TaxTMI 
TaxTMI 
2017 (6) TMI 1183
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.... if any action was to be taken against the assessee, the same should have been u/s 153C and not u/s 148. 4] The learned CIT(A) erred in confirming the additions of Rs. 34,00,000/- on account of the alleged finance provided by the assessee to Shri S. H. Soni and also of interest of Rs. 7,14,000/- on the same amount merely on the basis of the diaries maintained by Shri Soni and which were found during the search at his premises. 5] The learned CIT(A) was not justified in confirming the above additions without any evidence was found to the above effect and particularly when, the diaries found with Shri Soni could not be considered as an evidence against the assessee. 6] The learned CIT(A) failed to appreciate that the assessee's name was nowhere mentioned in the seized diaries found with Shri Soni and hence, there was no question of any addition to be in the hands of the assessee. 7] The learned CIT(A) failed to appreciate that - a. The diaries seized during the search at the premises of Shri Soni could be considered to be true and correct evidence only in his case but not in the case of the assessee. b. It may or may not be tr....
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....common office premises and had common staff members. Both the brothers had shown interest income from the loan advanced to various borrowers in several years. During the course of search operation, large number of documents, books of account were seized relating to the money lending business. Apart from regular transactions relating to the finance brokerage, incriminating documents relating to advances, cash loans were found and seized which were mostly in the form of blank promissory notes duly signed by the borrowers, blank undated cheques duly signed by the borrowers, with an amount of loan mentioned. Besides the entries in the cash book of part period, vide B.No.100/Panchnama dated 02.08.2003, checklist of borrowers indicating the due date of payment of interest and brokerage to Shri Soni were found (for the period 01.01.2000 to 31.12.2002, with broken period). The modus operandi followed by Shri Soni was that cash loan was advanced for 90 days, after deducting interest amount and brokerage amount. At the time of borrowing the cash loan, the borrowers handed over the blank cheque of the full amount borrowed and also promissory notes. Another promissory note for one percen....
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.... that on certain loose papers found during the course of search, there were signatures of assessee. The assessee was thus, show caused as to why Rs. 34 lakhs plus interest should not be added as his income. In reply, the assessee pointed out that it had not made any transaction with Shri Soni or any other party through him and hence, had no connection to the entries. The explanation filed by the assessee was found to be not satisfactory since the assessee's name was enlisted amongst the names of borrowers and lenders. In view thereof, the Assessing Officer made addition of Rs. 34 lakhs under section 69 of the Act and further addition on account of interest under section 56 of the Act at Rs. 7,14,000/-. 5. Before the CIT(A), the first objection raised by the assessee was against the validity of re-assessment under section 147 of the Act. The second issue raised was in respect of addition made of Rs. 34 lakhs under section 69 of the Act and the interest thereon. The CIT(A) noted that the assessee had raised the issue of validity of re-assessment proceedings under section 147 of the Act in the written submissions filed. However, the assessee had not raised any ground of appeal in t....
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.... 21.10.2000, page no.44 dated 25.10.2000, page no.58 dated 13.11.2000, page no.66 dated 22.11.2000, page 67 dated 23.11.2000, page no.70 dated 27.11.2000, page no.82 dated 11.12.2000, page no.86 dated 15.12.2000, page no.95 dated 26.12.2000 and page no.99 dated 30.12.2000. These entries are out of the seized documents vide bundle no.100 for the quarter 01.09.2000 to 31.12.2000, and are in addition to the entries in the name „Nanduseth Birla‟ on many of the pages contained in this bundle. Although these documents do not relate the assessment year under consideration, but, to the next assessment year; this doesn't given any relief to the appellant. This is because these documents are part of the same seizure, and the entries in bundle no. 100 are in the nature of cashbook, which show that the transactions related to payment of interest as well as repayment of loan, which are arising out of and linked with the seized documents vide bundle nos. 98 and 99, which recorded the giving away of the loan by Shri Nandkishor H. Birla, entered under the head 'Investor'. The authenticity and veracity of these seized documents" has been duly discussed, analysed and accepted....
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....hen the Department had no legal right to ignore or disbelieve the name of investor written on that very seized material. Similarly, the Tribunal also took note of the name of lenders as well and also the list of repayment of loan, etc. and based on these, the Tribunal accepted that Shri Shriram H. Soni, was finance broker, on the basis of list of investors / borrowers. The CIT(A) vide para 3.11 referred to the statement recorded on 30.07.2003 during the course of search of Shri Sunil. W. Ratnakar, Accountant, who described the modus operandi in detail and also pointed out that the list of investors included Shri Hiralal Birla, Shivaji Nagar, father of Shri Nandkishor Birla. The CIT(A) thereafter, referred to various other parts of discussion in the order of Tribunal and held that the Tribunal had relied on the entries under the head 'Investors' in Bundle Nos.98 and 99, which related to a particular person mentioned therein and also referred to the list in Bundle No.100 of the list of lenders. In the totality of the above said facts and circumstances and following the ratio laid down by the Tribunal vide its order dated 17.06.2010 in the case of Shri Shriram H. Soni and the entries ....
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.... to the first document at page 18 dated 28.03.2001, second one at page 19, dated 20.01.2001 and the third one at page 20, dated 30.03.2001 and in these documents, the entries are in the name of Birla NK, Birla Nandkishor and Birla NK, respectively. He further referred to the tabulated chart, under which the data of borrowers is tabulated; in the documents which were maintained by Shri Soni against the data entered by the borrowers, the name of investor was also mentioned. However, no such documents were confronted to the assessee and to the remand report, the documents as mentioned above were attached. The learned Authorized Representative for the assessee further referred to the order of CIT(A) in para 3.8, wherein he has also took note of various dates on which the amount is alleged to have advanced by the assessee. He strongly pointed out that all these entries which are being talked of or being referred to relate to the next financial year and do not relate to the year under consideration. The learned Authorized Representative for the assessee pointed out that no addition was made on account of alleged entries relevant to the succeeding year in the hands of assessee in assessme....
