TaxTMI 
TaxTMI 
2022 (1) TMI 478
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....und on cloud data and deleting the addition of Rs. 8,83,39,100/- made by the AO on account of unaccounted capital deployed by the assessee. 2. Whether on the facts and in the circumstances of the case and in law, ld. CIT(A)-4, Jaipur is justified in ignoring the transaction found on cloud data and deleting the addition of Rs. 1,06,35,650/- made by the AO on account of unaccounted interest earned on cash loan/capital. 3. Whether on the facts and in the circumstances of the case and in law, ld. CIT(A)-4, Jaipur is justified in ignoring the fact that entries pertaining to unaccounted capital and advances were found in the N Trading cloud data, and thus addition of unexplained unaccounted capital, advances and interest earned were on the basis of incriminating seized data. 4. Whether on the facts and in the circumstances of the case and in law ld. CIT(A)-4, Jaipur is justified in giving relief to the assessee on the ground that the Manglam Group had owned up the entire entries in the N Trading on cloud data before the Hon'ble ITSC. The order of Hon'ble ITSC has already been challenged in writ before the Hon'ble High Court." 3. Briefly the facts of the case....
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....inancial year 2013-14 for each of the projects and stated that unaccounted capital investment in cash was made on various dates and interest was also credited from time to time on the funds invested by Shri Ram Gopal Sarraf (RGS) in the projects where he is a business partner and deployed his unaccounted capital in cash and after decoding of the figures, the total cash funds deployed/credited were found as under:- S. No. Particular/Narration Amount (in Rs.) 1. Cash capital addition 8,83,39,100/- 2. Interest credited on various dates 1,06,35,650/- Total 9,89,74,750/- 5. The assessee was accordingly asked by the Assessing officer to show-cause and explain as to why these credit entries should not be treated as his undisclosed income and added to his total income and brought to tax. 6. In response to the show-cause, the assessee submitted that these transactions/entries/document/papers of N Trading Co. are not related with him. It was submitted that Mr. Nand kishor Gupta S/o Shri Rood Mai Gupta of Manglam Build-Developers Ltd. has given an affidavit stating that they have already considered these papers/ transactions related to N Tradin....
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....ut the presumption by submitting that he has never engaged in any of the transactions which are being reflected on the N. Trading Cloud and he has no knowledge of any such transaction. A rebuttable presumption is clearly a rule of evidence which has the effect of shifting the burden of proof by leading the evidence. The word "rebuttable" here means that the person against whom it lies can rebut it when called upon to prove it, which means that the party who denies and doubts the document can claim that the content of the document is not true. However, for that he has to adduce evidence, in absence of any evidence presumption holds true and has not been rebutted successfully. 8.4. In this case the assessee has simply tried to shift the onus on the department by resorting to denial. Denial does not have any evidentiary value, on the other hand the incriminating cloud data is a speaking document of evidentiary value, as the same has been owned up in totality by M/s MBDL Pvt. Ltd. before the Hon'ble ITSC. The admission in this case has been made by M/s MBDL Pvt. Ltd. and MBDL has continuously refused to disclose the details of the persons with whom this transaction was mad....
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....consideration, comes to Rs. 1,06,35,650/. In absence of proper explanation by the assessee, this undisclosed interest income needs to be added to the income of the assessee. Hence, the total interest of Rs. 1,06,35,650/- received by the assessee from cash loans and capital given to the Manglam Group is being added u/s 68 r.w.s. 115BBE of the Act in the nature of being income from other sources." 8. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) wherein the assessee challenged the action of the Assessing Officer in initiating the proceedings U/s 153C of the Act by way of additional grounds of appeal contending that the cloud data was seized from the business premises of Manglam Group and key person of the Manglam Group owned up all of them as pertaining to their own affairs and thus the same pertains to and information contained therein relates to them and not to the assessee and secondly, the said cloud data cannot be termed as incriminating material found as pertaining to the assessee and therefore, no action can be taken u/s 153C of the Act. Besides that, on merits of the case, the consequent order passed by the Assessing Officer U/s 143(3) r.....
