Shri Anil J.Dave,, Baroda v. The Dy.CIT., Cent., Circle-1,, Baroda

ITSSA 292/AHD/2004 | misc
Pronouncement Date: 26-02-2010 | Result: Partly Allowed

Appeal Details

RSA Number 29220516 RSA 2004
Assessee PAN ABQPD6071K
Bench Ahmedabad
Appeal Number ITSSA 292/AHD/2004
Duration Of Justice 5 year(s) 4 month(s) 18 day(s)
Appellant Shri Anil J.Dave,, Baroda
Respondent The Dy.CIT., Cent., Circle-1,, Baroda
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 26-02-2010
Date Of Final Hearing 17-02-2010
Next Hearing Date 17-02-2010
Assessment Year misc
Appeal Filed On 08-10-2004
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND N. S. SAINI AM) IT (SS) A NO.292/AHD/2004 BLOCK PERIOD: 01-04-1995 TO 19-12-2001 SHRI ANIL J. DAVE A-504 AISHWARYA COMPLEX NEAR ELLORA PARK VEGETABLE MARKET ELLORA PARK BARODA PA NO. ABQPD 6071K VS THE D. C. I. T. CENT. CIRCLE-1 AAYAKAR BHAVAN BARODA (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. N. SOPARKAR AND P. M. MEHTA AR RESPONDENT BY SHRI RAJEEV AGARWAL DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-IV AHMEDABAD DATED 23-07-2004 FOR THE ABOVE BLOCK PERIOD. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL AVAILABLE ON RECORD. 3. THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT PRE SS GROUND NOS. 4 AND 6. THE SAME ARE ACCORDINGLY DISMISSED. 4. BRIEFLY THE FACTS OF THE CASE ARE THAT THERE WA S A SEARCH OPERATION U/S 32 OF THE IT ACT IN THE JAYRAJ GROUP OF CASES C OVERING THE RESIDENTIAL AS WELL AS BUSINESS PREMISES OF THE ASSESSEE GROUP IN DECEMBER 2001 AND JANUARY 2002. THE ASSESSEE IS ELDER BROTHER OF SHRI JAYESH J. DAVE THE MAIN PERSON OF JAYRAJ GROUP. THE ASSESSEE IS A CLERK IN BANK OF IT(SS)A NO.292/AHD/2004 SHRI ANIL J. DAVE 2 INDIA. SINCE THERE WAS SPECIFIC INFORMATION AGAINST THE ASSESSEE HE WAS ALSO COVERED IN THE SEARCH. NOTICE U/S 158 BC OF TH E IT ACT WAS ISSUED ON 16-04-2003 TO THE ASSESSEE REQUESTING HIM TO FILE R ETURN FOR THE BLOCK PERIOD. THE ASSESSEE HOWEVER FILED RETURN OF INCOM E ON 06-10-2003. THE AO CONSIDERING THE EXPLANATION OF THE ASSESSEE COMP UTED THE UNDISCLOSED INCOME OF THE ASSESSEE VIDE BLOCK ASSES SMENT DATED 31-12- 2003. THE ADDITIONS WERE CHALLENGED BEFORE THE LEAR NED CIT(A). BUT THE ASSESSEE COULD NOT SUCCEED. THE GROUNDS OF APPEALS NOW RAISED IN THE PRESENT APPEAL ARE DECIDED AS UNDER: GROUND NO.1 THE LEARNED CIT(APPEALS)-IV AHMEDABA D HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITIO N OF RS.2 55 790/- AND RS.6 919/- TO THE EXTENT OF INVES TMENT AS WELL AS CASH FOUND DURING THE COURSE OF SEARCH PROC EEDING OUT OF THE TOTAL INCOME/FUNDS AVAILABLE TO AN EXTENT OF RS.5 60 000/-. THE INVESTMENT IS MADE OUT OF LOAN O F RS.5 00 000/- AVAILABLE TO THE APPELLANT AND HAVING ACCEPTED THE LOAN AS AVAILABLE TO THE APPELLANT THE INVESTM ENT THEREOF OUGHT TO BE ACCEPTED AS EXPLAINED AND THE ADDITION OF RS.2 62 709/- BE THUS DIRECTED TO BE DELETED. 