TaxTMI 
TaxTMI 
2015 (10) TMI 2243
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...., 2006-07 and 2007-08 were reopened by the Assessing Officer on the basis of information received from ACIT Central Circle- 1(2), Pune according to which certain entries in assessee's name were found from documents seized during the search action by the Income Tax Department on Shri Sohanraj Mehta, C & F agent of RMD Gutkha group. The seized document included a summary of unaccounted sales carried out by Shri Sohanraj Mehta for the period April 2003 to August 2006 and also indicated receipt of an amount of Rs. 1 crore by the assessee out of such unaccounted sale proceeds. During the course of assessment proceedings, the assessee was provided with the reasons of reopening on 09-11-2011. The assessee was also provided a copy of the seized material and was requested to explain as to why the payment of Rs. 1 crore made to him by Shri Sohanraj Mehta should not be treated as his income. 3. In response to the query raised by the AO the assessee made the following submission which have been reproduced by the AO in the assessment order and which read as under : "1. The seized document handed over to me compromises of two pages-one on the letter head of Al India Shwetambar Jain C....
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....e an opportunity to buttress my claim." 4. However, the AO was not satisfied with the explanation given by the assessee. According to the AO although the assessee has stated that he has not entered into any transaction of such type, however, the factual contents of the seized document cannot be ignored as the name of the assessee is clearly mentioned in the seized document which proves his involvement in the said transaction. He noted that Dhariwal Industries through their C&F agent of RMD Gutkha group of Karnataka Region Shri Sohanraj Mehta has carried out unaccounted sale of Gutkha for the period April 2003 to August 2006 worth Rs. 345.85 crores and has distributed a part of such unaccounted sale proceeds to his friends who are into real estate business. In the seized document, it is clearly mentioned that the assessee Shri Suhas Mantri has received cash worth Rs. 1 crore in July 2004 for which no repayment liability is mentioned in the seized document. He therefore treated this amount of Rs. 1 crores as unexplained money u/s.69A of the I.T. Act and made addition to the total income of the assessee. 5. Before CIT(A) the assessee challenged the validity of assumption of juri....
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.... income of the assessee which is not correct in view of the clear notings and admission of its author explaining each and every noting recorded on the seized documents. 7. However, the Ld.CIT(A) was not convinced with the arguments advanced by the assessee regarding validity of the reassessment proceedings and upheld the action of the AO. While doing so he noted that the return of income for the impugned assessment year was only processed u/s.143(1) and no assessment was made u/s.143(3) prior to the issue of notice u/s.148 and therefore it cannot be said that the assessment was reopened on mere change of opinion. For the above proposition he relied on the decision of Hon'ble Supreme Court in the case of ACIT Vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. reported in 291 ITR 500. He noted that since the AO has received information from ACIT, Central Circle-1(2), Pune regarding certain entries in asessee's name found in the documents seized during the search action by the income-tax department on Shri Sohanraj Mehta, C&F Agent of RMD Gutkha group, therefore, the AO had prima-facie reasons to believe that income had escaped assessment. Therefore, there is no infirmity or illegality in ....
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....deration was recorded on the loose paper and consideration received was apparent and it was therefore for the assessee to establish the contrary. Relying on various decisions the Ld.CIT(A) held that there are enough circumstantial evidences and preponderance of probabilities in this case namely, the ownership of the documents, the entire modus operandi regarding receipt in cash of the unaccounted sale proceeds which has been corroborated by the statement of the author of the seized documents which clearly points the fingers at the assessee. Distinguishing the various decisions cited before him the Ld.CIT(A) upheld the addition made by the AO u/s.69A of the I.T. Act. 10. However, since the documents show that the amount has been paid to the assessee on 09-07-2004 and the AO has assessed the same in A.Y. 2004-05, therefore, he directed the AO to assess the income for the A.Y. 2005-06 by taking recourse to the provisions of section 150(1) of the I.T. Act. 11. Aggrieved with such order of the CIT(A) the assessee is in appeal before us with the following grounds : "1. The Ld.CIT(A) has erred in law and on facts in confirming the Assessing Officer's assumption of jurisdict....
