TaxTMI 
TaxTMI 
2019 (12) TMI 817
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....l the 9 entries found on loose paper at par. The natural presumption should have been that if 7 cheque entries on the loose paper are accepted by the assessee, the 2 cash entries on the same loose paper, should be accepted as assessee's transaction in cash. The entire record of the loose paper could be accepted or rejected only in full and not in parts in the absence of any clinching evidence to the contrary. This aspect has not been appreciated by the Ld. CIT (A). 3. Whether on the facts and in circumstances of the case and in law, the Ld.CIT(A) has erroneously arrived at the conclusion that there were no cash found during the survey, ignoring the fact that the addition on account of bogus purchases was confirmed by the Ld. CIT (A) which clearly points to the cash generation in the business. Also, documents found and statements taken during survey revealed unaccounted scarp sales in earlier years which clearly indicate cash generation by the assessee. 4. The appellant prays that the order of the Ld. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. 5. The appellant craves leave to add, amend or alter all or any o....
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....iz. S/sh. Avinash Bhosale & Amit Bhosale towards consultation fees and advance for purchase of land. Accordingly, the payments stated against the aforesaid "07 entries" being in the nature of disclosed transactions are not in dispute before us. In fact, the controversy hinges around the remaining "02 entries" which though formed part of the aforesaid impounded document viz. Annexure A-2 - Page 27, but were therein separately mentioned. Against the said "02 entries", though there was no mention of the persons to whom the payments were made, however, alike the aforesaid "07 entries", there was a specific mention of amounts of Rs. 7,50,00,000/- and Rs. 2,00,00,000/- under the common head i.e ''amount paid'', and also a reference to the respective dates of payments i.e 28/02/2013 and 25/06/2012 under the common head i.e ''date of payment''. Apart therefrom, as in the case of the aforesaid "07 entries" there were calculations of interest on the said amounts at varying rates, though for a fixed period of days therein mentioned. 4. On a perusal of the contents of the impounded document, the A.O held a conviction that the aforesaid "02 entries" of Rs. 7,50,00,000/- and Rs. 2,00,00,000/-....
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....ls, copies of orders, bank statements, and the photos of all the items lying/fixed at the site of its project viz. Windsor Grande. In order to verify the genuineness of the aforesaid purchase transactions, the A.O issued notices under Sec. 133(6) to the aforementioned parties. One of the party, namely M/s Priya Exim Pvt. ltd. complied with the said notice and submitted its reply. However, the summon which was thereafter issued by the A.O under Sec.131 of the A.O to M/s Priya Exim Pvt. Ltd. was not complied with by the latter. On the other hand, the other party namely M/s Kotsons Impex Pvt. Ltd. did not submit any reply. It was observed by the A.O that the assessee in the course of the survey proceedings had submitted that they had purchased the aforesaid items from M/s Sources Limited. It was the claim of the assessee, that the aforesaid concern had provided the bills of M/s Priya Exim Pvt. Ltd. and M/s Kotson Impex Pvt. Ltd. In order to verify the genuineness of the aforesaid purchase transactions, the A.O deputed his Inspector to physically verify as to whether the assessee was in possession of the various items at its project site, or not. As per the report dated 04.03.2016, it ....
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....being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. Apart therefrom, the assessee is also before us as a cross-objector. However, the cross-objection filed by the assessee involves a delay of 36 days. The assessee explaining the reasons leading to the delay in filing of the cross-objection has filed an 'affidavit', dated 19.11.2018. It is the claim of the assessee, that the delay of 36 days in filing of the crossobjection was due to the prolonged differences and disputes between the promoters of the assessee company. It was submitted by the ld. A.R, that as the delay in filing the cross- objection had occasioned due to compelling and unavoidable circumstances, therefore, in all fairness the same may be condoned. Per contra, the ld. Departmental Representative (for short 'D.R') did not object to the seeking of condonation of the delay in filing of the cross-objection by the assessee. We have given a thoughtful consideration and find substantial force in the claim of the assessee company, that due to the differences and disputes between its promoters viz. S/sh. Gopal Narang and Akshay Raheja, the delay in filing of the cross-objections had arisen.....
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.... the remaining two entries forming part of Annexure A-2 - Page 27 viz. (i) 28.02.2013: Rs. 2,00,00,000/-; and (ii) 25.06.2012: Rs. 7,50,00,000/-, formed part of the impounded 'document' which admittedly referred to 7 transactions in respect of the payments made by the assessee to S/sh. Avinash Bhosale & Amit Bhosale, therefore, there was no justifiable reason for the CIT(A) to conclude that the aforesaid remaining "02 entries" did not represent the payments which had already been made by the assessee to the aforementioned persons. Accordingly, it was submitted by the ld. D.R, that as the CIT(A) had most arbitrarily vacated the addition of Rs. 9,50,00,000/- that was made by the A.O by way of a reasoned order, therefore, his order may be 'set aside' and that of the A.O be restored. 9. Per contra, the ld. Authorized Representative (for short 'A.R') for the assessee relied on the order of the CIT(A). It was submitted by the ld. A.R, that admittedly the "07 entries" mentioned in the impounded document viz. Annexure A-2 - Page 27 referred to the payments which were made by the assessee to S/shri Avinash Bhosale & Amit Bhosale. Insofar the first "02 entries" (out of "07 entries") of Rs....
