TaxTMI 
TaxTMI 
2022 (3) TMI 526
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....ard, the relevant impounded papers are Page No. 2, 4 and 5 of Annexure A-1 seized on 28.03.2008 and Page No.99 to 103 of Annexure A-1 seized on 14.03.2008. In the assessment order, the Assessing Officer had concluded that as no satisfactorily reply was coming from the assessee about the meaning of the symbol '#' used in the seized material, it was presumed to mean 'cash'. Accordingly, the Assessing Officer made an addition of Rs..17,26,55,984/- after scrutinizing the seized Pg. No.99 to 103 of Annexure A-1 and Pg.No.2, 4 & 5 of Annexure A-1. 3. Aggrieved assessee preferred an appeal before the Ld.CIT(A) and filed detailed submissions which is reproduced in the first appellate order at Page No. 28 to 53, it was submitted that a family settlement had happened by way of share transactions between the Ashok Ruia Group (Assessee Group) and Bharat Ruia Group. The Assessee Group had purchased the share of M/s Phoenix Mills Limited amounting to Rs..256,82,11,894/-, M/s Galaxy Entertainment Ltd amounting to Rs..2,90,33,040/-, M/s RR Pvt. Ltd amounting to Rs..101,99,96,001/- and M/s. Senior Holding Pvt. Ltd amounting to Rs..4,000/-. The said shares were purchased by M/s Ashok Apparels Pvt....
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....vidence to establish that the appellant in the assessment year 2008-09 had paid the huge sum as alleged by the department. * The said documents on the basis of which the impugned additions had been made mere 'dumb documents' and has no relevance to make an additions. * The entire addition is based on the assumption of the Ld AO that sign '#' rhyme with cash. In this regards we submitted that in the case of the block assessment where the addition has to be made on the evidence found during the course of the search and one cannot go on assumptions and presumptions. * Total consideration has not been paid by the appellant in his individual capacity but through the companies. Than can how the alleged payment has been added in the appellant's income without evidence. * The figure of Rs. 381 crores and odd mentioned in the seized papers is not only figure which is estimated by the recipient. Besides, there are two more figure i.e. 360 crores and 377 croes and odd. Hence, then can how the figure Rs. 381 crores and odd is finalized by the department. Hence, we request your honour that a mere entry on loose sheet of papers and....
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.... which are as under:- Share Ashok Apparels Pvt. Ltd Bellona Finevest Limited A.Y. 2007-08 A.Y. 2008-09 A.Y.2007-08 A.Y.2008-09 Phoenix Mills Limited 160,92,19,626 95,89,92,268 - - Galaxy Entertainment Ltd. 2,90,33,040 R R Pvt. Ltd 1,01,99,96,001 - Senior Holding Pvt. Ltd 4,000 Total 2,62,92,19,627 95,89,92,268 - 2,90,33,040 12.4 To sum up, the undisputed fact on record is that the Bharat Ruia Group had sold it's stake in M/s Phoenix Mills Limited, M/s Galaxy Entertainment Ltd., M/s RR Pvt. Ltd. and M/s Senior Holding Pvt. Ltd. to the Ashok Ruia Group for a total consideration of Rs. 3,61,72,44,935/-. However, it may be noted that the Appellant has not directly entered into any share transaction with the Bharat Ruia Group. It is clarified here that M/s Ashok Apparels Pvt Ltd and M/s BeIlona Developers Ltd., are concerns of Ashok Ruia Group, which had purchased the stake from the Bharat Ruia Group. Hence, at the outset, the Appellant had contended that since no transaction had been entered into by him in his individual ca....
