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2017 (9) TMI 955
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....atement of Shri R.K. Miglani. The matter travelled up to the ITAT and these four appeals of the assessee were disposed of by a common order of the Tribunal dated 23.11.2012, wherein all the appeals of the assessee were allowed. It had been held in the aforesaid order in Para 18 that if all the annexures i.e. A-1 to A- 10 found from the residential premises of Sh. R.K. Miglani during the course of search u/s 132(1) the Act and A-1 to A-8 from the business premises of M/s UPDA during the course of the survey u/s 133A of the Act and also found from premises of M/s Radico Khaitan during the course of search u/s 132(1) of the Act, as had been relied by Revenue are looked into in the light of the statement given by Sh. R.K. Miglani, the contention of Revenue that such documents belonged to assessee is unsustainable. It was observed by the ITAT in the aforesaid Para 18, that no forwarding letter in the shape of e-mail, fax or any recorded audio message recorded on telephonic conversation was found with regard to the assessee which could establish that any document/material which was seized from the residential premises of Shri. R.K. Miglani belonged to the assessee. It was held that since....
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.... 1.2 Thus, the Hon'ble High Court has remitted these appeals to the ITAT, to consider and render findings with regard to the documents alleged by the revenue and also on the grounds raised in the appeals before it by the assessee. It has been clarified by the Hon'ble High Court that it is not making a limited remand and the ITAT shall proceed to hear the merits of the appeals pending before it on other grounds as well. We find that the Hon'ble High Court has not reversed the findings or set aside the findings recorded by ITAT in order dated 23.11.2012. However, it appears from the aforesaid judgment of the High Court that the revenue had contended before the Hon'ble High Court (as is noted by their Lordships in Para 5) that the Assessing Officer and CIT(A) took note of not merely the document which listed out the payments made in a tabular form for different purposes but also other documents and materials in the form of production figures forwarded by the respective assessees, the statement of Shri R. K. Miglani and the circumstances that the production figures coincide with the figures available with the revenue in the pending proceedings. The Hon'ble High Court, in view of the ....
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....uch documents/ material were produced before us during the course of hearing and as such, we are inclined to decide the instant appeal on the basis of material already available on record. 1.5 With the aforesaid background as stated above, before we proceed to hear the appeals filed by the assessee M/s Mohan Meakins Limited, for the sake of completeness, we reproduce the grounds taken by the assessee. They are as under- ITA No. 3787/Del/2008:- "1. That the learned Commissioner of Income Tax (Appeals) has grossly erred, both on facts and in law in upholding the legality and the validly of the order of assessment dated 31.12.2007, impugned before him, framed by the learned ACIT by invoking the provisions of section 153C of the Income Tax Act. 1.2 That the learned CIT(A) has failed to appreciate that, the assessment framed by the learned ACIT, was wholly without jurisdiction and was ab-initio bad in law and thus deserved to have been quashed altogether. 1.3 That the leaned CIT(A) has further failed to appreciate that the jurisdictional precondition for invoking the applicability of provisions of section 153C of the Act being absent, no valid proc....
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....ecord the necessary material in support thereof. The finding of the learned CIT(A), that the assessee had incurred the expenditure i.e. the amount has been paid by the assessee as alleged, is based on no valid admissible evidence and is based on merely theoretical assumptions and presumptions and as such the addition made of the aforesaid sum is totally arbitrary and is wholly unsustainable in law. 2.3 That in any case and without prejudice, the learned CIT(A) has completely ignored, while confirming the aforesaid addition, that the learned ACIT did not either provide to the assessee any valid opportunity and had not confronted to the assessee any such adverse material for its rebuttal and had proceeded to draw adverse inferences on the basis of such material which is no material in the eye of law and in any case before making use of any such material the same was not confronted to the assessee, by providing adequate and valid opportunity. In fact he has failed to appreciate the burden lay upon the learned ACIT to establish that the assessee had incurred such an expenditure which could have been done only by producing the author of the documents, which had not even been at....
