TaxTMI 
TaxTMI 
2014 (4) TMI 1087
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....ration u/s 132 of the IT Act on the residential premises of the assessee on 24/07/2008. Consequent to notice u/s 153A of the Act, the assessee filed return of income on 13/10/2009 disclosing the details of income, which were already disclosed in the return filed originally on 29/09/2003 wherein the income was declared at Rs. 6,27,500/-. Consequent to this, assessment was framed and the AO made the following additions: 1. Towards opening cash balance of Rs. 6,50,000/- 2. Towards cash received from Shri M. Koti Reddy(HUF) -Rs. 200000 3. Towards cash received from daughter - Rs. 100000 4. Towards cash received from wife - Rs. 800000 4. When the assessee carried the matter in appeal before the CIT(A) challenging the aforesaid additions, the CIT(A) deleted the same. 5. Aggrieved by the order of the CIT(A), the revenue is in appeal before us against the action of the CIT(A) in deleting the addition on account of opening cash balance of Rs. 5,05,000/- and Rs. 8,00,000/- from the wife of the assessee. 6. We have heard the arguments of both the parties, perused the record and have gone through the orders of the revenue authorities. Regarding the first ....
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.... Amount 18/12/2002 2,50,000 27/12/2002 1,50,000 17/01/2003 4,50,000 05/03/2003 5,00,000 26/03/2003 5,00,000 7.2 The AO disbelieved the claim of the assessee and observed that although the amounts were withdrawn no evidence was produced to show that the same was out of Stoneware Enterprises and no balance sheet was filed along with the return. He, therefore, made the addition. 8. On appeal, the CIT(A) directed the AO to delete the entire addition of Rs. 8,00,000/- by observing as under: "9.2 I have gone through the submission of the appellant and the observation of the AO. It appears that the AO has disbelieved the withdrawals from Stoneware Enterprises despite the fact that the concern existed and was assessed to tax for a long time. The details of returned income were filed in course of assessment proceedings. In course of search no evidence was filed to show that the withdrawals were applied for any other purpose. It was further noticed that during previous year 2002- 03 the appellant invested in purchase of land and this necessitated withdrawal of cash from the bank account. It may also be observed that if AO had any doubt about the source ....
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....ails of which are as follows: Central Bank of India, Kalyan Nagar Rs.6,00,000 Bank of India, Ameerpet Rs.4,00,000 Paid by Cash Rs.1,20,000 Rs.11,20,000 Less: refunded by the company Rs. 2,35,000 Rs.8,85,000 ========== The above amount comprised of payment as per document Rs. 5,85,000/- and the balance amount of Rs. 3,00,000/- was paid towards development. Reg. Fee Total value Official Amt. Actual value 26,790 18,69,540 10,67,000 34,67,750 50,415 35,18,167 5,67,000 18,42,750 --------- ------------ ------------ -------------- 77,205 53,87,705 16,34,000 53,10,500 16,34,000 - DD 77,205 ------------ ------------- 37,53,705 - cash 53,87,705 10,00,000 - paid ------------- 27,53,705 - cash The assessing officer has adopted that the above notings pertain to both Smt Padmavathi and her sister Smt Rama. Out of the above the assessing officer has worked out Rs. 35,18,165 as relating to Smt Padmavati. Out of this the assessing....
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....tion or by the assessing officer to corroborate the notings. 8. Although there is a mention that Smt Rama, another purchaser whose name is included in the above noting in the seized paper, has paid Rs. 12,75,750 the same does not tally in the consolidated notings as indicated above. 14.2 Finally it was submitted the document is not a speaking one and therefore the same should not be relied upon to draw adverse conclusion against the appellant. 15. After considering the submissions of the assessee in the context of notings in the diary and observations of the Assessing officer, the CIT(A) dealt the issue elaborately as under: 15.1 It is a rule of evidence that the best evidence about the contents of a document is the documentary itself. This principle is embodied in section 91 of the Indian Evidence Act which is followed by the Courts in the Income Tax proceeding. As per the provisions of section 91 when the terms of a contract, grant or other dispositions of property have been reduced in the form of a document, no other evidence is permissible to be given in proof of such terms. In the case of the appellant in the absence of corroborative evidence to support the notings....