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.... nature and quantum of transactions noted on these pages and substantiate that the same are duly recorded in the books of account. Also explain what does the sign '#' indicate? Ans. These statements are prepared by Shri B.R.Ruia's staff member/advisor. The statement show rough calculation/working of the amount BRR to receive as per family settlement and sale of Phoenix Shares, R.R. Ltd. Shares etc. The # items are additional claims BRR has raised, which were agreed to be settled by taking over BRR's liabiHties to sisters (i.e. 50% of 34CR.) This is explained as below: Late RR Ruia had 6 children of which 4 are daughters and 2 are sons namely, Shri Ashok Ruia and Shri Bharat Ruia. In the family settlement implemented under a signed Memorandum Of Family Settlement the sisters have been paid Rs. 34 crores i.e. Rs. 8.50 crores each by cheque. Bharat Ruia was refusing to pay Rs. 1 7 crores which was 50% of the amount to be paid to sisters. Ashok Ruia paid the full Rs. 34 crores. Theoretically, each brother should have paid 50% of Rs. 34 crores, or 17 crores so Bharat Ruia's accountants notionally set off Rs. 17crores in their internal worki....
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....ent signifies that the balance part of old deal and amount as per additional deal has actually been received by Shri Bharat R Ruia as on preparation of the statement. Further there is no mention of any word/ phrase, such as, 'draft', 'provisional', etc. on this statement, signifying that this statement is final in nature. The sign'#'(pronounced as hash) clearly signifies that it has been used for showing the amount received in 'cash'. This meaning is also evident from the various phrases used in this statement, such as 'received in # 'share account in #', 'monthly compensation up Sept 07 #' and'50% Saki Naka in # 4,40,00,0000'. It is also important to note that nowhere in this statement anything about share of sisters is mentioned. In light of above, it is evident that total amount received by Shri Bharat R Ruia group on account of family settlement is Rs. 381,39,58,7131- as mentioned in the said statement. Please comment on this. Ans. As already stated in my earlier reply, the statements had been prepared by the Accountant/B ha rat Ruia in connection with family settlement though you have raised the quer....
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.... duly adjusting his share of Rs. 17 crores payable to four sisters, as per the family settlement agreement. From the Para 4 of the settlement deed, it is evident that the 4 sisters were paid a sum of Rs. 34 crores (Rs. 8.50 crores to each sister). The said payment was made by the Appellant, which is evident from the ledger accounts submitted by the Appellant. 12.11 Since, it is a family settlement, it is customary that the two brothers would have to bear equal cost on account of payments to sister. The family settlement documents read along-with the seized material in a coherent manner reveals that the partition of the assets had been done in an extremely fair manner. The assets had been divided on a 50: 50 basis between the two brothers and each of the sister had been paid Rs. 8.5 Crore. It belies logic as to why only one brother shall bear the cost of payments to the sisters. The documents placed on records supports the argument of the Appellant that an amount of Rs. 17 crores was adjusted against the amount paid to the sisters. I have noted that the said argument of the Appellant duly corroborated by material on record has not at all been refuted or rebutted by the Asse....
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....sale and the deed of conveyance was never executed and the proposed transfer of capital asset was aborted. When this final fate of the proposed transaction is apparently clear on the date of search itself, we are unable to understand that how it is possible for the Assessing Officer to read the chronology of events in piece-meal and stop on 31-3-1999. The events up-to 31-3-1999 and the events after 1-4-1999 should be read together. The whole chain of events is open before the authorities at the time of search on 6-8-2003. By the time of search, it is clear that the agreement to sell was not reached to its logical conclusion and the agreement was rescinded and part of the money received from the vendee was returned and the subject property was let out to another third party and the whole transaction was aborted. When the whole chain of events are available in the course of search and all the agreements were very well before the authorities, how it is possible for the Assessing Officer to read the events in a piece-meal manner instead of reading it in a logical and a continuous manner from the beginning to the end. The Assessing Officer has stopped on 31-3-1999 to make out a case tha....
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....e document. Such reading gets further fortified by the fact that one Mr. Rajender Agrawal was one of the contractor of the assessee and his bill was placed on page 112 of the paper book. Though the figure of Rs. 4,200 is qualified by the remark approximately in the said papers, the expenditure on that basis will have to be estimated. Such conclusion also gets strength from the fact that the figure is a round figure. Accordingly, it is held that the expenditure of round some of Rs. 40 lakhs becomes admissible to the assessee as cash expenditure in relation to cash receipts of the assessee. Thus, the excess of receipts over the expenditure can be worked out at Rs. 8.95 lakhs. The matter does not end here. It has been pointed out earlier that there are certain other figures of cash amount to be received by the assessee. The two sums of 400, being old and 179 from Dhawal, aggregating to 579, are to be received in cash. Therefore, this amount will have to be added to the undisclosed income. Thus, the undisclosed income, by reading the document as a whole is calculated at Rs. 14.74 lakhs (Rs. 8.95 lakhs + Rs. 5.79 lakhs). The argument of the learned DR in this matter may also be consider....
