SHRI KASHINATH TAPURIAH,KOLKATTA vs. DY.CIT.C.C.2, MUMBAI

आयकर अपील�य अ�धकरण “डी” �यायपीठ मुंबई म�। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI �ी डी. म�मोहन, उपा�य� एवं �ी संजय अरोड़ा, लेखा सद�य के सम� । BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM Sr. Appellant Respondent A.Ys. ITA Nos. No. Kashinath Tapuriah Dy. CIT, Central 9, Rowdon Street, Circle-2, Udayanchal Building, New CGO Bldg., 2001-02 to 1. 3815 to 3821/M/10 Flat No. 20, 5th Floor, M. K. Road, 2007-08 Kolkata 700 017 Mumbai-400 020 PAN : ABUPT 5665 K 2. 8339 to 8345/M/11 Kashinath Tapuriah Dy. CIT, Mumbai -do- अपीलाथ� क� ओर से / Appellant by : Shri Chetan Karia & Shri Haresh P. Kenia ��यथ� क� ओर से/Respondent by : Shri Girish Dave & Ms.Kadambari Dave सुनवाई क� तार�ख / : 17.02.2016 Date of Hearing घोषणा क� तार�ख / : 25.04.2016 Date of Pronouncement आदेश / O R D E R Per Sanjay Arora, A. M.: The instant Appeals agitate separate orders by the Commissioner of Income Tax (Appeals)-36, Mumbai ('CIT(A)') of even date (26.2.2010) dismissing the assessees' appeals contesting his assessments under section 153A r/w s. 143 (3) of the Income Tax Act, 1961 ("the Act") for assessment years (A.Ys.) 2001-02 to 2006-07 and u/s. 144 for 2007-08. The other set of seven appeals is in relation to the penalty u/s. 271(1)(c) for these years. The appeals raising common issues, were taken up for hearing, and were accordingly heard together.

2 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT Quantum Assessments 2. The assessments presently under appeal before us (as well as the corresponding penalty appeals) are consequent to a search action u/s. 132(1) of the Act at the assessee’s different, as it appears, Short Street and Camac Street premises, at Kolkata on 05.1.2007. The same formed part of a concerted action by the Revenue on Hassan Ali Khan and other related parties at different place across India. The first four grounds of appeal, common for all the years, as under, raise legal/jurisdictional issues, and are accordingly taken up first, i.e., prior to the other grounds agitating to the various additions/disallowances on merits: ‘1. The learned Commissioner of Income Tax (Appeals) failed to appreciate that the assessment order u/s. 143(3) r. w. s. 153A is without jurisdiction and bad in law. 2. The learned Commissioner of Income Tax (Appeals) erred in not granting a reasonable and sufficient opportunity of being heard to the appellant. 3. The learned Commissioner of Income Tax (Appeals) failed to appreciate that the learned Assessing Officer had relied on incomplete investigation and had also failed to bring all evidences and findings of investigation on record and erred in not directing the learned Assessing Officer to obtain findings of investigations made by Enforcement Directorate having relied on the information provided by the said department. 4. The learned Commissioner of Income Tax (Appeals) failed to appreciate that the learned Assessing Officer had not granted reasonable and sufficient opportunity of being heard to the appellant.’

3.1 The pleadings with regard to the assessment being without jurisdiction revolve around canvassing the scope of the assessment, claimed, relying on the decision in the case of CIT vs. Continental Warehousing Corporation [2015] 374 ITR 645 (Bom), to be restricted where the assessment is not pending (as on the date of search u/s.132(1) or requisition u/s. 132A), so that it does not abate, to the books of account, documents and materials, etc. not produced, but found during the course of search or requisition,

3 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT or to the undisclosed income discovered as a result of search or requisition. The Revenue’s response is that except for A.Y. 2002-03, there has been no assessment either u/s. 143(1) or 143(3) at any time prior to the date of search (05.1.2007) and, accordingly, the said decision by the Hon'ble jurisdictional High Court shall not apply thereto. This in fact is the admitted position, reflected in the tabular chart prepared and furnished by the assessee (APB 10/pg. 1781). The limitation on the scope of the assessment would, therefore, only be for A.Y. 2002-03, for which assessment stands made vide order u/s. 143(3) dated 31.3.2005. The assessee’s argument and, consequently, his objection is thus largely to no avail. We may though clarify that his challenge is thus not to the jurisdiction to assess per se, toward which the provision of section 153A is plainly clear, nor adversely commented upon in Continental Warehousing Corporation (supra), but to the scope of the assessment u/s. 153A where it follows an unabated assessment, i.e., which has attained finality.

3.2 The assessee in this regard had also assumed another argument before the first appellate authority, i.e., as to non-issue of notice u/s. 143(2), to which passing reference was also made before us and, accordingly, responded to by the ld. special counsel, Sh. Girish Dave, by placing reliance on the decision in the case of Ashok Chaddha vs. ITO [2011] 337 ITR 399 (Del), holding the issue of notice u/s. 143(2) as not mandatory in the case of an assessment u/s. 153A and, besides, on a third member decision in Sumanlata Bansal vs. Asst. CIT (in ITA Nos. 525 to 530/Mum/2008 dated 20.5.2015 - reported at 2015-TIOL-1053-ITAT-Mum-TM), following the same. The factual position is that the assessee did not file any return in response to the notice u/s. 153A. How could then, it is wondered, he claim non-assumption of proper jurisdiction by the Assessing Officer (A.O.) for want of notice u/s. 143(2)? True, the assessee claims to have communicated to the A.O., vide letter dated 31.3.2008, to treat the return/s originally filed u/s. 139 as in response to notice u/s. 153A. So, however, we do not find any merit therein as the non-furnishing of a return in response to notice

4 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT u/s. 153A stands confirmed in view of the levy of penalty u/s. 271F of the Act (for A.Ys. 2001-02 to 2006-07), since confirmed by the Tribunal (in ITA Nos. 2919- 2929/Mum/2009 dated 16.4.2010/APB-9, pgs. 1771-1773), and which order stands admittedly accepted by the assessee. For A.Y. 2007-08, admittedly no original return u/s. 139 was filed (APB 10, pg. 1781). The question of the assessee requesting the A.O. for treating the same as in compliance to notice u/s. 153A, therefore, does not arise for that year. The assessment for A.Y. 2007-08 is in fact made u/s. 144; there being no compliance of notice u/s. 142(1). The impugned assessment, and for all the years, can thus neither be said to be without jurisdiction or bad in law. The only limitation is on its’ scope, which could be claimed only for A.Y. 2002-03, which would therefore be examined while considering the appeal for that year. We decide accordingly, dismissing Gd. 1 for all the years.

5.1 Grounds 3 and 4 overlap, and were accordingly argued together. The same assail the impugned order, again, for want of proper opportunity to the assessee to explain and present his case before the assessing authority in-as-much as the ld.

5 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT CIT(A) failed to appreciate this aspect, as well for having completed the assessment without awaiting for the completion of the investigation in the matter by the Directorate of Enforcement, the agency of the Government of India (GOI) investigating economic offences. With regard to the latter aspect, the same only needs to be stated to be rejected, the proceedings under the Act being independent statutory proceedings, which are to be completed in a time bound manner, on the basis of and upon considering the material (brought) on record and the explanation/s furnished in the matter, and which, needless to add, is an aspect that concerns the merits of the assessment/s. Its completion, impending the investigation by Enforcement Directorate (ED), which also does not form part of the Revenue, cannot be faulted with. Reference in this context may also be made to the detailed observations by the tribunal in the matter vide paras 11.2, 12 and 128 of its’ order in Hassan Ali Khan vs. Dy. CIT (in ITA Nos. 4156-4162/Mum/2010 dated 29.2.2016).

5.2 As regards the plea as to non-allowance of proper opportunity by the A.O., the same we find stands raised before the first appellate authority, and duly dealt with him in his order (as vide Ground 7 and at para 18 for A.Y. 2001-02), stating that no submission in this regard was made before him even as the A.O. had allowed sufficient opportunity to the assessee. The ld. Authorized Representative (AR) would toward this state that the first effective notice seeking details and clarifications on the seized materials was issued to the appellant only on 07.11.2008, while the information received from the ED communicated, also show causing the assessee in its respect, only on 19.12.2008. Both these were, thus, toward the fag end of the assessment, leaving insufficient time to respond to the detailed questionnaire/requisition. This is supported by a plea for admission of additional evidences. The Revenue responds by listing the several notices – eleven in number, issued u/s. 142(1), mentioning the dates of their issue and service (including one u/s. 143(2) dated 02.12.2008).

6 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT The matter, though pertinent, is purely factual in-as-much as if adequate opportunity stands not allowed by the assessing authority it may vitiate the proceedings. The charge, however, as we find, is misplaced. The assessment order (vide paras 3 to 6.4/pgs. 2-7 for A.Y. 2001-02) deals extensively with the proceedings as transpired before the assessing authority, with the assessee being conveyed, vide letter dated 24.4.2008, that he may collect the copies of the seized documents as may be deemed relevant, and the copies being furnished to the assessee’s representative Shri Pradeep Shah (power of attorney in whose favour was submitted on 17.9.2008), even as his authorization only extended to representation and not to collect/make copies, also adverting to the order sheet entries dated 25.9.2008, 17.11.2008 and 21.11.2008. True, a detailed questionnaire stands issued late into the assessment proceedings, which were on in parallel for all the years under reference, sifting through the plethora of materials gathered. The assessee – whose case is one of denial, either before or subsequent to the said notices, was, however, recalcitrant. How, then, is the said date relevant – the assessee only denying any knowledge of any account, throughout denying his association with Hassan Ali Khan (HAK) or of maintaining any foreign bank account? The information with regard thereto comprises the bulk of questionnaire by the Revenue. The queries in respect of domestic transactions, we observe have in fact been responded to, as vide letters dated 12.11.2008, 01.12.2008, 23.12.2008 & 26.12.2008 by the assessee. This is also what the A.O. states in substance vide his remand report dated 04.2.2010 to the ld. CIT(A) (APB 1, pgs. 124 to 125). The additional evidence is also qua transactions in or through such foreign bank accounts. Then, again, the assessee could have furnished his explanation/s before the first appellate authority, meeting any deficiency in presenting his case earlier. Ground after ground, we find the ld. CIT(A) to state of either the assessee reiterating his explanation before the A.O. or not making any substantive reply. No wonder, heavy emphasis is laid down before us on admission of additional evidence, placing reliance on the two letters by the assessee (i.e., dated 13.12.2011 at APB 6, pgs. 936,

7 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT 938) and by his wife, Chandrika Tapuriah (CT) dated 12.9.2013 (at APB 5, pgs. 853- 854), listing eight foreign bank accounts in their names. The second letter, issued in response to a requisition u/s. 142(1) to furnish copies of such accounts (APB pg. 877), is accompanied by eight separate instructions dated 12.9.2013 (one dated 20.9.2013) (APB 5, pgs. 855 – 870) by the assessee, in the format suggested by the Department, to the respective banks for furnishing all the accounts recorded. Both the letters are much after the completion of the assessment proceedings, nay, even after the conclusion of the proceedings at the first appellate stage. How, then, can they be of any consequence in-so-far as the assessee’s charge of non-grant of proper opportunity by the A.O. is concerned? How, rather, could the Revenue modify the impugned assessments in any manner. In fact, these are mere requisitions (on the respective banks), not accompanied by the bank account statements, so that by itself this is of little moment as far as the assessments are concerned. On the contrary, it establishes non-co-operation as well as a deliberate design to mislead the Revenue. All that the said letters may therefore exhibit, taking a magnanimous and liberal view of the matter, is of a change of heart at the end of the assessee, even if belatedly, and correspondingly an attempt to co-operate with the Revenue. In this regard, given the secrecy/privacy laws of the relevant countries, even perhaps the letter of December, 2011, not accompanied by a similar requisition on the respective banks, do not amount to much, except perhaps signify a willingness to co-operate and mislead no longer, i.e., assuming, again, the list furnished to be complete. The second letter, after nearly two years of the first one, and only at the instance of the Revenue, is only a follow up of the first letter. We in fact observe a lack of earnestness on the part of the Department as well, which should have acted with a much more alacrity; it requisitioning the said information only vide its letter dated 11.7.2013. True, the assessments had been already framed, yet, the same were pending in appeals, so that the information is relevant, besides the accounts, particularly where not disclosed, being in violation of other laws as well. So, however, the burden of proof, in view of

8 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT the materials in the possession of the Revenue, duly confronted to the assessee, clearly is on the assessee, and which remains completely un-discharged. The assessee’s case, with regard to the relevant Grounds, in view of the foregoing, rather than being proved, gets disproved, so that the same is without merit.

