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TaxTMI 
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TaxTMI 
2013 (12) TMI 362
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....r. It filed its return of income on 17-07-2008 declaring total income of Rs.24,910. The Investigation Wing of Mumbai and Pune had carried out a search and survey at the business premises of Marvel group of Pune and in the business premises of Sri Pandoo P. Naig, one of the directors of Marvel Realtors and Developers Ltd. Pune (in short 'MRDL'). From the documents impounded it was found that M/s. Nandan Associates, the assessee, had received Rs.2.39 crores in cash from Marvel group. To verify this transaction, a survey u/s.133A was carried out at the office premises of the assessee. The partner of the assessee firm Sri Shamkant Kotkar in his statement recorded on oath had stated that the said deal with Marvel group was cancelled and the amou....
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....ich was recorded u/s.131 and noted that the said director had not denied the transaction. In view of the above facts, the Assessing Officer came to the conclusion that the assessee has received Rs.2.39 crores in cash which is an undisclosed income liable to be added u/s.69A of the Income Tax Act. He accordingly made addition of Rs.2.39 crores to the total income of the assessee. 5. Before the CIT(A) the assessee vehemently opposed the addition made by the Assessing Officer. It was submitted that the addition of Rs.2.39 crores is based on mere alleged cash payment by MRDL on the basis of some entries found in the books of the said party. Relying on a number of decisions it was submitted that such third party based documents cannot be used i....
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.... submitted that the copies of the statements of representatives of MRDL was never given to the assessee nor any opportunity to cross examine them was granted to the assessee. It was further argued that since there was a search in the premises of MRDL and some incriminating documents relating to the assessee were found from the said premises, therefore, assessment should have been completed u/s.153A r.w.s. 153C and not u/s.143(3). It was accordingly submitted that the addition made by the Assessing Officer was uncalled for and liable to be deleted. 6. However, the learned CIT(A) was not convinced with the arguments advanced by the assessee. He noted that the payment of Rs..1.61 crores paid by different cheques by MRDL get corroborated with ....
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....ve points. However, the Assessing Officer made wrong inference from the above statement and concluded that Mr. Pandoo P. Naig had not denied the transaction. He submitted that the Assessing Officer did not bother to examine the other directors or call for any explanation from the said company. He submitted that when the assessee has denied to have received any cash from MRDL and since the deal was cancelled and the amount of Rs.1.61 crores received from MRDL was refunded to them and since the other party had not categorically stated to have paid any cash to the assessee, therefore, under these circumstances, no addition u/s.69A is called for. 7.1. In his alternate contention he submitted that since search took place in the premises of MRDL....
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.... received the on money in shape of cash to the tune of Rs.2.39 crores. The director of Marvel group has also never denied to have paid the on-money. None of the parties have come forward with the agreed price required for the transactions. Therefore, the incriminating documents found containing the payment of cash to the assessee giving date-wise details has to be believed as true. He submitted that the entries found in the books of account has to be read as a whole and it cannot be said that a part of the same is correct and the other part is not correct. Since entries relating to cash transactions and cheque transactions were found in the premises of MRDL group and since the cheque transactions tally with the books of account maintained b....
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....t Pune by the other directors and they can only comment about the cash payments, the details of which were found during the course of survey. We find the Assessing Officer in the instant case has not examined the other directors of the MRDL who were responsible for maintaining the books of accounts. Further, on being questioned by the Bench as to what has happened in the case of Marvel Realtors and Developers Ltd., neither the learned counsel for the assessee nor the learned Departmental Representative could throw any light as to whether any unexplained expenditure in the hands of MRDL has been made or the treatment of such cash payment made to the assessee. It is pertinent to note here that even though the transaction involves huge amount ....