TaxTMI 
TaxTMI 
2022 (9) TMI 1016
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....CIT, Central Circle-1, Bhopal. 2. As submitted by the Ld. Counsel for the assessee(s) and also duly accepted by the Ld. Departmental Representative that most of the issues raised in these appeals are common and inter-linked and as also, are arising out of the similar facts, for the sake of convenience and brevity, all these appeals were heard together on the request of both the parties and are being disposed of by this common order. 2.1 Grounds of appeal raised by the Revenue for AY 2010-11 in IT(SS)A No.149/Ind/2019, in the case of M/s. K.L. Sharma & Sunita Maheshwari: "1 On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 1,33,43,800/- and Rs. 36,343/- made by the A.O. on account of undisclosed investment u/s 69B of the Income Tax Act, 1961 on the basis of the report of the D.V.O. 2. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 3,04,78,000/- made by the A.O. on account of unexplained expenditure u/s 69C of the Income Tax Act. 3. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 1....
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....,00,000/- made by AO for A.Y. 2009-10 on account of unaccounted cash payments." 2.5 Grounds of appeal raised by the Revenue for AY 2010-11 in IT(SS)A No.45/Ind/2020, in the case of Shri Suresh Kumar Maheshwari: "1 On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 1,70,00,000/- made by the AO for A.Y. 2010-11 on account of unaccounted cash receipts." 2.6 Grounds of appeal raised by the Revenue for AY 2012-13 in IT(SS)A No.46/Ind/2020, in the case of Shri Suresh Kumar Maheshwari: "1 On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 1,00,00,000/- made by the AO for A.Y. 2012-13 on account of unaccounted cash receipts. 2. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 1,00,00,000/- made by the AO for A.Y. 2012-13 on account of unaccounted loan given in cash. 3. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 5,50,000/- made by the AO for A.Y. 2012-13 on account of unaccounted interest received. 4. On the fact a....
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....he Ld. CIT(A) has erred in deleting the addition of Rs. 3,00,00,000/- made by AO for A.Y. 2013-14 on account of unaccounted loans given in cash. 3. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 99,00,000/- made by AO for A.Y. 2013-14 on account of unaccounted interest received." 2.11 Grounds of appeal raised by the Assessee for AY 2009-10 in IT(SS)A No.22/Ind/2020, in the case of Smt. Sunita Maheshwari: "1 That on the facts and in the circumstances of the case, the learned CIT(Appeals) erred in giving relief of Rs.24,42,240/- only out of the total addition of Rs.43,55,072/- made on account of unaccounted investment in construction of hostel building and thereby confirming the addition of Rs.19,12,832/- without considering the explanation offered by the assessee and without considering the facts properly and hence, the addition should be deleted by giving full relief in this case. 2. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing." 2.12 Grounds of appeal raised by the Assessee for AY 2013-14 in IT(SS)A No.35/....
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....lant was seized or requisitioned. 3a). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.20,30,000/- made by the AO in the appellant's income without considering and appreciating the material fact that the subject loose paper was an unsigned document seized from the premises of a third person and was not pertaining to the appellant. 3b). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.20,30,000/- made by the AO in the appellant's income without considering and appreciating the facts and circumstances of the case and without properly considering the written and oral submissions made by the appellant. 4. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary." 3.1 First, we shall take up the departmental appeals filed in the case of M/s. K.L. Sharma & Sunita Maheshwari for the assessment years 2010-11 to 2012-13. 3.2 The brief facts of the case as culled out from the records are that the assessee is a p....
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.... of Rs.1,33,43,800/-, Rs.1,17,52,082/- and Rs.67,42,257/- on account of undisclosed investment in project Regal Mohini and additions of Rs.36,343/-, Rs.23,756/- and Rs.8,384/- on account of undisclosed investment in project Abhinav Homes respectively for A.Ys. 2010-11, 2011-12 and 2012-13. 7.2 Briefly stated facts of the issue, as culled out from the records, are that during the years under consideration, the assessee firm had made investment in the construction of two housing projects namely 'Regal Mohini' at Awadhpuri, Bhopal and 'Abhinav Homes Phase-III Extension' at Ayodhya Bypass Road, Bhopal. During the course of the assessment proceedings, Ld. AO vide letter dated 30-06-2016 made a reference to DVO, Bhopal for obtaining valuation reports in respect of the aforesaid two projects of the assessee. The valuation reports were submitted by the DVO on 24-11-2016. The DVO made an estimation of the total investment in "Regal Mohini" project at Rs.26,41,86,626/- as against the same shown by the assessee at Rs.22,07,75,642/- in its audited books of account. Likewise, the DVO estimated the total investment in Abhinav Homes Phase-III Extension project at Rs.5,93,06,535/- as against th....