5.3 Next, we may examine plea for admission of additional evidence. The issue was argued at length before us. Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963, which is a provision regarding production of additional evidence before the Tribunal, reads as under: ‘29. Production of additional evidence before the Tribunal. The parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal, but if the Tribunal requires any documents to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or, if the income-tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them, or not specified by them, the Tribunal, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced.’

Relying on the decision by the Hon’ble Apex Court in the case of K. Venkataramiah vs. A. Seetharama Reddy AIR 1963 SC 1526, 1530, it was submitted that the scope of the words ‘substantial cause’ occurring in rule 29 stands explained therein to mean that where evidence on record is sufficient to enable the court to pass an order, it may yet admit additional evidence for any other substantial cause. The ld. special counsel for the Revenue would rely on the decision in the case of in Ibrahiam Uddin and Anr. [2012] 8 SCC 148, specifically referring to para 41 (at page 168 thereof), to say that the power to admit additional evidence u/r. 29 ‘for any other substantial cause’ is to be read in context of the earlier words ‘requires… to enable it to pass orders’, and cannot be admitted where evidence on record enables the tribunal to pass an order. The argument raised by the ld. AR is even prima facie not valid. If the words

9 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT ‘substantial cause’ in rule 29 are not to be read in the context of the words ‘requires… to enable it to pass an order’, which is imminent from a plain reading of the rule, how, it may be asked, is the same to be read and understood as? That is, what then would inform or guide the understanding or the meaning of the said words? Surely, if the said words had received a different or expanded meaning to the said words, the Apex Court would have explained the same, dilating on the exact scope of the said words, and how the same are to be understood and applied, so that the same could only mean to be able to do justice as between the parties, in the context of the matter before it. The scope of the words ‘substantial cause’ occurring in rule 29, which is similar in terms to Order 41, Rule 27(1) of the Code of Civil Procedure, 1908, was, with reference to the decision in the case of K. Venkataramiah (supra), understood to mean that though the court may not strictly be said to require additional evidence to pronounce the judgment, it still considers that in the interest of justice something which remains obscure should be filled up, so that it could pronounce the judgment in a more satisfactory manner, which would in that case be a case covered under Rule 27(1)(b) of the said Code. In short, the power for admission of additional evidence is to be exercised for a just and fair disposal of the appeal. We do not find any dichotomy between the two decisions by the Hon’ble Apex Court cited supra. There is accordingly no question of the decision by it’s division bench in Ibrahiam Uddin and Anr. (supra) overriding or prevailing over the larger (five member) bench decision in the case of K. Venkataramiah (supra); it only explaining the latter. The former decision, including para 41 thereof, is thus judicially binding on us, and is accordingly to be considered as conclusive, settling the law in the matter. We may in this regard also profitably refer to the discussion at para 3.3 (pgs. 6- 9) of the order by the tribunal in the case of HAK (supra). This order has in fact, due to the commonality and over-lap of the issues; rather, even to a large extent the evidences as well as the arguments advanced, to be read in conjunction with the said order, to which therefore frequent (and specific) references stand made, the reasons

10 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT and principles guiding the said decision, being equally applicable, informing the present decision as well. The power of the tribunal to admit additional evidence, it notes with reference to the settled law in the matter, is strictly limited. Rule 29 places a total ban on the parties to the appeal to produce additional evidence, oral or documentary, before the tribunal, which though is vested with judicial discretion to allow production of the same under specified circumstances, i.e., either to enable it to pass an order or for any other substantial cause, or where the Revenue authorities had decided the case without affording sufficient opportunity to the assessee to adduce the same. The latter aspect is not in dispute in the present case, which, it would be appreciated, could not, where so, strictly qualify to be additional evidence – the assessee being prevented to produce it in the first place. The words ‘substantial cause’, as a holistic reading of the several decisions cited as well as the analysis in the case of HAK (supra) referred to would suggest, cannot be read removed from or de hors the purpose for which and toward which the adjudication under reference is being made. As explained by the Hon'ble jurisdictional High Court in Ahmedabad Electricity Co. Limited vs. CIT [1993] 199 ITR 351 (Bom) (FB), the jurisdiction of the tribunal is not restricted to the subject matter of the appeal, i.e., the points challenged in the memorandum of appeal before it, but ranges over the whole assessment. If the evidence is not to enable it to pass an order in a more satisfactory manner, with reference to the issue/s arising, which require its deliberation and adjudication, what purpose, one may ask, would it serve. The same has to necessarily relate to the adjudication process and, consequently, to proper adjudication, i.e., the end to which the entire exercise is geared toward and attempts to seek.

5.4 This brings us to our first observation (factual) in the matter. We find no evidence which would enable us to arrive at a decision, much less in a satisfactory manner. As explained by the Hon’ble Courts time and again, the admission of additional evidence under rule 29 (which is pari materia to the provision of Order 41,

11 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT Rule 27(1) of the CPC) is to be considered at the stage of considering the issue on merits. The reason is, again, simple. It is only upon examining the issue arising before it for adjudication, that the tribunal could appreciate the import or the purport of the evidence or the material being now sought to be produced and relied upon, i.e., by way of additional evidence. In other words, the process necessarily involves a correlation between the evidence and the issue/aspect of assessment under examination, i.e., is to be evidence–issue specific; a particular evidence may pass muster while another not. Apart from, however, broadly mentioning the contents of various paper-books stated as containing additional evidences, no specific pleadings were made qua any evidence, save one, and which, it would be appreciated, has to be while pleading a specific issue/ground of appeal. The matter, given the law in the matter, is clearly factual, requiring the consideration by the appellate authority if particular evidence shall better serve cause of justice in-so-far as it relates to adjudication of issue/s under reference. There is accordingly no scope for generalized pleadings, as made. The only evidence to which our specific attention was drawn with reference to an issue is the account statements (of bank account no. 835-357-902-3 with Credit Suisse Private Banking, Zurich) for the period 01.7.2001 to 28.12.2006 (APB-5, pgs. 883-913). The same would, however, be of no avail as, as pointed out during hearing by Shri Dave, with reference to the disclaimer qualifying the said statement (at pg. 890), that the said statement is not suitable for tax purposes. Also, as argued by him, the same originating in a foreign territory, is not apostilled and, accordingly, cannot be accepted in evidence. This, then, makes a short shrift of the fore-going discussion on the law in the matter, which was yet preferred by us in view of the lengthy arguments in the matter canvassed before us. No wonder, the ld. AR has chosen not to make a separate and specific prayer for admission of additional evidence u/r. 29, as ought to be and is generally the case, but seeks to make out a case in its respect, and argues the same with reference to grounds of appeal, contesting the non-allowance of proper opportunity by the assessing and the first appellate authority.

12 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT The two aspects, save to the extent that are clearly interrelated, are separate and distinct. If there has been non-allowance of proper opportunity by the Revenue authorities, an aspect considered by us earlier, that by itself is a ground sufficient for seeking a set aside qua the relevant issue/s. The same, depending on the facts and circumstances of the case, could be an open set aside or for furnishing some specific evidences, either way serving the appellants’ cause. Rather, the admission of additional evidence at first appellate stage itself includes, as a consideration, the refusal to or non-grant of sufficient opportunity by the assessing authority to produce the same, besides being prevented by sufficient cause to be able to do so, both generally as well as which the assessee was specifically called upon to (rule 46A(1) of the Income Tax Rules, 1962). That apart, that does not restrain the first appellate authority to, to enable him to dispose an appeal or for any substantial cause, including the enhancement of assessment, admit the evidence for the first time. The denial of opportunity to furnish evidence by either the assessing or the first appellate authority, in exercise of their power to adjudicate, is thus a separate ground - not under challenge before us, from that of non-allowance of opportunity, except where the lack of opportunity itself relates to or is toward non-production of the evidence, so as to form a sub-set thereof. That there has been no failure to provide proper opportunity to the assessee to present his case before them by the authorities below, i.e., at the assessment and the first appellate stage, has been found by us as a fact. The whole purport of the foregoing is to explain that, save and to the extent factually interrelated – for which the law itself provides, non-grant of opportunity to present its case by the Revenue and the admission of additional evidence before the tribunal, are separate and distinct aspects of the appellate proceedings before it. This constitute our second observation in repelling the case for the latter before us, the first being toward the matter being, in substance, factual. We have, it may be added, already found no merit in the assessee’s argument of the Revenue to have awaited the conclusion of the proceedings before the ED prior to the completion of the assessment under the Act

13 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT and, consequently, keeping even the appellate proceedings – which are only an extension of the appellate proceedings, in abeyance, on that score. This, then, brings us to the third limb of the discussion in the matter. The assessee, as discussed above, in response to a requisition u/s. 142(1), placed request on the different banks in which he and his wife, CT, have since admitted to have accounts, for furnishing copies of account since inception of the account to its closure. We have already explained that the same cannot by itself be considered as an evidence but only an expression of earnestness on the part of the assessee to come clean. There is also no way to hold the said list of bank accounts as exhaustive. We have, however, admitted the report by UBS AG, Zurich, dated 30.10.2007 to ED in the case of HAK (supra) (refer para 3.3 of the said order), to which reference stands also made by the assessee in support of his case, noting that the same as well as the facsimile dated 15.1.2007 by the Swiss Federal Government to the Embassy of India, both available at the time of assessment, ought to have been taken into account, providing, in all fairness, a copy thereof to the assessee. The same, to whatever extent, may have a bearing on the present assessments as well. This is as the Transfer Instructions (TIs), which form the bulk of the additions toward unexplained balances in foreign bank accounts, are for most part from the accounts of or controlled by HAK. The basis of the TI based additions is that the same would only be given effect to, and even if some reason not, the very fact of drawing the TI implies balance in the relevant account, at least to the extent. The rationale has been found by us as valid. The matter, however, has been, considering the entirety of the facts and circumstances of the case and for the reasons stated therein (refer paras 11-12, 15, 25, 30, 49 & 65 of the order supra in case of HAK), remanded back to the file of the A.O. to allow the assessee an opportunity to produce the copy of the relevant accounts, establishing his case, which would, it opined, prove or disprove the assessee’s, on whom the burden of proof lies in view of the material in the possession of the Revenue, case. This, it considered as toward a just and fair disposal of the appeals in the given facts and circumstances, as

14 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT analyzed by it in the various paragraphs to which reference has been made, applying the law in the matter of admission of additional evidence by the tribunal in conformity with its’ understanding thereof. Now, if, the said account statement/s for the relevant period reveals no balance, or a balance which does not match at all with the transfer instruction, clearly drawing of the transfer instruction shall be of little consequence. The further question of it being given effect to, and the inference flowing there-from, would also not arise. In other words, as a corollary and a necessary adjunct to having decided in favour of the restoration of the assessment qua the additions made on account of transfer instructions from HAK/HAK controlled bank accounts, the corresponding additions with reference to the balances in the transferee accounts, would require a like remission. Accordingly, all our observations as stated in the foregoing paragraphs in the order of HAK (supra), to the extent relevant and not inconsistent with the facts as may be found in the present case, would equally apply and hold for instant appeals as well. This, it may be stated, decides the relevant grounds. True, however, in-as-much as the considerations for the same flow from the principle informing the admission of additional evidence/s by us as well as, similarly, in the case of HAK, the same represents our view point in the matter, so that it was considered only proper to state the same while discussing the said aspect of the assessee’s appeals.

