TaxTMI 
TaxTMI 
2021 (11) TMI 673
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....,23,17,600/- on account of alleged unexplained investment in properties. 2. That the Ld. CIT(A) has erred in law and on facts in restricting the addition of Rs. 14,49,14,000/- on account of alleged unexplained investment in properties to Rs. 6,51,00,000/-. 3. That the Ld. CIT(A) has erred in law and on facts in deleting addition of Rs. 5,42,82,079/- on account of alleged unexplained investment in properties. 4. That the Ld. CIT(A) has erred in law and on facts in deleting addition of Rs. 13,46,94,265/- on account of alleged unexplained investment in properties. 5. That the Ld. CIT(A) has erred in law and on facts in deleting addition of Rs. 1,34,37,000/- on account of alleged unexplained investment in properties. 6. That the Ld. CIT(A) has erred in law and on facts in deleting addition of Rs. 20,00,000/- on account of alleged unexplained investment in properties. 7. That the Ld. CIT(A) has erred in law and on facts in deleting addition of Rs. 32,50,00,000/- on account of alleged unexplained investment in properties. 8. That the Ld. CIT(A) has erred in law and on facts in deleting addition of Rs. 34,00,000/- on account o....
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....is prayed that the order of the Commissioner of Income Tax (Appeals), be set-aside and that of the AO be restored. And the grounds raised by the assessee in ITA No. 461/Chd/2014 read as under: 1. That Ld. CIT(A) erred on facts and law in confirming the action of the AO of determining the assessed income at Rs. 6,80,71,080/-. 2. That Ld. CIT(A) erred on facts and law in confirming the addition of Rs. 6,51,97,000/-. The addition confirmed by the CIT(A) is on the basis of arbitrary interpretation of dumb documents. 3. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 5. The common grievance in the Departmental appeal as well as in assessee's appeal relates to the deletion / addition on account of alleged unexplained investment in properties. 6. The grievance of the Department in its appeal relates to the deletion of additions while the assessee is in appeal against the sustenance of addition made by the A.O. 7. Since the Ld. CIT(A) dealt with all the additions sustained and the deletions made simultaneously in the impugned order therefore we will also decide all the issues si....
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....ses of the assessee at Mohali, certain documents in the form of annexure ISB-8, 11 & 21 were found during the course of search. The notings on these documents are discussed as under: (a)Document No.25 & 26 of ISB-8 On these pages, the investment of Rs. 4,87,00,000/- and Rs. 5,66,00,000/-in properties in Hans Nagar, Bathinda has been mentioned regarding purchase of property for Rs. 5,66,00,000/- it is total land of 7acres, the purchase price of which comes to Rs. 1600/- per sq. yards.-Vide this office letter dated 27.02.2013 the assessee was specifically requested to give the complete details regarding source of investments on these properties. The assessee file letter dated 11.03.2013 stating there in that no such property was purchased and it was only dumb document. The reply of the assessee has been considered and I find no merit in that because the specific figures along with the area of land and situation of property is also mentioned. As such it can not be treated as a dumb document. Since the assessee has failed to explain the source of these investments in the properties these amounts are added back to the total income of the assessee. Further the assessee ....
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....s. 7,97,17,000/- in various lands and profit of Rs. 6,51,97,000/- on the sale of the various lands situated at Bathinda. Since the assessee has failed to disclose the source of investment, the investment of Rs. 7,97,17,000/- plus profit earned on the sales out of above property amounting to Rs. 6,51,97,000/- i.e. total of Rs. 14,49,14,000/- are added back to the total income of the assessee. Penalty proceedings u/s 271AAA is initiated separately for concealing the particulars of income. (c)Document No.28 of ISB-8 This document mentions the details of land transaction done by assessee with regard to 23155 sq. yards of land situated at Lai Singh Basti, Bathinda. From the details on this document it can be concluded that the assessee made investment of Rs. 3,92,75,215/- in the purchase of land measuring 23155 Sq. yards in Basti Lai sing Bathinda @ Rs. 1696/-per Sq. Yards. The following land has been sold by the assessee: a) land measuring 3666 Sq. Yards at the rate of Rs. 3800/- per sq yards for a total consideration of Rs. 13930800/- (b) Land measuring 9700 sq. yards at the rate of Rs. 2400/- per sq. yards for a total consideration of Rs. 23280000/....