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....additional evidences under Rule 46A which were forwarded to the Assessing Officer for comments. According to the Ld. CIT(A), the Assessing Officer neither objected to the admissibility of additional evidences nor offered any comments. The ld. CIT(A) observed that the AO had not made any specific reference of any incriminating material suggesting unaccounted investment in the projects of the assessee, for which a reference to the DVO was required. The ld. CIT(A) further noted that the AO did not spell out any basis which necessitated reference to DVO and had also not given any basis for making addition except relying solely upon DVO's Report. The ld. CIT(A) also observed that the assessee had maintained regular books of account which were subject to audit and the Auditors had not made any adverse remarks about any discrepancy or undervaluation in the projects of the assessee firm. The ld. CIT(A) further observed that the assessee firm had duly produced the necessary bills, vouchers, records etc. before the AO but, the AO could not point out any specific defect or discrepancy in the records. The ld. CIT(A) noted that the AO had not specifically addressed/ replied to the objections, b....
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....has also filed written synopsis. The relevant portion of such synopsis is being reproduced as under: "E. Key Points of Assessee's Submission and Relevant Pages of Paper Book: S. No. Marginal Notes Submission in Brief Relevant Pages of PB 1 Not based upon any incriminating material The AO has not made any specific reference of any incriminating material which acted as a clinching evidence for making a reference to DVO. Further, even in the Remand Report dated 01-05-2019, the AO did not make any comments on the reference of any incriminating material qua the subject issue. Para (11.1), Page 19 of AO's Order 49 to 54 (Remand Report of the AO) 2 Sec. 69B v/s. Sec. 69C The AO invoked the provisions of s.69B which is applicable for investment in a property. In the instant case, the investment in housing projects, being valuation of inventories, is the business expenditure of the assessee for which sec.69C could have been invoked. Para (11.5) Page 25 of AO's Order - 3 AO's action for making reference to DVO is bad in law. Pre-amended and Post-amended Section 142A Pre-amended s.142A (before 1.10.2014) conferred the power to the AO....
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....ects are within same locality with a distance of just 2 kms. Both the projects commenced and completed in same years. Both comprise of duplex housing facility. Still, without any reason assigned, the construction rate of Rs.12101 per sq.mtr. was taken by DVO for Project Abhinav P-III Extn and Rs.12866 per sq.mtr. for Project Regal Mohini. The estimation of the DVO for Project Abhinav P-III Extn. is almost near to the cost shown by the assessee with a negligible variation of 0.20%. This shows rates adopted by DVO are inconsistent, adhoc and unreliable. - 7 Important points not considered by DVO i) DVO did not consider that the partners of the firm are engaged in this line of business from last 20 years. They had advantage of lower cost of material and labour. Further, they have their own plant and machineries. ii) Both the projects were meant for providing duplex housing facilities for lower & middle class families. The projects were made up of simple housing & basic amenities only. iii) Regal Mohini project also comprised of 722.67 sq.mtr. of EWS units which involve relatively lower cost. Such fact was ignored by the DVO. iv) The books of assessee were audited ....
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....rt is not binding upon the AO and is only an opinion of expert. - 14 Valuation method of DVO is prone to difference of 20-25% In Rajhans Builders vs. DCIT (2010) 41 SOT 331 (Ahd.), the DVO himself quoted that variation of 20% is possible. In CIT vs. Abeeson Hotels (P) Ltd (2004) 191 CTR 253 (MP), the Hon'ble MP High Court held that difference of 10% is usual phenomenon. - 15 Addition solely on DVO report not sustainable It is a settled law that addition made solely on the basis of DVO report is not sustainable. DVO's report is not conclusive. M/s. Golden Realities & Ors. vs. ACIT (2021) 42 ITJ 544 (Indore Trib.) - 16 Case laws relied by AO not applicable to assessee None of the cases referred to by the AO in the assessment order are relevant for the assessee's case and are entirely on different set of facts. 30-31 17 Onus of the Revenue The burden is upon the revenue to establish that the actual consideration was more than that disclosed by the assessee. Decision of Hon'ble Supreme Court in the case of K.P. Varghese 131 ITR 594. - 8.1 Before us, the ld. counsel for the assessee firm primarily contended that the additions h....