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....IT (A) has failed to appreciate that, the assessment framed by the learned ACIT, was wholly without jurisdiction and was ab-initio bad in law and thus deserved to have been quashed altogether. 1.3 That the leaned CIT(A) has further failed to appreciate that the jurisdictional precondition for invoking the applicability of provisions of section 153C of the Act being absent, no valid proceedings could have been initiated by invoking the provisions of section 153C (1) of the Income tax Act, and as such the assessment framed was entirely illegal. 1.4 That the learned CIT(A) has overlooked that the provisions of section 153C could be invoked only, "where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing" or "books of account or documents seized" or "requisitioned 'belongs' or 'belong' to a person other than the person referred to in section 153A of the Income tax Act and as such in the absence of any documents or book of accounts "belonging to" the assessee having been seized from the person searched no valid proceedings could have been initiated against the assessee. 1.5 The CIT(A) has further completely ....
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....the eye of law and in any case before making use of any such material the same was not confronted to the assessee, by providing adequate and valid opportunity. In fact he has failed to appreciate the burden lay upon the learned ACIT to establish that the assessee had incurred such an expenditure which could have been done only by producing the author of the documents, which had not even been attempted, in spite of the appellant's written requests. The learned CIT (A) has failed to appreciate the nature of allegation leveled by the Ld. ACIT in making the addition and without appreciating that on these mere allegation no addition could have been made. 2.4 That the learned CIT(A) has completely ignored the detailed written submissions filed by the assessee before him. The learned CIT(A) has failed to appreciate that there was no evidence at all to establish that it is the assessee who had incurred an expenditure as has been alleged nor was even there any evidence from the documents seized to establish that such alleged expenditure was incurred by the assessee company. The inference drawn to hold the assessee having incurred such an expenditure is highly arbitrary and wholly u....
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....ment framed was entirely illegal. 1.4 That the learned CIT(A) has overlooked that the provisions of section 153C could be invoked only, "where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing" or "books of account or documents seized" or "requisitioned 'belongs' or 'belong' to a person other than the person referred to in section 153A of the Income tax Act and as such in the absence of any documents or book of accounts "belonging to" the assessee having been seized from the person searched no valid proceedings could have been initiated against the assessee. 1.5 The CIT(A) has further completely overlooked that neither any books of accounts nor any document(s) which were allegedly seized, could be held to belong to the assessee and as such the learned CIT(A) has erred in confirming the order of assessment, since no valid proceedings u/s 153C (2) could have been initiated against the assessee. The order of the CIT(A) made thus is without application of mind, who has merely mechanically upheld the order by the Assessing Officer. 2. That without prejudice and in the alternative the learned CIT(A) has thu....
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....ed by the Ld. ACIT in making the addition and without appreciating that on these mere allegation no addition could have been made. 2.4 That the learned CIT(A) has completely ignored the detailed written submissions filed by the assessee before him. The learned CIT(A) has failed to appreciate that there was no evidence at all to establish that it is the assessee who had incurred an expenditure as has been alleged nor was even there any evidence from the documents seized to establish that such alleged expenditure was incurred by the assessee company. The inference drawn to hold the assessee having incurred such an expenditure is highly arbitrary and wholly unjustified, more particularly when neither Shri Miglani nor any other person was produced for the assessee's cross examination, before relying on the statements as were allegedly/recorded. The authorities have acted in complete disregard of the judgment of Hon'ble Delhi High Court in the case of J.T. Exports. 3. That the learned CIT(A) has further erred in sustaining the addition of Rs. 4,64,200/- representing a disallowances made out of business expenditure and debited under the head tips. 4. That the l....
