TaxTMI 
TaxTMI 
2014 (10) TMI 326
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.... hands of the purchaser of flat as unexplained cash by their respective Assessing Officer. 3. On the facts and in the circumstances of the case and in law, the Id. CIT(A) was not justified in deleting the addition of "on-money' received in cash outside the books of the recipient assessee ignoring the fact that undisclosed investment by M/s Rochem Separation Systems (I) Pvt. Ltd and M/s K.K. Goel (HUF) in immovable properties has already been added as their undisclosed income u/s 153A on the basis of the statement given by Shri K.K. Goel u/s 132(4). 4. On the facts and in the circumstances of the case and in law, the Id. CIT(A) was not justified in deleting the addition of "on-money" thereby accepting the contention of the assessee that the sums paid and recorded in the seized documents were payment made to contractors despite the fact that the said contractors were never produced before the Assessing Officer despite several reminders by the latter. 5. On the facts and in the circumstances of the case and in law, the Id. CIT(A) was not justified in deleting the addition relying on the judgement of the Hon'ble Tribunal in the case of Shri Jag Mohan Singh Arora (101 TTJ 682....
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....treat the sum of Rs. 46,00,000/- as undisclosed income. 5. Aggrieved, assessee contended before the CIT(A) that the statement recorded under section 132(4) and 131 of the Act, copies of the seized material, etc. were not supplied initially. Based on the information furnished subsequently, assessee claimed that the addition was mainly based upon pages 61 to 63 of the seized documents and on a close analysis of page 63 it can be seen that a sum of Rs. 75,00,000/- was paid by cheque and Rs. 46,00,000/- was stated to have been paid by cash on various dates but it did not mention any specific item for which such payment was made. The payment receipts by cheques on various dates do not match with the seized documents. Based on the factual discrepancies it was contended that the assessee has not received any extra consideration other than those specified in the agreement for sale. It was also submitted that the whole reassessment proceedings took place simply on account of search action and the statement of Mr. K.K. Goel in the capacity of Karta of the HUF whereas the said loose papers as well as the statement of Shri K.K. Goel have not been corroborated by any other documentary evidence....
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....as never paid any cash to the said builder for purchase of flat. It is also pointed out that in the statement of Shri K.K. Goel, it is nowhere stated that Rs. 46,00,000/- was paid to the builder i.e. the appellant. Since the purchaser and its associate company has denied payment of on money to the appellant in clear terms and has stated that the payment has been made for interiors and decorators for finishing job therefore the payment of on money to the appellant is not established. The Assessing Officer has stated that there is no proof of making payment of Rs. 46,00,000/- to interior decorators and the contention is after thought. However, the burden of not furnishing evidence of payment of Rs. 46,00,000/- to the interior and decorators directly for finishing work is not on the appellant and no adverse inference can be drawn against the appellant on this account. 3.10 Perusal of the loose paper Annexure A1 page-63 shows that there is no date mentioned regarding payment of 'on money' and there is no signature or any acceptance given by the appellant company on the said paper. Therefore, the appellant has stated that any third party document or averment cannot be relied upon unles....
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....el in his statement recorded u/s. 132(4) of the Act. However, it is also not in dispute that no opportunity was given to the assessee to cross examine the said statement of Shri K.K. Goel. It is also an undisputed fact that subsequently during the assessment proceedings of MIs. Rochem Separation System, it was explained that no such payment was made directly to the assessee but the payment was made to certain contractors for furnishing and interior decoration work. In our humble opinion, no addition can be made to the income of the assessee on the basis of documents seized from third party without any corroborative evidence and without allowing opportunity to cross examine the person concerned who were alleged the payment of 'on money'. 9. The Hon'ble Jurisdictional High Court in the case of Miss Lata Mangeshkar (supra) has held that mere entries in the accounts regarding payments to the assessee was not sufficient as there was no guarantee that the entries were genuine. The Hon'ble High Court confirmed the findings of the Tribunal as they were based on findings of the facts. The facts of the case of the assessee shows that the entries upon which the department is ....