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....ails regarding source of investments on these properties. The assessee filej letter dated 11.03.2013 stating there in that no such property was purchased and it was only dumb document. The reply of the assessee has been considered and I find no merit in that because the specific figures along with the area of land and situation of property is also mentioned. As such it can not be treated as a dumb document. From the above said detail it can be concluded that the assessee has made investment of Rs. 7,05,26,000/-and Rs. 4,67,50,000/- in various lands and profit of Rs. 1,74,18,265/- on the sale of the various lands situated at Bathinda. Since the assessee has failed to disclose the source of investment, the investment of Rs. 4,67,50,000/- an Rs. 7,05,26,000/- plus profit earned on the sales out of above property amounting to Rs. 1,74,18,265/- i.e. total of Rs. 13,46,94,265/- are added back to the total income of the assessee. Penalty proceedings u/s 271AAA is initiated separately for concealing the particulars of income. (e)Document No.30 of ISB-8 The document mentions the details of purchase of land for Rs. 1.25 Crore at Bir Talab, Bathinda and earned profit of Rs. ....
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....he same is added back to the total income of the assessee i.e. Rs. 20lacs. Penalty proceedings u/s 271AAA is initiated separately for concealing the particulars of income. (q)Document No.7 of ISB-11 (1) This page has two parts, on one part there is mention regarding some investment of Rs. 35crores however there is totaling mistake and exact amount comes to Rs. 32.5crores. Since the assessee has failed to explain the contents of this document, for the sake of natural justice and to be fair the investment is taken at Rs. 32.5crores. Vide this office letter dated 27.02.2013 the assessee was specifically requested to give the complete details regarding source of investments on these properties. The assessee file letter dated 11.03.2013 stating there in that no such property was purchased and it was only dumb document. The reply of the assessee has been considered and I find no merit in that because the specific figures along with the area of land and situation of property is also mentioned. As such it can not be treated as a dumb document. Because the assessee has failed to explain the source of investments, as such the same is added back to the total income of the as....
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....ayments made to various persons of Rs. 21,00,000/- on 26.10.2010. Vide this office letter dated 27.02.2013 the assessee was specifically requested to give the complete details regarding source of payments. The assessee file letter dated 11.03.2013 stating there in that it was only dumb document. The reply of the assessee has been considered and I find no merit in that because the specific figures regarding various payments, as such it can not be treated as a dumb document. Because the assessee has failed to explain the source of payments, the same is added back to the total income of the assessee i.e. Rs. 21lacs. Penalty proceedings u/s 271AAA is initiated separately for concealing the particulars of income. The income of the assessee is computed as under;- Returned income Rs. 28,74,080/- Add: Addition as per para 2.1(a) Rs. 11,23,17,600/- Addition as per para 2.1(b) Rs. 14,49,14,000/- Addition as per para 2.1(c) Rs. 5,42,82,079/- Addition as per para 2.1(d) (1) Rs. 13,46,94,265/- Addition as per para 2.1(e) Rs. 1,34,37,000/- Addition as per para 2.1(f) Rs. 20,00,000/- ....
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....her investment by the assessee in any assessment year during the course of search. The addition were made only on the basis of noting in the diary which had not been correlated to any document found during the course of search. It was further submitted that the presumption under section 132(4A) of the Act is available to the proceedings under section 132(5) of the Act only and where the legislature intended to provide such presumption it has been so provided in various chapter. It was also stated that in the chapter relating to search and seizure the presumption about books of account and the documents is provided but it is limited to the summary proceedings about retention or release of the assets under section 132(5) of the Act which cannot be extended to the assessment proceedings and that the presumption under section 132(4A) is rebuttable presumption and the same can only be raised by the department when a document is a speaking one and it reflects complete transaction without two interpretations. Reliance was placed on the following case laws: * P.R. Metrani Vs. CIT 287 ITR 209 (SC) * ACIT Vs. Satyapal Wassan (2008) 5 DTR (Jab) 202 para 31 * Gurlal ....
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....9,37,000/- Profit 2 Acre 9,10,000/- Sale Hans Nagar 1,66,00,000/- S.J. 6,51,97,000/- 9.4 The Ld. CIT(A) mentioned that a letter was written on 04/12/2013 to the Sub-Registrar cum Tehsildar, Bathinda regarding purchase / sale of properties by Shri Inderjeet Singh Brar i.e; the assessee and his family members during the period 01/04/2009 to 31/03/2011 in the area of Hans Nagar, Bathinda; Bir talab, Bathinda; Vill. Jai Singh Wala, Bathinda; Lal Singh Basti, Bathinda and Multania Road, Bathinda. He also mentioned that a reply was received vide letter No. 575 dated 12/12/2013 in which it had been stated that Shri Inderjeet Singh Brar has sold 35 Kanals of land in vill. Jai Singh Wala on 05/06/2009 and Smt. Jaswinder Kaur W/o Shri Karnail Singh (mother of Sh. Inderjeet Singh Brar) had also sold land measuring 32 Kanal 14 Marla in Vill. Jai Singh Wala on 05/06/2009 and that no other property was purchased or sold during the period 01/04/2009 to 31/03/2011 by the assessee or his family members. 9.5 The A.O. submitted in his report that it was the Modus-operandi of the property dealers that generally they do not purchase the property by way of registration deed but o....
