TaxTMI 
TaxTMI 
2021 (11) TMI 308
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.... Income Tax Act, 1961. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the entire re-assessment proceedings, being illegal and without jurisdiction. 2. In the facts and circumstances of the case and in law, ld. CIT(A) has erred in confirming the action of the ld. AO in issuing notice u/s 148 of the Income Tax Act, 1961, without obtaining proper sanction u/s 151 of the Income Tax Act, 1961. Relief may please be granted by quashing the entire re-assessment proceedings, being illegal and without jurisdiction. 3. In the facts and circumstances of the case and in law, ld. AO has erred in reopening the assessment u/s 147 instead of section 153C of the Income Tax Act, 1961. The action of the ld. AO is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the reassessment proceedings being illegal and without jurisdiction." 3. In ITA No. 1298/JP/2019, the Revenue has taken the following grounds of appeal:- "1. Whether on the facts and in the circumstances of the case & in law, the Ld. CIT(A) has erred in deleting the....
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....een received from the office of DCIT, Central Circle-3, Jaipur that search and seizure action u/s 132 of the Act was carried out in the case of Ramesh Manihar Group which has been indulging in cash loan financing on a large scale. During the course of search, voluminous data comprising of excel sheets in 18 pen-drives were seized during the course of search action at the main office of the Ramesh Manihar Group at 303, Ratna Sagar, MSB Kaa Rasta, Johari Bazar, Jaipur which included details of cash loans financed by the Ramesh Manihar Group. It was found that the persons of the said group namely Sh. Ramesh Chand Maheshwari and Sh. Manmohan Krishan Bagla were engaged as finance brokers for arranging cash loans between various borrowers and lenders which were not reflected in the books of accounts and that the brokerage received for such unrecorded cash transactions was also not offered for taxation by the Group. It has also been found that the figures in the aforesaid data were suppressed by five zeroes. The Assessing Officer thereafter has listed down certain details of the transactions stating that the same relates to the assessee and from the perusal of the information, it is found....
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....he reasons recorded vis-a-vis documents/statements provided to the assessee. It was further submitted by the assessee that the Assessing Officer may point out specific portions of the statements of Sh. Ramesh Chand Maheshwari, on the basis of which he concluded the involvement of assessee in providing cash loans and for which the case of assessee was reopened. It was further submitted that where the Assessing Officer wishes to rely on the statement of Sh. Ramesh Chand Maheshwari, the assessee may be allowed an opportunity to cross examine him and in absence of such cross examination, such statements/documents cannot be used against the assessee in any manner whatsoever. 8. The reply so furnished by the assessee was examined by the Assessing Officer and as per the Assessing Officer, reply of the assessee is of routine nature having no evidence to contradict the information available with the Revenue and duly incorporated in the reasons for reopening of the case and the assessee has failed to substantiate the onus cast upon him about the impugned transactions of Rs. 25 crores where the assessee has provided cash loans through Ramesh Manihar Group to various parties. 9. The Asse....
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....he statement of Sh. Ramesh Chand Maheshwari dated 07.01.2016 recorded on oath u/s 132(4) of the Act and his subsequent statement dated 08.11.2017 recorded u/s 131 of the Act and reproduced certain questions and replies so submitted by him. The Assessing Officer further stated that after search operations, Ramesh Manihar Group and its associates have filed their application before the the Income Tax Settlement Commission. In their application filed before the Settlement Commission, they have surrendered the income so earned as commission on account of these un-recorded or unaccounted transactions and due taxes has also been paid. The Assessing Officer basis the said application filed by the Ramesh Manihar Group stated that it can clearly be deduced that the assessee also made transactions regarding lending its unaccounted money through said group and advanced the same out of books to earn interest income which was also not recorded in the books of accounts. 11. Regarding assessee request to provide cross examination of these persons whose statements were recorded and relied upon, the Assessing Officer stated that the right of cross examination is not an absolute right and depends....
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....l before us. 14. On merits of the additions made by the AO and grounds of appeal so taken by the assessee challenging such addition, the ld. CIT(A) firstly referred to the statement of Sh. Ramesh Chand Maheshwari recorded during the course of search at his premises on 07.01.2016 and stated that though the Assessing Officer has produced certain questions and answers of the said statement in the assessment order, however, neither during the course of search by the Investigation wing nor during assessment proceedings by the Assessing Officer, any question was put to Sh. Maheshwari as to what 'PCK' stand for and against the name 'PCK', no address or telephone number is found to have been recorded. The ld CIT(A) stated that in what circumstances and on what basis or evidence the name 'PCK' is inferred as to the appellant herein is not forthcoming. The name of appellant is appearing only in the records maintained under the filename 'Ankoot' which was stated to be for the purpose of sending invitation card as per answer to question No. 31 of the above referred statement. The ld CIT(A) further stated that on perusal of extracted statement in the assessment order or in the entire stateme....
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.... in respect of entries by third-party in the assessment of other person so as to initiate inquiry for assessment, yet when there is no finding that such entries are in fact pertaining to such third person only which should be emanating from the entries itself or from the person who has recorded such entry, no cognizance can be taken so as to fasten tax liability on such third person. 16. The ld. CIT(A) further referred to the observations of the Assessing Officer regarding application filed by the Ramesh Manihar Group before the Settlement Commission and stated that it is not understood as to how an income admitted by one person will bind other person in absence of any nexus between the person admitting and other person. Neither the Investigation wing during search proceedings nor Assessing Officer during the assessment proceedings have put any question as to what 'PCK' stand for nor is it discernible from the seized record any reference to the appellant herein against the entries stated to be of Rs. 25 crores. Further, referring to the decisions of Hon'ble Supreme Court in case of Kishinchand Chellaram reported in 125 ITR 713 and Andaman Timber Industries (dated 2 September, 20....
