Deputy Commissioner of Income Tax vs Radhe Developers India Ltd. and Another

D.A. Mehta, J.—Originally the Appellant herein had preferred Special Civil Application No. 1708 of 1999 challenging order dated January 15, 1999, made by Income Tax Appellate Tribunal, Ahmedabad Bench "B" in IT(SS) A. No. 103/AHD/1997 relatable to the block period: (i) April 1, 1985 to March 31, 1995, and (ii) April 1, 1995 to March 14, 1996. The High Court, after hearing the parties, vide order dated April 28, 1999, came to the conclusion that the preliminary objection as to the maintainability of the special civil application was required to be accepted and the Petitioner was directed to avail of the statutory remedy available under the provisions of Section 260A of the Income Tax Act, 1961 (the Act). The Petitioner was permitted to convert the petition into tax appeal and permission was also granted to propose substantial questions of law stated to be involved in the case.

Accordingly, the Appellant herein, proposed 22 questions and the Respondent herein also proposed two counter questions. Accordingly, vide order dated May 10, 1999 the appeal was admitted on the following 22 substantial questions of law formulated by the High Court as framed by the Appellant. The High Court also formulated two additional questions as suggested by the Respondent by the same order:

Whether the findings of the Tribunal that there was no material brought on record to show that the Assessee would not have included the undisclosed income in the return for regular assessment is perverse inasmuch as the Assessee has itself admitted that such undisclosed income had not been recorded in the books of account and such income had also not been included in the accounts as reflected in the annual reports for the relevant financial years which had been produced by the Assessee ?

Whether Chapter XIV-B of the Act prescribing special procedure for assessment of search cases contemplates setting off of losses incurred by an Assessee in the part of the year after the block period, from the undisclosed income of the block period ?

Whether the report of the Commissioner of Income Tax to the Settlement Commission justified the conclusion of the Tribunal and could at all have been taken into account by the Tribunal for concluding that all the additions made were to be considered on the basis of unsustainable surmises and conjectures, particularly when the Settlement Commission had after considering the report and relevant matters concluded to the contrary ?

Whether in the facts of the case, the investment by the Assessee for the purpose of owning the development rights of the subject land could be taxed only as unexplained expenditure u/s 69C of the Act as held by the Tribunal and not u/s 69B as unexplained investment ?

Whether the Tribunal was justified in law in permitting deduction of the undisclosed payment by the Assessee for acquisition of the development rights in the subject land from the undisclosed receipts by it on allotment of plots in the same land when the Assessee had itself not treated that portion of the payments disclosed in its books as expenditure and nor had it sought to deduct the same from the disclosed receipts ?

Whether the Assessee is entitled to a deduction u/s 37 of the Act of the undisclosed payment of Rs. 12.80 crores paid in cash for acquiring the development rights in the subject land from the undisclosed receipts from members for allotment of plots in the said land as held by the Tribunal ?

Whether the undisclosed payment for acquisition of development rights in the subject land by the Assessee when it had no unknown sources of income could be treated as having been explained for the purposes of Section 69B or Section 69C of the Act by the subsequent undisclosed receipts on sale/allotment of plots in the said land ?

Whether the finding of the Tribunal that the undisclosed payment by the Assessee for acquiring the development rights in the subject land was not Rs. 20,55,86,000 as found as a matter of fact by the Assessing Officer on the basis of relevant documentary and oral evidence, but only Rs. 12,41,57,296 to be taken as Rs. 12,80,00,000 being the sum admitted to have been paid by the Assessee, was a finding contrary to the evidence on record and, therefore, perverse ?

Whether the Tribunal was justified in accepting the bare, unsupported assertion by the Assessee of having undisclosed receipts of Rs. 12,80,000 wholly ignoring the finding of the Assessing Officer based on relevant oral and documentary evidence that the Assessee had received a sum of Rs. 19,00,000 as on-money for sale/allotment of 5,68,000 sq. yd. of land ?