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....ections as reasons on the basis of which he was proceeding to issue notice u/s.148. These could not be the reasons for proceeding u/s.147/148 of the Act. As the first part was only an information and the second and the third parts of the reasons were mere directions, it was not at all discernible as to whether the Assessing Officer had applied his mind to the information and independently arrived at a belief that, on the basis of the material which he had before him, income had escaped assessment. There was no substantial question of law for consideration." 14. As regards ground of appeal No.2 is concerned, the Ld. Counsel for the assessee referring to pages 49,57,59 and 74 submitted that although the assessee had made various submissions during the course of assessment proceedings, however, the AO has not dealt with any of his objections. Neither the statement of Shri Sohanraj Mehta was provided to the assessee nor cross examination of the person was allowed. Referring to the decision of the Delhi Bench of the Tribunal in the case of Share Brokers Ltd. Vs. DCIT reported in 109 TTJ 700 he submitted that the Tribunal in the said decision has held that addition in block assessment....
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..../s.69A made in the hands of assessee only on the basis of documents recovered in search of third party with which the assessee had no business transactions and without any corroborative evidence was invalid. It has further been held that the presumption u/s.132(4A) is available only in respect of the person from whom the paper is seized. It could not be applied against a third party and hence no addition could be made on the basis of the evidence found with third party. It has been held that presumption u/s.132(4A) could be used only against the person from whose premises the documents are found and not against the person whose name appeared in the seized papers. He accordingly submitted that the facts of the case being identical to the facts in the case of Pradeep Amrutlal Runwal (Supra) decided by the Pune Bench of the Tribunal, therefore, the addition made by the AO should be deleted. He also relied on the following decisions : 1. General Motors India (P) Ltd Vs. DCIT 354 ITR 244 2. Jawaharbhai Atmaram Hathiwala Vs. ITO 128 TTJ 36 3. N.K. Malhan Vs. DCIT 91 TTJ 938 4. ACIT Vs. Ashok Kumar Vig 106 TTJ 422 5. Consolidated Doffee Ltd. Vs....
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....nd 1106/PN/2013 order dated 12-06-2015 wherein additions were made on the basis of seized documents found from the residence of Shri Sohanraj Mehta, C&F Agent of RMD Gutkha Group during the course of search. After considering the various submissions made by both the sides, the Tribunal deleted the addition by observing as under : "37. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find in the instant case a search u/s.132 of the I.T. Act was conducted at the premises of Mr. Mittulal at Bangalore on 09-10-2009 wherein certain incriminating documents were found belonging to the Dhariwal group. Those documents were maintained by one Shri Sohan Raj Mehta, C&F agent of M/s. Dhariwal Industries Ltd. In his statement recorded u/s.132(4) Mr. Mehta had stated that he was effecting unaccounted sales of Gutkha of Dhariwal Industries Ltd. and the sale proceeds were deployed as per the instructions of Shri Rasiklal M. Dhariwal and his son Shri Prakash M. Dhariwal. In some of the seized papers nam....
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.... to have received any such amount from Mr. Sohan Raj Mehta. According to him, no addition can be made in the hands of the assessee on the basis of papers found in the premises of third party. Further, the assessee being a small taxpayer, some evidence should have been found from the residence of the assessee to show that in fact he has received such huge amount. It is also the case of the Ld. Counsel for the assessee that the Department itself is treating this as "short term advance" during the course of search action. Similarly, the statement of Mr. Rasiklal M. Dhariwal is contrary to the finding of the Department. It is also the submission of the Ld. Counsel for the assessee that different Benches of the Tribunal under identical facts and circumstances have deleted the addition made by the Assessing Officer on the basis of notings found from the premises of Mr. Sohan Raj Mehta. 40. We find some force in the submission of the Ld. Counsel for the assessee. The assessee in the instant case is an individual and proprietor of M/s. S. Chains which is engaged in the business of job work in gold ornaments. M/s. S.D.D. Agencies is the C&F Agent of M/s. Dhariwal Industries Ltd. in the Stat....