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.... that only on the basis of so called information, the Assessing Officer concluded that 'PCK' was no other person but the assessee who has advanced the money in cash through Ramesh Manihar Group and figures mentioned in the table were suppressed by 'five zeroes'. It was further submitted that the identity of the persons alleged to have received loans from the assessee was also not established and proceedings, if any, initiated against such persons for any contravention of the provisions of the Income Tax Act, 1961 were not disclosed. It was submitted that the Assessing Officer did not corroborate the information received from the DCIT, Central Circle-03, Jaipur and did not mitigate the risk of any lapse/disconnect in the information so provided. It was submitted that the Assessing Officer relied upon extracts of certain excel sheets, however, no steps were taken to mitigate any risk of the Electronic Records having been tempered in terms of section 65A, 65B of Evidence Act, 1872. It was submitted that even the screenshot of excel sheet provided to the assessee, relied upon by the Assessing Officer was taken on 22.10.2018, after recording the reasons for reopening the case. It was ac....
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....sessee had not made true and full disclosures during the course of original assessment proceedings. Thus, as per the first proviso to section 147 as well, reopening is bad in law. It was further submitted that as thorough scrutiny was done in the course of original assessment proceedings pursuant to search and materials seized during search, present proceedings are nothing but a clear case of change of opinion and in support, reliance was placed on the Hon'ble Supreme Court decision in case of CIT vs. Kelvinator of India Ltd. 320 ITR 561 (SC). 22. It was further submitted that the Assessing Officer vide letter dated 19.07.2018 has not supplied copy of reason actually recorded by Assessing Officer. From the extract of the reasons supplied, it is not possible to ascertain the date on which reasons were actually recorded. Further it is not clear whether compliance of first proviso to section 147 and other aspects of section 147 were recorded in the reasons actually recorded by Assessing Officer. It is also not clear whether the reasons actually recorded demonstrated independent application of mind by AO to the information received by him. Hence, great prejudice is caused to the ass....
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....ity in the action of the Assessing officer in assumping jurisdiction u/s 147 of the Act by recording the reasons and issuance of notice u/s 148 of the Act. 25. In support, reliance was placed by the ld PCIT/DR on the decision of Hon'ble Rajasthan High Court in case of Ankit Agrochem (P.) Ltd vs. Joint Commissioner of Income-tax, Range-1, Bikaner [2018] 89 taxmann.com 45 (Raj), the decisions of the Hon'ble Gujarat High Court in case of Peass Industrial Engineers (P.) Ltd. vs. Deputy Commissioner of Income-tax [2016] 72 taxmann.com 302 (Guj), HVK International (P) Ltd. vs. Deputy Commissioner of Income-tax, Central Circle-3 [2016] 72 taxmann.com 208 (Guj), and Ankit Financial Services Ltd. vs. Deputy Commissioner of Incometax, Circle 1(1)(2) [2017] 78 taxmann.com 58 (Guj), the decision of Hon'ble Mumbai High Court in case of Bright Star Syntex (P.) Ltd. vs. Income-tax Officer 9(2)(1) [2016] 71 taxmann.com 64 (Bom), the decision of the Hon'ble Delhi High Court in case of Principal Commissioner of Income-tax-7 vs. Paramount Communication (P.) Ltd [2017] 79 taxmann.com 409 (Del). 26. It was further submitted by ld PCIT/D/R that there is no doubt and it's a factual position as eman....
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....Yogendra kumar Gupta vs. Income-tax Officer [2014] 51 taxmann.com 383 (SC), and Raymond Woolen Mills Ltd. vs. Income-tax Officer [1999] 236 ITR 34 (SC). 28. We have heard the rival contentions and purused the material available on record. Both the parties have relied upon a number of decisions rendered by the Hon'ble Supreme Court and by various Hon'ble High Courts regarding conditions precedent for assumption of jurisdiction by the Assessing officer u/s 147 of the Act. We have gone through these decisions as well as other authorities on the subject, and we find that in these decisions, the Courts have laid down certain cardinal tests which need to be fulfilled for assumption of jurisdiction u/s 147 and have reiterated the same from time to time considering the facts and circumstances of the particular case. These cardinal tests provide that before assuming jurisdiction u/s 147, the Assessing Officer must form a prima facie opinion on the basis of material/information in his possession that there is an escapement of income, the opinion formed may be subjective but the reasons recorded or the information available on record must show that the opinion is not a mere suspicion, the ....