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.... seized from the person searched no valid proceedings could have been initiated against the assessee. 1.5 The CIT(A) has further completely overlooked that neither any books of accounts nor any document(s) which were allegedly seized, could be held to belong to the assessee and as such the learned CIT(A) has erred in confirming the order of assessment, since no valid proceedings u/s 153C (2) could have been initiated against the assessee. The order of the CIT(A) made thus is without application of mind, who has merely mechanically upheld the order by the Assessing Officer. 2. That without prejudice and in the alternative the learned CIT(A) has thus erred in confirming the addition made of Rs. 2,73,41,542/-, representing an alleged payment without even identifying and establishing that, who had made the payment, when the alleged payment was made and to whom such an amount was paid. In the absence of any positive evidence that the assessee had incurred the alleged sum of expenditure the addition sustained is highly perverse and is totally unjustified. 2.1 That the learned CIT(A) has thus erred in confirming the addition of the aforesaid sum of Rs. 2,73,41,5....
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.... was incurred by the assessee company. The inference drawn to hold the assessee having incurred such an expenditure is highly arbitrary and wholly unjustified, more particularly when neither Shri Miglani nor any other person was produced for the assessee's cross examination, before relying on the statements as were allegedly/recorded. The authorities have acted in complete disregard of the judgment of Hon'ble Delhi High Court in the case of J.T. Exports. 3. That the learned CIT(A) has further erred in sustaining the addition of Rs. 4,21,488/- representing a disallowances made out of business expenditure and debited under the head tips. 4. That the learned Commissioner of Income Tax (Appeals) has erred in not directing the Assessing Officer to carry forward the long term capital loss, short deduction u/s 80HHC and non-application of provisions of section 115JB of the Act. The findings that the assessee is to file an application u/s 154 of the Act before A.O. is misconceived. 5. That the learned Commissioner of Income Tax (Appeals) has erred in not disposing off the additional legal ground of appeal before him of not allowing the deduction of provision for ....
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....see - appellant were found as a result of search on Sh. R.K. Miglani. 2. Second Proposition: Additions have been made by learned AO under section 69C of the Act and under the said section, the burden squarely lies on Revenue to establish that the assessee has made alleged payments so as to warrant addition under section 69C of the Act, which has not been discharged by Revenue by leading any material what so ever and thus, the addition so made needs to be deleted. In order to support the said proposition, the assessee company would seek to place reliance on following judgments: a. 254 ITR 261 (Del) CIT vs. Dr. S. Bharti. b. 261 ITR 664 (Del) CIT V. Naresh Khattar (HUF). 3. Third Proposition That in face of denial by assessee - appellant with regards to the said alleged payments, the burden is on Revenue to establish the factum of making said alleged payments with corroborative evidences, which has not been done by Revenue and thus, relying on the judgment of Hon'ble Delhi High Court in the case of CIT vs Ved Prakash Choudhary reported in 305 ITR 245, the additions so made needs to be deleted. Here even the recipients of the alleged payments have n....
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.... 7. Seventh Proposition: That Hon'ble Settlement Commission in the case of M/s Radico Khaitan has dismissed the plea of Revenue to rely on the documents found from Sh. R.K. Miglani and M/s UPDA and have also held that since opportunity to cross - examine Sh. R.K. Miglani was not provided to M/s Radico Khaitan, thus, addition cannot be made on the basis of said documents." 2.3 In the submissions made, the learned counsel for assessee supported the findings and conclusion recorded by ITAT in the first round that the proceedings initiated u/s 153C of the Act were per-se bad in law and were without jurisdiction. The various contentions raised by Shri Salil Aggarwal, the Ld. AR, are summarized as below: 2.3 The Ld. AR submitted that the proceedings initiated under section 153C of the Act, were without jurisdiction in as much as, no document belonging to Assessee Company were made the basis of recording the note of satisfaction. In support of the aforesaid argument, it was contended by the Ld. AR that that the documents were seized from the premises of the Shri R.K. Miglani and the presumption u/s 132(4A) of the Act is that such document belongs to the person from whose premi....