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....the assessee had maintained day-to-day records of construction expenses actually incurred by it and such records along with the copy of supporting bills and vouchers were duly produced by it before the Ld. Assessing Officer as well as the DVO. The Ld. Counsel further submitted that since the DVO's report was full of discrepancies and faulty, the assessee firm obtained a separate valuation report from a Government approved registered valuer (which was filed before the ld. CIT(A) and was also forwarded to the AO for his comments) wherein cost of construction was estimated at Rs.22,81,50,500/- which was close to the amount of actual cost of construction incurred and shown by the assessee in its audited books of account. The Ld. Counsel vehemently argued that DVO prepared the valuation report by applying CPWD rates completely ignoring the fact that duplex units were constructed near Bhopal, Madhya Pradesh and therefore, valuation ought to have been made using the local PWD rates instead of CPWD rates. 8.4 The Ld. Counsel for the assessee also argued that addition on account of undisclosed investment in construction of project was made by the Ld. Assessing Officer solely on the basis....
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....tion of the AR of the assessee that while making the subject addition, the learned AO has not made reference of any incriminating material found during the course of search from which it could have been inferred that the assessee had incurred more expenditure in construction activities than that shown in its books of account. We find that the learned AO has made the additions solely on the DVO's report without considering the assessee's objections towards various discrepancies crept into the said report. Even on valuation, we are in agreement with the findings given by the Ld. CIT(A) that in the instant cases, PWD rates ought to have been adopted by the DVO instead of adopting CPWD rates as the subjected properties were not constructed in any metro city. We find that the case of the assessee is covered by various judicial authorities, some of which are listed as under: i) CIT vs. Raj Kumar 182 ITR 436 All HC ii) CIT vs. Prem Kumar Murdiya 296 ITR 508 Raj HC iii) ITO vs. Nilesh Maheshwari (2011) 53 DTR 43 ITAT Jaipur iv) Rajeev Mewara 35 SOT 001 Indore Trib. v) ITO vs Prakash Chand Soni 94 TTJ 0631 Indore Trib. vi) Sh....
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...., noted that total payment of Rs.4,34,78,000/- was made against various heads out of which Rs.1,30,00,000/- was paid through cheques and the remaining amount of Rs.3,04,78,000/- was paid in cash. The AO further observed that against some entries, dates were also mentioned which ranged from Jan 2010 to March 2010 and thus, as per AO, the transactions pertained to F.Y. 2009-10. The AO also scanned the relevant pages 2 to 12 of LPS-12 at page no. 4 to 6 of the assessment order. As per the AO, the assessee was asked to explain these papers and to reconcile the same with its books but, the assessee did not submit any explanation. However, as per the assessee, vide its letter dated 18.11.2016 (placed at page no. 134 of the Paper Book) it had duly furnished copies of ledger accounts of persons appearing in its books of account. Further, as per the AO, the assessee was also issued a showcause notice dated 21.11.2016 [placed at Page no. 130 & 131 of the Paper Book] which remained uncomplied. However, as per the assessee, it had duly submitted its reply before the AO [placed at PB Page No. 135]. In its reply, the assessee firm categorically stated that the said diary was not related to it. T....
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....he ld. CIT(A), the AO failed to establish whether the transactions represent receipt/ payment or balance and also very basic details such as date of payment/ receipt, mode of payment/ receipt, place of payment/ receipt, correct amount whether in lakhs or in thousand or in hundred etc. Thus, according to the ld. CIT(A), in absence of any cogent evidence having direct nexus with the impugned transactions, the said pages of diary cannot be used against the assessee. Accordingly, the ld. CIT(A) observed that the absence of vital details made the impugned loose papers as 'deaf and dumb document'. The ld. CIT(A) further noted that not a single transaction mentioned in the diary related with suppliers/ contractors was found in the books of account of the assessee. The ld. CIT(A) observed that the AO, on the one hand, at para (8.3)(i), stated that these amounts were made to different firms/ suppliers but on the other hand, at para (8.3)(iv), the AO stated that the said amounts were paid to Shri K.L. Sharma. The ld. CIT(A) also noted that the AO did not find any major discrepancy in books of account and therefore, the books were not rejected. Finally, the ld. CIT(A) deleted the addition of ....