Whether the finding of the Tribunal that the Assessee had taken possession of only 7,50,000 sq. yds. of land and not 11,11,000 sq. yd. as determined in the assessment order, based solely on a photostat copy of an alleged development agreement dated March 16, 1995, which the Assessee itself through Shri Ashish Patel, the managing director of the Assessee -company, admitted had not been executed in the statement dated March 14, 1996, was a finding based on inadmissible evidence and contrary to the oral and documentary evidence on record which indicated that the Assessee had made payment for all the three sectors aggregating to 11,11,000 sq. yds. of land ?

Whether merely recording of receipts of Rs. 99,35,200 and Rs. 4,00,000 in the books of account of the Assessee would necessarily exclude it from the purview of undisclosed income though such receipts could not be substantiated as regards person or amount as found by the Assessing Officer who brought the said amount to tax as unexplained credit u/s 68 of the Act ?

Whether the Tribunal was justified in deleting the unexplained investments which were established as a matter of fact by the Assessing Officer from documents and papers seized from the Assessee as well as by independent sources ?

Whether the block assessment cannot be made when the regular assessment is due as held by the Tribunal ?

Whether the Tribunal was justified in law in adopting dual standards in dealing with the additions made by the Assessing Officer to wit, deleting the additions in paragraphs 16.1 and 15.7 of the assessment order on the ground that the income would have been disclosed in the regular return while not applying this principle to the addition of Rs. 20.55 crores, granting deduction of payment of Rs. 12,80,00,000 to the Assessee while deleting the same as not being proved in the assessment of the recipient ?

Whether the Tribunal was justified in law in concluding that the undisclosed income of the Assessee in relation to the transaction of Shela land would be nil ?

Whether the Tribunal was justified in law to allow a further deduction of Rs. 12.80 crores from the net income of the identical amount disclosed voluntarily as being the income of the Assessee -company by Shri Ashish Patel, the managing director of the Assessee -company, in his statement u/s 132(4) of the Act recorded on oath on May 1, 1996 in the course of search ?

Whether the Tribunal was justified in law in completely overlooking the said statement of dated May 1, 1996, and in effect allowing complete retraction thereof without any basis ?

Whether the Tribunal was justified in law and on facts in allowing set off of Rs. 12.80 crores as expenditure against receipts of equal amount in total disregard to the principles of accounting ?

Whether the Tribunal was justified in law in changing the nature of additions of Rs. 99.35 lakhs and Rs. 4 lakhs from the case of a 12 ''fictitious booking'' to that of ''deposit verification'' ?

Whether the finding of the Tribunal holding the testimony of Shri Ashish Patel, the managing director of the company, in the context of allowing deduction of Rs. 12.80 crores to the Assessee, as reliable, was not a finding contrary to the Tribunal''s own decision in the context of the same transaction in the case of Shri Manoj Vadodaria where the testimony of Shri Ashish Patel was held unreliable and, therefore, perverse ?

Without prejudice to the above, whether the Tribunal has not committed a gross error in law in the allowance of deduction of payment of Rs. 12.80 crores made by the company in cash to an unidentifiable and unverifiable person in gross violation of the provisions of Section 40A(3) ?

Whether the Tribunal was justified in deciding the issues respecting additions of Rs. 4.51 crores, Rs. 1.50 crores and Rs. 70 lakhs in the hands of the company without having first decided these issues in the hands of Shri Ashish Patel as these additions in the case of the Assessee -company were only of consequential nature ?

The following two additional questions have been suggested by learned Counsel for the Respondents:

Whether the Tribunal is justified in not deciding the contention of the Respondent that the payment made for the development rights acquired was not an investment made by the Respondent nor an expenditure incurred by the Respondent as the same was sourced from collection made from members and hence not income of the Respondent ?

Whether the payments made of Rs. 12.80 crores being expenditure incurred for the development rights acquired and sourced from collection made from members ought to have been allowed as deduction u/s 28 of the Income Tax Act ?

