AI Drafter 
TaxTMI 
TaxTMI 
2014 (10) TMI 938
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....me exclusively belongs to Shri Umesh Kajve and not to the asses see. The learned Commissioner of Income-tax (Appeals) before rejecting the explanation of the assessee must ought to consider that Shri Umesh Kajve is regularly assessed to tax before the search and has his own PAN, Sales Tax No. and Drug Licence No. and during the course of search no any document was found which could form the basis that Shri Umesh Kajve is only the name lender and income actually belongs to the assessee. 2. That on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in giving relief of Rs. 13,849 out of the total addition of Rs. 1,08,76,560 and thereby confirming the addition of Rs. 1,08,62,711 in the hands of the appellant being undisclosed profit of Shri Umesh Kajve Prop. M/s. Chhattisgarh Pharmaceuticals. It is submitted that the method of determination of profit in the hands of Shri Umesh Kajve is highly unjustified, purely arbitrary and on very higher side and was determined without appreciating the fact that in a trading concern and particularly in Government supply business where the sale is undisputed, the profit sh....
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....) being the undisclosed profit of Shri Umesh Kajve Prop. M/s. Netam Industries and M/s. Chhattisgarh Pharmaceuticals in the hands of the assessee substantively without considering the explanation offered by the assessee that the aforesaid income is exclusively belongs to Shri Umesh Kajve and not to the assessee. The learned Commissioner of Income-tax (Appeals) before rejecting the explanation of the assessee must ought to consider that Shri Umesh Kajve is regularly assessed to tax before the search and has his own PAN, Sales Tax Number and Drug Licence No. and during the course of search no any document was found which could form the basis that Shri Umesh Kajve is only the name lender and income actually belongs to the assessee. 2. That on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in giving relief of Rs. 1,05,684 out of the total addition of Rs. 2,49,07,842 and thereby confirming the addition of Rs. 2,48,02,158 in the hands of the appellant being undisclosed profit of Shri Umesh Kajve Prop. M/s. Chhattisgarh Pharmaceuticals. It is submitted that the method of determination of profit in the hands....
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....dition of Rs. 17,28,61,528 (including the income of Rs. 6,26,528 as shown in the original return of Shri Satyendra Sahu) being the undisclosed profit of Shri Satyendra Sahu Prop. M/s. Neptune Remedies in the hands of the assessee substantively without considering the explanation offered by the assessee that the aforesaid income is exclusively belongs to Shri Satyendra Sahu and not to the assessee. The learned Commissioner of Income-tax (Appeals) before rejecting the explanation of the assessee must ought to consider that Shri Satyendra Sahu is regularly assessed to tax before the search and has his own PAN, Sales Tax Number and Drug Licence No. and during the course of search no any document was found which could form the basis that Shri Satyendra Sahu is only the name lender and income actually belongs to the assessee. 4. That on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in not giving relief and confirmed the addition of Rs. 17,28,61,528 in the hands of the appellant being undisclosed profit of Shri Satyendra Sahu Prop. M/s. Neptune Remedies. It is submitted that the method of determination of ....
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....the learned Commissioner of Income-tax (Appeals) erred in holding that the amount of Rs. 1,21,80,000 given by the appellant to Shri Gaurav Sharma S/o Dr. Yogi Raj Sharma as advance as per the agreement to sale is to be added in the hands of Dr. Yogi Raj Sharma substantively without considering the fact that the aforesaid advance was given for the purchase of property situated at Gram, Raslakhedi and the same was shown by the assessee in the regular return filed and also included in the balance-sheet of the assessee and taxes due thereon has already been paid. It is submitted that when the appellant himself has declared this amount in the return of income and paid the taxes due thereon and the rate of tax is same for the appellant as well as for the recipient, question of adding the same in the hands of the recipient father is unjustified, unwarranted and bad in law." While the Revenue in its appeals has taken the following grounds : IT(SS) No. 383/Indore/2012 : On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in : "Deleting the addition of Rs. 21,00,000 made by the Assessing Officer as cas....
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....07 12,45,339 31-10-2008 18,76,86,028 2008-09 31-10-2008 1,78,26,510 8-11-2007 - 31-10-2008 3,04,46,558 The Assessing Officer on the basis of the documents found during the course of the search made the following additions in respect of Shri Umesh Kajve, proprietor of Netam Industries (NI) and Chhattisgarh Pharmaceuticals (CP) substantively in the hands of the assessee as detailed under in each of the assessment year : A. Y. Regular profit of these two concerns Bogus purchase in Chhattisgarh Pharma Bogus purchase in Netam Industries Total 2004-05 41,600 1,00,00,000 8,21,111 1,08,62,711 2005-06 - - 1,16,01,194 1,16,01,194 2006-07 86,681 - 2,47,15,477 2,48,02,158 2007-08 1,82,163 - 1,20,62,000 1,22,44,163 2008-09 - - - 2,58,988 Total 1,00,00,000 4,91,99,782 5,97,69,214 The Assessing Officer made addition in respect of the income of Shri Umesh Kajve on estimated basis in the hands of the assessee as he noticed that during the course of the search at the office and factory premises of HIPL at A5, Kasturba Nagar, Bhopal and 96A, Mandideep Ind....