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.... AO issued a show-cause notice dated 21.09.2016 requiring to furnish details of creditors along with their ledgers whose names were appearing in page no. 2 to 12 of LPS-12 which were duly furnished vide letters on 18.11.2016 & 16.12.2016. No discrepancy was noticed by the AO. 134 7 The names of creditors in LPS are very common The AO, on the sole basis that the names of maximum creditors in the books were getting tallied with those listed in the loose paper, reached to a conclusion that the diary pertains to the assessee firm. It is notable that these creditors/ suppliers are very common and renowned suppliers and therefore, their names could appear in almost all other concerns of the group. The similarity of names would not ipso facto attribute the belongingness of diary to the assessee. - 8 No evidence found for on-money receipts/ unaccounted cash income During the course of entire search, not even a single piece of evidence was found which could suggest any receipt of on-money by the assessee or any of its partners. When the assessee is not found to have generated unaccounted income/ receipts, how the unaccounted payments in cash would be made. ....
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....ed that the impugned addition made solely on the basis of a diary which was found and seized from the residence of two partners of the assessee firm namely Smt. Sunita Maheshwari and Shri Suresh Kumar Maheshwari. It was further contended that Smt. Sunita Maheshwari and Shri Suresh Maheshwari were not only the partners in the assessee firm but they were also engaged in real estate business individually and/or in association with other concerns as well. It is further contended that the AO has not brought on record any corroborative material to establish that the subject incriminating material, found and seized from the premises of a partner, was actually pertaining to the assessee firm only. The ld. counsel for the assessee stressed upon that during the course of entire search, not even a single unaccounted bill or voucher relating to the assessee firm was found from any of the premises. The assessee firm also contended that the jottings made in the diary were undated, unsigned and further, these jottings were unclear regarding the nature of transaction, whether a receipt or payment, mode of receipt or payment, whether the jottings were in hundreds, thousands or lakhs. As per the ass....
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.... observe that the AO, except placing sole reliance upon some jottings made on page nos. 2 to 12 of the diary LPS-12, has not brought any cogent material or evidence on record to substantiate his allegation that the jottings made in the diary were actually pertaining to the transactions carried out by the assessee firm. We further note that the jottings made in the said diary are in abbreviated form, the figures jotted in such diary are in decimals from which it could be anybody's guess that whether the jottings are in hundreds or thousands or lakhs or crores and unless these jottings are corroborated with any cogent material on record, no definite conclusion can be drawn on the basis of such jottings. We also note that from these jottings, it is not discernible that who made such jottings, when such jottings were made and what was the purpose of making such jottings. These jottings also do not speak about carrying out of any actual transaction and as also, the nature thereof if they at all pertain to any transaction. From such jottings, it cannot be conclusively proved that these jottings pertained to the assessee firm only and not to any other entity. 12.2 We find that during t....
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....ed paper alone without any corroborative evidence could not be sustained". 12.6 In the case of CIT V/s. Girish Choudhary (2008) 296 ITR 691 (Delhi), the Hon'ble High Court had dismissed the revenue's appeals holding that "when there was no materials on record to show on what basis the AO had reached to the conclusion that the figure 48 was to be read as Rs.48 lakhs when the document recovered during the course of search a dumb document and lead nowhere". 12.7 The Hon'ble Apex Court in the case of Common Cause (A registered Society) Vs. Union of India (2017) 77 taxmann.com 245 (SC) held as follows:- "22. In case of Sahara, in addition we have the adjudication by the Income Tax Settlement Commission. The order has been placed on record along with I.A.No.4. The Settlement Commission has observed that the scrutiny of entries on loose papers, computer prints, hard disk, pen drives etc. have revealed that the transactions noted on documents were not genuine and have no evidentiary value and that details in these loose papers, computer print outs, hard disk and pen drive etc. do not comply with the requirement of the Indian Evidence Act and are not admissible evidence. ....
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....f PCIT V/s. Pukhraj Soni (2019) 34 ITJ 489 (MP) adjudicated the similar issue relating to addition made by the Ld. A.O. on the basis of notings found in the seized documents, confirmed the order of the Tribunal by relying on the judgment of Hon'ble Apex Court in the case of CBI V/s V.C. Shukla (supra) and in the case of Common Cause (A registered Society) Vs. Union of India (2017) 77 taxmann.com 245 (SC) (supra). 12.9 The Coordinate Bench of ITAT Hyderabad in the case of DCIT vs. M. Aja Babu following the decision of Hon'ble High Court of Delhi in the case of CIT vs. Anil Bhalla (supra), CIT vs. Dinesh Jain (HUF) 211 Taxman 23 (Del) and CIT vs. Jaipal Aggarwal 212 Taxman 1 (Del), ITAT Mumbai in the case of ACIT vs. JP Morgan India Pvt. Ltd. 46 SOT 250 (Mumbai), held that the addition made by the AO was based on the loose paper, which is not a conclusive evidence and therefore, the same is not sufficient for making the addition. The Tribunal also held that no addition can be made on the basis of dumb document/notebook/loose slips in absence of any other material to show that the assessee has made investment in land. The relevant observations and findings of the Tribunal i....