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....ases of Tulsiram Jodharaj Pallod Vs. ITO (2015) 44 CCH 112 (Pune-Trib.), in Shri Ratanlal S. Dugar Vs. ITO in ITA Nos.57 & 58/PN/2011, relating to assessment years 2000-01 and 2001-02, order dated 29.03.2012 and in Jagannath Eknath Lahoti (HUF) Vs. ITO in ITA No.453/PN/2012, relating to assessment year 2000-01, order dated 11.02.2014. The next contention of assessee was that the addition under section 69 of the Act can be made only if there is material found against the assessee. Where the assessee had denied that he had made any advances / deposits and merely on the basis of certain entries, the Hon'ble High Court of Allahabad in CIT Vs. Salek Chand Agarwal (2008) 300 ITR 426 (All) held that the provisions of section 69 were not attracted. 10. The learned Departmental Representative for the Revenue on the other hand, relied on the orders of authorities below. The learned Departmental Representative for the Revenue was also during the course of hearing asked to produce seized material on the basis of which, the additions were made in the hands of assessee in the captioned year. Despite several opportunities, the learned Departmental Representative for the Revenue has failed to p....
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....Soni. Taking the gamut of incriminating evidence found during the course of search, he was held to be engaged in the unaccounted business of money lending and the income was accordingly, worked out in the hands of Shri Soni. Simultaneously, proceedings were initiated against the persons who had either invested or borrowed funds from Shri Soni. The assessee was found to be one such investors, wherein certain entries were found which were alleged to be belonging to the assessee. It may be pointed out herein itself that no specific document was found which related to the assessee, except the entries in various documents which were admittedly, not in the name of assessee but allegedly, in the abbreviated name similar to that of assessee. The document referred to by the authorities below was in the name of Nanduseth Birla or BIRA NK, Bira H.NANDK and the presumption of Assessing Officer was that these entries belonged to the assessee. For coming to the said conclusion, the Assessing Officer alleged that the document bore signature of assessee and also reliance was placed on the statement of accountant Shri Ratnakar of Shri Soni, who pointed out that he know Hiralal Soni, who was the fat....
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....basis of data of borrowers for the period ending 31.03.2000. The Assessing Officer refers to the papers / documents seized as per Bundle No.100 vide Annexure A, Panchanama dated 02.08.2003 from Shri Shriram H. Soni, which as per the Assessing Officer corroborates with the transaction mentioned in the papers seized vide Bundle No.98. The copy of Bundle No.100, Annexure A is enclosed are pages 18 to 21 of the Paper Book. The first document is dated 28.03.2001, there is name of Birla NK and second document is dated 20.01.2001 and the third document is dated 30.03.2001 i.e. all these documents relate to assessment year 2001-02 and not to assessment year 2000-01. These tabulated details in the remand report are for period ending 31.03.2000, but they do not relate to the documents enclosed, which are relating to assessment year 2001-02 and not to assessment year 2000-01. Further, the CIT(A) has also referred to these entries in para 3.8 to establish that the assessee had invested Rs. 34 lakhs. The perusal of para 3.8, which is reproduced by us in the paras hereinabove would clearly shows that all those entries also relate to assessment year 2001-02 and not to the year ending 31.03.....
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....roduce seized material in order to establish the case of Revenue that the entries relating to the year under consideration were found and furnish sufficient evidence against the assessee. However, despite allowing several opportunities to the learned Departmental Representative for the Revenue and adjourning the case from time to time, no seized material was produced to establish the case of Revenue. In the absence of the same, we find no merit in the addition made in the hands of assessee. In this regard we place reliance on various orders passed by the Tribunal in respect of entries of Shri Soni. 17. The first such case is that Tulsiram Jodharaj Pallod Vs. ITO (supra). The Pune Bench of Tribunal in the case of M/s. Kejals Furnishings Vs. ACIT (supra) has referred to the case of alleged investors with Shri Soni. The Tribunal vide para 11 in turn, had relied on the decision in the case of Jagannath Eknath Lahoti (HUF) Vs. ITO (supra) to hold as under:- "11. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various dec....
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....considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in the instant case made addition of Rs. 15 lakhs and corresponding interest as well as brokerage on the same on the basis of certain documents seized from the premises of Mr. Shriram H. Soni. It is an admitted fact that during the course of search in the premises of Mr. Shriram H. Soni his statement was recorded u/s.132(4) and he had refused specifically to identify each and every investor/operator. Although credits appearing in the seized diaries in the name of different investors was treated as undisclosed income of Mr. Shriram H. Soni by the CIT(A), however, the Tribunal vide order dated 17-06-2010 has reversed the same by holding that persons are identifiable and all the materials available clearly show that Mr. Shriram H. Soni has only earned commission. Be that as it may be, Mr. Shriram H. Soni had refused to identify each and every person. We find the seized diaries/papers clearly show different names such as "Jagannath....
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....eresting 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 the seized document. Moreover, nothing is on record to show that Shriram H. Soni has stated about the assessee that whatever the notings found were in respect of the assessee. No corroborative material is found. In our opinion, the Ld.CIT(A) has rightly deleted the entire addition as there is no evidence against the assessee. We find no merit in the appeal filed by the Revenue. Accordingly, the same is dismissed." 8.2 Since identity of the assessee was not proved by Mr. Shriram H. Soni at any point of time nor any corroborative evidence was found from the residence....