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....ing out the present reassessment proceedings. 30. In this regard, we refer to the reasons recorded by the Assessing Officer before issuance of notice u/s 148 of the Act. In the reasons so recorded, the Assessing Officer refers to the information received from the office of DCIT, Central Circle-03, Jaipur pursuant to search and seizure action carried out in case of Ramesh Manihar Group u/s 132 of the Act and the same read as under:- "2. Brief details of information collected/received by the A.O: Information has been received from the office of DCIT, Central Circle-3, Jaipur that search & seizure action u/s 132 of the IT Act, 1961 was carried out in the case of Ramesh Manihar Group on 07.01.2016. The group has been indulging in cash loan financing on a large scale. During the course of search, voluminous data comprising of excel sheets in the 18 pen-drives seized during the course of search action at the main office of the Ramesh Manihar Group at 303. Ratna Sagar, MSB Kaa Rasta, Johari Bazar, Jaipur, which consisted details of cash loans financed by the Ramesh Manihar Group was found. It was found that the persons of the Ramesh Manihar group, being Shri Ramesh Chand Mahes....
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....g Explanation 1 of section 147 of the Act. It was held by the Assessing Officer that the detailed enquiries conducted by the investigation wing and material available on the assessment record is self sufficient and accordingly, he formed reason to believe that the assessee has paid the loan amount of Rs. 25 crores out of his income from undisclosed sources and has failed to disclose fully and truly all material facts necessary for determination of income and therefore, he has reason to believe that income of Rs. 25 crores and interest received thereon has escaped assessment within the meaning of section 147 of the Act. 32. It is therefore manifest from the reasons so recorded by the Assessing Officer that he has basically relied upon the information received from the DCIT Central Circle -3, Jaipur and enquiries conducted by the Investigation wing. Further, given that the original assessment has been completed u/s 143(3) and more than four years have elapsed from the end of the impugned assessment and proviso to section 147 applies, with a view to satisfy the additional condition that there should be failure or omission on the part of the assessee in disclosing full and true mate....
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....ata depicts as everything is in abbreviated form, what "T" stand for, what "@" stand for, what "AT" stand for, what "PCK" stand for, what is the linkage of "PCK" with other persons whose name are also written in abbreviated form, and how this data and so called transactions are related to the assessee and how the figures so depicted represent and add up to a figure of Rs. 25 crores in cash are again not discernable even from close reading of the said data. Therefore, in our considered view, the said data per se cannot constitute tangible material in possession of the Assessing officer unless the same is analysed and examined thoroughly and necessary linkage is established with the assessee. In this regard, useful reference can be drawn to the decision of the Hon'ble Supreme Court in case of ITO vs Lakhmani Mewal Das reported in 103 ITR 437 wherein the Hon'ble Supreme Court has laid down the following legal proposition (pg 448): " As stated earlier, the reasons for the formation of the belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the mater....
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.... latter's failure or omission to disclose fully and truly all material facts was missing in the case. In any event, the link was too tenuous to provide a legally sound basis for reopening the assessment. The majority of the learned judges in the High Court, in our opinion, were not in error in holding that the said material could not have led to the formation of the belief that the said material could not have led to the formation of the belief that the income of the assessee-respondent had escaped assessment because of his failure or omission to disclose fully and truly all material facts. We would, therefore, uphold the view of the majority and dismiss the appeal with costs." 35. In the reasons so recorded, the Assessing officer has further stated that detailed enquiries have been conducted by the Investigation Wing and it has been found that these transactions pertains to the assessee where the assessee has paid cash loans to various persons through Ramesh Manihar Group during the year under consideration. Here, the question is not about the reliance placed by the Assessing officer on the enquiry conducted by the Investigation Wing which the Assessing officer is well within h....
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....enakshi Overseas Pvt Ltd (supra) wherein the Hon'ble High Court held as under: "19. A perusal of the reasons as recorded by the AO reveals that there are three parts to it. In the first part, the AO has reproduced the precise information he has received from the Investigation Wing of the Revenue. This information is in the form of details of the amount of credit received, the payer, the payee, their respective banks, and the cheque number. This information by itself cannot be said to be tangible material. 20. Coming to the second part, this tells us what the AO did with the information so received. He says: "The information so received has been gone through." One would have expected him to point out what he found when he went through the information. In other words, what in such information led him to form the belief that income escaped assessment. But this is absent. He straightaway records the conclusion that "the abovesaid instruments are in the nature of accommodation entry which the Assessee had taken after paying unaccounted cash to the accommodation entry given (sic giver)". The AO adds that the said accommodation was "a known entry operator" the source bei....
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....t this stage it requires to be noted that since the original assessment was processed under Section 143 (1) of the Act, and not Section 143 (3) of the Act, the proviso to Section 147 will not apply. In other words, even though the reopening in the present case was after the expiry of four years from the end of the relevant AY, it was not necessary for the AO to show that there was any failure to disclose fully or truly all material facts necessary for the assessment. 26. The first part of Section 147 (1) of the Act requires the AO to have "reasons to believe" that any income chargeable to tax has escaped assessment. It is thus formation of reason to believe that is subject matter of examination. The AO being a quasi judicial authority is expected to arrive at a subjective satisfaction independently on an objective criteria. While the report of the Investigation Wing might constitute the material on the basis of which he forms the reasons to believe the process of arriving at such satisfaction cannot be a mere repetition of the report of investigation. The recording of reasons to believe and not reasons to suspect is the pre- condition to the assumption of jurisdiction unde....