5.5 The foregoing discussion decides Grounds 3 and 4 of the instant appeals for all the years.

A.Y. 2001-02

15 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT sum (USD 100 Million) from HAK, on the basis of transfer instruction by HAK, i.e., vide his letter dated 16.7.2000 to the said bank, even as the assessee denied any knowledge of the same or even of the existence of the said account.

HASSAN ALI KHAN’

The assessee’s case, as in the case of HAK (in whose hands also addition stands made on the basis of the said letter), is one of complete denial, which in view of the Revenue cannot hold in view of the specific information contained therein, reliability of which, being received from an official source, cannot be doubted. The respective cases of the parties are thus the same, as in the case of HAK, which stands discussed at length by the tribunal at paras 9-12 of its order (in ITA Nos.4156-4162/Mum/2010 dated 29.2.2016), with paras 11 and 12 bearing its’ findings. The said addition, in fact, happens to be the first such addition, i.e., based on a transfer instruction (TI), in the case of HAK (supra), several of which follow, as a reading of the said order would

16 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT show, discussed in its various aspects therein, even as the approach and the rationale underlying the same and, consequently, the result, remains the same. Reference toward this may also be made to paras 15, 25, 30, 49, 65A and 109 of the said order. The tribunal found the TIs, despite being transmitted to the Revenue by ED, which joined the Revenue in the search operations, and not found by the latter itself in search u/s. 132(1), so that section 132(4) as well as the statutory presumption of section 292C of the Act would, strictly speaking, not apply in relation thereto, to yet have a strong and persuasive evidentiary value. The non-mention of the transferors’ bank account number or its’ non-signing by him – though obtaining in some cases, stands discussed, as were the other aspects in relation thereto, viz. the background and the surrounding facts and circumstances; the bank particulars, including the names of the bank officials, the abiding and apparent relationship between the assessee and KT, in the said paras. The same would apply in the equal measure in the present case, with rather the existence of the account number 76001 (in the name of the assessee (KT)) being admitted, both by him as well as in the bank report. As regards the reason for the HAK to transfer funds in such huge sums to him, the assessee himself now (vide letter dated 01.7.2009, pgs.914-917/APB-5) explains that to be the sole purpose and the raison de’tre of his relationship with HAK, who, claimed to have access to huge funds, promised to invest in the assessee’s projects. Whether that by itself was sufficient for the assessee to have, on the contrary, as claimed, incur heavy expenditure or, rather, transfer no insubstantial sums to HAK, i.e., to have continued to be deluded by the said promise for several years, is another matter. There is, however, sufficient evidence on record to show the two sharing a close relationship for several years – the assessee claiming to know HAK since 1994, of which mutual trust is an essential ingredient, as well as, by implication, common business intent and interest. There is an Agreement dated 07.8.2001 between them, at Dubai, recovered from the premises of both in search, envisaging transfer of huge funds to the assessee (which stands discussed extensively in the order dated 29.2.2016 (supra) in the case of

17 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT HAK), who though now debunks the same. Further, HAK vide his notarized statement dated 30.6.2003 at London (forming Annexure-C to the order afore-mentioned), whereat the assessee was also present, states of him as being his advisor. In fact, HAK was found to have lent Rs.5 crs. to R. M. Consultants P. Ltd., Kolkata a company of KT (assessee) (refer paras 11-12, 18, 30.2 of the order afore-stated). The Revenue in fact is not obliged to prove the nature of the receipt or to locate its source, so that, where not satisfactorily explained as to its nature and/or source, it could be deemed as income (refer: CIT vs. Devi Prasad Vishwanath Prasad [1969] 72 ITR 194 (SC); Sreelekha Banerjee vs. CIT [1963] 49 ITR 112 (SC)). In the view of the tribunal, this was a matter of fact, which had to be established by definite material/evidence, viz. the copy of the bank accounts, in view of the definite material with the Revenue (in the form of TIs), and which therefore would presumably be considered as having been given effect to. Then, again, even so, the addition is toward unexplained deposit (balance) in account, signified by the drawing of the TI itself. As such, even if not given effect to, the necessary implication and the inference of the balance in account shall follow and hold, justifying invocation of section 69A. There is implication for the transferee’s case as well. This is as the TI implies a right in the amount sought to be transferred thereby, and presumably only on own account. This could though be disproved, adducing, again, satisfactory explanation as to the nature of the funds sought to be transferred. Accordingly, a concomitant of the assessee being entitled to funds in the sum stated in the transfer instruction, in the absence of explanation as to its nature, would, even where not received, admit an inference as to accrual of income, as also of the application of the deeming fiction of section 69A; the assessee being found to be a creditor qua a debt to that extent. That is, the nature of the debt, unexplained, is sufficient to attract the rigor of the provision.

7.2 No improvement in his case stands made by the assessee, i.e., vis-a-vis that before the Revenue, even as indicated above with reference to the arguments in

18 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT respect of admission of additional evidence by the tribunal. So, however, and even as we say so, we cannot help but observing and, accordingly, state that the tribunal in the case of HAK (supra), decision in which case shall for apparent reasons stand to be adopted in the present case, i.e., a set aside to the file of the assessing authority to enable the assessee to conclusively prove the facts, besides being precisely what the ld. counsel, Shri Chetan Karia, CA, argued and was at pains to bring home. In the present case, the account number specified in the document is admitted and confirmed to be that of the assessee’s bank account with UBS AG, Zurich. The decision of the tribunal in HAK (supra) shall, accordingly, apply on all fours, with we finding no reason to take any different view in the matter. As such, for the same reasons as stated in the said order, and for which reasons reference is drawn to the six (6) paras thereof adverted to above, we decide likewise, i.e., restore the matter back to the file of the A.O. to adjudicate afresh, allowing the assessee an opportunity to establish his case. He shall be required to produce the relevant bank account/s to exhibit the non receipt of the relevant amount/s – in the whole or in part – during the relevant year, or at any time later. We state so as it could well be that the TI gets delayed in execution for some reason, and is given effect to at a later point in time. The addition though, we may clarify, even if this amount stands received – in whole or in part, during a subsequent year, shall be for the current year as, as presently discussed, the same is only in pursuance to the rights already inured, i.e., in discharge of the liability already accrued/arisen. Where, however, no amount is received, the addition, solely on the basis of a TI, though could be made, would only be where the Revenue has any material to justify the accrual of income and, accordingly, would require being adjudicated on the basis of the entirety and facts and circumstances of the case. Qua TIs where no bank account is specified therein, in-as-much as the assessee cannot prove a negative, it shall, as also clarified in HAK (supra), suffice, i.e., the burden of proof on the assessee shall stand discharged, where he produces the bank statement of all such bank accounts, either admitted by the assessee or his wife

19 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT or in the knowledge of the Revenue on the basis of the material found in search or otherwise transmitted to it. We may also, before concluding, clarify that it shall be open for the assessee to, i.e., apart from the course suggested above, explain the transaction. That is, the basis or the reason for the drawing of the TI and the consequent events leading to the receipt – in whole or in part, or the non-receipt of the stated sum/s, explaining as to why the receipt should not be deemed as income or, as the case may be, the reason for its non-receipt, and where so, the assessing authority shall decide, giving reasons in support of his decision. We decide accordingly. This also decides other TI based additions in these appeals by the assessee, facts of which are pari materia, being in fact also argued together, viz. Ground # 6 (for the current year).

20 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT

21 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT 2002-03 4,20,000 4,20,000 2003-04 4,20,000 4,20,000 2004-05 4,20,000 1,00,000 10,000 5,30,000 2005-06 4,20,000 1,20,000 10,000 + 5,62,000 12,000 2006-07 4,20,000 12,000 4,32,000 2007-08 4,20,000 4,20,000 Total 29,40,000 2,20,000 44,000

The interest charged and received having not been disclosed as income, the A.O. sought to bring the same to tax. The assessee explained the same to be rough notings, and that no interest had in fact been received. Being unsubstantiated, the amount was added in assessment and confirmed in appeal, so that the assessee is in second appeal.

22 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT her hands since 1997, which aspect also would require being examined as the same is indicative of funds in her hands, which could have been utilized to pay the assessee. De hors any materials or evidence toward her being in receipt of any sum, it is difficult to hold that the income had arisen to the assessee, considering her financial stringency. We have, rather, considered a claim by the assessee as valid in view of the statutory presumption of section 292C, so that his interest calculation implies an understanding to that effect. Why, the assessee could have clarified that the payments shall be subject to interest, at the defined rate, deferring its receipt to the sale of the property. Again, there is nothing on record to indicate actual receipt of interest, or even the resources with the lonee to pay the same. The matter, accordingly, is restored to the file of the A.O. to clarify these aspects, in the absence of which we find the matter is factually indeterminate.

Sr. No. Name of the Bank Assessment Year Amount (in Rs.) 1 American express 2001-02 42,535 2 American express 2002-03 1,87,232 3 American express 2003-04 2,02,699 4 American express 2004-05 87,399 5 American express 2005-06 2,50,604 6 American express 2006-07 8,52,867 7 American express 2007-08 8,06,065 8 City Bank 2007-08 8,62,463 9 ICIC Bank 2007-08 1,38,428 10 ABN Amro Bank 2007-08 2,16,745

The assessee claimed the said expenditure to have been paid for by cheques and, further, treating the same as withdrawals on account of personal expenses, so that no part of the same was claimed by way of deduction in the computation of income

23 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT per the returns of income for the relevant years. The said claim, however, being unsubstantiated, additions for different years came to be made, and which stand confirmed in view of a status quo; the assessee failing to make any improvement in his case before the first appellate authority. 13. We have heard the parties, and perused the material on record. No improvement, again, to his case stands made before us by the assessee. We are, however, moved by the fact that the assessee has throughout maintained that the payments were made by cheque/s drawn on his regular bank account/s, duly reflected in his accounts, claiming no part of the same as deduction under the Act, being personal expenses. The transaction is thus admitted as toward personal expenses, while the explanation required is with regard to establishing the source of the payment thereof. The contention of the payment by cheque, which though is not proved, is not disproved as well, raises the presumption as to the payment being, as claimed, accounted for in the assessee’s books of account or otherwise discharged from an accounted/disclosed source, so that the source becomes explained. The assessee is a reputed businessman at an advanced stage of his life. We cannot but have regard to the trying circumstances in which he was placed during the relevant period as well as the complete disarray in which his office set-up went into on account of the search by the Revenue as well as ED and the subsequent proceedings. In fact, the tribunal has, taking cognizance of the similar circumstances and considering the injustice which a non-allowance of opportunity may entail, restored the matter for fresh adjudication back to the file of the A.O. in the case of HAK (supra). The matter is essentially factual, and the onus to establish his claims, i.e., as to the source of the expenditure incurred by him through credit cards, is strictly on the assessee. We, accordingly, taking the entirety of the facts and circumstances of the case into account, only consider it proper to restore the matter back to the file of the assessing authority with a view to allow a final opportunity to the assessee to discharge the burden of proof, which continues to be un-discharged, and adjudicate afresh per a speaking order in

24 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT accordance with law. Needless to add, the assessee shall be allowed reasonable opportunity to present its case. We decide accordingly.