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....e nature of entries contained in the seized documents. As per Q.No.27 the assessee was specifically asked that if he does not remember the location of land and the name of person who made the proposal for sale of land in all the cases mentioned in the seized record, then he should tell only the names of three persons or location of land for which offers for sale of land was received by him during this period. Even to this question he stated that the matter is very old and he has not kept any record. This shows gross non-cooperative attitude of the assessee and clearly proves that he is not willing to give any information to the department to avoid further investigations. It is very much unbelievable that a person of sound mind is stating that he has forgotten all the land transactions proposal during the last 7-8 years, not even remembering names of three persons or the location of lands against which proposals were made to him which he noted in his diary with specific amounts. During the post search enquiries by the investigation wing, the statements of Sh. Inderjit Singh Brar were recorded on 10.03.2011, he did not give answer or explanation to the seized documents confr....
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....f locality known as Hans Nagar, Lal Singh Basti, Multania Road, Bir Talab, Jai Singh Wala etc. The assessee purchased only 1/2 share of 70 kanal of agriculture land at Vill Jai Singh Wala on 03.08.2007 and the same was sold on 30.06.2009 as agriculture land. The evidence regarding the same was filed during the course of assessment proceedings. Despite the fact that the AO failed to correlate the notings in the seized record with any document/purchase deed/agreement to prove that such notings resulted into actual investments/sale of immovable properties or profit was actually earned by the assessee, exorbitant additions have been made by the AO which are merely based on presumptions. Our contention that the assessment has been framed by the AO without making any effort to correlate the notings with any document in seized records is proved beyond any iota of doubt from the fact that the AO made additions of Rs. 32,50,00,000/- based on the notings of 35 cr. (which could be credit also) on left hand side of the document and 34,00,000/- on account of 34 written on right hand side of the document no. 7 of ISB-11 which shows that the figures have been extrapolat....
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....s sold for Rs. 16632800/- and 2250 sq. yrds has been treated sold for Rs. 4500000/- and Rs. 16000000/- as the sale consideration of 2 acres. In the assessment order the AO has interpreted as investment in purchase in Hans Nagar despite the fact that the word invest and not investment has been used. There are no further reference of any transaction of sale of this property in the seized record. In the assessment order/remand report the AO has treated the amount of Rs. 4.87 crores as part of the amount invested for purchase of 7 acres of land in Hans Nagar Bathinda. This proves the non application of mind by the AO because 4.5 acres @ 80 has been noted on page 25 in the context of Rs. 48700000/- mentioned on page 25 and top of the page 26. 1 acre of land consist of 4840 sq, yrds and 55% saleable area is normally available after leaving the area for streets etc. The purchase price has been computed @ Rs. 1600/-per sq. yrds which is without any details of working in the assessment order or in the remand report and the same comes to Rs. 1670/- if calculated actually for 7 acres which comes to 33180 sq. yrds. The saleable area would have been 18600 sq. yrds from the total 7 acres o....
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....n added to the income without application of mind by the AO. 3 Page 28 of ISB 8 Addition of Rs. 54282079/-(Page 4 of the assessment order) (Rs. 39275215/- + Rs. 15006864/-) The AO has interpreted the noting on this loose slip as transaction of purchase/sale of land in Lai Singh Basti, Bathinda. The purchase price has been taken at Rs. 39275215/- and sale has been computed at Rs. 39710800/-for sale of 14566 sq. yrds of land and 4308 sq. yrds has been treated as available @ Rs. 2500/- per sq. yrd and the profit has been computed at Rs. 15006864. The calculation on this page relates to 23155 sq. yrds of land against which the sale and left area is only 18874 sq. yrds. (3666+9700+ 1200 sq. yrds taken as sales and 4308 sq.yrds as left out area) sold without any details of the balance land which shows that these are only projections. The AO has not taken any cognizance of the balance land which shows non application of mind by the AO. The word 1200 sold by 255/85 and 25 lacs has been interpreted as sale price of 1200 sq. yrds. Left area 5558 has not been taken into consideration for purpose of computation as 5558-1200=4308 has been taken as left area which shows that calculat....