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....s. Dr. S. Bharti and on 261 ITR 664 (Del) in CIT vs. Naresh Khattar (HUF). 2.7 It was submitted by the Ld. AR that in face of denial by the assessee with regard to the alleged payments, the burden was on the Revenue to establish the factum of making the alleged payments with corroborative evidences, which has not been done by the Revenue and thus, relying on the judgment of Hon'ble Delhi High Court in the case of CIT vs Ved Prakash Choudhary reported in 305 ITR 245, the additions so made need to be deleted. It was submitted that even the recipients of the alleged payments have neither been identified nor produced for cross examination by the assessee even though a specific request to that effect was made before the AO vide letter dated 28.12.2007 ( copy at pages 132 and 133 of PB Part - I). 2.8 The Ld. AR submitted that the Hon'ble Settlement Commission in the case of M/s Radico Khaitan has dismissed the plea of the Revenue to rely on the documents found from Sh. R.K. Miglani and M/s UPDA and have also held that since the opportunity to cross - examine Sh. R.K. Miglani was not provided to M/s Radico Khaitan, addition cannot be made on the basis of the said documents. 2.9 I....
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....cing of figures. Thus, in the absence of any entry made in such alleged documents and there being no other evidence, either in the shape of cash book, day book, recording of payments etc., the documents showing the alleged production of all the distilleries and the alleged contribution by such distilleries are wholly unreliable. It was submitted that had there been any entry found establishing the payouts by UPDA, the Department could be then probably be justified in contending that contributions were made by the distilleries and payments were made to the politicians and bureaucrats. It was submitted that the documents are not only illegible and dumb but have no connection, whatsoever, with the alleged contribution. It was further contended that it has not been established as to who is author of the document as no such person has either been identified or examined. The Ld. AR submitted that the allegation of the revenue is unsupported and uncorroborated by any material. 3. The learned CIT DR, (apart from Annexures A-1 to A-10), also filed written submissions which are being reproduced here in under for a ready reference - "1) Entire seized documents seized from the resi....
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.... of molasses lifted by the members of UPDA including the appellant & computation and receipt of money & pending amounts of various payment of Govt. officers/ including excise Department & politician :- A) Annexure A-3 S.No. Production figure for the period Page No of annexure 1. 01.04.2003 to 31.03.2004 97 2. 01.04.2003 to 31.03.2003 36 ii) Statement of Sh. R.K. Miglani at his residence u/s 132(4) & 133 A at the office premise of UPDA of IT Act supports the view that the above seized documents belong to the members of UPDA including the appellant. Specific instances are quoted as under:- a) Answer in response of Q.3 of Sh. R.K.Miglani at the office of UPDA during 133A proves that the complete data of dispatch was received from the members. Answer question no. 5 during survey states that the data received from his residence are related data taken out from drive 'F' from the computers at the office, therefore, the data of dispatch seized from the residence is prepared on the basis of fax received from the members of UPDA including the appellant. b) Answer to Question No.8 at residence u/s 132(4), Sh. R.K. Miglani has stated that i....
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....he appellant is a member. Therefore, if the statement of Sh. R.K. Miglani which was adverse to the member was untrue than immediately Sh. R.K. Miglani could have been removed from the post of Secretary General, UPDA, or Sh. R.K. Miglani could have brought before I.T. Authority for retraction or modification of statement. Further, statement of Sh. Miglani is not on stray/dumb documents but contains the figures of dispatch and amount of illegal payment made by members which is clear from the notings of the seized documents. Therefore, Sh. Miglani has only confirmed the specific variation contained in the seized material. Still further, Sh. R.K. Miglani being employee of UPDA is an interest person and associates of the members of UPDA. Therefore, the appellant and other members of UPDA could itself has produced Sh. R.K. Miglani, if his statement was untrue and could not have waited for the revenue to offer cross examination. iv) Retraction of Sh. R.K. Miglani has no evidential value on the following grounds:- a) Retraction of Sh. R.K. Miglani was made after two years from the statement recorded u/s 132(4). Therefore it is after thought. b) ....
