Amarjit Singh Bakshi (Huf) Vs. Assistant Commissioner of Income - Court Judgment

Excerpt:
1. these are two appeals by two assessees against the assessment order under section 158bd r/w section 113 of the it act, 1961 for the block period i.e., from asst. yrs. 1987-88 to 1997-98 (up to 6th nov., 1996).these two assessments i.e., in case of assesses, individual and huf were completed by passing separate orders. in the case of assesses-individual, the assessment was made on substantive basis and in the case of huf, the assessment was made on protective basis.2. brief facts of the case are that a search was conducted at the premises of one shri n.s. atwal on 6th nov., 1996. some incriminating documents were found and seized. a paper found during the search marked as annexure a-3 was seized. in this paper some entries were made in regard to sale of land admeasuring 9.16 acres. as.....

Judgment:
1. These are two appeals by two assessees against the assessment order under Section 158BD r/w Section 113 of the IT Act, 1961 for the block period i.e., from asst. yrs. 1987-88 to 1997-98 (up to 6th Nov., 1996).

These two assessments i.e., in case of assesses, individual and HUF were completed by passing separate orders. In the case of assesses-individual, the assessment was made on substantive basis and in the case of HUF, the assessment was made on protective basis.

2. Brief facts of the case are that a search was conducted at the premises of one Shri N.S. Atwal on 6th Nov., 1996. Some incriminating documents were found and seized. A paper found during the search marked as Annexure A-3 was seized. In this paper some entries were made in regard to sale of land admeasuring 9.16 acres. As per contents of the paper the land was agreed to be sold at Rs. 77 lakhs per acre and the total consideration agreed to be paid was Rs. 7.07 crores.

3. At the time of recording the statement of Shri N.S. Atwal, a special query was put up by the concerned Officer in regard to the paper marked Annexure A-3 and it was replied by Shri N.S. Atwal that he and his family members owned 16 plus acres of agricultural land at village Kishan Garh. Out of this land, some portion was sold earlier and the remaining portion of 9.16 acres known as Sunrise Farm, was agreed to be sold to Shri A.S. Bakshi and his family members @ Rs. 77 lakhs per acre. In reply to further question it was answered by Shri N.S. Atwal that the paper annexed as Annexure A-3, is an agreement for sale of agricultural land and on the date of signing of this agreement, a sum of Rs. 5.51 lakhs was paid by Shri A.S. Bakshi. It was further stated that at the moment of signing, only a sum of Rs. 51,000 was paid and Rs. 5 lakh was arranged by Shri Bakshi in the evening and the same was delivered to Shri N.S. Atwal. In response to O. No. 24 it was replied by Shri N.S. Atwal that a total sum of Rs. 368 lakhs had been received from Shri A.S. Bakshi and his family members upto the date of 15th Oct., 1994. Further some more questions were put up by the official to Shri N.S. Atwal and they were replied accordingly.

4. Statement of one Shri R. Ganeshan, who was personal secretary and assistant to Mr. Atwal, was also recorded by the Income-tax Official on 31st March, 1997. This person also admitted that the agreement as Annexure A-3 was signed in his presence. It was further stated by Shri R. Ganeshan that this paper was written by the brother of Shri A.S.Bakshi, namely, Shri Kanwaljit Singh Bakshi. It was also stated that the contents were written by pencil, though the paper was signed by Shri A.S. Bakshi, and Shri N.S. Atwal by ball pen. It was further stated that a sum of Rs. 5.51 lakhs was paid by Shri A.S. Bakshi on same day. It was further clarified that at the time of signing of the paper only Rs. 51,000 was given and the amount of Rs. 5 lakhs was given on a later stage. It was also admitted by Shri R. Ganeshan that on different dates, some more amounts were received by Shri N.S. Atwal from Shri A.S. Bakshi and his family members on account of sale of agricultural farm known as Sunrise Farm. The amount of sale at Rs. 7.07 crores was also admitted by Shri Ganeshan 5. On the basis of paper as Annexure A-3 found during the course of search at the premises of Shri N.S. Atwal, the proceedings under Section 158BD were initiated against Shri A.S. Bakshi, individual and HUF separately. A survey was conducted on assessee under Section 133A of the IT Act, 1961. The statement of assessee was recorded by the Asstt. Director of IT (Investigation) on 29th Jan., 1997. After this date a notice under Section 158BD was issued on assessee by Asstt. CIT, PSC 9(1), New Delhi on 23rd July, 1997. Second notice under Section 158BD was again issued by Asstt. CIT, PSC 9(1) on 28th Aug., 1997. Then a notice under Section 142(1) was received by the assessee from Asstt.

CIT Central Circle-10 on 22nd Sept., 1997. Again on 23rd Sept., 1997, a third notice under Section 158BD was issued by the Asstt. CIT, Central Circle-10, New Delhi, by which the assessee was required to file return on Form 2B of undisclosed income. The assessee filed his return on Form No. 2B declaring Nil undisclosed income. The income already declared while filing the regular returns were shown by the assessee in the return on Form 2B.6. During the course of assessment proceedings under Section 158BD the AO noticed that assessment under Section 143(3) has already been completed and an addition of Rs. 6,83,50,000 have been made under Section 69B of the IT Act. It was further noticed by the AO that this addition was made on protective basis keeping in view the decision of the Hon'ble Punjab & Haryana High Court in the case of Raja Ram Kulwant Rai v. Asstt: CIT (1997) 227 ITR 187 (P&H). It is further noticed by the AO that in regular assessment the addition was made because of insertion of Explanation to Section 158BA by Finance (No. 2) Bill, 1998 with retrospective effect i.e., from 1st July, 1995 and from this insertion of Explanation, the controversy was set at rest, that the regular assessment will be separate and apart from the block assessment under Chapter XIV-B. The assessee was required to explain the sources of payment of Rs. 6,83,50,000. It was stated that no such amount has been paid by the assessee. It was further clarified that the land was purchased only for Rs. 23.5 lakhs and that is in the names of assessee and his family members through separate 16 sale deeds. Copies thereof were also filed. The AO was not satisfied with the reply of assessee.

In his view the observations of the AO made in regular assessment order was correct, where the additions of Rs. 6,83,50,000 were made under Section 69B. However, a further opportunity was given to the assessee.

A copy of Annexure A-3 was given to the assessee. Some informations were received from the bank. An extract of those informations were also given to the assessee for filing the reply. A detailed reply was filed by the assessee on 28th July, 1998, whereby it was submitted that he and his family members have paid only a sum of Rs. 23.5 lakhs and the same is shown in the registered sale deeds. Through this letter it was requested by the assessee that the original documents relied upon by the Department should be shown to him. It was further requested by the assessee that both the witnesses should be produced for cross-examination. After considering the submissions of the assessee, the AO found that there is no substance in the submissions made by assessee. By making following observations in para 4 of the order of AO, an addition of Rs. 6,83,50,000 was made on substantive basis for asst. yr. 1995-96 : "I have considered the submissions of the assessee, however, I do not find substance in the same. The documents seized from the premises of Shri N.S. Atwal referred to by my predecessor in the order under Section 143(3) clearly established that the consideration of Rs. 7.07 crores was agreed to and paid by the assessee to Shri N.S. Atwal. These documents inter alia, include an agreement to sell signed both by the assessee and Shri Atwal mentioning therein the exact amount of consideration. Photocopy of the sale agreement was forwarded to the assessee by the undersigned vide notice dt. 28th July, 1998. In their detailed statement as recorded by my predecessor in the order under Section 143(3) Shri N.S. Atwal and his employee Shri R. Ganeshan unequivocally stated that the consideration for the land was Rs. 7.07 crores. The information received from Punjab & Sind Bank brought to the notice of the assessee also shows that value of land measuring 3.812 acres i.e., part of the entire land of 9.16 acres as declared and accepted by the bank was more than the value shown in the registered sale deed(s) and even more than the value at Rs. 7.07 crores. It cannot be logically or legally argued that the value declared for lending purposes is irrelevant and has no sanctity. The Courts have not accepted such double standards and have attached due importance to the declaration and submitted before the banks. Assessee's argument that the Valuation Report for 8th July, 1995, has no relevance for the value as on 29th Nov., 1994, has no force because one valuation intimated to him on the basis of information received from Punjab & Sind Bank is for 3rd April, 1990, i.e., much prior to 29th Nov., 1994 and value mentioned therein is Rs. 2,10 crores for 3.812 acres.

On the basis of the same the value of 9.16 acres even on 3rd April, 1990, would come to Rs. 5,08,88,888, the reference to valuation as on 8th July, 1995, is indicator of the fact that value declared by the assessee of the land in registered sale deed(s) is much less than the real value and the consideration actually paid. Assessee is well aware of the fact that Shri Atwal is being assessed at Calcutta and original seized papers are in possession of the concerned AO at Calcutta and, therefore, insistence of the original papers at this stage was to circumvent true facts. Assessee's repeated reliance on the registered sale deed(s) is not acceptable because the value shown therein is self-serving specially in view of the statement of the seller and his employee to the contrary. The assessee was made aware by my predecessor of the documents to be used in the course of the regular assessment under Section 143(3) but assessee did not choose to cooperate with the Department. The facts fully indicate that assessee has suppressed the investment in Sunrise Farms measuring 9.16 acres and is now trying to get out of the predicament one way or the other. Though registered sale deed(s) the name of the buyers have been shown as Shri A.S Bakshi, Shri A.S. Bakshi (HUF) and Smt. Amrita Bakshi, yet the seized papers and evidence as well statements of Shri M.S. Atwal and R. Ganeshan amply show that investment was made by Shri A.S. Bakshi (individual). Hence an addition of Rs. 6,83,50,000 is made in the income of the assessee under Section 69B of the IT Act." 7. Similarly, an addition of Rs. 2,78,41,093 was made in the case of A.S. Bakshi, HUF on protective basis. While making the addition in the hands of the HUF, the AO has observed that "since the sale deeds referred to above, also include the name of A.S. Bakshi, HUF and Smt.

Amrita Bakshi, besides the name of Shri A.S. Bakshi (Individual), and I have held in the order of Shri A.S. Bakshi, (individual) on the basis of seized paper, that the entire investment is that of Shri A.S.Bakshi. The investment shown in the name of Shri A.S. Bakshi (HUF) is taxed in the hands of Shri A.S. Bakshi, HUF i.e., assessee, on protective basis." 8. Now both the assessees are in appeal here before the Tribunal against these orders of the AO.9. First we will take the appeal in the case of Shri A.S. Bakshi, individual. The effective hearing in both these cases were started on 5th Oct., 2000 and finally they were completed on 1st June, 2001.

Detailed arguments were put forth by both of the parties i.e., the counsel of the assessee, Shri C.S. Aggarwal and the Sr. Departmental Represntative, Shri Satish Goyal.

10. On 31st May, 2001, the learned Deparmtenal Represntative filed an application for admitting additional evidences under Rule 29 of the ITAT Rules. These evidences were in shape of forensic report in regard to verification of signature of Shri A.S. Bakshi on Annexure A-3 seized during the course of search on 6th Nov., 1996, from the premises of Shri N.S. Atwal. Some more papers were also enclosed with this report which were sent to the forensic department for verifying the signature, those were copy of Annexure A-3, copy of return filed for asst. yr.

1996-97 along with computation of taxable income, which were duly signed by Shri A.S. Bakshi. This application also accompanied by copy of statement of Shri N.S. Atwal recorded under Section 132(4) on 6th Nov., 1996, the date on which the search was made on Shri N.S. Atwal.

The learned Departmenal Representative requested to admit these additional evidences as they go to the root of the matter.

11. The learned counsel of the assessee filed copy of summarised submissions signed by assessee on the basis of oral submissions made on various dates on earlier hearings started from 5th Oct., 2000, onwards.

These submissions also include summarised synopsis to synopsis filed on 5th Oct., 2000. These synopsis filed on 31st May, 2001, starts from p.

17. At p. 23, a copy of letter dt. 28th March, 2001, is placed. This letter was written by Shri N.S. Atwal to the Addl. CIT, Special Range-3, Calcutta in regard to asst. yr. 1996-97. This was also an additional evidence and the learned Counsel of the assessee requested the Bench to admit this additional evidence as the same goes to the root of the matter.

12. Firstly both the parties, i.e., the counsel of the assessee and the learned Departmenal Representative objected to admit the additional evidences filed by both the parties. However, it was further submitted by both the parties that if accepted, it should be accepted in both the cases and if it is considered that they are not acceptable, then it should not be accepted in both the cases.

13. After considering these additional evidences and perusing the contents thereof, we feel that they should be accepted as they go to the root of the matter in both of the cases, i.e., of assessee and the Department. Accordingly additional evidences filed on 31st May, 2000, by both the parties are admitted.

14. After going through the summarised submissions filed on 31st May, 2000, by the counsel of the assessee, we find that they are in fact summarised submissions of the oral arguments made on various dates of hearings, which were started from 5th Oct., 2000 and to avoid the repetition of the arguments, we reproduce the summarised arguments filed on 31st May, 2001, here as under: "From the oral submissions made and the synopsis filed in short, it is submitted that: (a) There is no evidence to establish that the assessee, in the financial year 1994-95, relevant to the asst. yr. 1995-96, has invested/paid Rs. 683.50 lakhs, as has been alleged.

(b) That there is no such statement made even by the two witnesses on whose testimony, the addition has been made. This is without prejudice to the assessee's submissions that such statement had never been confronted to the assessee. The two witnesses were not produced for assessee's cross-examination at any time even as late as on 17th March, 2001, when a further repeated request was made in the pending assessment proceedings for the asst. yr. 1995-96.

(c) Further, that there could be no justification to assume that the assessee had purchased the property for Rs. 7.07 crores; because the value of the land and building, as evalued by the Valuation Officer as on 29th Nov., 1994, only aggregated to Rs. 2,96,50,600.

(d) Further, this property was also undisputedly encumbered property with Punjab & Sind Bank since 1991. It is undenied that the title of the property were with Punjab & Sind Bank, from whom the vendor had obtained the loan of about Rs. 4.00 crores and the Bank had agreed to release the title of the property on the payment of Rs. 2.50 crores. This is evident from p. 165 Part "A" of the paper book.

(e) Fourthly, the vendor himself in a suit filed before the Sub-Judge-1, Dhanbad in Title Suit No. 124 of 1997, p. 87 Part-B of the paper book at p. 93, has duly admitted that an estimate of the measurement of land with price and mode of payment were estimated on paper with the total price of Rs. 7.07 crores, payable in instalments upto 19th May, 1995 and both Mr. A.S. Bakshi and Shri N.S. Atwal, signed the said paper as Memorandum of Agreements. All these Agreements were made in the presence of higher officials who technically did not want to be named for the transaction. It is further stated in Clause 15 that as per the Agreement, Mr. A.S. Bakshi did not pay the entire consideration amount to set off the loan account of the Bank and got the land of the Plaintiff as all the three Plaintiffs executed number of sale deeds with eager desire to remove the burden of bank dues and over business dues. In Clause 17, it is stated that the dues against the company were of approximately Rs. 6,47,77,643. It is, thus, apparent that there is no basis for the allegation that the assessee had paid Rs. 7.07 crores to the vendors.

(f) Fifthly, a Suit had also been filed by Shri N.S. Atwal before the Senior Sub-Judge, Delhi as would be evident from p. 78, Part-B of the paper book. In this suit also, it was stated by him at p. 81 that "not only the defendant did not pay the amount either to the Plaintiff or deposited with the Bank, as agreed and they started harassing and creating trouble to the Plaintiff and as per the suspicion of the Plaintiff, the income-tax raid was made at the instance of the defendant. During the income-tax raid, after the documents were seized by the IT authority, including the documents which contain the terms and conditions and the mode of payment by depositing the amount to acquire the loan, were also taken up by the IT authorities. It is very significant to be noted that had there been no such Agreement" implying the assessee Mr. A.S. Bakshi, taking over the liability of the Bank and the Bank would have accepted the same no sale deeds could have been executed because the Title Deeds of the same property were in the custody of the Bank.

(g) Sixthly, in the returns of income filed for the asst. yr.

1995-96, nowhere either of the three vendors have shown or declared the receipt of any extra consideration other than the disclosed or invested by the assessee, his wife, and the HUF and duly recorded in their books of accounts. This fact is tabulated hi a separate statement which is based on the assessment record of vendors. So far as Shri N.S. Atwal's declaration of an amount of Rs. 7,07 crores as sale consideration for the asst. yr. 1996-97 is concerned, the same itself will show that : (A) The same was done with an intention to cause harm to the assessee and is contrary to his own various statement, filed with Sub-Judge-I, Dhanbad and Senior Sub-Judge, Delhi; and (C) As he was not the owner of the entire land, how could he disclose the alleged extra consideration as his income against the sale of land more particularly when the two other Vendors, who are his sons, have not declared any such alleged extra consideration.

It will be seen that the total land agreed to be transferred is 43 bighas and 17 biswas; whereas Shri N.S. Atwal has only 18 bighas of and 6 bighas as his owned property. To be consistent with the claim, obviously, each of the three co-owners would have then either shown or would have been assessed to tax in respect of the sale consideration (had the property been sold as alleged for Rs. 7.07 crores).

(h) Seventhly, it is submitted that unless evidence is brought on record establishing that the assessee had made an investment in the year 1995-96 only, for which there is not an iota of evidence, it cannot be held that the assessee had made investment which could be subjected to tax by invoking the provisions of Section 69B of the IT Act. It cannot be disputed that the burden to establish that the assessee has made investment of a sum in excess to the declared consideration, rests on the Revenue. The mere execution of sale deeds by itself cannot be any evidence to establish that the alleged consideration, as agreed between the parties for which there is no evidence again, was paid before the sale deed was executed when the sale deed does not mention any such figure. In this connection the judgment of Supreme Court in the case of K.P. Verghese v. ITO and Anr. (1981) 131 ITR 597 (SC) and that of Tribunal in the case of Bigjo's is referred.

(i) From the aforesaid, it is evident that the figure of Rs. 7.07 crores, as is stated in the paper found, was a mere estimated figure and not a figure which had either been agreed or paid by the assessee and on the contrary, the detailed circumstances under which the aforesaid estimate was prepared, has been narrated by Shri N.S. Atwal in his letter dt. 28th March, 2001, a copy of which appears at p. 23 of the synopsis. Further, the circumstances have also duly been narrated in the two suits filed by Shri N.S. Atwal, which also provides the nature of document and the circumstances, as also no further money was received other than declared in the deeds of sale.

It is not denied that this letter is a recent letter, after the proceedings but since there was no other occasion earlier, obviously, then the mere fact this letter is a recent letter cannot be made a valid basis to ignore the contents of the letter. This letter cannot be ignored because this is a letter addressed by Shri N.S. Atwal in his proceedings before his IT authorities for the asst. yr. 1996-97, wherein he had offered the income for the purpose of assessment without admitting any tax liability. Computation of his tax return appears in the documents furnished before the Hon'ble Tribunal from his assessment records which records were summoned by the Hon'ble Tribunal.

(j) It is submitted that the Revenue cannot be allowed to blow hot and cold. There has to be consistency in the stand, for which the Revenue is seeking to rely on the mere statement of Shri N.S. Atwal, then his statement has to be read as a whole and cannot be read in piecemeal, by ignoring his written statement dt. 28th March, 2001, and also by ignoring by the circumstances as has been outlined above. It is, therefore, submitted that there being no evidence to establish that the assessee had made investment of Rs. 7.07 crores as alleged, there is no justification to assess the income as its undisclosed income more particularly under Chapter XIV-B of the IT Act when no such evidence has been found during search evidencing the payment of the said sum.

(k) It is restated that the provisions of Chapter XIV-B of the IT Act are the special provisions and have been enacted to tax the undisclosed income which has been found as a result of search. It is submitted nothing has been found as a result of search to establish that the assessee had invested the said alleged amount and, therefore, the amount cannot be the subject-matter of assessment under Chapter XIV-B of the IT Act.

(1) It is needless to repeat that the assessment for the asst. yr.

1995-96 was completed which was set aside on appeal and again, the same has been repeated, pending the disposal of appeal by the Tribunal, even disregarding the contention of the assessee stated in its submissions dt. 17th March, 2001, a copy of which has been placed at pp. 27/31 of the synopsis." On the other hand the learned Deparmtenal Represntative firstly made arguments on legal issue. Then he made arguments on merit. In regard to grounds on merit, it was submitted that main thrust of argument of the counsel of assessee is in regard to opportunity, that no proper opportunity was given to the assessee to cross-examine two witnesses i.e., Mr. N.S. Atwal and Shri R. Ganeshan. It was submitted by the learned Deparmtenal Represntative that the matter can be restored to the file of the AO to allow an opportunity to the assessee for cross examining the two witnesses.

In regard to other grounds it was submitted that there was sufficient material before the AO to make the impugned additions. The assessee had signed the agreement on 19th Aug., 1994, by which he agreed to purchase the agricultural land for a sum of Rs. 7.07 crores from Shri N.S. Atwal and his family members, The paper as Annexure A-3 enclosed at p. 37 in B-section of paper book is very clear. It was further submitted that during the course of recording the statement of Shri N.S. Atwal, he had clearly and categorically admitted that he agreed to sell the land to Shri A.S. Bakshi and his family members for a total consideration of Rs. 7.07 crores. Therefore, there is no point to doubt the contention of Shri N.S. Atwal, because of, agreement is there and statement of Shri N.S. Atwal who sold the land was also recorded. It was further submitted that in property dealings, always some amount has to be paid underhand, and the same is never mentioned in the sale deed. Therefore, the amount paid underhand was not mentioned in the sale deed registered later on. However, at the time of entering into an agreement, the paper was prepared on 19th Aug., 1994, in which all the amounts agreed was mentioned. Therefore, there cannot be any better evidence than the paper found during the course of search made on Shri N.S. Atwal. The major portion of the deal amount was not shown by the assessee and only a sum of Rs. 23.5 lakhs was shown in the books of account. Accordingly the same was shown by assessee. Therefore, the order of the AO is correct and accordingly it should be upheld. The attention of the Bench was drawn on the report of Forensic expert, whereby it is established that Shri A.S. Bakshi has signed the document on 19th Aug., 1994.