25 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT facts are admitted, and the assessee’s return stands filed beyond the time allowed for furnishing the return of income u/s. 139(1). The provisions of sections 139(3) and 80 are explicit in the matter. The said provisions, however, would came into effect only when the question of carry forward of the loss is to be determined, i.e., to the following years, to be set off against the income in terms of the relevant provisions of Chapter VI of the Act. The loss under reference is for the current year, which would surely stand to be set off against income from the same source or assessable under any other head of income for the same year, in terms of sections 70 and 71 of the Act. We further notice that no ground qua this aspect has been raised by the assessee before the ld. CIT(A). So, however, the issue is legal, and there is under the circumstances, no question of application of sections 139(3) and 80, which would come into play only when a loss, determined under a particular head of income, is to be carry forward for set off against specific income/s for a subsequent year. The Ground, notwithstanding its being not raised before the first appellate authority, is accordingly admitted for adjudication - there being no dispute with regard to the relevant facts. As regards the issue on merits, i.e., set off of loss against the other income for the current year, we find that the A.O. has merely rejected the loss without determining it. In fact, he has disallowed the entire expenditure which may have itself resulted in the impugned loss. The same would, accordingly, require being determined. Without doubt, only the loss on the basis of the expenditure allowed (in computing income) can be said to result in a loss, so that it would stand to be reduced by the amount of expenditure disallowed. The matter, accordingly, as for Grounds 9 and 10 qua expenditure, is set aside to the file of the A.O. with like directions. We decide accordingly.

26 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT A.Y. 2002-03

18.1 Grounds 1 to 4 stand decided vide paras 2 to 5 of this order.

18.2 We may, however, before we begin to address and adjudicate the other grounds raised by the assessee, clarify that for this year only the additions and/or disallowance made or effected on the basis of the material or evidences found during search, or that found in pursuance thereof, i.e., as a direct result of search, only would, in view of the decision in Continental Warehousing Corporation (supra/also at APB-11, pgs. 1888- 1948), stand to be adjudicated on merits, the balance being, as held therein, incompetent in the present proceedings which arise only on account of a search u/s. 132 or requisition u/s. 132A of the Act. The said decision, being by the Hon’ble jurisdictional High Court, is judicially binding. Per the same, the Hon’ble Court has held that though a non obstante provision, so as not to restrict the power of assessment of the A.O. u/s. 153A, yet the foundation of action u/s. 153A is a search u/s. 132 or requisition of books of account or other assets u/s. 132A. As such, section 153A, enabling assessment in case of a search or requisition, making specific reference to the carrying out of search or exercise of power of requisition, the assessment u/s. 153A is only in furtherance to what is contemplated therein. Accordingly, for completed assessments, which do not abate, assessment shall be made on the basis of books of account not produced in the course of original assessment but found in the course of search, and undisclosed income discovered in the course of search (refer paras 18, 23, 28-31 of the Judgment as well as paras 48-54 of the order of the tribunal in All Cargo Global Logistics Ltd. vs. Dy. CIT [2012] 23 taxmann.com 103(Mum)(SB), reproduced at para 31). The Hon’ble Apex Court in P. R. Metrani vs. CIT [2006] 287 ITR 209 (SC) had an occasion to consider the scope of the search and seizure proceedings under the Act. Approving the decisions in Pushkar Narain Sarraf vs. CIT [1990] 183 ITR 388 (All) and Daya Chand vs. CIT [2001] 250 ITR 327 (Del), and the reversing the decision in

27 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT CIT vs. P. R. Metrani (HUF) [2001] 251 ITR 244 (Kar), it clarified this scope to be very limited, i.e., restricted to a summary assessment toward retaining sufficient assets to meet the demand of tax and/or penalty that may arise in assessment. Section 132, it explains, is a complete code in itself, which cannot intrude into any other provision of the Act and, similarly, the other provisions of the Act cannot interfere with the scheme of the working of section 132 or its provisions. The presumption of section 132(4A) is only for the limited purpose of passing an order u/s. 132(5), and was not available for framing a regular assessment. The Hon’ble Apex Court found the provisions (forming part of Chapter XIII-C) to have all the trappings of a small code in itself, embodying an integrated scheme (sections 132 to 132B) for a specific purpose, i.e., laying down a complete procedure for search and seizure; the power of the relevant authorities, and confiscation of the assets seized. The material seized though could be used as a piece of evidence in any proceedings under the Act, with section 132(4) itself so providing. That is, the provisions of sections 132 and 132A, save to the extent specifically provided, would not impact or regulate the process of assessment in any manner. An assessment under the Act, i.e., where the A.O. has the power to assess income after making enquiries, by effecting adjustment/s to the returned income, can even otherwise be made only on the basis of material on record, applying the extant law (of-course duly confronting the assessee therewith) and, besides, is impermissible to be reviewed (CIT vs. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC)). Be that as it may, in all cases of completed assessment, as held by the Hon’ble Court in Continental Warehousing Corporation (supra), binding on us, the scope of section 153A assessment shall be confined to the findings of the search or, as the case may be, requisition.

28 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT discussion appears at para 11 and paras 11-15 of the assessment and the impugned order respectively. Briefly, page 6 of Bundle 6 of Annexure A dated 05.1.2007 (to Panchanama dated 06.1.2007), i.e., forming part of the documents found and seized from the Pune residence of HAK and his wife, Rheema Hassan Ali Khan (RHAK), is a letter of authorisation, signed by the assessee in favour of PA, authorising him to act as his (assessee’s) agent as well as of Mr. HAK, i.e., to represent him internationally. Pages 7 and 8 is a copy of the bill dated 05.4.2001 for USD 5 lacs raised by PA on the assessee (KT). The assessee not furnishing any satisfactory explanation, submitted vide reply dated 01.12.2008 (refer page 14 of the assessment order), the A.O. made the addition toward the same. No improvement in his case whatsoever being made, the same came to be confirmed in first appeal, with the ld. CIT(A) finding, on the basis of internet searches, the various persons/entities mentioned in the letter/communication found – to which the presumption of section 292C, i.e., as to truthfulness to their contents, shall apply, as being real, existing persons/entities. Aggrieved, the assessee is in second appeal.

29 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT either found in search or adduced at any stage and, accordingly, only needs to be rejected. If at all, it only confirms the validity of the documents found, so that negotiations toward purchase of real estate properties was under way; the bill by PA under reference being in respect of one such property – Hotel Chateau Gutsah, Luzern, Switzerland. The same was, however, not sold. Liability toward the services of PA could yet arise, being not in any manner dependent on the actual sale of the property and, therefore, validly raised, payment in respect of which could be understandably made. What is intriguing though is that the same hotel was being negotiated for purchase by HAK as well, at the same time, who had expressed his desire to invest in projects in Switzerland to PA in February, 2001 retaining him as his agent in April, 2001. PA representing the interest of both HAK and KT, the only inference one can reasonably draw is of the purchase being negotiated for both, perhaps jointly, even as he raises separate bills for the services on them. Both HAK and KT, on whom the onus to explain the seized material lies, have furnished vague replies. Similar addition has been made, in fact also toward purchase cost of the said hotel, in the case of HAK, even though the tribunal found as a fact that the same had not materialized (refer paras 20A, 21, 22 of the order in HAK(supra)). It has, however, set aside the matter to the A.O. toward determining certain aspects of the transaction. The addition toward payment for services (to PA) was deleted for want of any evidence as to payment, with that on record, rather, suggesting otherwise. There is no such corroborative material in the case of the assessee, who has admitted to holding and maintaining foreign bank accounts, suggesting that the payment may as well have been made. Under the circumstances, we consider it fit and proper to restore the matter back to the file of the A.O. The assessee shall, with reference to the account statements of the bank accounts, since admitted, as well as the bank accounts in the knowledge of the Revenue, exhibit that no such payment, which could well be in the installments, has been made. True, there is no direct proof of payment, yet, by all indica the payments has been made; the assessee himself admitting to being in negotiation for purchase of

30 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT real estate properties in Western Europe (albeit on behalf of unknown, unspecified friends), and having hired the services of PA for the purpose, so that the non-payment, as claimed, shall have to be reasonably proved. PA, after all, was pursuing HAK, and not the assessee, who has himself been found to have financed and/or incurred expenditure for and on behalf of HAK. Needless to add – each year being an independent unit of assessment, it is only the payment found made during the current year that could, to that extent, where unexplained, be confirmed for assessment for the current year. We decide accordingly.

31 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT statutory presumption of section 292C. At the same time, however, we wonder as to how could the document be read to imply any income in the hands of the assessee (KT). Loan to HAK by PA, even if through the agency of the assessee, or commission promised by him, would not translate into income in his hands; the same being, without doubt, to the account of HAK. Similarly, the bills to the assessee (CHF 5458 for medicine, courier and telephone expenses) being charged by PA to HAK, only imply being paid by PA, who, in turn, charges the same to HAK. Irrespective of HAK having paid the same to PA or not, the very fact of their charge to him implies that the understanding is of the HAK paying the same. How, then, the same could it be considered as discharged by the assessee, for being considered as his income. We, therefore, have no hesitation in deleting the said addition. We decide accordingly.

32 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT claims it to be a loss for the current year. Be that as it may, it is only the loss as determined in assessment that could be set off, which is stated as made u/s. 143(3) on 31.3.2005 (APB 10, pg. 1785). We, accordingly, modify the impugned order to hold in favour of the loss, as determined, to the extent it relates to the current year, against income assessable for the current year. In other words, it is the income as already assessed u/s. 143(3), as against that returned, that shall be the starting point of the computation of income, followed by the adjustments made thereto per the instant assessment. We decide accordingly.

A.Y. 2003-04 27. Grounds 1 to 4 stand decided vide paras 2 to 5 of this order.

33 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT Rs.9,45,269/- from 11.7.2002 to 05.2.12005. The assessee, in explanation, vide his letter dated 26.12.2008, submitted that the same, being for foreign travel, could only be verified from his old passport, no longer in his possession. Further, that all the payments stand made through cheques and are duly reflected in his income-tax returns. In the absence its substantiation, however, the expenditure incurred during the current year (Rs.2,21,990/-) came to be added as unexplained expenditure u/s. 69C, and also confirmed for the same reason, so that the assessee is in second appeal.

34 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT adjudicating Ground 11 for A.Y. 2001-02; the respective cases of the parties being the same.

A.Y. 2004-05 37. Grounds 1 to 4 stand decided vide paras 2 to 5 of this order. 38. Ground # 5 is toward an addition for Rs.1,07,700/- on account interest and brokerage. The same stands already decided vide paras 8-9 of this order, adjudicating Ground 7 for A.Y. 2001-02.

35 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT Ground 7 before us, is accordingly confirmed. The same also decides Ground 7 for A.Y. 2005-06; the amount for that year being Rs.1,20,000/-; the facts of the case as well as the respective cases of the parties being the same. We decide accordingly. This decides Gds. 6 and 7 for A.Y. 2007-08 as well, being qua the same set of facts.