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....cash received from Sohanraj Mehta at the discretion of Shri R.M. Dhariwal are recorded in your books of account. A.34 I have gone through the statement shown to me of Shri Prakash Dhariwal recorded on 20-01-2010, however, I have never recorded the amount mentioned from Shri Sohanraj Mehta hence the said payment are not recorded in my books. Q.35 The statement of Shri Sohanraj Mehta recorded u/s.132(4) on 09- 10-2009 has been confirmed by Shri Prakash Dhariwal in the statement recorded u/s.132(4) on 20-01-2010. Thus, both Shri Sohanraj Mehta and Shri Prakash R. Dhariwal have stated on oath that payments in cash of Rs. 21.22 cr has been made to you at the direction of Shri Rasiklal Dhariwal by Shri Sohanraj Mehta. As the statements have been given by them on oath, you are therefore once again requested to go through the above referred documents/statement and state whether the said cash receipts are reflected and recorded in your regular books of accounts. A.35 As already stated earlier, I have never received any cash from Sohanraj Mehta at the instant of Shri Rasiklal Dhariwal or Prakash Dhariwal. Hence, no such cash is recorded in my regular books of accou....
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....tion Nos. 33 and 34 he has replied as under : "Q.33 I am showing you exhibit marked as A/M/29, seized from the residence of Mr. Mitulal, No. 219, 68th, Cross, 5th Block, Rajaji Nagar, Bangalore. Please go through these loose sheets serially numbered 1-61 and state the contents written over these loose sheets? Ans : I have gone through the exhibit marked A/M/29. I have placed my signature on page ho. 24 of this exhibit in confirmation of having seen it. This exhibit contains loose slips serially number 1-61. Slips marked as sl.no. 4 to 8, 49 to 50, 58 arid 59 contain the notings of Mr.Raskilal Manikchand Dhariwal and his son Mr; Mr. Prakash. The notings on these slips contain their directions to me to handover the amount mentioned in the slip to the person who brings the slip. Sometimes, they do not write any name on the slip, I have to handover the money mentioned in the slip to the bearer of the slips. Most of the times, I may not know the person but still I make payment to them as I have standing instructions from Mr.Raskilal Manikchand Dhariwal and his son Mr. Prakash to handover the money to the bearer of the slip. The money is paid out of the collections rece....
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....le Bombay High Court in the case of Aziende Colori Nazionali Affini, Italy (Supra) has held that the agreement had to be considered as a whole and that the different clauses in the agreement could not be considered separately. Therefore, when the Department itself is treating the same at one place as short term advance, therefore, the question of treating the same as income of the assessee does not arise. It is also an admitted fact that the papers were found with Mr. Sohan Raj Mehta at Bangalore. Therefore u/s.132(4A) they can be presumed to be true, genuine and correct only in the case of the searched person, i.e. Mr. Sohan Raj Mehta who has admitted that the papers belong to him. Therefore, we find force in the submission of the Ld. Counsel for the assessee that on the basis of the papers found with some third party addition cannot be made in the hands of the assessee particularly when there is no business connection between the assessee and that party. 47. The Hon'ble Bombay High Court in the case of Addl.CIT Vs. Lata Mangeshkar reported in 97 ITR 696 has held that mere entries in the accounts regarding payment to the assessee was not sufficient as there was no guarant....
