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TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 528
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....esidence of the assessee, out of which Rs. 11 lakhs was seized. Search officials also noticed that the back side of page No. 28 in the diary seized (Annexure 2) contains certain noting, which were made in pencil but was erased subsequently. Hence the entries were not legible. Hence the revenue referred the same to the forensic laboratory located at Kalina. The forensic laboratory reported that the noting have been made in 4 columns. First column contains certain narration and remaining three columns contain numeric numbers. Forensic Laboratory deciphered numeric numbers to some extent. Numeric numbers deciphered by the Forensic Laboratory has been tabulated as under by the Assessing Officer:- The Assessing Officer took the view that the numbers mentioned should be taken as "in lakhs" and accordingly assessed the aggregate sum of Rs. 22.05 crores (7.81 + 9.51 + 4.73 crores) as undisclosed income of the assessee. 4. With regard to cash of Rs. 11 lakhs seized from the assessee, the Assessing Officer took the view that the assessee could not correlate cash withdrawals made from company's account with the physical cash found. The assessee had mentioned in the statement given u/s. 132(....
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....the explanation offered. by the appellant stands duly corroborated by the Forensic Report relied upon by the Assessing Officer and as such, the conclusion drawn by the Assessing Officer that "the paper is not very old than the year of search" is wrong, contrary to the material available on record with the Assessing Officer which is the very basis of the addition. It may also be noted that "2002" is appearing in the first column-of the seized paper and it certainly does not represent coded element i.e. rupees in "lakhs" and therefore, the same is not added to the income of the appellant. The entry made in the seized paper certainly indicates that it refers to the "period" i.e. pertained to the year 2002. Therefore, it can only be logically concluded that the entries reflected on the seized material certainly did not pertain to the previous year relevant to A. Y.2010-1 1 and therefore, 'the addition made on the basis of this seized material is required to be deleted. The appellant had also stated during the course of the appeal proceedings that the date of 2002 is definitely and undoubtedly outside the period of the block assessment of 2004-05 to 2010-11. Vide letter dated ....
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.... to that year. It is submitted that even section 132(4A) stipulate that the entry contained in document found during the search is presumed to be true. It is submitted that the Assessing Officer cannot be permitted to place partial reliance on the document i.e. believing the other figures stated therein to be income for the purpose of making addition and at the same time the figure "2002" which clearly refers to "year" to be incorrect. It is further submitted that if the reasons advanced by the Assessing Officer is accepted i.e. there is no evidence to establish that notings are pertaining to year "2002", then by applying same logic no addition can be made for the year under consideration as there is no mention of year to establish that it pertains to previous year relevant to A.Y. 2010-11 under consideration. It is submitted that the appellant could not explain this entry as the document could not be read with normal copy and now it is legible because serious attempt was made subsequently by enlarging the same. This is evident from the copy of this very same document reproduced at page 3 of the assessment order. It is strange that the Assessing Officer is disbelieving the contents....
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....not extrapolate 50 as 50,00,000, 575 as 575 lakhs without any corroborative/demonstrative evidence. Without there being any corroborative evidence additions merely on the basis of some illogical and irrelevant entry/jotting on a piece of paper cannot justified the actions of the AO and the learned CIT(A)." It was also held by the Honourable Members in the order that "It is clear that the AO has made the additions purely on the basis of surmises and conjectures. We therefore cannot sustain such additions purely on assumption without there being any corroborative evidence bought on record." 6.2 I also rely on the Honourable Apex Court decision in the case of CIT vs Kalyanasundaram case and Honourable Mumbai ITAT's decision in S.P.Goyal case. 6.3 Respectfully following the above mentioned Honourable Supreme Court decision and the Honourable jurisdictional Mumbai ITAT decision in S.P. Goyal case and also in the appellant's own case for earlier years Ground of Appeal No.3 is disposed as under: "I have carefully perused the assessment order and also the remand reports AO-the documents enclosed as annexure by the appellant. The seized page in the diary did not contain ....
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....receipts or to payments. There is no mention about the nature of transactions also. He further submitted that both the decisions relied upon by the Ld D.R is not applicable to the present case, as they have been rendered on the basis of facts available in those cases. He further submitted that the facts relating to the incriminating documents found in the cases before the Hon'ble Delhi and Bombay High Courts were very clear and further the assessees have failed to rebut the presumption placed u/s 132(4A) of the Act. However, in the instant case, the facts relating to the entries were not clear and hence the same is a dumb document and no inference could be drawn thereon without any corroborating material. 9. The Ld A.R further submitted that the assessee did not admit that the entries should be extrapolated into lakhs. He submitted that the Hon'ble Tribunal has held in the assessee's own case relating to AY 2006-07 to 2008- 09 that the AO cannot extrapolate the entries into "lakhs" without any corroborative material and further he cannot make any addition on the basis of surmises and conjectures. He submitted that the Ld CIT(A) has rightly relied upon the decision of Hon'ble Supre....
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....mand report from the AO on this point also. The AO, in his report, pointed out that the assessee has submitted in his statement given u/s 132(4) of the Act that the entire cash balance belongs to the business concern, M/s Flemingo Duty free shop. He further reported that the cash book of the above said business concern was not found during the course of search. Further the above said concern has shown cash receipts from another business concern, but the account books of that business concern were also not found during the course of search. Accordingly the AO reported that the explanations of the assessee should be rejected. The Ld CIT(A) was convinced with the report of the AO and accordingly confirmed the addition. 13. We heard the parties on this issue. It is a fact that the assessee has stated that the cash balance of Rs. 12.18 lakhs found during the course of search belonged to the business concern. However, the fact remains that the personal cash book of the assessee was showing cash balance of Rs. 7.33 lakhs. The personal balance sheet as on 31.3.2009 also shows cash balance of Rs. 9.61 lakhs. The assessee has placed a copy of his personal cash book at page 27 of the paper b....