5. THIS GROUND RELATES TO THE ADDITION OF RS.5 60 0 00/-. THE FACTS OF THE CASE AS REPORTED BY THE AO ARE THAT IN THE COUR SE OF THE SEARCH THE ASSESSEE WAS FOUND TO BE OWNER OF SHARES OF RS.2 55 790/- AND ALSO CASH OF RS.66 919/- WAS SEIZED. WHILE EXPLAINING THE SOU RCE OF INVESTMENT IN THE SHARES AND CASH FOUND THE ASSESSEE CONTENDED T HAT HE HAS RECEIVED LOAN OF RS.5 00 000/- FROM HIS BROTHER JAYESH J. DA VE ON DIFFERENT DATES WHICH IS THE MAIN PERSON OF THE GROUP. THE AO DID N OT ACCEPT THIS CONTENTION OF THE ASSESSEE AND CONCLUDED THAT CASH LOAN IS NOTHING BUT THE UNDISCLOSED REMUNERATION RECEIVED BY THE ASSESS EE FROM JAYRAJ GROUP. THE AO OBSERVED THAT THE ASSESSEE HAD RENDER ED SERVICE WITHOUT CHARGING ANY SALARY. THEREFORE RS.5 00 000/- IS NO THING BUT REMUNERATION AND ADDED THE SAME AS UNDISCLOSED REMU NERATION RECEIVED FROM JAYRAJ GROUP. SIMILARLY ANOTHER AMOUNT OF RS. 60 000/- ADDITION IS MADE ON THE BASIS OF THE CHEQUES RECEIVED FROM HIND USTAN EARTH MOVERS IT(SS)A NO.292/AHD/2004 SHRI ANIL J. DAVE 3 PVT. LTD. THE AO OBSERVED THAT IT IS NOTHING BUT BR OKERAGE PAID TO THE ASSESSEE. IN THIS REGARD HE NOTED DOWN THAT SOME V OUCHERS HAVE BEEN SEIZED FROM THE RESIDENCE OF SHRI ANIL J. DAVE WHIC H SHOWS THAT HE HAS BEEN PAID BROKERAGE ON VARIOUS DATES (PAGES 39 TO 4 4 OF ANNEXURE A-2). 6. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT THE SAID AMOUNT OF RS.5 00 000/- HAS BEEN GIVEN BY HINDUSTAN EARTH MOV ERS PVT. LTD. TO THE ASSESSEE AS LOAN WHICH HAS ALSO BEEN CONFIRMED BY T HEM. IN THE ABSENCE OF ANY CONTRADICTORY EVIDENCE AVAILABLE WITH THE AO NO ADDITION COULD BE MADE TO TREAT THAT THE ASSESSEE RECEIVED UNDISCLOSE D REMUNERATION. AS REGARDS ADDITION OF RS.60 000/- IT WAS CONTENDED T HAT THE SAID AMOUNT WAS DEPOSITED IN THE REGULAR ACCOUNT AND DISCLOSED TO THE REVENUE DEPARTMENT IN THE RETURN OF INCOME FILED AND THE RE TURN FOR THE YEAR WAS NOT DUE. THEREFORE THERE WAS NOTHING ON RECORD TO PRESUME THAT SAME WAS NOT DISCLOSED. THE LEARNED CIT(A) CONSIDERING T HE EXPLANATION OF THE ASSESSEE NOTED THAT THERE IS FORCE IN THE ARGUMENT OF THE ASSESSEE WITH REGARD TO ADDITION OF RS.5 00 000/-. THE LEARNED CI T(A) ALSO NOTED THAT THE AO HAS FAILED TO SUBSTANTIATE HIS OBSERVATION T HAT THE SAID AMOUNT IS REMUNERATION AND NOT LOAN. THEREFORE ADDITION OF R S.5 00 000/- IS NOT JUSTIFIED. THE LEARNED CIT(A) HOWEVER DID NOT AGRE E WITH THE SUBMISSION OF THE ASSESSEE FOR ADDITION OF RS.60 000/- THAT TH E SAME WAS DISCLOSED TO THE REVENUE DEPARTMENT. THE LEARNED CIT(A) ACCOR DINGLY CONFIRMED THE ADDITION OF RS.60 000/-. THE LEARNED CIT(A) THE REAFTER PROCEEDED TO DECIDE THE ALTERNATIVE CONTENTION OF THE ASSESSEE T HAT THE ADDITION SHOULD BE MADE ON THIS AMOUNT BECAUSE IN THE SEARCH CASH O F RS.66 919/- AND THAT SHARES WORTH RS.2 55 790/- WERE FOUND. THE LEA RNED CIT(A) ACCORDINGLY CONFIRMED