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.... cross examination was not offered, cannot be accepted. In this case also Sh. Ashok Dutt & Sh. Rahul Jain was the employee of PDL therefore, these persons were not independent witness but business associate of the appellant with whom the appellant continued its business even after giving adverse statement. In these circumstances as witness was not independent, judicial pronouncements relied by Ld. AR for providing opportunity of cross examination to treat statement as evidence will not apply in present case. Further, PDL admittedly was only supervising the Lucknow Plant with two persons. Plant was run by the employees of the appellant, plant & machinery of the appellant and sales are effected by the head of the appellant. These are undisputed facts. Further the appellant is a member of UPDA and not PDL. Therefore, unaccounted expense incurred has to be borne by the appellant and not PDL. viii) Ld. AR's argument that in the case of Radico Khaitan, in the order of u/s 245D(4), Settlement Commission have not accepted Rule 9 report of CIT(C)-III for enhancement of income by the figure of unaccounted payment as per seized document. A perusal of order u/s 245D(4) reveal....
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....he assessee and so it was the onus of assessee to produce theses persons before the AO. 3.5 The Ld. CIT DR also submitted that the matter may be remanded or set - aside to the AO as the AO had not worked out the correct figures on the basis of seized documents and as such, for proper calculation of additions on the basis of seized documents, the matter may be set - aside to the file of Assessing Officer. 4. In rejoinder to the submission of the learned CIT DR, Sh. Salil Aggarwal, Advocate appearing for assessee submitted that the argument of learned CIT DR that details/ annexures seized from Sh. Miglani contain production or dispatch figures, as forwarded by the assessee through fax, is completely baseless and without any material available on record. The Ld. AR submitted that even on specific directions of the Hon'ble High Court and the ITAT, the learned CIT DR has only made oral submissions without bringing any material on record which could suggest that any such material or letter or note was forwarded by the assessee via Fax. 4.1 The Ld. AR reiterated that the reliance placed on the statement of Sh. R.K. Miglani is unwarranted, as he has not been produced for cross exa....
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....ani and which were made the basis for initiating the proceedings u/s 153C of the Act, and not a single document/evidence had been pointed out by the learned CIT DR which could suggest that such documents belong to the assessee. Apart from the aforesaid documents, despite the specific direction of the Hon'ble High Court, and also our specific query, no other documents were produced before us. Even in the documents produced before us, no document had been pointed out by the learned CIT DR which would suggest that the assessee had forwarded any production figures. Further, no document has been referred to by the revenue which could connect the assessee of making or forwarding of the documents as alleged and there is also no material to support that the production figures as mentioned in the seized documents coincide with the production figures as allegedly forwarded by the assessee. As such, the earlier finding of the ITAT that documents do not belong to the assessee has to be reiterated. 5.1 However, looking into the chequered history of the case, we will deal with each and every argument of assessee and revenue in detail, in the following paragraphs. 5.2 It is seen that a comm....
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....since facts are identical in all the remaining assessment years 2004-05 and 2005-06, as the assessment proceedings for such assessment year was pending on the date of search, as such assessment was made under section 143(3) of the Act: (a) Return of Income was filed by assessee on 02.11.2003 at an income of Rs. 5, 12, 56, 800/-. (b) Original assessment was completed under section 143(3) of the Act dated 01.03.2006 at an income of Rs. 5, 37, 69, 100/-. (c) The assessee challenged the said additions before the learned CIT (A), who partly allowed the appeal of the assessee vide order dated 18.08.2006 and on further appeal, the ITAT deleted the additions. (d) The notice under section 153C of the Act was issued by the AO on 22.12.2006 (at pages 20 of PB - 1) and on the basis of the a satisfaction note dated 05.12.2006 recorded by the ACIT, CC-4, New Delhi i.e. by the AO of M/s Radico Khaitan and Sh. R.K. Miglani, Secretary General (UPDA), on whom the search was conducted on 14.02.2006 (at pages 281 to 285 of PB - 2). However, the said satisfaction note was brought on record for the first time before the ITAT only in the first round of proceedings. ....