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....nnot be read in bits and parts to suit the convenience of one party or the other. 12.20 I have noted that the transactions mentioned against the '#' sign have been duly explained during the course of search, as being with reference to the sisters. In order to understand the meaning of the '#' sign, reference may be made to the bottom of the seized Page No. 103, which reflects certain payments received in '#' towards chandu. The Appellant had explained that the said #' payment was made to one Shri Chandru by cheque. It had been clarified by the Appellant that the said amount of Rs. 15,00,000/- was transacted through banking channels and pertains to reimbursements made by Phoenix Mills Ltd. to M/s. B.R. International. Thus, the theory of the AO that '#' represent cash payments is merely based on conjectures and surmises. 12.21 Mere suspicion, however strong or probable it maybe, is no effective substitute for the legal proof required to substantiate a charge, which the learned AO has failed to furnish. There is a long mental distance between 'may be true' and 'must be true' and this basic and golden rule helps to m....
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.... generated a sizeable amount of loss out of prearranged transactions so as to reduce the quantum of income liable for tax might have been the view expressed by the Assessing Officer but he miserably failed to substantiate the same. The High Court held that the transactions were at the prevailing price and therefore the suspicion of the Assessing Officer was misplaced and unsubstantiated. 12.25 Raising of presumption itself does not amount to proof. Presumption however strong, cam-lot take the place of evidence. Reliance is placed on the decisions of Pooja Bhatt 66 TTJ (Mum) 817& D. M. Kamani (HUF) 65 TTJ (Pat) 504. It is well settled by the Hon'ble Supreme Court in more than one decision that courts have to be watchful and avoid the danger of suspicion to take place of legal proof for sometime, unconsciously it may happen to be a short step between moral certainty and legal proof. In this regard, reference may be made to the judgment in the case of Narendra Singh v. State of MP, 2004 SCC 1893. 12.26 It is well settled proposition of law that the court should safeguard itself against the danger of basing its conclusions on suspicions, howsoever strong they may ....
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....to make a pure guess and make an assessment without reference to any evidence or any material at all. There must be something more than bare suspicion to support the assessment under Section 23(3). The rule of law on this subject has, in our opinion, been fairly and rightly stated by the Lahore High Court in the case of Seth Gurinukh Singh v. Commissioner of Income-tax, Punjab." 12.30 The Punjab & Haryana High Court in CIT v. Anupam Kapoor [2008] 299 ITR 1 79did not believe on the allegation: A cheque had been taken by the beneficiary i.e. by paying cash equivalent to the cheque amount and the premium thereon". The Hon'ble Court at page 182 observed: There was no material before the Assessing Officer, which could have led to a conclusion that the transaction was, simpliciter a device to camouflage activities, to defraud the Revenue. No such presumption could be drawn by the Assessing Officer, merely on surmises and conjectures". 12.31 The Hon'ble Supreme Court in Parimisetti Seetharamamma v. CIT [1965] 57-ITR-532 at 536-537 observed:- 'By sections 3 and 4, the Indian Income-tax Act, 1922, imposes a general liability to tax upon all in....
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....Mag.) * Dumb documents or documents with no certainty have no evidentiary value for purpose of resorting to deeming provisions of sections 68, 69, 69A to 69D. In the absence of adequate material as to nature and ownership of transaction, undisclosed income cannot be assessed in hands of assessee merely by arithmetically totalling various figures jotted down on loose documents found during search. Bansal Strips (P) Ltd. vs. Asstt. CIT [2006] 99 ITD 177 (Del.) * Addition on the basis of loose paper which cannot be treated as books of account cannot be made under section 68. Asstt.CIT v. SatyapaiWassan [2007] 295 ITR (AT) 352 (Jabalpur) [2008] 5 DTR (Jab.) (Trib.)202. * Additions made by the Assessing Officer, inter-alia, on the basis of loose papers found during search by making certain presumptions which are found to be inconsistent or contrary to other evidence on record cannot be upheld, especially when no significant asset outside the books or no evidence of ostensible expenditure outside the books is found. Nirnial Fashions (P) Ltd. V. Dy.CIT [2009] 23 DTR 386 (Kol.)(Trib.). * Assessee's undisclosed income could not be taken as Rs. 48 lakh....