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.... of the aforesaid impounded document viz. Annexure A-2 - Page 27 were merely a tentative working of the payments which were yet to be made to the aforementioned persons i.e S/shri Avinash Bhosale & Amit Bhosale, and were not an authentic record of transactions evidencing any payments made to them. In order to fortify his aforesaid contention, the ld. A.R took us through the aforesaid impounded document viz. Annexure A-2 - Page 27 [as reproduced in the order of the CIT(A)]. On a perusal of the aforesaid impounded document, it stood revealed that on the extreme "right side"(on top) a date i.e "11.02.2013" was mentioned. It was averred by the ld. A.R, that the aforesaid date i.e "11.02.2013" had a strong bearing on adjudicating the import of the contents of the aforesaid impounded document i.e Annexure A-2 - Page 27. It was submitted by the ld. A.R, that the aforesaid date "11.02.2013" could safely or rather inescapably be construed as the date on which the print out of the aforesaid computerised sheet was taken by the assesse's accountant. Ld. A.R took us through the contents of the impounded document viz. Annexure A-2 - Page 27 and submitted, that the second part of the aforesaid im....
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.... No. of days 24% 21% 18% 15% 12% 6% Rs. Rs. Rs. Rs. Rs. Rs. Rs. Amit Consultancy 2,75,75,000 01.01.2011 03.10.2011 275 49,86,164 43,62,894 37,39,623 31,16,353 24,93,082 12,46,541 Avinash Bhosale 2,75,75,000 01.01.2011 03.10.2011 275 49,86,164 43,62,894 37,39,623 31,16,353 24,93,082 12,46,541 Avinash Bhosae & Amit Bhosale 5,00,00,000 01.01.2011 27.12.2011 360 1,18,35,616 1,03,56,164 88,76,712 73,97,260 59,17,808 29,58,904 Avinash Bhosale & Amit Bhosale 5,00,00,000 01.01.2011 10.04.2012 465 1,52,87,671 1,33,76,712 1,14,65,753 95,54,795 76,43,836 38,21,918 Avinash Bhosale & Amit Bhosale 5,00,00,000 01.01.2011 10.04.2012 465 1,52,87,671 1,33,76,712 1,14,65,753 95,54,795 76,43,836 38,21,918 Avinash Bhosale & Amit Bhosale 5,00,00,000 01.01.2011 30.09.2012 638 2,09,75,342 1,83,53,425 1,57,31,507 1,31,09,589 1,04,87,671 52,43,836 Avinash Bhosale & Amit Bhosale 5,00,00,000 01.01.2011 30.12.2012 729 ....
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....rvey proceedings). Admittedly, the payments mentioned in the "first part" of the aforesaid document i.e the "07 entries" therein referred to the payments which were made by the assessee to the aforementioned persons, i.e S/shri Avinash Bhosale & Amit Bhosale or their concern. As for the "02 entries" (out of "07 entries") against which an amount of Rs. 2,75,00,000/- each is stated, the same are in context of the charges paid by the assessee company to S/shri Avinash Bhosale & Amit Bhosale or their concern for the consultancy services which were rendered by them for resolving certain claims and dispute pertaining to M/s Jasani Realty Pvt. Ltd. with regard to their Oshiwada project. As regards the remaining "05 entries" (out of "07 entries") aggregating to Rs. 25,00,00,000/-, we find, that the same were the payments which were made by the assessee to S/shri Avinash Bhosale & Amit Bhosale as 'advance' for purchase of land at Village Mundwa, Pune, which the assessee had proposed to acquire for setting up a residential-cum-commercial project. Insofar the aforesaid "07 entries" are concerned (i.e "02 entries" + "05 entries"), there is no dispute as regards the payment of the amounts there....
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....yments aggregating to Rs. 9,50,00,000/- pertained. Also, as observed by us hereinabove, both directors of the assessee company i.e S/sh. Akshay R. Raheja & Gopal Narang had categorically stated in their respective 'statements' recorded under Sec. 131 of the Act, that the amounts mentioned against the "02 entries" in the second part of the impounded document viz. Annexure A-2 - Page 27 were the amounts which had yet not been paid to the aforementioned persons viz. S/sh. Avinash Bhosale & Amit Bhosale. As is discernible from the orders of the lower authorities, we find, that the aforesaid factual position had categorically been stated by Shri Akshay R. Raheja, director of the assessee company in his statement recorded under Sec.131 in the course of the survey proceedings conducted on 09.05.2014. It was categorically clarified by him that the amount of Rs. 9,50,00,000/- [Rs. 7,50,00,000/- (+) Rs. 2,00,00,000/-] was to be paid on the dates mentioned in Annexure A-2 - Page 27 ,but the same had remained unpaid. Further, he had clarified that though the aforesaid amounts viz. (i). Rs. 7,50,00,000/- and (ii). Rs. 2,00,00,000/- were wrongly mentioned under the common head i.e "amount paid",....
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....a particular date mentioned in the "Date of Payment". Further, in reply to Q.No.20 to 22 you have stated that the amount of Rs. 9,50,00,000/- (Rs. 7,50,00,000 + Rs. 2,00,00,000) which are stated to be paid on the dates mentioned in column "date of payment", but you have replied that the same is yet to be paid and the same is inadvertently mentioned in column "date of payment". Please explain the contradiction that on the same sheet out of 9 rows in 7 rows the amount reflected in 'amount paid' column is paid on the date referred in the same sheet on the other hand in two rows the amounts mentioned in the same column i.e. 'amount paid' is not paid. However, the date is also mentioned against the amount paid. Please explain why two different stands taken by you in reply to Q. Nos. 19 to 22 should be believed to be true. Ans. Sir, this is a mistake as no payment has been made. Q.25 Please refer to the page No. 27 of the loose paper file found and impounded and marked as Annexure - A from your premise during the course of survey action, the gist of some of the entries are as under :- Entry in row No. Payment made to Amount Date of Payment ....
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....0,000/-). For Rs. 30,51,50,000/- you have accepted amount paid to Avinash Bhosale and Amit Bhosale but in same page amount of Rs,9,50,00,000/- you answer that amount to be paid to Avinash Bhosale and Amit Bhosale. Please explain this contradictory statement. Ans. Though the entries are appearing on the same page the payments were to be made have not been ma de up to date for amount of Rs. 9,50,00,000/- (Rs. 7,50,00,000 and Rs. 2,00,00,000)." Further, in the course of the post survey proceedings, the A.O had as on 30.06.2014 once again recorded the statement of Shri Gopal Narang, director under Sec.131 of the Act. Once again, Shri Gopal Narang, director of the assessee company, on being called upon to explain the "02 entries" viz. (i). Rs. 7,50,00,000/-; and (ii). Rs. 2,00,00,000/- mentioned in the impounded document viz. Annexure A-2 - Page 27, had reiterated that the aforesaid payments were to be made but had not been paid till date. Relevant extract of the aforesaid statement of Shri Gopal Narang, that was recorded under Sec. 131 on 30.06.2014, reads as under: "Q.6. I am showing you, your statement dated 10.05.2014. Kindly explain the two entries of Rs. 7,50,....
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....ugh, we are not oblivious of the fact that Sec.292C envisages a presumption that where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of search under Sec.132 or survey under Sec.133A, then it may in any proceedings under this Act, be presumed viz. (i) that, such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that, the contents of such books of account and other documents are true; and (iii) that, the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that persons handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. Although, the aforesaid Sec.292C inter alia envisages a presumption that the contents of such books of account a....
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....o be paid by the dates mentioned therein i.e 28.02.2013 and 25.06.2012, however, the same had not been paid till date. We find that the aforesaid factual position had also been affirmed by the aforementioned persons i.e S/sh. Avinash Bhosale & Amit Bhosale, to whom as per the revenue the aforesaid payments were made by the assessee. In fact, we find that the revenue had not been able to place on record any 'material' which could dislodge or disprove the aforesaid claim of the assessee, and therein prove to the contrary that the aforesaid amounts aggregating to Rs. 9,50,00,000/- were actually paid by the assessee. Rather, we are also persuaded to subscribe to the reasoning given by the assessee for the failure on its part to make the aforesaid payments. It is the claim of the assessee that as it was passing through a financial crisis, and also there were certain internal disputes amongst the directors of the assessee company, therefore, the purchase transaction of the aforesaid land at Village : Mundwa, Pune, which was proposed to be acquired for setting up a residential-cum-commercial project had came to a standstill. The aforesaid claim of the assessee is also supported by the fac....
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....ly M/s Kotsons Impex Pvt. Ltd. did not submit any reply. It was observed by the A.O, that the assessee in the course of the survey proceedings had submitted that they had purchased the aforesaid items from M/s Sources Limited. It was the claim of the assessee, that the aforesaid concern had provided the 'bills' of M/s Priya Exim Pvt. Ltd. and M/s Kotson Impex Pvt. Ltd. On the basis of the aforesaid facts, the A.O deputed his Inspector to physically verify as to whether the assessee was in actual possession of the various items at its project site, or not. As per the report, dated 04.03.2016, it was submitted by the Inspector that he had physically verified that all of the items as per the list and the photo album that was submitted by the assessee were available at the assesse's project site. On the basis of the aforesaid facts, the A.O was of the view that the assessee had actually purchased the aforesaid goods which were thereafter were put to use in its sample flats. However, at the same time, the A.O held a conviction that the assessee would have procured the aforesaid items not from the abovementioned dealers, but at a discounted value from the open/grey market. Accordingly, t....