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2013 (6) TMI 792
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....nvestment of the assessee of Rs. 4,22,30,000/- in Avis Motors Pvt. Ltd., wherein assessee's wife and son are Directors. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in coming to the conclusions by overlooking the fact that Shri Haren Chokshi has never specifically denied the transaction. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in ignoring the business connection between the party from whose premises the papers are found and the assessee, while accepting the assessee's version regarding the notings on the paper." 3. The facts are that the assessee is a Doctor by profession. His wife, Mrs. Kailash Tiwari and son, Mr. Anand Tiwari are directors in M/s Avis Motors Private Limited. 4. There was a search and seizure operation on the premises of Mr. Haren Choksi and Mr. Harshil Choksi on 05.10.2007, from where certain loose papers and other documents were found and seized. One such document was a loose paper no. 165, wherein certain transaction details were noted, pertaining to some investment in Avis Motors, aggregating to Rs. 1,22,30,000/- in cheques, and Rs. 3,00,00,000/- in cash. W....
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....essee had nothing to do with any of the transactions. 7. The assessee also placed before the CIT(A) copies of assessment orders of Avis Motor. Mr. Anand Tiwari and Mrs. Kailash Tiwari for assessment year 2007-09 (i.e. the impugned year) to show that investments and monies were accepted in the names of the two directors of Avis Motor, i.e. Mr. Anand Tiwari & Mrs. Kailash Tiwari. 8. The CIT(A), observed 3.4 The assessment status of A.Y. 07-08 in the cases of Appellant's wife and son is seen. Appellant has submitted that investment in Avis Motors by his wife, son and Avis Motors have been accepted. On enquiry during appellate proceedings, Appellant has submitted that he was not a guarantor for Avis Motors nor had he hypothecated any of his assets for any loans by said company. Appellant's monies in the joint a/c. of Appellant with his son and used by the son are shown as loans given to son. The monies deposited by Appellant in the joint accounts with his son and wife have been enumerated by Appellant. Appellant submits that AO disregarded facts of the case entirely and regardi....
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....Appellant's denial of the contents of loose paper no.165 does not hold good. On this basis, AO added the entire sum of Rs. 4.223 Cr in Appellant's hands. 2.4.1 A study of this loose paper no. 165 shows that period below names of Harshil Choksey and Haren Choksey is 23.6.06 to 20.6.07. Below Bhupinder Singh it states 2006-07. There is no period mentioned against or below Appellant's name. Further, against the total of Rs. 4.223 Cr. shown as contribution by cash and cheque against Appellant's name, a sum of Rs. 4,67,08,371/- i.e. Rs. 4.67 Crs. is shown as 'less to be contributed' - i.e. the narration does not mention any contributed amount but only states "less to be contributed'. The bracketed figure thereafter is 'balance to be contributed' Rs. 44,78,371/-. The bottommost figures also show percentage to be contributed by Anand Tiwari at 40% at Rs. 4,67,08,371/- i.e. the figure mentioned against Appellant's name at 'less to be contributed." Paper no. 165 indicates that the sum of Rs. 4.67 Crs. had to be contributed by Appellant and makes no mention of amounts paid by Appellant. It is seen that the AO has not identified the cheque payment of Rs. 1.223 Cr. from any bank ac....
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....d investment by; him. 2.4.4 In this background, it is held that AO has not established any investment indicated against Appellant's name on loose paper no. 165 as having seen made by Appellant from undisclosed sources or that the said investment was undisclosed by Appellant. The reason for making the addition as stated by AO is inadequate to determine undisclosed investment in Appel1ant's case. The addition having been made on inconclusive facts, arguments and evidence and relying only on partial Information on page No. 165 is not sustainable in facts and law. It is consequently deleted". 9. The CIT(A), thus deleted the addition made by the AO. 10. Against this order, the department is in appeal. 11. Before us, the DR primarily relied on the order of the AO and reiterated that Avis Motor was owned by wife and son of the assessee and without whose help and contribution, the project would not have got underway. He further submitted that once the cheque entry in the books had been corroborated, cash entry in the same paper also had to be presumed to be correct and this contrib....