On March 14, 1996, search and seizure proceedings u/s 132 of the Act were initiated at the business premises of the Respondent -company along with the residential premises of one Shri Ashish Patel, managing director of the Respondent -company and one Shri Arun B. Shah, an employee of the Respondent -company. In response to the notice u/s 158BC of the Act return of income declaring nil income for the block period was filed on March 21, 1997. The Respondent -company is engaged in the business of land development and allied activities, having come into existence in the previous year relevant to the assessment year 1995-96. After hearing and recording statement of Shri Ashish Patel and after analyzing the 18 seized documents as well as the seized books of account of the Respondent -company, assessment was framed on a total undisclosed income of Rs. 28,30,21,200 comprised of:

Rs. Investment of Shela land 20,55,86,000 Booking of plots in fictitious names 99,35,200 Under Section 68 of the Act 4,00,000 Unexplained investments 118,50,00,000 Unexplained investments 70,00,000 Unexplained investments 4,51,00,000

The Assessee carried the matter in appeal before the Tribunal and vide the impugned order succeeded.

After hearing the learned Counsel for the parties, the court has found it necessary to reformulate the questions to bring out the correct controversy between the parties. Such reframed questions are:

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in law in deleting the addition of Rs. 20.55 crores made as undisclosed investment for acquiring the development rights ?

Whether, the Tribunal is right in law in holding that the transaction of acquiring the development rights can be taxed only u/s 69C of the Income Tax Act, 1961 and not u/s 69B of the Act ?

Whether, the Tribunal is right in law in holding that the amount of undisclosed income taxed u/s 69C of the Act could be correspondingly deducted u/s 37 of the Act ?

Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in deleting the addition of Rs. 99.50 lakhs and Rs. 4 lakhs made by the Assessing Officer as unexplained credits u/s 68 of the Act ?

Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in deleting the additions of Rs. 1.5 crores, Rs. 70 lakhs and Rs. 4.51 crores ?

In relation to the first addition, it is the case of the Assessing Officer, that the Assessee -company had made an unexplained investment for acquiring a land located in Shela village and described as Radhe Acre 1 and Radhe Acre 2. That the Assessee had entered into a transaction involving a total land area to the tune of 11 lakhs sq. yds. and this was on the basis of loose papers file "A-3", more particularly page 103 of the said file, which was found from the residence of Shri Arun B. Shah, the employee of the Respondent -company. According to the Assessing Officer, the claim made by the Assessee that in fact the transaction had taken place only as regards 7 lakhs sq. yds. of land and not the entire 11 lakhs sq. yds. of land, was not accepted because of the seized documents. The Assessing Officer also disbelieved the statement of Shri Ashish Patel wherein it was stated that only 7 lakhs sq. yds. of land had been acquired by way of development rights and the balance land had not been made available to the Assessee -company as per the terms of the agreement with Shantinagar Shela Co-operative Housing Society. The Assessing Officer held that the Assessee having failed to bring any confirmation account from M/s. Shantinagar Shela Cooperative Housing Society the Assessee -company was granted development rights only for 7 lakhs sq. yds. an irresistible conclusion could be drawn that the Assessee acquired development rights of the total land admeasuring 11.11 lakhs sq. yds. at Rs. 226 per sq. yd. during the relevant period. The Assessing Officer, therefore, worked out the investment at a sum of Rs. 25,10,80,000 as being unexplained investment and added the same u/s 69B of the Act. According to the Assessing Officer, the aforesaid amount would include a sum of Rs. 12,80,00,000 disclosed as receipt of on-money by Shri Ashish Patel as per the statement dated May 1, 1996. Simultaneously, the claim made by the Assessee that a sum of Rs. 12,80,00,000 was paid for acquiring the development rights of 7 lakhs sq. yds. of the land was not believed by the Assessing Officer and the claim of deduction denied.