Therefore, it cannot be said that no agreement was entered between the assessee and Shri N.S. Atwal.

15. Regarding that AO has not made any further enquiry, it was submitted by the learned Deparmtenal Represntative that after taking the possession of the agreement entered on 19th Aug., 1994, nothing was left with the Department to enquire further. From the paper found, it is clearly established that assessee had entered into agreement and paid the amount agreed for purchase of land underhand. In regard to valuation by DVO, it was submitted, that of course, the report was prepared, but this report has only evidentiary value, because of the main evidence on which the reliance can be placed, is the real agreement which was entered into by both the parties.

16. In regard to letter dt. 28th March, 2001, filed by Shri N.S. Atwal before the Addl. CIT, it was submitted that this letter has no evidentiary value, because Shri N.S. Atwal has himself disclosed the amount of consideration while filing the return of income earlier.

Therefore, this letter has no value now. This is just retraction from its earlier stand, which should not be taken into consideration because this letter has no evidentiary value now. It was further submitted that the assessment order passed in the case of Shri N.S. Atwal has been set aside for consideration and if the Department accepts the letter dt.

28th March, 2001, and delete the addition in the hands of Shri N.S.Atwal, then of course Department has no case. Therefore, it was submitted, lastly, that the matter can be restored to the AO for fresh consideration in view of the setting aside of the issue in regard to Shri N.S. Atwal.

17. In reply, the counsel of the assessee firstly gave reply in regard to legal objection raised by the learned Departmental Representative.

Further he strongly objected in regard to restoring the matter for granting an opportunity. Again the reliance was placed on the decisions of the Hon'ble Supreme Court in Kishinchand Chellaram v. CIT (1980) 125 ITR 713 (SC) and R.B. Shreeram Durga Prasad and Fateh Chand Naising Das v. Settlement Commission & Am. (1989) 176 ITR 169 (SC). Therefore, it was submitted that now the Department cannot be allowed to make a fresh case. The reliance was also placed on the decision or Tribunal (Third Member). In regard to reply on merits, it was submitted by the counsel of the assessee that Shri N.S. Atwal has changed his statements for many times. First he stated that he has received the amount from assessee; secondly he had filed suit against the assessee as well as against the Punjab & Sindh Bank, wherein it is categorically stated that he had not received any amount from the assessee and the assessee had got sale deed registered fraudulently. Then again he came with a statement before the Department by filing a letter dt. 28th March, 2001. If a person changes statement from time to time then the other party should not be suffered from the act of that person who mala fidely changes his verison. Accordingly it was strongly opposed in restoring the matter to the file of the AO. The reliance was placed in the case of V.S. Shukla 159 ITR 956 (SC) (sic).

18. In further reply in regard to the amount received, it was submitted that no evidence whatsoever has been filed by the Department in regard to payment made by assessee to Shri N.S. Atwal. It was further submitted that this is a case of search and in search cases, addition can be made on the basis of cogent material found during the search. It was further submitted that somewhere Shri N.S. Atwal had admitted that he had received a sum of Rs. 368 lakhs, nowhere this amount has been shown by Shri N.S. Atwal that where it is invested. It is also somewhere stated that the amount was received for the purpose of discharging liabilities of Punjab & Sindh Bank for getting the original papers from the bank to get the sale deed registered in the name of Shri A.S. Bakshi and his family members, but the amount has not been paid to the bank, neither any evidence was brought on record that where that amount was utilised. It was a conjecture and surmises of the Department as well as of Shri N.S. Atwal that assessee had made a payment of Rs. 368 lakhs. Without bringing out any material on record, no addition can be sustained under Section 69B, as the burden heavily lay upon the Department while making the addition under Section 69B of the Act. The reliance was placed on various case laws. The list of case laws has already been furnished by the counsel on earlier hearings.

Accordingly the attention of the Bench was drawn on those case laws. In last, the learned counsel has stated that synopsis filed on 5th Oct., 2000 and case laws relied upon by him from time to time during the course of hearing should be taken into consideration.

19. It was further submitted that the addition in the case of Shri A.S.Bakshi (HUF) was made on protective basis; whereas the addition of the entire amount had already been made in the case of Shri A.S. Bakshi, (individual). Therefore, it was submitted that the addition made in the hands of HUF was illegal and unwarranted. However, lastly it was submitted that the arguments taken in the case of individual, may be considered in the case of HUF also, as the additions were made in similar circumstances and on the basis of paper seized during the course of search on Shri N.S. Atwal.

20. In reply, the learned Departmental Representative also submitted that the arguments taken in the case of individual may be considered in the case of HUF also, as the additions made by the AO were made in similar circumstances in the case of individual.

21. We have heard the rival submissions and considered them carefully.

We have also perused the material on which our attentions were drawn.

The case laws relied upon by both the parties have also been considered by us. Though the facts briefly have already been stated above, but to understand the real controversy and at, the cost of repetition, we will like to discuss the facts once again.

22. The assessee Shri A.S. Bakshi and his family members have purchased agricultural land known as Sunrise Farm, measuring 9.16 acres from Shri N.S. Atwal and his family members. This agricultural farm was purchased by the assessee A.S. Bakshi in his individual capacity and in HUF capacity and in the name of his wife, Smt. Amrita Bakshi. The land was purchased for a total consideration of Rs. 23.5 lakhs. A further payment of Rs. 45 lakhs was made on account of superstructure thereon.

The amounts were paid by Shri A.S. Bakshi for the area of 13 bighas and 8 biswas at Rs. 7.91 lakhs; Shri A.S. Bakshi, HUF has paid for Rs. 17 bighas at 7.68 lakhs and Smt. Amrita Bakshi paid for the area of 13 bighas and 9 biswas at Rs. 8.16 lakhs. In this way the total area comes to 43 bighas and 17 biswas, which is equivalent to 9.16 acres. Total consideration for the land comes to Rs. 23.75 lakhs. A sum of Rs. 25 lakh was not in regard to sale consideration, but was for other consideration and the same has been recorded in the books of account of Smt. Amrita Bakshi. Accordingly total consideration paid for land, thus, was at Rs. 23.50 lakhs. The sum of Rs. 45 lakhs was paid for building and superstructure appurtenant thereto, from the account of M/s Bhiwani Steels at Rs. 11.25 lakhs; from the account of M/s I.P.Castings at Rs. 16,87,500 and from the account of M/s Continental Engines Ltd. at Rs. 16,87,500, totalling to Rs. 45 lakhs. In this way the total consideration for land and building paid by Shri A.S. Bakshi and his family members was at Rs. 68,75 lakhs. These payments were duly recorded in the regular books of account maintained by assessee and his family members, along with the companies, stated above. All these payments were made in the month of September, 1994 and onwards. The sale deeds, which were 16 in numbers, were executed between both the parties i.e., Shri A.S. Bakshi and his family members and Shri N.S.Atwal and his family members and they were duly registered on 29th Nov., 1994, Copies of these saledeeds are enclosed in the paper book in A-section from pp. 30 to 159. The details of the payments made by Shri A.S. Bakshi and his family members are placed at pp. 1 to 5 of the compilation.

23. A search was conducted at the premises of Shri N.S. Atwal on 6th Nov., 1996, and some documents and loose papers were found and were seized by the Department. Statement of Shri N.S. Atwal was recorded. As per version of the learned counsel these statements were recorded on 7th Feb., 1997 and 31st March, 1997, but copy filed by the learned Deparmtenal Represntative shows that the statement of Shri N.S. Atwal was recorded on the date of search i.e., on 6th Nov., 1996. A copy of the same is enclosed along with the application filed by the learned Deparmtenal Represntative on 31st May, 2001. Copies of the statements recorded on 7th Feb., 1997 and 31st March, 1997, are placed in B-section of the paper book at pp. 38 to 44. Contents of all these statements are different, which establishes that the statements of Shri N.S. Atwal were recorded on the date of search i.e., on 6th Nov., 1996 and on 7th Feb., 1997, and then on 31st March, 1997, A statement of Shri R. Ganeshan, personal secretary of Shri N.S. Atwal was also recorded on 31st March, 1997. The copy of the same is also placed in B-section of the paper book filed by the learned counsel of assessee.

24. A paper page No. 8 of Annexure-3, which was found during the course of search at the premises of Shri N.S. Atwal indicates that some agreement of sale of land was entered between Shri N.S. Atwal and Shri A.S. Bakshi on 19th Aug., 1994. The copy of the paper-Page No. 8 of Annexure-3 seized on 6th Nov., 1996, is enclosed here as next page, i.e., page No. 23 of this order.

25. After going through the contents of this paper, we find that from the figure "9 16 acre to Today-19th Aug., 1994" were written by pencil.

Again the figure from "2 Cr Now to figure 0.60-9" were also written by pencil. The words written in left side of the paper i.e., 19-8-9 to 9 months 19th May, 1995 were written by Ball pen. The name of the parties i.e., A.S. Bakshi and Mr. N.S. Atwal were written by pencil. However, the signatures of these two parties were made by Ball pen. The original of this paper was produced by the Department on the date of hearing on 4th Jan., 2001, and the same was seen originally. Accordingly this verification was done, that which figure is written by pencil and which figure is by ball pen. The original paper was returned to the Department on the request of the learned Deparmtenal Represntative, because of the Department needed this paper in Calcutta. Marking was done by the Bench on the paper at p. 37 in "B" section of the paper book, after comparing with the original produced by the learned Deparmtenal Represntative. In doing this exercise, it was felt necessary to compare the paper with original, because of the entire controversy in regard to addition of Rs. 6,83,50,000 revolves on this paper, as the entire addition was made on the basis of this paper only.

26. During the course of recording of the statement of Shri N.S. Atwal it was admitted by him before the authorities that he agreed to sell 9.16 acres of agricultural land known as Sunrise Farm to Shri A.S.Bakshi and his family members for a consideration of Rs. 77 lakh per acre, totalling Rs. 7.07 crores. It was stated that on the day of signing of this paper/agreement, a sum of Rs. 5.51 lakh was paid by Shri A.S. Bakshi to Shri N.S. Atwal. Further it was clarified that a sum of Rs. 51,000 was paid at the moment of signing of this document and later on, i.e., in the evening Rs. 5 lakhs was paid. It was further admitted by Shri N.S. Atwal that he has received a total amount of Rs. 3.68 crores from the assessee on account of sale of the aforesaid agricultural land. The statement of Shri R. Ganeshan was also recorded on 31st March, 1997, who also confirmed the version of the statement of Shri N.S. Atwal. Accordingly it was confirmed by him also that the document, i.e., page No. 8 of Annexure-3, was signed in his presence, and a sum of Rs. 5.51 lakhs was paid on the day of signing of this document.

27. The proceedings under Section 158BC were initiated against Shri N.S. Atwal. On receiving the material from the Department, the AO issued notice under Section 158BD on assessee, Shri A.S. Bakshi in capacity of individual and in capacity of HUF. The proceedings under Section 158BD were initiated on the basis of document page No. 8 of Annexure A-3, seized during the course of search on Shri N.S. Atwal and on the basis of statement of Shri N.S. Atwal recorded on 6th Nov., 1996 and again on 7th Feb., 1997 and 31st March, 1997, The notices under Section 158BD were issued on 23rd July, 1997; again on 28th Aug., 1997 and lastly on 23rd Sept., 1997. In response to notice under Section 158BD issued on 23rd Sept., 1997, the assessee filed return on Form No.2B declaring nil undisclosed income.

28. The assessee in his individual capacity and in capacity of HUF had already filed regular returns. Proceedings under Section 143(3) were started by the AO and notices under Section 143(2) were issued from time to time. Last notice was issued by the AO on 19th Feb., 1998, fixing the case for hearing on 24th Feb., 1998, and as per assessment order under Section 143(3), none appeared on behalf of assessee.

Accordingly the assessment was completed on the basis of material placed on record. After discussing in regard to income shown in regular returns, the AO further discussed in regard to purchase of Sunrise Farm. It is mentioned in his order that the assessee was allowed opportunity but he did not cooperate. Accordingly, the AO observed in his order that assessee had purchased agricultural land measuring 9.16 acres at Rs. 77 lakhs per acre totalling to Rs. 7.07 crores. It is further observed that this agreement is dt. 19th Aug., 1994. (p. 8 of Annexure-3) signed by both the parties, i.e., Shri A.S. Bakshi and Shri N.S. Atwal, It is further observed that according to this paper, total amount of Rs. 3.68 crores had been received by Shri N.S. Atwal till 15th Oct., 1994. These observations are made at p. 8 of the assessment order under Section 143(3) dt. 31st March, 1998. In para 6.1, it has been observed that proceedings under Section 158BD have already been started and the issue of investment in Sunrise Farm has to be considered in the block assessment of the assessee. Since the transaction relating to the investment was done during the financial year relevant to this assessment year, the same has been given effect in this assessment on protective basis and in view of the judgment of Punjab & Haryana High Court in the case of Raja Ram Kulwant Rai v.Asstt. CIT (supra). In further paragraphs the AO has reproduced the contents of the statement of Shri N.S. Atwal and Shri R. Ganeshan, which runs from pp. 9 to 18 of the assessment order under Section 143(3). After this, in para 6.9 the AO has observed that assessee was given another opportunity to explain the transaction relating to investment in Sunrise Farm, as mentioned above. However, no explanation was filed by the assessee. Accordingly the addition of Rs. 6,83,50,000 was made in total income of the assessee on protective basis. The assessment was completed on 31st March, 1998.

29. As we have already stated that notice under Section 158BD was issued lastely on 23rd Sept., 1997. Similar observations have been made by the AO in order under Section 158BD, as were made by the AO while making assessment under Section 143(3). The reason on which the addition was made by the AO while completing the assessment under Section 158BD, have been recorded in para 4 and the same has already been reproduced somewhere above in the order.

30. After reading deeply these two assessment orders, we nowhere find that reply filed by the assessee has been discussed by either of the AOs. The assessee repeatedly made requests to summon two witnesses for cross-examination. It was further mentioned by him that total land was not purchased by Shri A.S. Bakshi alone, as the same was purchased by three persons i.e., the assessee Shri A.S. Bakshi in his individual capacity, in HUF capacity and by his wife, Smt. Amrita Bakshi and the same has been purchased from three different persons i.e., Shri N.S.Atwal, Shri F.S. Atwal and Shri B.S. Atwal. The consideration was also paid to these three persons separately i.e., Rs. 9.47 lakhs to Shri N.S. Atwal; Rs. 3.80 lakhs to Shri F.S. Atwal and Rs. 10.48 lakhs to Shri B.S. Atwal, totalling to Rs. 23.75 lakhs. Out of this sum of Rs. 23.75 lakhs, a sum of Rs. 23.50 lakhs paid to these three persons were for consideration on account of agricultural land known as Sunrise Farm. From the copies of the letter enclosed in the paper book, clearly establishes that these papers were filed by Shri A.S. Bakshi before both of the AOs i.e., at the time of proceedings under Section 143(3) and at the time of proceedings under Section 158BD. It is further noted that 16 separate sale deeds were executed and they were got registered on 29th Nov., 1994. Copies thereof were also filed before both of the AOs. It is further noted that assessee has informed by filing various letters before both the AOs that Shri N.S. Atwal had filed suits against the assessee and his family members, and also against Punjab & Sind Bank. It is further noted that assessee also informed that Punjab & Sind Bank has also filed suits against Shri. N.S. Atwal before the Debt Recovery Tribunal for recovering the amount outstanding against Shri. N.S. Atwal, which was more than Rs. 10 crores.

31. It is further noted that from the day one, the assessee is denying that he has not purchased any land for a consideration of Rs. 7.07 crores. However, it was admitted that the land in question was purchased for a consideration of Rs. 23.5 lakhs and further building and super-structure was purchased for a consideration of Rs. 45 lakhs, which was paid from the accounts of three companies, as stated above.

Nowhere these facts have been discussed by the AO either while passing the assessment under Section 143(3) or under Section 158BD. We further noted that the Department got valued this property from its Valuer, who valued this agricultural land at Rs. 2,66,96,600 and building thereon at Rs. 29,58,000. The DVO further valued the cost of additions, alterations, modifications and new construction after 29th Nov., 1994 and upto 31st July, 1997 at Rs. 45,23,000. Copy of the report of DVO is placed from pp. 1 to 6 in "C" section of the paper book. The itemwise detail of valuation is placed further from pp. 7 to 22 in the same section of the paper book. Nowhere the AO has taken into account this valuation report. They merely took into consideration the page No. 8 of Annexure-3, found during the course of search on Shri N.S. Atwal. Both of the AOs have not allowed cross-examination of the two witnesses, i.e., Shri N.S. Atwal and Shri R. Ganeshan, whose statements were recorded and were relied upon heavily by the AO. It is further noted that the AO has clarified through the letter that how a prudent person will purchase land for a consideration of Rs. 7.07 crores, especially when he knew that there, is a heavy charge on the land to Punjab & Sind Bank, from whom the loan was obtained by Mr. N.S. Atwal, which was more than Rs. 4 Crores and the loan was obtained after mortgaging the properties belonging to Shri N.S. Atwal, which includes the agricultural land of 9.16 acres known as Sunrise Farm. It is further noted that it is clarified by the assessee that of course, some deals were agreed upon, but on a later stage, when the assessee came to know that there is a heavy lien on the land, he refused to purchase the land from him. However, after making negotiations with the bank and Shri N.S. Atwal, the assessee agreed to purchase this agricultural land for a consideration of Rs. 23.5 lakhs and the same was paid through account-payee cheques to Shri N.S. Atwal and his family members. It is also noticed that assessee has declared the amounts paid for purchase of this agricultural land in his regular returns and Shri N.S. Atwal also has shown the same consideration received from the assessee.

32. It is also worth mentioning here that no evidence was found by the Department that any amount, as alleged to be received by Shri N.S.Atwal, was invested somewhere else. As per statement of Shri N.S.Atwal, a sum of Rs. 368 lakhs have been received by Shri N.S. Atwal. If such a huge amount was received and the person who has categorically admitted that he has received the amount, the same amount should have been found invested somewhere else, but no material was found though an extensive search was made on Shri N.S. Atwal. It is also noticed that somewhere Shri N.S. Atwal stated in his statement that it was agreed between him and Shri A.S. Bakshi that after receiving the amount from him the same will be paid to the bank as the original papers are mortgaged. It is also noted that Punjab & Sind Bank has agreed to release the papers after receiving an amount of Rs. 2.5 crores, Neither this amount was paid to the bank, nor the bank has released the papers; rather the bank had filed suit before the Debt Recovery Tribunal for recovering the amount as on the date of filing of the suit, the amount became more than Rs. 10 crores receivable from Shri. N.S. Atwal. It clearly shows that Shri N.S. Atwal was either facing losses or was not in a position to pay the amount for the reason best known to him.

33. It is further noticed that firstly he gave statement that he has sold the land for Rs. 7.07 crores and has received a sum of Rs. 3.68 crores. Again he changed this stand as he filed suit against the assessee and his family members in the Court at Dhanbad, and in Court at Delhi, whereby it was stated that assessee fraudulently got sale deeds registered and no amount had been paid by the assessee. The civil suits are still pending in the respective Courts. Again Shri N.S. Atwal changed his statement by filing a letter dt. 28th March, 2001, before the Addl. CIT, Special Range-3, Calcutta, whereby it was informed that he has not received any sum from Shri A.S. Bakshi or from his family members. By this letter it is clearly admitted that he had received only Rs. 23.5 lakhs against the sale of Farm House known as Sunrise Farm. It was further stated through this letter that Shri A.S. Bakshi fraudulently transferred the land in his name and in the name of his family members and no amount had been paid by him, though it was agreed by Shri A.S. Bakshi that he will clear the loan of Punjab & Sind Bank, but he failed to do so. Copy of this letter is placed at p. 23 of the synopsis filed on 31st May, 2000. After taking all these contentions of Shri N.S. Atwal into consideration, the only inference which can be drawn, that no such valid agreement was entered into between Shri A.S.Bakshi and Shri N.S. Atwal, and no such payment was made by Shri A.S.Bakshi to Shri N.S. Atwal.

34. If we go by the page No. 8 of Annexure A-3, which is enclosed at p.

37 of "B" section of the paper book, from this paper also only inference can be drawn that this paper cannot be equated with a valid agreement. Two parties are entering into an agreement for a consideration of Rs. 7.07 crores, no signature of any witnesses is there; no receipt of any amount is there; even there is no receipt of Rs. 5.51 lakhs, as stated by Shri N.S. Atwal and Shri R. Ganeshan during the course of recording of their statements. The signatures are by Ball Pen but the other contents are written by Pencil, which can be rubbed or can be changed at any time. Therefore, this paper cannot be equated with a valid agreement either on factual position or in the eyes of law. There is no iota of evidence that assessee had paid any amount on 19th Aug., 1994, as all the payments made by him are in the month of September onwards. Without taking any item in possession, i.e., original sale deed or possession of land, no person will pay a penny to other person from whom the land is purchased, otherwise what is the security that the seller will honour the agreement to sell.

Undoubtedly the original papers are still with the Bank who has filed suit against Shri N.S. Atwal.

35. For a moment if we presume that a valid agreement was entered between the parties, i.e., Shri N.S. Atwal and Shri A.S. Bakshi, but if it is not proved that any payment was made by the purchaser, in that situation no addition can be made by holding that assessee had invested any sum in the property out of undisclosed income. The burden lies heavily on the Department to establish that the purchaser had made payments which were not recorded in the regular books of account or was not paid from the bank account. Without discharging the onus which lay upon the Department, any addition made under Section 69B of the Act, therefore, cannot be sustained, In the present case, as per Annexure A-3, the assessee agreed to pay a sum of Rs. 7.07 crores but nowhere it is established that any payment was made by the assessee. The Department is making an addition of Rs. 6,83,50,000 but there is no iota of evidence that the assessee had made payments of this amount.