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....absent in the instant case and the ratio laid down in the aforesaid decision rendered by the Hon'ble Delhi High Court squarely applies in the instant case. 37. In the reasons so recorded, we find that the Assessing officer has further stated that the transactions so reflected in the data relates to cash loan provided by the assessee to various persons through Ramesh Manihar Group and since the same has not been reflected in the loans and advances account in his balance sheet and no cash book has been produced in the original assessment proceedings, there is a failure on part of the assessee to disclose fully and truly all material facts necessary for determination of income. In our view, in order to establish failure on part of the assessee to reflect the transactions in his books of accounts, firstly, it has to be prima facie established by the Revenue that the transactions infact pertains to the assessee and he has carried out these transactions of cash loans through Ramesh Maniar Group and he has reasons to believe that income has escaped assessment. Therefore, where the Revenue has not been able to establish, even prima facie, basis any tangible material that the transaction....
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....cer recorded the reasons for escapement of income and initiated the proceedings u/s 147 by issuance of notice u/s 148 of the Act. In this regard, we refer to the provisions of section 153C which read as under: "Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on....
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....manifest that in absence of any such satisfaction that documents so found and seized during the course of search pertains to the assessee or any information contained therein relates to the assessee, no linkage or nexus has been established with the assessee and what has been received by the Assessing officer is pure raw data in abbreviated form and information which per se cannot constitute as tangible material, as we have noted earlier, and unless and until the said data and information is properly analysed and examined and necessary linkage and nexus established with the assessee, the same cannot form the basis for initiating action u/s 147 in hands of the assessee. It cannot be a case that since action could not be taken under section 153C, the Assessing officer is free to initiate action u/s 147 of the Act as the Courts have held from time to time that reopening of assessment proceedings is a potent power which cannot be casually and mechanically invoked and lightly exercised by the Assessing officer and the invocation of such powers is based on satisfaction of certain cardinal tests and principles as we have discussed above and which have not been fulfilled in the instant cas....
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....r suppressing 'five zeros' i.e. Rs. 25,00,00,000/- was mentioned as 2500 in the form of different entries. In these pen drives, it was also mentioned, as for which period and on what rate of interest, the amount was advanced to the borrowers. It was accordingly submitted that based on such corroboration, the excel sheet notings extracted from the Jagat. XIs from the PEN drive in possession of Ramesh Manihar revealed that these are related to Shri Prakash Chand Kothari (PCK). 45. It was further submitted by the ld PCIT/D/R that Sh. Ramesh Chand Maheshwari in his statement dated 07.01.2016 recorded on oath u/s 132(4) of the Act and his subsequent statement dated 08.11.2017 recorded u/s 131 of the Act has admitted that he was involved in cash loan financing transactions on a large scale. It was further submitted that Ramesh Manihar Group have filed their application before the Income Tax Settlement Commission and have surrendered the income so earned as commission on account of these unrecorded or unaccounted transactions and due taxes has also been paid. It was submitted that basis the said application filed and admission by the Ramesh Manihar Group, the Assessing officer has righ....
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....ubmitted that the order of the ld CIT(A) be set-aside and that of the AO be sustained. 49. In his submissions, the ld A/R submitted that firstly, the contention of the ld PCIT/DR that the ld CIT(A) has passed the order in a summarly manner is not correct. It was submitted that detailed submissions were filed before the ld CIT(A) and the matter was heard at length by the ld CIT(A) and after appreciating the entirety of facts and circumstances of the case and considering various authorities on the subject including the decisions of the Hon'ble Supreme Court, the ld CIT(A) has passed a detailed, speaking and a well-reasoned order. The ld A/R accordingly supported the findings and the order of the ld CIT(A). 50. The ld A/R further submitted that the Assessing officer, on the basis of extracts of excel sheets and statements recorded during the course of search has failed to point out any basis of allegation of involvement of the assessee in providing cash loans. It was submitted that even identities of the persons alleged to have received cash loans from the assessee through Ramesh Manihar group was not established and thus, the second leg of the alleged transaction could not be p....
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.... • Dealings in cash was done by him only on his personal account, out of his own funds. • RM earned interest thereon ranging from 0.8 to 1% per month, in cash, which was applied for the purpose of further lending. 17 Business of lending in cash, on his personal account, was done by him from last 4 to 5 years, as on the date of search. 25 RM never collected any identification proof of persons with whom transactions were undertaken by him. 31 • Excel sheets were prepared and maintained by the receptionist for the purpose of sending invitation cards. • Such information had no link with the regular business carried out by RM. 54. It was submitted that in the extracts of the statement recorded u/s 131, as set out in the AO order at Pages 11 and 12, Ramesh Manihar has not specified the name of the assessee or any transaction done through him in cash. Even copy of such statements recorded, u/s 131 on 08.11.2017 was not provided to the assessee during the course of assessment proceedings. 55. It was further submitted that the ld. AO wrongly relied on the extracts of the excel sheet maintained by Ramesh Manihar Group a....
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....ospel truth". It was submitted that Hon'ble Supreme Court, in the case of Arjun Panditrao Khotkar Vs. Kailash Kushanrao Gorantyal and Ors. (in Civil Appeal Nos. 20825-20826 of 2017, 2407 and 3696 of 2018 vide its order dated 14.07.2020) confirmed its earlier view in the case of Anvar P.V. v P.K. Basheer (supra) apropos admissibility of electronic recorded as evidence and held that a certificate under Section 65B(4) of the Evidence Act, 1872 is mandatory, and a condition precedent to the admissibility of evidence by way of electronic record. The non-obstante language of Section 65B(1) makes it clear that when it comes to information contained in an electronic record, admissibility and proof thereof must follow the drill of Section 65B, which is a special provision in this behalf. Requirement under Section 65B(4) is not necessary if the original computer/laptop etc in which the data/information, relied upon, itself is produced and conditions under Sections 65B(2) and 65B(4) must be satisfied cumulatively. 59. It was further submitted that in case of K. Natwar Singh (ITA No. 3258,3290,4168/Del/2013) and Jagat Singh (ITA No. 3036, 3037, 3038 and 3039/Del/2015), having similar factua....
