TaxTMI 
TaxTMI 
2006 (8) TMI 261
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....Khariwal is the manager (finance) of M/s Chemicals & Minerals Industries (P) Ltd., Jodhpur. 3. Office-cum-factory premises of M/s Chemicals & Minerals Industries (P) Ltd., 29(1), Light Industrial Area, Jodhpur. 3. The assessee has been residing in a joint family house situated in Moti Chowk, Jodhpur, along with his wife Smt. Asha Singhvi, Shri Rahul Singhvi and his wife Smt. Payal Singhvi, Shri Vishant Singhvi and his wife Smt. Rohini Singhvi. During this search various incriminating evidences were found and seized from the searched place(s). The assessee derives income from salary, share of profit from firms and income from other sources. 4. During search a loose paper marked No. 1 of Annex. A-1, of the Panchnama, found at the residence of the assessee on 20th Dec., 2002, was seized by the search party. As per this seized paper it was revealed that some sale transactions are recorded on it. This is a paper of 'Kalpa-Taru Theatres, Shastri Nagar, 'E' Sector, Jodhpur. Some of the writings are in indirect manner, i.e., in coded language. Three plots were agreed to be purchased by the assessee-one in his own name, one in his wife Smt. Asha Singhvi and one in the name of asses....
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....nbsp; Amount (-) 12-11-2002 50 10.75 30-12-2002 20 10.00 30-1- 2003 15 10.00 Agreement of sale 28-2-2003 20 25-3-2003 69.25 ------ ----- 174.25 30.75 ------  ....
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....see could not establish any direct link between the amount withdrawn in cash and payment made to seller. In the backdrop of these facts, the AO held that the payment of Rs. 9,50,000 was made in cash on 11th Nov., 2002, as per Annex. 'A'. The total payment of Rs. 10,75,000 was not found recorded in the books, and therefore, the AO added Rs. 10,75,000 under s. 69 of the Act. 7. The learned CIT(A) agreed with the learned AO and concluded that the signs (+) and (-) stood for payments by cheque and in cash because this view found support from the seized paper Annex. A-1/1, itself, that amount of Rs. 10.75 lakhs written below (-) sign was to be paid in cash. Thus he confirmed the addition of Rs. 10,75,000 as unexplained investment under s. 69 of the Act. The assessee has assailed this addition before us. 8. We have heard the rival submissions and perused the evidence on record. 9. The learned Authorised Representative Shri N.R. Mertia, has vehemently argued before us that both the authorities below have wrongly construed loose paper Annex. A-1/1, to come to the conclusion that the impugned investment is an unexplained one. According to him, the writings on Annex. A-1/1 are quite....
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....paper and other sundry ancillary expenses. Upto 20th Dec., 2002, the assessee had paid Rs. 50 lakhs by cheque and Rs. 1,25,000 in cash. Under the (-) sign, the assessee had to pay Rs. 10,75,000 towards "registration charges and stamp duty expenses" (in short registry charges). The next payment was to be made on 30th Dec., 2002. Since the search took place on 20th Dec., 2002, before the second payment, we are concerned with the payments, which stood exchanged until that date. There is no dispute with regard to payment of Rs. 50 lakhs, which was admittedly paid through cheque. The dispute hinges around the payment of Rs. 10,75,000, which is shown under (-) sign upto 20th Dec., 2002. According to assessee only Rs. 1,25,000 was paid in cash that too from withdrawals already made and the same was given as a token money. The balance of Rs. 9,50,000 due to be paid on 11th Nov., 2002, was actually not paid in cash on 11th Nov., 2002. The case of the Revenue is that when the assessee has honoured all the conditions of this memorandum (agreement), the term of payment of Rs. 9,50,000 must have also been adhered to by the assessee, in all its probabilities. We are aware that in a block assessm....
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....vour of the assessee. It is a settled rule of law that when two opinions can be formed on a set of facts, the one favouring the assessee has to he accepted. The receipt of Rs. 1,25,000 by Shri Parag Munot has been acknowledged and shown in the cash book dt. 10th Nov., 2002, a copy of which is placed on page No. 44 of the paper book. The amount of Rs. 9,50,000 agreed to be paid on 11th Nov., 2002, was paid on 27th Dec., 2002, vide demand draft. Thus, how the contention of the assessee can be overlooked. When the assessee has paid major portion of the sale consideration through cheques and the parties have shown the sale consideration of Rs. 2,05,000 in the sale deeds, it would be unjust to disbelieve the version of the assessee. Moreover, there is no proof that the assessee had paid in cash, over and above what is found recorded on this loose paper, or that the amount of Rs. 10,75,000 is unexplained money of the assessee, particularly, when the same stands explained. Mere suspicion cannot be made a basis of addition. We may refer to the decision of the Hon'ble jurisdictional High Court in the cases of CIT vs. R.Y. Durlabhji (1995) 211 ITR 178 (Raj) and Jayanti Lal Patel vs. Asstt. C....
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....; Rs. 3,60,000 Rs. 2,35,010 Rs. 1,24,990 6. 2002-03 Rs. 3,60,000 Rs. 2,75,090 Rs. 84,910 7. 2003-04 Rs. 2,70,000 Rs. 1,61,080 Rs. 1,08,920 up to date of search ------------ Rs. 5,96,280 ---------------------------------------------------------- And thus he added excess household expenses of Rs. 5,96,280 in the block period. This addition was sustained by the learned CIT(A). 17. We have heard the rival subm....