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....recorded on November 27, 2009 as also details of returns of income filed by Shri Umesh Kajve in the assessment years 2004-05 to 2006-07. As per statement of Shri Umesh Kajve, he has not filed any returns in respect of M/s. Netam Industries or M/s. Chhattisgarh Pharmaceuticals. The only material supplied by M/s. Netam Industries to M/s. KAPL as per sale bill furnished are medical kits containing needle and syringe and destroy machines whereas Shri Umesh Kajve in his statement stated to have supplied antibiotic/antipyretic to M/s. KAPL. The Assessing Officer has observed that being proprietorship concern such ignorance was not possible for a real proprietor. Further, as per statement of Shri Umesh Kajve and detail shown by him in the returns of income it was found that he was drawing salary from M/s. Speed Automobiles. The Assessing Officer has observed that it was not understandable as to how a person who was a salaried employee was able to carry on business of such magnitude. Further, Shri Umesh Kajve was found to be unaware of name of the parties from whom purchases has been made or name of the employees working in M/s. Netam Industries. Shri Umesh Kajve as per statement of affair....
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....L and therefore was having business relationship. He was having separate office at D-18, BDA Duplex, Zone-1, MP Nagar but some work was done at the premises of HIPL as he was buying the medicines from HIPL also. The assessee did not have any financial control and has not made any investment. Even the assessee has also not introduced Shri Umesh Kajve while opening the bank account which is operated by Shri Umesh Kajve. He was the legal owner of the business belonging to these two concerns. There had been a search. No documents or any proof was found that the assessee derived any benefit or gain from Shri Umesh Kajve's business to establish determination of income of any other person in the hands of the assessee. The Department should prove the ownership and financial relation or financial interference of the assessee in the benami business. No such facts were brought on record. The Assessing Officer has misinterpreted the statement recorded in Hindi while translating it into English. The assessee has never stated that such business was carried out by him or profit earned from such business was surrendered by him. The assessee has simply stated that whatever income was earned on ....
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.... pad of Shri Satyendra Sahu. The documents as referred to by the Assessing Officer were found from the premises of HIPL. HIPL is a public limited company and is being assessed to Income-tax separately having independent entity. The Assessing Officer has wrongly held that these were benami concerns of the assessee. The additions were made on account of certain unverified purchases of these concerns treating them as bogus purchases. Even the profit was also added to the declared income. It was pointed out that the Madhya Pradesh Government placed orders through M. P. Laghu Udyog for supply of drugs and medical instruments to the following two Government controlled companies-(a) Karnataka Antibiotic and Pharmaceuticals Ltd. (Government of India Enterprise) and (b) Rajasthan Drugs and Pharmaceuticals Ltd. (Government of India Enterprise). These companies made purchases from the open market. The concerns belonging to Shri Umesh Kajve and Shri Satyendra Sahu were amongst the persons who had to supply medicines/medical equipment on direction of the principal. They made purchases and supplied to the Government under instructions from the principal supplier on receipt of diversion letter fr....
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....ared Rs. 5.30 crores at my residence : I would not be able to give the breakup of three concerns now and after discussing with my chartered accountant, I shall give you the same in next ten days." In this regard, attention was drawn towards page 33 of the paper book which contains the original statement in Hindi. From the said English translation an impression has been given as concluded by the Assessing Officer and the Commissioner of Income-tax (Appeals) that the assessee has carried on the business in the names of Shri Umesh Kajve (Netam Industries and Chhattisgarh Pharmaceuticals) and Shri Satyendra Sahu (Neptune Remedies). It was vehemently contended that this was not correct translation from Hindi to English. For this, our attention was drawn towards the Hindi statement. Referring to the last sentence it was contended that this translation should read as "whatever I have taken from them as undisclosed income I have included in the statement I have made at my residence". Thus, it was stated that the translation made by the Assessing Officer with respect to the answer to question No. 24 gave a misleading impression as if these concerns belonged to the assessee while the a....
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....tal, i.e., investment in business (ii) Control over the business (iii) Destination of profit, i.e., who enjoys the benefit (iv) Intention of the parties (v) Whether burden of proof is discharged by the Department Reliance was placed by the learned authorised representative in this regard on the following decisions : (a) Krishnanand Agnihotri v. State of Madhya Pradesh, AIR 1977 SC 796 ; (b) Setabganj Sugar Mills Ltd. v. CIT [1961] 41 ITR 272 (SC) ; (c) Prakash Narain v. CIT and WT [1982] 134 ITR 364 (All) ; (d) Ladhu Ram Taparia v. CIT [1962] 44 ITR 521 (SC) ; (e) Jaidayal Poddar v. Mst. Bibi Hazra, AIR 1974 SC 171 ; and (f) Union of India v. Moksh Builders and Financiers Ltd., AIR 1977 SC 409. It was contended that there had been search and no evidence was found that the assessee has investment in the alleged benami concerns. Neither the Assessing Officer nor the Commissioner of Income-tax (Appeals) has brought any such evidence. Our attention was drawn towards the balance-sheet available in the paper book at pages 91, 96 and 106. There is no interlacing, intermingling, interdependence ....
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...., sales tax licence, shops and establishment licence which are available at pages 320- 323. Address of these concerns, therefore, was totally different from the address of the assessee. In respect of para 5, page 25 in which it is mentioned that two bills showing address of Neptune at Mandideep and Neptune Remedies, Mandideep it was submitted that HIPL is located at Mandideep. The purchases made by Shri Satyendra Sahu from HIPL were directly lifted at Mandideep and therefore the transporter had mentioned the address of Mandideep. Attention was drawn towards question No. 10 which proves that address of Netam Industries was the office of Rajesh Jain which has been taken on rent. This fact has also been accepted by Shri Umesh Kajve in his statement that he established the business with the support of Rajesh Jain. Bank account of Shri Umesh Kajve has been introduced by Rajesh Jain and address of Rajesh Jain is available therein. The Assessing Officer did not examine Rajesh Jain so that it could have been proved whether it is a bogus concern of Rajesh Jain. Rajesh Jain is a chartered accountant. The assessee has nothing to do with the bank account of Shri Umesh Kajve. He is operating hi....