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....n the Department to first prove its allegation by way of impeccable evidences. It is well settled that the burden is on the person who makes allegation and to discharge such burden the said person has to lead positive evidences. Mere fact that there were certain entries found from records of third party, it is not sufficient to make additions on grounds that assessee had made investment. It was submitted that even the assessee has not been identified nor is there any allegation by Ramesh Manihar that in the Pen-Drive alleged to be his, there were deposits received by him from the assessee. It was submitted that without examining the persons, who allegedly received loans, and without obtaining due confirmations from them, even the factum of investment is not proved. What would be the case of the Department, if the so-called alleged loan takers refuse to ever having received loan from the assessee? Without agreeing, if the loans given is not proved, what is the point in tracing and taxing the person who allegedly has given the loan. It was submitted that the present case is similar to a situation, wherein, an allegation is made on the assessee to have made investment in land, without....
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....ribunal that no material was found to show that the amount contained in the data was paid by the assessee firm at any point of time. Resultantly, in the absence of any corroborative evidences no addition can be made. 65. It was further submitted that the ld AO, without any basis, alleged that assessee earned interest, of Rs. 90,58,625, on the loans advanced to different persons through RMG. Since the assessee did not provide any loan, in cash, to any person through RMG, there was no question of any interest being earned by the assessee. 66. It was accordingly submitted that the ld CIT(A) has rightly accepted the contentions of the assessee and deleted the additions holding that Ramesh Manihar was never confronted by the ld. AO or the Investigation Wing as to what "PCK" stands for, against the name "PCK', no address or telephone number is found to have been recorded, no evidence or basis to suggest "PCK" was no one else but the assessee, no evidence to suggest that assessee had advanced loans in cash through Ramesh Manihar, evidences as relied upon by ld. AO do not relate to the assessee, in the statements recorded of Ramesh Manihar, there is no reference to "PCK" being consid....
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....essee stated that he, at no point of time, during the relevant previous year or otherwise, has given any amount in cash, as loan or otherwise, through any person, including Sh. Ramesh Chand Maheshwari of Ramesh Manihar Group. It was further submitted by the assessee that from the documents so provided, the assessee is unable to understand as to how the Assessing Officer has inferred that he has provided cash loans to different persons through Sh. Ramesh Chand Maheshwari. The reply so furnished by the assessee was examined by the Assessing Officer and as per the Assessing Officer, reply of the assessee is of routine nature having no evidence to contradict the information available with the Revenue and duly incorporated in the reasons for reopening of the case and the assessee has failed to substantiate the onus cast upon him about the impugned transactions of Rs. 25 crores. During the course of hearing, there is reiteration on part of the ld PCIT/D/R that initial onus lies on the assessee which he has failed to satisfy and reliance has been placed on the findings of the Assessing officer in this regard. 70. The ld A/R in his submissions has however stated that the addition has be....
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....ar Group and then, in such a scenario, how can the assessee lead any evidence in support of a transaction which he denied having executed and undertaken at first place. Therefore, we agree with the contentions advanced by the ld A/R that the initial onus lies on the Assessing officer to establish through leading positive evidence that the assessee has infact invested the money by way of cash loans through Ramesh Manihar Group and therefore, we believe that merely stating that the same has not been recorded in the books of accounts so maintained by the assessee is not sufficient enough to discharge the initial burden cast on the Assessing officer. 72. In order to determine whether the onus cast on the Assessing officer has been satisfied or not and basis of his findings, we refer to the information and other material/documentation available with the Assessing officer prior to initiation of the reassessment proceedings as well as analysis/examination thereof during the course of reassessment proceedings and besides, other information/documentation relied upon by the Assessing officer during the course of reassessment proceedings to arrive at his findings and which forms the basis ....
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....for, what "@" stand for, what "AT" stand for, what "PCK" stand for, what is the linkage of "PCK" with other persons whose name are again written in abbreviated form, and how this data and so called transactions are related to the assessee and how the figures so depicted represent and add up to a figure of Rs. 25 crores are again not discernable even from close reading of the said data and said data is unclear, vague and in abbreviated and codified form and therefore the said data per se on a standalone basis cannot constitute as tangible and cogent material/evidence in possession of the Assessing officer unless the same is analysed and examined thoroughly and necessary linkage is established with the assessee. 74. Now, let's look at as to how the Assessing officer has examined and analysed the said data further during the course of reassessment proceedings. The Assessing officer has referred to and compared the aforesaid data with data found in other pen drives as well as statements of Ramesh Chand Maheshwari recorded u/s 132(4) during the course of search and post search proceedings u/s 131 of the Act given that the said data has been found in pen drives from the premises of Ra....