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....as been made in the A.Y. 2011-12 for which no reasons have been given by the A.O. in the assessment order or the remand report. 7. Page 7 of ISB 11 (Page 6&7 of the assessment order) Addition of Rs. 32.5 crores and Rs. 34 lacs Right hand side of this page has been interpreted as investment of Rs. 32.5 crores and left hand side of this page has been interepreted as investment of Rs. 3400000/- in some properties. The figure of Rs. 32.5 has been taken in crores by extrapolation only on the basis of 32.5 cr despite the fact the totaling of the notings has been mentioned as 35 but the same comes to 32.5 which proves that these are rough notings otherwise the person making investment to the tune of 32.5 crores cannot write the total as 35 crores. The figures on right hand side written as 34 has been interpreted as 3400000/- without linking the noting on this page with any unaccounted investment. The notings has been made in the diary dated 21.01.2010 but the addition has been made in A.Y. 2011-12 for which no reason have been given either in the assessment order or the remand report. 8. Page 6 of ISB 21 (Page 7 of the assessment order) Addition of Rs. 14228500/- Roug....
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....hased or sold, the buyers or sellers thereof, the specific dates/year in which such transaction had been carried out and other attendants details to establish that the presumed transactions had actually taken place and the amounts in question had been actually exchanged. However in case the documents so found and seized fall short in any respect, the gaps thereof were to be bridged by carrying out investigations either by the investigation wing or by the Assessing Officer. The Ld. CIT(A) further observed that the documents found and seized had not sufficiently descriptive and speaking which is the first step in the process of arriving at the likely unaccounted income of the person concerned and that the next logical step was to collect more evidence in the form of investigations so that the possibility of unaccounted investment / income as evidenced by the seized document was established with certain reasonable certainty. The Ld. CIT(A) observed that the judicial view on whether a particular seized document was speaking enough or not has been expressed in number of cases. The reference was made to the following case laws: * Gurlal Singh Grewal Vs. ACIT, Cirlce-VI, Ludhiana....
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.... any rate or rates, income-tax at that ate or those rates shall be charged for that year in accordance with and subject to the provisions (including provisions for the levy of additional income-tax) of this Act in respect of the total income of the previous year of every person : Provided that where by virtue of any provision of this Act, income-tax is to be charged in respect of the income of a period other than the previous year, income-tax shall be charged accordingly. (2) In respect of income chargeable under sub-s. (1), income-tax shall be deducted at the source or paid in advance, where it is so deductible or payable under any provision of this Act." From a reading of above section, we find following components which enter into the concept of taxation. The first is the taxable event which attracts the levy. The second is the person on whom the levy is imposed and who is obliged to pay the tax. The third is the assessment year in which charge of income-tax is levied. The fourth is the total income of the previous year and the fifth is the rate or rates at which tax is to be imposed. The rates are prescribed in the annual Finance Act. Therefore, this ....
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....interest; whether it is a statement of existing assets, disclosed or undisclosed; what is the commodity involved; who are the people involved in the transaction; if it is advance, then whether debtors concerned are existing, their identity; whether advance so taken is reflected in their books; whether any interest is paid on such transaction, what are the documents executed for recovery of such advances or what arrangement the assessee has done for recovery of such advances; whether there are any other related document found in the search; whether any person recorded in the impugned documents had, otherwise any other transaction with the assessee recorded in the regular books. In the present case, the AO has simply presumed that the alleged figures are advances without there being any material on record to support such presumption. About the second component the charging section clearly spells out that income-tax will be levied on the total income of a person. The person must be the one as defined in s. 2(31). It must be clearly established who is that person whether he is the one from whose possession the document is recovered or someone else. Merely because a document is....
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....AO would be justified to make such presumption, if drawn after judicial application of mind to the fact of the case. Thereafter, when the assessee leads the evidence, then the AO has to consider it judicially. What amount of evidence one requires to rebut the evidence depends upon facts of each case. There is no rigid rule in this behalf. Sometimes, mere statement of the assessee may be enough. Hon'ble Rajasthan High Court in Addl. CIT vs. Thahrayamal Balchand 1977 CTR (Raj) 219 : (1980) 124 ITR 111 (Raj) observed as under : The evidence which satisfied the Tribunal was the facts and circumstances of the case. As pointed out above what quantum of evidence would rebut a legal presumption in a given set of facts does not admit of any rigid rule. The evidence may be direct or circumstantial or both and a mere statement of the assessee may be enough in some cases. It does not raise a question of law." The assessee filed his affidavit and also the affidavit of Smt. NirmalaKantaWassan wife of Dharamvir Wassan to the effect that impugned document contained transaction belonging to Shri DharamvirWassan. It could not be said that onus did not shift to the AO. In our co....
