TaxTMI 
TaxTMI 
2020 (1) TMI 1459
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....e of the assessee as 'Long term capital gains'. The AO has mentioned that the assessee along with her husband Sh. Mohinder Singh and her daughter- in-law Smt. Jaswinder Kaur owned a property which was sold on 02.05.2008. The shares of the co-owners were Sh. Mohinder Singh 1/2, Smt. Harmohinder Kaur L/3rd and Smt. Jaswinder Kaur 1/6th. The AO has mentioned that as per the registry, the property was sold for a total consideration of Rs. 29,50,000/-received in cash, out of which assessee's share comes to Rs. 9,83,333/-. The property was purchased on 01.01.2004 and the investment by the assessee for her share was Rs. 5,49,800/- and accordingly the assessee declared long term capital gain of Rs. 2,92,224/-. It is further mentioned by the AO that during the search, a diary was found and seized as Annexure A-9 from the residence of the assessee and page-13 of this diary has noting that shows the actual sale consideration received in respect of this property was Rs. 1,15,00,000/-. A show cause was accordingly issued to the assessee on 04.02.2015 confronting these facts and asking why the total sale consideration should not be taken at Rs. 1,15,00,000/- and capital gains be re-c....
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....,001/- was made to the returned income of the assessee as 'Long Term Capital Gain'. The facts of the case, the basis of addition made by the A.O. and arguments of the AR during the course of appellate proceedings have been considered. The AR during the appellate proceedings argued that the seized/material in the form of diary does not belong to the assessee, it belong to the aessee's husband Sh. Mohinder Singh. As per the AR, the property was sold for total consideration was Rs. 29,50,000/- and the assessee's share, being l/3rd of the total sale consideration, was Rs. 9,83,333/- as per registration deed dated 02.05.2008. It is also argued that there is no mention of assessee's name in the particulars of the diary seized during the search and that it is nowhere mentioned in the sale deed. As per the AR, even if the assumption is to be made, it cannot be in the case of the assessee. The other arguments of the AR were that the present case is not a case where circle rate or value as per stamp registration authority is more than what has been disclosed. As per AR, the nothing on the diary by no stretch of imagination can be treated as conclusive proof of on....
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....his diary, the various transactions entered into by him relating to the family members. Once, the entries on one page has been relied upon for granting relief to the assessee for assessment year 2008- 09, the entries on the other pages are also to be relied upon for decided the appeal for assessment year 2009-10. The argument about the documents seized being 'dumb documents' is also not found acceptable because in the reply filed before the AO for A.Y. 2008-09, it was accepted that the diary seized as AnnexureA-14 was being maintained by the husband of the assessee. The entries on page no.13 (which are written in lacs) duly co-relate with the entries at page no.10 where the actual figures are written. Hence, on the basis of the seized material, the total sale consideration of the property under consideration is to be taken at Rs. 1,15,00,000/- and the AO rightly calculated the 'long term capital gain' taxable in the hands of the assessee at Rs. 31,42,225/-. Therefore, under the facts and circumstances of the case, the addition of Rs. 28,50,001/- made by the AO is found sustainable and hence confirmed. Accordingly, these grounds of appeal are dismissed.....
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....its and credits. They can at the most be described as a memorandum kept by a person for his own benefit which will enable him to look into the same whenever the need arises to do so for his future purpose. Admittedly the said diaries were not being maintained on day-today basis in the course of business. There is no mention of the dates on which the alleged payments were made. In fact the entries there in are on monthly basis. Even the names of the persons whom the alleged payments were made do not find a mention in full. They have been shown in abbreviated form. Only certain 'letters' have been written against their names which are within the knowledge of only the scribe of the said diaries as to what they stand for and whom they refer to." x x x x x x x x x x x x x x x 17. From a plain reading of the Section it is manifest that to make there under it must be shown that it has been made in a book, that book is a book of account and that book of account has been regularly kept in the course of business. From the above Section it is also manifest that even if the above requirements are fulfilled and the entry becomes admissible as relevant evidence, still, ....
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....tained in the two files (Mrs 72/91 and 73/91). 6. Further in the case of the Common Cause (A registered Society and Ors Vs. Union of India & Ors. interlocutory application Nos. 3 & 4 of 2017 in Writ Petition (Civil) No. 505/2015, the Apex Court dealt with the loose sheets and was pleased to held that "It is apparent from the aforesaid discussion that loose sheets of paper are wholly irrelevant as evidence being not admissible U/s 34 so as to constitute evidence with respect to the transactions mentioned therein being of no evidentiary value. Further the Apex Court in para No.22 was pleased to held that: "In case of Sahara, in addition we have the adjudication by the Income Tax Settlement Commission. The order has been placed on record along with I.A. No.4. The Settlement Commission has observed that the scrutiny of entries on loose papers, computer prints, hard disk, pen drives etc. have revealed that the transactions noted on documents were not genuine and have no evidentiary value and that details in these loose papers, computer print outs, hard disk and pen drive etc. do not comply with the requirement of the Indian Evidence Act and are not admissib....
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....ared for Bhatti + 5L Cheque" 16. We note that the said seized material in the shape of diary did not belong to the assessee. It belonged to the assessee's brother. He has not at all been confronted with the contents of the said diary. Assessee cannot be called upon to explain the contents of diary which belonged to the assessee's brother and was found from the brother. 17. We also note that there is no mention of the assessee's name in the particulars of diary as contained hereinabove. Though there is mention of the farm house belonging to the assessee, there is no mention of the total price paid etc. From the jottings as above, Assessing Officer has inferred that assessee has paid Rs. 35 lacs over and above the disclosed consideration to the seller. Now we find that the seller has denied having taken any money over and above the disclosed sale consideration. It is also not the case that seized material were in the hand writing of the assessee or the seller or were seized from the premises of the seller. Even the total price paid for the property is not mentioned in the seized material. The jottings in the diary by no stretch of imagination can be trea....
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....e, the CIT (A) drew a presumption under Section 292C of the Act was that it belonged to him. Further, the CIT(A) proceeded to hold that Rs. 49 lakhs constituted the unexplained income of the Assessee since the Assessee had not submitted any evidence like a confirmation letter or any other document to show that expenditure related to any project of the aforementioned company. 5. The ITAT in the impugned order noted that the said document "does not indicate if it pertains to the assessee nor the address and location of the property is mentioned therein nor such property has been located by the AO during the assessment proceedings. The AO has also not brought on record any forensic evidence to prove the handwriting of the loose paper relied upon by him to make the addition, which is exclusively made on the basis of suspicion and guesswork. Even no corroborative material has brought on record by the AO to substantiate the addition nor the CIT(A) has called for any remand report seeking corroborative evidence, if any." 9. Now coming to the instant case, as it appears from the orders passed by the authorities below, a diary was found and seized as Annexure A-9 from the reside....
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....ircle rate as prescribed by the Government and acted against the Indian Stamp Act, 1899. The Assessing officer allegedly corroborated the entries on page no. 10 and 13 of the diary by reproducing the copies in the assessment order and by observing " that the heading on the top of the page no.13 'DIV- 3' indicate that these payments pertain to sale of the property near Chowki Divison-3. Further total amount of Rs. 1,15,00,000/- has been received on sale consideration of this plot which is also proved when these entries are seen along with entries on page no. 10 of the same diary. The AO futher mentioned that this page shows amount of cash actually with Sh. Ruby (i.e. Sh. Balwinder Singh Kohli, the son of the assessee) and the figure of Rs. 28,50,000/- pertains to another unaccounted sale consideration of shop in MBD Mall. The co-relation of the other entries on these pages and the dates mentioned against the two entries as 25th and 26th February at place Goraya for receipt of cash from the purchaser. On the basis of the documents, a total cash of Rs. 1,15,00,000/- was received as sale consideration of this property near Divison-3, Chowki while the registry shows the sal....