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2017 (12) TMI 1470
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....delay in filing of the appeals. A perusal of the affidavit shows that delay in filing of the appeals for the assessment years 2003-04 & 2004-05 has been caused due to confusion and mis-communication between the assessee and his Authorized Representative to whom the task of filing appeals before the Tribunal was assigned. After perusal of affidavit, we are satisfied that delay in filing of appeals is not intentional or deliberate. The delay has occurred for the bona-fide reasons mentioned in the affidavit. Therefore, delay in filing of appeals for assessment years 2003-04 & 2004-05 is condoned and appeals are admitted to be heard and disposed of on merits. 3. The brief facts of the case as emanating from records are: The assessee is a partner in M/s. Nanchand & Company, engaged in business of wholesale and retail trading of dry fruits. The assessee is also engaged in business of money lending. A search and seizure action u/s. 132 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') was carried out at the business and residential premises of assessee on 29.03.2003. During course of search Rs. 40,00,000/- cash was seized from residence of assessee. A simultaneous sear....
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.... 59,00,000 17,01,000 2002-03 5,00,000 17,91,000 2003-04 - 17,91,000 2004-05 - 17,91,000 Total 71,00,000 87,39,000 5. Shri Neelesh Khandelwal appearing on behalf of the assessee submitted that during the course of search at the business and residential premises of the assessee, except cash and some jewellery, no other document was found by the Department. From total cash of Rs. 41,47,390/- found during search, Rs. 40,00,000/- was seized. The assessee offered aforesaid amount of Rs. 40,00,000/- in various assessment years starting from 1998-99 to 2004-05 in the name of three concern i.e. M/s. Nanchand & Company, M/s. Swati Automobiles and M/s. Danendrakumar & Company. During search, the Department also found jewellery worth Rs. 7,48,867/-. The said jewellery was not seized. The 2004-05 - 17,91,000 Total 71,00,000 87,39,000 Revenue on the basis of some documents and entries in the books of Soni seized during search on Soni Group is trying to link that the assessee is engaged in money lending business and had advanced unaccounted cash loans to Soni Group. The ld. AR submitted that document seized from the premises of Shriram M. Soni does not ....
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....d herein below: "Ground No. 1 (ITA No.1008 to 1012/PN-2011 & 1334-1335/PN-2011) Issue being addition on account of unaccounted cash investments and imputed interest thereon. 3. promissory notes : 3.1. As per the AO, during the search proceedings in case of Shri Shriram Soni, large number of blank promissory notes and undated cheques of borrower were found and the name of appellant was written in distorted/abbreviation forms on the said promissory notes. 3.2. However, on perusal of the CIT(A) order and as per the submissions made by the DR during the course of hearing before ITAT it has been an accepted fact that no promissory notes has been found in respect of the appellant. None of the undated cheques found belong to the appellant. 4. Distorted/ Abbreviated names : 4.1. Printed ledger extracts has been found from the premises of Shri Sriram Soni wherein the transactions pertaining to Investors/borrowers are reflected. As per the AO the said transactions include the cheque transactions as well as the cash transactions. 4.2. It has been submitted by the AR that the names appearing in the said ledger extracts do ....
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.....7 Further, on perusal of his reply to question 3 and 4 of the statement on page 112 & 113 of PB, it can be concluded that he was not at all involved in physical movement of cash. Therefore, he was never a party to receiving / paying cash from/to investors so that he can identify the appellant. 6. Connection with Shri Sriram Soni : 6.1. During the statement recorded during search proceedings, the appellant had categorically denied any connection with Shri Sriram Soni. 6.2. Whereas, the appellant had stated that he has few transactions with Jugalkishore Soni (Brother of Shri Sriram Soni). But the said transactions are in cheque only and no cash transactions have been entered into by him. 6 .3. During the course of hearing it was submitted that appellant had no connection with Shri Sriram Soni, though he had entered into few cheque transactions with Shri Jugalkishore Soni. It was also submitted that the transactions entered into with Shri Jugalkishore Soni were completely separate transactions on his personal account which had no connection with Shri Sriram Soni by any means. 6.4. During the course of hearing, the Ld DR had stated that app....