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....eptune Industries of Satyendra Sahu. For the purchases, certain examples are as under in respect of the documents referred to in the orders of learned AC and learned Commissioner of Income-tax (Appeals) that appear in the paper- book No. III. (i) C. P. PB 491 to 496 From HIPL LPS-33 PB 522 to 546 Under various documents LPS-11 from others. (ii) Direct supply order of M/s. Netam Industries showing the corresponding purchases : PB 446-457 Corresponding and other orders from Government. PB 458-477 Orders directly from District Civil Surgeons. PB 479-486 Including correspondence and bank drafts after deduction of sales tax showing corresponding purchases. Payments for purchases have been made by the respective concerns. No document was found to show that the purchases were made by the appellant on benami names. Kindly refer to 'facts' at the beginning of the synopsis. It given the year-wise figures of purchases made by S. Shri Umesh Kajve (NI & CP) and Satyendra Sahu (Neptune) that were held to be bogus by the Department and additions were made. The asses....
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....ere not verifiable. In this regard also, it is submitted that the delivery of goods was made to the consignee and the payments against the supply were made by the Madhya Pradesh Government or its concerned Department. This has been shown in the bank accounts of the respective concerns/persons. For the sales, certain examples are as under in respect of the documents referred to in the orders of learned AC and learned Commissioner of Income-tax (Appeals) that appear in the paper book-III. PB 547 to PB 567 LPS-12 under seizure. Relating to C. P. PB 497-506 LPS-3 -do- Relating to Netam Industries orders. PB 481 to 490. LPS-7. The files containing photocopies of purchase and sale vouchers of NI, CP, Neptune are being produced. These photocopies were supplied by the Department. These are voluminous documents. Paper-Book-III contains photocopies of documents that are mentioned in the orders passed by learned AC and learned Commissioner of Income-tax (Appeals). The sales are made only to the Madhya Pradesh Government as mentioned in para 2 under the heading "Mode of operation for Government supplies". Supplies/sales are not made to any ....
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....pal Corporation registered the establishment with effect from July 12, 2006 to December 31, 2010. PB 326 For Income-tax, the followings facts are submitted. PB 327-342 PB 343-344 Assessment year 2007-08 Returned on October 31, 2007 Income 6,26,528 Audited accounts dated October 16, 2007. Sales shown 35,31,64,152 PB 339 Return under section 153C filed on March 31, 2009 Income 6,26,528 Assessment dated December 29, 2009. Income determined is Rs. 17,28,61,528 relief given by the learned Commissioner of Income-tax (Appeals) Rs. 17,28,61,528. Totally deleted and assessed in the hands of Shri Ashoka Nanda. Appeal in this case is pending before the honourable Appellate Tribunal Appeal No. IT (SS) A/376/Ind/2012. This appeal is also fixed today for hearing. PB 382-383 He had been to Nagpur to consult his chartered accountant Shri S. K. Goyal. While returning on October 23, 2007, he lost the books for which police complaint was filed. Shri Umesh Kajve : PB 166 Madhya Pradesh State : Nil Vat registration. It is registered prior to July 1, 2013. It was changed to TIN number with effect from July 1, 2003. ....
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....ddress or they are not dealer of drugs, it very clearly shows that these supplies are made by certain persons who do not wish to come to light for reasons best known to them. Payments were made to these persons and there is no evidence to show that the payments were not made or they were subsequently returned. As per delivery challans, the Department did not choose to verify the delivery from the Madhya Pradesh Government from whom the payments for the goods were received. Payments by Government itself proves the sales. Therefore, the learned Commissioner of Income-tax (Appeals) was not justified in holding that purchases were bogus. (vi) Employees : Salary was paid to employees. N. I. Audited accounts. AY Salary Staff Welfare PB 2005-06 1,69,525 25,362 246 2006-07 5,25,254 1,52,352 281 2007-08 2,55,658 6,526 PB 154 of Kajve's Appeal No. 378-381/Indore/2012 Neptune Remedies : 2007-08 76,550 19,582 PB 339 (vii) Papers/documents found : Also mentioned in Commissioner of Income-tax (Appeals) pages 11 and 19. CIT(A) Page 11 PB 434....
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....18 Bank slips for CP. PB 519-520 Bank statement and bank transaction-CP. PB 521 Bank slips for CP. CIT(A) Page 19 PB 522-546 LPS-11 PB 525 Purchase from RDPL to CP. CIT(A )Page 19 PB 547-567 LPS-12 Sale-bills from CP to various Government bodies. CIT(A) Page 19 PB 568-569 LPS 2/13 Letter from Linco SIC Pvt. Limited to NI. CIT(A) Page 19 PB 570-586 LPS-2/11 Details supply of medicines to Government agencies. PB 578 Two DDs to NI and to HIPL. PB 579 Order to MPLUN from CMHO. PB 580-581 Order to Netam from CMHO & CS. PB 582-583 Letter of payment by DD to NI from CS, Damoh and copy of DD. PB 584 Letter of payment from C. S. Raisen to NI. PB 585-586 Receipt issued by Netam to CM and HO, Morena. CIT(A) Page 19 PB 587-588 LPS-II Blank letter pad of Neptune/Remedies. PB 589 Annexure to MA. Agreement between KAPL and NP. CIT(A) Page 19 PB 590 LPS-116 HIPL. Rates/Estimate. AO Page 31-33 PB 591-593 LPS-IV/94 to 96. At the top of all these documents, the following words have been printed. "From the desk of P(C)" LPS IV/94 "From the desk of CFO" LPS IV/95....