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.... in the documents are same these are the quantities then they have to be converted in terms of money. There has to be some basis for conversion. If it is money, then it has to be shown how much it is. The presumption that these figures are in lakhs is simply bald, wild and baseless. We have no option but to infer that the AO has failed to discharge his duties. He drew inferences, made presumptions, relied on surmises and thus made unsustainable additions. The above discussion also leads us to infer that a charge on the basis of document can be levied only when the document is a speaking one. The document should speak either out of itself or in the company of other material found on investigation and/or in the search. The speaking from the document should be loud, clear and unambiguous in respect of all the four components as described above. If it is not so, then document is only a dumb document. No charge can be levied on the basis of a dumb document. We also notice that the AO could not establish that the assessee has charged any interest, if at all the impugned figures were advances. There is no material to show that the AO has taxed these advances as wealth of....
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....be treated only as dumb document and on that basis no addition can be made. In the same case, other slips were found along with the cash. The contents of the slips were correlated with the cash found and, therefore, entries in the slips were treated as reflected unaccounted income. Those slips contained details of the amounts having correlation with the cash found from the same almirah. The Tribunal held them as speaking documents reflecting undisclosed income. In the present case also, it s not established that document No. 7 contained any amount. In D.N Kamani (HUF) vs. Dy. CIT (1999) 65 TTJ (Pat)(TM) 504 : (2000) 241 ITR 85 (Pat)(TM)(AT), it was held by the Third Member that where document did not reflect any on-money taken in respect of some other flats sold, then additions on that basis could not be made. It means that recording of receipt of on-money in respect of one flat can result into addition in respect of that flat only and on that basis no further addition could be made in respect of other flats sold by the assessee as the document did not reflect receipt of such on-money in respect of others. To that extent, the document was treated as dumb document. ....
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....d not be raised. Similar view was taken by the Tribunal in the cases of KishanchandSobhrajmal vs. Asstt. CIT (1991) 42 TTJ (Jp) 423 : (1992) 41 ITD 97 (Jp) and Agrawal Motors vs. Asstt. CIT (2000) 66 TTJ (Jab) 130 : (1999) 68 ITD 407 (Jab). The crux of these decisions is that a document found during the course of search must be a speaking one and without any second interpretation, must reflect all the details about the transaction of the assessee in the relevant assessment year. Any gap in various components as mentioned in s. 4 of the IT Act must be filled up by the AO through investigations and correlations with other material found either during the course of the search or on investigation. As a result, we hold that document No. 7 is a non-speaking document." 9.11 The Ld. CIT(A) observed that the detailed analysis of the judicial view on whether a particular document is sufficiently descriptive/speaking or dumb has to be applied to the facts of the case under consideration. The Ld. CIT(A) discussed the document found, sized and relied upon by the A.O. to make the impugned additions which are reproduced at page no. 49 to 59 of the impugned order, for the cost....
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....th the proposed transaction or not. Therefore the claim of the assessee as made before the A.O. and during the appellate proceedings before him that recordings on the impugned seized documents were just estimates could also be a distinct possibility in view of the peculiar nature of business carried out by the assessee. The Ld. CIT(A) observed that in the above said background that the documents found and seized have to be analyzed and appreciated to see if those document stood on their own without any corroboration to show that certain transactions of purchase / sales of land had taken place or not. 9.15 The Ld. CIT(A) observed that pages at serial no. 25,26,27,28,29 and 30 of Annexure ISB-8 were all interrelated in terms of their impact. The Ld. CIT(A) pointed out that documents at S.No. 25 and 26 records certain transactions pertaining to Hans Nagar and sales thereof and document at S.No. 27 was a summary of funds available on a given date with the assessee on account of different projects and also record below investments in the same from different persons like Shri Aulakh and Shri I.S. Brar etc. He further pointed out that the documents at S.No. 27 talks of sale of Jai Sing....
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....gh to take care of the transactions recorded on these seized documents. 9.17 The Ld. CIT(A) categorically stated that the recordings at page no. 28 of the Annexure ISB-8 did not represent the record of transactions which had actually happened as the entire recordings seem to be a proposal wherein even the working was erroneous in terms of calculation, such account of working could be accepted in respect of any proposal by the assessee and therefore no cognizance of the same could be taken in the absence of any corroborative evidence. He further observed that the addition made to the tune of Rs. 35 Crores at page no. 7 of Annexure ISB-11was not warranted as the recordings on the impugned seized documents did not convey whether it was investment or sales or record of amounts advanced or record of amounts received. The description on the left hand side also did not record any details to make complete picture so as to lead to addition of an amount of Rs. 35 Crores. He was of the view that the documents could be clearly described as dumb document because of the absence of vital features to permit the same to be taken as the basis for an addition. Similar was the case with the figure ....
