TaxTMI 
TaxTMI 
2017 (12) TMI 1705
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.... unjustified, arbitrary and against the case of the assessee. Relief may please be granted by deleting the said addition of Rs. 6,12,500/- 3. In the facts and circumstances of the case and in law the ld. CIT(A) has erred in confirming undisclosed income from other sources amounting to Rs. 34,500/- 4. The ld. CIT(A) has erred in upholding the addition of Rs. 1,38,00,000/-u/s 68 of the I.T. Act, 1961.'' 2.1 During the course of hearing, the ld.AR of the assessee has not pressed the Ground No. 1.Hence, the same is dismissed being not pressed. 3.1 Apropos Ground No. 2 and 3 of the assessee, the facts as emerges from the order of the ld. CIT(A) is as under:- ''3.3.2 I have duly considered the assessee's submission and also carefully gone through the assessment order.I have taken a note of the factual matrix of the case as well as case laws relied upon. In this case AO has made the addition on account of undisclosed investment amounting to Rs. 13 lacs made through the finance broker Sh Manish Tambi and interest thereof of Rs. 34,500/-. AO has made a detailed discussion in this regard in para 43 to 53 pg 13 to 15 of the assessment ....
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....ssment on the basis of deaf, dumb and rough noting which nothing more than rough papers are. 2. The order passed by the Ld. AO u/s 153A/143(3) is void ab-initio deserves to be quashed. 3. Under the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the addition of Rs. 3,21,31,893/- as income on the basis of peak creditors calculated by them ignoring the submissions of the assessee and without considering the contention of the assessee against declared peak of Rs. 52,40,137/- which was calculated on more scientific basis. 4. Under the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the addition of Rs. 32,42,597/- as own unexplained cash/capital employed in debtors after addition of Rs. 3,21,31,893/- which amount to double addition and without considering the surrender of Rs. 52,40,137/- by the assessee. 5. Under the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the addition of Rs. 1,24,77,126/- on account of interest income which is not the real income of the assessee and was calculated. 6. The assessee prays your indulgen....
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....le on record, we are of the considered opinion that the seized papers cannot treated as books of account. Furthermore, only the commission income can be assessed in the hands of the assessee @ 0.10% on a total of the credits of Rs. 91,67,81,272/-. The addition u/s 68 of the Act can be made only if any sum is found credited in the books of the assessee. A book means a collection of sheets of papers bound together with the intention that such binding shall be permanent and papers used are kept collectively in one volume. A book which contains successive entries of items maybe a good memorandum book but until those entries are totaled or balanced or both as the case may be, there is no reckoning and no accounts. A book which merely contains entries of items of which no account is made at any time, is not a "book of account" in a commercial sense. Thus the addition made u/s 68 is not justified. It is noticed that over and above the peak credit, the AO has further made an addition of Rs. 52,40,137/- on account of debtors exceeding the creditors. We have found that the peak determined by the AO is not correct, otherwise also, when once peak amount has been added then no separate addition....
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....f persons whose names are appearing in the seized documents cannot be taxed. In fact in pg 16 para 7.4 Hon'ble ITAT Bench Jaipur has also mentioned that when once peak amount is added then no separate addition is required because AO had added over and above peak credit. Accordingly, the case of Manish Tambi will be actually in favour of the assessee. It is also a fact that assessee has not controverted AO's findings given in the assessment order. In view of facts and circumstances of the case and duly considering the Principle of Human Probability as explained by Hon'ble Apex Court in case of Sumati Dayal & Durga Prasad More(Supra), and also duly considering circumstantial evidences of the case, both the additions made on a/c of undisclosed investment of Rs. 13,00,000/= and interest earned thereof of Rs. 34,500/= for the intervening period are hereby confirmed. Assessee's appeal in Grs no 3 & 5 fail.'' 3.2 During the course of hearing, the ld.AR of the assessee prayed for deletion of addition confirmed by the ld. CIT(A) for which following written submission has been filed. ''3. SUBMISSIONS 3.1 The e....
