TaxTMI 
TaxTMI 
TaxTMI 
2022 (1) TMI 478
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....,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 are that the assessee filed his original return of income on 27-3-2015 dec....
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....pital 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 Trading Company in their application filed before the Settlement Commission. The records were found with....
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.... 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 made. To elucidate this point further the statement of Sh. N. K. Gupta, Managing Director of M/s MBDL which was recorded during the....
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.... 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.w.s. 153C of the Act was also challenged. 9. The ld. CIT(A) admitted the additional grounds of appeal wherein the assessee has challenged the initiation of t....
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..../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 Commission, the 'on money' (of) received by the group on its various projects was considered for computing the income. In its admissions made before the Hon'ble Settlement Commission, MBDL has explained the natur....
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....e 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, however rejected the said affidavit without making any enquiry from him or examining him personally. Further, the Assessing Officer did not brought on record any corroborative material to controvert the affidavit of Shri N.K. Gupta and the fact t....
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....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 assessment order has been considered as of Manglam group and covered in determining undisclosed income of Manglam group and therefore those ledger accounts cannot be held as pertaining to or related to assessee herein. 17. It was further submitted that the C....
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....n 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 parties as well as the orders passed by the Revenue authorities. From the facts of the present case, we noticed that the assessee is a partner in different firms and details of which have already been submitted in preceding paragraphs of this appeal. The assessee had declared ....
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....son 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 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. 15.1....
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....t 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 further loan raised, repayment is made of the earlier loan." Para 7.7 (Findings of the Commission) Page No. 151 of the Hon'ble Settlement Commission order "The Commission has considered the submissions made by both parties. After going through the facts of the case the commission finds merit in the contention of the applicants that in computation of Peak the debit....
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....en 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 which the on money was all settled, the earlier cash receipts against "booking advances" were all deleted and on the said date of final settlement, a fresh consolidated cash entry was passed wherein cash was debited and the "Surplus - Project Name" Account was credited. o After transfer of the settled receipts to the Surplus A/c, the said on money was transferred to the partners/directors of the Group by debiting the said Surplus ....
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.... 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 them. On the basis of the same, it filed settlement petition before Settlement Commission on 28.03.2018 and the `peak deposit' of unaccounted Capital introduced, loans and advances and interest paid and received was considered for computing its income and income of Rs. 15.10 cr. was offered on the basis of cloud data of N. Trading Company which was finally accepted by the Settlement Commission in its order dated 16.05.2019 and accordingly, where the amounts have been subjected ....
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....ettlement 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 been stayed by the Hon'ble Rajasthan High Court or not. Where the decision of the Coordinate Bench is not acceptable to the Revenue, the Revenue is well within its right to pursue the matter before the Courts and however, till such time, the order of the Coordinate Bench is not stayed or overruled by the Courts, the assessee is well within his rights to draw support from the said decision. Where the matter is adjudicated by the Hon'ble Rajasthan High Court in favour of the Revenue, the Re....