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....les made by respective concerns. MPLUN correspondence and direct orders from LUN. Inspection of goods by authorities. Bills for supply of medicines/instruments pertaining to respective concerns. Correspondence/dealings with M. P. Public Health and Family Welfare Department with respective concerns. Delivery challans respective concerns. Payments made by Government and TDS certificates to respective concerns. Commercial tax-respective concerns. Some extracts of bank statements and pay-in-slips. (c) Kindly refer to submissions under the head "Intention of the Parties" that follows later. It shall be clear as to why these documents were found at the premises of the appellant. (viii) Power of attorney : The various concerns NI, CP, NR, UK or SS did not write any power-of-attorney to anybody for conduction of its business. The assessee was not a power-of-attorney holder for any of these concerns/persons. (ix) General including observations/findings of learned Commissioner o....
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....nbsp; No paper/document pertaining to Umesh Kajve or his concerns NI or CP were found at the premises of the assessee-appellant. For Satyendra Sahu, one blank letter pad only was found. Calcutta enquiries. The Inspector, deputed to make enquiries at Calcutta, reported that the supplier concerns were not available at the given addresses. It was submitted that major supplies were through brokers. Further, the payments were made for the purchases. Supplies were made to Madhya Pradesh Government. Payments for the supply were made by Madhya Pradesh Government. There is nothing against the concerns that the money came back to the concerns. No such report of any enquiry is there. Even in the case of HIPL, where share money was taxed as HIPL's own funds, no report or information is there that the money came from UK or SS. The bank accounts show the withdrawals for purchases that are undisputed transactions in the light of submissions made above. There is no nexus between the income of SS or UK and shares of HIPL. Annexures 1 to 14. CIT (A) Pages 22-23 In view of the facts mentioned above, it cannot be said that the assessee had absolute or any control ove....
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.... Mills Ltd. v. CIT [1961] 41 ITR 272 (SC) • Unity of control and management. • Conduct of business. • Inter-relation. • Source of capital. • Common books of account. • Possibility of one being closed without affecting the texture of other. 2. Prakash Narain v. CIT and WT [1982] 134 ITR 364 (All). • Source of capital. • Nature and possession of property. • Motive. • Position of parties and their relationship. • Custody of title deed. • Conduct of parties. 3. Ladhu Ram Taparia v. CIT [1962] 44 ITR 521 (SC). • Source of capital • Control. • Destination of profits. • Intension of parties. 4. Jaidayal Poddar v. Mst. Bibi Hazra, AIR 1974 SC 171 Locus classicus- • Source of consideration. • Nature of possession. • Motive. • Relationship. • Conduct. • Custody. 5. Union of India v. Moksh Builders and Financiers Ltd., AIR 1977 SC 409, Two tests. • Source of consi....
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....une Remedies. We also noted that the Assessing Officer has duly accepted sales of these concerns but made the addition in respect of purchases treating the purchases to be bogus and treated the income earned as belonging to assessee as in his opinion these concerns are benami concerns of the assessee. 2.4.1 Before deciding the issue whether these concerns are the benami concerns of the assessee, we would first like to deal with whether any addition can be made on account of bogus purchases when the sales has been duly accepted by the Assessing Officer in respect of these benami concerns. It is not disputed that these concerns have made sales to the Government undertaking namely Karnataka Antibiotic Pharmaceuticals and Rajasthan Drug and Pharmaceuticals Ltd. for supply of drugs and medical instruments. A person cannot carry on the business of supplying the drugs and medical instruments until and unless it is duly registered and having a drug licence. The Government undertaking will also not make purchases from any concern until and unless it is duly registered with the sales tax and Central sales tax authorities. The concerns which were held to be benami of the assessee no doubt ....
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....a Sahu are being assessed separately under the Income-tax Act. The concerns owned by them are having separate drug licences, sales tax registration. In the registration certificate issued by the Central Sales Tax Authorities in respect of Chhattisgarh Pharmaceuticals and Netam Industries, Shri Umesh Kajve has been shown to be the proprietor. Even in the drug licence which was issued, Shri Umesh Kajve has been shown to be the competent person as proprietor of Chhattisgarh Pharmaceuticals as well as Netam Industries. In the TIN number certificate issued by the Commissioner, Commercial Tax, Madhya Pradesh in the name of Netam Industries, Shri Umesh Kajve has been shown to be the proprietor. Shri Umesh Kajve has filed return much prior to the search. The return for the assessment years 2004-05 to 2007-08 were filed by Shri Umesh Kajve in which income in respect of Netam Industries and Chhattisgarh Pharmaceuticals were shown by him. Similarly, Shri Satyendra Sahu has shown income from business in the return filed for the assessment year 2008-09 in respect of Neptune Remedies. Shri Satyendra Sahu has been shown as proprietor in the drug licence, sales tax registration, shops and establis....