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....document no. 27 of ISB-8 the description of investment & sale in properties at village Jai Singh Wala was there and the A.O. rightly worked out the unexplained investment at Rs. 7,97,17,000/- on which profit of Rs. 6,51,97,000/- was earned by the assessee therefore the addition of Rs. 14,49,14,000/- was rightly made by the A.O. and the Ld. CIT(A) was not justified in deleting the same. 11.1 It was further stated that he document no. 28 of ISB-8 mentioned the transactions relating to 23155 Sq. Yards of land situated at Lal Singh Basti, Bathinda for which investment of Rs. 3,92,75,215/- was made out of which the land measuring 14566 Sq. Yards was sold for Rs. 3,97,10,800/- by making the profit of Rs. 1,50,06,864/- therefore the addition of Rs. 5,42,82,079/- (Rs. 3,92,75,215/- + 1,50,06,864/-) was rightly made by the A.O. and the Ld. CIT(A) wrongly deleted the same. 11.2 The Ld. CIT DR stated that the document number 29 of ISB-8 had the description of transactions in two lands measuring 5.5 ace and 21 kanal 2 marla situated at village Jai Singh Wala & Multani Road, Bathinda. Thus the specific figures of investment alongwith area of the land were mentioned on the seized papers th....
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....cuments rather they are speaking documents containing meticulous details of various transactions having sufficient description of unaccounted amounts in respect of all the additions made. b) The CIT (A) has not appreciated the facts that the assessee failed to disclose the source of amounts mentioned in seized documents and also failed to prove the nature of documents seized. The seized documents were confronted to the assessee, however, the assessee gave vague replies to the questions asked. Such vague replies of the assessee are listed below; > These are only projections. > The matter is very old and the assessee did not remember any such land or the person. > Regarding the amount shown as paid on some seized documents, the assessee replied that the amount might have been required to be paid. > The figures were only estimates. > When asked that if does not remember the location of the land and the name of person who made the proposal for sale of land in all the cases mentioned in the seized documents, then he should tell only the names of 3 persons or locations of land for which offers for sale of land was received by him. The....
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....as none of the proposals materialized. The assessee has been getting large numbers of proposals however, strangely none of them materialized. Ql l : On page 26 of this annexure also reveals that amount of Rs. 4.87 Lacs has been invested in Hans Nagar the same amount was written as paid on page 25. Please explain. Ans: It was only proposed investment which did not mature. The same figures find mention on 2 pages, the assessee still stated that these were only proposals. The assessee was very sure that these were only proposals but did not remember any other details like name of the proposer, time period of receiving the proposals. Q16: On lower part of page 27 there is noting regarding investment of Rs. 6,29,17,000/- and the names of the persons are also mentioned. Please tell the identification of these entries and persons who invested the amounts. Ans: The word written is "invest" not invested. Hence the figures written on this page are all the proposals of investment. However no investment has been made by me or my family ................ Q19: At this page the word 1200 sold at Rs. 25,00,000/- is written and below this left land 4308 s....
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..... The additions have been for all the independent entries. k) The CIT (A) has described the entire ISB-11 as dumb document as the recording on the document do not convey whether it is investment or sales or record amounts advanced or received. This implies that the CIT (A) did agree that the amount mentioned represent sale/investment/payments/receipts. All these are unaccounted transactions and require to be added. It was the duty of the assessee to properly explain the contest of the document. However, despite number of opportunities, the assessee had been non-cooperative. As such the AO has rightfully made the additions. 1) The CIT (A) vide para 18 of his order has stated that additions made by the AO of Rs. 1,42,28,500/- on the basis of page no. 6 of ISB-21 are related to recordings at page no. 7. The same figures have been repeated again. The AO has made addition of figures appearing at Page No. 6 only. The repetition of figures at page 7 has not been added. Repetition only proves that the figures are not mere estimates but actual transactions. It is prayed that the order of the AO may please be restored. 12. In his rival submissions the Ld. Counse....
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.... application of mind by the AO is apparent from the fact that at the beginning of the remand report it has been stated by the AO that the assessee invested Rs. 4,77,00,000/- in the properties but in the assessment order & at the end of the remand report the same has been treated as sale of 12 plots. (ix) The notings of this document are only projection for converting the land into plots. (x) That while deciding the appeal the CIT(A) discussed at how a document seized has to be interpreted for the purpose of computing the undisclosed income & has relied on the order of this Hon'ble bench of Gurlal Singh Grewal vs. ACIT dated 29.08.2012. Kindly refer to para 9-11 on page 16 & 17 of the appellate order. (xi) The CIT(A) has further relied on the order of Jabalpur Bench of the IT AT in the case of ACIT vs. Satyapal Wassan & the detailed findings of the Hon'ble bench have been discussed in para 12-14 of the appellate order. (xii) According to the Jabalpur Bench of the Hon'ble IT AT the document should speak either of itself or in the company of other material found on investigation and/or in the search & four components have been laid down ....