THE ADDITION OF INVESTMENT IN SHARES OF RS.2 55 790/-. THE ASSESSEE WAS ALLOWED TELESCOPING AND ACCORDINGLY OUT OF CASH OF RS.66 919/- THE ADDITION OF RS.60 000/- WAS DELETED. IN THE NUTSHELL ADDITION OF RS.2 55 790/- AND RS.6 919/- WAS CONFIRMED GIVING TELESCOPING BENEFIT OF CASH. IT(SS)A NO.292/AHD/2004 SHRI ANIL J. DAVE 4 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT WHEN THE ASSESSEE EXPLAINED THE SOURCE OF INVESTMENT IN SHAR ES AND CASH THROUGH THE AMOUNT RECEIVED IN A SUM OF RS.5 00 000/- AND E XPLANATION OF THE ASSESSEE IS ALSO ACCEPTED BY THE LEARNED CIT(A) TH EREFORE THERE WAS NO JUSTIFICATION TO MAKE THE ADDITION ON THE ALTERNATI VE CONTENTION. HE HAS SUBMITTED THAT THE ALTERNATIVE CONTENTION OF THE AS SESSEE SHOULD NOT HAVE BEEN DECIDED BY THE LEARNED CIT(A). ON THE OTHER HA ND THE LEARNED DR RELIED UPON THE ORDERS OF THE AO AND REFERRED TO PA GE 2 OF THE ASSESSMENT ORDER WHERE THE ASSESSEE ADMITTED BEFORE THE DDIT ( INV.) THAT ENTIRE INVESTMENT IN SHARE IS UNDISCLOSED INCOME OF THE AS SESSEE. THE LEARNED DR SUBMITTED THAT THE ASSESSEE DID NOT FILE RETURN OF INCOME IN TIME AND THAT RS.5 00 000/- IS THE SOURCE ONLY TO EXPLAIN T HE ADDITION. THEREFORE THE ADDITIONS ARE JUSTIFIED. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND DO NOT FIND ANY JUSTIFICATION TO SUSTAIN ANY ADDITION ON THIS ISSUE . THE ASSESSEE EXPLAINED WITH REGARD TO SOURCE OF INVESTMENT IN SH ARES AND CASH THAT IT WAS INVESTED OUT OF LOAN RECEIVED IN A SUM OF RS.5 00 000/- FROM HIS BROTHER JAYESH J. DAVE (HINDUSTAN EARTH MOVERS PVT. LTD.). THUS THE ASSESSEE EXPLAINED THE SOURCE OF INVESTMENT IN SHAR ES AND CASH FOUND DURING THE COURSE OF SEARCH. THE AO HOWEVER TREATE D THE SAME TO BE UNEXPLAINED REMUNERATION AND BROKERAGE ETC. WITHOUT ANY BASIS. THE LEARNED CIT(A) RIGHTLY HELD THAT THE EXPLANATION OF THE ASSESSEE IS ACCEPTABLE WITH REGARD TO RECEIPT OF RS.5 00 000/- AS LOAN AND THAT NO ADDITION SHOULD BE SUSTAINED TO THAT AMOUNT BECAUSE THE AO HAS FAILED TO SUBSTANTIATE HIS OBSERVATION THAT THE ASSESSEE R ECEIVED REMUNERATION . THE LEARNED CIT(A) THEREAFTER SHOULD NOT HAVE DECI DED THE APPEAL OF THE ASSESSEE ON ALTERNATIVE CONTENTION BECAUSE THE ALT ERNATIVE CONTENTION OF THE ASSESSEE WAS THAT ADDITION OF RS.5 60 000/- SHO ULD NOT HAVE BEEN MADE IN THE MATTER AND IT SHOULD BE CONFINED ONLY T O THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH I.E. SHARES WORTH RS.2 55 790/- AND IT(SS)A NO.292/AHD/2004 SHRI ANIL J. DAVE 5 CASH OF RS.66 919/-. WHEN THE LEARNED CIT(A) ACCEP TED THE SOURCE OF INVESTMENT IN SHARES AND CASH FOUND DURING THE SEAR CH THROUGH THE LOAN AMOUNT RECEIVED BY THE ASSESSEE IN A SUM OF RS.5 00 000/- THERE WAS NO JUSTIFICATION TO SUSTAIN ANY PART OF ADDITION ON TH E ISSUE OR TO CONSIDER ALTERNATIVE CLAIM OF THE ASSESSEE. THERE IS NO DEPA RTMENTAL APPEAL AGAINST THE FINDING OF THE LEARNED CIT(A) IN