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....ng benami is upon the one who alleges benami. No absolute formula or acid test, uniformly applicable in all situations, can be laid down ; yet, in weighing the probabilities and for gathering the relevant indicia, the courts are usually guided by these circumstances : (1) the source from which the purchase money came ; (2) the nature and possession of the property, after the purchase ; (3) motive, if any, for giving the transaction a benami colour ; (4) the position of the parties and the relationship, if any, between the claimant and the alleged benamidar ; (5) the custody of the title deeds after the sale ; and (6) the conduct of the parties concerned in dealing with the property after the sale. The above indicia are not exhaustive and their efficacy varies according to the facts of each case. Nevertheless, the source whence the purchase money came is by far the most important test for determining whether the sale standing in the name of one person, is in reality for the benefit of another. The mere rejection of an explanation would not entitle the Department to claim that the consideration for the purchase of the property in the name of another was provided by the assessee. Apar....
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....e was dishonest because he had admittedly purchased one house benami in the name of his wife. No motive had been suggested for the benami purchases by the assessee. There was no material or evidence on record in support of the finding of benami recorded by the Tribunal. The purchases of the first three items of properties were not benami purchases for purposes of Income-tax. They could not be included in the total wealth of the assessee." This judgment also in our opinion supports the case of the assessee because in the case before us also the Assessing Officer has merely rejected the explanation of the assessee without bringing any evidence on record to support the case of the benami nature of the transaction. A finding regarding the benami nature is a finding of fact and it must be based on the relevant material on record. None of the circumstances as laid down under this judgment to prove the benami nature, has been established by the Revenue while treating the concerns belonging to Umesh Kavje and Satyendra Sahu to be the benami concerns of the assessee. 2.4.4 We have also gone through the decision in the case of Gulzarilal Rawat v. CIT [2003] 259 ITR 176 (Raj). In this c....
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.... in the case of Dhirajlal Girdharilal v. CIT [1954] 26 ITR 736 (SC). In this case it was held that (headnote) : "The question whether a Hindu undivided family is doing business in shares is a question of fact ; but if the court of fact whose decision on a question of fact is final, arrives at the decision by considering material which is irrelevant to the inquiry, or by considering material which is partly relevant and partly irrelevant, or bases its decision partly on conjectures, surmises and suspicions, and partly on evidence, then in such a situation clearly an issue of law arises. When a court of fact acts on material, partly relevant and partly irrelevant, it is impossible to say to what extent the mind of the court was affected by the irrelevant material used by it in arriving at its finding. Such a finding is vitiated because of the use of inadmissible material and thereby an issue of law arises." In this case also the honourable Supreme Court has categorically held that a finding of fact is final if it has been arrived at by considering the relevant material or evidence. The finding cannot be based on conjectures, surmises and suspicion. Therefore, the....
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....did not act on any material but acted on pure guess and suspicion. It is thus a fit case for exercise of our power under article 136." From the perusal of this decision also it is apparent that estimation of the gross profit or income cannot be based on surmises, conjectures or suspicion. This is a well settled law that the onus is on the Revenue to prove that M/s. Netam Industries, M/s. Chhattisgarh Pharmaceuticals and M/s. Neptune Remedies are benami concerns of the assessee and the assessee has made the investments as well as enjoyed the fruits therefrom. Therefore, this decision is applicable only to the extent that the addition cannot be based on surmises, conjectures or suspicion. 2.4.7 We have also gone through the decision in the case of Omar Salay Mohamed Sait v. CIT [1959] 37 ITR 151 (SC). In this case it was held that (headnote) : "The Income-tax Appellate Tribunal is a fact finding Tribunal and if it arrives at its own conclusions of fact after due consideration of the evidence before it the court will not interfere. It is necessary, however, that every fact for and against the assessee must have been considered with due care and the Tribunal must have gi....
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.... If the Revenue wants to treat it to be the benami concern of the assessee, in our opinion, in view of the decision of the Supreme Court, the onus is on the Revenue to prove that these concerns are the benami concerns of the assessee. 2.4.9 We have also gone through the decision in the case of L. Sheo Narain Lal In re [1954] 26 ITR 249 (All). In this case the question before the court was whether there was sufficient material on the basis of which the Tribunal could come to the conclusion that the wife was benamidar for the husband. While deciding this question the Allahabad High Court has held that there is no doubt that the burden of proof was on the Revenue to prove that the wife was a benamidar for her husband. The presumption must be that when the house stood in the name of wife, she was the owner thereof and it was for the persons alleging that she was merely a benamidar, to prove the allegation either by direct evidence or by substantial evidence. This case, in our opinion, will support the case of the assessee because in our opinion the Revenue has not brought any evidence on record that Dilip Enterprise is benami concern of the assessee. The assessee in his statement, h....
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.... partner was not able to satisfactorily explain the source of deposit. It was held that it will not automatically mean that the fixed deposit belong to the assessee-firm. 2.4.13 In view of the aforesaid case law, in our opinion, it is settled position of law that the onus is on the Revenue to prove that the concerns belonging to Shri Umesh Kajve and Shri Satyendra Sahu are the benami concerns of the assessee, that the assessee is having control and possession over these concerns, he is enjoying the fruits of these concerns and whatever income is generated, same has been received by the assessee. The Revenue, we noted, to prove these concerns to be the benami concerns of the assessee mainly relied on the statement of the assessee recorded on September 18, 2007-Question Nos. 24 and 25 of the statement of the assessee. These questions and answers are reproduced as under : We noted that the Assessing Officer has incorrectly translated the last sentence of answer to question No. 24 stating "whatever business had been carried out in these concerns I have declared all that as undisclosed income in the statement given at my residence". The correct translation could be "whatever I hav....