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....ken. To substantiate their claim the Bank solely relied upon certified copy of the accounts maintained by them under Section 4 of the Bankers' Book Evidence Act, 1891 and contended that certified copies became prima facie evidence of the existence of the original entries in the accounts and were admissible to prove the payment of loan given. The suit was decreed by the trial Court and the appeal preferred against it was dismissed by the High Court. In setting aside the decree this Court observed that in the face of the positive case made out by Chandradhar that he did not ever borrow any sum from the Bank, the Bank had to prove that fact of such payment and could not rely on mere entries in the books of account even if they were regularily kept in the corse of business in view of the clear language of Section 34 of the Act. This Court further observed that where the entries were not admitted it was the duty of the Bank, if it relied on such entries to charge any person with liability, to produce evidence in support of the entries to show that the money was advanced as indicated therein and thereafter the entries would be of use as corroborative evidence. The same question came ....
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....rly kept in the ordinary course of business and that, therefore, all entries therein should be considered to be relevant and to have been prove, said that the rule as laid down in Section 34 of the Act that entries in the books of account regularly kept in the course of business re relevant whenever they refer to a matter in which the court has to enquire was subject to the salient proviso that such entries shall not alone be sufficient evidence to charge any person with liability. It is not, therefore, enough merely to prove that the books have been regularly kept in the course of business and the entries therein are correct. It is further incumbent upon the person relying upon those entries to prove that the were in accordance with facts. The evidentiary value of entries relevant under Section 34 was also considered in Hiralal Mahabir Pershad (supra ) I.D. Dua, ]. (as he then was) speaking for the Court observed that such entries though relevant were only corroborative evidence and it is to be shown further by some independent evidence that the entries represent honest and real transactions and that monies were paid in accordance with those entries. A conspectus....
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.... transaction carried out by Shri Sohanraj Mehta C & F of Karnataka Region of RMD Group. After analyzing the issue exhaustively as detailed in the assessment order as well as in the appellate order under dispute, a sum of Rs. 57.5 lakhs in cash as evidenced by the seized documents was treated as unaccounted receipt in the hands of the assessee and, accordingly, added to the income of the assessee for the period under consideration by the AO which has been subsequently sustained by the learned CIT (A) for the detailed reasons recorded in his appellate order which is under scrutiny. 7.1. Admittedly, the whole proceedings were initiated on the strength of a statement of a third party (Shri Sohanraj Mehta). The purported seizure of slips, loose sheets etc. at the premises of a third party contained only the names, but, not other details such as their identity, addresses, contact numbers etc. On a perusal of the statement, it is clear that the payments made were to the persons whose names were appearing on the right side of the papers (sheets) which were paid to those persons on the instructions of PRD & RD. Moreover, against the names of Mustufa & Taufik, it was specifically wr....
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....o you, I once again state that all my statements recorded during the search proceedings on 10.9.2009 and my statement dated 10.8.2011 recorded at Bangalore before Deputy Commissioner of Income-tax, Central Circle 2(2), Bangalore is retracted un- conditionally by me, it being improper."[Refer: Pages 225 - 27 of the assessee's submission dt.12.12.2012]. 7.4. Thus, there is force in the assessee's contention that he should have been afforded an opportunity to cross-examine the third party [ Shri Shohanraj Mehta] since his statements on oath were coupled with inconsistency, he retracted his earlier statements and, thus, not above the board. 7.5. Moreover, the assessee's plea for permission to cross examine Shri Sohanraj Mehta at the assessment stage was not conceded by the AO on the ground that - "[On page 9 CIT (A)] 2.8........................................................................... Comments of the AO: (ii) Opportunity of cross examination of Shri Sohanraj Mehta: 'The assessee was provided with the copy of the statement of Shri Sohanraj Mehta recorded by the ADIT (Inv), Pune, along with documents on which his statement was....