There is only a statement of the seller that he had received Rs. 3.68 crores from the present assessee, but he failed to establish or prove that where the sum has been invested by him. This statement was given at the back of the assessee and assessee was not allowed to cross-examine both the persons, i.e., Shri N.S. Atwal and his Secretary Shri R. Ganeshan. As we have already discussed above that extensive search was made on Shri N.S. Atwal, but nothing was found which prove that Shri N.S. Atwal had received any sum which was not recorded by the assessee or his family members.

36. In the case of Smt. Neena Sayal v. Asstt. CIT (2000) 69 TTJ (Chd) 516 : (1999) 70 ITD. 62 (Chd), the additions made under Section 69 r/w Section 158BA were deleted by the Bench. The facts in this case were similar to the facts of the present case here before us. The facts of that case were that as a consequence of search, block assessment was made under Section 158BA for the block period 1985-86 to 7th Sept., 1995. An addition of Rs. 4,83 lakhs was made on account of premium paid over and above the cost of land purchased mentioned in registered deed.

In this regard the AO noticed that out of various items seized at residence of a relative, some related to purchase of land. He further noted that in case of assessee the transaction related to 12 bighas of land, the registration of which was made at Rs. 3 lakhs but the consideration paid for the same was at Rs. 7.83 lakhs. It was further noticed by the AO that seizure from the house of one "V" confirmed the premium of Rs. 4.83 lakhs, paid over and above the cost mentioned in the registered deed, and hence added back Rs. 4.83 lakhs as income of the assessee from undisclosed sources being unexplained investment in purchase of land. It was contended before the Tribunal that assessee had not made any payment over and above the amount shown in registered deed, It was further argued that assessee was not allowed cross-examination of the witnesses and without allowing an opportunity, no addition can be made. In this case, the learned Deparmtenal Represntative had requested the Tribunal to restore the matter to the file of the AO to allow the assessee to cross-examine the witnesses. In reply the learned counsel of the assessee had strongly objected for restoring the matter. The reliance was placed on various case laws.

After considering the submissions of both the sides and perusing the material placed before the Tribunal, the Tribunal has observed and held as under: "Thus, the AO had not given any reason for either not accepting the explanation of the assessee or for finding the explanation as unsatisfactory. It was further observed that even the affidavit filed by the seller, was not confronted to the assessee. It was observed that no question was put to V about payment of premium to the seller of plot. Thus, on the facts and circumstances of the case the AO did not comply with the conditions stipulated in Section 69 of the Act, which are mandatory in nature and are relevant for assessment made under Section 143(3) r/w Section 158BC. It may be mentioned that under Section 158BB(2), the provisions of Sections 68, 69, 69A, 69B and 69C have been made applicable for the purpose of computing undisclosed income of the block period. In the instant case, even the seized document on the basis of which the impugned addition of Rs. 4,83 lakhs had been made, had not been found at the residence of the assessee and the same had not been specifically confronted to the assessee before making the impugned addition.

Further, in assessment of V addition of Rs. 14.20 lakhs found at his residence had been made without discussing the diary seized at his residence. Thus, the addition of Rs. 4.83 lakhs was not sustainable in the case of the assessee when the AO had failed to comply with the basic conditions stipulated in Section 69.

As regards Department's plea for restoring the matter to the file of the AO, it may be mentioned that the provisions of Chapter XIV-B are more stringent and have placed a greater burden on the Departmental authorities to comply with the essential provisions of law and that these provisions have to be construed strictly. Thus, in a situation where the AO had failed to comply with the basic provisions of Section 69/69B, whereunder the impugned addition had overtly been made it was difficult to accept the plea that the matter may be restored to the file of the AO, so that the requisite material can be confronted to the assessee and then the addition made. It is not the function of the Tribunal to further allow opportunity to the AO so as to cover up legal lapses made by him while making addition by restoring the matter back to his file. Further, the power of remand under Section 254 is required to be exercised in a disciplined and responsible manner and that the same cannot be invoked in a case where the AO has not cared to follow the provisions of Section 69/69B, inasmuch as no explanation had been called for by the AO in relation to the documents relied upon by him for making the impugned addition and further the said documents which were found with other persons, had not been specifically confronted to the assessee.

Hence, the plea of revenue to restore the issue to the file of the AO and to delete the impugned addition of Rs. 4.83 lakhs could not be accepted." 37. The facts of the case here before us are more or less similar. The search was made on one Shri N.S. Atwal. A document was found and it was seized as Annexure A-3. Some sale consideration was recorded in this paper. Proceedings under Section 158BD started against the assessee, because of the entry made on the paper indicates the name of assessee as purchaser. On the basis of this paper and on the basis of statement of seller, the additions were made. Neither the assessee was allowed to cross-examine the witnesses, nor any other material was brought. On record which establishes that assessee had invested some amount over and above mentioned in the registered sale deeds, which were executed in the month of November, 1994. Without bringing any material on record and without allowing any opportunity, no addition can be said to be made justifiably under Section 69B, as the onus lies heavily on the Department. Therefore, on the facts of the case discussed above and in view of the decision of the Tribunal (supra), we are of the view that assessee deserves to succeed here in the present case.

38. Here also the learned Deparmtenal Represntative has requested that matter can be restored for allowing opportunity to the assessee to cross-examine. Again respectfully following the order of the Tribunal (supra), we are of the view that Department cannot be allowed to cover up the lapses, which it made earlier. Even on merit, we feel that no purpose will be served if the matter is restored to the file of the AO, because of the statement of the seller has already been recorded. The statement of the assessee has also been recorded, where he categorically denied in having paid any sum over and above entered in the registered sale deeds. No evidence was found which establishes that assessee had made any such payment to the seller. Even the seller had contradicted himself by taking different stands at different stages.

Therefore, for this reason also we do not see any reasonableness in restoring the matter. Accordingly we do not find merit on the plea of the learned Deparmtenal Represntative for sending the matter back to the file of the AO.39. Similar view was taken by the Tribunal in the case of Asstt. CIT v.Anima Investment Ltd. (2000) 68 TTJ (Del)(TM) 1 : (2000) 73 ITD 125 (Del)(TM). In this case there was a difference of opinion in regard to sending the matter back to the file of the AO. The matter was referred to Third Member as per rule of the Tribunal and the Third Member has held that "The powers of the Tribunal in the matter of setting aside an assessment are large and wide, but these cannot be exercised to allow the AO an opportunity to patch up the weak part of his case and to fill up the omission. A party guilty of remissness and gross negligence is not entitled to indulgence being shown. Therefore, remand/setting aside order could not be made in this case to enable the AO to make up his earlier deficient work by initiating assessment proceedings for the third time after a lapse of considerable time." Therefore, in view of the decision of the Tribunal and in view of the discussion of ours above, we reject the plea of the learned Deparmtenal Represntative in regard to sending the matter back to the file of the AO.40. The Hon'ble Supreme Court in the case of Kishinchand Chellaram (supra) has categorically held that without affording opportunity, addition cannot be made in the hands of assessee. In this case before the Supreme Court the facts were very peculiar. In that case the assessee had an office in Bombay and one in Madras. On receiving information that a sum of Rs. 1,07,350 was remitted by the assessee by two telegraphic transfers from Madras to Bombay through a bank, the ITO wrote two letters to the Manager of the bank dt. 14th January and 10th Feb., 1955, making inquiries about the remittance. These two letters were neither disclosed to the assessee nor brought on record. The manager replied, by a letter dt. 18th Feb., 1955, to the effect that a telegraphic transfer of Rs. 1,07,350 sent by the assessee from Madras was received by the bank at Bombay on 16th Oct., 1946, and the amount was paid to N, an employee of the respondent, on the same day. This letter also was not disclosed to the assessee. The application for the telegraphic transfer was signed by one T describing himself as : "T C/o M/s K. Chellaram". There were at the relevant time two employees of that name, both of whom had left service long back. There was another letter dt. 9th March, 1957, addressed by the bank to the assessee wherein it was stated by the manager that the bank had received a telegraphic transfer from the Madras office on 16th Oct., 1946, favouring N and this amount was remitted by the assessee through their Madras office. In a copy of this letter forwarded to the ITO, there was an endorsement referring to a summons dt. 3rd March, 1957, issued by the ITO, which was also not disclosed to the assessee. Relying upon those two letters, the Tribunal held sum of Rs. 1,07,350 was the undisclosed income of the assessee, for the reason that the assessee could not show that the amount did not belong to it, which it could have done by examining the respective employees and the bank officers.

On a reference, the High Court held that there was material before the Tribunal to justify the finding that the amount remitted by T to N was the undisclosed income of the assessee. On appeal before the Supreme Court orders of all the lower authorities were set aside and the appeal of the assessee was allowed. It was observed by the Hon'ble apex Court here as under : "The Department ought to have called upon the manager to produce the documents and papers on the basis of which he made the statements and confronted the assessee with those documents and papers. It was true that proceedings under the income-tax law were not governed by the strict rules of evidence, and, therefore, it might be said that even without calling the manager of the bank in evidence to prove the letter dt. 18th Feb., 1955, it could be taken into account as evidence. But before the IT authorities could rely upon it, they were bound to produce it before the assessee so that the assessee could controvert the statements contained in it by asking for an opportunity to cross-examine the manager of the bank with reference to the statements made by him. Nor was there any explanation regarding what happened when the manager appeared in obedience to the summons referred to in the letter dt. 9th March, 1957, and what statements he had made." 41. After observing these observations the apex Court further observed that the burden was on the Department to show that the money belonged to assessee by bringing proper evidence on record and the assessee could not be expected to call T and N in evidence to help the Department to discharge the burden that lay upon it. Accordingly, the additions sustained by Tribunal and High Court were deleted by the apex Court.

42. Here before us the facts are on stronger footing. Only a document was found at the place of Shri M.S. Atwal. There was no evidence whether any amount was paid by assessee or was received by Shri N.S.Atwal. Neither there was any material which establishes that the amount paid by assessee had been invested by Shri N.S. Atwal. The statement was recorded on 6th Nov., 1996, of Shri N.S. Atwal, even a copy of the statement was not provided to the assessee till the date of hearing before the Tribunal, as the learned Deparmtenal Represntative has filed a copy of statement recorded on 6th Nov., 1996, now here before us on 31st May, 2001. Therefore, respectfully following the decision of the apex Court (supra), we feel that there was no material for making any addition in hands of assessee.

43. Similar view has been expressed by the Hon'ble Supreme Court in the case of R.B. Shreeram Durga Prasad & Fatechand Narsing Das v.Settlement Commission and Anr. (supra) wherein it is held that without affording an opportunity to the assessee, the order passed by the Settlement Commission was a nullity because it was made in violation of the principle of natural justice. Therefore, in view of the decision of the apex Court, the additions made by the AO are not justified.

Accordingly we delete the entire addition of Rs. 6,83,50,000.

44. In the case of assessee-Shri A.S. Bakshi (HUF), the additions were made on protective basis. We have already deleted the addition made in the case of assessee, (individual). Therefore, no basis remains for making addition in hands of HUF on protective basis. Accordingly the additions made in the hands of Shri A.S. Bakshi (HUF) on protective basis are also deleted. Since we have decided the issue on merit in both of the cases, therefore, we feel no necessity to adjudicate upon the legal ground raised by the learned counsel in regard to initiation of proceedings under Section 158BD of the Act at this stage.

1. I have perused the proposed order of learned JM in which he has proposed the deletion of the addition of Rs. 6,83,50,000 made by the AO in the block assessment on the basis of seized document marked as Annexure A-3. I regret I am not able to persuade myself to agree with the proposed deletion. I discussed the case with the learned JM but no agreement could be reached. Under the circumstances, I would proceed to write my dissenting order as under.

2. A search under Section 132 of the IT Act was conducted at the premises of Shri N.S. Atwal on 6th Nov., 1996. During the search certain papers were seized including the document marked as Annexure A-3. This seized paper revealed an agreement between Shri N.S. Atwal and Shri A.S. Bakshi entered into on 19th Aug., 1994. As per this agreement Shri Bakshi agreed to purchase from Shri Atwal 9.16 acres of land known as Sunrise Farms at Kishangarh, Mehrauli, Delhi, at the rate of Rs. 77 lakhs per acre and for total consideration of Rs. 7.07 crores. Shri Bakshi, however, declared the purchase price of 9.16 acres of land at Rs. 23.50 lakhs as per sale deeds executed on 29th Nov., 1994.

3. The above information was passed on by the AO assessing Shri Atwal to the AO assessing Shri Bakshi. The AO initiated proceeding under Section 158BD of IT Act against Shri Bakshi and completed block assessment for the asst. yrs. 1987-88 to 1997-98 (upto 6th Nov., 1996) adding Rs. 6,83,50,000 (Rs. 7.07 crores--Rs. 23,50,000) as unexplained investment under Section 69B of the IT Act, 1961. Addition of the same amount was also made in the case of Shri A.S. Bakshi, HUF on protective basis.

4. The AO observed that the sale consideration of Rs. 23,50,000 for 9.16 acres of land shown in the sale deeds was not real and was too low. He added that the seized document marked as Annexure A-3 was clear agreement between Shri Atwal and Shri Bakshi showing the sale consideration of Rs. 7.07 crores for the said land. This agreement was confirmed by Bakshi in his three statements and IT return of him. He noted that the real price of the land was also evident from the fact that 3.08 acres out of the same land was earlier mortgaged to Punjab & Sind Bank for obtaining bank loan in which the market price of the mortgaged land was declared at Rs. 3,67,49,000 i.e., Rs. 94 lakhs per acre. In view of these evidences he held that the sale consideration shown in the registered sale deed was not real and was too low. In view of these evidences he also held that the DVO's report dt. nil (but after 2nd Sept., 1997) estimating the value of the land 9.16 acres at Rs. 2.96 crores as on 29th Nov., 1994, was not correct and acceptable.

5. The AO also observed that the assessee did not co-operate with his predecessor in the course of assessment proceeding under Section 143(3) and also with him in the course of proceeding under Section 158BD of the Act. He observed that the assessee was given opportunity to rebut the evidences but he only kept denying and reiterating the sale consideration shown in the registered sale deeds. He further observed that in the statement of Shri Atwal and his assisstant, Shri R.Ganeshan, they had confirmed the contents of the seized document marked as Annexure A-3 and stated that the sale consideration was Rs. 7.07 crores as mentioned in the seized document.

6. The AO observed that though the registered sale deeds were in the name of Shri A.S. Bakshi (Individual) Shri A.S. Bakshi HUF and Smt.

Amrita Bakshi, the seized papers and other evidences as well as statement of Shri Atwal and his assisstant, Shri Ganeshan amply showed that the investment was made by Shri A.S. Bakshi (individual). He therefore, added Rs. 6,83,50,000 as unexplained investment under Section 69B of the Act on substantive basis in the case of Shri A.S.Bakshi, individual and on protective basis in the hands of Shri A.S.Bakshi, HUF. In the proposed order, the learned JM has proposed deletion of addition in both the cases.

7. I have carefully perused and analysed the contents of the seized document marked as annexure A-3. A copy of the same is placed at p. 23 of the proposed order of learned JM. This paper contains all the relevant details like 9.16 acres of land, sale consideration of Rs. 7.07 crores at the rate of Rs. 77 lakhs per acre, the date of agreement as on 19th Aug., 1994, payment of Rs. 2 crores on 19th Aug., 1994, balance in two instalments of Rs. 1 crore each in third and fourth month and balance in five instalments of Rs. 60 lakhs each in 5th, 6th, 7th, 8th & 9th months i.e., by 19th May., 1995. Further this seized document contains signature of Shri N.S. Atwal on right-hand side and signature of Shri A.S. Bakshi on left-hand side. This seized document is in original having its contents, signature etc. in original. In the course of hearing of the appeal before us, the learned senior Departmental Representative produced the original document which was perused by both of us and was also shown to the learned counsel of the assessee.

8. It is found that as many as three statements of Shri Atwal were recorded in the case. The first was under Section 132(4) of the Act on the date of search i.e., 6th Nov., 1996. The second was under Section 131(1) on 7th Feb., 1997, and the third was on 31st March, 1997.

Statement of Shri Atwal and his close employee Shri Ganeshan was also recorded on 7th Feb., 1997 and 31st March, 1997. All these statements duly confirmed the contents of the seized document marked Annexure A-3.

It will be relevant to produce one question and answer from the statement of Shri Atwal recorded on 6th Nov., 1996; "Q. Document No. 3 is a loose paper bundle containing 13 pages and these appeared to be in respect of Farm House sold by you during August, 1994, On p. 8 it has been mentioned that you have sold 9.16 acres of farm land at Rs. 77 lakhs per acre totalling to Rs. 7.07 crores and this paper has been signed by you as well as by buyers Shri A.S. Bakshi. Part of the payment has been shown to have been received by cheque and major portion has been received in cash page 7 shows that you received Rs. 1,61,76,000 between 19th Aug., 1994 to 15th Oct., 1994. Please tell whether you have been shown entire sum of Rs. 7.07 crores in your income-tax return while showing your capital gain on sale of farm house.

Ans. I have received about 3.80 crores out of the Rs. 7.07 crores which I was supposed to receive in instalments. In my income-tax return, I have only shown that amount which were mentioned in registered sale deed, but I have the intention to revise the return showing full particulars of this transaction. The entire transaction was in three names such as Mr. N.S. Atwal, Mr. F.S. Atwal and Mrs.

B.S. Atwal. All the three of us will revise our income-tax return showing full particulars of this transaction and any additional tax if at all become payable the same will be paid out of the amount received from Shri A.S. Bakshi." 9. From the statement of Shri Atwal recorded on 7th Feb., 1997, the following questions and answers are reproduced to show that he confirmed the sale consideration of Rs. 7.07 crores as noted in the seized document: "Q. 1. Have you received a questionnaire issued to you by this office on 17th Jan., 1997, which is based on primary scrutiny of documents seized from your residence and business premises on 6th Nov., 1996, during the course of a search under Section 132(1) of IT. Act? Q. 2. Have you furnished any reply to the questionnaires so issued to you? Ans. Not yet, we have requested you to furnish us photo copies of the documents seized by the Deptt.

Q. 3. Have you been allowed any inspection of seized documents or not? Ans. Inspection has been allowed to my authorised representative and we are in the process of finalising our reply to your Department.

Q. 4. Have you gone through Question Nos. 10, 18 & Question No. 25 of the questionnaire dt. 17th Jan., 1997, which deal with your sale of land to Mr. A.S. Bakshi? Ans. Yes, I have gone through question Nos. 10, 18 & 25 of the above questionnaire dt. 17th Jan., 1997.

Q. 5. How much land you and members of your family owned at "sunrise Farms, Kishangarh, Mehrauli, Delhi and how much of it was sold to Shri A.S. Bakshi.? Ans. In about 1982-83 I and my family members owned 16 plus acres of agricultural land at village Kishangarh which was named by me as Sunrise Farms. Even though it was agricultural land so many brick kilns were coming around and some of them already existed around that land. A part of land was sold by me in 1991 to 1993. About 9.16 acres of the land was sold by me in 1994 to Shri A.S. Bakshi and his family. That was the last piece of land, I and my family members disposed off. Nothing was left thereafter with me at Sunrise Farm.

Q. 9. What price you demanded and what offer of rate of land did he make? Ans. He offered a rate of Rs. 77 lakhs per acre to buy entire 9 plus acres of land but he put a condition that entire money would be paid in 9 months. I was in need of money and I thought the price offered is reasonable. In addition to this he promised to pay Rs. 2 crores immediately out of the sale proceeds to be paid to Punjab & Sind Bank to facilitate release of documents of the land pertaining to 3.85 acres of land. The documents were lying with the bank as an additional security for the credit facilities provided by the bank.

Q. 10. Whether any agreement was written and executed incorporating above condition? Ans. Yes, an agreement was made and executed to this effect on 19th Aug., 1994. This was written by Shri Kanwal Jeet Singh Bakshi, younger brother of Shri A.S. Bakshi on 19th Aug., 1994, specifying the rate of land, the schedule of payments agreed to between myself and Shri A.S. Bakshi. This agreement was signed by me and by Shri A.S. Bakshi in the presence of Shri K.S. Bakshi and my son Shri B.S. Atwal. Apart from four of us, one Shri R. Ganeshan, my secretary at that time, was also present.

Q. 13. Now I show you annexure-Document No. 3 at p. 8 thereof.

Whether this page is the same agreement referred to by you in question No. 10 above and entered into with Shri A.S. Bakshi for the sale of 9.16 acres and farm land at Sunrise Farm, Kishangarh, Mahrauli? Ans. Yes, this page No. 8 of annexure document No. 3 seized from my residence on 6th Nov., 1996, is the same agreement entered into by me with Shri Amar Jeet Singh Bakshi for the sale of 9.16 acres of land referred to above.

Ans. Both the signatures by me and by Shri A.S. Bakshi are made by a black ball point pen (black ink used in the pen)., possibly that ball point pen of black ink was of Mr. A.S. Bakshi.

Q. 16. Whether, this agreement at p. 8 of annexure document No. 3 was written before you by Shri Kanwal Jeet Singh Bakshi or it was brought in there by Shri A.S. Bakshi or Shri Kanwal Jeet Singh Bakshi? Ans. This was written right in front of all of us i.e., at the time of writing of this agreement myself, my son Shri B.S. Atwal, Amar Jeet Singh Bakshi, and Shri R. Ganeshan were present when Shri Kanwal Jeet Singh wrote this agreement.

Q. 19. As per rate of the land mentioned on this agreement you were supposed to get Rs. 7.07 crores for 9.16 acres of land. But the Schedule of payment written on this agreement shows that you will get only 700 lakhs (seven hundred lakhs) (two crores now) 1-3 months, 1-4 months, 60-5, 60-6, 60-7, 6,0-8, 60-9, totalling (not done on the document) to 700 lakhs Can you explain the difference? Ans. It was really, a schedule of payment mentioned on right side of the big arrow on this document and was approximately agreed upon to be executed and there could be slight variation in the amount to be paid by Mr. Bakshi from 5th month to 9th month as suitable to him.

This means that it could be more in any of the month from 5th to 9th month, it could also be less than 60 lakhs during those months, This is indicated by an curvy bracket and a three sided box indicating the schedules from 5th to 9th month permitting suitability of Mr.