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....l purpose. It is, therefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income-tax Department. Similarly, while recording statement during the course of search and seizure and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, the Assessing Officers should rely upon the evidences/materials gathered during the course of search/survey operations or thereafter while framing the relevant assessment orders." 2.4.14 In view of these instructions it is apparent that it is a prevalent practice that even if there are no corroborative evidence, the search team pressurises the assessee to make declaration in the manner in which they like and therefore in the absence of evidence the additions made on the basis of such declaration does not stand in the eyes of law as there remains difference in the real income and the income declared in such forceful surrender to the extent as the d....
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....it belongs to him. It is only for certain purposes that the presumption under section 132(4A) has been enacted and not for all purposes including the assessment. Further this presumption is not conclusive. It is rebuttable. What amount of evidence one requires to rebut the evidence depends upon facts of each case. There is no rigid rule in this behalf. Sometimes mere statement of the assessee may be enough. The honourable Rajasthan High Court in the case of Addl. CIT v. Thahrayamal Balchand [1980] 124 ITR 111 (Raj) observed as under (page 117) : "The evidence which satisfied the Tribunal was the facts and circumstances of the case, as pointed out above what quantum of evidence would rebut a legal presumption in a given set of facts does not admit of any rigid rule. The evidence may be direct or circumstantial or both and a mere statement of the assessee may be enough in some cases. It does not raise a question of law." On the appreciation of the document which were found relating to these concerns we are of the firm view that it cannot be said that these are the benami concerns of the assessee as these documents do not satisfy the basic conditions are enumerated above f....
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.... indirectly proves that the concerns were not carrying on business and have not made any sales. Once the Assessing Officer has accepted the sales, in our opinion, the Assessing Officer is bound to allow the purchases. At the most, addition can be made only in respect of the profit embedded in the purchases. The whole of the purchases cannot be disallowed. Our aforesaid view is duly covered by the decision of the honourable Gujarat High Court in the case of CIT v. Bholanath Poly Fab Pvt. Ltd. [2013] 355 ITR 290 (Guj) wherein the honourable Gujarat High Court has held as under (headnote) : "Held, dismissing the appeal, that whether the purchases themselves were bogus or whether the parties from whom such purchases were allegedly made were bogus was essentially a question of fact. The Tribunal having examined the evidence on record came to the conclusion that the assessee did purchase the cloth and sell the finished fabrics. Therefore, as a natural corollary, not the entire amount covered under such purchases, but the profit element embedded therein would be subject to tax." 2.4.16 No contrary decisions were brought to our knowledge. We, therefore, delete the addition in r....
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....gratification and the figure 40 represents 40 lakhs. The Assessing Officer on the basis of the admission made by the assessee in the reply to question No. 6 that it represents assessee's unexplained income, added it as undisclosed business expenditure. When the matter went before the Commissioner of Income-tax (Appeals), the Commissioner of Income-tax (Appeals) also confirmed the addition. 4.1 We heard the rival submissions and carefully considered the same along with the order of the tax authorities below. We noted that during the course of the search the documents marked LPS I/6 was seized. On the top of this document in the handwriting of the assessee the following has been mentioned : BLA-10 CM-2 HM-3 PS-3 Patel-2 Total-20 Statement of the assessee was recorded. Question Nos. 6 to 8 which are the relevant question are reproduced as under : "Question No. 6 : Please go through the page No. 32 of LPS-I/6 which was seized from A-5, Kasturba Nagar, Bhopal during action under section 132 of the Income-tax Act and explain the handwritten entries on it. Answer : The abovementioned entries in the page No. ....
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..... 40 lakhs. Since the handwriting has also not been denied by the learned authorised representative, admission made by the assessee under free will and without coercion has to be accepted. Had it been dumb paper or contained rough noting, the assessee could have not come forward by explaining the denomination and making the surrender of the said amount as the figures are in the handwriting of the assessee. The assessee could have very well explained what the words represent. The assessee since even did not deny that it is his handwriting, the onus is on the assessee to prove what does these alphabets denote and why this has been written on this. In view of these facts, we are of the view that it is not a fit ground which warrants our interference. We accordingly confirm the order of the Commissioner of Income-tax (Appeals). Thus, this ground stands dismissed. 5. Ground No. 3 in assessment year 2008-09 relates to the sustenance of addition of Rs. 2,35,000. The brief facts relating to this addition are that the Assessing Officer made the addition on the basis of LPS I/9. This document was found and seized from the office premises of the assessee at A5, Kasturba Nagar, Bhopal. The ....
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....v Sharma are partners in Vinayak Properties which provides hostel facilities to the students of International Public School which is run by the assessee. The Assessing Officer thus was of the view that there are close financial relationship between Dr. Yogiraj Sharma and the assessee. During the course of search at the residence of Dr. Yogiraj Sharma cash amounting to Rs. 1,13,26,338 was found out of which Rs. 1,13,000 was seized. In the initial statement before starting the search Dr. Yogiraj Sharma admitted that whatever cash or gold jewellery was available at residence pertained to the family and no cash or jewellery of any other person was kept at his residence. At the time of final statement on September 7, 2007 when the question was raised about the cash, he stated that the cash belonged to his son and his son's business. When Gaurav Sharma was asked the question, in his final statement he explained that the cash found at the premises belonged to him and his mother generated through his business. When the specific source was asked for, it was explained to be the commission as also that loan of Rs. 15 lakhs from the assessee. Subsequently, after two months of the search th....
