TaxTMI 
TaxTMI 
2018 (4) TMI 1548
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....Dixit group in the form of cheques, pay orders and also in the form of cash. During the course of assessment proceedings, the Assessing Officer asked the assessee to furnish complete details of payment made to Shri Vijay Dixit and his group companies along with source of payment and documentary evidences. 3. It was replied that since the assessee is extremely social person, many people visit assessee's place to discuss their problems. Further, the seized files are maintained by the staff of Mr. Vijay Dixit who kept on visiting assessee's place due to his business relation with the assessee. Since many transactions appearing in the extracted pages pertained to assessee and his group concerns, the assessee, taking the moral responsibility, wants to explain the details. It was submitted that page-1 of the extracted document notes the details of all payments made by the assessee group to Vijay Dixit and his concerns. As per the noting on the said page, the total amount paid by the assessee group during financial year 2010-11 is Rs. 13.42 crores. It was submitted that an amount of Rs. 15.04 crores (inclusive of interest) was paid to Mr. Dixit and his group concerns during financial y....
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.... and an amount of Rs. 1,42,75,159/- was explained to be paid as interest. However, the assessee did not accept the following entries appearing in the above documents :- a. A sum of Rs. 12,48,356/- transaction between Sh. Vijay Dixit & Senior Builders Private Limited. b. Payment made after 25.12.2010 amounting to Rs. 6,12,37,817/-. c. Over Draft by Senior Builders Limited account Rs. 85,00,489/-. d. Interest amounting to Rs. 2,70,29,795/-. e. Payment made during 28.12.2010 to 07.03.2011, Rs. 3,11,10,600/-. f. Pay order Rs. 47,82,037/-, (Rs.1552000 + Rs. 3230037/-). g. Rs. 75000/- and Rs. 15000/- dated 15.07.2010. h. Cash Rs. 200000/- dated 02.07.2010. 5. Subsequently, the assessee made further submission explaining each and every entry. However, the Assessing Officer was not satisfied with the explanation given by the assessee. According to him, a perusal of the extracted documents from the hard disk shows that as per page no.1 the total payments made by Shri Rajesh Kumar Kanodia and Shri Rajat Kumar Kanodia to Vijay Dixit amounted to Rs. 13,42,76,687/-. As per page no.4 of the extracted documents the total p....
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....s. 200000/- by Kanodia Group Interest on Rs. 31310600/- @ 3.334% as mentioned on page no.4 Rs.31310600/- ii) Bank overdraft Rs. 8500489 plus interest thereon Rs. 851748/- @ 3.334% as mentioned on page no.4 Rs.3290456/- iii) The total interest received by Kanodia Group on Rs.27029794/- Rs.9352237/- a) Rs. 104349470 up to 28/02/2011 From 28/02/2011 to 31/03/2011 Rs.2203062/- b) On balance amount of Rs. 29927217 Pg. No.1 upto 31/03/2011 Rs.2425770/- Rs.31658626/- Less: Interest shown by the assessee a) Mrs. Sumedha Pathak Rs.5,14,908/- b) Sh. Rajesh Kanodia Rs.1,37,60,251/- Rs14275159/- Balance amount of interest not disclosed = Rs. 17383464/- (Rs.31658626 - Rs. 14275159) c) Share of Sh. Rajesh Kanodia & Smt. Sumedha Pathak in the ratio of advance given by Vijay dixit group: i) Sh. Rajesh Kanodia ii) Smt. Sumedha Pathak Rs. 54,27,849/- will be added in Smt. Sumedha Pathak in the A.Y. 2011-12. Rs. 1,19,55,614/- Thus the assessee has made unacco....
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....xit only. An idea about this can be had from some of the observations. In item no. 7 is Vinod, Accountant salary. Vinod is not an employee of the assessee. Vinod apparently is an accountant of Mr. Vijay Dixit whose salary has been paid. Similarly at item no.8 is payment to Solanki, driver, Solanki is also not an employee of the assessee. He apparently is the driver of Mr. Vijay Dixit. Similarly at item no.11 it is stated Policeman Tomar and P expenses. Item 5 and 12, 22 and 23 are the amount of the cash deposited in the Senior Builders ltd. Accordingly all these payments are made by Vijay Dixit. It is not a case where this amount is not explainable from Mr. Vijay Dixit. On going through the bank statement of Senior Builders Lt. it can be seen that cash has been withdrawn from time to time from this bank account. All these cash has been utilized by Mr. Vijay Dixit. The AO has totally ignored the explanation and arbitrarily made the addition in the hands of the assessee. The AO never made any effort to even enquire from Mr. Vijay Dixit. He did not make any effort to co-relate these transactions with the business associates or the activities of Mr. Vijay Dixit. All these transactions ....
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....st is concerned, it was submitted that the Assessing Officer ignoring the correct figure of Rs. 1,42,75,159/- done his own calculation and computed the interest at Rs. 3,16,58,626/-. It was submitted that the figure of interest nowhere comes in any of the documents. Further, there is no evidence to show that the assessee has received such huge amounts of interest. The Assessing Officer without verifying the veracity of the evidences found in the explanation submitted by the assessee made the addition which is not correct. It was submitted that the Assessing Officer neither called Shri Vijay Dixit for his examination nor asked for the accounts of Senior Builder Ltd. which is a company. Further, the Assessing Officer has also did not enquire from the respective bank accounts to make further enquiries. It was submitted that as per the provisions of section 132(4A) of the I.T. Act, there lies a presumption against the assessee, in case certain documents are found during the course of search. However, such presumption is a rebuttable presumption and as such the additions on the basis of such documents are not to be made mechanically without giving any finding against the same. Various d....