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....Choksey's place. It did not contain the signatures of Avis Motors P. Ltd's Directors viz. Appellant's wife and son. Assessee has denied entries made in his name and other strong objection has been taken against it, even before the AO. These objections and arguments, coupled with the facts of the case was necessary and incumbent upon the AO to deal with. This has not been done, as is evident from the reliance placed by the AO on only two of the figures on the impugned loose paper no.165. The AO in the assessment order has not been able to precisely indicate any facts or evidence to conclude that contribution of the said sum of Rs. 4.223 Cr. (by cash and cheque) has been made by assessee, during the impugned year. The only reliance placed by the AO, that the assessee's wife Mrs. Kailash Kumari has accepted the amount of Rs. 1.54 crore, shown in the impugned paper, as paid to her by Mr. Bhupinder on paper no. 165 could, by itself cannot conclude that contribution of the said sum of Rs. 4.223 cr (by cash and cheque) has been made by the assessee during the impugned year. This by itself cannot be the only criterion for the addition to have been made as undisclosed investment by the asse....
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..... 13,48,000/- & Rs. 9,92,000/- respectively. When the contents of the document were confronted to the assessee, it was stated by the assessee that the contents of the loose papers seem to be some rough working estimates upon which, assessee was queried, then how the amounts written against the assessee's wife Smt. Kailash Kumari Tiwari and his son Shri Anand Tiwari in the same bunch of seized loose papers tallied with the their books and accepted as such by them in their respective assessments. According to the AO, which ultimately knocks down the assessee's claim that the contents of the loose papers are rough workings. To this, assessee stated, vide submissions dated 24.12.2010, are as under: "the loose nos.,56 and 57 appear to be rough working estimates. These papers do not belong to me and / am not aware what is mentioned in the loose papers. Although, the name Dr. Tiwari appear in those papers, it does not mean that they belong to me or the amounts mentioned therein are pertaining to me. Further, as regards the amounts written against my wife Mrs. Kailashkumar Tiwari and son Shri Anand Tiwari in the same bunch of seized papers. / would like to stated that certain cheques ha....
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....f search & seizure action in their case. On going through the page 57, it is seen from the page 57 that "DRAFT" word has been written and mentioned on top of this page which gives the indication, that this page appears to be related to some rough working of project proposal being considered. The total amount at page No 57 is appearing at Rs. 66,42,000/- out of Rs. 33,72,000/- is paid and balance of it shown at Rs. 33,72,000/- as payable out of which 13,48,800/- was against the name of Dr. Tiwari. Similarly, as per page no. 56, the amount of Rs. 4,80,000/- is payable out of which Rs. 9,97,000/- was supposed to be paid by Dr. Tiwari. The pages does not indicate name of project or building to be constructed or built and by whom. The AO has also not brought on record any material evidence to suggest that Dr. Tiwari, the appellant, has made investment in the Avis Motors P. Ltd. These loose papers did not contain the signature of the Avis Motors P. Ltd. Directors viz, appellant's wife and son. It is also fact that these are not in the handwriting of the assessee or his family members. It is further seen that this is rough working which appears to be a estimate for a proposed project wher....
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.... these papers were seized to establish that the investment of Rs. 23,40,800/- was actually made. The AR relied in the case of Dilshad Trading Co. 49 ITR 318, wherein it was mentioned that for invoking section 69B, the assessee himself have made investment and he must have found making such investment exceeded the amount recorded in the books of accounts or the assets offers no explanation about the excessive amount. The Tribunal held that the basic dings which is to be recorded are clear and cogent material in respect of the amount explained by the assessee and the onus is on the deportment that the assessee has shown expended extra amount. However, in the instant case, the AO has failed to bring on record any material to justify the conditions laid down in the aforesaid decision of the Tribunal. The other case laws relied by the AR are also supports the case of assessee. Therefore, in absence of any cogent material that figures appearing are actual or part of it appears in balance sheet or the amount which was to be contributed or indicated appellant's name. Therefore, the reasons for making the addition as stated by the AO are inadequate, unestablished, inappropriate to determ....