A.S. Bakshi by mentioning therein "As suitable to Mr. A.S. Bakshi" Q. 20. Now kindly see signatures on this agreement (p. 8 of annexure document No. 3. Do you recognise who has signed over Mr. A.S. Bakshi and do you recognise the signature of Shri A.S. Bakshi? Ans. Signatures over Shri A.S. Bakshi are those of Amarjeet Singh Bakshi and I do recognise them same as his signature.

Q. 21. Who has signed over Mr. N.S. Atwal on this agreement referred above, (page No. 8 of annexure document No. 3)? Q. 23. Whether this schedule of payment was acted upon as was agreed in the document No. 8 in annexure document No. 3? Ans. The schedule of payment was not strictly adhered to by him and they did not fulfil commitment of paying the quantum of instalments and the time indicated in the document.

Q. 24. How much money Shri A.S. Bakshi really paid to you in respect of purchase of this land of 9.16 acres? I am referring to amount paid by Shri A.S. Bakshi and members of his family? Ans. So far Shri Amarjeet Singh Bakshi and his family members has paid to me and to my family a sum of Rs. 368 lakhs (three crores sixty eight lakhs). However I do not remember the amount of instalments and date when it was paid, Kindly give me time to check my books of account I will come out with the details of payments and its schedule as I actually affected in respect of this deal." Again in his statement recorded on 31st March, 1997, Shri Atwal confirmed the same sale consideration and furnished relevant details.

It is relevant to reproduce the following portion of the said statement: "Q. 3. How much money originally or the rate per acre you had demanded from Mr. Amarjit Singh Bakshi? Ans. I have demanded over a crore of rupees per acre, anywhere 1 to 1.25 crore per acre. However, the sale price was settled at Rs. 77 lakhs per acre for 9.16 acres of land, after considering the facts that the titled documents pertaining to 3.85 acres out of total 9.16 acres were lying with Punjab & Sind Bank.

Q. 4. Whether payment to Punjab & Sind Bank against the loan taken by mortgaging 3.85 acres was to be made out Rs. 77 lakhs per acre or such payment was to be made by Mr. Bakshi over and above Rs. 77 lakhs per acre? Ans. Payment to Punjab & Sind Bank was to be made out of sale consideration of land settled at Rs. 77 lakhs per acre. However, Mr.

A.S. Bakshi had agreed that within the period of nine months from 19th Aug., 1994, he would ensure settlement of my loan accounts with Punjab & Sind Bank at Principal amount only by waiver of complete interest charged by bank on those loan accounts failing which the transfer of land would become void.

Q. 6. How much payment you and your family members had received on 29th Nov., 1994, from Mr. Bakshi & family and what induced you to execute sale deed on 29th Nov., 1994, when final payment were to be received May, 1995/in as per p. 8 of annexure document No. 3.

Ans. Upto 29th Nov., 1994, I had received little above Rs. 3 crores.

Mr. A.S. Bakshi induced me that Punjab & Sind Bank has not recorded their lien in respect of the land with Registrar, however, by executing the sale deed we can pressurise the Punjab & Sind Bank to settle the loan accounts at the principal amount. Under this inducement I executed the sale deed on 29th Nov., 1994 in favour of Mr. A.S. Bakshi and his family members without receiving full and final payment as per agreement dt. 19th Aug., 1994, which was seized by you." 10. The statement of his close employee Shri R. Ganeshan, copies of which are placed in the paper book, also gives graphical picture and all details of the background of the agreement as per seized document and subsequent development which confirmed the contents of the seized document and the statement of Shri Atwal. The seized document was prepared in the presence of Shri Ganeshan besides others. The answer to question No. 8 of Shri Ganeshan gives intimate knowledge of important things of Shri Atwal.

11. The above statements give graphical picture and detailed picture about the background in which the seized document was prepared between Shri Atwal and Shri Bakshi and also about the subsequent follow up. The genuineness of the seized document is also proved and established by the fact that the subsequent transaction of sale of the same land and between the same two parties took place and sale deeds were executed on 29th Nov., 1994, though on much lower sale consideration shown in the deeds. The fact that the aforesaid amount as per his statements referred above was also received by Shri Atwal in pursuance to the agreement in the seized document, also proved that the seized document was acted upon though partly with regard to the payment of the full sale consideration as stated by Shri Atwal. It is also worth noting that Shri Atwal declared capital gains in his return filed on the basis of the sale consideration mentioned in the seized document. The importance of Shri Ganeshan and his intimate knowledge of Shri Atwal's affairs can also be judged from the facts that in his statement he gave description of code words and the amount noted in another seized paper which he decoded and explained. As for the sale consideration of Rs. 77 lakhs per acre, it is also proved to be real and fair when we are taking into account the valuation of Rs. 94 lakhs per acre given in the valuation report of 3.812 acres of land out of land in question mortgaged to Punjab & Sind Bank for bank loan of Rs. 2.50 crores vide report dt. 8th July, 1995 at p. 60 of the paper book. In view of the preponderance of evidences in support the sale consideration of Rs. 77 lakhs per acre as mentioned above, the valuation of the land in question made by the DVO at Rs. 2.96 crores on 29th Nov., 1994, in report prepared after the search was rightly rejected by the AO.12. It is also found that Shri Atwal filed suit in the Court of Sub-Judge-I, Dhanbad on 11th Dec., 1997. He confirmed the sale consideration agreed in the seized document and stated that the entire consideration was not paid to him by Shri Bakshi and Shri Bakshi also did not clear the bank loan of Shri Atwal as promised.

13. I have noted the submissions of the learned counsel for the assessee and the observations of the learned JM in the proposed order.

I am of the view that these submissions and observations cannot make any dent into the strong, clinching evidence contained in the seized document and supported by several statements of Shri Atwal and Shri Ganeshan as mentioned above. The retraction by Shri Atwal in his letter dt. 28th March, 2001, addressed to his AO cannot impair and alter the earlier three statements on different dates as mentioned above. The retraction letter to the AO was long after the three statements by him referred to above and also long after impugned assessments. In the proposed order, the learned JM has admitted the said retraction letter of Shri Atwal but still that cannot alter the admitted position much earlier and before the impugned assessment. The statements were given by Shri Atwal voluntarily and without any coercion or undue influence.

Perusal of the statements would show that Shri Atwal was in free and frank state of mind at the time of statement and he was voluntarily giving all the details' and the background of the matter as mentioned in the seized document. In view of this and in the light of the relevant observation of Supreme Court in Gura Singh v. State of Rajasthan (2001) 2 SCO 205, JTO v. Sadhu Ram Gupta (1998) 61 TTJ (Chd) 466 : (1998) 66 ITD 441 (Chd) and Smt. Vasanti Sethi v. Asstt. CIT (1993) 45 TTJ (Del) 503 : (1992) 43 YTD 447 (Del), the statement of Shri Atwal has to be accepted as the correct statement of facts in the case.

14. It is important to note that in pursuance of the agreement as per seized document, actual sale of the land was made by Shri Atwal to Shri Bakshi and sale deeds were executed on 29th Nov., 1994, in the names of Shri A.S. Bakshi (individual), Shri A.S. Bakshi, HUF and Smt. Amrita Bakshi for total amount of Rs. 23.50 lakhs. The seized document and statement of Shri Atwal and Shri Ganeshan clearly established that the investment was made by Shri A.S. Bakshi. Hence the addition had to be made in this case as done by the AO and not in the hands of all the three.

15. I have noted the submission of the learned counsel and the observations of the learned JM in the proposed order to the effect that the seized document was not proper agreement and, therefore, it could not be treated as proper evidence. I am of the view that these submissions and observations are not correct. It is not necessary that an agreement must always be in a particular format or in particular manner to carry evidentiary value. The contents of the agreement and its binding nature for both the parties to the agreement is important.

In view of all the contents with signatures of both parties, its expression, statements of Shri Atwal and his assisstant, Shri Ganeshan and the admission by Shri Bakshi that the signatures on the seized document appeared to be his own, the declaration of capital gains by Shri Atwal in his return on the basis of Rs. 7.07 crores, the evidentiary value and the importance of the seized document can be ignored only at the peril of justice in the case.

16. I have also noted the submissions of the learned counsel for the assessee and the observations of the learned JM with regard to the sale consideration of Rs. 7.07 crores mentioned in the seized document. I am of the view that after the content of the seized paper including agreed sale consideration of Rs. 7.07 crores was duly accepted by both the parties viz., Shri Atwal and Shri Bakshi by putting their signatures on the seized document and as in accordance with the same, Rs. 2 crores was paid on the date of agreement i.e., 19th Aug., 1994, and further the agreed sale consideration having been confirmed by Shri Atwal and Shri Ganeshan in their statements, these submissions and observations in the proposed order cannot impair the value and importance of the seized document. The AO noted, in the impugned assessment order that "the information received from Punjab & Sind Bank brought to the notice of the assessee also shows that value of land measuring 3.812 acres as declared i.e., the part of the entire land of 9.16 acres as declared and accepted by the bank was more than the value shown in the registered sale deed(s) and even more than the value at Rs. 7.07 crores. It cannot be logically or legally argued that the value declared for lending purposes is irrelevant and has no sanctity. The Courts have not accepted such double standards and have attached due importance to the declaration submitted before the banks. Assessee's argument that the valuation report for 8th July, 1995 has no relevance for the value as on 29th Nov., 1994, has no force because one valuation intimated to him on the basis of information received from Punjab & Sind Bank is for 3rd April, 1990, i.e., much prior to 29th Nov., 1994 and value mentioned therein is Rs. 2.10 crores for 3.812 acres. On the basis of the same, the value of 9.16 acres even on 3rd April, 1990, would come to Rs. 5,08,88,888. The reference to valuation as on 8th July, 1995, is indicator of the fact that value declared by the assessee of the land in registered sale deed(s) is much less than the real value and the consideration actually paid." 17. In view of what is discussed above, the sale consideration of Rs. 23.50 lakhs shown in the sale deed and even the valuation made by the DVO cannot demolish and do away with the strong, clinching evidentiary value of the seized document.

18. I have also noted the submissions of the learned counsel for the assessee and the observations of the learned JM regarding lack of opportunity given to the assessee before completing the impugned assessment including cross-examination. In this connection, it can be seen from the impugned assessment order that the AO had observed that the assessee had not co-operated with his predecessor in the course of assessment proceeding under Section 143(3) and also with him in the course of proceedings under Section 158BD of the Act except some co-operation a few days before the finalisation of the assessment.

Copies of the various documents in the possession of the AO were forwarded to the assessee for his comments and rebuttal of the evidences, but the assessee did nothing except denying these documents and the agreement between him and Shri Atwal thereunder. The assessee in his statement admitted that the signature on the seized document appeared to be his but still persisted that it was forged but did not file any evidence in support of this. The agreement as per the seized document and the assessee's signature thereon was confirmed by Shri Atwal in as many as three statements and also confirmed by Shri Ganeshan as mentioned above. The signature is also confirmed by the report of the expert though this report was filed in the course of appeal proceeding before us and not earlier. In the proposed order, the learned JM admitted this evidence alongwith Shri Atwal's retraction letter dt. 28th March, 2001, referred to above. The materials and the evidence on record, had confirmed that the signature on the seized document was of the assessee. This was further established by the handwriting expert's report on the assessee's signature. Under these circumstances and in the face of all these evidences how can it be said that the seized document was not genuine and reliable.

19. I am also of the view that it will not be proper and just to quash the addition on the ground of alleged lack of opportunity. The learned counsel for the assessee in his submission and the learned JM in his observations thereon has relied on certain decisions in support of the view that on the ground of lack of opportunity the addition was liable to be deleted. The facts of the cases referred to in this regard were not same as the facts of the present case. The learned JM is of the view that on the ground of lack of opportunity the addition must be deleted and the learned senior Departental Representative's alternative prayer for restoring the case to the AO for passing a fresh order after giving reasonable opportunity to the assessee for cross-examination, etc. cannot be acceded to. In support, he has referred certain decisions. I respectfully disagree with the learned JM on this point.

The AO had fully and convincingly proved and established that the seized document was genuine and the sale consideration was Rs. 7.07 crores as agreed in the seized document and the sale consideration of Rs. 23.50 lakhs mentioned in the sale deed executed was not real and correct. In fact, the setting aside was not going to provide an opportunity to the AO to investigate the matter further and bring fresh materials on record but it was going to remove the assessee's technical grievance of not being allowed an opportunity to cross-examine. It was to serve the purpose of the assessee and not the purpose of the AO who had already convincingly established his case as mentioned above.

Moreover in large number of cases the Supreme Court has held that setting aside and not quashing the addition is the just and appropriate course of action. Reference may be made to the decisions in CIT v. Jai Prakash Singh (1996) 219 ITR 737 (SC), Kapurchand Shrimal v. CIT (1981) 131 ITR 451 (SC), Guduthur Bros. v. ITO (1960) 40 ITR 298 (SC), Bhagwat Prasad. v. CIT (1998) 232 ITR 480 (All) and the decision in (2001) 247 ITR (St) 36.

20. The learned JM has also observed in the proposed order that the DVO's report referred to above showed that the value of land in question was not as much as Rs. 7.07 crores. He added that the AO was not justified in ignoring the DVO's report. In this connection I have already mentioned above that in view of the preponderence of evidences in support of the sale consideration of Rs. 7.07 crores, the AO in the interest of justice and fairplay was justified in ignoring the DVO's report which was prepared after the search. Further in view of the statement of Shri Atwal and the value declared for mortgage of the land to Punjab & Sind Bank for the purpose of bank loans also the AO was justified to ignore the DVO's report and go by the sale consideration in the seized document. The learned JM has also observed that the amount allegedly received by Shri Atwal under the seized document was not found in the course of search in the premises nor any investments of the amounts were discovered. He, therefore, held that no such amount was received by Shri Atwal from Shri Bakshi and the seized document was not genuine. In this connection I am of the view that it is not always possible that all the assets of the assessee are seized or discovered during the search. Merely because the amount was not found during the search or the investments of the amounts were not discovered, the seized document and other evidences supporting the same cannot be dismissed.

21. In the above view of the case I respectfully disagree with the learned JM that the impugned addition of Rs. 6,83,50,000 should be deleted. However, the entire addition of Rs. 6,83,50,000 can neither be confirmed. It is evident from the statement of Shri Atwal that he had not received, the entire amount of Rs. 7.07 Crores as per the seized document. Shri Atwal in his statement stated that he had received over Rs. 3 crores upto 29th Nov., 1994, vide his statement on 31st March, 1997. In his earlier statement he had more specifically mentioned that he had received Rs. 3.68 crores upto 15th Oct., 1994. In view of this, we can consider only Rs. 3.68 crores as the total payment by Shri Bakshi to Shri Atwal under the agreement as per the seized document.

Since the AO had accepted the declared sale consideration of Rs. 23.50 lakhs as explained, the unexplained investment would work out to Rs. 3,44,50,000 (Rs. 3.68 crores--Rs. 23.50 lakhs). Addition under Section 69B for unexplained investment in the hands of Shri A.S. Bakshi (individual) cannot be made more than Rs. 3,44,50,000. Accordingly, the addition is reduced from Rs. 6,83,50,000 to Rs. 3,44,50,000.

22. I am of the view that in view of the preponderance of evidence as mentioned above and as the assessee was given reasonable opportunity in the course of assessment proceedings under Section 143(3) and again in the course of proceeding under Section 158BD of the Act, it will not serve any purpose to set aside the assessment as the assessee will continue to deny the seized document as not genuine. I am also of the view that cross-examination of Shri Atwal and Shri Ganeshan by the assessee long after the relevant event and also because of Shri Atwal's retraction letter of 28th March, 2001, would not serve any purpose and would complicate the matter giving handle to the assessee to manipulate and overturn the whole thing and undermine the genuine interest of justice in the case, In all the three statements on different dates Shri Atwal confirmed the seized document. This was also confirmed by Shri Ganeshan in his statement. The statements of both Shri Atwal and Shri Ganeshan are very detailed and clear and they do not leave any scope for disbelieving the same. In income-tax matter strict rules of evidence and procedure are not necessarily to be followed. In this connection I draw support from observations in decision T. Devasahaya Nadar v. CIT (1964) 51 ITR 20 (Mad), Cement Distributors (P) Ltd. v.IAC (1973) 871TR 163 (Mad) and Dhakeswan Cotton Mills Ltd. v. CIT (1954) 26 ITR 775 (SC) at p. 782. On the facts and in the circumstances of the case, the setting aside of the addition would not serve any purpose except prolonging and multiplying the litigation. The genuineness of the seized document having been convincingly proved and established and as now it is held by me that the amount paid by Shri Bakshi to Shri Atwal was Rs. 3.68 crores and not the entire sale consideration of Rs. 7.07 crores, the addition for unexplained investment is to be made at Rs. 3,44,50,000 only.

23. I have not discussed and given finding on the ground in which the assessee has challenged the proceeding initiated under Section 158BD in this case because the learned JM has not given his finding on the same in the proposed order.

Since there is a difference of opinion between the Members of the Bench, we state the following point of difference and refer the same to the Hon'ble President for further necessary action as envisaged under Section 255(4); "Whether, on the facts and on the basis of material on record, the learned AM was correct in sustaining an addition of Rs. 3,44,50,000 or whether the JM was justified in deleting the entire addition made by the AO while framing the Block assessment on the basis of proceeding initiated under Section 158BD of the IT Act." 1. On a difference arising between the learned Members constituting the Division Bench, the matter has been referred to me under Section 255(4) of the IT Act to resolve the following : "Whether, on the facts and on the basis of material on record the learned AM was correct in sustaining an addition of Rs. 3,44,50,000 or whether the JM was justified in deleting the entire addition made by the AO while framing the block assessment on the basis of proceeding initiated under Section 158BD of the IT Act." 2. There is no dispute between the learned Members as regards the facts of the case, but for purposes of disposing of the present reference, I summarize these as under: There was a search conducted at the premises of Shri N.S. Atwal on 6th Nov., 1996, and during the course of which certain papers were found and seized. One of the documents found (marked as Annexure A-3) revealed "an agreement" between the assessee and Shri N.S. Atwal on 19th Aug., 1994, pertaining to the sale of 9.16 acres of land known as Sunrise farms. In the document/agreement found the rate of Rs. 77 lakhs per acre had been mentioned and the total sale consideration worked out at a figure of Rs. 7,07,00,000. As against this the? purchase consideration declared by the assessee was only Rs. 23.5 lakhs. According to the AO, there was an unexplained investment in the purchase of the said land to the tune of Rs. 683.5 lakhs.

3. On the basis of the aforesaid facts, an addition of the amount in question viz. Rs. 683.5 lakhs was made in the regular assessment made under Section 143(3), but this was done on protective basis keeping in view the judgment of the Hon'ble Punjab and Haryana High Court in the case of Raja Ram Kulwant Rai v. Asstt. CIT (1997) 227 ITR 187 (P&H).

The controversy, according to the AO was, however, resolved by insertion of Explanation to Section 158BA by Finance (No. 2) Bill, 1998 with retrospective effect i.e., from 1st July, 1995. This amendment had clarified that regular assessment would be separate and apart from a block assessment under Chapter XIV-B.4. The AO in para 3 of the order pertaining to block assessment referred to the view expressed by his predecessor in the order passed under Section 143(3) agreeing fully with the reasons recorded therein.

It was, however, noticed by the AO that the assessee had not co-operated with his predecessor and had been denying the facts brought on record by the said predecessor. The assessee had completely denied paying a sum of Rs. 7.07 crores to Shri N.S. Atwal as a consideration for the purchase of the land in question. The AO, however, issued a final notice in July, 1998 to the assessee pointing out therein that the seized papers found from the premises of Shri N.S. Atwal made it very clear that a sum of Rs. 7.07 crores had been paid by the assessee for the purchase of the land and the consideration shown in the sale deed was much less. The AO also forwarded copy of the "agreement" entered into between the assessee and Shri Atwal and which stated a figure of Rs. 7.07 crores.

5. A reading of the assessment order shows that the AO independently obtained information from the Punjab & Sind Bank pertaining to the mortgage of the property in question and attention was drawn to the valuation reports placed on record in respect of a part of property in question. It was specifically confronted to the assessee that in one of the valuation reports viz. the one dt. 8th July, 1995, an area of land measuring 3.08 acres had been valued at Rs. 3.67 crores and on the basis of this figure, the value of land purchased by the assessee i.e., 9.16 acres was bound to be much higher than the figure shown in the sale deeds. The AO, in fact, by means of the notice sent to the assessee proposed to treat the purchase consideration of the land in question at Rs. 7.07 crores and which would mean an addition of Rs. 6.83 crores.

6. In response to the communication of the AO the assessee submitted that the sale consideration be taken as shown in the registered sale deeds and he also asked the AO to show him the original documents relied upon by the Department. The further submission was to the effect that information received by the AO from the Punjab & Sind Bank had been shown to him for the first time and such documents were not part of the record of assessment and, therefore, confronting the assessee with the same in a block assessment was against the law. In referring to the valuation report forwarded by the AO to him i.e., the one of M/s S.S.K. Bhagat, the submission was that this was dt. 8th July, 1995, whereas the relevant valuation date in the case of the assessee was 28th Nov., 1994.

