2021 (12) TMI 1206

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....B/4 a 'gahan' printout taken from computer in the business premises of the assessee which gave figures of interest calculation in money lending business of the assessee. 2. On the facts and circumstances of the case, the ld. CIT(A) erred in holding that the document B/4 is not verified by the AO failing to appreciate that ld. CIT(A) possesses the power coterminous with AOP as per Kanpur Coal Syndicate 53 ITR 225 (SC) and she could verify the document independently, instead of outright deleting the addition. 3. On the facts and circumstances of the case, it is urged to set aside the matter to the file of AO for adequate enquiry relying on the decision of the Hon'ble Ahmadabad Tribunal in the case of M/s. Omnilens Pvt. Ltd. in ITA No. 2818/Ahd/2017 dated 16/10/2018 wherein it is held that if the AO has failed to discharge his responsibility to conduct a proper enquiry, it is the duty of the ITAT to ensure that effective inquiry is carried out. 4. It is submitted that monetary limit of CBDT Circular No. 17/2019 will not apply as prosecution u/s. 276CC & 276(1) of the IT Act is filed. 5. It is humbly prayed to set aside the order of CIT(A....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ey lending from Sarafa Bazar, Itwari, Nagpur, in accordance with the strict rules and regulations as laid down by the Maharashtra Money Lending (Regulation) Act, 2014 and Bombay Money Lenders Act, 1946. The appellant charges interest at the rate of 12% to 15% per annum i.e. 1% or 1.25% per month to his customers which is prescribed under Money Lending Act. The detailed interest account, that was regularly maintained for the year under consideration was produced before the A.O. as required by him. During the search proceedings, a printout identified as "gahan" and numbered as B/4 giving figures of interest calculation in money lending business was seized. In the said seized printout, the rate of interest charged to the customers, was shown at 3% per month. 5.2 Whereas, the document B/1 is receipt book containing the details of amounts received back under 'gahan' and are duly signed by both the parties i.e. the lender as well as borrower. The said voucher is issued to the borrower by the lender after the loan is repaid by the borrower and it is in prescribed format under Bombay Money Lenders Act 1946. The document B/2 is a voucher book containing terms and conditions....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....r the Money Lending Act as there was no direct and corroborated evidence of such rate charged, and that the additional income in the later year AY 2015-16 was offered just to buy peace and avoid protracted litigations. 5.5 As regards the seized document B/4, I find force in the arguments of the A.R. that except the said seized material (B/4), no other incriminating material was found during the search action for the year under consideration. Whether a document is incriminating or not is a question of fact and can only be ascertained through proper enquiry. The AO has also not proved his case with any independent inquiry made in this matter that can justify the stand taken by him. In such a circumstances, the judgment in the case of CIT Vs C.J. Shah & Co., 246 ITR 671 (Bom), is squarely applicable to the facts of the case, wherein it was held that "there is no material seized to justify any sales figure to be included for a period earlier to the said period of three months for which the loose paper, were found. The estimation made by the A.O, for earlier period was deleted by Tribunal and the order of the Tribunal was confirmed by Bombay High Court. 5.6 Further, th....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ng material i.e. (a) the books of accounts and other documents found in the course of the search but not proceeded in the course of original assessment and (b) undisclosed income or property discovered in the course of search. 5.10 Considering the facts of the case, the addition made of Rs. 5,93,707/- for A. Y. 2009-10, Rs. 7,27,366/- for A. Y. 2010-11, Rs. 13,67,354/- for A. Y. 2011-12 and Rs. 15,32,863/- for A. Y. 2012-13 are hereby directed to be deleted." 10. From perusal of the record, we observed that the assessee is a money lender holding valid license under the Money Lending (Regulation) Act, 2014, since last 15-20 years. He is operating his business of money lending from Sarafa Bazar, Itwari, Nagpur, in accordance with the rules and regulations as laid down by the Maharashtra Money Lending (Regulation) Act, 2014 and Bombay Money Lenders Act, 1946. The assessee charges interest at the rate of 12% to 15% per annum i.e. 1% or 1.25% per month to his customers which is prescribed under Money Lending Act. The detailed interest account, which was regularly maintained for the year under consideration, was produced before the A.O. as required by him. During the search p....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ntaining authentic information by cross checking, before using it against the assessee. It is necessary always to ascertain the contents of any document found so as to rule out any arbitrariness while applying/using the same to prove suppression of income, more so, since such documents have to finally stand the test of rules of evidence and law. We agree with the contentions of the AR that the assessee could not have charged an interest at a rate higher than that of the rate prescribed under the Money Lending Act as there was no direct and corroborated evidence of such rate charged, and that the additional income in the later year AY 2015-16 was offered just to buy peace and avoid protracted litigations. As regards the seized document i.e. B/4, we find force in the arguments of the A.R. that except the said seized material (B/4), no other incriminating material was found during the search action for the year under consideration. Whether a document is incriminating or not is a question of fact and can only be ascertained through proper enquiry. The AO has also not proved his case with any independent inquiry made in this matter that can justify the stand taken by him. In such a circ....