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....T (A), vide order dated 05.12.2008, dismissed the appeal of assessee, both on the legal ground as well as on merits. At page 34, Para 22 of the said order, the learned CIT (A) gave a finding that documents relating to assessee had been found from the searched residential premises of Sh. R.K. Miglani. However, in respect of the specific contention of the assessee that addition made without providing an opportunity of the cross examination of the persons whose statements have been relied upon, no finding had been recorded by the Ld. CIT (A). (k) The ITAT, vide order dated 23.11.2012, allowed the appeal of the assessee and quashed the proceedings so initiated under section 153C of the Act by recording a finding that no document belonging to the assessee was found from search conducted at the residential premises of Sh. R. K. Miglani and as such, proceedings under section 153C of the Act were quashed. It was also observed that no forwarding letter in the shape of e-mail, fax or any recorded audio message recorded on telephonic conversation was found which could allege that any document belonging to assessee were found from the premises of Sh. R.K. Miglani during the course of ....
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.... 3. It is thus, most respectfully submitted that the aforesaid additional evidences be admitted, as the same goes to the root of the matter and is of paramount importance for deciding the captioned appeals. Reference is also being made to the judgment of Hon'ble High Court of Calcutta in the case of Sanjay Kumar Modi vs DIT reported in 278 ITR 374, wherein, it has been held that, "It has now become an elementary principle of law that the subsequent development having nexus to the original cause of action can be brought in the present proceeding to cut short the litigation and to meet the ends of justice." 4. It is prayed accordingly." 5.5 It is seen that along with the application under Rule 29, the assessee has filed a letter dated 03.03.2008, containing an affidavit of Sh. R.K. Miglani dated 01.03.2008, filed during the course of proceedings of M/s UPDA. The aforesaid letter dated 03.03.2008 along with the affidavit was filed in the case of M/s Lords Distillery Ltd. before the learned CIT (A). After going through the said additional evidence, we are of the opinion that the letter dated 03.03.2008 along with the affidavit of Shri Miglani was already on record when the ....
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....nue before Hon'ble High Court". In response, the learned CIT DR placed reliance on the seized annexures A-1 to A-10, found from the residential premises of Sh. R.K. Migalni during the course of search on 14.02.2006 and referred to various pages of seized annexures. However, nowhere, the learned CIT DR has been able to show any such document, which could suggest that any document showing production figures was in fact forwarded by the assessee to Sh. R.K. Miglani or M/s UPDA. He again placed reliance on the statement of Sh. R.K. Miglani recorded during the search on his residential premises and also at the business premises of M/s UPDA, wherein Sh. Miglani had stated that production figures had been recorded by him on the basis of fax messages forwarded by various member distilleries of UPDA. However, not even one such alleged fax message with regard to the assessee has been produced before us by the revenue as seized annexure does not contain any such document. These arguments placed by learned CIT DR have already been dealt by Tribunal in the first round of proceedings and nothing new has been brought on record by the Revenue even though specific plea was raised by the Revenue bef....
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.... of the said Act does not arise. 16. Thirdly, we would also like to make it clear that the assessing officers should not confuse the expression "belongs to" with the expressions "relates to" or "refers to". A registered sale deed, for example, "belongs to" the purchaser of the property although it obviously "relates to" or "refers to" the vendor. In this example if the purchaser's premises are searched and the registered sale deed is seized, it cannot be said that it "belongs to" the vendor just because his name is mentioned in the document. In the converse case if the vendor's premises are searched and a copy of the sale deed is seized, it cannot be said that the said copy "belongs to" the purchaser just because it refers to him and he (the purchaser) holds the original sale deed. In this light, it is obvious that none of the three sets of documents - copies of preference shares, unsigned leaves of cheque books and the copy of the supply and loan agreement - can be said to "belong to" the petitioner. 17. In view of the foregoing discussion, we do not find that the ingredients of Section 153C of the said Act have been satisfied in this case. Consequently the notic....