7. In considering the aforesaid submissions with reference to the facts of the case and the material on record, the AO proceeded to make the addition of Rs. 6.83 crores under Section 69B of the IT Act on the following grounds : "I have considered the submissions of the assessee, however, I do not find substance in the same. The documents seized from the premises of Shri N.S. Atwal referred to by my predecessor in the order under Section 143(3) clearly established that the consideration of Rs. 7.07 crores was agreed to and paid by the assessee to Shri N.S. Atwal. These documents inter alia include an agreement to sell signed both by the assesses and Shri Atwal mentioning therein the exact amount of consideration. Photocopy of the sale agreement was forwarded to the assessee by the undersigned vide notice dt. 28th July, 1998. In their detailed statement as recorded by my predecessor in the order under Section 143(3) Shri N.S. Atwal and his employee Shri R. Ganeshan unequivocally stated that the consideration for the land was Rs. 7.07 crores. The information received from Punjab & Sind Bank brought to the notice of the assessee also shows that value of land measuring 3.812 acres i.e. part of the entire land of 9.16 acres as declared and accepted by the bank was more than the value shown in the registered sale deed(s) and even more than the value at Rs. 7.07 crores. It cannot be logically or legally argued that the value declared for lending purposes is irrelevant and has no sanctity. The Courts have not accepted such double standards and have attached due importance to the declaration and submitted before the banks. Assessee's argument that the Valuation Report for 8th July, 1995 has no relevance for the value as on 29th Nov., 1994, has not force because one valuation intimated to him on the basis of information received from Punjab & Sind Bank is for 3rd April, 1990, i.e., much prior to 29th Nov., 1994, and value mentioned therein is Rs. 2.10 crores for 3,812 acres. On the basis of the same the value of 9.16 acres even on 3rd April, 1990, would come to Rs. 5,08,88,888. The reference to valuation as on 8th July, 1995, is indicator of the fact that value declared by the assessee of the land in registered sale deed(s) is much less than the real value and the consideration actually paid.

Assessee is well aware of the fact that Shri Atwal is being assessed at Calcutta and original seized papers are in possession of the concerned AO at Calcutta and, therefore, insistence of original papers at this stage was to circumvent true facts. Assessee's repeated reliance on the registered sale deed(s) is not acceptable because the value shown therein is self-serving specially in view of the statement of the seller and his employee to the contrary. The assessee was made aware by my predecessor of the documents to be used in the course of the regular assessment under Section 143(3) but assessee did not choose to co-operate with the Department. The facts fully indicate that assessee has suppressed the investment in Sunrise Farms measuring 9.16 acres and is now trying to get out of predicament one way or the other. Though registered sale deed(s) the name of the buyers have been shown as Shri A.S. Bakshi, Shri A.S. Bakshi (HUF) and Smt. Amrita Bakshi. Yet the seized papers and evidence as well statements of Shri N.S. Atwal and R. Ganeshan amply show that investment was made by Shri A.S. Bakshi (Individual).

Hence addition of Rs. 6,83,50,000 is made in the income of the assessee under Section 69B of the IT Act." 8. Being aggrieved with the addition, the assessee filed an appeal before the Tribunal. At the outset, both the parties sought to place additional evidence on record, the Department a forensic report in regard to the verification of the signatures of the assessee on Annexure A-3 seized during the course of the search on 6th Nov., 1996, from the premises of Shri N.S. Atwal and the learned counsel on behalf of the assessee placing on record copy of a letter dt. 28th March, 2001, addressed by Shri N.S. Atwal to the Addl. CIT, Special Range-III, Calcutta, in regard to asst. yr. 1996-97. After hearing both the parties the learned JM who wrote the initial order, admitted the Addl.

evidences, as according to him, these went to the root of the matter.

Inasmuch as in his dissenting order the learned AM has not expressed an opinion to the contrary, the admission of the additional evidence from both sides becomes the view of the Division Bench.

9. Coming back to the order of the learned JM, he reproduced in para 14 of his order the summarized arguments filed on 31st May, 2001, on behalf of the assessee, but I proceed/propose to make them concise as follows : (i) There was no evidence to establish that the assessee in the financial year 1994-95 had paid the huge sum as alleged by the Department ; (ii) No statement had been made by the two witnesses on whose testimony the addition had been made about the huge amount having been paid, but this was without prejudice to the assessee's submission that the statement made had not been confronted to the assessee and the two witnesses had not been produced for assessee's cross-examination ; (iii) There was no justification to presume that the assessee had purchased the property for a sum of Rs. 7.07 crores since even as per the report of the Valuation Officer made on 29th Nov., 1994, the value worked out to Rs. 2.96 crores ; (iv) The property was undisputedly encumbered with the Punjab & Sind Bank since 1991 and it was an accepted fact that the title of the property vested with the Punjab & Sind Bank from whom the vendor had obtained a loan of Rs. 4 crores and the bank had agreed to release the title of the property on the payment of Rs. 2.50 crores; (v) The vendor in a suit filed before Sub-Judge-I, Dhanbad, had duly admitted that an estimate of the property had been made on paper mentioning a total price of Rs. 7.07 crores payable in instalments upto 19th May, 1995, and both the assessee and Shri N.S. Atwal had signed the said paper as a memorandum of agreement. Further all agreements were made in the presence of higher officials, who did not want to be named and further it was stated that even as per the agreement the assessee did not pay the entire consideration amount to set off the loan due to the bank and remove thereby the burden of bank dues. Further the dues against the company of Mr. N.S. Atwal were approximately Rs. 6.47 crores and vis-a-vis the aforesaid facts there could be no basis for the allegation that the assessee had paid Rs. 7.07 crores to the vendors; (vi) A suit had also been filed by Shri N.S. Atwal before the Senior Sub-Judge, Delhi, and a perusal thereof would show that it had been stated therein that the defendant (the assessee) did not pay the amount either to the plaintiff (Mr. N.S. Atwal) nor deposited the amount with the bank and further the bank started harassing and creating trouble for the plaintiff and it was the suspicion of the plaintiff that the income-tax raid was conducted at his premises at the instance of the defendant ; (vii) In the returns of income filed for asst. yr. 1995-96 none of the three vendors had shown or declared the receipt of any extra consideration over and above the amount disclosed or invested by the assessee, his wife as also the HUF ; (viii) So far as Shri N.S. Atwal's declaration of an amount of Rs. 7.07 crores as sale consideration for asst. yr. 1996-97 was concerned, the same was done with an intention to cause harm to the assessee and which was contrary to his own statement filed with the Sub-Judge, Dhanbad, and the Sr. Sub-Judge at Delhi. Further by filing the return he did not admit any tax liability ; (ix) Shri N.S. Atwal admittedly was not the owner of the entire land and, therefore, how could he disclose the alleged extra consideration as his income against the sale of land more particularly when the two other vendors who were his sons had not declared any such alleged extra consideration; (x) The total land agreed to be transferred was 43 bighas and 17 biswas whereas Shri N.S. Atwal had only 18 bighas and 6 biswas as his own property. With a view to maintain consistency, each of the three co-owners should have either shown or should have been assessed to tax in respect of the total sale consideration viz., Rs. 7.07 crores in case the property had been sold for this amount as alleged ; (xi) No evidence had been brought on record especially that the assessee had made the investment as alleged in the year 1995-96 and it was not disputed that the burden to establish so was on the Revenue ; (xii) There was no evidence with the Department to establish that the alleged consideration vis-a-vis the seized document had changed hands between the parties prior to the execution of the sale deeds and such sale deeds not making a mention of any such huge amount; (xiii) From the facts it was evident that the figure of Rs. 7.07 crores as stated in the paper found was a mere estimate and not a figure which had been agreed upon or paid by the assessee. On the contrary the circumstances in which the estimate had been prepared stood duly narrated by Shri N.S. Atwal in his letter dt. 28th March, 2001, filed before the Addl. CIT at Calcutta. Further the circumstances had also been narrated in the two suits filed by Shri N.S. Atwal; (xiv) The Revenue could not be allowed to blow hot and cold and there was to be some consistency in the stand of the Revenue, which was seeking to rely on the statement of Shri N.S. Atwal, but ignoring in the process the communication dt. 28th March, 2001. The plea, in other words, was that the statements as also the said letter should be read as a whole before coming to a conclusion; and (xv) There was no justification to tax the huge amount more particularly in the assessment framed under Chapter XIV-B, which provided that undisclosed income could be taxed only as a result of material/ evidence found as a result of a search.

10. As against the aforesaid submissions made on behalf of the assessee, the learned Departmental Representative, at the outset, contended that since the main thrust of the argument of the assessee's counsel was with regard to non-granting of an opportunity to cross-examine two witnesses i.e., Shri N.S. Atwal and Shri R. Ganeshan, then the matter could be restored back to the file of the AO to allow such an opportunity.

11. Coming to the merits of the case i.e., the addition itself, his submission was that there was sufficient material before the AO to make the impugned addition. It was submitted that the assessee had signed the "agreement" on 19th August, 1994, whereby he agreed to purchase the property in question for a sum of Rs. 7.07 crores from Shri N.S. Atwal and his family members and the seized paper marked Annexure A-3 was very clear in this respect. The further submission was to the effect that Shri N.S. Atwal, during the course of the recording of his statement had clearly and categorically admitted that he had agreed to sell the land to the assessee and his family members for a total consideration of Rs. 7.07 crores, According to him, there was nothing, to doubt the contention of Shri N.S. Atwal because of the "agreement" and secondly, the recording of his statement. The further submission was to the effect that in property dealings some amount was paid underhand and which was never mentioned in the sale deed registered later on. It was emphasized by the learned Departmental Representative that at the time of entering into the agreement, which was prepared on 19th Aug., 1994, the various amounts agreed upon had been mentioned and, therefore, there could not be any better evidence than the paper found during the course of the search made on Shri N.S. Atwal. It was further emphasized by the learned Departmental Representative that only a sum of Rs. 23.5 lakhs had been shown in the books of account and the major portion of the deal amount had been kept out. Attention was also invited to the report of the forensic expert, which clearly established that the assessee had signed the document on 19th Aug., 1994.

12. The further submissions on behalf of the Revenue were to the effect that once the "agreement" entered into on 19th Aug., 1994, had been found, nothing further was left with the Department to enquire about.

It was reiterated that from the paper found it was clearly established that the assessee had entered into an "agreement" and paid the amount mentioned therein for purchase of the land. As regards the report of the DVO the submission was to the effect that this only had evidentiary value, but the main evidence on which reliance was being placed was the "agreement", which had been entered into by both the parties.

13. Coming to the letter dt. 28th March, 2001, filed by Shri N.S. Atwal before the Addl. CIT, the submission was that this had no evidentiary value because Shri N.S. Atwal had himself disclosed the sum of Rs. 7.07 crores while filing his return of income earlier and this letter only amounted to a retraction from his earlier stand. It was also submitted by the learned Departmental Representative that the assessment order passed in the case of Shri N.S. Atwal had been set aside for reconsideration and in case the Department accepted the letter dt. 28th March, 2001, and deleted the addition in the hands of Shri N.S. Atwal, then the Department had no case. The learned Departmental Representative urged before the Division Bench that the matter could be restored to the AO for fresh consideration in view of the setting aside of the issue in regard to Shri N.S. Atwal, In reply, the learned counsel for the assessee objected to the stand taken by the learned Departmental Representative for having the matter restored back for granting an opportunity.

14. On the merits of the case the learned counsel reiterated that Shri N.S. Atwal had changed his statement a number of times initially accepting that he had received the amount from the assessee, thereafter categorically stating that he had not received any amount vis-a-vis the suit filed against the assessee as also against the Punjab & Sind Bank and then again a different version in the letter dt. 28th March, 2001, sent to the Department. The plea ultimately was that the assessee should not be made to suffer for the act of Shri N.S. Atwal in changing his submissions so many times. In support of these arguments, reliance was placed on the judgment of the Hon'ble Supreme Court in the case of Indian Oil Corporation v. ITO (1986) 159 ITR 956 (SC).

15. It was further emphasized by the learned counsel in his reply that no evidence had been placed on record by the Department to substantiate the payment of the amount in question by the assessee to Shri N.S.Atwal and further this was a search case and no addition could be made unless and until cogent material was found during the course of the search. It was also emphasized by the learned counsel that even though at one place Shri N.S. Atwal had admitted receiving a sum of Rs. 3.68 crores there was no material/evidence showing an investment of the amount of this magnitude. A reference was also made by the learned counsel to the statement of Shri N.S. Atwal and this being to the effect that the amount was received for the purposes of discharging the liability of Punjab & Sind Bank and obtaining the original papers pertaining to the property from the bank and to get the sale deed registered in the name of the assessee and his family members, but, in fact, no amount had been paid to the bank and neither had any evidence been placed on record showing the utilization of such amount. According to the learned counsel the allegation of the Department about the payment of Rs. 3.68 crores to Shri N.S. Atwal was based entirely on conjectures and surmises and without bringing on record any material.

According to him the burden lay heavily on the Department whenever it proposed to make an addition under Section 69B and this on the facts of the present case had not been discharged.

16. The learned JM, who wrote the initial order, at the outset, discussed relevant facts of the case and for purposes of disposing of the present reference I would refer to some of these and which could either be a reiteration of something already stated or these could be in addition thereto.

17. The learned JM noted as a fact that the assessee and his family members purchased agricultural land known as Sunrise Farms measuring 9.16 acres from Shri N.S. Atwal and his family members and this was purchased by the assessee in his individual capacity, in the capacity of the HUF and lastly, in the name of his wife, Smt. Amrrta Bakshi. The consideration for the land was noted at Rs. 23.5 lakhs and to which was added a further payment of Rs. 45 lakhs on account of the superstructure the total thereby coming to Rs. 68.75 lakhs, At p. 20 of the order the learned JM noted the quantum paid by each of the purchasers as also the land area thereof. The sum of Rs. 45 lakhs for the superstructure was noted as having been expended from three firms/companies. The learned JM noted as a fact that all the aforesaid payments aggregating Rs. 68.75 lakhs were recorded in the regular books of account maintained by the assessee as also his family members plus the firms/companies. The period of payment was also noted as the month of September, 1994 and onwards. It was also noted as a fact that 16 sale deeds were executed between the parties and registered on 29th Nov., 1994.

18. Coming to the statements of Shri N.S. Atwal, the learned JM noted as a fact that where as per the version of the assessee's counsel the statements, were recorded on 7th Feb., 1997 and 31st March, 1997, there was another statement recorded on the date of search i.e., 6th Nov., 1996. It was noted as a fact that copy of the said statement was enclosed along with the application filed by the Departmental Representative on 31st May, 2001, praying for admission of additional evidence. At p. 22 of his order the learned JM noted as a fact that the contents of all the three statements were different and it was also noted as a fact that the statement of Shri R. Ganeshan, Personal.

Secretary of Shri N.S. Atwal, was recorded on 31st March, 1997.

19. The learned JM thereafter referred to the crucial document in question viz., p. 8 of Annexure 3, which was found during the course of the search at the premises of Shri N.S. Atwal and which indicated some sort of an "agreement" of sale of land between Shri N.S. Atwal and the assessee on 19th Aug., 1994. A photocopy of the said document is at p.

23 of the order of the learned JM. In para 25 of his order the learned JM noted as a fact that some part of the document was written in pencil and some part more notably the signatures of the assessee and Shri N.S.Atwal were made by ball pen. The verification of the original document by the learned Members constituting the Bench was also mentioned in the said para 25.

20. The learned JM thereafter in his order discussed various factual aspects, which ultimately led him to conclude that the addition of Rs. 6.83 crores could not be made and he, therefore, directed its deletion.

These are as follows : (i) A reading of the various assessment orders showed that the detailed replies filed by the assessee had not been discussed; (ii) The assessee had repeatedly made request to summon the two witnesses for cross-examination but nothing turned out; (iii) The total land in question had not been purchased by the assessee alone in his individual capacity, but by his HUF as also his wife and the seller was not Shri N.S. Atwal only, but two others, namely, Shri F.S. Atwal and Shri B.S. Atwal and separate amounts were paid to each of them the total coming to Rs. 23.75 lakhs; (iv) 16 Separate sale deeds were executed and registered on 29th Nov., 1994 ; (v) The assessee had informed through written communications to the AO that Shri N.S. Atwal had filed a suit against the assessee, his family members as also against Punjab & Sind Bank and further Punjab & Sind Bank had filed a case against Shri N.S. Atwal before the Debt Recovery Tribunal, for an outstanding amount exceeding Rs. 10 crores; (vi) The assessee had denied from day one that he had not purchased any land for a consideration of Rs. 7.07 crores and it had all along been admitted that the land in question was purchased for a consideration of Rs. 23.5 lakhs and further building and superstructure was purchased for a consideration of Rs. 45 lakhs and all the aforesaid amounts coming from the books of account of the individuals and the firms/companies; (vii) That the Department had got the property in question valued by the DVO, who had worked out the value of land at Rs. 2.66 crores and the building thereon at Rs. 29.58 lakhs. Further the DVO valued the cost of additions/alterations as also modifications and the new construction between the period 29th Nov., 1994 and upto 31st July, 1997 at Rs. 45,23,000; (viii) That the aforesaid valuation report had not been taken into account while framing the assessment and all that had been done was to rely on page No. 8 of Annexure 3 found during the course of the search on Shri N.S. Atwal ; (ix) Cross-examination of Shri N.S. Atwal and Shri R. Ganeshan, whose statements had been recorded and heavily relied upon by the AO had not been allowed ; (x) It was rather not prudent for a person to purchase land for a consideration of Rs. 7.07 crores especially when he knew that there was a heavy charge on the land to Punjab & Sind Bank, from whom a loan exceeding Rs. 4 crores was obtained by Shri N.S. Atwal and such loan had been obtained after mortgaging the properties belonging to Shri N.S. Atwal and which included the agricultural land measuring 9.16 acres known as Sunrise Farm ; (xi) It was clarified by the assesses that some deal was agreed upon, but at a later stage when the assesses came to know that there was a heavy charge on the land, he refused to purchase the said land, but after negotiations with the bank and Shri N.S. Atwal, it was agreed to purchase the agricultural land for a consideration of Rs. 23.5 lakhs and the same was paid through account-payee cheques to Shri N.S. Atwal and his family members ; (xii) No evidence was found by the Department which would show that Shri N.S. Atwal had invested a sum of Rs. 3.68 crores alleged to have been received by him from the assessee; (xiii) Shri N.S. Atwal had stated that there was an agreement between him and the assessee to the effect that after receiving the amount from the assessee the same would be paid to the bank for the purposes of releasing the original papers, but it was noted as a fact that Punjab & Sind Bank agreed to release the papers only after receiving a sum of Rs. 2.5 crores and further neither this amount was paid to the bank nor had the bank released the papers and in turn it had filed a case against Shri N.S. Atwal before the Debt Recovery Tribunal.

(xiv) That Shri N.S. Atwal initially gave a statement that he had sold the land for Rs. 7.07 crores and had received a sum of Rs. 3.68 crores, but which he changed in the suit filed in a Court at Dhanbad and in a Court at Delhi against the assessee and his family members whereby it was stated that the assessee had fraudulently got sale deeds registered and no amount had been paid by the assessee. This was further changed by filing a letter dt. 28th March, 2001, before the Addl. CIT at Calcutta where it was stated that he had not received any sum from the assessee or from his family members and it was in fact clearly admitted that only a sum of Rs. 23.5 lakhs had been received against the sale of the property in question ; (xv) By the same very letter i.e., the one dt. 28th March, 2001, it was stated that the assessee had fraudulently transferred the land in his name and in the name of his family members and no amount had been paid by him though it was agreed that he (the assessee) would clear the loan of the Punjab & Sind Bank, but which he failed to do ; (xvi) Taking all the facts and circumstances into consideration, the only inference which could be drawn was that no valid agreement existed between the assessee and Shri N.S. Atwal and no such payment was made by the assessee to the said Shri N.S. Atwal; (xvii) That the document seized viz., Annexure A-3 could not be equated with a valid agreement since it did not bear the signature of any witness, no receipt of any amount had been mentioned although a sum of Rs. 5.51 lakhs had been paid as stated by Shri N.S. Atwal and Shri R. Ganeshan during the course of recording of their statements. Further the signatures were by ball-pen, but the remaining contents written by pencil and which could be rubbed off and changed at any time ; (xviii) There was no iota of evidence, which would show that the assessee had paid any amount on 19th August, 1994 since all the payments made by him were in the month of September onwards. Further no person would pay a penny to the other person from whom land is purchased without the existence of an original sale deed or for that matter the possession of land itself; (xix) If for a moment it was presumed that a valid agreement was entered into between the parties, but if it could not be proved that any payment had been made by the purchaser, then in such a situation no addition could be made by holding that the assessee had invested any amount in the property out of undisclosed income ; (xx) The burden lay heavily on the Department to establish that the purchaser had made payments, which were not recorded in the regular books of account or the payment had not been made from a bank account. Without discharging such onus no addition could be made under Section 69B of the Act; (xxi) No doubt as per Annexure A-3 the amount agreed to be paid was a sum of Rs. 7.07 crores, but nothing had been brought on record to establish that any payment was made by the assessee; and (xxii) That although Shri N.S. Atwal at one stage had stated that he had received a sum of Rs. 3.68 crores from the assessee, yet he failed to establish or prove where such a huge amount had been kept/invested by him. In any case, such a statement was given behind the back of the assessee, who was not allowed an opportunity to cross-examine either Shri N.S. Atwal or for that matter, his Secretary, Shri R. Ganeshan.

21. The learned JM at this stage took up the plea of the learned Departmental Representative for having the matter restored back to the file of the AO for the purposes of allowing to the assessee an opportunity to cross-examine the witnesses. This plea in fact was opposed by the learned counsel of the assessee and the learned JM relying on the decision of the Chandigarh Bench of the Tribunal in the case of Smt. Neena Syal v. Asstt. CIT (2000) 49 TTJ (Chd) 516 : (1999) 70 ITD 62 (Chd) rejected the plea of the Department. According to the learned JM, the facts in the present case were quite identical and I may mention that the same very decision of the Chandigarh Bench (supra) was also found to be applicable on the merits of the addition itself.

Another decision which was relied upon by the learned JM was that of the Delhi Benches of the Tribunal in the case of Asstt. CIT v. Anima Investment Ltd. (2000) 68 TTJ (Del)(TM) 1 : (2000) 73 TTD 125(Del)(TM).

Third decision which was relied upon was that of the Hon'ble Supreme Court in the case of Kishinchand Chellaram v. CIT (1980) 125 ITR 713 (SC) and this was, for the proposition that an addition could not be made in the hands of an assessee without affording due opportunity to the said assessee. Another decision which was relied upon was that of the Hon'ble Supreme Court in the case of R.B. Shreeram Durga Prasad & Fateh Chand Narsing Das v. Settlement Commission and Anr. (1989) 176 ITR 169 (SC).