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....reement for the purchase of the property and voluntarily showed it as his income even in the return filed for the assessment year 2008-09 and paid the taxes. This income already shown cannot be added protectively or substantively. The money was paid to Gaurav Sharma and not to Dr. Yogiraj Sharma. If any addition is to be made substantively, it should be made in the hands of Gaurav Sharma. The Commissioner of Income-tax (Appeals) after considering the submission of the assessee confirmed the action of the Assessing Officer but observed that since the assessee himself voluntarily surrendered the sum of Rs. 1,21,80,000 and offered the amount for taxation, therefore, no interference is required. Accordingly, this ground stands dismissed. 6.2 We heard the rival submissions and carefully considered the same along with the order of the tax authorities below. We noted that the sum of Rs. 1,21,80,000 has duly been shown by the assessee in his return filed for aforesaid assessment year in consequence of the search and paid the taxes thereon. The return was filed by the assessee on October 31, 2008 at an income of Rs. 1,78,26,510 within the due date of filing the return. This is a fact tha....
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.... could have earned the income to make payment to Gaurav Sharma. 6.3 There had been a search in the case of Dr. Yogiraj Sharma but no evidence was brought on record or found which may prove the source from which Gaurav Sharma got the cash to the extent it was found at his residence. Merely that the father of Gaurav Sharma is a Government employee, it cannot be presumed that the money would have been procured by the father and given to the son by illegal means. It is apparent from the order of the Assessing Officer as well as that of the Commissioner of Income-tax (Appeals) that they rejected the agreement entered into between the assessee and Gaurav Sharma merely on the basis that the father of Gaurav Sharma, i.e., Dr. Yogiraj Sharma is a Government employee and the consequence of discovery of undisclosed income in his hands are not limited to the tax burden thereon but constitute violation of Government service rules. It is also a fact that Gaurav Sharma is engaged in business and earning business income much prior to search. There had been search in the case of Dr. Yogiraj Sharma but not such evidence was found or brought on record by the Assessing Officer during the course of ....
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....P). On the top of this paper he noted that it is written "From the desk of VP(C)". When inquired, the assessee submitted that this paper consists of some projections of these posts against the designation, monthly salary of around Rs. 6 lakhs is mentioned. It is merely an estimation of the organisation. The Assessing Officer did not get satisfied with the explanation of the assessee and he made addition of Rs. 21 lakhs as if the assessee has given illegal gratification to various persons. When the matter went before the Commissioner of Income-tax (Appeals), before the Commissioner of Income-tax (Appeals) the assessee contended that in all these documents the name of the organisation or to whom it belongs is not given, there is no signature nor purpose of calculation is given. The assessee is an individual deriving salary income from HIPL as director. Even in his concern there are no such posts like CMD, GMD, ED, CFO, PA, GM(A), DGM (MM), DGM (P&T). In HIPL, where the assessee is the director, the total remuneration is Rs. 5,94,000 and the total salary of the staff is only Rs. 5,33,100 for the year ended March 31, 2005. It contains rough and projected figures. Reliance was placed on....
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....ntent of the document should also prima facie indicate some credence of relevance with the appellant. Moreover, in the document in the end/lower side it is written rough working for the salary of director of HIPL. Therefore, prima facie there is no indication of any unaccounted payment by way of direct corroborative evidence. Therefore, the addition made by the Assessing Officer cannot be sustained and the same is hereby deleted." 7.2 We heard the rival submissions and carefully considered the same. We have also gone through the seized paper which is forming part of the assessment order. We noted that the Commissioner of Income-tax (Appeals) has rightly appreciated that the papers seized does not have name of the assessee, it is not in the handwriting of the assessee, no date, etc., is mentioned and after appreciating all the facts he came to the conclusion that there is no indication of any unaccounted payment and it is a dumb document and not the speaking one. Even he noted that in the document in the end/lower side it is written rough working for the salary of the director of HIPL. No cogent material or evidence was brought to our knowledge by the learned Departmental represe....
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....lly considered the submission of the appellant and findings of the Assessing Officer. I have also perused the contents of the seized documents. The Assessing Officer's case is that the documents were found in the premises of the appellant and that the onus was on the appellant to explain the transactions and that as no satisfactory explanation was given therefore, addition of Rs. 69.46 lakhs was made. It may be noted that the document is of the same nature as of LPS-95 and 96. There is no date, no mentioned of asses see name or any concern and simply three figures are mentioned i.e., 48, 10.37, 11.09 total at 69.46. On this document it is also mentioned that discuss (VP-P & A) for issuance as also "Crompton-2728". From such transactions no such inference or conclusion can be drawn that unaccounted or illegal payment of Rs. 69.46 was made. As discussed earlier, the document itself by way of corroborative or other evidence or circumstantial evidence should indicate some relevance that the transactions are of income nature. The findings given earlier are again repeated that each and every transaction of the seized paper cannot be the undisclosed income. The inference is to be draw....