36 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT A.Y. 2005-06

37 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT though is stated to have not been filed, leading to an addition qua the admitted cash- in-hand (as on 31.3.2005) being unexplained as to its source. Similarly, for A.Ys. 2006-07 and 2007-08, the cash-in-hand is admitted, stated to be sourced from different bank accounts and, further, deposited again in different bank accounts. Only a production of the assessee’s regular accounts, which have presumably been maintained in view of the returns u/s. 139 having been filed for the relevant years (except for A.Y. 2007-08), accompanied by the balance-sheets as at the end of the relevant year/s, coupled with the bank statements, would support the assessee’s claim/s. Two, as it appears, the figures stated are combined for both KT (assessee) and CT, so that only a single cash account, for both, has apparently been maintained by the assessee, deploying it for either deposit (in the bank accounts) or for user (for the purposes) of either. The matter is essentially factual; the assessee being called upon to explain the source of the cash available with him, and which he states as sourced from different bank accounts. The deposit of cash in bank is toward utilisation of the said cash; apart from explaining the source of the relevant bank deposit/s. The matter, in our view, therefore, merits being examined, allowing the assessee an opportunity to prove his claim/s. The cash-in-hand, to the extent unproved, and confirmed for addition, would form part of the cash-in-hand, as much as that which stands explained as to its source, so as to be available for subsequent utilisation. Two, the A.O. shall be at liberty, nay, obliged to also examine the balance/deposit in the bank, and the mere fact of the cash being withdrawn from bank account may by itself not be conclusive of the explanation as to the source of cash, which only translates into the source of the corresponding bank deposit/s /balance. We decide accordingly. This also decides Grounds 16 and 18 for A.Ys. 2006-07 and 2007-08 respectively; the facts and circumstances of the case as well as the respective cases of the parties being the same.

38 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT 13 of this order, adjudicating Ground 9 for A.Y. 2001-02; the respective cases of the parties being the same.

39 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT matter is clearly unexamined, i.e., on merits, at any stage, so that the dictate of justice would be its restoration back to the file of the assessing authority, allowing the assessee a final opportunity to present his case, including furnishing of any material in support, and adjudication by the former in accordance with the law per a speaking order. We decide accordingly. We have, however, two observations to make in this regard. Firstly, if and where a loss under the head ‘capital gains’ obtains consequent to the A.O.’s findings, issued having regard to the provision of section 71 of the Act, i.e., which allows the set off of loss from one head of income against income from another for the same year; the return having been filed only on 29.7.2006, i.e., much after the time allowed for furnishing the return u/s. 139(1), the same shall not be, in terms of sections 80 and 139(3), stand to be carry forward. Two, there is no indication if the assessment for the current year (A.Y. 2005-06) was framed at any time, i.e., prior to the impugned assessment. True, one could argue, as indeed it was before us, that where no assessment for the year is pending, in-as-much as the time provided for the service of notice u/s. 143(2) under the Act had expired, it did not abate, and it was by implication a concluded assessment, which cannot be interfered with in section 153A proceedings. Both the parties before us relied, in support of their cases, on the decision in the case of Continental Warehousing Corporation (supra). There is, firstly, admittedly no intimation u/s. 143(1) or order u/s. 143(3), so that the stated issue does not arise for consideration, save for A.Y. 2002-03, for which, as afore-discussed, concluded assessment u/s. 143(3) stands made. Further, this issue will also not arise for A.Y. 2007-08 for which no return has admittedly been filed u/s. 139 and the impugned assessment (u/s. 144) for which year is the original assessment. As, however, processing of each return, validly furnished, is an established procedure, we consider this issue, without prejudice, moving on the premise that the same may have been subject to processing u/s. 143(1), and which issue would therefore survive for A.Ys.

40 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT 2001-02, 2003-04 to 2005-06. This is as for A.Y. 2006-07, the return filed prior to the date of search is on 28.5.2008, i.e., beyond the time prescribed therefor u/s. 139(1) or for a belated return u/s. 139(4) and, thus, non-est in the eyes of law. On merits, the gist of the afore-said decision, even otherwise binding on us, stands stated at para 18.2 of this order, making reference to different paragraphs thereof. The same, carefully perused, in our view, makes it abundantly clear that when the Hon’ble Court speaks of a completed assessment, it adverts and refers to just that, i.e., an assessment completed observing the due process of law, for which there is an order of assessment (or reassessment) in force as on the date of search or requisition. It, in so doing, reiterates its earlier decision in CIT vs. Murli Agro Products Ltd. (in ITA No. 36 of 2009 dated 29.10.2010), which it in fact follows, reproducing the relevant part (paras 8-13) at para 28 of its Judgment (reported at pgs. 658 – 660 of the Reports). Vide para 10 (reproduced) the Hon’ble Court speaks of assessment/reassessment which stands finalized as not abating, so that the appeal or revision proceedings pending against such finalized assessment would not abate. This is also what stands clarified by the Board per its Circulars. Then, at para 12 (reproduced), it clarifies that in passing an assessment u/s. 153A r/w s. 143(3), the A.O. cannot disturb the finality of an (re)assessment order, unless of-course the relief granted under a finalised assessment is contrary to the facts unearthed during the course of section 153A proceedings. It further expresses itself unequivocally at para 29 (of its’ later decision), at pg. 660 of the Reports, as under: ‘If they were pending on the date of initiation of the search u/s. 132 or making of requisition u/s. 132A, as the case may be, they abate. It is only the pending proceedings that would abate and not where there are orders made of assessment or reassessment are in force on the date of initiation of the search or making of a requisition.’

What, one may ask, could be more explicit than this? A finalised assessment, it continues to explain (at pg. 661), cannot be touched by resorting to the provision

41 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT (section 153A). Whether the processing of the return u/s. 143(1) could be said to be an assessment is a matter dealt with, and can be said to be concluded by the decision by the Hon’ble Apex Court in CIT vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. [2007] 291 ITR 500 (SC). Tracing the legislative history of the provision, for which it makes reference to its earlier decision in Apogee International Ltd. vs. Union of India [1996] 220 ITR 248 (SC), it explained that the legislative intent is very clear from the use of the word ‘intimation’ as substituted for ‘assessment’, which denote different concepts. While in assessment, the A.O. is free to make any addition after grant of opportunity to the assessee, no such addition/adjustment is permissible u/s. 143(1), where-under he cannot go beyond the return, accounts or documents accompanying the return, and for the reason that no opportunity is granted to the assessee. Substantial changes, it notes, have been further made w.e.f. 01.6.1999, restricting the power to make adjustment to removal of arithmetic errors or that otherwise apparent on the basis of the return itself or the documents accompanying the same. The processing of the return, leading to an Intimation u/s. 143(1), may not be done by the AO himself and, further, is without prejudice to the provision of section 143(2) (refer pgs. 507 to 510 of the reports). The intimation u/s. 143(1), it further explains, is not an assessment and cannot be treated as an assessment order, also explaining the purpose for which it is deemed as a notice of demand u/s. 156, i.e., to enable recovery thereof, where it reflects ‘tax payable’. Continuing further, it explains that the word ‘assessment’ is used in the Act for conveying different meanings. It may be used to mean ‘the computation of income’, sometimes ‘the determination of the amount of tax payable’ and sometimes ‘the whole procedure laid down in the Act for imposing liability upon the tax payer’ (pgs. 507-510). We having set out the said decision in brief, may as well reproduce a part thereof (pgs. 509-510), as under:

‘In the scheme of things, as noted above, the intimation under section 143(1)(a) cannot be treated to be an order of assessment. The distinction is also well brought out by the statutory provisions as they

42 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT stood at different points of time. Under section 143(l)(a) as it stood prior to April 1, 1989, the Assessing Officer had to pass an assessment order if he decided to accept the return, but under the amended provision, the requirement of passing of an assessment order has been dispensed with and instead an intimation is required to be sent. Various circulars sent by the Central Board of Direct Taxes spell out the intent of the Legislature, i.e., to minimize the departmental work to scrutinize each and every return and to concentrate on selective scrutiny of returns. These aspects were highlighted by one of us (D. K. Jain J) in Apogee International Limited v. Union of India [(1996) 220 ITR 248]. It may be noted above that under the first proviso to the newly substituted section 143(1), with effect from June 1, 1999, except as provided in the provision itself, the acknowledgment of the return shall be deemed to be an intimation under section 143(1) where (a) either no sum is payable by the assessee, or (b) no refund is due to him. It is significant that the acknowledgment is not done by any Assessing Officer, but mostly by ministerial staff. Can it be said that any ‘assessment’ is done by them? The reply is an emphatic ‘no’. The intimation undersection 143(1)(a) was deemed to be a notice of demand under section 156, for the apparent purpose of making machinery provisions relating to recovery of tax applicable. By such application only recovery indicated to be payable in the intimation became permissible. And nothing more can be inferred from the deeming provision. Therefore, there being no assessment under section 143(1)(a), the question of change of opinion, as contended, does not arise.’

Finally, we may, for the sake of completeness of the discussion in the matter, which we have though found as completely covered by the decisions by the Hon’ble jurisdictional and the Hon’ble Apex court cited supra, consider the argument of the processing of a return u/s. 143(1) as leading to an assessment, i.e., after the expiry of the time prescribed for the service of notice u/s. 143(2), in the context of section 153A proceedings or a s. 153A assessment. There is no concept of deemed assessment, i.e., by lapse of time, under the Act, which is a positive act of determination of income by the assessing authority. The law does not contemplate two assessments, i.e., one by issue of notice u/s. 143(2) and the other, otherwise, i.e., without the issue of the said notice. As explained by the Hon’ble Court per its afore-referred decisions, what

43 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT section 153A contemplates, quite simply, is that the return (for a year) that has undergone the process of verification, resulting in an order of assessment (or reassessment), becomes finalized and cannot be visited again. That is, what s. 153A contemplates is an assessment of total income on a scrutiny of the assessee’s claims, i.e., following the verification procedure under the Act, and due application of mind by the A.O. And it is precisely for this reason that where the assessment stands so framed, passing an assessment order, the same is held as not liable to be visited again. This is subject to the caveat that no adverse material, incriminating the return, is found in search or requisition (of books of account or other assets). It is notable that even income recorded in the books of account would stand to be included in a section 153A assessment, where not produced but found during search or requisition. There is no question of calling for the books of account, much less examining them, under the processing of the return. As explained by the Apex Court in Rajesh Jhaveri Stock Brokers Pvt. Ltd. (supra), the question of the A.O. expressing his opinion u/s. 143(1) does not arise. There is no determination of income in such a case by the A.O., who is precluded for making enquiries, nay, even affecting prima facie adjustments to the return (w.e.f. 01.6.1999). The income so accepted, being not determined by the A.O. and sans any assessment order, can only be said to be returned or processed income, and not assessed income. The assessee’s argument, to our mind, constricts the scope of the proviso to section 153A beyond its mandate, which is limited to abatement of assessments pending on the date of initiation of search or, as the case may be, making the requisition. As afore-discussed, the limitation on the scope of inquiry or examination only to the findings of search or requisition while making a s. 153A assessment would extend only to concluded assessments, signified by orders of assessment or reassessment. This, we find to be the unequivocal view expressed by the Hon’ble Court in Continental Warehousing Corporation (supra) and Murli Agro Products Ltd. (supra), judicially binding on us, and which we further find as consistent with the

44 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT decisions in Rajesh Jhaveri Stock Brokers Pvt. Ltd. (supra) and Kelvinator of India Ltd. (supra), as also the scope and purport of a s. 153A assessment as explained by the Hon’ble Courts of law.

A.Y. 2006-07 57. Grounds 1 to 4 stand decided vide paras 2 to 5 of this order.