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....zed pen drives found during the course of search have not been handed over to the Assessing officer by Assessing officer of the Ramesh Manihar Group. Therefore, what has been received by the Assessing officer in the instant case is only the information in form of extracts and print out of the excel sheets containing the aforesaid data in various pen drives found during the course of search in case of Ramesh Manihar Group. Here, it is relevant to note that presumption available under section 132(4A) in terms of authencity and correctness of contents of such data/information found in the pen drives can be drawn against the person in whose case the search has been authorized and from whose possession or control such pen drives have been found during the course of search. Therefore, in the instant case, the presumption lies against Ramesh Manihar Group, and not against the assessee. In such a case, the burden lies on the Assessing officer by leading corroborative evidence that the data/information so found in the pen drives relates to the cash loan transactions belongs to the assessee and the same have actually been undertaken by the assessee through Ramesh Manihar Group and the conten....
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....g positive evidence and recording of satisfaction by the Assessing officer which we find has not happened in the instant case. 78. Having said that, let's examine whether data so found in the pen drives and received by the Assessing officer stand corroborated by the Shri Ramesh Chand Maheshwari in his statement recorded under Section 132(4) at the time of search conducted on 27.01.2016. In reply to question no. 12, he has stated that through his two firms, namely Amarnath Associates and Amarnath Enterprises, loan financing through cheque/RTGS has been undertaken on commission basis and in reply to question no. 15, he has stated that cash loan financing is done jointly with Manmohan Bagla in their private capacity and his companies/firms have no relationship with such cash loan transactions. In reply to question no. 16, he has further stated that whatever amount was given as cash loans was his's and Manmohan Bangla's own money which was given on interest and which on receipt, is further given on interest to various parties. Thereafter, in subsequent questions, he has explained since how long these cash loan transactions have been undertaken by them and how the accounts are mainta....
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....epresent the assessee only and the assessee also made his transactions of lending unaccounted money through the said group and earned interest income thereon. We therefore find that there is a clear disconnect between the findings of the AO and the statement of Ramesh Chand Maheshwari recorded on oath u/s 132(4) of the Act, and data so found in the pen drives which is claimed by the AO as relating to cash loan financing by the assessee through Ramesh Manihar cannot be held to be corroborated by the statement of Shri Ramesh Chand Maheshwari recorded under Section 132(4) of the Act. 80. Now, coming to the another statement of Shri Ramesh Chand Maheshwari recorded under Section 131 on 8.11.2017 which has been relied upon by the Assessing officer and we refer to response of Shri Ramesh Chand Maheshwari in response to various questions. We find that in this statement recorded u/s 131 on 8.11.2017, after a gap of almost 21 months from the earlier statement which was recorded u/s 132(4) on 27.01.2016, when Shri Ramesh Chand Maheshwari was confronted with his earlier response to question no. 15 in statement recorded u/s 132(4), there has been a change in his stand where he stated that c....
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....nancing of various lenders stand corroborated by the statement of Shri Ramesh Chand Maheshwari recorded under Section 131 of the Act. The assessee has also challenged the same stating that such statement was never confronted to him during the course of reassessment proceedings and even an opportunity of cross-examination of Shri Ramesh Chand Maheshwari so demanded was not provided to him. 82. To our mind, in the facts of the present case, where there is shifting stand of Shri Ramesh Chand Maheshwari in his two statements and there is heavy reliance placed by the Revenue on the latter statement recorded u/s 131, it is imperative that the assessee be allowed an opportunity to seek a copy of the said statement and file his objections and secondly and equally important, an opportunity to cross examine Shri Ramesh Chand Maheshwari which has been recognized time and time by the Courts as an important facet through which the principle of natural justice can be implemented and is duly supported by various authorities quoted at the Bar. In absence of such an opportunity, no reliance can be placed on such statement more so where in his statement, Shri Ramesh Chand Maheshwari did not categ....
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....ggi vs ACIT (supra). In that case, payment of onmoney by assessee, Anil Jaggi, was noticed in the course of search in the Hiranandani Group in respect of purchase of certain properties. The Coordinate Bench after appreciating the entirety of facts and circumstances held that the findings of the Assessing officer that assessee had paid "on money" for purchase of property under consideration is based on the contents of the pen drive which was seized from the residence of an exemployee of Hiranandani group and the information as emerges from the print out of the pen drive falls short of material facts and remain uncorroborated and mere admission of the amounts recorded in the pen drive as the additional income by Sh. Niranjan Hiranandani in his application before the Settlement Commission falling short of any such material which would inextricably evidence payment of "on money" by the assessee would not lead to drawing of adverse inference as regards the investment made by the assessee for purchase of the property under consideration and additions made by lower authorities were deleted and the relevant findings of the Coordinate Bench read as under: "14. We shall now take up ....
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....ded on oath in the course of the Search & seizure proceedings had confirmed that the amounts aggregating to Rs. 475.60 crore recorded in the pen drive were the on-money received on sale of flats, which was offered as additional income under Sec. 132(4) and thereafter offered as such for tax in the petition filed before the Settlement commission. We are of the considered view that there is substantial force in the contention of the ld. A.R that mere admission of the amounts recorded in the pen drive as the additional income by Sh. Niranjan Hiranandani, falling short of any such material which would inextricably evidence payment of "on money" by the assessee would not lead to drawing of adverse inferences as regards the investment made by the assessee for purchase of the property under consideration. We rather hold a strong conviction that the very fact that the consideration paid by the assessee for purchase of the property under consideration when pitted against the 'market value' fixed by the stamp valuation authority is found to be substantially high, further fortifies the veracity of the claim of the assessee that his investment made towards purchase of the property unde....
