TaxTMI 
TaxTMI 
2013 (6) TMI 792
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....ors 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 ₹ 1,22,30,000/- in cheques, and ₹ 3,00,00,000/- in cash. When the contents of the document was confronted to the asses....
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....itted 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 regarding application of any tests regarding the genuineness of the facts submitted by the Appellant AO resorted to a very casual and easy approach by relying on a unsigned piece of paper found during course of a search in the case of a third party from the premise of that third party which was in no way related to Appellant. It was submitted that the onus was on the AO to prove that such investments were made by Appellant. Whereas AO has not been able to bring any material on record to prove that investment, was made by Appellant neither by way of cheque amounting to ₹ 1.223 Crs. nor of cash amount of ₹ 3 Cr....
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....ion any contributed amount but only states "less to be contributed'. The bracketed figure thereafter is 'balance to be contributed' ₹ 44,78,371/-. The bottommost figures also show percentage to be contributed by Anand Tiwari at 40% at ₹ 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 ₹ 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 ₹ 1.223 Cr. from any bank account of Appellant during the previous year relevant to the impugned year. The assessment order (impugned) also reflects no dissatisfaction or objections of the AO with regard to any of Appellant's bank account including joint accounts with his wife and son. In fact, this payment by cheque has not been identified from any of Appellant's bank accounts whether disclosed by him or not. In so far as cash shown against Appellant's name is concerned, the assessment order does not indicate any discrepancy in Appellant's details/financial statements etc. or of any unaccounted money or receipts, which would lead to....
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....d". 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 contribution is proved to have been made by the assessee. The DR also submitted that the unsecured loans in the balance sheet tallied with the entries in the impugned paper. 12. The AR supporting the order of the CIT(A), pointed out that the paper was found from the premises of a stranger and from the fact of the document, it can be seen that it was an estimate and the fact, as proved from the supporting documents show that no payment or investment was made by the assessee. 13. On the query from the Bench with regard to the cash flow, the AR produced the same, wherein, it was shown that only ₹ 15,00,000/- was given by the assessee to the son, Mr. Anand Tiwari to be paid into Avis Motor. T....
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....ring the impugned year. The only reliance placed by the AO, that the assessee's wife Mrs. Kailash Kumari has accepted the amount of ₹ 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 ₹ 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 assessee. 18. In this background, and as per the cash flow submitted, which does not establish 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 the assessee. The reasons, for making the addition, by AO are inadequate to determine undisclosed investment. The addition having been made on inconclusive facts, arguments and evidence and relying only on partial information cannot be sustained. 19. In our opinion, the CIT(A) was correct in employing the facts and law to delete the addition, which we sustain. 20. In the result the appeal filed by the department is....
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....e 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 have been received by them from Mr. Harshil Choksey and Mr. Bhupinder Singh in pursuance of agreement to sell the premise on the first of the building proposed to be constructed by the Company M/s. Avis Motors Pvt. Ltd. wherein both are directors. The copy of the said agreement has already been submitted in their assessment proceedings. Some of the said amounts may be matching against their names. But, it may please be noted that these papers are rough workings or estimates only and presumptive in nature. Although a few amounts may match with the presumptions it does not mean that other amounts would also pertain to me or my family members. I or my family members have not entered into an....
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.... 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 wherein no name of Avis Motors P. Ltd. is mentioned. It is also seen that these pa'-' does not contain full name or full initials of appellant but only refers as Dr. Tiwari. It is also seen that the amount shown was the draft working page which means that the amount was calculation only and at the same time it was unpaid which was to be contributed and paid in future. I also found that the AO has not brought on record any statement of Hiren Choksey to substantiate that the entries reflected in the name of Dr. Tiwari pertains to the appellant and the appellant has made any contribution towards these supposed future payments. No statement of the assessee was ever r....
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.... 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 determine the undisclosed investment in the name of the appellant. Thus, the addition made by the AO is not justified. It is also relevant to mentioned here that similar type of addition made in the case of appellant on account of loose paper No. 165 found and seized from Mr. Hiren Choksey for assessment year 2007-08 also stands deleted by the CIT(A)-3, Mumbai vide order No. ITA No. 328/09-10 dated 3.9.2010. Further, such type of addition made in the case of Avis Motors P. Ltd. were also deleted by CIT(A) -16, Mumbai vide his order dated 5.4.2010 These facts and finding of the appellate authorities, also shows that the additions were made based on third party mater....