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....individual who used to invest cash with Shri Sriram Soni. 9. Case directly covered by decisions of Pune Tribunal with exactly similar facts : 9.1. Jagannath Eknath Lahoti HUF Vs ITO Wd 1(1), Pune ITA no. 453/pn/2012 (ITAT Pune "B" Bench) 9.1.1. Para 2.5, page 4 of the order refers to the observation made by the AO about the assessee's name appearing in the seized documents in abbreviated and/or distorted form. Also, AO has mentioned that Shri Soni declined to identify such investors /persons. 9.1.2. Para 4, page 6 of the order refers to submission of the assessee that Shri Soni has neither identified the assessee as the person who has advanced loan to him nor gave the identity, genuineness or credit worthiness of the loan creditors. 9.1.3. Para 6, page 9 of the order refers to the submission by the assessee categorically stating that he is not the same person as appearing in the seized documents. The assessee also submitted that no promissory note or security in the name of the assessee was found from the premises of Shri Soni. Also, no confirmation or any other document was found from the premises of Mr. Soni so as to confirm that t....
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....O Wd 1 (1), Pune ITA no. 453/pn/2012 (ITAT Pune "B" Bench). 9.3.2. The distorted / abbreviated names referred to by the department in this case were: "PALD TJ" (pg 12,17,18 of PB), "D S PALD" (pg 2 of PB) 9.4. M/s Kejals Furnishings Vs ACIT (ITA No. 928, 929/Pn/2011) (ITAT Pune) 9.4.1. This case, with exactly similar set of facts including distorted names, was allowed completely in favour of assessee relying on the decision of Jagannath Eknath Lahoti HUF Vs ITO Wd 1(1), Pune ITA no. 453/pn12012 (ITAT Pune "B" Bench). 9.4.2. The distorted/abbreviated names referred to by the department in this case were: "Kejals - Rashmi G" (in Hindi at pg 90, 98, 103, 105 of PB), "Rashmi Gandhiji Kejals" (in Hindi at pg 88 of PB), "kejals Ushicover" or "Kejals Rashmi Gandhi" (in Hindi at pg 87 of PB), "Kajals Rashmi" (pg 4 of PB) 9.5 Nandkishor Hiralal Birla HUF Vs. ITO (ITA 53/pun/2011) (ITAT Pune) 9.5.1. This case, with exactly similar set of facts including distorted names, was allowed completely in favour of assessee relying on the decision of Shri Ashok Keshvlal Oswal Vs ITO (ITA no. 357/PN/2012) (ITAT Pune). 9.5.2. The distorted /....
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....0/- were seized. The assessee has failed to explain the source of generation of cash Rs. 40,00,000/-. The Tribunal in the case of Shriram H. Soni Vs. The Addl. CIT Central Range-2 in ITA No. 474 to 478, 518/PUN/2017 decided on 17th June, 2010 deleted the addition with the observations that no addition can be made in the hands of Shriram M. Soni either on protective basis or substantive basis. If the aforesaid amount offered by assessee is neither taxed in the hands of assessee nor in the hands of Shriram M. Soni then this amount will escape tax net. The ld. DR referred to the statement of Shri S. W. Ratnakar, Accountant of Shriram Soni at page No. 112 of the paper book. The ld. D.R pointed that in response to question No. 10, Ratnakar admitted that major cash money lender/investor who use to lend/invest money to Soni Brothers include Shri Nanchand Bhogilal Shah. The ld. DR pointed that a diary seized during survey at the premises of Shriram M. Soni was written by Ratnakar. Ratnakar decoded the entries in diary. Therefore, the statement of Ratnakar admitting that assessee was one of the investor/money lender to Soni Group is credible piece of evidence and thus, cannot be ignored. Th....
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....rder of 2002-03 Para D) This can be highlighted from below example:- 1) The entry on page 26 of Bundle no 100 mention Rs. 479000/- receipt from Nanchand Bhai for M/s. Bora Transport In bracket code (N/3) is used. This means Nanchand Bhai & code N /3 are same person. The document also mentions how much interest is to be calculated. 2) The entry on page 34 bundle No.100 mentions receipt of Rs. 4,77,500/- from Nanchand for skyline. This also mentions code (N/3) in bracket this means Nanchand & code N/3 are same person. Similarly many documents mention receipt from Nanchand Bhi for borrowers namely Bora Transport, skyline, G.Hathi Bai, Vinod Transport. IT IS PERTINENT TO HIGHLIGHT THAT IN BUNDLE NO 98 & 99 the name Nanchandani & Nandchand is used. But the name of borrowers & amounts are same which are mentioned in documents in bundle 100. Few examples to highlight same are Page No. 123 of paper book of Assessee 1) Page 67 of Bundle No. 98 Ledger of Nandchandani- Skyline account is detailed- Same borrowers and amount mentioned under name NANDCHAND BHAI in Bundle No.100 2) Page No 126 Paper....