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....tracts of the excel sheets on which reliance had been placed were found from the computers of employees of Shri Ramesh Manihar. Those employees were never examined independently by the AO to find out whether "PCK" as mentioned in such excel sheets represent assessee only. There is no positive confirmation or concrete evidence available with the AO, in the form of acceptance by the parties alleged to have received loans that they have actually received loans, in cash, which was provided by the assessee through Ramesh Manihar Group. Leaving aside a positive confirmation from the recipients of the loan, the AO has not been able to establish even the identity of the persons alleged to have received loans from the assessee. There is shifting stand of Shri Ramesh Chand Maheshwari in his two statements recorded u/s 132(4) and u/s 131 of the Act. We find that in his latter statement recorded u/s 131, he has stated that cash loan financing is undertaken in their personal capacity where they acted as a mediator/facilitator. This is unlike his earlier statement u/s 132(4) where he had stated that cash loan financing is done jointly with Manmohan Bagla in their personal capacity and whatever a....
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.... Mumbai Benches in case of Katrina Rosemary Turcotte (supra). In this case, on the basis of a print out taken from the computer back-up of Ms. Sandhya Ramchandra, assessee's manager and assessee's agent Matrix India, it was concluded by the Assessing Officer that the assessee has received an amount of Rs. 2,50,000 in cash for appearing as a host at an ICC event in Sidney. The Coordinate Bench deleted the additions holding that the addition was made on the basis of a print out taken from the computer of a third party who happened to be an employee of Matrix and there are no other corroborative evidence brought on record to prove the fact that the payment mentioned in the seized material was actually received by the assessee and relevant findings read as under: "8. We have heard rival contentions and perused the material available on record. Undisputedly, on the basis of a print out taken from the computer back-up of Ms. Sandhya Ramchandra, it was concluded by the Assessing Officer that the assessee has received an amount of Rs. 2,50,000 in cash for appearing as a host at an ICC event in Sidney. It is very much clear that apart from this document, there was no other evidence....
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....e two evidences relied upon by the Assessing officer, on a standalone basis cannot form the basis for invoking section 69. Therefore, it was held that provisions section 69 are not attracted as neither the Assessing officer discharged the initial burden cast upon him to prove investment nor any material has been brought on record to this effect and additions were held to be rightly deleted by the ld CIT(A) and the relevant findings of the Coordinate Bench read as under: "8. The learned counsel of the assessee submitted before us that in assessment year 2008-09, addition of Rs. 10,06,43,054 comprises of two additions, one of Rs. 7,32,98,821 and the other of Rs. 2,73,44,233. The facts relating to both the additions are different and therefore both these additions need to be adjudicated at length. We observe that the addition of Rs. 7,32,98,821 has been made by the assessing officer on the basis of the screenshot of journal entry dt. 4-9-2007 taken from the tally data in the pen drive and the printout of the details of land which has been reproduced by the assessing officer on page Nos. 2 and 3 of the assessment order as table 1. Other than these two materials, there is no ot....
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....essing officer, on a standalone basis, in our considered view, cannot form basis for invoking section 69. Therefore, we hold that provisions section 69 are not attracted as neither the assessing officer discharged the initial burden cast upon him to prove investment nor any material has been brought on record to this effect. 8.1 A perusal of the journal entry dt. 4-9-2007, which has been one of the basis for addition, shows that through this journal entry, the lands was purchased by the two persons named in the journal entry and was being introduced as their capital contribution in the partnership firm. Since, these journal entries have been relied upon by the assessing officer. Thus, it has remained undisputed that the lands were not purchased by the assessee but by the two persons as named in the journal entry. When the lands were not purchased by the assessee firm, any question of payment of "on money" does not arise in the case of assessee firm. As rightly contended by learned Authorised Representative of the assessee, that all the lands, except one, described in the assessment order on page Nos. 2 and 3, were purchased prior to formation of the assessee firm. We obser....
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....nal. In Smt. Rajabai B Kadam v. Asstt. CIT (supra) it was found that the assessee, who was a minor, was found carrying cash of Rs. 1,18,500 by the police Department. The assessee thereafter died. In pursuance to the reassessment notice, his mother filed return declaring nil income and she could not explain the money which was recovered from her minor son. Co-ordinate Bench held that there is no material on record to suggest that the minor could earn said money just within a period of 2 months after leaving his school. It was in these facts and circumstances that the addition was held to be not justified, relying upon the decision of Hon'ble Supreme Court in the case of Smt. P.K. Noorjahan (supra). If we apply the ratio of aforesaid two decisions to the facts of the present case, we find that when the source of income/revenue for the assessee was missing in the sense that the business had not even started during all the three years and since during search, nothing was found to establish that the assessee had any undisclosed income from any other source, the discretion vested in the assessing officer should have been exercised in favour of the assessee and the addition should not hav....