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....of proof. There is no conclusive presumption. The Assessing Officer shall be specific about the nature of nexus of the material to the business of the assessee. The allegation of the Department is the material that reflected unexplained investment of the assessee in land. But they are not able to unearth any background with regard to these loose documents. Without any of this, the department has taken a view that the assessee is carrying on unexplained investment in land. The department not traced and examined any of the parties. The department cannot draw inference on the basis of suspicion, conjuncture and surmise. Suspicion, however strong cannot take place of material in support of the findings of the Assessing Officer. The Assessing Officer should act in a judicious manner, proceed with judicial spirit and should come to a judicial conclusion. The Assessing Officer is required to act fairly as a reasonable person and not arbi trarily and capriciously. Assessment made should have adequate material and it should stand on its own legs. The Assessing Officer without examining any party cannot come to the conclusion that the assessee made investment in land. The basis for add....
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....orroborated notings additions cannot be sustained. 15.4 In the case of ACIT Vs Satyapal Wassan 2007 295 ITR 80 (352) Jabalpur certain guiding principles have been evolved in the matter of evaluation of the contents of a loose sheets. These are: a) A document found during the course of a search must be a speaking one and without any second interpretation must reflect all the details about the transaction of the assessee. Any gap in various components for the charge must be filled up by the assessing officer through investigation and correlation with other materials found in course of search or on investigation. It is the duty of the assessing officer to carry out necessary investigation by correlating the notings with other documents regular books of accounts and records kept by the assessee. b) As a quasi judicial authority the assessing officer has to satisfy himself on the basis of cogent material either found in course of search or on post search enquiries that the transaction recorded in a document is a real but not an imaginary one and the same has actually taken place. a) The document should speak either out of itself or in the company of other material found o....
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....dicial precedents, in the absence of any enquiry by the assessing officer and the inconsistencies found in the notings, the addition cannot be sustained. He, therefore directed the assessing officer to delete the addition of Rs. 26,33,185/-. 16. Aggrieved by the order of the CIT(A), the revenue is in appeal before us. 17. We have heard the arguments of both the parties, perused the record and have gone through the orders of the authorities below. In this case, the addition was made by the AO based on the loose paper and the same, in our view, cannot be considered as conclusive evidence. As held by the CIT(A) in the impugned order "except relying on the notings in the loose slips, no attempt has been made to corroborate the notings with independent evidence. The parties to the transaction particularly the vendor has not examined. In every transaction there is a circle concerning two parties. It is not known whether the vendor has disclosed the consideration as noted in the diary. Therefore, merely on the basis of presumption and some uncorroborated notings additions cannot be made." In our opinion, the deletion of addition by the CIT(A) is justified and no interference is call....
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.... Rs. 31,04,000/- made based on the scribbling found in the seized material evidencing the unaccounted payments made by the assessee for investment in lands. 20. The assessee made the investment of Rs. 31,04,000/- in plots in Info City Malapur from one Sri B. Chenchall Reddy. In this transaction, the assessee had actually paid Rs. 3,68,000/- to the vendor. Out of this Rs. 2,36,000 was paid by DD and Rs. 1,32,000/- was paid by cash which includes registration charges. 20.1 The AO has adopted the consideration at Rs. 34,30,000/- on the basis of the following notings found in course of search. This is extracted in page 4 of the AO as under: "440 x 400' 400 x 4175 17,60,000 16,70,000 16,70,000 3,36,000 2,00,000 ------------ -------------- Advance 34,30,000 2,00,000 34,30,000 42,000 30,26,000 4,45,000 32,30,000 34,72,000 34,71,000 DD part 3,36,000 -------------- 28,94,000 KPR 4,40,000 50,000 24,49,000 42,000 4,40,000 5,500 ------------- 24,91,000 &nb....