22. According to the learned JM, the facts in the case of the assessee were stronger than those considered in the judgments cited since only a document had been found at the premises of Shri N.S. Atwal and there was no evidence about any amount having been paid by the assessee or for that matter received by Shri N.S. Atwal and there was no material which could establish the investment of such a huge amount by Shri N.S.Atwal in case it was so received from the assessee. Further, the statement of Shri N.S. Atwal recorded on 6th Nov., 1996, i.e., the date of search at this premises was not provided to the assessee till the date of hearing before the Tribunal i.e., 31st May, 2001.

23. In the final analysis, the learned JM deleted the addition of Rs. 6,83,50,000 in the case of Shri A.S. Bakshi. (Individual) and consequentially the addition made on protective basis in the case of Shri A.S. Bakshi (HUF) also came to be deleted.

24. The learned AM, however, did not subscribe to the view expressed by the learned JM and he passed a separate dissenting order. This was done on the following main grounds : (i) The seized document marked Annexure A-3 contained all relevant details pertaining to the area of the land, the rate per acre, the total sale consideration, the date of agreement as also the payment plan. Further the seized document contained the signatures of Shri N.S. Atwal as also of the assessee and the copy placed on the paper book had been compared with the original, which was produced by the Departmental Representative, during the course of the hearing; (ii) Three statements of Shri Atwal were recorded, the first on the date of search i.e., 6th Nov., 1996 : the second on 7th Feb., 1997, and the third on 31st March, 1997, and in all these statements Shri Atwal had confirmed the sale consideration of Rs. 7.07 crores; (iii) The statement of the close employee of Shri N.S. Atwal i.e.

Shri R. Ganeshan also gave a graphic picture as also the details pertaining to the background of the agreement as per seized document and subsequent developments confirmed the contents of the seized document as also the statement of Shri Atwal. Further the seized document was prepared in the presence of Shri Ganeshan besides others and the statement of Shri Ganeshan revealed that he had intimate knowledge of the affairs of Shri Atwal ; (iv) Authenticity of the seized document stood proved and established by the fact that subsequent transaction of the sale of the same land between the same two parties took place although the consideration stated was much lower; (v) That Shri Atwal declared capital gains in his return on the basis of the sale consideration mentioned in the seized document; (vi) The sale consideration mentioned at Rs. 77,00,000 per acre was proved to be real and fair when one took into account the figure of Rs. 94,00,000 per acre given in the valuation report pertaining to the mortgage of 3.812 acres of land to Punjab & Sind Bank for obtaining a bank loan of Rs. 2.50 crores ; (vii) In view of the preponderance of evidence in support of the sale consideration of Rs. 77,00,000 per acre the valuation of land made by the DVO at Rs. 2.96 crores on 29th Nov., 1994, was rightly rejected by the AO ; (viii) That Shri Atwal filed a suit in the Court of Sub-Judge Dhanbad on 11th Dec., 1997, where he confirmed the sale consideration mentioned in the seized document, but stated that the entire consideration had not been paid to him by the assessee, who also did not clear the bank loan of Shri Atwal, as promised ; (ix) That the submissions of the assessee's counsel as also the observations of the learned JM in his order did not make any dent in the strong clinching evidence contained in the seized document and which was supported by the statements of Shri Atwal and Shri Ganeshan; (x) The retraction by Shri Atwal in his letter dt. 28th March, 2001, addressed to the Addl. CIT could not impair and alter the three earlier statements given on different dates and further the retraction letter to the AO was much after the three statements.

Further the three earlier statements were given by Shri Atwal voluntarily without any coercion or undue, influence ; (xi) That the submissions of the assessee's counsel as also the observations of the learned JM to the effect that the seized document was not a proper agreement were not correct since it was not necessary that an agreement must always be in a particular format or set out in a particular manner. What was important was the contents of the agreement and its binding nature for both the parties.

(xii) The submissions of the assessee's counsel and the observations of the learned JM could not impair the value and importance of the seized document once the contents thereof including an agreed sale consideration of Rs. 7.07 crores was duly accepted by both the parties i.e., Shri Atwal and the assessee by putting their signatures on the seized document and further a sum of Rs. 2 crores being paid on the date of agreement i.e., 19th Aug., 1994 ; (xiii) That the value declared to the Punjab & Sind Bank could not be overlooked as it could not be logically or legally argued that the value declared for lending, purposes was irrelevant and had no sanctity since the Courts had not accepted such double standards and had given due importance to the declaration submitted to the banks ; (xiv) On the question of lack of opportunity to the assessee before completing the assessment and which included opportunity for cross-examination of witnesses the assessee had not co-operated with the AO either during the course of the proceedings under Section 143(3) or in the course of the proceedings under section 158BD In spite of this, copies of the various documents in the possession of the AO were forwarded to the assessee for his comments and rebuttal, but other than denying these documents, the assessee did not say anything else ; (xv) That the assessee in his statement while accepting that the signature on the seized document appeared to be his, but still persisted that it was forged, but not filing anything in support of this contention. Further the said signature was subsequently confirmed by the report of the expert and which was placed before the Tribunal, during the course of the hearing ; (xvi) That it was not proper to quash an addition on the ground of alleged lack of opportunity and, more so, when in the present case, the AO had fully and convincingly proved and established that the seized document was genuine and the sale consideration was Rs. 7.07 crores as agreed in the seized document and the sale consideration of Rs. 23,50 lakhs mentioned in the sale deed executed was not real and correct; (xvii) The setting aside was not going to provide an opportunity to the AO to investigate the matter further or to bring fresh material on record, but it was going to remove the assessee's technical grievance of not being allowed an opportunity to cross-examine the witnesses. That in a number of cases the Hon'ble Supreme Court had held that setting aside and not quashing the addition is the just and appropriate course of action. Reference made to the decisions in CIT v. Jai Prakash Singh (1996) 219 ITR 737 (SC), Kapurchand Shrima v. CIT (1981) 131 ITR 461 (SC), Guduthur Bros. v. TTO (1960) 40 ITR 298 (SC) and Bhagwat Prasad v. CIT (1998) 232 ITR 480 (All).

(xviii) Vis-a-vis the view of the learned JM that the amount allegedly received by Shri Atwal on the basis of the seized document was not found during the course of the search in his premises and nor was any corresponding amount found invested anywhere and, therefore, no such amount was received by Shri Atwal and the seized document was not genuine, it was not always possible that all the assets of the assessee were seized or discovered during the search and merely because the amount was not found during the course of the search or reflected in any investments, the seized document and other evidence supporting the same could not be dismissed; (xix) The assessee was given reasonable opportunity in the course of the assessment proceedings under Section 143(3) and again in the course of the proceedings under Section 158BD and it would not serve any purpose to set aside the assessment since the assessee would continue to deny the seized document as being not genuine; and (xx) The cross-examination of Shri Atwal and Shri Ganeshan by the assessee long after the relevant event and also because of Shri Atwal's retraction letter dt. 28th March, 2001, would not serve any purpose and would complicate the matter giving handle to the assessee to manipulate and overturn the whole thing and underline the genuine interest of justice.

25. In view of the aforesaid the learned AM ultimately disagreed with the learned JM, but being of the view that the addition to the tune of Rs. 6,83,50,000 was not warranted, he reduced the same to a sum of Rs. 3.68 crores, which Shri N.S. Atwal had accepted receiving in one of his statements. The addition accordingly sustained by the learned AM was Rs. 3,44,50,000.

26. Before me both the parties argued at length, the hearings taking place on more than half a dozen occasions spread over a few months considering everybody's convenience i.e., the Bench, the counsel and the learned Departmental Representative. In such a situation there are bound to be some repetitions, but my task has been made somewhat easier by the learned counsel for the appellant, who has summarized his arguments in the form of a written note and which is appended at pp, 1 to 16 of the paper book which runs into 130 pages. The main submissions of the learned counsel, who has vehemently supported the view expressed by the learned JM, are as under : "(a) That the document seized from Shri N.S. Atwal (p. 8) on the basis of which the impugned addition has been made is mere 'dumb document' and at the best, is in the nature of a mere proposal, which noted in principal, basic detail pertaining to agricultural land, the demand made and the manner of making payment, obviously if agreed on the basis of the proposal. In fact close scrutiny of the paper would show that the figures noted in the said paper is in different ink, pencil and handwriting ; (b) That the assessee was unaware, when he had been negotiating, on the basis whereof, the aforesaid proposal was made that the subject property was an encumbered property i.e., it was mortgaged with the bank; (c) That there is no evidence to establish that the assessee, in the financial year 1994-95, relevant to the asst. yr. 1995-96 had invested/paid Rs. 683.50 lakhs as has been alleged ; (d) That no statement has been made as alleged, even by the two witnesses, namely Shri N.S. Atwal or Shri R. Ganeshan, that the assessee had paid Rs. 683.50 lakhs in the financial year 1994-95 on whose alleged testimony, the addition of Rs. 683.50 lakhs has been made and is without prejudice to the submissions that such alleged statements had never been confronted to the assessee in spite of the repeated requests made on behalf of the assessee for their cross-examination, as even till 17th March, 2001, even when a further repeated request were made, in the pending assessment proceedings for the asst. yr. 1995-96 (which assessment was pending as a result of the set aside of the assessment made by the learned CIT(A) under Section 143(3) of the IT Act, for the asst. yr. 1995-96 and in fact, till the assessment was made, even then, the said statement had not been confronted for rebuttal, and the witnesses had never been produced for their cross-examination ; (e) That even on the basis of the report obtained by the AO from the DVO, the market value of the land and building as estimated by the Distt. Valuation Officer, IT Department 11th Floor, Rohit House, 3, Tolstoy Marg, New Delhi as on 29th November, 1994 (date of sale of transaction) done in 1997 pursuant to order of Addl. DIT (Inv.) V-I/97-98 dt. 4th April, 1997, only aggregated to Rs. 2,96,50,600 only, which is far below the alleged value of Rs. 683.50 lakhs. This evidence, it was contended, establishes that the allegation that assessee had not merely entered into a negotiation but had agreed to a price of Rs. 683.50 lakhs is misconceived. It was submitted the slip found was a noting made of a mere proposal, but does not represent an agreement of sale for the aforesaid sum; (f) The aforesaid property was also undisputedly encumbered property which had been mortgaged with Punjab & Sind Bank since 1991 and the title of the property were with Punjab & Sind Bank from whom, the vendor (i.e., Shri N.S. Atwal) had obtained a loan of Rs. 4.00 crores and the bank had agreed to release the title of the property only on the payment of Rs. 2.50 crores. To support an evidence, which appears at p. 165 of Part 'A' of the paper book, was furnished; (g) It was further contended that the vendor himself in a suit filed before Sub-Judge I, Dhanbad, in Title Suit No. 124 of 1997 had duly admitted that, an estimate of the measurement of the land with price and mode of payment were estimated on paper with an estimated price of Rs. 7.07 crores, which sum was payable in instalments upto 19th May, 1995. This evidence was furnished to substantiate that no amount was paid as alleged upto 31st March, 1995, as is duly admitted by the vendor himself with suit filed in 1997 and further the slip on the basis of which alone addition has been made has been itself discredited as an agreement ; (h) In the same Suit it was averred by, Shri N.S. Atwal that Shri A.S. Bakshi had not paid the entire consideration, to set off the loan amount of the bank, and got the land of Shri N.S. Atwal and all the three other plaintiffs executed by number of Sale Deeds, with a desire to remove the burden of bank dues and other business dues ; (i) Another suit had been filed by Shri N.S. Atwal before the Sr.

Sub-Judge, Delhi, wherein it was averred by the plaintiff ie., Shri N.S. Atwal, that the assessee did not pay the amount either to the plaintiff nor deposited the sum agreed with, in the bank and the vendors have started harassing and creating trouble to the plaintiff and further, as per the suspicion of the plaintiff, the income-tax raid was made at the instance of the Defendant (i.e., the assessee Shri A.S. Bakshi), when documents were seized by the IT Authorities, including the documents which contain the terms and conditions and the mode of payment by depositing the amount to acquire the loan i.e., p. 8, the document seized on the basis of which alone the addition had been made; (j) It was further stated in the same suit by Shri N.S. Atwal, that, had there been no such agreement of taking over the liability towards the Bank (implying the assessee Shri A.S. Bakshi, took over the liability of the Bank and the Bank had accepted the same) no sale deeds could have been executed because the Title Deeds of the same property were in the custody of the Bank. In other words, the assessee had taken over the liability towards the Bank which the Bank had agreed to settle for Rs. 2.50 crores) and as such it was submitted there is no justification to conclude that the assessee had paid any extra consideration other than recorded in the books of account of Rs. 23.50 lakhs towards land and Rs. 45.00 lakhs towards superstructure on the land being integral part of the sale transaction ; (k) That in the returns of income filed by Shri N S. Atwal and two other vendors for the asst. yr. 1995-96, had not shown or declared the receipt of any alleged extra consideration, other than the disclosed or invested consideration by the assessee, his wife and HUF which had duly been recorded in their books of account ; (1) That on the contrary, Shri N.S. Atwal had declared Sale consideration of Rs. 7.07 crores for the asst, yr. 1996-97 which was done with the object of : (b) By filing the return declaring the aforesaid amount, he did not admit any tax liability as they were substantial business losses from where, it could set off the alleged income and further, he was not the owner of the entire land and as such, he could not have disclosed the alleged extra consideration as his income, if it really represented the genuine sale consideration, since the same could be of the two other vendors also who are his sons but had not disclosed any such extra consideration even in their returns of income filed for the asst. yr. 1996-97 ; This itself shows that the assessee had not paid any extra alleged consideration at least in the asst. yr. 1995-96 : That no reliance can be placed on the statement of Shri N.S. Atwal since he was having his share of land only 18 Bighas and 6 biswas whereas, the aggregate land transferred was 43 Bighas and 17 biswas for which, it was alleged by him that he had received Rs. 7.07 crores, which too was later denied by him in writing in a letter filed in the course of his assessment proceedings before the learned AO and had been received by his learned AO also. This document has duly been admitted by both the Hon'ble Members as reflecting the statement of Shri N.S. Atwal. The aforesaid letter addressed and dt.

28th March, 2001, reads as under : (1) Due to sudden changes in the Government policy in 1991, our major works for removal of overburden and coal mining with Coal India Ltd. and its subsidiaries came to a stand-still. This had put lot of financial stress on me and my company, thus resulting in losses, I had to sell some of my assets to meet my liabilities ; (2) Since there were no activities during the period, I planned to develop my/family property at Delhi-Sunrise Farms by converting the same into three constructed Farm Houses with a view to sell the same at a good price. I contacted many parties including Mr. A.S. Bakshi who was known to me for a couple of years. They showed keen interest to take constructed Farm Houses. I had got the maps for the Farm Houses approved from MCD. At one time, even Mr. A.S. Bakshi agreed to buy all 3 Farm Houses and make payment in stages as the construction and development took place.

A rough paper was prepared for Rs. 707 lakhs as a probable guideline to be incorporated in case the agreement is reached for 3 Farm Houses. However, during the course of negotiations, Mr. A.S. Bakshi came to know from his sources that Sunrise Farm was mortgaged with Punjab & Sind Bank for some loans taken by me/a company in which I am a Director. On account of the liability of the Punjab & Sind Bank, Mr. A.S. Bakshi did not agree for purchase of the proposed three Farm Houses. After sometime he showed interest to buy the land only and assured me that he will settle the liability of Punjab & Sind Bank on the Sunrise Farm on his own; (3) After a couple of meetings that took place with officials of Punjab & Sind Bank, I was convinced that Mr. A.S. Bakshi had good connections in Punjab & Sind Bank. I was in desperate need of some money and I also wanted to relieve myself from the problems of the Punjab & Sind Bank. It appeared that Punjab & Sind Bank may release documents of title of Sunrise Farms on receiving about Rs. 175 lakhs to Rs. 200 lakhs or so. I, thereafter agreed to sell the land to Mr.

A.S. Bakshi and his family members for a sum of Rs. 23.50 lakhs with an understanding that the Sunrise Farm property papers which were lying with Punjab & Sind Bank as security will be got released by Shri A.S. Bakshi by using his own contacts and he shall pay to Punjab & Sind Bank the amount that the Bank may require for releasing the mortgaged property. He also agreed to otherwise help me to settle the total dues with Punjab & Sind Bank so that I can restart my operations with Punjab & Sind Bank with reduced and settled dues. Apart from this Mr. A.S. Bakshi also promised that he would help me in my business by aligning with me/my company in new business ventures etc. Under these circumstances, we executed the sale deeds dt. 29th Nov., 1994. Keeping in view the overall settlement it was found desirable by both of us not to mention anything about the encumbrance of Punjab & Sind Bank in the Sale Deeds ; (4) After Mr. A.S. Bakshi and his family members took possession of the land/property pursuant to the conveyances, he stopped taking any interest in respect of my problems with Punjab & Sind Bank . I made a number of visits to Mr. A.S. Bakshi and requested him either to resolve the Punjab & Sind Bank problem or to pay me some amount immediately so that I could negotiate with Punjab & Sind Bank on my own. He however did not pay me anything further after execution of sale deeds. In the meantime, Punjab & Sind Bank started demanding huge amount towards their dues. They even started recovery proceedings against me probably at the instance of Mr. A.S. Bakshi; (5) Thereafter I filed Court cases against Mr. A.S. Bakshi to rescind and/or cancel the sale deeds. I felt that I had been taken for a ride and has been severely deprived of my legitimate and agreed rights. In order to strengthen my claim against Shri A.S. Bakshi, I decided to utilize the rough paper of Rs. 707 lakhs against Shri A.S. Bakshi. Accordingly, I filed an IT Return for Asst. yr., 1996-97 basing on the rough paper prepared regarding 3 Farm Houses; With a view to keep my claim alive on Mr. A.S. Bakshi, I created a receivable to the tune of Rs. 638,50 lakhs as additional sales consideration of Sunrise Farm Land. The fact remains that I have received only the agreed consideration of Rs. 23.50 lakhs only in favour of myself/my family from Mr. A.S. Bakshi and his family members for sale and transfer of the land as specified in the sale deed executed by us and nothing more. I/ my family members did not receive anything or any consideration before the execution of sale deeds or even after the execution of sale deeds till date; (6) Further, I have to submit that in my return of income for the asst. yr. 1996-97, I have stated a sum of Rs. 638.50 lakhs, as additional consideration for sale of Sunrise Farms received/receivable against the total consideration of Rs. 707 lakhs from Shri A.S. Bakshi and his family members and his companies.

Actually I have received Rs. 9.47 lakhs, Shri Bir Singh Rs. 10.23 lakhs and Shri Fateh Singh Rs. 3.80 lakhs only towards sale consideration (as per sale deeds) and further I have also received a sum of Rs. 45 lakhs from various companies of Shri A.S. Bakshi on account of sale of building material arising out of dismantling the structures; (7) Further, it may be noted that the sale transaction relates to asst. yr. 1995-96 and not asst. yr. 1996-97 and two other persons who were also seller of the same land that is Shri Bir Singh and Shri Fateh Singh have not shown any additional amount as received and receivable from Shri A.S. Bakshi and his family member/companies and has shown in their IT return for the asst. yr. 1995-96 the sales consideration as per sale deeds only. Further it may be noted that the amount as stated by me in the statement before the IT authorities and other information filed before you was not the amount received actually from Shri A.S. Bakshi or any other persons connected with him including his companies; (8) When an Income Tax raid took place at my residence and office on 6th Nov., 1996, I decided to depose before the IT authorities in accordance with my return of income for asst. yr. 1996-97, which was based on rough paper prepared regarding 3 farm houses as mentioned in Para 5 above, with a view to force Mr. A.S. Bakshi to come to some settlement. My accountant Mr. R. Ganeshan also made statement accordingly with an intention to create a prejudice in the minds of IT authorities against Mr. A.S. Bakshi.

You are requested to kindly make the assessment on the basis of above facts." 27. According to the learned counsel, the, learned JM had rightly observed that there was not an iota of evidence to establish that the assessee had made, the payment of the amount in question to the seller and, on the other hand, there was only the statement of the seller wherein he had stated receiving a sum of Rs. 3.68 crores from the assessee, but failing to establish or prove where the sum so allegedly received had been invested by him. A reference was also made by the learned counsel to the statements recorded of the seller and his Secretary Shri R. Ganeshan behind the back of the assessee without allowing opportunity of cross-examination and there was also a factual observation of the learned JM to the effect that even after an extensive search on Shri N.S. Atwal, nothing had been found and which could prove that the said Shri N.S. Atwal had received any sum from the assessee, which did not stand recorded by the assessee or his family members.

28. Coming to the view expressed by the learned AM, the learned counsel for the appellant contended that heavy reliance had been placed on the seized document i.e., Annexure A-3 and which had been designated as an "agreement" whereas it was only a proposal contending certain facts and figures noted in ink, pencil and at the best it could be described as a "dumb document". According to the learned counsel the payment schedule mentioned in the said document had not at all been adhered to and the importance which had been given by the learned AM to the statements of Shri N.S. Atwal and his secretary, Shri R. Ganeshan was somewhat misplaced, more so, if it was taken into account that the initial statement recorded on 6th Nov., 1996, i.e., the date of the search was not at all confronted to the assessee and which saw the light of day only when the appeal came up for hearing before the Tribunal. The other submission of the learned counsel was that the detailed arguments, which had been advanced during the course of the hearing before the Division Bench had not been taken into account by the learned AM, more so, when these had also been reduced in writing. He, however, hastened to add that certain submissions had been considered by him and these were : (b) That the sale consideration received of Rs. 7.07 crores was unsupported by material either documentary or oral evidence which could be held as valid and reliable (para 16); (d) The report obtained by the AO from the DVO pertaining to the valuation of the property as on 29th Nov., 1994, (para 20); 29. The conclusions of the learned AM on the aforesaid submissions, according to the learned counsel, were legally incorrect. The learned counsel stressed that on the same points the view of the learned JM merited acceptance.