ACCEPT ING THE EXPLANATION OF THE ASSESSEE WITH REGARD TO LOAN OF RS.5 00 000/-. WE THEREFORE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELET E THE ENTIRE ADDITIONS OF RS.2 55 790/- AND RS.6 919/- AS CONFIRMED BY THE LEARNED CIT(A). AS A RESULT GROUND NO.1 OF THE APPEAL OF THE ASSESSEE I S ALLOWED. GROUND NO.2: THE LD. CIT(APPEALS)-IV AHMEDABAD HA S ERRED IN LAW AND IN FACTS IN CONFIRMING THE ACTION OF THE LD. A. O. IN THE ADDITION OF RS.1 00 000/- AS UNEXPLAINED EXPEND ITURE IN THE HANDS OF THE APPELLANT FOR THE BLOCK PERIOD. TH E CONFIRMATION OF ADDITION OF RS.1 00 000/- BEING ERR ONEOUS IN FACTS AND LAW DESERVES TO BE DELETED. 9. THE AO MADE THE ADDITION OF RS.1 00 000/- ON THE BASIS OF PAGE 75 OF ANNEXURE A-2 SEIZED FROM THE RESIDENCE OF THE A SSESSEE IN WHICH A NOTING WAS FOUND THAT RS.1 00 000/- WAS GIVEN BY SH RI ANIL J. DAVE TO SHRI JAYESH J. DAVE. IN THE STATEMENT OF THE ASSESS EE RECORDED ON 16 TH DECEMBER 2003 THE SEIZED PAPER WAS CONFRONTED TO T HE ASSESSEE IN WHICH HE HAS DENIED HIS HAND WRITING ON THE SEIZED PAPER BUT CONFIRMED THAT HE HAD GIVEN LOAN OF RS.1 00 000/- TO SHRI JAY ESH J. DAVE AND ALSO ADMITTED THAT HE CANNOT EXPLAIN THE SOURCE OF THE S AME RIGHT NOW. THE AO ALSO NOTED THAT SINCE THE SEIZED PAPER IS UNEXPL AINED THEREFORE ADDITION WAS ACCORDINGLY MADE TREATING THE SAME AS UNDISCLOSED INCOME. THE ADDITION WAS CHALLENGED BEFORE THE LEARNED CIT( A) AND IT WAS SUBMITTED THAT IN RESPONSE TO QUESTION NO.11 THE AS SESSEE HAD CLEARLY DENIED HIS HAND WRITING ON THE SEIZED PAPER. THEREF ORE THE ADDITION SHOULD HAVE BEEN DELETED AND QUESTION NO.12 WOULD N OT BE RELEVANT. THE LEARNED CIT(A) HOWEVER DID NOT ACCEPT THE CONTENTI ON OF THE ASSESSEE IT(SS)A NO.292/AHD/2004 SHRI ANIL J. DAVE 6 AND CONFIRMED THE ADDITION BECAUSE THE SOURCE OF RS .1 00 000/- AS PER THE SEIZED PAPER IS NOT EXPLAINED BY THE ASSESSEE. 10. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION MADE BEFORE THE LEARNED CIT(A) AND SUBMITTED THAT O NCE THE ASSESSEE DENIED HIS SIGNATURE IN THE SEIZED PAPER THERE WAS NO RELEVANCY TO ASK QUESTION NO.12 TO EXPLAIN THE SOURCE OF THE LOAN GI VEN TO SHRI JAYESH J. DAVE. HE HAS SUBMITTED THAT THE MANNER IN WHICH REP LY WAS GIVEN BY THE ASSESSEE WOULD SHOW ASSESSEE WAS UNDER CONFUSION AN D COERCION TO SAY SO. ON THE OTHER HAND THE LEARNED DR RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ADDITION I S BASED UPON THE SEIZED PAPERS FOUND DURING THE COURSE OF SEARCH FRO M THE POSSESSION OF THE ASSESSEE AND THAT THE ASSESSEE COULD NOT EXPLAI N THE SOURCE OF THE LOAN. THEREFORE THERE WAS NO JUSTIFICATION TO DELE TE THE ADDITIONS. HE HAS SUBMITTED THAT THE ASSESSEE NEVER ALLEGED ANY COERC ION FOR THE PURPOSE OF RECORDING HIS STATEMENT BY THE OFFICIALS OF THE REV ENUE DEPARTMENT. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD. SECTION 132 (4A) OF THE IT ACT PROVIDES AS UNDER: SECTION 132 : [4A) WHERE ANY BOOKS OF ACCOUNT OTHER DOCUMENTS MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING ARE OR IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSO N IN THE COURSE OF A SEARCH IT MAY BE PRESUMED (I) THAT SUCH BOOKS OF ACCOUNT OTHER DOCUMENTS MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG BELONG OR BELONGS TO SUCH PERSON ; (II) THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHE R DOCUMENTS ARE TRUE; AND IT(SS)A NO.292/AHD/2004 SHRI ANIL J. DAVE 7 (III) THAT THE SIGNATURE AND EVERY OTHER PART OF SUCH BOO KS OF ACCOUNT AND OTHER DOCUMENTS WHICH PURPORT TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON OR WHICH MAY REASONABLY BE ASSUMED TO HAVE BEEN SIGNED BY OR TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON AR E IN THAT PERSONS HANDWRITING AND IN THE CASE OF A DOCUMENT STAMPED EXECUTED OR ATTESTED THAT IT WAS DULY STAMPED AND EXECUTED OR ATTESTED BY THE PERSON BY WHOM IT PURPORTS TO HAVE BEEN SO EXECUTED OR ATTESTED.] 12. IT IS ADMITTED FACT THAT SEIZED PAPER WAS SEIZE D FROM THE RESIDENCE OF THE ASSESSEE SHOWING NOTINGS THAT RS.1 00 000/- WAS GIVEN BY THE ASSESSEE TO SHRI JAYESH J. DAVE. THE PROVISIONS OF SECTION 132(4A) THUS WOULD CLEARLY APPLY AGAINST THE ASSESSEE AND IT WAS TO BE PRESUMED THAT THE SEIZED PAPER BELONG TO THE ASSESSEE. SINCE THE SEIZED PAPER IS RECOVERED FROM THE POSSESSION OF THE ASSESSEE THER EFORE IT IS THE DUTY OF THE ASSESSEE TO EXPLAIN THE SAME TO THE SATISFACTIO N OF THE REVENUE DEPARTMENT. MAY BE THE ASSESSEE HAS DENIED THE SIG NATURE IN THE SEIZED PAPER BUT THE ASSESSEE NEVER DISPUTED THE GENUINENE SS OF THE SEIZED PAPER FOUND FROM HIS POSSESSION DURING THE COURSE O F SEARCH. THE ASSESSEE HAS NEVER DISPUTED THAT HE WAS UNDER COERC ION AT THE TIME OF MAKING THE STATEMENT BEFORE THE OFFICIALS OF THE RE VENUE DEPARTMENT. IT WOULD THEREFORE PROVE THAT THE ASSESSEE MADE VOLU NTARY STATEMENT TO THE REVENUE DEPARTMENT IN WHICH HE HAD CONFIRMED TO HAVE GIVEN LOAN FROM UNDISCLOSED SOURCE TO SHRI JAYESH J. DAVE. HIS STATEMENT CLEARLY CORROBORATES THE SEIZED PAPER RECOVERED FROM HIS RE SIDENCE DURING THE COURSE OF SEARCH. THE ABOVE FACTS THEREFORE SHOW THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF GIVING RS.1 00 000/ - TO SHRI JAYESH J. DAVE. SINCE THE ASSESSEE HAS FAILED TO EXPLAIN THE SEIZED PAPER THEREFORE THE AUTHORITIES BELOW WERE JUSTIFIED IN TAKING ADVE RSE INFERENCE AGAINST THE ASSESSEE AND HAVE CORRECTLY MADE THE ADDITION I N THE BLOCK ASSESSMENT ON THE BASIS OF THE SEIZED DOCUMENTS. WE ACCORDINGLY DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW. IT(SS)A NO.292/AHD/2004 SHRI ANIL J. DAVE 8 WE CONFIRM THEIR FINDINGS AND DISMISS THE APPEAL OF THE ASSESSEE ON THIS ISSUE. GROUND NO.3 THE LD. CIT(APPEALS) IV AHMEDABAD H AS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ACTION OF THE LD. A. O. IN THE ADDITION OF RS.2 41 461/- AS UNDISCLOS ED INCOME IN THE HANDS OF THE APPELLANT FOR THE BLOCK PERIOD. THE CONFIRMATION OF ADDITION OF RS.2 41 461/- BEING ERR ONEOUS IN FACTS AND LAW DESERVES TO BE DELETED. 