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.... corroborated by other evidence and should also include the statement of a person who admittedly is a party to the noting and statement from all the persons whose names there on the note book/ loose slips and their statements to be recorded and then such statement undoubtedly should be confronted to the assessee and he has to be allowed to cross examine the parties. The vendor has not examined in this case. Therefore, we do not find any infirmity in the order of the CIT(A) in directing the Assessing Officer to delete the addition made on the basis of loose paper and the order of the CIT(A) is hereby upheld dismissing the grounds raised by the revenue on this issue." 12.10 Respectfully following the above judgments of Hon'ble Apex Court/Hon'ble High Courts and Tribunals, we are of the considered view that the impugned addition for unaccounted cash expenditure has rightly been deleted by the Ld. CIT(A) as they were merely based on the rough jottings on the alleged seized loose papers which do not convey either receipt/ payment, mode thereof, nature of transaction etc.. Undisputedly, neither during the course of the assessment proceedings nor during the course of submission of rema....
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....e AO also scanned the relevant pages 13 to 16 of LPS-12 at page no. 11 & 12 of the assessment order. The AO, from pages 17 to 20 of the diary LPS-12, noted that total payment of Rs.5,35,00,000/- was made against various heads out of which Rs.80,00,000/- was paid through cheques and the remaining amount of Rs.4,55,00,000/- was paid in cash to two other partners Smt. Sunita Maheshwari and Shri Suresh Kumar Maheshwari. The AO also scanned the relevant pages 17 to 20 of LPS-12 at page no. 15 & 16 of the assessment order. As per the AO, the assessee was asked to explain these papers and to reconcile the same with its books but, the assessee did not submit any explanation. However, as per the assessee, vide its letter dated 06.12.2016 (placed at page no. 137 of the Paper Book) had duly furnished copies of ledger accounts of all the partners appearing in its books of account. Further, as per the AO, the assessee was also issued a show-cause notice dated 21.11.2016 [placed at Page no. 130 & 131 of the Paper Book] which remained uncomplied. However, as per the assessee, it had duly submitted its reply before the AO [placed at Page No. 135 of the Paper Book]. In its reply, the assessee firm ....
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....in the business of trading of land in their individual capacities. The ld. CIT(A) further noted that Shri K.L. Sharma had admitted unaccounted income of Rs.4,02,00,000/- before the Income-Tax Settlement Commission (ITSC) vide his application dated 09.02.2017. Thus, the ld. CIT(A) held that once Shri K.L. Sharma had accepted the amount of Rs.4,02,00,000/- as his unaccounted income through separate transactions not related to the firm, there does not remain any locus to allege that the assessee firm had paid such sum to Shri K.L. Sharma in cash. The ld. CIT(A) also held that the AO failed to establish whether the transactions represented payment/ receipt or balance. The ld. CIT(A) also noted that the AO failed to bring on record any cogent evidence creating direct nexus of payments by the assessee firm. Thus, as per the ld. CIT(A), in absence of any cogent evidence having direct nexus with the impugned transactions, the said pages cannot be used against the assessee. Accordingly, the ld. CIT(A) deleted the entire additions of Rs.4,02,00,000/- and Rs.4,55,00,000/- respectively on account of payments to Shri K.L. Sharma and Smt. Sunita/ Shri Suresh Maheshwari, made by the AO for four a....
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....ould suggest any receipt of onmoney by the assessee or any of its partners. When the assessee is not found to have generated unaccounted income/ receipts, how the unaccounted payments in cash would be made by the assessee firm. - 7 No addition of on-money/ unaccounted payment in earlier Assessments The assessee firm, since its constitution in the year 2000, had undergone various assessments u/s. 143(3)/147 in the past but, in none of the assessments, any addition on account of unexplained income/ expenditure was made. Even a block assessment u/s. 153C for AY 2002-03 to AY 200809 was made in which except making disallowance of claim u/s. 80-IB(10), no other addition was made. - 8 Name of 4th partner Mr. JC Sharma not appearing Shri J.C. Sharma was also one of the partners of assessee firm (30%). On the pages from 1 to 20, nowhere the name of the Shri J.C. Sharma was appearing. If at all the diary was pertaining to firm, the names of all the partners ought to have been found therein. - 9 No cogent material or evidence brought on record The AO failed to bring on record any single corroborative material or evidence which could prove that the sa....