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..... Though the AO has placed reliance upon the statements of MV and GC for the purpose of taxing the amount in the hands of the assessee, despite specific request being made by the assessee for cross- examining both the said persons, the AO has not permitted the assessee to cross-examine them. In the circumstances, no reliance could be placed upon the statements of the said persons as the assessee had no opportunity to cross-examine them. The statements made by the aforesaid persons would have no evidentiary value and as such, would not be admissible in evidence. Further, though the said MV has stated that he has paid Rs. 60 lakhs to the assessee on behalf of one GC, the said amount has not been taxed in the hands of GC. Moreover, no evidence has been adduced to indicate that any transaction in relation to the land in question has actually taken place. The Tribunal has rightly found that the basis for making the addition in the case of the assessee is merely a bald statement of MV, which is not corroborated with any documentary evidence found at the time of search, either in the case of S or MV or the assessee. No plea to the effect that the impugned order of the Tribunal suffers fro....
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....levant material has been ignored. The conclusion arrived at by the Tribunal on the basis of the findings of fact recorded by it cannot in any manner be said to be unreasonable. In the aforesaid premises, the impugned order of the Tribunal being based upon findings of fact recorded by it upon appreciation of the evidence on record, which findings have not been dislodged by the revenue by pointing out any evidence to the contrary, therefore, does not warrant any interference." 7.9. Taking into account the submissions of the assessee, the stand of the AO, reasoning of the CIT (A) in sustaining the action of the AO and also in conformity with the rulings of the Hon'ble jurisdictional High Court (supra), we are of the considered view that that learned CIT (A) was not justified in sustaining the addition of Rs. 57.5 lakhs made by the AO in the hands of the assessee for the following reasons: (i) that the learned AO had solely depended upon the information received from the Investigation Wing of Pune; (ii) that the AO had failed to substantiate the same with any credible documentary evidence to the effect that the assessee had indeed received the alleged cas....
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....s dismissed and ground No.2 with respect to addition on account of undisclosed income is allowed in favour of the assessee." 50. We find the Bangalore Bench of the Tribunal in the case of DCIT Vs. H.S. Chandramouli (Supra) had also an occasion to decide an identical issue and deleted the addition by observing as under : "13. We have considered the submissions of the learned DR. It is seen that the document in question was seized from the possession of one Mr. Sohanraj Mehta. The seized document makes a reference to the name of the assessee and a figure of Rs. 22.75 lakhs appears against his name. As to whether this document evidences payment of Rs. 22.75 lakhs to the assessee is a moot question. There is no basis set out in the order of the AO for coming to the conclusion that the seized document evidences receipt of money by the assessee from Sohanraj Mehta. The presumption u/s. 292C of the Act is only with reference to the person searched and it cannot be extended to the assessee. There is no corroborative evidence or statement of Sohanraj Mehta relied upon by the AO, to the effect that a sum of Rs. 22.75 lakhs was paid to the assessee. The assessee has categori....
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....nvolving the assessee to the alleged receipt of Rs. 50 lakhs, reopening in the hands of the assessee under section 147 of the Act is not proper and he accordingly annulled the assessment. 4. Aggrieved the Revenue has preferred an appeal before the Tribunal and reiterated its contentions. During the course of hearing, a specific query was raised from the ld. D.R. as to what evidence they have collected during the course of search or thereafter, on the basis of which the Assessing Officer has formed a belief that the income chargeable to tax has escaped assessment in the hands of the assessee. No satisfactory answer was furnished by the ld. D.R. We have also carefully perused the seized documents and we find that there is a debit entry of Rs. 50 lakhs in the name of Mlik Kannauj, but this entry does not indicate that the amount of Rs. 50 lakhs was given to the Managing Director of the assessee. There may be hundred of Malik in Kannauj but on the basis of this dumb document, the reopening of assessment in the hands of the assessee is not permissible. Moreover, the searched party has also examined Shri. Sohanraj Gupta and the statement is also placed on record and at nowhere S....