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....ing Company is not sufficient to prove that it is assessee's name and therefore, the ld. CIT(A) held that the assessee succeeds in his legal ground of appeal that initiation of proceedings U/s 153C are void ab-initio and the transaction in the cloud data in the name of RGS cannot be attributed to the assessee. 11. Thereafter, on merits of the case, the ld. CIT(A) has recorded his findings which read as under:- "8. It may further point out that Mangalam Builder & Developer Ltd. (MBDL) has owned up all the data found in cloud as belonging to them. On the basis of the same it filed settlement petition before settlement commission on 28.03.2018. As per the petition filed by MBDL before the Hon'ble Settlement Commission the 'peak deposit' of unaccounted capital introduced, loans and advances and interest paid and received was considered for computing the income. Accordingly income of Rs. 15.10 cr. was offered on the basis of cloud data of N. Trading Company. The same is accepted by the Settlement Commission at page 151 of the order dated 16.05.2019. 8.2 In respect of surplus it may point out that as per the petition filed by MBDL before the Hon'ble Settlement Commis....
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....015-16 which are again pending adjudication. Further, the ld DR has relied upon the Ahmedabad Benches decision in case of ACIT Central Circle vs M/s Amardeep Industries Ltd (IT(SS) A No. 342/Ahd/2018 dated 13.10.2020). 14. On the other hand, the ld. AR supported the order and findings of the ld. CIT(A). It was submitted that in course of search, statement of Shri N.K. Gupta, the Director and Key person of the Manglam Group was recorded u/s 132(4) wherein he owned up all the cash loan/transactions found in cloud data and stated that name of persons/entities mentioned in the said date are imaginary/false names. He has also stated that Manglam Group has not taken any loan in cash from any person or repaid it to any person as mentioned in cloud data and these relates to their own affairs and reference was drawn to the reply submitted by Shri N.K. Gupta in response to question No. 117 and 118. It was further submitted that during the course of assessment proceedings, the assessee also submitted an affidavit of Shri N.K. Gupta wherein he again affirmed on oath that no transactions of cash loan/transaction with assessee were taken by Mangalam Group or by himself. The Assessing Officer,....
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....en M/s MBDL has itself owned up the entire cloud entries while filing its petition before the Hon'ble ITSC, M/s MBDL has admitted that the contents of the unaccounted tally data found on cloud are correct and has offered it for taxation. When one party of the transactions under consideration has held the contents of the cloud data are correct, then the second party to the transaction (in this case the assessee) needs to bring forth more evidence which could substantiate his stand that no such transaction had taken place." In this connection, it was submitted that when Manglam group admitted the data in cloud as its own and names are imaginary and fictious than the said data and accounts belongs exclusively to them only and transactions shown pertains only to Manglam group, and not that Manglam group is one party and therefore there has to be other party of the transaction. The Ld. A.O. is wrong in giving such finding contrary to facts. Further, now the Hon'ble Settlement Commission has decided the settlement petition filed by Manglam group by passing settlement order u/s 245D (4) and each and every transactions given in ledger accounts by Ld. A.O. on page 9 - 15 of assessme....
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....tual 'on-money receipts' has been determined at Rs. 1908 crore and on account of undisclosed booking advances the income is determined at Rs. 85.80 crore for the entire applicant group. The analysis of extracted Tally Data and of the seized records has been verified with the records available with the department". 20. It was submitted that as per above contents of the Pr. CIT, Central, Jaipur's Rule 9 report, it is evident that all the transactions in Tally data maintained in cloud have been considered and taken into account in determination of the undisclosed income of M/s. Manglam Builders and Developers. It was accordingly submitted that there is no basis in the present appeal filed by the Revenue and the same deserve to be dismissed and the order of the ld CIT(A) be confirmed. 21. We have heard the rival contentions and perused the material available on record. In case of DCIT Central Circle 1 vs Shri Jugal Kishore Garg (supra), the Coordinate Jaipur Benches of the Tribunal has held as under: "3.8 We have heard the ld. counsel for both the parties, we have also perused the materials placed on record, deliberated upon the judgement cited by both the pa....
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....p on the basis of cloud data. (iii) Addition of Rs. 14,24,800/-on account of surplus interest from Manglam Group on the basis of cloud data. 2017-18 28.12.2018 4,04,51,940/- Addition of Rs. 70,94,000/- on account of onmoney received against booking of flats on the basis of cloud data of the person who owned that these transactions are only his transactions and paid tax and offered the transactions in settlement. 3.10 After meticulously going through the facts of the case and submissions of the parties at length, we found that the transaction recorded in the cloud data of N Trading was owned up by the main person of the company MBDL with regard to the transactions like transactions under the heading of unsecured loans (receipt and payment) and consequent interest payment thereof. We have also gone through the order of the Hon'ble Settlement Commission dated 16-05-2019 passed in the case of MBDL and have also gone through the statement of Shri N.K. Gupta, main person of MBDL group wherein we found that M/s. Mangalam Builder & Developer Ltd.(MBDL) had already owned up all the data found in cloud as belonging to them. On the basis of the same, it filed settl....