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....re. Then, how the diary could be related to the assessee firm. - 4 Undated & unsigned jottings in diary and mode of payment/receipt also missing in many cases. Although many jottings were having dates and were signed by Shri Suresh Maheshwari, but some jottings were undated and unsigned. Moreover, some jottings do not contain vital details such as mode of payment/receipt, date of payment/receipt etc. Thus, these jottings do not convey any clear interpretation of nature of transaction between the assessee and Smt. Sunita/ Shri Suresh Maheshwari. - 5 Mode of payments/ receipts unclear Transactions do not convey whether these are payments or receipts. The jottings do not contain any mode of payment/ receipt. Further, there is no clarity whether these jottings are in thousands, lakhs or crores. - 6 No evidence found for on-money receipts/ unaccounted cash income During the course of entire search, not even a single piece of evidence was found which could suggest any receipt of on-money by the assessee or any of its partners. When the assessee is not found to have generated unaccounted income/ receipts, how the unaccounted payments in cash would be....
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....of assessee firm having a substantial share in profit of 30%, but, on none of the pages from 1 to 20, the name of Shri J.C. Sharma was appearing. The ld. Counsel for the assessee argued that if at all the diary was pertaining to firm, the names of all the partners ought to have been found therein. The assessee firm also contended that the jottings made in the diary were unclear regarding the nature of transaction, whether a receipt or payment, mode of receipt or payment, whether the jottings were in hundreds, thousands or lakhs. As per the assessee, the AO did not make any independent enquiry. It was also contended that during the course of entire search, not even a single incriminating material was found which could suggest any receipt of on-money by the assessee or any of its partners and when the assessee was not found to have generated any unaccounted income/ receipts, then how the unaccounted cash payments would have been made by it to its partners. Finally, the ld. counsel for the assessee contended that the jottings made in the diary were only rough jottings which do not convey either receipt/ payment, mode thereof, nature of transaction etc. and thus, the said diary could o....
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.... the hands of the assessee firm. 15.4 In view of our detailed findings made above, we are of the considered opinion that the jottings made in the diary are only rough jottings which do not convey either receipt/ payment, mode thereof, nature of transaction, amount of transaction whether in hundreds, thousands or lakhs etc.. Thus, the said diary could only be termed as a 'dumb' document. Since we have already discussed at length the various judicial authorities while giving our findings in respect of Ground No. 2 of the Revenue for the A.Y. 2010-11, the same are not being discussed here again. Thus, considering the facts and circumstances of the case, we do not find any infirmity in the findings of the ld. CIT(A) in deleting the additions of Rs.1,50,00,000/-, Rs.1,55,00,000/- and Rs.37,00,000/- respectively for A.Y. 2010-11, A.Y. 2011-12 and A.Y. 2012-13, made by the AO on account of unaccounted cash payments to Partner Shri K.L. Sharma. Similarly, we also consciously uphold the findings of the ld. CIT(A) in deleting the additions of Rs.1,50,00,000/-, Rs.1,65,00,000/- and Rs.1,00,00,000/- respectively for A.Y. 2010-11, A.Y. 2011-12 and A.Y. 2012-13, made by the AO on account of u....
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..... 18. Now, aggrieved by the relief granted by the ld. CIT(A) to the assessee, the revenue is in appeal before this Tribunal for the assessment years under consideration. 19. Ground No. 1 of the Revenue for A.Y. 2009-10 20.1 Through this ground of appeal, the revenue has challenged the action of the ld. CIT(A) in deleting the addition of Rs.1,50,00,000/- made by the AO for A.Y. 2009-10 on account of unaccounted cash payments to Shri Sushil Kumar Bajpai. 20.2 Briefly stated facts of the issue, as culled out from the records, are that during the course of search at the residential premises of Smt. Sunita Maheshwari, page nos. 33 to 39 of LPS-3 were seized. From such loose papers, the AO noted that it was a signed agreement dated 16.03.2009 between Shri Sushil Kumar Bajpai (as first party) and Shri K.L. Sharma, Shri Suresh Maheshwari (i.e. the assessee) & Shri Arvind Jain (as second party). The AO further noted that it was a joint venture agreement as per which duplexes were to be constructed by the second party on the land owned by the first party. The AO noted that as per such agreement, the second party will pay Rs.1.25 crore to first party out of which Rs.75 lacs will b....