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....us, the whole asstt. framed u/s 147 is hereby annulled, While taking this view, I am fortified by the decisions of the Hon'ble Apex Court in fie case of CIT vs Daulat Ram Rawat Mull (87 ITR 349) wherein, it was held: 'there should, in our opinion, be some direct nexus between the conclusion of fact arrived at by the authority concerned and the primary facts upon which the conclusion is based. The use of extraneous and irrelevant material in arriving at that conclusion would vitiate the conclusion of facts.............................." In the result, the appeal is allowed." 5. Since we do not find any infirmity in the order of the ld. CIT(A), we confirm his order." 52. Similarly the Lucknow Bench of the Tribunal in the case of DCIT Vs. Pawan Kumar Agarwal (Supra) has held as under : "5. We have considered the rival submissions. We find that the issue in dispute was decided by learned CIT(A) as per para 7 & 7.1 of his order, which is reproduced below for the sake of ready reference:- "7. That vide grounds No. 3 to 7, assessee has challenged the additions of Rs. 1,13,40,000/- made on account of alleged undisclosed income. I have ca....
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....II, Kanpur but evidences are not collected or placed. Copies of the statements, on the basis of which additions has been made, were not provided nor was the opportunity of cross- examination given to the appellant. The assessing officer merely summarized the salient features of the report of the ADIT (Inv.)-III, Kanpur and thereafter summarily rejected the reply of the appellant as not satisfactory. Learned counsel for the assessee, on the other hand, contends that neither the said Shri Shobhan Raj Mehta was allowed to be cross-examined nor a copy of his statement was given despite several requests. The AO's contention to the effect that the contents of the statement were made known to the assessee, is not a compliance of mandatory requirement to provide the assessee incriminating material to defend its own case and therefore it can categorically be held that: (i) Statement of Shri Shobhan Raj Mehta was not given to the assessee. (ii) Beyond the belief of presumption on the information supplied by the ADIT(Inv.)-III, Kanpur, further evidences are not found to corroborate the additions. (iii) Cross-examination of Shri Shobhan Raj Mehta was not allowed.....
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....t the assessee's business premises as well as at the business premises of RMD Group. No evidence of any unrecorded sale by the assessee or unrecorded purchase by RMD Group was found. Thus, when, despite search at the premises of seller and buyer, no evidence of any unrecorded sale or purchase is found, in our opinion, merely because in the chits found at the premises of some third party with whom the assessee has no business dealing, it cannot be presumed that the assessee is making sales outside books. Moreover, as per chits found from Shri Sohan Raj Mehta, the payment made to the assessee is only Rs. 9 lakhs and not Rs. 9 crores. The department has also relied upon the statement of Shri Sohan Raj Mehta. It was pointed out by the learned counsel that Shri Sohan Raj Mehta retracted his statement. However, as per Revenue, Shri Sohan Raj Mehta has retracted his retraction affirming the original statement. On these facts, the learned CIT(A) has come to the conclusion that the statement of Shri Sohan Raj Mehta cannot be relied upon because he is frequently retracting his statement. Moreover, a statement of a third party cannot be used against the assessee unless the assessee is all....
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....fficer has dealt with this letter but he has not given any reason for not allowing the assessee an opportunity to cross-examine Shri Sohan Raj Mehta. Similarly, he has neither supplied the copy of retraction of his statement nor dealt with the retraction in the 9 ITA- 5149/Del/2012 assessment order. It is only in the remand report he has mentioned that Shri Sohan Raj Mehta has retracted his retraction also. Considering the totality of above facts, we entirely agree with the learned CIT(A) that the statement of Shri Sohan Raj Mehta cannot be used against the assessee and, similarly, the chits found from the third party, with which the assessee has no dealing, cannot be used against the assessee in the absence of any corroborative evidence. That merely because some excess stock was found in the survey for which separate addition has already been made, it cannot be further presumed that the assessee made sales outside the books, specially when the survey was followed by the search and neither during the course of survey nor during the course of search, any evidence of sale outside the books was found. In view of the totality of above facts, we do not find any justification to interfer....