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....rding receipt of on money, then presumption on the basis of documents could not be raised. 12.35 The crux of the various judicial 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 Section 4 of the I.T. Act must be filled up by the AO through investigations and correlations. It is also a settled law that addition cannot be made on the basis of loose documents, unless and until there are corroborative evidences. 12.36 In the case of CIT vs. Anil BJialla [(2010) 38 DTR (Del) 113: (2010) 322 ITR 191, the Hon'ble Tribunal held that until independent evidences exist, the addition on the basis of notings and jottings cannot be upheld. The relevant extracts of this decision are reproduced hereunder:- "The third dispute in the present appeal is with regard to the addition of Rs. 35 lakhs made by the Assessing Officer as unexplained expenditure of the appellant under section 69C of the Income-tax Act, 1961. The Commissioner of Income-tax (Appe....
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....pellant against each and every entry. We have already indicated that each and every paper found may not represent undisclosed income or expenditure. The entries in question belonged to VTPL inasmuch as the appellant could explain from the books of VTPL that these projects were under taken by it. In view thereof, we uphold the findings of the Commissioner of Income-tax (Appeals) holding that the loose sheet does not represent any expenditure incurred by the appellant. This ground of the Revenue is dismissed." 12.37 The matter went to Hon'ble Delhi High Court in CIT vs. Anil Bhalla (2010) 38 DTR 0113 : (2010) 322 ITR 0191, wherein the Hon'ble High Court has upheld, the following observations of the CIT(A):- "4.2 I have considered in detail the material on record. From the notings on p. 47 of Annex. A2, it cannot be said that any actual expenditure is represented by such notings which is not recorded in the books of account. To support the addition on account of unexplained expenditure on the basis of jottings on a loose sheet of paper, it is necessary to establish that the notings represent unaccounted transaction, with the help of independent corroborative ....
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....ed. Accordingly, the Ground No.2 raised by the appellant is allowed. 6. With regard to Ground No. 2, during the assessment proceedings AO observed that cash amount Rs..15 lakhs belonged to the company M/s. PML evident from the Scrap Deposit account produced during the proceedings, the assesse could not produce evidences for the rest of the amount i.e., (Rs..18,32,415 - Rs..15,00,000) Rs..3,32,415. Assessing Officer observed that during the statement u/s. 132(4) of the Act, the assessee stated that the cash amounting to Rs..3 lacs belonged to his wife Mrs. Amla Ruia and the balance to his personal savings. On perusal of the balance sheet of Mrs. Amla Ruia, the wife of Mr. Ashok Ruia, it is observed that the cash in hand reflected is only at Rs.NIL for AY 2008-09 and Rs.NIL for AY 2007-08. Assessing Officer observed that this clearly indicate that the cash Rs..3,32,415 is not reflected in any books of accounts. Accordingly, he made addition as undisclosed cash found and seized in the hands of Mr. Ashok Ruia in terms of provisions u/s. 69A of the Act. 7. Aggrieved assessee preferred an appeal before CIT(A) and filed detailed submissions before him. The same are reproduced below:....
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.... been made. In relation to balance amount of Rs. 3 lacs (approx.) it was submitted that the same belong to appellant and Mrs. Amla Ruia, who is the wife of the appellant and this amount was his and her saving over the years. However, the contention of the appellant has not been accepted by the department and made the addition on account of unaccounted cash u/s 69A. In regards to the above addition we would like to submit that since the seized cash was the saving of appellant and his wife, we need to discuss the appellant and his wife's source of income, there status in the society. Further, we would also like to discuss the additions made by the department in the earlier years of the appellant. The appellant is well reputed person in the society. He is the Director in various companies and is also partner of R R Hoisery and R R textiles. He is also engaged in the business of share trading and investment. Further, he also manages his own HUF. Accordingly, appellant is earning his income by way of salary, business income, capital gains and income from other sources. Further, he has also received dividend income from the investments. Further, we....