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..... Further, the AO also by making a reference to the clause (34) of the agreement dated 16-03-2009, noted that Rs.1,00,00,000/- was given earlier to Shri Sushil Kumar Bajpai by the assessee which would be repaid from the advances, bookings etc. to the assessee. The AO concluded that Rs.1,00,00,000/- was given by the assessee out of his undisclosed income and accordingly, the AO made an addition of Rs.1,00,00,000/- in the assessee's income for A.Y. 2009-10. Thus, in aggregate, the AO made an addition of Rs.1,50,00,000/- in the assessee's income for A.Y. 2009-10 on account of unaccounted cash payments to Shri Sushil Kumar Bajpai. 20.3 Aggrieved with the Order of Assessment, the assessee preferred an appeal for the subject assessment year before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions. The ld. CIT(A) noted the contention of the assessee that the agreement did not get materialized because the third partner of the assessee namely Shri Arvind Jain did not agree to the terms of agreement and which is why there is no signature of Shri Arvind Jain on the said agreement and for such reason, the cancellation agreem....
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.... cheques and Rs.39,00,000/- through cash. - 61 2 Only a sum of Rs.75,00,000/- actually paid through cheques and Rs.11,00,000/- through cash Under such agreement, only Rs.75,00,000/- was paid through cheques on various dates during F.Y. 2009-10 (A.Y. 2010-11). Further, a sum of Rs.11,00,000/- was paid by the assessee in cash, on behalf of all 3 partners. - - 3 Clause 34 of JVA. No such cash paid by assessee The clause reads: Factually, no cash was paid in the past by the assessee. Also gets established from the cancellation agreement which does not contain reference of any such amount. - 65 & 66 to 68 4 Agreement did not materialize Shri Arvind Jain refused to agree with the terms and conditions of agreement and refused to sign the same. There arose dispute among the parties of second part. - 59 to 65 5 Cash of Rs.11,00,000/- paid by the assessee got returned The assessee, in his statement dated 15-11-2014, recorded on oath before the search party, was confronted with such loose papers and the assessee, in reply to Q. No. 6, had categorically in an unambiguous term, had stated that such JVA did not get execut....
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....It was further contended that under such agreement, only Rs.75,00,000/- was paid through cheques from a Joint Account in the name of firm opened with Canara Bank, BHEL Branch, Bhopal. It was also stressed that no cash of Rs.1,00,00,000/- was paid by the assessee at any point of time in the past. The ld. counsel for the assessee also brought to our notice that along with such Draft JVA, a Draft Cancellation Agreement was also found and seized during the course of search and inventorized as page no. 36 to 44 of LPS-13 which has also been taken into consideration by the AO in his assessment order. It was contended that since the Joint Venture Agreement with Shri Sushil Kumar Bajpai could not get materialized due to differences amongst the parties to the purported agreement and eventually, the draft cancellation agreement was prepared and was also found during the course of the search. It was also contended that one of the persons to the agreement namely Shri Arvind Jain did not agree to the terms and conditions of the JV and therefore, he did not sign the said agreement which is also clearly evident from the draft JV agreement itself that out of total 4 persons, only 3 persons put the....
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....aid earlier by the assessee. We also note that the said agreement was signed by the first party and two members from the second party viz. Shri K.L. Sharma and Shri Suresh Maheshwari (the assessee). The signature of the third member of the second party namely Shri Arvind Jain has not been found on the said agreement. In our considered view, since the agreement was not signed by all the parties thereof, it cannot be said to be a complete legally enforceable agreement and such agreement has no evidentiary value in the eyes of the law. 22.2 We also find that during the course of search and post search investigation, the aforesaid JV agreement was confronted to the assessee and in response, he had stated that the joint venture agreement was done with Shri Sushil Kumar Bajpai and only Rs.75 lacs was given through cheque, however, the agreement was subsequently cancelled. We further find that during the course of search, one draft cancellation agreement of the aforesaid JV was also found and seized as page no. 36 to 44 of LPS-13. As per such agreement, the JV agreement dated 16.03.2009 was cancelled and the second party was withdrawing from the joint venture. 22.3 Considering the f....
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.... and therefore, the same could not have been used against the assessee. Thus, considering the facts and circumstances of the case, we do not find any infirmity in the findings of the ld. CIT(A) in deleting the addition of Rs.1,50,00,000/- for A.Y. 2009-10, made by the AO on account of unaccounted cash payments to Shri Sushil Kumar Bajpai. Accordingly, the Ground No. 1 of the Revenue for A.Y. 200910 is hereby dismissed. 23. Ground No. 1 of the Revenue for A.Ys. 2010-11, 2012-13 & 2013-14 23.1 Through this ground of appeal, the revenue has challenged the action of the ld. CIT(A) in deleting the additions of Rs.1,70,00,000/-, Rs.1,00,00,000/- and Rs.40,00,000/- made by the AO, on protective basis, on account of unaccounted cash receipts from the partnership firm M/s. K.L. Sharma & Sunita Maheshwari, respectively for A.Ys. 2010-11, 2012-13 & 2013-14, on the basis of jottings made in some diary seized during the course of search from the residence of the assessee. 23.2 We find that the issue relating to the subject diary has already been discussed at length by us in the preceding paras while dealing with the revenue's appeals in the case of the partnership firm 'M/s. K.L. Sharm....