45 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT the captioned property, bearing the details of the work and the payment schedule, duly signed by the contractor. Summarising the expenses on various counts, as under, in the A.O.’s view, the burden to rebut the presumption of section 292-C was on the assessee (reproducing the same at para 7), which he had not discharged by furnishing any material, merely denying the transactions and, accordingly, made an addition for the impugned sum (refer para 8(i) of the assessment order): (Amount in Rs.) Dismantling work 3,04,050 Civil & electrical work 23,87,085 Plumbing work 2,50,000 Window & door chaukhat 7,96,995 Misc Work 15,07,085 Total 52,45,215 The same found confirmation in appeal for the same reason; the presumption of section 292-C being attracted.

46 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT Window & door chaukhat 7,96,995 total 37,38,120

We find no separate estimation for miscellaneous work (taken at Rs.15,87,085/- by the A.O.) or description thereof, or even reference thereto, in the said papers. This figure is in fact of the cost of the civil work (as per the revised estimate at pg. 1035), with electrical work being estimated thereat at Rs.8,80,000/- (i.e., both aggregating to Rs.23,87,085/-). This, in fact, summarises the revised cost estimate (dated 07.2.2006), appearing at pgs. 1029 to 1036, being thus in supercession of the provisional estimate (dated 24.8.2005), appearing at pgs. 1023 to 1028, estimating the civil and electrical cost at Rs.14,66,005/- and the dismantling cost Rs.1,74,075/- (at pg. 1028). Another Rs.4 lacs is written as toward ‘wood work’, also mentioning ‘plumbing’, ‘terrace cover’ and ‘passage in dining room’, by hand (which appears to be of the assessee), suggesting that the estimates were subject to discussion. However, the work, clearly, was not carried out, necessitating the revision in estimates, which stands summarised at pg. 1037 (supra) at Rs.37,38,120/-. The assessee’s plea of no work at all having been carried out due to paucity of funds, is a bald plea, not borne out by the record, which suggests otherwise. The very fact that the exercise detailing the work to be undertaken, alongwith concomitant cost, was carried out again, only implies a renewed interest in the project, which was for same reason not undertaken earlier. Would it be so, if the assessee was constrained for funds? The paucity of funds has not been shown in any manner, the assessee, rather, maintaining cash balance in lacs, besides liquid funds with banks. The time schedule also stands specified along with, signifying its essence. The dismantling work (costing Rs.3.04 lacs) is scheduled to be completed in 4 - 6 weeks, paid for at 50% in advance, with the final instalment of (10%) after the fourth week. Similarly, the civil and electrical work (costing Rs.23.81 lacs) is schedule to be completed in 8-10 weeks, with the payment, beginning with an advance of 20% (first week), is to be made up to 95% after completion of 7 weeks. The onus is clearly on the assessee, who has not in any manner shown that, even to,

47 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT the work was, though planned, not actually carried out, or was executed only partially, or that the same stands duly accounted, paid for through disclosed sources and/or only subsequently. In fact, no material in rebuttal has been brought on record at any time; the assessee merely denying the transaction. Then, the assessee states of the flats, purchased in 1983-84, being not owned by him, but by R. M. Investment and Trading Co. Pvt. Ltd. and Robert Mclean Consultants P. Ltd., whose names are conspicuous by their absence, i.e., except in the assessee’s submission dated 01.2.2008. There is, firstly, no document to evidence the same. Two, it is clear that it is the assessee who was residing in these flats, located at first floor of the building, occupying the same as a bona fide resident, and it is he who, as a resident and ostensible owner of the flats, would be interested in the renovation, and was interacting with the contractor, specifying and discussing the works to be carried out, and would be called upon to pay, and whose names appears on the records of the resident’s association/society in- so-far as the communication there from is concerned – in other words, has, in any case, the beneficial interest in the flats, which he holds out to the world as belonging to him. Income-tax law recognises beneficial ownership as against legal or titular ownership (CIT vs. Podar Cement (Pvt.) Ltd. [1997] 226 ITR 625 (SC)), even as the issue before is qua the payment for the renovation of assessee’s residence. No case of he being required to reside in these flats for the purpose of the business of the stated companies, even assuming them to be the owner, has been made out, or of the negotiations with the contractor being carried out by the assessee (and his wife) for and on behalf of these companies. Under the circumstances, we have no hesitation in confirming the addition in principle. However, as observed earlier, there is clearly a double addition of Rs.15.07 lacs, even as pointed out by the ld. AR. We, accordingly, uphold the addition at Rs.37,38,125/-. The assessee gets part relief. We decide accordingly.

48 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT 60. Ground # 6 is in respect of an addition of Rs.53 lacs on account of unexplained payment to one Syed Ahmed Abbas Naqvi (SN). Pages 3 and 3A (of the loose papers) seized during search on 05.1.2007 from the Mumbai (Andheri West) residence of SN, read as under (APB 14, pgs. 2119-2128): Page No. 3A contains the following notings: ‘TO TAKE FROM (TAPURIAHJI) Tapuriaji’s a/c. 1.32 CR for diamond 3 – lacs given to Khan (Khan) 5 – lacs given to Faisal (by Appa) 10,000/- pounds – i.e. 9 lacs in London 10,000/- pounds – i.e. 9 lacs in London Total 1.58 cr gross as on 25.12.2005

Received from Tapuriahji 5 lacs in Calcutta 2 lacs in Delhi 3 lacs in Calcutta 5 lacs in Calcutta 10 lacs in Calcutta 15 lacs 14.02.06 5 lacs 16.02.06 8 – lacs 13.04.06 Balance 1.05 cr as on 16.4.2006 Rs. 3 lacs received from Mr. T. Balance 1.02 cr as on 23.5.06’

The paper shows that Rs.53 lacs were received by Sh. Naqvi from the assessee at various places and dates. Thus, leaving payable at Rs.1.05 crore as on 16.4.2006. Rs. 3 lacs were again received from Mr. ‘T’ thereby reducing balance to Rs.1.02 crore as on 23.5.2006.

Page No. 3 is as follows: ‘From & to Mr. Tapuriah Rate 90,000 – USD = i.e. (44.60 Rs.) = 40 Lacs received from Mr. TH 24 lacs given to Mr. Khan }on

49 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT 9 lacs given to Mr. Khan }Mr. Tapuriah’s 8 lacs given to Mr. Khan } A/c. Total 41 lacs given – this word is scored out/ 41 lacs given to Mr. Khan by Munna 40 lacs received in USE 90,000 Balance 1 lac and 1.5 lac ticket. 25,000 USD i.e. 11 lacs received From Mr. Tapuriah Less: balance – 2.5 lacs – 11 = 8.5 lacs As on 16.4.2006’ On the basis of the said documents, a total of Rs.107 lacs (i.e., Rs.56 lacs as per pg. 3A and Rs.51 lacs as per pg.3), was paid by the assessee to SN, who vide a statement of oath u/s. 132(4) dated 05.1.2007 stated that the amount/s received were toward payments in respect of the transactions between the assessee and M/s. Soir Jewellers and, accordingly, the amounts were given to one, Mr. Imtiaz (of Soir Jewellers – SJ), on assessee’s behalf. Copy of the assessee’s accounts in the books of Soir Jewellers reflected payment/s received from KT (assessee) at Rs.84 lacs (during f.y. 2005-06) and at Rs.19 lacs (during f.y. 2006-07, in April, 2006), i.e., at a total of Rs.103 lacs. Accordingly, it was inferred that out of Rs.107 lacs received by SN from the assessee, Rs.103 lacs were given to SJ. The same, to the extent pertaining to the current year (Rs.53 lacs), was proposed to be added for A.Y. 2006-07, and the balance Rs.54 lacs for the following year (A.Y. 2007-08). The assessee denied the transactions, stating that all that SN had requested of him was assistance by way of finance, and though the possibility of diamond exports was discussed with him, the same did not materialise, also disclaiming the transactions listed in the seized papers (vide statement u/s. 132(4) dated 11.1.2007). SN, on being confronted with the assessee’s statement, would, in rebuttal, allude to the dishonour of cheque/s issued by CT in favour of SJ (pgs. 27, 28 of Annexure A2, seized from the assessee’s residence) vide his statement dated 21.3.2007. The A.O. found the assessee’s denial unacceptable, and made the addition for the proposed amounts, which are the subject matter of Grounds 6 and 7 of the appeals for A.Ys. 2006-07 and 2007-08 respectively.

50 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT In appeal, the assessee reiterated his claim of no diamonds being purchased, with the ld. CIT(A) finding the transactions as being corroborated and confirmed from the accounts of SJ. The copy of the lawyers’ notice (on behalf of SJ) along with the copy of dishonoured cheque, found in search from the assessee’s residence, further proved the same. The additions for the consecutive years, at Rs.53 lacs and Rs.54 lacs respectively, were confirmed, so that aggrieved, the assessee is in second appeal.

51 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT Revenue’s case is not made on the basis of, or hinges on the said statement alone, which is rather in agreement with the facts as found from the various documents seized in search. It is the assessee who, therefore, would be required to produce SN – who has merely affirmed the truthfulness of the documents found in search, even otherwise mandated by law (section 292-C of the Act). In our view, it is, on the contrary, the assessee who needs to explain the documents found from his residence in relation to this addition, as well as to how was SN in the know of the same, i.e., the dishonoured cheque and the lawyer’s notice. We are conscious that the date/s of the payment as recorded in the books of SJ do no match with that in the seized material. It is the letter, which though forms the principal document and the basis of the addition. Two, it is clear that the assessee, HAK and SN maintain open accounts with each other, giving payments to one another, or one another’s behalf, from time to time, to be adjusted/settled subsequently. This also explains the different between Rs.107 lacs paid to SN (as per pgs. 3, 3A) and the amount reflected as received from the assessee (Rs.103 lacs) in the accounts of SJ. The matter is purely factual, decided by us on the basis of the various materials found in search, to which the presumption of section 292C shall also apply, as well as that led in support, viz. the copy of the assessee’s account in the books of SJ (f.ys. 2005-06 and 2006-07). Accordingly, the assessee’s reliance on the decisions in the case of CBI vs. V. C. Shukla, AIR 1998 SC 1406 and Kishinchand Chellaram vs. CIT [1980] 125 ITR 713(SC) would be of no assistance thereto. We decide accordingly, confirming the impugned addition.

52 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT passport. The assessee, on being confronted with the same, confirmed having fallen sick in London, and that, fearing hospitalisation, had requested for funds from his friend, SN, who arranged for the same through his friend, Shabeeh Sayed. However, as the assessee was not required to be hospitalised, the entire amount brought (GPB 20000) by the said friend was returned then and there (December 2005). No case for addition is thus made out. In the view of the AO, Shabeeh Sayed had clearly stated of having given GBP 20,000 to KT (assessee) in December, 2005 for the latter’s medical needs, which was returned back later. The assessee’s denial of receipt was, accordingly, not accepted, and the impugned sum added as income by way of unexplained repayment, and confirmed for the same reason, so that, aggrieved, the assessee is in second appeal.