The Assessee carried the matter in appeal before the Tribunal. The Tribunal for the reasons stated in its impugned order, came to the conclusion that the addition for the undisclosed receipt had to be sustained only to the extent of Rs. 12,80,00,000 as accepted by the Assessee and there was no basis for making addition to the tune of Rs. 20,55,86,000 as the Assessee had acquired the development rights only in relation to 7 lakhs sq. yds. of land and not 11.11 lakhs sq. yds. of land. At the same time, the Tribunal also recorded that the amount of Rs. 12,80,00,000 paid by the Assessee for acquisition of development rights had to be treated as allowable deduction u/s 37 of the Act.

The learned senior standing counsel appearing on behalf of the Appellant -Revenue assailed the aforesaid order of the Tribunal, principally on the ground that the impugned order suffers from the vice of perversity, the Tribunal having ignored the various pieces of evidence and made factually contradictory statements. That the Tribunal had wrongly relied on the report of the Commissioner of Income Tax filed before the Settlement Commission. In relation to certain observations made by the Tribunal various submissions were made, including relying upon the audited accounts, to submit that the Tribunal had proceeded on an erroneous presumption and thus the order was vitiated. On the merits it was submitted that the Assessing Officer had given cogent reasons for working out the addition of undisclosed receipt at a sum of Rs. 20,00,00,000 odd but the Tribunal had restricted the same to a figure of Rs. 12,80,00,000 without assigning any reasons for reducing the said figure. It was further pointed out that the Tribunal had taken note of the statement made by Shri Ashish Patel but not correctly appreciated the same inasmuch as it was an accepted position that payment of rupees eight crores and rupees seven and half crores for sector No. 1 and sector No. 2 were respectively made for acquiring the development rights but the Tribunal had restricted the said figure at a sum of Rs. 12,80,00,000 and thus the order of the Tribunal was not only bad in law but perverse as being divorced from the facts.

In relation to the addition made and sustained by the Tribunal u/s 69C of the Act, it was contended that the case of the Revenue was only under the provisions of Section 69B of the Act and there was no question of any unexplained expenditure having been incurred which was to be added back. The Tribunal had failed to appreciate the basis of the addition made by the Assessing Officer and thus had wrongly converted the said basis by invoking and applying the provisions of Section 69C of the Act. In support of the submission made, reliance was placed on the decision of this Court as reported in case of Fakir Mohmed Haji Hasan Vs. Commissioner of Income Tax, to submit that any addition made under the provisions of Sections 69, 69A, 69B and 69C of the Act would not permit the corresponding deduction under any other provisions of the Act as the said group of sections dealing with deemed income do not fall under any of the heads of income enumerated in Section 14 of the Act. According to the learned Counsel, therefore, the Tribunal had erred in granting corresponding deduction of Rs. 12,80,00,000.

In relation to the second addition of Rs. 99,35,200, it was submitted that the Assessing Officer had found that allotment letters had been issued to various allottees but addresses of the alleged allottees were not available as could be seen from the loose papers found in the file annexures A/29 and A/30 seized from the office premises of the Assessee -company. That after making inquiries, it was found that one Shri Naresh Patel had booked only four plots, as against that documents revealed that 11 plots were allotted to Shri Naresh Patel and, therefore, the Assessing Officer had arrived at a conclusion that the persons enumerated in paragraph 15.6 of the assessment order were fictitious persons and allotment money/booking amount stated to have been received from such persons, was to be added u/s 68 of the Act as unexplained credit in the books of account of the Assessee -company.

Similarly in so far as the addition of Rs. 4,00,000 is concerned, as recorded by the Assessing Officer, though the amount had been shown to have been received in cash towards booking of plots, the amount had been returned to the said party by cheque and hence, the same was rightly added as unexplained credit brought in the books of account through cash u/s 68 of the Act. It was submitted that the Tribunal had wrongly deleted the addition in question because it was always open to the Assessing Officer to make addition on the basis of inquiries made after the search.

