TaxTMI 
TaxTMI 
2017 (11) TMI 897
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee u/s. 132 of the Income-tax Act, 1961 [hereinafter called "the Act"] on 20.01.2010. In response to notices issued u/s. 153A of the Act, the assessees had filed their return of income. During the course of search in the premises of Shri Mitulal on 09.10.2009 in connection with search u/s. 132 in the case of M/s. Dhariwal Group concerns, where certain documents were found and seized and are stated to be belonging to Mr. Sohanraj Mehta, who has taken C&F agency of Dhariwal group, the assesses who were employees of Dhariwal group at factory in Bangalore were also covered u/s. 132 of the Act. The seized paper (seized from the premises of Shri Mitulal) suggested that Mr. Sohanraj Mehta had made payments to various parties and name of the assesses were also reflected therein. The amount reflected in the seized papers in the name of assesses are as under:- 1. Shri Jeevan Bansilal Sancheti A.Ys. Amount 2004-05 7,97,00,000 2005-06 9,27,00,000 2006-07 12,92,50,000 2007-08 22,05,50,000 2008-09 17,77,77,000 2. Shri Prashanth Sampatlal Bafna A.Ys. Amount 2007-08 5,92,85,000 2008-09 12,65,55,000 3. Shri Sohanraj Mehta in his statement dated 10.10.2009 recorded ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... it is held that any amount was received by the assesses, it was received only on behalf of Dhariwal Industries Ltd. Therefore, no addition can be made in the hands of the assesses at all. He also placed reliance upon the orders of the Tribunal in the case of Shri Sohanraj Mehta of this Bench of the Tribunal and in the case of Dhariwal Industries Ltd. of the Pune Bench of the Tribunal. The issue was examined in the case of Dhariwal Industries Ltd. and the Tribunal has held that Shri Sohanraj Mehta might be indulging in parallel business since the product of the company was branded product. In support of this findings, the Tribunal has relied upon various evidences filed before it and the protective additions made on the basis of seized material were deleted in the name of other persons whose names were reflected in the loose papers. The relevant observations of the Tribunal is reflected in paras 129 to 140 of its order, which are extracted hereunder:- "129. We find the assessee from the very beginning was stating that Shri Sohanraj Mehta might be indulging in parallel business since the product of the company was a branded product. He might be indulging in clandestine manufacturi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the order of the CIT(A) in deleting the addition of Rs. 50 lakhs which was added by the AO on account of entry found in the documents of Shri Sohanraj Mehta, C&F Agent of RMD Group at Bangalore. The Lucknow Bench of the Tribunal in the case of DCIT Vs. Pavan Kumar Agarwal vide ITA No.413/Lkw/2012 and CO No.70/Lkw/2012 order dated 16-02-2015 has upheld the order of the CIT(A) in deleting the addition of Rs. 1,13,40,000/- made by the AO on account of addition on the basis of seized document of Shri Sohanraj Mehta. The Delhi Bench of the Tribunal in the case of M/s. Bholanath Radhakrishna vide ITA No.5149/Del/2012 order dated 15-04-2013 has upheld the order of the CIT(A) in deleting the addition of Rs. 9 crores made by the AO on the basis of entries found in the books of Shri Sohanraj Mehta, C&F Agent for Karnataka Region of RMD group. The Pune Bench of the Tribunal in the case of Pradeep Arun Runwal reported in 149 ITR 548 has also deleted the addition made by the AO and upheld by the CIT(A) on account of additions made on the basis of the seized papers from Shri Sohanraj Mehta, C&F Agent of RMD group. 131. Based on the above decisions, the Pune Bench of the Tribunal in the case ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fore, in absence of any cogent evidence in the hands of the department, it is not proper to decode the same by adding two more zeros. 134. So far as the statement of various persons recorded during the course of search in the case of Shri Sohanraj Mehta are concerned, the presumptions u/s.132(4A) will apply to the person who is searched and in whose custody the papers are found. Therefore, we find merit in the submission of the Ld. Counsel for the assessee that loose papers found with Shri Sohanraj Mehta cannot be presumed to be belonging to the assessee or reflecting the business transaction of the assessee. It has been held in various decisions that the presumption u/s.132(4A) is applicable only against the person from whose possession the books of account or other documents were found and not against any other person. It has been held that as per section 132(4A) where any books of account or document is found in the possession and control of any person in the course of the search, it is to be presumed that they belong to such person. Thus, clearly the presumption is in respect of the person from whom they were found. In the instant case, such incriminating documents were foun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ngalore factory to various C&F agents in Tamilnadu, Andhra Pradesh, Kerala, South Maharashtra etc. No proof that these agents have taken the stock from Shri Sohanraj Mehta and paid money to the assessee or Mr. Mehta was found. If all these sales are made through Shri Sohanraj Mehta in these territories, the above C&F agents would have objected. Secondly, no evidence that Shri Sohanraj Mehta maintained the warehouses in various states was found. Thus, if what Shri Sohanraj Mehta says is correct, these unaccounted sales can be made by Shri Sohanraj Mehta and that too in his region, i.e. Karnataka and any other presumption is not possible. 139. We further find that the accounts written by Shri Sohanraj Mehta are written for the period from January 2003 to February 2008 whereas the payment chits written by the assessee to Shri Sohanraj Mehta are for the period from June 2006 to October 2007. No letters for the balance period are found during the searches. We therefore find force in the arguments of the Ld. Counsel for the assessee that what is not found is presumed to be not there and therefore Shri Sohanraj Mehta has not corroborated that the assessee has verified all these loose p....