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....in the business and thus in the spirit of settlement, the peak of the same was offered as the undisclosed income of the Applicant group.In the working of such peak, the following cash entries relating to loans were considered: (the peak working is enclosed at pages 422-439 of the P/B). - Receipt of unsecured loans. - Repayment of unsecured loans. - Interest paid or received on cash loans. The same being settled in cash, the same is included in the peak calculations. Thus based on the above, the peak of the cash transactions was arrived at Rs. 15,10,77,6001 and the same, being the business income of the Group was thus offered as the Additional income of the group." Para 2.5 Page No. 141 of the Hon'ble Settlement Commission order "Thus, based on the above, the Applicant, in the event of loan confirmations being not readily available, in the spirit of settlement, has considered all these loan transaction as his own transaction. In the tally data both receipt of loan as well as repayment of loan is recorded. The loans raised from one party is utilised in the business activities of the group and out of such business receipts or f....
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....as far as 'cash component' was concerned, though, projects remains yet to be delivered to the customer. In the Tally Data, the said information is available with account head 'Surplus' for various schemes like "Surplus Ananda", 'Surplus Ajmer Road, 'SurplusVaishali Estate'. All such bookings are termed as Settled bookings for ready reference since in such cases, cash component has already been received/settled with customers. These advance bookings are also not revenue of the year of receipt, however, to determine overall profitability/cash profit, the said amount has been considered as 'revenue' in computation of additional income. The total of such Settled Booking received in cash as available in Tally data comes at Rs. 382.89 Crores. Thus in total there has been receipt of booking advances in cash ('on money') of Rs. 684 Crore (301.11 cr. + 382.89 cr.), which is treated as revenue for the purpose of offer of additional income though the same is amount representing liability of the Applicant(s) is given in Enclosure1. Para 6.4 of page. 33 of the Hon'ble Settlement commissioner order o In the Tally Data, on the date on ....
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....y the Revenue in controverting the order of the ld. CIT(A) to the issue in question. In this view, of the matter, we find no reason to interfere with the order of the ld. CIT(A). Thus the appeal of the Revenue for the assessment year 2014-15 is dismissed." 22. In the aforesaid decision, it is noted that pursuant to search action in case of M/s Manglam Group, the action was taken in the hands of the assessee u/s 153C of the Act based on transactions in "N Trading Company" found on cloud data found and seized during the course of search and the assessment was completed u/s 143(3) r/w 153C for A.Y 2014-15, 2015-16, 2016-17 and 2017-18 wherein addition on account of unaccounted/undisclosed capital employed in various projects of the Manglam Group, addition on account of surplus share in profits in various projects and addition on account of interest earned on such capital employed were made by the Assessing officer. On appeal, the ld CIT(A) deleted the additions. While confirming the findings of the ld CIT(A), the Coordinate Benches has recorded a categorical finding that M/s Manglam Builder & Developer Ltd had owned up all the "N Trading Company" data found in cloud as belonging to....
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.... data in form of "N trading Company" found in cloud data which has formed the basis of addition and the matter has already been examined by the Coordinate Jaipur Benches basis the filings and acceptance of MBDL's petition before the Settlement Commission and the addition has been deleted. The Revenue has not been able to highlight and demonstrate before us as to how the findings of the Coordinate Benches should not be followed in the instant case. 24. The fact that the order of the Settlement Commission has been challenged by the Revenue by way of writ before the Hon'ble Rajasthan High Court and similarly, the fact that another set of writ petitions have been filed before the Hon'ble Rajasthan High Court against the decision of the Coordinate Benches in case of Shri Jugal Kishore Garg for A.Y 2014-15 and A.Y 2015-16 cannot be the basis for not following the decision so passed by the Coordinate Benches in aforesaid case as nothing has been brought on record in terms of the specific grounds basis which the findings in aforesaid orders have been challenged by way of writ petition and secondly, whether the order of the Settlement Commission and that of the Coordinate Benches have be....