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....n such tally data were not found as there is no reference of any such corroborative books in the assessment order. We agree with the argument of learned Authorised Representative of the assessee that if any unaccounted investment was made in respect of so many lands, from so many persons that too spread over a period of three years, some other corroborative material like account of the parties, details of individual payments etc. must also have been maintained and found during search and in absence of any such corroborative material, the contents of the pen drive/chart does not inspire confidence. It is also worth noting that there is no finding of fact recorded by the assessing officer about any unaccounted assets or unaccounted expenses or excess cash found during search. Considering all the facts, it comes out that apart from the printout in the form of chart, there is no other evidence in support of the addition made by assessing officer and the chart, by itself, does not constitute any material/evidence to establish unaccounted payment. As held by us earlier, for invoking section 69, the initial burden is on the Revenue to establish that any unaccounted investment was made by ....
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....Bank of Baroda and that the cheque number in respect of payment made through State Bank of India did not relate to any bank account held by the concerned person in that bank and similarly other many discrepancies were pointed out before the assessing officer. All these explanations were rejected by the assessing officer without giving any reason whatsoever. However, for rejecting the explanation of assessee, it was incumbent upon the assessing officer to have given detailed reasons for not accepting the same and in absence of any reason given, we do not approve the action of the assessing officer." 88. Similarly, in case of Mahabir Prasad Gupta (supra), the matter came up before the Coordinate Delhi Benches of the Tribunal. In this case, during the course of search at the premises of Brij Mohan Gupta, a diary containing entries in coded language was found and basis the said entries, the Assessing officer has held that the assessee has advanced loan of certain sum through Shri Brij Mohan Gupta and addition was made under section 69 as undisclosed investment. The Coordinate Bench held that the Revenue could not establish that name of the person recorded in the diary as 'MPG....
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.... such writing. That can be starting point of investigation but revenue has to establish that it is the assessee who has paid the money to certain concerns without recording them in the books of account. Learned First Appellate Authority has discussed this aspect while deleting the addition and we do not see any reason to interfere in his findings. The findings in all the other assessment years are almost similar except variation in the quantum of additions. Therefore, all the appeals of the revenue are de void of any merit and they are dismissed." 8. There is no disparity on facts. The revenue could only able to lay its hands on the diary of Shri Brij Mohan Gupta where names of persons were recorded in coded words e.f. 'HD' means Hamamm Dass, R.K. means Ram Kumar. The revenue could not establish that 'MPG' means Mahabir Prasad Gupta only i.e. 'assessee'. The revenue has not placed on record statements of Shri Brij Mohan Gupta or Ram Avtar Singal or Rajiv Gupta before us. Therefore, in our opinion, the issue in dispute is squarely covered in favour of the assessee by the orders of the ITAT passed in the case of other persons i.e. Ashok Prasad Gupta, ....
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....hat the assessee had filed his return of income on 29.09.2011 declaring total income of Rs. 1,10,86,623/- and assessment was completed vide order passed u/s 143(3) dated 31.03.2016 wherein returned income of Rs. 1,10,86,623/- was accepted. It was further submitted that the pursuant to notice u/s 148 of the Act, the assessee filed his return of income on 17.04.2018 wherein he has declared his income at Rs. 1,10,86,623/- as originally returned and assessed. It was further submitted that in the order passed u/s 147 read with section 143(3) dated 25.12.2018, the Assessing Officer has made addition of Rs. 25,90,58,625/- as against the returned income of Rs. 1,10,86,623/- and assessed income was determined at Rs. 27,01,45,250/-. It was submitted that there was no discussion in the assessment order as well as no addition was made by the Assessing Officer while passing the order u/s 147 read with section 143(3) in respect of Long Term Capital Gain amounting to Rs. 50,05,578/- and only addition was in relation to alleged cash loans and alleged interest income of Rs. 25,90,58,625/-. It was submitted that in the Income Tax Computation Form attached with the assessment order, the Assessing Off....
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....3,91,888/-, and after setting off long term capital gains against long term capital loss, the assessee has claimed carry forward of long term capital loss of Rs. 72,673/-. The findings of the Assessing Officer in the remand report that the assessee himself while filing the return of income u/s 148 of the Act has taken capital gains of Rs. 50,05,578/- in the computation of total income is therefore not based on tax filings made by the assessee or any other independent material available on record. Further in the order passed u/s 147 read with section 143(3), it is an admitted fact that the issue of capital gains didn't arise for consideration during the course of reassessment proceedings and there is no finding which has been recorded by the Assessing Officer disputing the figures as reported by the assessee in his return of income under the head "long term capital gains". We therefore find that it is a clear mistake on the part of the Assessing Officer while computing the total income wherein the Long Term Capital Gains amounting to Rs. 50,05,578/- has been inadvertently brought to tax in the hands of the assessee. The Assessing Officer is hereby directed to delete the said amount ....
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....ªà¥à¤¶à¤¨à¤¿à¤·à¥à¤Ÿ (Receptionist) के कमà¥à¤ªà¥à¤¯à¥‚टर से à¤à¤• Excel फाईल मिली है जिसमें कि कई वà¥à¤¯à¤¾à¤ªà¤¾à¤°à¤¿à¤¯à¥‹à¤‚ के नाम व पते लिखे गठहै। यह फाईल "copy of New Update 2015 Neha के नाम से मिली है। इस फाईल में लिखे हà¥à¤ नाम और आपके कैश लोन से संबंधित बरामद दसà¥à¤¤à¤¾à¤µà¥‡à¤œà¥‹à¤‚ Annex.AS. Exh.1 से 18 और Exh.20 हतà¥à¤¯à¤¾à¤¦à¤¿ में लिखे हà¥à¤ नाà....