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....‡à¤›à¤¤à¥à¤¤à¥€à¤¸à¤—ढ़फारà¥à¤®à¤¾à¤ªà¤¹à¤²à¥‡à¤šà¤²à¤¾à¤¤à¥‡à¤¥à¥‡à¤¬à¤¾à¤¦à¤®à¥‡à¤‚उनà¥à¤¹à¥‹à¤¨à¥‡ Netam Industries खोलली।Govt. orderलेनेवsupplyकरनेमेंउनकीमददकरताथावअपनीफरà¥à¤®à¤¸à¥‡à¤‰à¤¨à¥à¤¹à¥‡supplyà¤à¥€à¤•à¤°à¤¤à¤¾à¤¥à¤¾à¥¤à¤šà¥‚ंकिवेमेरेफेकà¥à¤Ÿà¤°à¥€ कामालखरीदकरअनà¥à¤¯à¤à¥‡à¤œà¤¤à¥‡à¤¥à¥‡à¤µà¤²à¤˜à¥à¤‰à¤¦à¥à¤¯à¥‹à¤—निगमवअनà¥à¤¯à¤œà¤—होंटेणà¥à¤¡à¤°à¤à¤°à¤¤à¥‡à¤¥à¥‡à¤µà¤…पनाकामकर....
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....€ परोकà¥à¤· रूप से उसके सà¥à¤µà¤¾à¤®à¤¿à¤¤à¥à¤µ पà¥à¤°à¤¬à¤‚ध तथा संचालन में योगदान ? उतà¥à¤¤à¤° पà¥à¤°. 20 उतà¥à¤¤à¤° à¤à¥‚ठबोलता हूं । मेरा कोई à¤à¥€ उकà¥à¤¤ पà¥à¤°à¤¤à¤¿à¤·à¥à¤ ानों में नही है केवल वà¥à¤¯à¤µà¥à¤¸à¤¾à¤¯à¤¿à¤• संबंध है । मैं उनके लिठलाइजिनिंग का काम करता हूं । आप पà¥à¤¨: इस बारे में सोचà¥....
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....ठवà¥à¤¯à¤µà¤¹à¤¾à¤° से हà¥à¤ˆ आय आपने अपनी विवरणियों में दरà¥à¤¶à¤¾à¤¯à¥€ है ? उतà¥à¤¤à¤° नहीं, और इसीलिठही मैं अपने अनियमिततायों को à¤à¥€ देखते हà¥à¤ इतनी बड़ी राशि रूपये 5 करोड़ तीस लाख आय की घोषणा ऊपर की है । His statement dated 18-09-2007. 4. छतà¥à¤¤à¥€à¤¸à¤—ढ़ फारà¥à¤®à¤¾, नेताम इंडसà¥à¤Ÿà¥à¤°à¥€à¤œ व नेपà....
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.... नहीं है। बैंक à¤à¤•à¤¾à¤‰à¤‚ट इंडिया, रायपà¥à¤° में था इसके अलावा कहीं होते नही पता । इसके पà¥à¤°à¥‹à¤ªà¥à¤°à¤¾à¤‡à¤Ÿà¤° शà¥à¤°à¥€ उमेश का इनका पता व फोन मà¥à¤à¥‡ मालूम नहीं। इनकी आयकर विवरणी व PAN की जानकारी मà¥à¤à¥‡ नहीं है यह आपको à¤à¤• सपà¥à¤¤à¤¾à¤¹ दे दूंगा । नेताम इणà¥à¤¡à¤¸à¥à¤Ÿà¥à¤°à....
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....²à¤—à¤à¤— 25 करोड़ का काम हà¥à¤† है । पà¥à¤°. 24 उतà¥à¤¤à¤° शà¥à¤°à¥€ उमेश काजवे व सतà¥à¤¯à¥‡à¤¨à¥à¤¦à¥à¤° साहू कà¥à¤¯à¤¾ कहते है आपके इनसे कà¥à¤¯à¤¾ संबंध है, आपके इनसे कà¥à¤¯à¤¾ Financial लेनदेन है तथा आपको Govt. supplyतीनों बेनामी concern बनाने की कà¥à¤¯à¤¾ आवशà¥à¤¯à¤•à¤¤à¤¾ है यह काम आप HIPL के दà¥à¤µà¤¾à¤°à¤¾ à¤à¥€ ले सके थे ? सà¥à¤ªà¤·à....
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....®à¥à¤®à¤¿à¤²à¤¿à¤¤ किया है । शà¥à¤°à¥€ सतà¥à¤¯à¥‡à¤¨à¥à¤¦à¥à¤° साहू, नेपà¥à¤šà¥‚न रेमेडिज़ चलाता है जो कि वरà¥à¤· 2006 में बनी हैं यह à¤à¥€ बेनामी नही है कà¥à¤¯à¥‹à¤‚कि इनके पास à¤à¥€ Drug License, CST व MPST नं. है । इनसे à¤à¥€ मैंने जो à¤à¥€ लिया उसे मैंने घर पर दिये गठStatement में व किठगठअघोषित आय में समà¥à¤®à¤¿à¤²à¤¿à¤¤ कà....
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.... इसे अपनी अघोषित आय में घोषित कर दूंगा ।" Document 5 पà¥à¤°. 24 उतà¥à¤¤à¤° पà¥à¤°. 25 उतà¥à¤¤à¤° शà¥à¤°à¥€ उमेश काजवे व सतà¥à¤¯à¥‡à¤¨à¥à¤¦à¥à¤° साहू कà¥à¤¯à¤¾ कहते है आपके इनसे कà¥à¤¯à¤¾ संबंध है, आपके इनसे कà¥à¤¯à¤¾ Financial लेनदेन है तथा आपको Govt. supplyतीनों बेनामी concern बनाने की कà¥à¤¯à¤¾ आवशà¥à¤¯à¤•à¤¤à¤¾ है यह काम आप HIPL ....