at Annexure LP-5 and the assessee was not able to discharge his onus as contained in section 68 of the I.T.Act 1961 to the satisfaction of the AO.

4. That the CIT (A) erred in deleting the addition of Rs.1,01,25,000/- on account of unexplained cash credit without appreciating the fact and without any basis ignoring the facts brought on records by the A.O. as the assessee was not able to discharge its onus as provided in Section 68 of the I.T.Act to the satisfaction of the AO.

5. That the order of the CIT (A) being erroneous in law and on facts needs to be vacated and the order of the AO. be restored.

7. That the appellant craves leave to add or amend any one or more of the ground of the appeal as stated above as and when need for doing so may arise.”

I.T.A .No.-3150 to 3152/Del/2011 been rebutted by the revenue and in fact, all admitted facts. Accordingly finding no infirmity in the order in allowing the admission of fresh evidence petition and in passing the order after obtaining the Remand Report, we dismiss the ground.

“During the year, assessee has declared income from capital gain on sale of share of M/s. Prateek Resorts & Builders P. Ltd. and income from other sources consisting of interest on FDRs and saving accounts. Besides, misc. income of Rs. 75 Lacs has also been declared in the return of income being surrender made by the asseseee during the course of search and post search investigation.

I.T.A .No.-3150 to 3152/Del/2011 During the course of search of locker No. 234, Axis Bank, NOIDA held by Shri Mukesh Joshi, cash of Rs. 10 Lacs was found. He was, vide statement recorded after operation of the said locker, asked to explain the source of Rs. 10 Lacs found in his bank locker, in response, assessee had replied as under:

Q No. 3: As you have stated earlier you do not remember contents of each locker separately. Now a cash of Rs. 10 Lacs was found in locker No. 234. Do you want to say anything because this has not been reflected in your books of account?

Ans: - Since this amount has not been reflected in my books of accounts the amount of Rs. 10 lakh may kindly be treated my undisclosed income in current year.

Thus, from the above reply, it is clear that assessee did not have any explanation regarding this cash found and this cash of Rs. 10 Lacs was surrendered by him as his undisclosed income for the A. Y. 08-09.

Further, at the time of search, cash of Rs. 7,56,000/- was also found residence of the assessee. Therefore, vide questionnaire dated 06/11/09, assessee was asked to explain sources of this cash found at his residence. In response, it was stated that he had surrendered Rs. 75 Lacs in the return of income and the cash of Rs. 17.56 Lacs found (Rs. 7.56 Lacs from residence and Rs. 10 Lacs from locker) was part of said surrender of Rs. 75 Lacs. The reply made by the assessee has been considered and checked from records. After perusal of search records. panchnama files and post search investigation folder, it is found that at the time of search, many incriminatory documents were found and seized from his residence and locker and it was found that assessee is a director in number of companies and is also involved in land transactions at Dehradun. He was found to be in possession various land agreements entered into between various parties. He was given a show cause by the Investigation Wing to explain various transactions vide letter dated 03/06/08. n response to that letter, during the course of post search investigation a letter was submitted by the assessee, the contents of which are reproduced as under:

"This is with reference to the search and seizure proceedings conducted in my case and various documents etc. seized by the Department. In this connection, it is submitted that the assessee is mainly facilitator / arranger helping in consolidating purchase and sale of lands at various places working for others. As a consolidator many time, many combinations and permutations are to be done resulting into different and meaningless figures, which are scribbled in the notes by way of projections because the proposed deals are not done in one go but time to time over a period of time and most of the time it does not materialize. It is further submitted that even most of the notings, scrubbings are not made by me and are not in my handwriting and are not in my handwriting have nothing to do with me.

I.T.A .No.-3150 to 3152/Del/2011 However, without prejudice to the submissions, information, details and explanations being given from time to time in our case explaining the notings, scribblings etc., in order to by peace & avoid litigation, I hereby disclose a sum of Rs. 75,00,000/- ( Rupees seventy five Lacs only) as my income with an understanding that no concealment penalty will be levied in my case and no prosecution shall be initiated against us. The cash found and seized by the department may be adjusted against the tax payable on the aforesaid disclosures."