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..... Lacchman Dass Oswal [(1980)126 ITR 446(P&H)]. 5.3 According to us, the additions made by the Assessing Officer were not justified in the facts and circumstances vis-à-vis of the assessee. As discussed earlier, during the course of search in the case of Dhariwal Group, the only documents found on the basis of which the addition u/s 69A has been made in the case of the assessee are in the form of two loose papers wherein amounts of Rs. 4.80 Crores and Rs. 30 lacs were noted against the name "Mr. Pradeep Runwal". Apart from this, no evidence has been found to suggest that the assessee had actually received the said amount or that the assessee had entered into any transaction with Dhariwal Group. There is no evidence on record to suggest that the assessee has previous business relations with the Dhariwal Group. In the absence of any documentary evidence to suggest the same, it could not be presumed that the amounts reflected in the loose papers were the income of the assessee received from Dhariwal Group. It has been the consistent stand of the assessee that there may be many persons of the name Pradeep Runwal in Pune and there was no specific evidence to suggest that....
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....vidence to that effect. 5.6 Without prejudice to the above, the learned Authorized Representative submitted that the Assessing Officer was not justified in making the additions by relying on the provisions of section 114 of the Indian Evidence Act. The concerned Assessing Officer has referred the aforesaid section which states that the court may presume that the evidence which could be and is not produced would, if produced be unfavourable to the person who withholds it. It is pertinent to mention this rule applies to the cases wherein it is evident or an established fact that a particular evidence or document was in possession of the assessee. For example, an owner of a land may well be expected to be in possession of a 7/12 extract of the said land in order to check whether the said land was used for agricultural purposes. In the present case, the provisions relied by the Assessing Officer are not applicable, the assessee is not withholding any documents. The case of department is that the amount mentioned on the seized paper found with the Dhariwal Group indicates that the assessee has received the amount, therefore, the burden was on the Assessing Officer to establish ....
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....ute. The issue related to whether the receipts were received from genuine lenders or whether the investments or receipts were a part of the disclosed sources of income of the assessee. We find that in the present case, the issue in question itself is whether rough noting on loose paper found in the course of search at the premises of third person could be assumed the income from the assessee as in the cases relied by the Assessing Officer. This fact has not been established in the case of assessee, therefore, the case laws relied by the Assessing Officer are clearly distinguishable on facts and hence, not applicable to the case of the assessee. 5.10 According to CIT(A), the name of the assessee appears on the seized papers and seized documents give a detailed and minute noting of the transactions of Dhariwal Group. He has stated that Shri Sohanraj Mehta has admitted that the documents were written by him and most of the papers were written in marwadi language. The CIT(A) referred to the fact that Shri Mehta had admitted that the papers belonged to Dhariwal Group. In para 4.3, the CIT(A) states that when the author of the paper has accepted the notings made by him, in that ....
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....has further relied upon ITAT Third Member decision in the case of Dhunjibhoy Stud and Agricultural Farm Vs. DCIT [(2002) 82 ITD 18 (PUNE)(TM)], In this case, the assessee was a builder and had sold flat to one Mr. Tanna. There was search on Mr. Tanna wherein a document was found indicating flat purchased from the assessee firm and the amount of cheque and cash paid. The amount of cheque paid was tallying with the books and therefore, it was held that cash was paid as noted on the paper. Mr. Tanna had also accepted the fact that cash was paid to the assessee. In these facts, ITAT held that since there was transaction between assessee and Shri Tanna and also the fact that the amounts paid by cheque tallied, the addition was rightly made. The assessee rightly submitted that the said decision is not applicable to the facts of the present case. Firstly, there is no transaction between the assessee and Dhariwal Group. Secondly, there is no corroborative evidence found which could suggest that the assessee had received any amount. The Assessing Officer and CIT(A) have also not brought on record any evidence to suggest that the payment was made to the assessee. Accordingly, considering the....