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.... documents seized from the premises of UPDA, is that the assessee had made illegal payments to various politicians/ bureaucrats. We have gone through the pages of the seized documents Annexure A-1 to A-10 furnished before us and from the examination of the aforesaid documents, as have been furnished before us by the revenue, we are of opinion that the said documents are dumb documents as such documents are wholly unauthenticated and unreliable. The allegation of the revenue is that UPDA was collecting the sums from the distilleries to make illegal payments to various politicians/ bureaucrats. Had the theory of revenue been true and correct then the document would have been complete i.e. would also recorded the name of payees i.e. the politicians/ bureaucrats to whom such payments have been made or even some entries would have been found indicating/identifying the persons to whom such alleged payments were made. We concur with the submission of the assessee that there is no document found in respect of balancing of figures in respect of the alleged payments. Thus, in the absence of any other evidence either in the shape of cash book, day book, recording of payment, etc. the record s....
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....n mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to crossexamine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that crossexamination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their exfactory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what as mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it....
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....ed to M/s Radico Khaitan, addition cannot be made on the basis of said documents. This is what has also been held by us in earlier paragraphs that not providing the opportunity to cross - examine Sh. R.K. Miglani is fatal to the proceedings and the addition needs to be deleted on this count also. 6.5 The facts of the instant assessee are somewhat peculiar as the distillery of the assessee company at Lucknow is not being operated by the assessee but by M/s Prudent Distilleries Ltd and M/s Suraj Distilleries Ltd under manufacturing, sales and, financial assistance agreements and the assessee gets a guaranteed amount only. The Lucknow Distillery was operated by M/s Prudent Distilleries Ltd. from 01.07.2002 to 31.03.04 and, thereafter from 01.04.2004 by M/s Suraj Distilleries Ltd. All the operations of the unit are to be managed and, financed by the operators. In such circumstances, even if the theory of the revenue is taken to be correct, which we have already negated, the submission of the assessee that there was no occasion for the assessee to have made any such alleged payment, seems logical and well founded. In such circumstances, merely because the documents refer MML, does no....
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....o transfer of money between him and Ravi Talwar and Madhu Talwar. On the other hand, Ravi Talwar and Madhu Talwar had denied receipt of any money from the assessee. In the fact of these denials, there ought to have been corroborative evidence to show that there was in fact such a transfer of money. Both the Commissioner as well as the Tribunal have come to the conclusion that there was no such material on record. 13. The Assessing Officer relied on certain other transactions entered into by the assessee with Ravi Talwar and Madhu Talwar for drawing a presumption in respect of the transfer of money, but the Tribunal rightly held that those were independent transactions and had nothing to do with the MoUs, which were the subject-matter of discussion. Even if there was something wrong with some other transactions entered into, that would not give rise to an adverse inference insofar as the subject MoUs are concerned. 14. In our opinion, no substantial question of law arises." 6.7 In the instant case, the allegation is that the assessee has made payments to UPDA for paying illegal gratification to politicians/Bureaucrats, and except making the aforesaid bald allega....
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....om the premises of Shri Miglani, which has been made the basis for making the addition are unreliable being unauthenticated and hence dumb documents. (b) That the statement of Sh. R.K. Miglani and directors of M/s Prudent Distillery cannot be relied upon and needs to be excluded for consideration, as none of them have been produced for cross - examination, even though specific request for the same was made by assessee vide letters dated 24.12.2007 and 28.12.2007 (at pages 125 to 128 and 132 to 133 of PB Part - I). (c) Reliance is placed on following judgments in support of the aforesaid proposition: Kishinchand Chellaram vs. CIT. [1980] 125 ITR 713 (SC), CIT vs Ashwani Gupta. 322 ITR 396 (Del) and Andaman Timber Industries vs CCE (SC) reported in 127 DTR 241. 8.1 It was further submitted that even the statement of Sh. R.K. Miglani so relied on by the Revenue, cannot be relied on, as Sh. Miglani had retracted the said statement by filing an affidavit dated 01.03.2008 and thus, relying on the judgment of Hon'ble High Court of Delhi in the case of CIT vs Sunil Aggarwal (supra) and order of ITAT Pune in the case of Prabhat Chandra S. Jain vs ACIT (supra), it was prayed that th....