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....E FROM CAPITAL GAINS (STCG) 8,91,68,208/- INCOME FROM OTHER SOURCES 1,16,341/- Add: Addition on account of family settlement 17,26,55,984/- 17,27,72,325/- Add: Undisclosed Cash seized u/s.69A 3,32,415 GROSS TOTAL INCOME 27,71,76,8297- Less: Deduction under Chapter VIA 12.90.000/- TOTAL INCOME 27,58,86,829/- Total INCOME ROUNDED OFF U/S.288A 27,58,86,8307- From the above tables it can be easily depicted that appellant has offered substantial incomes amounting to Rs. 11,91,75,637 which assessed at Rs. 12,05,08,311 for the A.Y. 2006-07. Further, the appellant has earned the exempt dividend income of Rs. 2,66,53,472 during the A.Y. 2006-07. Hence, we can say that the appellant has earned the total income including dividend of Rs. 14,58,1 9,1 09 (11,91,75,637 + 2,66,53,472). In respect to the A.Y. 2007-08 we would like to submit that the appellant had earned the income of Rs. 1,38,02,495 and suffered with business losses of Rs, 25,17,43,459. Further, the appellant has earned the exempt dividend income of Rs. 1,03,73,985 during the A.Y. 2007-08. ....
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....sh found during the course of search is nothing but the savings of the appellant as well as his wife over the years. Quantum of the cash is very nominal. It is nothing but pin money of her wife. The fact relating to savings was clearly stated by the appellant in his statement of oath. It is pertinent to note that in the search action department did not find any impounding material which shown that the appellant had any undisclosed source of Income. Hence, if there is no any undisclosed source of income than how the assessing officer made the addition on account of unaccounted cash. Further, the section 69A is a deeming section. Any amount should be proved to be the income of the appellant. In this provision, it was for the Revenue to prove that any sum, not disclosed by the appellant but which is sought to be taxed as income of the appellant, income of the appellant for the previous year relevant to the assessment year. Hence, the Ld AO nothing find out in the assessment proceeding. Further, the Ld. AO in his assessment order, only narrated that the cash balance as showed in the balance sheet in the year of search stood at Rs. NIL. Hence, the entire cash is out of undisclo....
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....in crores every year, I find that the availability of cash of Rs. 3,32,415/- at the residential premises is not unreasonable and this amount is therefore personal savings of the appellant and his wife & it cannot be treated as unexplained in nature. I therefore find that there is no merit in addition of the said cash to the Appellant's income. Accordingly, the addition of Rs. 3,32,415/- made by the AO is deleted. In the result, Ground No.3 raised by the appellant is allowed. 9. Aggrieved with the above order, revenue is in appeal before us raising following grounds in its appeal: - "1. The Ld. CIT(A) erred in deleting the addition of Rs..17,26,55,984/- made on account of cash payment and ignored the findings of the Assessing Officer that there is no reference to the settlement between the two brothers (Shri Ashok Ruia and Shri Bharat Ruia as stated in the loose papers in the deed of family settlement dated 26.09.2006. 2. The Ld. CIT(A) erred in holding that cash found at residential premises is not unreasonable and it cannot be treated as unexplained in nature and not appreciating the fact the assessee failed to explain the source of cash and deleted the ad....
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....ages 53 and 54 of the CIT appeals order where in the assessee has summarised its submission in 12 bullet points. For the sake of convenience these submissions of the SSC are being further categorized under 5 heads i) The documents relied upon by the assessing officer are dumb documents and the noting there in are nothing but estimation or projection made by the recipient. Further the documents themselves reflect different figures at different places and hence are not reliable Further, the entire addition is made on the assumption that # rhymes with cash. ii) no undisclosed source was found by the department to substantiate the generation of the alleged cash. Further no undisclosed assets were found by the department in the case of recipient to substantiate the utilization of alleged cash. iii) neither the payer nor the recipient has ever admitted that the cash of such magnitude has been passed on in family settlement iv) Since the total consideration in terms of the settlement is paid through the company, there is no rationale behind making the addition in the name of the appellant. v) Neither any section is mentioned under which the add....