30. I may also mention at this stage that the learned counsel filed on each of the occasions when the hearing took place, a synopsis of the arguments advanced by him at each preceding occasion. Considering the nature of the addition involved as also appreciating that lot of facts have been adverted to, there are once again bound to be repetitions, but I proceed to extract some of the relevant arguments advanced by the learned counsel as follows : "(i) In fact, the aforesaid land had been purchased by the assessee, his wife and the HUF of which he was the Karta along with the superstructure for a total consideration of Rs. 68,50,000 (towards the value of land Rs. 23.50 lakhs and Rs. 45 lakhs towards the value of superstructure) amounts having been paid by the various companies of which the assessee was the shareholder. In other words, an aggregate amount of Rs. 68,50,000 had been paid in respect of the property acquired. The property acquired was wholly an encumbered property and had been mortgaged with Punjab & Sind Bank. In fact, the aforesaid fact that the property is mortgaged with Punjab & Sind Bank and was an encumbered property was not known to the assessee, at the time when the seller had offered the property to be sold. It was thus submitted that in the absence of any positive evidence that the assessee had made any such investment, as alleged, no addition on the basis of the document was justified and is sustainable in law. This submission has duly been accepted by both the Hon'ble Members and that is how the addition made of Rs. 683.50 lakhs has not been sustained ; (ii) At the outset, it is stated that, what has been paid by the assessee is not only Rs. 23.50 lakhs but really is Rs. 68.50 lakhs which had all been paid prior to the search and are duly recorded in the books of the assessee, his wife, the HUF and the companies who had made the payment towards the purchase of the land and the value of the superstructure standing thereon ; (iii) Thirdly, it is submitted that the assessee, in the course of assessment proceedings, has only been supplied copies of the statements dt. 7th Feb., 1997, and 31st March, 1997 and had not been furnished a copy of the initiall statement recorded on the date of the search i.e., 6th Nov., 1996, which statement was very material as the same was recorded on the date of search itself. In absence thereof, the assessee was unable to make any comment on the statement made by Shri N.S. Atwal dt. 7th Feb., 1997 and 31st March, 1997; (iv) Fourthly, there are contradiction and incoherence in the statements of Shri N.S. Atwal dt. 6th Nov., 1996, (which has been supplied only in the course of appellate proceedings before the Tribunal), 7th Feb., 1997 and 31st March, 1997. It will be seen that in the statement recorded on 6th Nov., 1996, it has been stated by him that Rs. 3.8 crores out of Rs. 7.07 crores, which he was supposed to receive in instalments, had duly been disclosed in the IT return. However, when the return of income is seen, for the asst, yr. 1996-97, it will be found that the same was furnished on 30th Oct., 1996 i.e., prior to the date of search. This is the return of income for the assessment year, namely 1996-97, and not for the asst. yr. 1995-96, wherein the said amount was disclosed as addiitonal amount towards the purported sale price. Without making any further comment about the correctness of the said statement, the situation however, remains that the amount had been offered by him in the asst. yr. 1996-97, as the amount received and not in the asst. yr. 1995-96 and as such, on the basis of the statement, obviously, no adverse inference could have been drawn against the assessee and it was for this reason alone, there had been an attempt to suppress the aforesaid statement from the assessee in the course of assessment proceedings. Let alone a copy was not supplied but also the fact any statement was made also not intimated or informed ; (v) Further, it will be seen that in the said statement, it has been stated that he had received Rs. 3.80 crores, whereas in the statement dt. 7th Feb., 1997, the amounts stated to have been received is Rs. 368 lakhs and in the statement which is of 31st March, 1997, it has been stated that he had received a little over Rs. 3.00 crores; while in his written submissions dt. 28th March, 2001, in the course of assessment proceedings, for the asst. yr.

1996-97, he has denied to have received any such said sum ; (vi) The learned AM also has relied heavily on the statement of Shri R. Ganeshan, stated to have given a graphic picture of entire transaction. It will be seen from the statement of Shri R. Ganeshan dt. 31st March, 1997, (the only statement confronted to the assessee) without producing the witness though requested, that he had stated in answer to Question No. 18 that, cash of Rs. 1,61,76,000 was received from Shri A.S. Bakshi and not any other amount. It is thus submitted that here too, the aforesaid statement is also motivated one and the aforesaid Shri R. Ganeshan had never been confronted so as to enable the assessee to demonstrate that he is also totally untrustworthy. The amount stated to have allegedly been received is not by him but is by Shri Atwal and is also unsupported by any material; and (vii) It will further be seen from the suits filed by him before the Distt. Court that in the suit filed, he had stated that he had not received any such amount from the assessee. In such a situation, it is submitted that the addition made cannot be sustained on the basis of the statement of Shri N.S. Atwal. It has also been stated that Shri N.S. Atwal is not the owner of the entire property. If it was a case of genuine receipt towards sale price as alleged, apart from the fact that the fair market value of the property was far, less, and the property being encumbered property, then too such an income would have been duly disclosed towards the sale proceeds by all the owners of the property and not by Shri N.S. Atwal, who alone had accumulated loss and he alone in order to enable himself to claim a set off the losses and bring in the books of account, the alleged cash consideration had disclosed the entire purported amount allegedly received by way of sale consideration. In fact, in the hands of the two other co-owners as was evident from the assessment records no income or receipt or any such sale consideration was shown or assessed in either of the two assessment years i.e., 1995-96 and/or 1996-97." That if the value as on 3rd April, 1990, was Rs. 5,08,88,888, as alleged, (for which no evidence was either brought on record or confronted to the assessee for rebuttal) then how had the valuation officer estimated the value of the land at Rs. 2,96,50,600 as on 29th Nov., 1994 ; (ii) Why then, the sale consideration is being adopted at Rs. 3,68,00,000 instead of atleast Rs. 5,08,00,000. If however the aforesaid sum of Rs. 3.68 crores represents an amount allegedly received by Shri N.S. Atwal and does not represent the sale value, then why is there a discrepancy, in the amounts claimed/alleged to have been received by Shri N.S. Atwal : (1) In the statement recorded on 6th Nov., 1996, it was, stated the amount received is Rs. 3,80,00,000 ; (2) In the statement recorded on 7th Feb., 1997, it was stated the amount received is Rs. 3,68,00,000; (3) In the statement recorded on 31st March, 1997, it was stated, the amount received is about Rs. 3,00,00,000 (which statement was last made) (4) In the statement recorded of Shri R. Ganeshan on 31st March, 1997, it was stated the amount received by Shri Atwal was Rs. 1,61,76,000 (see p. 49 of paper book 2); (5) In the documents said to have been seized (which have never seen the light of the day) it was stated to Rs. 7.07 crores; (6) Further in the suits filed before the Sub-Judge, Dhanbad (pp.

170-178) and before Senior Civil Judge (pp. 166-169) he has denied to have received any such alleged amount ; (7) It is further important to be noted in the verified return of income no such receipt has been shown for the asst. yr. 1995-96.

(iii) Further, it will be seen that the learned AM at p. 15 of the order noted that, "in fact, the setting aside was not going to provide an opportunity to the learned AO, to investigate the matter further and being, therefore, the material on record but it was going to remove the assessee's technical grievance of not being allowed an opportunity to cross-examination; but it will be seen instead of having so done (which in his opinion was one of the better option available) still he chose, not to do so, since he held a view that it would serve the purpose of the assessee and not the purpose of the learned AO, who had already genuinely established his case as mentioned above. It was submitted that if in law, an opportunity was required to be provided and the same had not been provided, the duty was then to have provided the opportunity. On the contrary the Hon'ble AM did not choose to do, as he observed that it would serve the purpose of the assessee and not of the learned AO. It is submitted with greatest respect that what ought to have been seen by the learned AM was whose purpose is being served instead he should have confined himself to examine what is the requirement of law. It is most respectfully submitted the aforesaid conclusion of the learned AM is not merely biased, but is also contradictory and as such it is evident, the addition has been sustained by him, as he was of the opinion that if the assessee is allowed to cross-examine Shri N.S. Atwal, on whose testimony alone the addition has been made and was being sustained, the same would not finally stand ; (iv) It was lastly submitted by the assessee, that the Revenue never brought any documentary evidence on record though allegedly seized, as would be evident from the statement of Shri N.S. Atwal dated 6th Nov., 199.6, when documents containing in a paper bundle containing 13 pages, were alleged to have been found. In the course of entire proceedings, in fact the assessee had been given only one sheet i.e., p. 8, which has been extracted by the Hon'ble JM in his order at p. 23 and none of the other purported document have even seen the light of the day, either in the course of assessment proceedings or in the block assessment proceedings or when the matter had been heard by the Hon'ble Members. So much so, even the appellant was not made aware about any of the said documents, and the appellant could not have even known, since even the statement dt. 6th Nov., 1996, was not brought to his notice. In fact, even at the time of hearing before the Hon'ble Tribunal, when the statement dt. 6th Nov., 1996, of Shri N.S. Atwal was directed to be placed on record even then, there had been no attempt to place the said purported documents in order to enable the assessee to grant any opportunity and to make his comments with reference to those papers. In these circumstances the appellant believes that those documents had not been referred as the same might not have been in the interest of revenue to do so ; (v) In view of the aforesaid, it is submitted that the addition made cannot be sustained on the mere testimony of Shri N.S. Atwal, which alone cannot be regarded as sufficient to sustain the addition, as the witness has never been allowed to be cross-examined. The assessee has already furnished in the paper book the letters of the request filed before the learned AO seeking examination of the aforesaid witness i.e., Shri N.S. Atwal and Shri R. Ganeshan (see pp. 57 and 58 of paper book-II). The assessee had duly furnished the copies of the orders of assessment and appellate orders, to establish that the orders in the case of Shri N.S. Atwal for the asst. yrs. 1995-96 and 1996-97 have been set aside and also the apparent purpose of offering the income, in the asst. yr. 1996-97 by Shri N.S. Atwal as also not offering the alleged sums of capital gains in the hands of other owners i.e., Shri F.S. Atwal and Shri B.S. Atwal. Be that it may be, the short submission of the assessee is that the learned AM has erred in sustaining the addition on the basis of the mere statement of Shri N.S. Atwal without bringing any corroborative evidence to establish that the assessee had paid the aforesaid sum; and (vi) In the instant case it is submitted that similarly while holding that the amount was chargeable to tax, it must be held that unless actual consideration is shown to have been paid, the provisions of Section 158B(b) of the IT Act, could not be invoked to tax, the alleged capital gains, on an assumption that the fair market value of the aforesaid property exceeded the apparent consideration." "(i) On 4th March, 2002, the appellant at the outset, referred to para 21 of the order of the learned AM and submitted that the learned AM himself found, that the entire addition made by the learned Asstt. CIT, could not be sustained, yet he proceeded to sustain an addition of a sum of Rs. 3,44,50,000 on the finding recorded by him, that he had received Rs. 3.68 crores, as per statement dt. 7th Feb., 1997, as had been stated by Shri N.S. Atwal, though it was further noted that even in a later statement on 31st March, 1997, he had stated that he had received above Rs. 3.00 crores. Be that as it may, the submission of the assessee was that the addition was sustained only on the basis of the statement of Shri N.S. Atwal which, on the facts of the instant case, was totally unjustified, as there was no other material found to establish that any such payment was made by the assessee and that no reliance can be placed on the testimony of Shri N.S. Atwal who is wholly untrustworthy as he keeps on changing his statement from place to place and time to time ; (ii) The appellant thereafter proceeded to demonstrate that the amount paid and debited in the books of account could alone have been paid, since the assessee had taken over responsibility to settle the liability of the Bank as the documents of title were with the Bank and there could have been no valid transfer in the absence thereof; (iii) The appellant had thereafter submitted the document extracted at p. 23 of the order of Hon'ble JM was merely a proposal, which was also the contention of Shri N.S. Atwal; and (iv) Thereafter, the appellant referred to the order of the Hon'ble JM and stressed on the observations made in the aforesaid order on para 12 and further submitted that from the perusal of the order of the Hon'ble JM, it would be seen that it was the only basic admitted contention of the Revenue, that the assessee has not been given an opportunity to cross-examine Shri N.S. Atwal as the statements, on the basis of which, he had to be cross-examined, had not been furnished and, therefore, the learned Departmental Representative only had made a prayer to set aside the assessment and it did not support the order to sustain the addition, since he himself found that there is substantial contradiction in the statement of Shri N.S. Atwal and further there is no evidence that the assessee has been found to have paid the alleged consideration. It was at this stage reiterated the present proceedings are proceedings under Chapter XIV-B, where an addition of undisclosed income can alone be made on the basis of material found or detected as a result of search and in the instant case it was the submission that no such material or evidence has been found." 31. The learned counsel for the assessee relied on the following decisions, during the course of hearing ;R.B. Shreeram Durga Prasad and Fatehchand Narsing Das v. Settlement Commission and Anr.Kalra Glue Factory v. Sales-tax Tribunal and Ors. (1987) 167 ITR 498 (SC); (vii) Unique Associates Co-operative Housing Society Ltd. v. Union of India and Ors. (1985) 152 ITR 114 (Bom);K.P. Varghese v. ITO and Anr.

(xi) Ashwani Kumar v. ITO (1991) 42 TTJ (Del) 644 : (1991) 39 ITD 183 (Del); (xii) Asstt. CIT v. Sailesh S. Shah (1997) 59 TTJ (Mumbai) 574 : (1997) 63 ITD 153 (Mumbai); (xiii) Tatia Skyline & Health Farms Ltd. v. Asstt. CIT (2000) 66 TTJ (Mad) 203 ; (1999) 70 ITD 387 (Mad); (xiv) Un-reported decision dt. 20th March, 1995 in ITA No. 3201 (Delhi) of 1994, in the case of Pushp Lata Gupta); 32. The learned Departmental Representative on behalf of the Department vehemently supported the action of the learned AM. The subsequent arguments advanced were a reiteration of the reasons recorded by the AO in making the impugned addition. The learned Departmental Representative referred at length to the relevant observations in the order of assessment as also to the order of the learned AM. The following factual and legal aspects were emphasized : (i) There was no reference to the statement of Shri N.S. Atwal recorded on 6th Nov., 1996, in the assessment order and the assessee himself in the synopsis filed during the course of the hearing of the appeal had categorically stated that no statement of Shri N.S. Atwal was recorded at the time of the search ; (ii) As it subsequently emerged that a statement had been recorded on 6th Nov., 1996, the Department was obliged to file the same during the course of the hearing before the Division Bench ; (iii) Nothing new had been stated by Shri N.S. Atwal during the course of the recording of his statement on 6th Nov., 1996, in contradistinction to what had been averred in the other statements recorded subsequently and on which there was no dispute between the parties; (iv) Certain observations in the order of the learned JM were factually incorrect and a further reading of his order showed that certain observations were preconceived; (v) That the numerous sale-deeds pertaining to the transfer of the property in question had not been registered and the observations of the learned JM to this effect were improper; (vi) The signatures on the document, which was the basis for making the addition impugned had been signed by the assessee and this was substantiated by the report of the forensic expert; (vii) All relevant facts of the case were confronted to Shri N.S. Atwal in the statements recorded subsequent to 6th Nov., 1996 and this was also the position in respect of the statement of Shri Ganeshan, the Secretary to Shri N.S. Atwal. In other words, the assessee could not say that relevant facts of the case were not confronted to him; (viii) In the proceedings under Section 143(3) the assessee had not sought cross-examination of the persons in question; (ix) That even in the proceedings pertaining to the block assessment the assessee had initially not asked for cross-examination, but made such a request only at the fag-end when the proceedings were getting barred by limitation and in the latter communications addressed to the AO the request for cross-examination did not survive although raised in earlier letters; (x) The non-supply of the copy of the statement of Shri N.S. Atwal recorded on 6th Nov., 1996, to the assessee and the non-granting of opportunity to cross-examination was not fatal to the assessment proceedings; (xi) The AO had rightly not relied on the report of the D.V.O. and which even otherwise was not binding on him and there was other material to rely on in making the addition impugned ; (xii) The land mortgaged to the Punjab & Sind Bank was not 9.16 acres as was the observation of the JM, but it was only 3.812 acres, which was under mortgage; (xiii) Even on the assumption that the terms of the agreement between the parties (the document seized) were not adhered to there was no denial on the part of Shri N.S. Atwal that nothing was received from the assessee over and above the figure recorded in the books; (xiv) In case one was to consider the land mortgaged to Punjab & Sind Bank i.e., 3.812 acres for a loan of Rs. 2.50 crores, then for 9 acres and odd the value would come to Rs. 7 crores and odd and which tallied with the consideration of Rs. 77,00,000 per acre mentioned in the document found during the course of the search ; (xv) There was no lapse on the part of the Department inasmuch as the document in question had been signed by the assessee and adequate opportunity had been given to him to explain the same; (xvi) The decision of the Chandigarh Bench of the Tribunal in the case of Smt. Neena Syal (supra) was not applicable being distinguishable on the following facts : (i) The document in question had been confronted to the assessee in the present case whereas it was not so in the case of Smt Neena Syal (supra); (ii) In the assessee's case the statement of Shri N.S. Atwal mentioned receipt of an amount over and above the recorded figure, but no such fact existed in the case of Smt Neena Syal (supra); (iii) The document on the basis of which the addition had been made had been signed by the assessee in the present case whereas this was not a fact in the case of Smt Neena Syal (supra); (xvii) The decision in the case of Kishinchand Chellaram v. CIT (supra) was not applicable as the facts were distinguishable. That entire material in the present case had been disclosed to the assessee and the various statements recorded duly conformed and the only exception was that cross-examination had not been allowed; (xviii) It was not a requirement of law that cross-examination should be allowed in respect of all the material found/collected. It was sufficient in case the primary document had been confronted and under these circumstances non-granting of opportunity to cross-examine would not be fatal ;R.B. Shreeram Durga Prasad and Fatehchand Nursing Das v. Settlement Commission (IT & WT) and Anr. (supra) applied by the learned JM was not relevant since in that case the Settlement Commission did not allow opportunity of being heard whereas the facts were quite different in the assessee's case where material had been confronted to the assessee and due opportunity given to explain his stand; (xx) That a formal cross-examination was not a part of "natural justice" and in case there had been a violation of the principles of natural justice, then it could not lead to an annulment of assessment, but a set aside for purposes of de novo examination; (xxi) That the basic document for making the addition impugned was the one marked Annexure A-3 and those referred to in the assessment order were over and above/additional items of evidence; (xxii) That the learned AM had rightly noted that only a part of the land was mortgaged to the Punjab & Sind Bank; (xxiii) It was not the case of a dumb document as was the case sought to be made out on behalf of the assessee since the contents were absolutely clear and the signatures of both the parties were duly appended; (xxiv) At the time when the Division Bench had admitted as additional evidence the statement of Shri N.S. Atwal recorded by the AO on 6th Nov., 1996, the assessee's counsel did not ask for cross-examination.

(xxv) There was no inconsistency in the stand of Shri N.S. Atwal at various stages since he categorically accepted receiving a sum of Rs. 3.80 crores upto 6th Nov., 1996, which was the date of the first instalment as per the document seized. Further the land rate and the area remained static on the part of Shri Atwal and the mentioning of other amounts such as Rs. 3.80 crores at one stage and Rs. 3.68 crores at another stage represented only a slight variation, but this could be attributed to the different time frame for recording of the statements ; (xxvi) The retraction of Shri N.S. Atwal came much later i.e., after a period of 2 to 3 years and/this could not be given much credence ; (xxvii) There was no contradiction between the statements of Shri N.S. Atwal and Shri Ganeshan in the sense that the document on the basis of which addition has been made was not in dispute ; (xxviii) Registered documents pertaining to the purchase/sale of immovable property had an element of under-statement and which was a well-known fact; (xxix) The document seized did not speak of a farm house as there was a reference to per acre rate only; (xxx) That once the land was in the physical possession of the assessee, then it was quite immaterial as to how Shri N.S. Atwal would be effected vis-a-vis the amount due to the Punjab & Sind Bank ; (xxxi) It was a matter of record that only Rs. 3 crores had been mortgaged for a loan of Rs. 2.5 crores and under no circumstance would a seller take only a few lakhs of rupees for the remaining area ; (xxxii) That although Shri N.S. Atwal had retracted after a gap of few years there was no retraction on the part of Shri Ganeshan and under these circumstances it would be appropriate to read the three statements of Shri Atwal as also his retraction given much later ; (xxxiii) In examining a retraction by an assessee one had to take into account the point of time at which it was made the ground for retraction and the basis on which the earlier statement had been made and considering the facts of the present case it was apparent that the retraction was without any valid basis or justification ; (xxxiv) No useful purpose would have been served by restoring the matter back to the file of the AO asking him to allow opportunity to the assessee to cross-examine Shri N.S. Atwal on his first statement since the retraction had taken place at a later stage of the proceedings before the AO in the case of said Shri N.S. Atwal ; (xxxv) That the document signed by both the parties had been acted upon since the land had been sold to the assessee and part consideration had been received; (xxxvi) That it was not the case of a wholly encumbered property since the area mortgaged to the bank was only around 3 acres and the loan amount was Rs. 2.5 crores and if the total area sold to the assessee was taken into account, then the valuation would double up to more or less the same figure as mentioned in the seized document; (xxxvii) That the statements of Shri N.S. Atwal at different points of time were not motivated, but these were clear and focussed and these should not be rejected summarily on the basis of the subsequent retraction; (xxxviii) A reasonable inference had to be drawn from the evidence in question and the matter could even be decided on the principle of preponderance of human probability; (xxxix) That the entire amount of Rs. 7 crores and odd should have been subjected to tax since the total payment would have been made by the assessee to Shri N.S. Atwal before the sale deeds had been signed and registered; and (xi) That the sale deeds categorically stated that the land was free from encumbrances, but once it had been proved to the contrary, then the assessee could have walked out of the deal, but which he did not do and instead he is alleged to have paid Rs. 2.5 crores to the bank.

33. The learned Departmental Representative in support of her detailed arguments placed reliance on a number of reported decisions attempting at the same time to distinguish the catena of decisions relied upon by the assessee's counsel. Her reliance was on the decision of C.Vasantlal & Co. v. CIT (1962) 45 ITR 206 (SC). Reliance was also placed on the following decisions : (iv) Goodyear India Ltd. and Ors. v. State of Haryana and Anr.