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....ls vs. Dy. CIT (2003) 81 TTJ (Del) 734: (2003) 87 ITD 35 (Del) (iii) D.N Kamani (HUF) vs. Dy. CIT (1999) 65 TTJ (Pat)(TM) 504: (2000) 241 ITR 85 (Pat)(TM)(AT) (iv) Steel Home vs. Asstt. CIT (1999) 65 TTJ (Del) 393: (1999) 69 ITD 240 (Del) (v) Smt. Neena Syal vs. Asstt. CIT (2000) 69 TTJ (Chd) 516: (1999) 70 ITD 62 (Chd) (vi) Ashwani Kumar vs. ITO (1991) 42 TTJ (Del) 644: (1991) 39 ITD 183 (Del) (vii) Elite Developers vs. Dy. CIT (2000) 68 TTJ (Nag) 616: (2000) 73 ITD 379 (Nag) (viii) Kishanchand Sobhrajmal Vs. Asstt. CIT(1991) 42 TTJ (JP) 423 : (1992) 41 ITD 97 (Jp) (ix) Agrawal Motors vs. Asstt. CIT (2000) 66 TTJ (Jab) 130 : (1999) 68 ITD 407 (Jab) * The CIT (A) after discussing the facts & findings of the orders of the different benches of the IT AT held in para 15 that: (i) There is no mention of the location of the property concern & also the buyers/sellers, the mention of ward no.28 on top of the page has been presumed by the Assessing Officer to be the location where such transactions could have happened. However the perusal of the entire diary reveals that the appellant has recorded at page no.2....
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....oned was October and the date is 25th and on the top of the Diary the year mentioned is 2007 therefore even the said page of the diary did not relate to the year under consideration and the A.O. presumed the nothings 25/2 a 25.02.2007 which was factually incorrect. It was contended that no addition could have been made without any corroborated evidence as has been held by the ITAT Chandigarh "B" Bench in the case of Shri Mana Singla Vs. DCIT in ITA No. 229/Chd/2013, for the A.Y. 2006-07 vide order dt. 07/05/2019. It was stated that it had not been denied that the assessee was a director in the real estate company where there were purchase and sale transactions, certain proposals were received in the case of company and certain transactions were noted down in a very rough manner. It was stated that the A.O. made detailed enquiries during the remand proceedings from the " Land Revenue Authorities" which revealed that there was no purchase and sales of immovable property by the assessee or his family members, this fact has been mentioned by the Ld. CIT(A) at page no. 29 of the impugned order. 13.2 Ld. Counsel for the assessee submitted that during the course of search no document i....
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....e confirmed" 13.4 The Ld. Counsel for the assessee submitted that it was a matter of record that neither any Power of Attorney relating to any property, alleged to be mentioned at the location in the seized documents was impounded during the course of search proceedings and during the course of enquiries from revenue authorities by the A.O. no such registered Power of Attorney was reported by the revenue authority and that even if it was to be presumed that there was some Power of Attorney then the name of such Power of Attorney holder was to be mentioned in the sale deed but name of the assessee appeared nowhere. It was pointed out that the Ld. CIT(A) in para 9 on page 37 of the impugned order clearly mentioned that " the search in the case of the appellant was carried out on 18/02/2011 wherein no cash or any valuable except 200 gms of gold has been seized. Further, no documents in the form of agreement to sell or registered sale deed had been found evidencing any unaccounted purchases and sales by the assessee. 13.5 It was stated that all the purchases or sales which were made by the assessee were disclosed to the Department, reference was made to page no. 4 to 10 of the as....
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.... assessee had been found. However the additions had been made by the A.O. on the basis of notings on some documents / loose papers but in those notings, nowhere name of the assessee was mentioned. According to the assessee those notings were rough estimate by the company in which the assessee was a Director. In the instant case, the A.O. on the directions of the Ld. CIT(A) made the enquiries from the revenue authorities of Bhatinda. The result of those enquiries had been reproduced by the Ld. CIT(A) at page no. 25 of the impugned order wherein it has been mentioned that the Sub Registrar cum Tehsildar Bhatinda, in response to the letter written by the A.O. dt. 04/12/2013 regarding purchase / sale of property by the assessee and his family members during the period from 01/04/2009 to 31/03/2011, replied vide letter no. 575 dt. 12/12/2013 that the assessee had sold 35 Kanal of land in Village Jai Singh Wala on 05/06/2009 and mother of the assessee namely Smt. Jaswinder Kaur W/o Shri Karnail Singh also sold land measuring 32 canal 14 Marla in Village Jai Singh Wala on 05/06/2009 and no other property was purchased or sold during the period 01/04/2009 to 31/03/2011by the assessee or hi....