53 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT explained. The assessee’s explanation obviates that need by stating that the money, though offered, was in fact not accepted in-as-much as he was not required to be hospitalised. The ‘explanation’ is contrary to the clear evidence of the assessee being given UK Pounds 20,000 at London in late 2005. Why, one may ask, would it be recorded if no money had in fact exchanged hands? That is, the assessee’s ‘explanation’ challenges the very basis of recording the transaction, by ‘denying’ it, while at the same time not denying the circumstances and the background facts leading to it. On what basis? The assessee’s stating of being not hospitalised as the reason, is neither here nor there. There is, firstly, no basis or material of it being so, i.e., of being not hospitalised. Then, the question is: How is it relevant? The explanation is sans any details – as for example the statement of medical expenses incurred (suitably supported), matching it with the funds available with the assessee thereat (also including that expended during his stay abroad) and, thus, justifying the claim that the need for funds would arise only in case of hospitalisation. Rather, as apparent, the funds were clearly required on an emergent basis in view of his medical condition, and would, under normal circumstances, be accepted, if only by way of abundant precaution, i.e., even if hospitalisation was not ultimately needed, assuming it was this that had prompted the requisition (for funds) in the first place. The onus to prove that the apparent is not real is on the person who so alleges, the assessee in the present case, who in fact admits the entire sequence of events, except for being given funds, qua which there is evidence on record. The assessee in fact suffers, as a reference to his bail applications shall show (APB-4/pgs. 773-798), from serious medical problems, which only get accentuated with advancing age. The burden therefore to rebut the same, including by way of cross-examination (of the persons who were part of the evidence, and had issued corroborative statement/s), is on the assessee, whose plea qua the same, putting the blame for its non-conduct at the door of the Revenue, is not maintainable, as is his reliance on the

54 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT decisions in the case of V. C. Shukla (supra) and Kishinchand Chellaram (supra) – the matter being principally factual. In fact, the assessee stating in appellate proceedings, relying on the letter of Mr. Sayed, that the amount was ‘returned’ in London itself, is confirmatory and an admission of it being received/accepted in the first place. That it was returned in London further establishes of repayment being in the same financial year, the source of which though remains unexplained. We decide accordingly, confirming the addition.

55 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT facts, only consider it proper that the matter is restored back to the file of the A.O. for determination afresh. The onus to prove his case though would only be on the assessee. The A.O. shall decide in accordance with law, issuing defining findings of the fact. Where payments in cash are ascribed to personal withdrawals, the matter would necessarily require visiting the aspect of adequacy of such withdrawals, considering the assessee’s lifestyle, including on health care, besides of-course the availability of cash on the date/s of payment/s. Then there is the aspect of duplication, vehemently made out during hearing, not as much as payments could be made through credit cards, for which separate addition/s have been made, and finally settled through cheque/s, and which could be duly accounted. We decide accordingly.

56 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT over preceding year to that extent) and, in fact, to the extent of Rs.55,000/- are detailed in the bill itself. Also, there is nothing to exhibit of the balance being in dispute or not paid, the repair work in fact continuing upto 30.11.2005, over 2 month after the last payment of Rs.10,000/- was made on 28.9.2000. As regards the telephone expenses, the same are in the nature of regular expenses. However, the bills found are for a part of the year (commencing from 15.1.2006 up to 01.2.2008), working to an average of Rs.26,000/- p.m. The expenditure for f.y. 2006-07, corresponding to A.Y. 2007-08, is at Rs.3.41 lacs, which yields an average of Rs.28,000/- pm. To state therefore that Rs.50,000/- (out of the withdrawal of Rs.3 lacs for the year) and Rs.2,80,000/- (without specifying the total withdrawal for the year) from HUF account, be appropriated toward telephone expenses, is obfuscating, rather than addressing the issue, by issuing a gross statement. We could understand where the assessee says of having made a regular, monthly withdrawal of Rs. xxx (signifying the same), of which Rs.xxxx (stating the amount) is toward monthly telephone expenses, which would only but be a small part of the total expenditure that the personal/household withdrawal is toward, focussing thus on the adequacy thereof with reference to such expenditure. The explanation is wholly unsatisfactory, besides being unsubstantiated. Some of the impugned expenditure is stated to be paid by cheque, and which could well be from an explained source. We, accordingly, consider it proper to restore the matter qua Gd.13 to the file of the A.O. to enable the assessee to satisfy him with regard to that part of the expenditure stated and shown by cheque, as being from explained source/s. We decide accordingly, and this also decides Ground 16 for A.Y. 2007-08.

57 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT 68. Ground 15 is toward an addition for Rs.4,20,000/- on account of interest income and Rs.12,000/- on account of interest. The same stands disposed vide at paras 10-11 of this order, deciding Gd. 8 for A.Y. 2001-02; the respective cases of both the parties being the same.

58 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT 72. Ground # 19 is in respect of an addition for Rs.6,48,665/- toward purchase of foreign exchange. The case of the parties is the same as qua Ground 18, so that we have no reason to take a different view, and decide likewise (also refer paras 31-32).

59 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT backed by materials. We, for the same reasons as inform our decision with regard to Gd. 14 for A.Y. 2005-06, decide likewise.

A.Y. 2007-08 78. Ground 1: The assessment for this year is distinguishable from that for the preceding years in-as-much as no return was admittedly filed u/s. 139 of the Act and, two, is framed u/s. 144 of the Act. The search conducted, being prior to the close of the relevant previous year, the search year, there is no question of the assessee having filed the return by that date or of the assessment proceedings having commenced. The A.O. accordingly retains original jurisdiction, and the assessment, in our view, is u/s. 153A r/w s. 144 of the Act. The same would thus not stand restricted to the material found in search. Abundant opportunities to represent his case were provided to the assessee, which commenced with the issue of a questionnaire on 29.01.2008, continuing with the issue of questionnaires and notices up to 19.12.2008. Copies of the documents seized from the residence of the assessee, as well as of HAK and SN, were supplied to his representative, Shri Pradeep Shah, CA, on 05.9.2008, 17.11.2008 and 21.11.2008. No return, despite notice u/s. 142(1), being filed, with the assessee

60 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT also failing to make compliance, not responding even to summons u/s. 131 dated 16.12.2008, the assessment was finally framed u/s. 144 after duly show causing the assessee qua the same (vide letter dated 01.12.2008), also informing that the assessment was getting time barred on 31.12.2008, to no response, even as Shri Pradip Shah was again conveyed this vide order sheet entry dated 01.12.2008. Reference in this regard may be made paras 2-7 (pgs.1-7) of the assessment order. We, accordingly, find no infirmity in the framing of assessment u/s. 144, nor was any brought to our notice during hearing. This aspect, i.e., of the assessment being without jurisdiction and bad in law, agitated per Ground 1, was in fact not raised before the first appellate authority, whose order is therefore sans any discussion in the matter. The assessee fails on its’ Gd. 1, which is accordingly dismissed.

61 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT month/s, being from June to November, 2006). There is no question of it being, as stated by the assessee, an estimate of certain liabilities to be met in future. Unless, therefore, the assessee explains the same with reference to its accounts (or otherwise) the source thereof, the same are liable to be added as unexplained expenditure u/s. 69C of the Act. Whether the same have been made, admitted to be in part, from the sale proceeds of the shares (in Redico and GHCL), also listed alongside (on the same page), valued at Rs.11.50 lacs (out of a total four shares valued at Rs.20.50 lacs), is a question of fact, not proved; the assessee as much as not producing his books of account, stated to bear the said shares, some of which are further stated to be sold, and which (sale) also stands reflected therein. That is, the said sale is the assessee’s explanation toward the source – to whatever extent, of the said expenditure. Admittedly, only some of the shares have been sold later, so that the listing of the shares on the said page can at best be stated as of the holding, stated toward the intent of being sold. It could well be that the other shares were not sold (or required to be), or even that the same, though belonging to the assessee, are not disclosed. There is no indication of the expenditure being kept in abeyance and not made on a regular basis, being even otherwise of a recurring nature, and not discharging which could lead to disruption in the relevant service or even penal consequences, viz. electricity, telephone, rent, car instalments, credit card, etc. The matter is primarily factual and the relevant facts would need to be established. When were (and how many) the shares were sold; at what price; when were the sale proceeds received and how were they applied, would be among the pertinent questions (of fact). Then, again, is the question of sale of shares being offered to tax, where exigible. The assessee has singularly failed to discharge the burden of proof on him. We, under the circumstances, consider it proper to restore the matter back to the file of the A.O. to allow the assessee one final opportunity to substantiate his claims with all the relevant material or evidences. If the admitted source, to the extent accepted, leads to a finding of any taxable income having accrued to the assessee, the A.O. shall be at liberty to

62 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT bring the same to tax, being concomitant to the assessee’s explanation (refer: Ahmedabad Electricity Limited vs. CIT [1993] 199 ITR 351 (Bom) (FB)). He may also, at his option, for the purpose of the said verification, seek any material/evidence from the assessee to satisfy himself with regard to the truth of the explanation, and decide the same in accordance with law, issuing definite findings of fact. We decide accordingly.

63 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT require being shown as accounted and, further, disclosed as income. The matter would therefore merit being adjudicated afresh. We understand that assessment is a best judgment assessment, so that the AO is bound to act only on the materials, as well as explanation furnished, before him, and that the assessee had failed to discharge the burden of proof on him, only denying the transaction/s. The interest of justice, however, dictates our decision as to restoration; the interest amount indicated to be by cheque/s. Again, if the interest is accounted, could it be that the principal amount is not by cheque, though the question of it being accounted/disclosed is, again, wide open. The assessee, who is accorded one final opportunity to substantiate his claims, shall, needless to add, provide full co-operation/details, even as assured by the ld. AR during hearing time and again. The entire issue is open, and the AO shall decide in accordance with law, consistent with his factual findings. We decide accordingly.

85.1 Grounds 9 to 14 concern common issues, and are accordingly taken up together. We proceed by tabulating the basic details with regard thereto, as under: Ground Expenditure Based on Amount Remarks 9 Travel Seized material 2,15,000 10 Travel and other expenses Seized material 11 Travel Seized material 3,52,486 12 Travel Seized material 7,62,575 13 Travel Seized material 75,395 14 Travel Seized material 65,400

64 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT Seized material in the form of notings, invoices, by M/s. Travel Hub P. Ltd., Airlines, statements of account, etc. were found (APB-6/pgs. 1141- 1150). The same were added in the absence of any explanation by the assessee. The transactions, protected by section 292C, are even otherwise admitted. The assessee’s case is only toward reconciliation in-as-much as the same expenditure has been included twice, i.e., based on invoice/s raised and/or payment and/or statement of account (including the amount shown as balance outstanding or carry forward); which we consider to be a distinct possibility, particularly in the absence of any explanation/ correlation in the assessment proceedings. Needless to add, the assessee shall regard it as one, final opportunity in the matter, allowed in the interest of justice. We decide accordingly. Reference is also made to Ground 9 for A.Y. 2006-07 (decided along with Gds. 8, 10 and 11 for that year, vide para 64 of this order). Here it may be pertinent to mention that though the AO states of making the addition for Rs. 3,52,486/-, he actually includes only Rs.1,73,950/- (a component of the former amount) in assessment (refer para 20(5) of the assessment order). In-as-much the addition is to be made at the correct amount only, the AO, subject to hearing the assessee, shall be at liberty to bring the correct amount to tax. This decides the Grounds tabulated above, save Gd. # 10.

85.2 Ground 10 is in respect of unexplained expenses on viz. travel, mobile, AMC, personal expenditure (as on medicine), etc. (APB-6, pg. 1140). The statement is in the handwriting of, as it appears, the assessee. No explanation stood furnished, except for stating it to be through personal withdrawals, without of course showing it to be so. So, however, we observe that the expenditure includes payment for credit cards (American Express - Rs.25,395/-), as well as on telephone, paid per cheque/s. Subject to the assessee so exhibiting, i.e., of the payment/s being accounted for, we confirm the addition. We decide accordingly.

65 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT 86. Gd. # 15 is qua an addition for Rs.30,000/-, based on seized material (APB- 6/pgs. 1151 – 1153) on account of payments to one, Babu Chakravarty, on 2.05.2006 (Rs.10,000/-) and on 05.7.2006 (Rs.10,000), duly receipted. Page 1153 is a statement dated 21.06.2006 by him, again duly signed, of only Rs.10,000/- being outstanding. The assessee’s claim of the amount being accounted (through personal withdrawals) stands rightly rejected by the Revenue, being unsubstantiated. The claim of only Rs.20,000/- having been paid, though, merits acceptance, and no separate addition is called for qua pg. 1153. We decide accordingly, restricting the addition to Rs.20,000, and the assessee gets part relief.