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....ee and his group. As regards the contention of the assessee that the AO had no justification to interpret # (hash) as cash, reference is made to the entries containing these # signs on page 4(17): SHARES ACCOUNT IN # 100,000,000.00 Monthly Compensation up Sept 07 # 28,655,984.00 50% Sakinaka in # 44,000,000.00 As such the narration of the entries would lead any layman to decode the # as cash in the first instance. However, one needs to consider the 4- page submission filed by the assessee before the CIT(A) as to why # can be anything but cash. The assessee has contended that the AO's observations and presumptions that sign # represents cash are without any corroborative evidences. Therefore, the Bench's attention is drawn once again to question no. 13,14 and 15 of the statement of Shri Atul Ruia available on page 47-49 of the assessee's paperbook. The facts brought out by these questions conclusively prove that the assessee and his group are engaged in cash transactions out of books, and that the quantum of the cash transaction is nearly one third of the actual transaction amount. Shri Atul Ruia also disclosed an amount of Rs. 3....
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....es marked as # are towards cheque transactions. Then what about the mode of transaction of all other entries, which do not bear the # symbol? Should those be considered as indicative of cash transactions? Moreover, no supporting documents were placed by the assessee either before the assessing officer or before the CIT(A) to substantiate the above transactions being made vide cheque. Reference may also be made to the question no. 16 of the statement of Shri Atul Ruia, on page 49 of the paperbook, wherein he states that the symbol # or * have different meanings depending in which context it is used." Thus, it can be concluded that # is not a random symbol used by the accountant/advisor of the BRR group, but is used by both the ARR Group and the BRR group and serves a definite purpose of denoting the cash component of any transaction. One of the arguments forwarded by the assessee is that since there are three different figures arrived at on different pages, the documents are unreliable and cannot form the basis for making addition. Attention is invited to para 7.4 on page 35 of the CIT(A)'s order where in the assessee mentions three figures regarding the s....
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....d that the documents relied upon by the AO are not dumb documents but important piece of evidences. The relevance and the veracity of the notings are further strengthened by the findings posed to Shri Atul Ruia, the assessee's son regarding out of books transactions, the admission of undisclosed income and assets by BRR (HUF). One of the explanations given by the assessee for the figure of Rs. 17.26 crore added by the AO as unexplained expenditure is that it represents the liability of Shri Bharat R Ruia towards his sisters. As per the terms of the Family Settlement Deed dated September 2006, Rs. 8.5 crore is to be paid to each of the 4 sisters. Hence, Shri Bharat R Ruia was to contribute Rs. 17 crore and Shri Ashok R Ruia was to contribute Rs. 17 crore for the same. However, since Shri Bharat R Ruia refused to meet his liability, the entire payment of Rs. 34 crore was made by Shri Ashok R Ruia. The accountant / advisor of BRR Group may have considered the said amount of Rs. 17 crore and odd in the internal working. The said argument of the assessee was not accepted by the AO for reasons reproduced on page 37 of the CIT(A)'s order. Moreover, noth....
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....nts were made by Shri Ashok R Ruia. Moreover, the assessee has repeatedly stated that the payment of Rs. 17 crore, out of the total agreed deal amount of Rs. 381 crore was made by Shri Ashok Ruia. Hence, the cash component of the entire transactions can be considered to have been provided by the individual assessee and not the company. The assessee has also raised the contention that no year or section is mentioned by the AO. This is a complete misrepresentation of facts, as the AO in para 12.7 of the assessment order has specified that the amount of Rs. 17.26 crore is added as unexplained expenditure u/s 69 C of the Act. As regards the contention that the AO has failed to establish that the said alleged consideration was paid by the appellant in the captioned year, it is to be noted that the documents seized and relied upon by the assessee are dated 13/04/2007 and 21/06/2007. Further, as per the statement of Shri Atul Ruia, in response to query no. 10, the agreement pertaining to the surrendering of tenancy rights of the Sakinaka property was also executed on 03.07.2007. Therefore, the addition is rightly made in the A.Y.2008-09 by the AO. Summary of CIT....