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....f certain documents on which there were some notings but neither the possession nor the ownership of any property mentioned in those loose slips could be proved to be belonging to the assessee, therefore keeping in view the ratio laid down by the Hon'ble Jurisdictional High Court in the aforesaid case, no addition could have been made in the hands of the assessee. 14.2 On a similar issue the ITAT Chennai Bench in the case of DCIT Vs. SNJ Distillers Pvt. Ltd. 87 ITR (Trib) 540 (Chennai) held as under; "Statements recorded under various provisions of the Income-tax Act, 1961 are a vital tool in the hands of the income-tax authorities in their thrust to establish certain factual and legal positions. Admission is an extremely important piece of evidence and it is admissible against its makers, but a statement recorded during the course of search or survey is an important piece of evidence if it is supported by corroborative evidence. If the contents recorded in the statement are not supported by corroborative evidence, solely on the basis of the statement recorded during the course of search no adverse inference can be drawn against the assessee. more particularly when ....
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....tioned in the impugned entries which are basis of the additions. When no dates have been mentioned, then the AO could not come to the conclusion that the document pertains to asst. yr. 2008-09. Considering these facts in totality the additions made by the AO are without any corroborative evidence brought on record, therefore, there is no hesitation in deleting the addition." 14.4 In the present case also there were certain notings on various documents / loose papers found during the course of search which are placed at page no. 49 to 59 of the impugned order, the word used in some of those documents was invest not the investment which is apparent from the aforesaid pages reproduced by the Ld. CIT(A) in the impugned order. So there is no force in this contention of the Ld. Counsel for the Assessee that those were the proposals to invest and no investment was actually made, this fact has categorically been mentioned by the Ld. CIT(A) in the impugned order at page no. 25 wherein the Ld. CIT(A) had mentioned that a letter was written on 04/12/2013 to the Sub Registrar cum Tehsildar, Bhatinda regarding purchase and sale of property by the assessee and his family members, in the reply....
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....that those were the properties owned by the assessee and it is an admitted fact that no agreement to sell or sale deed having the name of the assessee was found during the course of search. We therefore considering the totality of the facts are of the view that the addition sustained by the Ld. CIT(A)amounting to Rs. 6,51,97,000/- was not justified as the same was made by the A.O. only on the basis of presumption. Accordingly the aforesaid addition sustained by the Ld. CIT(A) is deleted. 15. In ITA No. 455/Chd/2014 for the A.Y. 2007-08 i.e; the appeal by the Department wherein following grounds have been raised: 1(a). That the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 6.32 crore made on account of undisclosed income of the assessee. 1(b). That the Ld. CIT(A) has erred in law and on facts in not appreciating the facts mentioned in the assessment order as well as in the remand report. 1(c) That the Ld. CIT(A) has erred in law and on facts in not appreciating the facts that the seized document was not dumb document rather this was speaking document containing meticulous detail of various transactions having sufficient descri....
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.... unaccounted details of transactions /investments, how can they be correlated with books of accounts or land revenue records. c) The assessee before the CIT (A) had relied upon case law in the case of ACIT vs. Satyapal Wassan (2008) 5 DTR (Jab) 202 (para 32). This case law is in favour of revenue as the seized documents are speaking ones having specific figures. The department while raising this argument has ignored the full that according to the settled principle of law the transactions as recorded in the seize documents or diaries cannot be assessed as und as undisclosed income even if the asse assessee has failed to explain the contents of the slip & it was for the revenue to prove on the basis of material on record that the same represented undisclosed investment chargeable to tax u/s 69A transactions of sale or stock in hand before making any addition on this score CIT vs. Ravi kumar [2008] 168 Taxman 150 (P&H) The argument of the department is factually wrong because in the case of ACIT vs. Satyapal Wassan (2008) 5 DTR (Jab) 202 it has been categorically held th....
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....section 69B. It has also been held by the Hon'ble Punjab High Court the addition u/s 69A can only be made where the assessee is found to the owner of money, bullion, Jewellery or other valuable article & where the assessee is to be found in possession of loose slips/diary & not of valuable article or things the addition cannot be made u/s 69A. The argument of the department is recorded by the AO during the also vague & been it has not remand proceedings (Para 7, Page substantiated by any corroborative he evidence. 11 to 12). However, the assessee did not give any explanation regarding the entries mentioned in the seized documents. He only stated that the figures were rough estimates. When asked about the number of proposals received by the assessee from FY 2006-07 to these 2010-11, he stated that might be less than 10. When the assessee has received less than 10 proposals in the 5 year, he should have remembered the person and property about which proposals were received, however , wilfully did not disclose the same. f) The CIT (A) held that documents to ....