13. THE AO RECORDED THAT AFTER FINALIZATION OF CASH FLOW STATEMENT IT IS NOTICED THAT OPENING CASH IN HAND IS RS.1 25 000/- AND CASH IN HAND AS ON 31 ST MARCH 1996 IS SHOWN AT RS.1 40 328/-. THE AO RECO RDED THAT THE ASSESSEE DID NOT HAVE ANY EVIDENCE TO PROVE HIS CLAIM. THIS CASH HAS BEEN SHOWN TO HAVE BEEN UTILIZED FOR THE PURPOSE OF INVESTMENT IN SHARE ETC. THE AO FURTHER NOTED THAT SINCE THE ASSESSEE I S A BANK CLERK THEREFORE HE COULD HAVE THAT MUCH CASH IN HAND OUT OF THE PERSONAL SAVINGS. THE AO CONSIDERING THE DEPOSITS IN THE BAN K ACCOUNT ETC. AND WITHDRAWALS ETC. NOTED THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF RS.1 40 328/- AND RS.1 01 133/- AND MADE ADDITIO N OF RS.2 41 461/- BEING UNDISCLOSED INCOME. IT WAS SUBMITTED BEFORE T HE LEARNED CIT(A) THAT ADDITION IN THE BLOCK ASSESSMENT COULD BE MADE ON THE BASIS OF THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH. SINCE CASH FLOW STATEMENT IS FILED BEFORE THE AO AT THE ASSESSMENT STAGE THEREFORE ADDITION IS UNJUSTIFIED. THE LEARNED CIT(A) HOWEVER CONFIRMED THE ADDITION. 14. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FILED THE CAS H FLOW STATEMENT IN THE PAPER BOOK TO SHOW THAT THE ASSESSEE FILED THE SAME AT THE ASSESSMENT STAGE TO EXPLAIN THE ADDITION BUT THE AO MADE THE ADDITION ON THE BASIS OF THE CASH FLOW STATEMENT ITSELF. ON THE OTHER HAND THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIE S BELOW AND SUBMITTED THAT ADDITION IS BASED UPON THE SEIZED MATERIAL AND THE ASSESSEE FAILED TO IT(SS)A NO.292/AHD/2004 SHRI ANIL J. DAVE 9 EXPLAIN THE CASH FLOW STATEMENT TO EXPLAIN FURTHER ADDITION ON MERIT. THEREFORE THE ADDITION IS CLEARLY JUSTIFIED. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD. IN THE BLOCK ASSESSMENT ADDITION COULD BE MADE ON THE BASIS OF SEIZED MATERIAL/EVIDENCE FOUND AND RECOVERED DURING THE CO URSE OF SEARCH OR ON THE BASIS OF POST SEARCH ENQUIRIES CONDUCTED BY THE AO RELATABLE TO SUCH EVIDENCE. HOWEVER WE NOTED FROM THE ASSESSMENT ORD ER THAT THE AO ON THIS ISSUE HAS NOT REFERRED TO ANY SUCH MATERIAL TO CONNECT THE ASSESSEE WITH THE ADDITION. THE ASSESSEE IN ORDER TO EXPLAI N THE ADDITIONS FILED THE CASH FLOW STATEMENT AT THE ASSESSMENT STAGE WHICH C OULD NOT BE CONSIDERED AS SEIZED MATERIAL OR EVIDENCE FOUND DUR ING THE COURSE OF SEARCH. IN THE ABSENCE OF ANY INCRIMINATING EVIDENC E FOUND DURING THE COURSE OF SEARCH ON THIS ISSUE WE DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THE ADDITION. WE ACCORDINGLY SET ASIDE THE ORDERS O F THE AUTHORITIES BELOW AND DELETE THE ENTIRE ADDITION ON THIS ISSUE. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. HOWEVER REVENUE AUTHORITIES A RE AT LIBERTY TO USE CASH FLOW STATEMENT IN REGULAR ASSESSMENT IN ACCORD ANCE WITH LAW. GROUND NO.5: THE LD. CIT(APPEALS)-IV AHMEDABAD HA S ERRED IN LAW AND IN FACTS IN CONFIRMING THE ACTION OF THE LD. A. O. IN CHARGING INTEREST U/S 158BFA OF RS.41 377/- FOR THE PERIOD FROM 16/5/2003 TO 06/10/2003 FOR 6 MONTHS (DATE OF FILING OF RETURN) IN COMPLETE DISREGARD OF THE FACT THAT THE LEVY OF INTEREST IS NOT MANDATORY AND HAS ALSO IGNORED THE FACT THAT THE DELAY IN FILING OF THE RETURN IS SUBSTANTIALLY ATTRIBUTED TO NON-FURNISHING OF COPY OF SEIZED MATERIAL BY THE DE PARTMENT. THE INTEREST CHARGED U/S 158BFA OF RS.41 377/- MAY PLEASE BE DIRECTED TO BE DELETED. 16. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUT SET SUBMITTED THAT NOTICE FOR FILING OF THE RETURN WAS ISSUED ON 16-04 -2003 AND THE RETURN OF INCOME IS FILED FOR BLOCK PERIOD ON 06-10-2003. HE HAS FURTHER SUBMITTED THAT SINCE SEIZED PAPERS WERE SUPPLIED TO THE ASSES SEE ON 8-07-2003 THEREFORE TILL THAT DATE THERE WAS NOT JUSTIFICATI ON TO CHARGE THE INTEREST IT(SS)A NO.292/AHD/2004 SHRI ANIL J. DAVE 10 U/S 158 BFA OF THE IT ACT. HE HAS RELIED UPON THE O RDER OF THE ITAT AHMEDABAD BENCHES IN THE GROUP CASE OF HINDUSTAN EA RTH MOVERS PVT. LTD. VS DCIT IN IT(SS) A NO.289/AHD/2004 DATED 05-0 6-2009 IN WHICH THE AO WAS DIRECTED TO DELETE THE LEVY OF INTEREST U/S 158BFA OF THE IT ACT ON THE SAME REASONING. ON THE OTHER HAND LEARN ED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 17. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE A RE OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE AO. THE ASSESSEE SPECIFICALLY TOOK THE PLEA THAT SEIZED MATERIAL WAS SUPPLIED TO THE ASSESSEE ON 8-07-2003. THEREFORE UP TO THAT DATE T HERE WAS NO FAULT OF THE ASSESSEE IN NOT FILING THE RETURN OF INCOME FOR THE BLOCK PERIOD. THE TRIBUNAL IN THE GROUP CASE OF HINDUSTAN EARTH MOVER S PVT. LTD. (SUPRA) DELETED THE LEVY OF INTEREST ON IDENTICAL ISSUE. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THI S ISSUE TO THE FILE OF THE AO WITH DIRECTION TO VERIFY THE DATE ON WHICH THE S EIZED PAPERS WERE FINALLY SUPPLIED TO THE ASSESSEE AND TILL THE DATE OF SUPPLY OF THE SEIZED PAPER NO INTEREST COULD BE CHARGED. WE CLARIFY T HAT IN CASE FURTHER PERIOD IS LEFT FOR WHICH DELAY IS ATTRIBUTABLE TO T HE ASSESSEE THE AO MAY TAKE DECISION AGAINST THE ASSESSEE IN ACCORDANCE WI TH LAW BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AS A RESULT GROUND NO.5 OF THE APPEAL OF THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSES. 18. NO FURTHER POINT HAS BEEN ARGUED OR PRESSED. 19. AS A RESULT THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED ON 26-02-2010 SD/- SD/- (N. S. SAINI) ACOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 26-02-2010 LAKSHMIKANT/- IT(SS)A NO.292/AHD/2004 SHRI ANIL J. DAVE 11 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD