TaxTMI 
TaxTMI 
2021 (6) TMI 247
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....tation period and accordingly admitted. These appeals are filed by the revenue against the order of the Commissioner of Income Tax (Appeals), [CIT(A)]-3, Visakhapatnam in Appeal No. 716/2019-20/10516/CIT(A)-3/VSP/2020-21 and No. 719/2019-20/10519/CIT(A)-3/VSP/2020-21 dated 09.10.2020. Cross objections are filed by the assessee in support of the order of the Ld. CIT(A). Since the facts are identical, these appeals are clubbed, heard together and disposed of in a common order for the sake of convenience as under. A.Y. 2017-18 2. Facts of the case are extracted from ITA No. 06/VIZ/2021 Shri Badam Bhogalinga Swamy which are applicable to all the cases. Ground No. 1 is related to the addition deleted by the Ld. CIT(A) amounting to Rs. 10,08,315/- made by the AO relating to on money payment for purchase of plot. During the previous year relevant to the A.Y. 2017-18 the assessee and his brother found to have purchased the plots in the names of assessee and the family members as follows: Sl.No. Plot No. Extent (sq.yds) Sale deed No. and date of registration at SRO, Bhimili Consideration (Rs.) Name of vendee 1 108 183.33 230/2017 Dt.01.02.2017 6,....
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....g found in page No. 35 of Annexure-A/PDPPL/Vskp/Office/01 seized from the office of Phozo Digital Press Pvt. Ltd. the sum of Rs. 10,08,315/- was paid in cash, hence, made the addition of Rs. 10,08,315/- u/s. 69 of the Act. 2.1. Identical addition was made in the case of Badam Venkata Demullu in ITA No. 07/VIZ/2017-18. 3. Against the order of the AO, the assessee went on appeal before the CIT(A) and the Ld. CIT(A) observed that loose sheets found during the search do not contain any specific details of on money payment and no corroborative evidence was also brought on record, hence, viewed that on money payment was not proved and accordingly deleted the addition. 4. Against which the department filed appeal before this Tribunal. During the appeal hearing, the Ld. DR argued that the seized material found during the course of search in Annexure A/PDPPL/Vskp/Office/01 page 35 clearly shows that the assessee and his family members have purchased 4 plots from R.K. Megastructures Pvt. Ltd. in the names of the assessee and other family members. In the loose sheet there was a mention for payment of a sum of Rs. 25,68,000/- through RTGS @3,500/- per sq. yd and cash payment of Rs. 40....
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.... details were mentioned with regard to plot number, payer, payee and the purpose of payment etc. The assessee has denied having made any payment over and above the sale consideration recorded in the sale deed. Unless there is tangible evidence, merely on the basis of loose sheet which does not have any details do not convey any meaning for making the addition. It is settled issue that the sale consideration recorded in the sale deed needs to be adopted for the purpose of payments made to the vendor as decided by Hon'ble Punjab and Haryana High Court in the case of Paramjit Singh Vs. ITO (185 taxman 273) and the order of the coordinate bench of ITAT, Hyderabad in ITA No. 1472/2016 dated 13.07.17. Therefore, we hold that the Ld. CIT(A) has rightly deleted the addition and we uphold the order of the Ld. CIT(A) and the dismiss the ground of the revenue on this issue. 7. Ground No. 2 of ITA No. 06/VIZ/2021 is related to the addition of Rs. 6,04,800/- made u/s. 69A of the Act for on money payment which was deleted by the Ld. CIT(A).During the course of search on 12.04.2017 in the premises of the assessee Mr. Badam Bhogalinga Swamy certain loose sheets were found marked as Annexure....
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....e case of Badam Venkateswarlu, he has purchased Plot Nos. 184 to 189, whereas the loose sheet notings was only for 4 plots without the names of purchaser or vendor. Mr. Badam Bhogaling Swamy has purchased the plot Nos. 197 & 198 as per registered sale deeds. Similarly Mr. Badam Venkata Demullu has purchased the plot No. 190. The assessee denied having made the payment over and above the registered sale deed. He explained the notings on loose sheet are rough notings but not the actual payments. No other corroborative evidence was found by the AO to assert that the payment was made over above the consideration recorded on sale deeds. The legal validity of notings on a loose sheet without having the corroborative evidence has come up before the coordinate bench of ITAT, Amritsar in the case of Smt. Harmohinder Kaur Vs. Dy. CIT, Central Circle-II, Jalandhar 124 taxman.com 68 (Amrit-Trib). The coordinate bench of ITAT has considered the decision of Hon'ble Supreme Court in the case of CBI Vs. V.C. Shukla 199 taxman.com 2155 and the decision of common cause (registered society) Vs. Union of India 77 taxman.com 245 and the decision of Hon'ble Delhi High Court in the case of CIT Vs....
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.... did not examine the vendor to bring the evidence to controvert the submission of the assessee. Therefore, the issue is identical to the on money payment of Rs. 10,04,315/- discussed in para No. 2 of this order and the issue is squarely covered by the decision of Hon'ble Punjab and Haryana High Court and the decision of coordinate bench of ITAT, Hyderabad in ITA No. 1472/2016 dated 13.07.17. Respectfully following the view taken by the Hon'ble Punjab and Haryana High Court and the coordinate bench of ITAT, Hyderabad, we, hold that in the absence of corroborative evidence to support the payment of on money merely on the basis of some notings on loose papers, the addition made by the AO is unsustainable. Accordingly, we uphold the order of the Ld. CIT(A) and dismiss the appeal of the revenue. 11. Ground No. 3 and 4 are related to the addition of Rs. 60,00,000/- made by the AO u/s. 69C of the Act. This is also common issue for all the appeals of Badam Venkata Demullu, Badam Venkateswarlu and Badam Bhogalinga Swamy for the AY. 2017-18. The AO found that the assessees have shown the meager amount of drawings of Rs. 1,20,000/- per annum. When the assessee was asked to justify ....
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....the profit was mentioned and it was never accepted as undisclosed income. The entire sums mentioned in the scribbling pad was duly accounted in the books of accounts, and hence, the Ld. CIT(A) held that the AO is not justified in making the addition, accordingly, deleted the addition. 13. Against the order of the Ld. CIT(A), the department has filed appeal before this Tribunal. The Ld. DR supported the order of the AO and the Ld. AR relied on the order of the Ld. CIT(A). 14. We have heard both the parties and perused the material on record. In the instant case the AO made the addition u/s. 69C r.w.s. 115BBE of the act, therefore, it is necessary to have a look on section 69C which reads as under: "69C. Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the[Assessing] Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year: [Provided that, notwithstanding anything contained in any....
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....to disprove the explanation offered by the assessee due to some mismatch of entries. However, the assessee furnished the complete details of Rs. 1,79,94,169/- which was reproduced in the assessment order. Therefore, it is clear that the assessee had explained the payments with cash flow and the AO did not bring any evidence to show that the assessees have incurred the expenditure of Rs. 1,80,00,000/-. The AO also acknowledged the cash receipts were related to the company M/s. Phozo Digital Press (P) Ltd. in page No. 31 and Para No. 30 of the assessment order. 14.2. The legal validity of notings made in the loose sheet was considered by the coordinate bench of ITAT, Amritsar (Supra) and held that without the corroborative evidence, to prove the authenticity of diary seized during the course of search, the AO could not make addition in assessee's income on the basis of notings in the diary. 14.3. On similar issue in the case of Commissioner of Income-tax. v. C.J. Shah & Co., [2001] 117 TAXMAN 577 (BOM.), Hon'ble Bombay High court held that having found no material to show turnover during block period, on the basis of loose sheets which indicated figures of only incoming....
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.... in the form of wrist watches of foreign make. The ownership of such valuable articles have to be definitely proved and if the person in whose possession the said valuable article was found claimed that the same did not belong to him, the onus of proving that he was not its owner was on that person. In the present case here it is a mere loose sheet in which the assessee confirmed that the entry was in his own handwriting. The loose paper in itself has got no intrinsic value. It does not represent negotiable instrument which can be exchanged for a sum of Rs. 60 lacs. Therefore, the above decision does not have direct applicable to the facts of the present case. When it is a mere entry on a loose sheet of paper and if the assessee claims that it was only a planning, not supported by actual cash, then there has to be circumstantial evidences to support that this entry really represent cash of Rs. 60 lacs. There is no such evidence found by the revenue in the form of extra cash, jewellery or investment outside the books. In such a case, the explanation offered by the assessee cannot be rejected. In that view of the matter, I concur with the view taken by the learned Accountant Member."....
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....ere is no case for making the addition u/s. 69C on the basis of the notings made in scribbling pad in the hands of the assessees and hence, we, uphold the order of the Ld. CIT(A) and dismiss the appeals of the revenue. 16. The assessee filed cross objections supporting the order of the Ld. CIT(A). Since the Revenue appeals are dismissed the cross objections of the assessee becomes infructuous hence dismissed. I.T.A. No. 09/Viz/2021, A.Y. 2018-19 (Sri Badam Bhogalinga Swamy) 17. Ground No. 1 and 2 are related to the addition of Rs. 37,00,000/- made u/s. 69A of the Act. During the course of search conducted u/s. 132 the amount of Rs. 37,00,000/- was seized from the residence on 12.04.2017. When the assessee was asked to explain the source of cash, vide letter dated 12.12.2019, the assessee explained that the cash found in the residence belonged to the company and it was kept with him for safe custody. The assessee also explained that it was the practice of the company to keep the cash with the directors, since, keeping huge cash balances with a single person or in the premises of the company is risky. The assessee further requested for giving telescopic benefit of the cash f....
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.... to the company, M/s. Phozo Digital Pvt. Ltd. and blatantly erred in deleting the addition. Hence, requested to set aside the order of the Ld. CIT(A) and allow the appeal of the revenue. 20. Per contra, the Ld. AR submitted that the assessee has admitted the additional income of Rs. 1,23,88,439/- for the earlier year in the hands of the company and the cash found was belonged to the company and hence, requested for telescopic benefit. The Ld. AR further argued that the residential premises of all the directors and the business premises of the company were searched and no evidence was found during the course of search evidencing any expenditure for which the source was not explained and therefore submitted that it is unfair to reject the telescopic benefit requested by the assessee, hence, argued that the Ld. CIT(A) has rightly deleted the addition, and no interference is called for in the order of the Ld. CIT(A). 21. We have heard both the parties, perused the material placed on record. There is no dispute that the assessee has admitted the additional income of Rs. 1,33,88,439/- for the A.Y. 2017-18 and the assessee stated that the cash found during the course of search was b....
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.... 23. Against the order of the AO, the assessee went on appeal before the CIT(A) and requested for allowing the credit on account of streedhan and gifts as per CBDT circular and allow the telescopic benefit against the additional income declared in the hands of the company. The Ld. CIT(A), placing reliance on the order of this Tribunal in the case of Suresh Kumar Jain in ITA No. 585/Viz/2019 to 587/Viz/2019 dated 11.12.2019 and the Board Circular No. 1916, allowed the gold jewellery weighing 1044.192 gms as streedhan and gifts. With regard to balance addition of Rs. 29,10,000/-, the assessee requested for telescopic benefit from the additional income declared by the assessee in the hands of the company. The Ld. CIT(A) held that in the absence of any evidence to show that the undisclosed income declared by the assessee in the hands of the company was utilized for any other purpose, there is no justification for rejecting the assessee's claim for telescopic benefit, accordingly allowed the appeal of the assessee and deleted the addition. 24. Against which, the revenue has filed appeal before this Tribunal. During the appeal hearing, the Ld. DR argued that Circular No. 1916 is o....
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....he Ld. CIT(A) rightly deleted the addition placing reliance on Board circular and the decision of this Tribunal in the case of Suresh Kumar Jain in ITA No. 585/Viz/2019 to 587/Viz/2019 dated 11.12.2019 and hence, we do not find any reason to interfere with the order of the Ld. CIT(A) and the same is upheld. 26.1. The next issue is with regard to the addition of Rs. 29,10,000/- on account of gold bars. The assessee explained during the course of search that gold bars were related to the company, kept in assessee's house. The AO made the addition for want of evidence in the form of entries in the books of accounts. Since the gold bars were purchased from the undisclosed income declared in the hands of the company, naturally no evidence would be available, since the same was acquired out of unexplained sources. Therefore expecting the evidence for the application of undisclosed income is unreasonable and ambitious. The assessee has requested for telescopic benefit from the additional income declared in the hands of the company in earlier assessment years and the same is justified. Therefore, we hold that the Ld. CIT(A) has rightly allowed the telescopic benefit and no interfere....