In relation to the remaining three additions of Rs. 1,50,00,000, Rs. 70,00,000 and Rs. 4,51,00,000 it was submitted that the loose paper file annexure A-1 which was seized from the residence of Shri Ashish Patel contained parallel balance-sheet as could be seen from pages 1 and 18 of the said file and the said pages contained the following three references:

(a) Manoj--Rs. 1,50,00,000

(b) Shikhar--Rs. 70,00,000

(c) 154--Rs. 4,51,00,000

That the aforesaid amounts had been added by the Assessing Officer after recording statement of Shri Ashish Patel and thus was required to be retained, the Tribunal having wrongly deleted the same.

The learned senior advocate appearing on behalf of the Respondent - Assessee at the outset submitted that all the issues raised in the appeal were based on the facts and appreciation of evidence on record and the impugned order of the Tribunal did not give rise to any substantial questions of law. It was submitted that in so far as the principal addition is concerned, the Tribunal has found as a matter of fact that the Assessee -company had received the booking amount of Rs. 12,80,00,000 which was accepted by Shri Ashish Patel in his statement and offered for taxation. That there was no basis to enhance the said figure in the absence of any correlation with the seized material to indicate any such enhanced receipts. It was submitted that the agreement between the parties had been noticed by the Tribunal and thereafter the Tribunal had found as a matter of fact, that possession of sector No. 3 was never handed over to the Assessee. As such possession had to be handed over only after possession of sector Nos. 1 and 2 and procedure thereof was complete. That taking totality of the circumstances, the Tribunal had found that the amount of payment as well as the area of land for which the development rights had been acquired, had not been correctly determined by the Assessing Officer. The Tribunal had rightly come to the conclusion that the addition was required to be made only u/s 69C of the Act and consequently deduction u/s 37 of the Act was rightly granted to the Assessee.

It was also submitted that in fact the provisions of Section 69B or 69C of the Act would not be attracted in the facts of the case because once undisclosed receipts were known and quantified the only question that survived was whether a corresponding deduction was available to the Assessee considering the business of the Assessee and the payment made for acquiring the development rights. In other words, it was submitted that this was not a case where source of income or expenditure was not known and, therefore, no addition under any of the deeming provisions could have been made. Referring to the decision of this Court in the case of Fakir Mohmed Haji Hasan Vs. Commissioner of Income Tax, which was relied upon by the learned Counsel for the Appellant, it was submitted that in a later decision in the case of Krishna Textiles Vs. The Commissioner of Income Tax, this Court had categorically found that the observations made therein were obiter in relation to the provisions of Sections 69A, 69B and 69C of the Act, as the dispute was only in relation to the provisions of Section 69 of the Act. It was also submitted that as laid down by the Supreme Court of India in the case of (2005) 92 ITD 11 Sections 14 and 56 of the Act constitute a complete code for the purpose of determining under which head a particular income would be taxed and, therefore, once an income is included under any one of the heads, it could not be brought to tax under the residuary provisions of Section 56 of the Act.

In relation to the two additions of Rs. 99,00,000 and Rs. 4,00,000, it was submitted that the Tribunal had found as a matter of fact that the same were based on the entries recorded in the regular books of account and thus were outside the scope of special provisions for assessment of block period and had to be considered only in the regular assessment as held by this High Court in the case of N.R. Paper and Board Limited and Others Vs. Deputy Commissioner of Income Tax,

Similarly, in relation to the remaining three additions of Rs. 1,50,00,000, Rs. 70,00,000 and Rs. 51,00,00,000, it was submitted that the Tribunal had found, after appreciation of evidence on record, that the explanation of the Assessee that these were mere projected budgetary figures and were not reflecting actual transactions and thus no addition was warranted. That this was a pure finding of fact and was not required to be interfered with.