66 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT admitted expenditure remains unexplained. The second argument, i.e., of double addition, is taken before us for the first time. Further, there are other aspects of the matter as well. The names of the five persons, to whom salary is paid (for the month of June, 2006) are clearly spelt out. Are they the assessee’s personal staff, or of any of his companies? If they are of RMC or some other company, how, we wonder, could the same, i.e., the said expenditure, be added in the assessee’s hands? Again, if the companies are defunct, with no business, what, and for whom, the services were being rendered by them. No such inquiry stands made, the question in which respect may arise only where not accounted for in the books of the company/s, in which case the same could be considered as paid by the assessee in his capacity as the principal person of the employer-company. The issue, we may clarify, is not with regard to the employer, de facto or de jure, on whose behalf the payment/s may have been made, but the source of payment – the provider of funds therefor. The matter accordingly is restored back to the file of the AO for addressing this aspect, allowing the assessee a reasonable opportunity of being heard, and deciding on the basis of explanation furnished, issuing definite findings of fact. We decide accordingly.

67 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT 92. We have examined the relevant documents. The handwriting is the same as that appears at page 1207 (Ground # 19), i.e., toward withdrawal of cash (Rs.50,000), and the cash expenses discharged there-against. There is sufficient indica of the figures stated in these documents as representing amount in rupees, which are further tabulated under various heads, viz. cash, suspense, expenses, etc., and then summed up. The AO has added all such totals appearing at all the three pages. His totals are correct, except for that at page 14 (of Annexure CIL-1) – being at Rs.68,28,506/- (as against Rs.61,99,965/-). Also, the figure noted as ‘375853’ is actually ‘3175853’, so that the relevant total would work to ‘96,28,506’ (as against the adopted figure of Rs.61,99,965/-). Continuing further, the documents are not dumb, as stated by the assessee. Against each of the several amounts under each head, is a short narration, viz. ‘C & D’, ‘Suraj’, ‘BKC’, ‘Guptaji’. Then, some amounts have been written more than once and, therefore, have been included twice (or thrice). For example, ’25,00,000’ and ‘3500’ appear twice (at page 1210), under heads totalling to ‘31,75,853’ and ‘32,34,086’. Surely, the exercise has been carried out with some purpose and to some effect, the amounts have to be correlated with the assessee, or any of his businesses, income from which is assessable in his hands. The matter, accordingly, is restored to the file of the AO for fresh determination after hearing the assessee. We decide accordingly.

68 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT again, mere rough notings. The same did not find favour with the Revenue for being unsubstantiated.

69 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT the assessee’s hands (for the purpose of assessment) - which could also be in part, would arise only where expenditure and/or transaction/s is not reflected in the regular books of account of the relevant company, i.e., of the company/employer in case of regular staff salary/gratuity. This is as the company’s being private limited companies, with apparently no regular business, the ultimate responsibility to discharge the legal obligations would be on the promoter-directors - KT, who may well have deployed them for personal purposes or for some other group concern. Even if finally recorded in the books of the company which is legally liable for the same, the question (of fact) before us is as to source of payment, i.e., at the time it is made. There is in fact no contention toward this at any stage. Then, there are some amounts which are clearly noted to be for/toward KT, the assessee (refer page 19). Finally, both the year/s as well as the amount of payment/s, as adopted, may undergo change, as for example, working qua page 17 is found in excess by Rs.1,93,000/-. The matter, accordingly, shall warrant being restored to the file of the AO for fresh adjudication, who shall decide in accordance with law, issuing definite findings of fact upon hearing the assessee, who shall also be supplied page 21 (of Annexure CIL-1), for Rs. 4,57,048/-, stated by him as not available. We having - for like considerations, similarly restored the matter for other years also, guided by the interest of justice, do likewise for the current year as well. The AO in the set-aside proceedings, we may clarify, would be at liberty; rather obliged to bring the correct amount to tax in the assessee’s hands, and for the right year. We decide accordingly.

70 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT para 20 of his order. The same is, thus, a mistake apparent from record. The assessee, accordingly, did not appeal this ‘addition’ before the first appellate authority, whose order thus does not bear any reference thereto. The said Ground is accordingly not maintainable before us. We decide accordingly.

71 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT appellate authority, i.e., even considering him as constrained for time before the assessing authority. The assessee’s claim of the relevant expenditure being booked as personal expenses, thus, remains no more than a bald plea. His further statement of having not claimed the said expenditure in his income tax accounts, is, again, without merit in-as-much as the assessment is not based thereon - the assessee in fact not filing any return for the year. There is as such no material on record, except for the information received from the different credit card agencies - duly confronted to the assessee, with reference to which the addition could be examined for being consistent there-with. No doubt, it was incumbent on the assessee to specify the relevant bank accounts and lead evidence in the matter, yet, at the same time, in our view, the assessee’s claim of having discharged the expenditure through banking channel, could be in the very least cross verified with his known bank accounts. The same could be easily accessed. Besides showing if the assessee was stating the truth (or not), this would eliminate scope for any unjustified addition. The assessee’s balance-sheet as on 31.03.2007 (APB-6/pgs. 1239 – 1240) shows personal expenses (other than withdrawals, at Rs. 3 lacs) at Rs.17.07 lacs. Though not clear as to how the loss for the year as reflected in the profit and loss account (Rs.9.06 lacs) has been adjusted in the balance-sheet, we, admitting the same as an additional evidence, restore the matter toward explaining the source of the impugned expenditure as to its source. We may further add that where the said source is attributable to some credit/s in the assessee’s accounts, the AO shall be fully competent to examine the said source, being part of the assessee’s explanation, as well. We decide accordingly.

72 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT Date of Journey Date of Booking Sector Bill Amount 4.4.2006 1.4.2006 Bom/JRH/Bom 129106 13.6.2006 13.6.2006 CCU/Bom 72854 26.6.2006 24.6.2006 CCU/Del/CCU 29368 Open 6.11.2006 Open 63199 Voide Charge 200 24.5.2005 Swis Visa 18850 5.10.2005 Medical INS 2900 29.4.2006 Medical INS 1983 18.5.2006 UK Visa 15400 28.7.2006 Medical INS 2300 24.11.2006 Swis Visa & Med. 5110 Ins The same came to be added as income by way of unexplained expenditure, and confirmed in appeal in the absence of the assessee exhibiting it to be reflected in his accounts, as claimed. Similar additions have been made for the current year, being subject matter of Grounds 9, 10-14, and which stands restored to the file of the AO for fresh determination. We decide like-wise for this Ground as well. This shall also meet the assessee’s objection of there being double addition/s, i.e., qua the same expenditure. The onus though, we may clarify, is strictly on the assessee, and set aside is only toward the limited purpose of explaining the source of the payment of the admitted expenditure. We decide accordingly.

73 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT 100. We have heard the parties, and perused the material on record. True, the assessee’s balance-sheets as at 31.3.2001 to 31.3.2006 (except 31.3.2004, which is not on record), reflect cash balances in lakhs of rupees, the minimum being at Rs.4.84 lacs as at 31.3.2005. The data is only indicative in-as-much as sufficient cash balance at an earlier point of time does not necessarily imply or translates into an adequate (cash) balance at a given, later point of time. That apart, the search yielded a host of incriminating materials in the form of renovation (of house property), travel, healthcare, mobile/telephone expenses, etc. which being apparently unexplained/unaccounted, have been either confirmed or restored back to the file of the AO to allow the assessee an opportunity to explain the source with reference to verifiable documents/sources. What, then, is the value or the credibility of the cash-in- hand as per the accounts? Further, even if a part of the expenditure is explained with reference to the cash available at the relevant time, being anterior to 05.1.2007, the source would directly impact the cash available as on that date, i.e., 05.1.2007. The assessee, despite ample opportunities - the cash being found as on 05.1.2007 itself, failed to adduce any evidence toward the same being accounted for. So, however, considering that we have, as afore-stated, restored the addition/s toward different expenses, which would have a direct bearing on the availability of cash as on 05.1.2007, we consider it only proper that this matter is also restored to the file of the AO to enable proper adjudication, i.e., considering all the relevant aspects. The burden of proof to establish his claims would though be on the assessee. We decide accordingly.

74 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT returns of self, his wife (CT) and his HUF (as karta), also enclosing the wealth-tax returns for A.Y. 1999-2000. The assessee reiterated his stand in first appeal, emphasizing that they are old assessees, assessed to wealth tax, drawing attention to the ‘returns’, as afore-stated, for A.Y.1999-2000. Also, that the difference between the value of the jewellery (and utensils) shown in accounts, and that adopted for assessment, is on account of valuation, which had witnessed a manifold increase in the recent years - the market value as on the date of search being adopted for the purpose of assessment. The addition being confirmed in appeal, the assessee is in second appeal.

75 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT jewellery, which has since been confirmed by us (refer paras 60-63 and 84 of this order). It is not clear as to what part of the valuables found consist of diamonds or diamond jewellery. Again, if (and to what extent) is the same old jewellery, which (jewellery) also cannot be put in locker prior to its purchase from SJ. However, where and to the extent the same matches with the jewellery purchased, the details of which can be sought from SJ, credit in its respect could be allowed, which aspect the A.O. shall consider rather, is obliged to. We decide accordingly.

Penalty Appeals 106. We next consider the penalty appeals, i.e., the levy of penalty for all the years under reference u/s. 271(1)(c) of the Act. The assessee’s case in the quantum proceedings, as shall be apparent from a reading of the tribunal’s order on quantum, has been largely one of denial. The tribunal, however, considering the totality of the facts and circumstances of the case, considered it proper to – in the main, restore the matter back to the file of the assessing authority, either by way of an open set aside or

76 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT for a limited purpose, for fresh determination after examining the assessee’s case, per a speaking order. The additions/disallowances made in the first round may thus not survive or stand modified – in whole or in part, in the set aside proceedings. It would, in our view, be therefore improper to proceed to examine the correctness of the levy of penalty at this stage. The explanation/s that may now stand to be offered by the assessee, i.e., even qua the additions/disallowances that stand confirmed by us or may obtain in the second round, which are supposed to reflect the facts, i.e., the truth of the matter, may be substantially different from that obtaining in the first round - the assessee himself admitting to several relevant facts. Accordingly, we set aside the levy of penalty for all the years under reference. The AO, after passing fresh order/s of assessment in pursuance to our order in quantum proceedings, shall qua each addition/disallowance made/sustained, consider the issue of levy of penalty afresh as per law, show causing the assessee in the matter. Needless to add, the assessee shall be allowed proper opportunity to present his case before him. We decide accordingly.

Order pronounced in the open court on April 25, 2016

Sd/- Sd/- (D. Manmohan) (Sanjay Arora) �या�यक सद�य / Judicial Member लेखा सद�य / Accountant Member मुंबई Mumbai; �दनांक Dated : 25.04.2016 व.�न.स./Roshani, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent 2.

77 ITA Nos. 3815 to 3821/M/10 & 8339 to 8345/M/11 (A.Ys. 2001-02 to 2007-08) Kashinath Tapuriah vs. Dy. CIT आयकर आयु�त(अपील) / The CIT(A) 3. आयकर आयु�त / CIT - concerned 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 5. गाड� फाईल / Guard File 6. आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील�य अ�धकरण, मुंबई / ITAT, Mumbai