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....rder ld. CIT(A) has mentioned that the order of Shri Manish Tambi is actually in favor of the assessee). Ld. CIT(A) has wrongly held that Hon'ble ITAT Bench, Jaipur has not treated the seized document as a "dumb document". It is submitted that, Ground No. 1 of the assessee's appeal appearing at the Page 6 of the order of Hon'ble ITAT, was not pressed as appearing at para 5.1 at page 7 of the order of Hon'ble ITAT. Thus, the issue of document being deaf & dumb was not adjudicated and ld. CIT(A) is wrong in drawing any inference in this regard. Moreover, Hon'ble ITAT deleted the additions in the hands of Shri Manish Tambi for the technical reasons (page 16 of the order of Hon'ble ITAT) that loose papers cannot be termed as Books, therefore, no addition with reference to loose papers can be made u/s 68 of the Income Tax Act, 1961. 3.3 Ld. AO at para 47 pg 14 of his order has mentioned that some persons whose names were appearing in the documents have owned the said money. However, ld. AO has not mentioned the names of the persons appearing in the documents but who did not own up the money. Merely owning by some persons cannot make the entire contents of the diary to be....
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....the documents, with which we are concerned, fulfil the requirements of the above section so as to be admissible in evidence and if this question is answered in the affirmative then only its probative value need be assessed. 'Book' ordinarily means a collection of sheets of paper or other material, blank, written, or printed, fastened or bound together so as to form a material whole. Loose sheets or scraps of paper cannot be termed as 'book' for they can be easily detached and replaced. In dealing with the work 'book' appearing in Section 34 in Mukundram vs. Dayaram [AIR 1914 Nagpur 44], a decision on which both sides have placed reliance, the Court observed:- " In its ordinary sense it signifies a collection of sheets of paper bound together in a manner which cannot be disturbed or altered except by tearing apart. The binding is of a kind which is not intended to the moveable in the sense of being undone and put together again. A collection of papers in a portfolio, or clip, or strung together on a piece of twine which is intended to be untied at will, would not, in ordinary English, be called a book...............................
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.... therein long after the purported transactions took place. In support of his contentions he also relied upon the dictionary meanings of the words 'account' and 'regularly kept'. ........ In Beni Vs. Bisan Dayal [ A. I. R 1925 Nagpur 445] it was observed tat entries in book s of account are not by themselves sufficient to charge any person with liability, the reason being that a man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of the parties. There must be independent evidence of the transaction to which the entries relate an din absence of such evidence no relief can be given to the party who relies upon such entries to support his claim against another. In Hira Lal Vs. Ram Rakha [ A. I. R. 1953 Pepsu 113] the High Court, while negativing a contention that it having been proved that the books of account were regularly kept in the ordinary course of business and that, therefore, all entries therein should be considered to be relevant and to have been prove, said that the rule as laid down in Section 34 of the Act that entries in the books of account regularly kept in the course of business re rel....
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....sumption, however strong, cannot partake the character of evidence. 3.6 In respect of additions u/s 69, there is heavy burden on the revenue to establish that the money belonged assessee, which burden is not discharged by the department while making this addition. In view of the above submissions, additions of Rs. 13,00,000 made by ld. AO and confirmed by ld. CIT(A), as unexplained investments and interest thereon of Rs. 34,500, may please be deleted.'' 3.3 On the other hand, the ld. DR supported the order of the ld. CIT(A) on the issue in question. 3.4 We have heard the rival contentions and perused the materials available on record. It is pertinent to mention that similar issue in the case of M/s. Kamakshi International vs DCIT (ITA No.327/JP/2017) has been decided against the assessee by observing as under:- ''2.4 We have heard the rival contentions and perused the materials available on record. Brief facts of the case are that a Search u/s 132 of the Act was conducted at business cum residential premises, C-33, Sikar House, Outside Chandpole Gate, Jaipur of Shri Manish Tambi and his family members on 23-7-2009. Shri Manish Tambi and his fa....