In rejoinder, learned senior standing counsel for the Appellant -Revenue referred to a decision of this Court in the case of Gautam Harilal Gotecha Vs. DCIT, to submit that the Tribunal being a final fact finding authority the impugned order had to be reasoned and speaking order and if there were apparent contradictions the same would be a perverse order entitling the High Court to interfere. It was further submitted that it was always open to the Assessing Officer to make further inquiries in the light of the provisions of Section 158BB of the Act and make appropriate additions thereafter as held by this Court in the case of Cargo Clearing Agency (Gujarat) Vs. Joint Commissioner of Income Tax, Lastly, it was submitted that as there was apparent conflict between the two judgments of this Court rendered by the co-ordinate Benches as in the case of Fakir Mohmed Haji Hasan Vs. Commissioner of Income Tax, and in the case of Krishna Textiles Vs. The Commissioner of Income Tax, on the issue of interpretation of the provisions of Section 69C of the Act, the matter was required to be referred to a larger Bench.

The facts are not in dispute. In fact, when one reads the orders made by the Assessing Officer and the Tribunal in entirety, the only dispute is in relation to the same set of facts being read and interpreted differently by the two authorities. Thus, in effect, it can be stated that the Assessing Officer has arrived at one conclusion on the basis of the same set of facts and evidence on record, whereas the Tribunal has recorded a different conclusion. None the less the issue is only factual and based on appreciation of evidence only. It is not possible to accept the contention that any issue of law, much less a substantial question of law is involved in the present proceedings. The only issue of law, if one can term it to be so, is as to whether the impugned order of the Tribunal suffers from the vice of perversity.

In relation to the first addition, when one goes through the entire assessment order and the impugned order of the Tribunal, it becomes apparent that neither the Assessing Officer nor the Tribunal disagree on the issue, namely, disclosure of receipt of on-money to the tune of Rs. 12,80,00,000 having been received by the Assessee -company towards the booking amount for plots in the scheme known as Radhe Acre 1 and Radhe Acre 2. The only point of diversion between the two is, as to whether the Assessee has received anything over and above Rs. 12,80,00,000 as disclosed by the Assessee. In this context, the reasoning adopted by the Assessing Officer is based on the documents seized from the residential premises of Shri Arun Shah, employee of the Assessee -company, which is recorded in Gujarati and has been reproduced in paragraph 12.3 of the assessment order as under:

Shelani tamam 11,11,000 vaar jaminno bhav rupaya dho so chhabis choras vaarno raheshe. Koyie bhav vadharo nahi.

On a plain reading of the aforesaid extract, the only thing that transpires is that, the entire 11,11,000 sq. yds. of Shela land is contracted to be transacted at Rs. 226 per sq. yd. and nobody will be entitled to raise the price. Thereafter, as recorded by the Assessing Officer, other terms and conditions of the agreement between the parties have been recorded. It is not in dispute that the agreement contemplates handing over the possession of land falling in sector 3 only after the transaction relatable to land falling in sector Nos. 1 and 2 is complete. It is not even the case of the Revenue that there is any evidence to disprove the statement made by Shri Ashish Patel and the Assessee -company that possession of land falling in sector No. 3 was not handed over. The only basis of the Assessing Officer to compute the price is the entry made in the regular books of account regarding the payment to M/s. Shantinagar Shela Co-operative Housing Society at Rs. 40 per sq. yd. and the inference drawn by the Assessing Officer by adopting the said rate as multiplier in relation to the entire parcel of land admeasuring 11.11 lakhs sq. yds. after deducting amount of Rs. 1,55,00,000 as recorded in the books, the Assessing Officer has made addition to the tune of Rs. 20,55,86,000.

In this context, the Tribunal has recorded, after appreciating the same set of evidence in the form of documents, viz., seized material, that annexure A-3 seized from residence of Shri Arun Shah only contains the payment schedule and no amount was actually paid. The Tribunal has, therefore, after taking the totality of circumstances into consideration recorded that both, as regards the area as well as the amount of payment and the point of payment, the Department has not been correct in discarding the version put forth by the Assessee as supported by documentary evidence.