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....e reasons given by the A.O. in this regard are without any basis and support. The affidavit filed by Shri Kolhe remained uncontroverted and which is against the settled legal position on the issue that the contents of the affidavit be rejected by confronting the same to the deponent which is missing in this case. Nothing was shown by the A.O. that there was any other material co related to the seized documents. The A.O. was not justified in rejecting the contents of the affidavit as mentioned above. The A.O. further relied on the presumptions u/s 132(4A) of the Act on the ground that this section was very clear that the contents of book of account and other documents may be presumed to be true and presumption can be drawn even on the third person who was not searched u/s 132 of the Act. The A.O. further rejected the submissions given by the assessee in his paper book dated 28.12.2007 reiterating the same stand. The A.O. has drawn inferences and presupposes relying on surmises and conjectures. The ITAT Mumbai Bench in their decision in the case of Straptex (India) Pvt. Ltd. [84 ITD 320 (Mum), clearly held that the presumption u/s 132(4A) is applicable only against the person from wh....
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....e considered opinion no addition in the hands of the assessee can be made. Since it is held that the assessee has not received any amount, therefore, the question of taxing the same u/s.56(2)(vi) as held by CIT(A) does not arise. In this view of the matter, we set aside the order of the CIT(A) and direct the Assessing Officer to delete the addition of Rs. 1 crore for A.Y. 2006-07 and Rs. 20 crores for A.Y. 2007-08. Grounds raised by the assessee on this issue are accordingly allowed. 56. Since the assessee succeeds on merit, therefore, the ground relating to validity of assessment u/s.143(3) r.w.s. 153A become academic in nature and therefore the same is not being adjudicated. 57. In the result, both the appeals filed by the assessee are allowed." 21. Since the facts of the instant case are identical to the facts in the case of Shri Vinit Ranawat (Supra) to which both of us are parties, therefore, following our decision, we hold that addition u/s.69A is not warranted in the hands of the assessee either for A.Y. 2004-05 or for A.Y. 2005-06. In view of the above, we set aside the order of the CIT(A). 22. Since the assessee succeeds on merit the other grounds r....
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....ssment so framed was considered by him as erroneous and prejudicial to the interest of the revenue. He accordingly issued a notice u/s.263 dated 06-03- 2014 asking the assessee to explain as to why the assessment for A.Y. 2005-06 dated 17-12-2011 should not be set aside and fresh order be passed. The assessee made elaborate submissions stating that various details called for during the assessment proceedings were provided vide submission dated 23-11-2011. It was brought to the notice of the AO that the deployment of funds relates to the period 01-07-2004 to 31-07-2004 which falls in the previous year relevant to A.Y. 2005-06 and therefore the reopening for the other years is without jurisdiction. 26. The AO has in his wisdom after due consideration of the material produced before him brought the amount to tax in A.Y. 2004- 05 vide order passed on 17-12-2011, i.e. on the same day on which the order was passed for A.Y. 2005-06. Thus, there is clear application of mind on the part of the AO in so far as the year of taxation is concerned having chosen to tax it in the earlier year. It was argued that the seized document merely indicates only deployment of funds and it does not indic....
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....gh Court in the case of Grasim Industries Ltd. Vs. CIT reported in 321 ITR 92 he submitted that the Hon'ble High Court in the said decision held that when the AO takes a possible view while passing an order of assessment, the CIT cannot invoke jurisdiction u/s.263. Therefore, when the AO has adopted one of the course permissible in law or where two views are possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue unless the view taken by the AO is unsustainable in law. He accordingly submitted that the order passed by the Ld.CIT u/s.263 has to be set aside. 30. The Ld. Departmental Representative on the other hand strongly supported the order of the CIT. He submitted that the AO while passing the assessment order has not given any reason at all as to why he is making the addition in A.Y. 2004-05 instead of A.Y. 2005-06. Therefore, the order is erroneous as well as prejudicial to the interest of the revenue. The AO in the instant case has omitted to make proper application of mind. Even the CIT(A) has also held that the income pertains to A.Y. 2005-06. Therefore, the order of t....