AI Drafter 
TaxTMI 
TaxTMI 
2017 (12) TMI 1393
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....7. 3. First, we shall take up the cross appeals filed by the assessee and the Revenue, where the issue is interlinked, wherein the Assessing Officer had made the addition of Rs. 1,10,00,000/- on account of undisclosed investments in M/s. SAAR Properties based on seized document found at the residence of Shri Ashok Jain. The CIT(A) however, confirmed the addition to the extent of Rs. 22,50,000/- and hence, both the assessee and the Revenue are in appeal before us. 4. The assessee in ITA No.2116/PUN/2014 relating to assessment year 2005-06 has raised the following grounds of appeal:- On the facts and circumstances of the case and in law: 1. The CIT(A) erred in confirming addition to the extent of Rs. 22,50,000/- out of an addition of Rs. 1,10,00,000/- made in the Asst. Order, as undisclosed investment in M/s. Saar Properties based on seized document (Page No.9 Bundle No.1) found at the residence of Shri Ashok Jain. The appellant pleads that the AO and CIT(A) failed to appreciate that the seized document contained projections and did not evidence actual transactions and was insufficient evidence to justify an adverse conclusion. 2. The CIT(A) failed to appre....
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....ion at the residence of Shri Ashok Jain, one of the documents i.e. page No.9 of Bundle No.1 shows that Shri Nirmal Shantilal Jain i.e. the assessee had also introduced Rs. 1.10 crores. The Assessing Officer drew strength from the fact that the other entries appearing on the page were true, like, loan from Bora, contributions as on the date by Shri Ashok Jain, Nanaware and total expenditure of SAAR at Rs. 1.30 crores as on the date. The assessee was asked to explain as to why the said sum of Rs. 1.10 crores being introduction of capital should not be added in the hands of assessee as undisclosed investments. The assessee in turn, filed written submissions which are reproduced under para 7 at pages 4 and 5 of the assessment order. The assessee explained that the said document was seized at the residence of his brother and no such document or any other document confirming the said entry was found from the residence of assessee or his business premises. The assessee further stressed that none of the jottings therein pertaining to his financial transactions. He explained that he had advanced sum of Rs. 87,50,000/- to M/s. SAAR Properties before the date of search, out of which, Rs. 25 l....
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....ers to Rs. 1.10 crores. He also acknowledged that the document does not bear date and there was nothing in the document to indicate that the amounts mentioned over and above the amount of Rs. 87,50,000/- claimed to have been advanced in cheque were duly accounted for. He thus, confirmed the addition of Rs. 22,50,000/-. 8. Both the assessee and the Revenue are in appeal against the order of CIT(A). 9. The learned Authorized Representative for the assessee pointed out that the assessee was not partner in M/s. SAAR Properties which consisted of three partners Shri Ashok Jain, brother of assessee, S.E. Nanaware and Ranjit Pisal. He further referred to the documents which were seized from the residence of Shri Ashok Jain, which related to M/s. SAAR Properties, wherein four papers were seized and from one of the papers, the Assessing Officer concluded that the assessee has given loan to M/s. SAAR Properties. Our attention was drawn to pages 11 to 14 of the Paper Book and it was pointed out that entries in seized documents were in relation to the purchase of land at Katraj from A.V. Ranak by M/s. SAAR Properties, wherein both the cheque and the cash payments were made for purchasing....
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....ora, who admitted to have paid Rs. 50 lakhs by cheque, there is no merit in making any addition in the hands of assessee. He further pointed out that total transaction for the purchase of land was Rs. 92.10 lakhs, which included the cash component and in case NSJ had paid the amount, then the same should have been mentioned at page 13 i.e. seized document found from Shri Ashok Jain. 10. The learned Departmental Representative for the Revenue pointed out that under section 132(4A) of the Act, entries in the document are presumed to belong to the assessee and the onus was on the assessee to prove its case, which he has not established. He further relied on page 8 of the assessment order to stress that the addition in total should be made in the hands of assessee. 11. We have heard the rival contentions and perused the record. The addition of Rs. 1.10 crores was made in the hands of assessee being undisclosed investments in M/s. SAAR Properties, which in turn, is based on the seized document found and seized at the residence of Shri Ashok Jain i.e. brother of assessee. Search and seizure operations were carried out at the residential and business premises of the assessee on 27.0....
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....R Properties. The assessee had also paid Rs. 87.50 lakhs by different cheques to M/s. SAAR Properties, out of which sum of Rs. 25 lakhs has been returned by the said concern. However, the figures of cheques do not tally with the figures noted at page 9 of Bundle No.1 of the seized document placed at page 11 of the Paper Book. 13. The question which arises is whether addition can be made in the hands of assessee on account of such notings. The first aspect of the said seized document is that no date is mentioned on the said document, which has been also noted by the CIT(A). In the absence of any date on the said page, at best, the same can be only scribbling and further what is the sanctity of making the addition in this year, where different figures are mentioned. The assessee has also admittedly, paid cheque in two accounting years i.e. one ending March, 2005 and the second by April, 2005. The assessee had advanced sum of Rs. 62,50,000/- by three different cheques upto 31.03.2005 i.e. relating to assessment year 2005-06 and in the next year, had paid sum of Rs. 25 lakhs which was also returned by the said concern M/s. SAAR Properties. The second aspect which has to be noted tha....