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....es not speak about any investment in debtors. Moreover, Section 69B also stipulates the position where the investment exceeds the amount shown in the books of account. Since the assessee does not maintain any books of account wherein the debtors and creditors are reflected , therefore, this addition has also been wrongly made and upheld u/s 69B of the Act. Hence, in our considered opinion, only commission income has to be determined in this case and nothing more. Accordingly, we reverse the findings of the ld CIT(A) and order to delete the entire addition so made. Thus Ground Nos. 3 and 4 of the assessee are allowed.'' In view of the above facts, circumstances of the case and also the order of the Hon'ble ITAT Jaipur Bench (supra), we find no reason to interfere with the order of the ld. CIT(A) on the issue in question. Thus the solitary ground of the assessee is dismissed.'' Taking into consideration the decision in the case of M/s. Kamakshi International vs DCIT (supra), we find no reason to interfere with the order of the ld. CIT(A). Thus Ground No. 2 and 3 of the assessee are dismissed. 4.1 The Grou....
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....ee f) On the date of agreement both the concerns namely, M/s Murti Real Estate Pvt Ltd Navi Mumbai and M/s. Ravik Finance & Investment Pvt Ltd, Mumbai were not having sufficient cash balance so as to advance Rs. 73 lakhs& 65 Lakhs respectively to the assessee. g) On perusal of agreement dt 02.01.2009, AO has noticed that while notifying the document, the notary has simply put a stamp "ATTESTED" and "NOTARY, JAIPUR(RAJASTHAN)" and no registered no. of the notary is appearing on the agreement which raises serious doubt about genuineness and authenticity of this legal document. Assessee during the appellate proceeding has not controverted AO's aforementioned findings. In view of these facts and circumstances of the case as discussed above, addition made by the AO of Rs. 1,38,00,000 on account of unexplained cash is hereby sustained. Assessee's appeal in Gr No. 2 fails.'' 4.2 During the course of hearing, the ld.AR of the assessee prayed for deletion of addition sustained by the ld. CIT(A) amounting to Rs. 1.38 crores u/s 68 of the Act for which the ld.AR of the assessee filed the following written submission. ....
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.... Navi Mumbai, meaning thereby i.e., the date of said agreement of sale/on the date of transaction. Meaning thereby on the date, he was not in a capacity to enter into such an agreement of sale." The agreements entered into by the persons are alleged by the lower authorities to be not directors on the dates of entering into the agreements. However, companies have not refuted the agreement. No evidence has been brought on record in support of the allegation that these persons were not directors of these respective companies on the dates of agreement. However, these persons were, otherwise, directors of these companies have not been disputed or doubted by the lower authorities. (e) "On the date of agreement Sh. Nayan Arvind Shah was Director of M/s. Murti Real Estate Pvt. Ltd. Who has confirmed that no such transactions were performed by the assessee. Similarly, Sh. Ravi Kewlani who was the director of M/s Ravik Finance & Investment Pvt. Ltd. Has also denied to have such agreement with the assesee." The allegation of denial is not substantiated by the department by bringing appropriate material on record. Neither copies of statements rec....
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....based on suspicion, has rightly been held not sustainable in the eyes of law". In view of above submissions, addition of Rs. 1,38,00,000 made by ld. AO and confirmed by CIT(A), may please be deleted. 4.3 On the other hand, the ld. DR supported the order of the ld. CIT(A). 4.4 We have heard the rival contentions and perused the materials available on record. It is noted that the AO made the addition of Rs. 1.38 crores u/s 68 of the Act treating the amount as unexplained cash and added the same to the total income of the assessee with the observation that the assessee could not prove the source of advances received. In first appeal, the ld. CIT(A) has sustained the addition made by the AO. It is noted from the available records that during the search operation incriminating documents showing cash receipts amounting to Rs. 1.38 crores lacs on account of advance for sale of Khatwara Agriculture Land. The above cash payment had been made by M/s. Ravik Finance & Investment Pvt. Ltd, C-33/1-2 Nivara Co-operative Housing Society, Sector-3, Sanpada, Navi Mumbai of Rs. 65.00 lacs and from Miss. Murti Real Estate Pvt. Ltd L-33/1-2, Nivara Co-operative Housing ....