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.... kind of documents. 12.13 61 several entries noted in hash not added by the ao The observation of the CIT(A) is incorrect as (i) monthly compensation of 74 lacs is already included in the figure of 2.89 crore reflected on seized document no. 2 &103 available on page 14 &15 of the assessment order and is considered for making the addition . (ii) Rs. 800974/- towards short received in share transfer, is also reflected as the last entry on seized page 101, available on page 12 of the assessment order.Accordingly, it has been considered in the Rs. 10 crore# received in cash on account of shares. (iii) since no # was marked against entry related to Chandu, on seized document 4(page 17 of the assessment order) or in the main table on seized document no. 103(Page 14 of the assessment order), the sum of Rs. 15 lacs was not considered for addition by the AO. (iv) as regards payment of Rs. 52, 62, 346/- towards interest, here again since no # was marked against the said entry in the main table on seized document no. 103(Page 14 of the assessment order), the same was not considered for addition by the AO. 12.15-12.19 61-64 a seized document should be read as a wh....
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....IT DR's arguments Ld. AR's rebuttal 1. The entries of seized material 'not hypothetical It is not the case of the assessee that all the entries on the seized material are imaginary and hypothetical. The manner in which the notings have been made on various pages are as per the understanding of the person preparing the same and hence the same cannot be completely relied upon without having corroborative evidence. 2. Nowhere it is mentioned that the respondent is liable to discharge the liability of Bharat Ruia towards his sisters. In case of family settlement it was mutually agreed that the liability of the sisters to be shared by both the brothers. That way it is nowhere written on the seized page that # is cash. 3. Bharat Ruia had declared undisclosed income and opted for VSV scheme These facts are not relevant. Since allegation is that the assessee has paid cash, there ought to be source of income in the hands of the assessee. 4. Q.15 (PB pg 49) shows transactions related to Phoenix Mills Ltd (PML) where cash component was involved. The said transaction pertain to Phoenix Mills Ltd and not the assessee. The transaction was accepted and offer....
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....oss certain loose sheets which contained the details of settlement between the groups. These sheets were seized and it contained the details of three settlement amounts like Rs..381.39 crores, Rs. 360.69 crores and Rs..321.33 crores. It is claimed that the actual settlement amount between the group is Rs..364 crores. The Assessing Officer considered the various working contained in the above said seized documents and came to conclusion that the assessee has settled the difference between the highest value found in the seized papers and the actual settlement amount i.e., Rs..381 crores and Rs..364 crores in the form of cash, which according to him coincides with the documents found during the search, which are marked and identified with the mark '#'. We observe from the findings of Ld.CIT(A) and record submitted before us as under: a) The seized pages could have been prepared by the accountant of Shri Bharat Ruia. It seems different workings have been made at different point of time as per the understanding of the transactions. b) As per seized page no. 2 (page 15 of A.O.) the total deal value was Rs. 381 crores. The actual value for settlement was Rs. 364 crores, ....
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....en by the searched parties. (PB page no. 49, Q. no 16) It was stated that "The symbol # or * have different meaning depending on the context in which they are used'. The said explanation, which was pertaining to the transaction of Vamona Developers Pvt Ltd, has been accepted and no addition has been made, Further, no evidence has been brought on record by AO to disprove this explanation except a presumption that # is cash. (ii). As per page no 37 of the Assessment order, AO considered the # transactions did not have any underlying cheque transactions, it is cash transaction. As rightly observed by the Ld CIT(A) that none of the amounts aggregating Rs. 381 crores (page 15 of A.O.) has underlying cheque transactions. There is only one mode of discharge i.e. sale of shares. (iii). We observe, amount on account of Chandu is appearing on page no 15 of the assessment order in the first table without # whereas in the second table on the same page, same transaction appears with #. Thus, the theory of # is cash is not only based on presumption, it has inherent contradiction. (iv). Similarly, out of the total amount of Rs. 265,28,07,728, an amount of Rs. 10 crores ....