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....ce is clear:- 1) He admits that transactions which are in cheque under name Nandchand Bhai are his transaction 2) Financial relationship with Soni Brothers is established. 3) If cheque transactions are true then Cash transactions on same document is also true. In a way assessee himself admits he is mentioned as Nanchand Bhai in ledger seized from Soni Brothers. 3) The statement of employee of the Soni Brothers Shri Ratnakar too is a very important credible evidence in this regard. Shri Sunil W. Ratnakar was accountant of Shri Soni Brothers and while deciding case of Shri Soni, the Honble ITAT held that a statement of Shri Ratnakar dated 30.07.2003 on the seized bundle 98,99 & 100 during search has got a substantial evidentiary value (the statement submitted vide letter dated 30.12.2013 by Department to the Honble Tribunal). In his statement he has stated that the investors used to invest their money & borrowers used to take money as loan through Soni Brothers. In Q No.3 of statement he states that whenever certain cash is to be received by Soni Brothers, he is keeping the accounts & similarly he maintains account of all cash distributed. ....
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....g with Soni Brothers. - The disclosure made in different forms has already been consumed and utilized for the assets found in their cases and has been capitalized accordingly in respective hands and hence cannot be used to explain the investment made by assessee with Soni Brothers or interest earned thereon. - The assessee had recoverable of Rs. 64 lacs on date of search from Soni Brothers and also Rs. 40 lacs was found seized from assessee. If holistically seen that total undisclosed income of minimum 1.04 crores has been established in no way 40 lacs available with assessee on search can be set off against recoverable from Soni Brothers." 7. We have heard/read the extensive submissions made by both sides and have perused the orders of Authorities below. We have also considered various decisions and documents on which rival sides have placed reliance. The assessee in all appeals has assailed the additions made on account of unaccounted interest income. In appeals for assessment years 2000-01 to 2002-03, the assessee has also impugned addition on account of unexplained investment in money lending business. 8. During search operation carried out at the premis....
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....Officer, no promissory note or blank cheques on the names of the assessee were found. On perusal of the remand report, we find that Assessing Officer himself has examined many persons on suspicion, whose names were "Ashok Oswal" and the middle name was different. Admittedly, in the seized document, there is no middle name. The assessee filed the specific affidavit denying having any relation with Shriram H. Soni. In the remand proceedings, the AO examined bank account and has reported that no transaction was found between Shriram H. Soni and the assessee. It is very much interesting that when the AO himself is not sure about the identity of "Oswal Ashok", the name which is found in the seized document, how the assessee can be fastened with the liability of unaccounted transactions. We find that the AO himself admits that the assessee has specifically denied. Law is well settled that burden is on the Revenue to establish the identity if any person is to be charged under the Act. The action of the AO examining the different persons having the same name prima-facie establishes that Assessing Officer himself is not sure that the assessee is the same person whose name was found noted in....
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....shok Keshvlal Oswal Vs. ITO (supra), deleted the additions in the case of M/s. Kejals Furnishings Vs. ACIT (supra.), Tulsiram Jodharaj Pallod Vs. ITO (supra.) and Jagannath Eknath Lahoti HUF Vs. ITO (supra.) for similar reasons. The additions were made in all the aforesaid cases on the basis of diary, papers found and seized during the course of search in the case of Shriram H. Soni. In all the aforesaid cases, names of the parties were recorded either in abbreviated form or in distorted manner. Another important observations of the Tribunal in all the above cases is that in none of the said cases any promissory note or blank cheque or any security document were found from the premises of Shriram H. Soni. Apart from the entries, in the books of Shriram H. Soni in abbreviated/coded names, there are no other corroborative evidences to link the parties with Soni group. In the present case as well, we find that no document such as promissory note, signed blank cheque, property document in the form of security, etc were found in name of assessee during course of search either at the premises of Soni group or in the premises of assessee. 13. The ledger entries in the name of "Nanch....
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....various decisions on which the ld. DR has placed reliance. We find that all the decisions referred by ld. DR are distinguishable on facts and some of the decisions are not even remotely connected with the issues emanating in the present set of appeals. The main emphasis of the ld. DR is that the rules of evidence are not strictly applicable in Income Tax proceedings. There is absolutely no dispute on this proposition. However, the additions cannot be made in the hands of assessee merely on the basis of suspicious entries found in books of third party without there being any material to link the assessee with those entries. Additions in the hand of assessee cannot be made when there is vacuum between the material collected/ seized during search from third party and the assessee. Thus, the decisions cited by ld. DR does not support the cause of Department and hence, no reliance can be placed on them. 16. In view of the facts of the case and various decisions discussed above, we are of considered view that no addition can be made in the hands of assessee in absence of any corroborative evidence to link some suspicious entries found in the books of third party. As has been pointed e....