Therefore, the only issue is, as to whether such a finding can be termed to be perverse. For determining as to whether a particular order suffers from vice of perversity or not, the well settled parameters may be applied to the facts of the case. This is not a case where relevant evidence has been ignored and irrelevant evidence has been taken into consideration. The only test that is thereafter required to be applied is: whether on the facts found and the state of evidence on record the conclusion arrived at by the Tribunal is one which could have been arrived at by a reasonable person properly informed in law. Applying the aforesaid test, it cannot be said that the decision recorded by the Tribunal is one which could not have been arrived at by a reasonable person properly informed in law considering the state of evidence on record. Hence, in so far as the addition to the extent of Rs. 12,80,00,000 being upheld by the Tribunal is concerned, no interference is warranted and the Revenue cannot succeed on this count.

In so far as the connected issue regarding deduction of the amount paid for acquiring the development rights is concerned, suffice it to state that initially, the onus was on the Revenue to point out that such payment had not been made or that the amount of payment differed from the aforesaid figure of Rs. 12,80,00,000. Neither from the seized material nor from any other evidence recovered during the search proceedings has the Revenue been in a position to point out any such difference, viz., either there being no payment, or the payment being at variance with the amount claimed by the Assessee. The Revenue does not dispute the fact of acquisition of the development rights. It is not the case of the Revenue that the said development rights were gifted by the co-operative society to the Assessee. In the circumstances, if the Tribunal has stated that the amount of payment towards acquisition of the development rights has to be deducted even if the provisions of Section 69C of the Act are attracted, no infirmity can be found in the order of the Tribunal. Admittedly, the proviso inserted below Section 69C of the Act has been made effective from April 1, 1999 as inserted by the Finance (No. 2) Act, 1998.

The decisions of this Court in the case of Fakir Mohmed Haji Hasan Vs. Commissioner of Income Tax, and Krishna Textiles Vs. The Commissioner of Income Tax, are neither relevant nor germane to the issue considering the fact that in none of the decisions the legislative scheme emanating from the conjoint reading of the provisions of Sections 14 and 56 of the Act have been considered. The apex court in the case of (2005) 92 ITD 11 has dealt with this very issue while deciding the treatment to be given to a transaction of surrender of tenancy right. The earlier decisions of the apex court commencing from the case of United Commercial Bank Ltd. Vs. Commissioner of Income Tax, West Bengal, have been considered by the apex court and, hence, it is not necessary to repeat the same. Suffice it to state that the Act does not envisage taxing any income under any head not specified in Section 14 of the Act. In the circumstances, there is no question of trying to read any conflict in the two judgments of this Court as submitted by the learned Counsel for the Revenue.

In so far as the additions of Rs. 99,00,000 odd and Rs. 4,00,000 are concerned, admittedly the amounts were found having been entered in the regular books of account. Therefore, inquiry, if any, was permissible in the course of regular assessment proceedings and the finding of the Tribunal in this regard being in consonance with the ratio of the judgment of this Court in the case of N.R. Paper and Board Limited and Others Vs. Deputy Commissioner of Income Tax, no interference is warranted.

In so far as the remaining three additions of Rs. 1,50,00,000, Rs. 70,00,000 and Rs. 4,51,00,000 are concerned, the Tribunal has after appreciating evidence on record found that the said figures were projected budgetary estimates and no actual transactions had taken place. There is no evidence on record to indicate the contrary. In the circumstances, it is not necessary to make any further discussion in this regard.

In the result, all the questions are answered accordingly in the affirmative. The appeal stands dismissed in the light of what is stated hereinbefore with no order as to costs.

Before parting, it is necessary to record that during the course of hearing reference was made to historical background of proceedings before the Settlement Commission and even questions in this regard have been proposed as noted hereinbefore by the Appellant -Revenue. However, the said proceedings before the Settlement Commission having been found to be not maintainable by the Settlement Commission by rejecting the application moved by the Assessee, the court has not found it necessary to enter into any discussion in this regard as the said contentions have no bearing on the correctness or otherwise of the impugned order of the Tribunal in the facts and circumstances of the case.