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....ute that the assessee had business connection with Sh. Vijay Dixit group which also includes Senior Builders Ltd. belonging to Sh. Vijay Dixit. It is also not in dispute that the said 9 pages are extracts of the seized hard disc. The main issue to be adjudicated in this ground is whether the transactions mentioned on the nine pages pertain to the appellant and whether on the basis of the same addition could be sustained in the hands of the assessee. 5.3.3 The first of the 9 pages gives details of payments with the grand total of Rs. 13,42,76,687/-. The AO has admitted that the transactions contained in page No. 1 are duly accounted for by the assessee and his group. He also accepted that page no. 2 and 3 are repetitions of the amounts written on page no.1. The AO has concluded that the amounts mentioned on page no. 5 relate to the amounts paid in cash by the assessee to Vijay Dixit group which has not been accounted for by the appellant. Thus he has brought to tax Rs. 3,11,10,600/- mentioned in the said page No.5. On the basis of entries on page 4 the AO has also concluded that the appellant has received interest at the rate of 3.3334 % per month on the total advances made....
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....6. 5.3.8 Further, there is no allegation that the bank account of Senior Builder Ltd. with Bank of Baroda is an undisclosed/ concealed bank account of Senior Builders Ltd. Hence, it would be difficult to say that the amounts duly transacted through banking channels by Senior Builders could be unexplained investments of the assessee. Such inference could have been drawn only if those transactions are no reflected in the books of Senior Builders. But then, it would become taxable in the hands of Senior Builders in whose bank account these amounts have been found deposited. 5.3.9 The said page-S, also has payment of salary of Rs. 15000/- to "Vinod Accountant" who apparently is an employee of Vijay Dixit group. Next entry shows the payments to Solanki, Driver and the assessee has clearly stated before the AO that Solanki was not his employee. Item No. 11, refers to payments made to Policeman Tomar & P. expenses. Similarly, there are narrations which show that Vijay Dixit has spent money/ paid amounts to certain persons like "to NP Singh for Khemka case", "to Khan for MG Road Mall" etc. The assessee has submitted before the AO that all the. parties/ persons whose names....
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....ash withdrawal on 07th January, 2011 and 17th January, 2011. 4.14 Further a sum of Rs. 8,00,000/- has been paid by cheque on 09th March 2011 as can be cross-verified from the statement at page 13 and of the bank statement at page 88. 4.15 Further a sum of Rs. 31,50,000/- has been paid by cheque by Mrs. Kumkum Kanodia on 10th February, 2011 as is evident from page 13 read with page 85 and the same day the amount has been withdrawn in cash by Mr. Vijay Dixit. 4.16 This clearly shows that all cash transactions recorded at page 17 are that of the Vijay Dixit and not of the assessee. 4.17 The above explanation clarifies the allegation of Rs. 3,11,10,600/- out of Rs. 3,98,11,089/-. 5.3.11 Considering the above facts, I am of the view that the transactions recorded on page-5 pertain to Vijay Dixit group and not to the appellant. There are no evidences to show that all these transactions were financed by the appellant. In fact such chances appear remote as the page contains transactions involving the bank account of Senior Builders Ltd and payments to persons who are apparently employees of Sh. Vijay Dixit. 5.3.12 Further, inspite of re....
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....e effort to lead evidences to show that all the transactions in page 1 are properly accounted for by them. They have filed a reconciliation statement, before the AO (reproduced at page 2 & 3 of assessment order) whose final figures almost match with the amounts written on page 4. (Rs. 13,42,76,687 vs Rs. 13,42,85,648). The AO has not commented upon the reconciliation. He has gone by the arithmetic derivation of the figure of Rs. 3,11,10,600/- from the Rs. 13,42,76,687/- to conclude that the transactions reflected on page 5 are all undisclosed payments of appellant to Vijay Dixit Group. 5.3.16 I have already noted that such inference is not substantiable because Rs. 3,11,10,600/- also includes deposits into the bank a/c of Senior Builders Ltd which could only be out of their own books and could not be from the appellant. The said page also includes payments to persons related to Sh. Vijay Dixit and not the appellant. They are transaction of Sh. Vijay Dixit. The AR's submission that Sh. Vijay Dixit had substantial cash withdrawals from his bank a/c cannot also ignored (they could be the source of the present payments). If the sources of the transactions entered at page-5....
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....ed to the file of the Assessing Officer for fresh adjudication. 13. Ld. counsel for the assessee on the other hand heavily relied on the order of the ld. CIT(A). Referring to page 17 to 23 of the order of the ld. CIT(A), he drew the attention of the Bench to the various submission made explaining each and every entry. Referring to page 12 of the order of ld. CIT(A), he drew the attention of the Bench to the various submissions made. He submitted that the ld. CIT(A) after appreciating the facts properly has deleted the addition. Further, the Assessing Officer while accepting the pay orders as genuine and being purchased by M/s Senior Builders and Developers Ltd. has not accepted the cash transaction as belonging to them. Nothing prevented the Assessing Officer from making enquiries from M/s Vijay Dixit or his group of companies to find out the veracity of the submissions made by the assessee. Since the ld. CIT(A) has considered the submission made by the assessee and found the same to be correct, therefore, his order deleting the addition made by the Assessing Officer is fully justified. He accordingly submitted that the order of the ld. CIT(A) be upheld and the grounds raised....