(1991) 188 ITR 402 (SO;V. Kunhambu & Sons v. CIT (x) Surendra M. Khandhar v. Asstt. CIT (2001) 71 TTJ (Mumbai) 366 : (2001) 76 ITD 121 (Mumbai); (XI) ITO v. Bipin Faraskhana (2000) 69 TTJ (Ahd) 743 : (2000) 73 ITD 334 (Ahd); (xii) Ramesh T. Salve v. Asstt. CIT (2001) 71 TTJ (Mumbai) 111 : (2000) 75 ITD 75 (Mumbai); (xiii) Smt. Vasanti Sethi v. Asstt. CIT (1993) 45 TTJ (Del) 503 : (1992) 43 ITD 447 (Del)Mahmudabad Properties (P) Ltd. v. CIT (1972) 85 ITR 500 (Cal); and (xxiv) Sumati Dayal v. CIT (1995) 214 ITR 801 (SC); 34. During the course of the hearing the learned Departmental Representative also placed reliance on certain decisions reported in ELT, AIR and SCC, but wherever copies have been filed, as directed during the course of the hearing, these are being taken into account.

35. The learned Departmental Representative also sought to distinguish the judgments relied upon by the assessee's counsel and to mention some of these specifically they are as under :R.B. Shreeram Durga Prasad & Fatehchand Narsingh Das v. Settlement Commission and Anr.

(iv) Unique Associates Co-operative Housing Society Ltd. v. Union of India and Ors. (supra); (v) An unreported decision of the Tribunal in the case of Pushp Lata Gupta (supra).

36. In reply, the learned counsel for the appellant contended that the sale deeds pertaining to the property in question were registered and further the statement of Shri M.S. Atwal recorded on 6th Nov., 1996, was required in law to be confronted to the assessee since it was an accepted legal proposition that the best evidence available with a party to the proceedings was not to be kept back. Coming to the decisions relied upon by the learned Departmental Representative on behalf of the Revenue, the submission of the learned counsel was that there was a substantial difference between the retraction of a confessional statement and the retraction of any other statement and he further emphasized that the various decisions relied upon by the learned Departmental Representative pertained to the retraction of confessional statements. According to the learned counsel the testimony of an untested witness was wholly impermissible in law and it is an accepted fact that whereas the statement was recorded on 6th Nov., 1996, it saw the light of the day only in the year 2000 when the appeal came up for hearing before the Division Bench. The further plea in this direction was that no adverse findings could be recorded on the testimony of a witness, which was not confronted to the assessee.

37. As regards the question of encumbrance of the property in question, the learned counsel sought to draw a distinction between "mortgage" and "encumbrance" emphasizing that these had different effects, but coming to the facts of the assessee's case, it was his submission that in case the title deeds of the entire area of land i.e., 9.16 acres were with the bank and the mortgage was only in respect of 3.16 acres, then as per law, the entire property was encumbered. The further submission in respect of the statements was that the assessee requested for cross-examination of both Shri N.S. Atwal and Shri Ganeshan, after copies of the statements recorded by the AO had been given to the assessee. The further plea was to the effect that even if the assessee did not ask for cross-examination, it was the duty of the Court/AO to allow such opportunity.

38. Further, according to the learned counsel, there was no basis for the learned AM to sustain an addition of Rs. 3.68 crores since this figure did not emerge from any document available on record. The further submission of the learned counsel was to the effect that there was no document on record to support the fact that a sum of Rs. 2.5 crores had been paid for releasing 3.5 acres of land and the only other submission was that an investigator need not confront a document to the other side, but once he became an adjudicator, then he could not keep back anything. This argument was once again with reference to the statement of Shri N.S. Atwal recorded on 6th Nov., 1996. I must, however, mention at this stage that on a query, the learned counsel stated that the said first statement of Shri N.S. Atwal had not been used against the assessee, but he hastened to submit that all statements recorded on different occasions has to be read and considered together and, therefore, the first statement itself was required to be confronted to the assessee for purposes of allowing an opportunity to cross-examine.

39. In support of the aforesaid argument, the learned counsel placed reliance on the following decisions : (iv) Rambhai Manja Nayak and Ors. v. Union of India and Ors. (1983) 142 ITR 211 (Guj).

40. I have examined the rival submissions and have also perused the material on record to which my attention was invited during the course of the hearing. The decisions cited at the bar have also been taken into account. At the outset, I must observe that the point at issue has to be decided on a total consideration of the relevant facts and circumstances and not on the basis of a single submission with reference to a single fact or more and at one point of time one may be inclined to rope in the principle of "preponderance of probabilities", I would also like to observe that the entire addition rests on a single document to which the learned Members constituting the Division Bench have adverted at length and the same could be said of the hearings, which took place before the Division Bench and thereafter before me on numerous occasions pursuant to the reference made under Section 255(4).

41. Coming to the document itself and a copy of which appears in the order passed by the learned JM the same is stated to have been written partly in pencil and partly in pen and the learned Members constituting the Division Bench had an opportunity to examine the original document and during the course of the present hearing, the learned Departmental Representative appearing on behalf of the Department does not rebut the aforesaid factual aspect as also the manner in which the document has been written, I would not accord the status of an "agreement' to such a document and neither would I call it a "dumb document", but it would have to be examined on the interpretation of the said document as to whether anything over and above the figure stated in the books of account changed hands vis-a-vis the purchase of the immovable property in question by the assessee from Shri N.S. Atwal.

42. An odd fact emerges at this stage and which is that the property, which has been purchased by the assessee is stated to belong to Shri N.S. Atwal and others, but it is only Shri N.S. Atwal, who has reflected in his income-tax return the entire amount and none of the other co-owners of the property have done anything of the sort in their respective returns. It also emerged during the course of the hearing before me that Shri N.S. Atwal had been changing his stand in his own income-tax assessments by initially showing the amount of Rs. 7 crores and odd as capital gain and which came to be taxed as such, but then I am further informed during the course of the hearing that the assessment was set aside to be reframed afresh on the said point by the first appellate authority at Calcutta and during the entire hearing of this reference there was nothing said by any party and which would lead me to conclude that his assessment had attained finality. There was in fact a retraction on the part of Shri N.S. Atwal before the AO vis-a-vis the extra consideration itself over and above the figure booked in the accounts and which was filed as additional evidence during the course of the hearing before the Division Bench. To this must be linked the changing stand taken by Shri N.S. Atwal at various stages of the proceedings i.e., during the course of the recording of his statements, the averments in the suit filed at Delhi as also at Dhanbad and considering these in totality, could his testimony be treated as reliable and that also in a case of a block assessment where the addition has to be made on evidence found during the course of the search and one cannot go on assumptions and presumptions. The learned Departmental Representative in fact argued before me during, the present reference that it is a well-known fact that whatever is the amount mentioned in the registered sale deed is not the one which changes hands, but something over and above moves from the purchaser to the seller. This submission is clearly in the realm of assumption, doubt and suspicion.

43. Much was argued before me about the statement of Shri N.S. Atwal recorded on 6th Nov., 1996 and which had seen the light of the day for the first time before the Tribunal when the matter was argued before the Division Bench. According to the learned JM the non-granting of opportunity to cross-examine was fatal and this is also the stand taken by the learned counsel before me. As against these, the learned Departmental Representative on behalf of the Department has argued that the statement of 6th Nov., 1996, was not utilized by the AO against the assessee and the further submission on her part was that in case the same questions were repeated in the subsequent two statements, then the assessee could not ask for the annulling of the assessment/addition on this ground. She, in fact, went on to contend that opportunity for cross-examination was not a part of the principles of natural justice, but the further submission was to the effect that if there had been any lapse on the part of the AO, then the proper course would have been to set aside the addition rather than to knock it off as had been done by the learned JM.44. In respect of the aforesaid submissions, I am in part agreement with the learned Departmental Representative as she is right in contending that if the opportunity for cross-examination has not been allowed vis-a-vis the initial statement, but if the subject-matter of the subsequent statements is the same and if the cross-examination is allowed in respect of the subsequent statements, then the assessee really can have no grievance, but vis-a-vis the facts of the present case it appears that opportunity for cross-examination was not allowed even in respect of the subsequent two, statements and the learned counsel has pointed out two requests made in this behalf to the AO, but not responded to. The learned Departmental Representative, in fact, contended during the course of the hearing before me that such request was made at the fag end of the limitation period, but I really wonder as to why the learned Members constituting the Division Bench took different views in coming to the same conclusion on the request of the Departmental Representative for set aside since the learned JM took the view that non-granting of opportunity for cross-examination was fatal to the addition whereas the learned AM very oddly took the view that this would serve no useful purpose and it would at the most serve the assessee's purpose and not that of the AO. These observations, in my opinion, are rather odd since a Court is not expected to watch the interests of any party, but only those of justice. I am not in agreement with the learned Departmental Representative when she contends that cross-examination is not part of the principles of natural justice. In my opinion, if this argument is accepted, then the statement recorded on which cross-examination is not allowed is also to be ignored. Anything used against an assessee has to be confronted. I may only mention at this stage that the learned Departmental Representative's submission to the effect that the initial statement of 6th Nov., 1996, had not been used against the assessee remains unchallenged on behalf of the learned counsel and I, therefore, do not propose to detain myself any further with this statement.

45. A set aside could have been considered by the Division Bench as contended by the Departmental Representative before it so that the objection of the assessee could have been dealt with by the AO. The Tribunal could have adopted this course of action for another reason i.e. the assessments in the case of Shri N.S. Atwal were in a state of flux not attaining any finality and these did have a direct and important bearing on the assessee's case.

46. The learned Departmental Representative contended before me that the retraction by Shri N.S. Atwal was not valid as the same came about 2 to 3 years after his initial statement, but such an argument should be considered by the AO in the case of Shri N.S. Atwal rather than the present assessee. I have already reproduced relevant extracts from the retraction letter dt. 28th March, 2001, at pp. 28 to 32 of the present order and I only wish to emphasize that the Division Bench could have considered the request for set aside made by the Revenue in this case without differing.

47. Coming to the various statements recorded, there is a variance in the amount purported to have been received by Shri N.S. Atwal from the assessee. In the statement recorded on 6th Nov., 1996, it is Rs. 3.80 crores, in the statement recorded on 7th Feb., 1997, Rs. 3.68 crores, and in the statement recorded on 31st March, 1997, it is Rs. 3 crores.

Shri R. Ganeshan, the private secretary to Shri N.S. Atwal in his statement recorded on 31st March, 1997, has mentioned an amount of Rs. 1,61,76,000 and in the suits filed by Shri N.S. Atwal in various Courts at Dhanbad and Delhi he has taken an altogether different stand. The other accepted fact is that Shri N.S. Atwal in his return of income for asst. yr. 1995-96 has not shown any such receipt by revising the return, The figure of Rs. 7.07 crores has not been mentioned in any document with the exception of the one found during the course of search at the premises of Shri N.S. Atwal and which has been reproduced by the learned JM at p. 23 of his order. As already stated and which is an accepted fact between the parties, the said document is written partly in pencil and partly in pen, 48. Coming now to some of the submissions made by the learned Departmental Representative during the course of the hearing of the present reference the different deeds of sale in respect of the property in question are registered as is apparent from the originals produced during the course of the hearing and I must say that the learned Departmental Representative argued to the contrary. Another submission by her was that there were some factual inaccuracies in the order of the learned JM, but none have been pin-pointed during the course of the present hearing. Another submission was that the report of the DVO in respect of the property was not binding on the AO.Without entering into the legal aspect of this submission, all that I would like to observe is that the report of the DVO is at a figure much lower than the sum of Rs. 7 crores and odd which is attributed to the property vis-a-vis the seized document.

49. Much was argued by the parties about the mortgage of the property with the Punjab & Sind Bank as also the meaning and impact of the term "encumbered" but in my opinion these arguments are to be considered not in isolation, but as a part of the numerous facts, which have emerged during the course of the hearing before the Division Bench and now before me and as I have already stated the principle of "preponderance of probabilities" has also to be kept in mind and one must appreciate the matter from the view point of the common-man. In my view it is very fair and reasonable to hold that no prudent person would part with his property without receiving the full consideration and even the learned AM has not taken the view that the addition should be Rs. 7 cores and odd and he in turn has restricted it to Rs. 3.68 crores and it is now the argument of the learned Departmental Representative before me that the addition should have been upheld by the learned AM to the tune of Rs. 7 cores and odd, but this argument advanced by her goes directly against normal human conduct. I would at no point of time accept the submission that what has changed hands vis-a-vis the period of assessment under consideration is Rs. 3.68 crores and the remaining amount is still to pass or that the amount which has changed hands is Rs. 7.07 cores, which is the figure emerging from the seized document.

As already stated, the private secretary to Shri N.S. Atwal i.e., Shri Ganeshan mentioned a much lower figure of Rs. 1.61 crores. There is, of course, the stand taken by Shri N.S. Atwal in his IT assessment as also his retraction before his AO once again during the course of the proceedings in his case. The report of the DVO showing a figure of Rs. 2 crores and odd has to be considered in the light of the aforesaid facts and I on the facts of the case do not propose to go into the question of "encumbrance" and as to what the legal effect of such a term would be.

50. I would at this stage go back to the view expressed by the learned AM in centra-distinction to that of the learned JM and although I may not find myself in agreement with some of the observations made by the learned JM, I have to consider his order as a whole as also that of the learned AM. The learned AM has given complete importance to the seized document marked Annexure A-3 and which according to him contains all relevant details and conclusively proves that money over and above the figure appearing in the records had changed hands. He has mentioned at one stage that the sale consideration of Rs. 7.07 crores was confirmed in all the three statements recorded in respect of Shri N.S. Atwal, but this is not so since different figures have been mentioned and even the learned AM ultimately confirmed an addition of Rs. 3.68 crores and not Rs. 7.07 crores. He has also referred to capital gains being declared in the case of Shri Atwal taking into account the amount mentioned in the seized document, but the subsequent events pertaining to the assessments of Shri Atwal have been overlooked. He also upheld the action of the AO in not accepting the report of the DVO, but as already observed by me, this aspect of the matter has to be considered only for a limited purpose and that is to determine the prima facie value of the property in question. The learned AM has also referred to the retraction of Shri N.S. Atwal, but as already observed by me this was relevant to the assessment of Shri Atwal and it was best that his AO should have considered whether the retraction was in order or not, but in so far as the present proceedings were concerned, this was only one factor, which showed that the assessment in the case of Shri Atwal was not final and his AO had to determine as to what was the amount which changed hands i.e., whether Rs. 7.07 crores, the figure as stated by the assessee in his records with reference to the registered sale deeds or any other amount or amounts. I would once again reiterate that this was a case where the request for set aside should have been considered and in the interest of justice, the matter could have been restored back to the AO whether for allowing opportunity for cross-examination of Shri N.S. Atwal and Shri Ganeshan or for purposes of ascertaining the position in the assessment of Shri N.S. Atwal or both. In other words, a third view was possible in this case, but which I as a Third Member am precluded from expressing. I am not in agreement with the learned AM when he observes that the document seized conclusively proved the case of the Revenue because, if that was so, then why not an addition of the amount mentioned in the seized document as against any lower figure.

51. Another observation of the learned AM that the cross-examination of Shri Atwal and Shri Ganeshan by the assesses long after the relevant event as also on account of Shri Atwal's retraction would not serve any purpose is neither here nor there and in my opinion, this is a classic situation where the assessee loses both ways. The cross-examination cannot be allowed because it would serve no useful purpose and, more so, not that of the Revenue and further cross-examination is also not necessary because of the subsequent retraction, which otherwise is not being accepted.

52. As against some of the aforesaid views expressed by the learned AM, the learned JM gave some apt reasons for coming to the conclusion that the facts and circumstances of the case did not warrant any addition and I would like to refer to some of these as follows : (i) The assessee had denied all along that he had not purchased any land for a consideration of Rs. 7.07 crores and further there was information available on record and which showed that there were discussions between Shri N.S. Atwal and the Punjab & Sind Bank for recovery of substantial amounts from the former; (ii) The total land in question had not been purchased by the assessee alone in his Individual capacity, but by his HUF as also his wife and the seller was not Shri N.S. Atwal alone, but two others, namely, Shri F.S. Atwal and Shri B.S. Atwal and separate amounts were paid to each although from different books of account pertaining to individuals and other entities; (iii) The figure of Rs. 7.07 crores mentioned in the document could not be the one at which a prudent person would purchase land especially when he knew that there was a heavy charge on the said land with Punjab & Sind Bank from whom a loan of a few crores had been obtained by Shri N.S. Atwal; (iv) There were conflicting statements by Shri N.S. Atwal at various stages of the proceedings, before the Courts at Dhanbad and Delhi and lastly, in his own assessment when he completely retracted from the stand taken in earlier proceedings; (v) That even if a valid "agreement" had been entered into between the parties and by this the reference is to the seized document, the Department still had to prove that the amount stated in the said seized document changed hands between the parties when the registered documents and the books of account revealed a completely different position; (vi) That although Shri N.S. Atwal at one stage mentioned a sum of Rs. 3.68 crores as receipt from the assessee, but no material was found in his case and which would show as to where such a huge amount had been kept/invested by him.

53. The Third Member decision of the Mumbai Bench of the Tribunal in the case of S.P. Goyal v. Dy. CIT (ITA No. 4117 (Mum) of 1999) [reported at (2002) 77 TTJ (Mumbai)(TM) 1--Ed.] becomes relevant. A copy of this decision was filed before me during the course of the hearing and I heard the parties separately on the said decision. The question posed, before the learned Third Member, was as follows : "Whether, on the facts and in the circumstances of the case, the AO was justified in making the addition of Rs. 60 lakhs on the basis of the entries made in the diary found during the course of search." 54. The matter has been discussed at length by the learned Third Member, but the ultimate conclusion, which has been reached is "that a mere entry on a loose sheet of paper and where the assessee claims that it was only a planning done, but not supported by actual cash when there is no documentary evidence to support the passing of cash and further there is no evidence about the existence of the amount mentioned, in the loose sheet of paper as embedded in either cash, jewellery or investment, then the assessee's explanation cannot be rejected and addition made by the AO would, therefore, not be sustainable. Even in the present case, the entire addition rests on the seized document and no other material has been adverted to and which would conclusively show that a huge amount of the magnitude mentioned in the seized document proceeded from one side to the other. In his own tax assessments Shri N.S. Atwal, at one stage took the stand that the seized document was only a "projection" or an "estimate" and nolhing else.

55. I may mention at this stage that the provisions of the Indian Evidence Act are not strictly applicable to the proceedings under the IT Act, but the broad principles of law of evidence do apply to such proceedings. Further, an entry in the books of account maintained in the regular course of business is relevant for purposes of considering the nature and impact of a transaction, but notings on slips of paper or loose sheets of paper cannot fall in this category. Notings on loose sheet of papers are required to be supported/corroborated by other evidence and which may include the statement of a person, who admittedly is a party to the notings. A further distinction has to be drawn between slips of paper or loose sheets found from the possession of an assessee and similar documents found from a third person. In case the statement of the third person is recorded with reference to the notings, then such a statement undoubtedly has to be confronted to the assessee and he is to be allowed an opportunity of cross-examination.

In the present reference the document in question has not been found from the assessee's possession, but from the possession of Shri Atwal and undoubtedly no opportunity of cross-examination has been allowed to the assessee and it has clearly emerged from the record and as amply discussed in the present order itself the testimony of Shri Atwal is not credible at all since in three separate statements he has indicated different figures, his secretary, Shri Ganeshan, has given yet another figure and in proceedings before the two different Courts at Delhi and as far away at Dhanbad, he has given a different picture altogether and lastly, in his IT assessment he has retracted from all his earlier statements and has categorically stated that the document which has been signed both by him and by the assessee contains only projections and purported figures in respect of the property in question. In other words, the entire addition in the hands of the assessee is based on the document found, but there is no iota of evidence to support the Revenue's case that a huge figure whatever be its quantum over and above the figure booked in the records and accounts changed hands between the parties.

56. I have already stated and I would once again emphasize that all facts and arguments have to be considered in totality because if these are considered in isolation to one another, then some of these may favour the Revenue and yet others may favour the assessee, but I must take into account the totality of facts and circumstances as also weigh as to which order is the more reasonable one taking into account the facts and the position of law before coming to any conclusion. To summarize, the order of the learned AM rests primarily on the document seized and which according to him proves everything against the assessee and in favour of the Revenue whereas the learned JM has considered other facts as well before coming to his conclusion. I proceed to agree with the view expressed by the learned JM and which, in my opinion, is the more balanced one, a reasonable one and a plausible one.

57. Before I part with this reference, I would like to observe that the numerous decisions cited by both the sides have been duly considered by me in discussing various factual and legal aspects of the arguments advanced by both the sides and I do not propose to deal with each of these individually as these have all been taken into account in deciding the present reference. All that I would like to say is that the point at issue was not of the magnitude to which it has been blown before the Division Bench and now before me. For every single argument advanced, scores of decisions were cited whereas, in my opinion, the arguments could have been curtailed and restricted by both the sides.

58. The file may now be sent to the Division Bench for passing an order in conformity with the majority opinion.

1. These are two appeals by two different assessees relating to block period from asst. yr. 1987-88 to asst. yr. 1997-98. These appeals were heard by the Bench and a proposed order was sent for signature of the other Member. However, the AM was not agreed on the point of deletion of addition of Rs. 3,44,50,000 out of total addition of Rs. 6,83,50,000. Therefore, as per provisions of Section 255(4) of the IT Act, the following question was referred to the Hon'ble President, ITAT : "Whether, on the facts and on the basis of material on record, the learned AM was correct in sustaining an addition of Rs. 3,44,50,000 or whether the JM was justified in deleting the entire addition made by the AO while framing the block assessment on the basis of proceeding initiated under Section 158BD of the IT Act." 2. The matter was referred by the President to TM for deciding the above question and the TM vide his order dt. 22nd April, 2003 concurred with the view taken by the JM, who decided the issue in favour of the assessee.

3. In accordance with the majority view, the appeal of the assessee is, therefore, allowed.