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....the first party on 06.02.2012, Rs.25 lacs on 20.05.2012 and Rs.75 lacs on 20.05.2012. It was also mentioned therein that the second party was paying interest on this amount of Rs.2 crores on time. The AO further noted from the agreement that the second party had proposed before the first party to give Rs.2 crores for his personal needs and therefore, Rs.2 crores were being given on certain conditions, Rs. 1 crore was to be given on the date of agreement and the remaining Rs.1 crore would be given within one month of the date of agreement. Further, the rate of interest would be 2.75% per month which would be paid from 1st to 10th of every month by the second party. The AO also scanned the relevant pages 6 to 8 of LPS-3 at page no. 26 to 28 of the assessment order. The AO issued a show-cause notice dated 10.10.2016 requiring the assessee to showcause as to why an addition should not be made. In response, the assessee vide his letter dated 03-12-2016, made his reply which has been reproduced by the AO at para (9.5) on page no. 28 & 29 of his Order. The AO, while rejecting the submission of the assessee, further averted that during the course of the search, the agreement was confronted....
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....A). During the course of the first appellate proceedings, the assessee made detailed written submissions. The ld. CIT(A) noted that the loan agreement was undated, unsigned and was just a draft agreement which did not materialize on ground. The agreement was neither signed by both the parties nor by any witnesses and it was neither on a stamp paper nor notarized. The ld. CIT(A) observed that the cheque of Rs.75,00,000/- which was found and seized as page no. 52 of LPS-13 had no reference in the draft loan agreement. Thus, as per the ld. CIT(A), there was no direct nexus of the cheque of Rs.75,00,000/- with the said loan agreement. The ld. CIT(A) further noted that the affidavit found and seized as page no. 48 of LPS-13, was also undated and not notarized. Thus, as per ld. CIT(A), there was no legal sanctity of the loan agreement and the affidavit. The ld. CIT(A) further held that the onus was lying upon the revenue to establish, through some cogent evidence, that the loan agreement was duly executed or breach of the agreement according to which the 2 acres of land would be acquired by the first party. Further, the ld. CIT(A) observed that the AO never examined the only beneficiary ....
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....the said loan agreement. On a perusal itself, one would find that it is undated. Further, it is a joint Affidavit of Shri Bhav Singh Rajput and Shri Sunil Maheshwari, but, only Shri Bhav Singh Rajput has signed. It does not contain the signature of the other person to the affidavit Shri Sunil Maheshwari. Further, the affidavit is not notarized. Furthermore, the affidavit is pertaining to proposed sale of some land which was an independent transaction. Page 31 - 6 No cogent material or evidence brought on record - ONUS OF REVENUE The AO failed to bring on record any single corroborative material or evidence which could prove that the cash loan of Rs.4,00,00,000/- was actually given by the assessee or his wife Smt. Sunita Maheshwari. The onus was lying upon the revenue which the AO had miserably failed. - - 7 No independent enquiry by AO The AO, except solely relying upon the uncorroborated draft loan agreement, had not conducted any independent enquiry from the sole beneficiary namely Shri Bhav Singh Rajput by issuing summons u/s. 131 or letter u/s. 133(6) to such person. - - 8 Impugned document is not speaking one, hence 'dumb' It is a d....
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....ed by the ld. counsel for the assessee that the AO had not conducted any independent enquiry from the sole beneficiary of the agreement namely Shri Bhav Singh Rajput by issuing summons u/s. 131 or letter u/s. 133(6) to such person. 26.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of lower authorities. We find that the loan agreement, which has also been reproduced by the AO in the body of the assessment order, appears to be a draft. On a careful perusal of such agreement, we find that the said agreement is printed on a plain paper, it is undated, does not contain any signature of any of the parties to the agreement or any of the witnesses. 26.2 We observe that Ld. AO has failed to bring on record any single corroborative material or evidence from which it could be established that the cash loan of Rs.4,00,00,000/- was actually given by the assessee or his wife Smt. Sunita Maheshwari. We find ourselves in agreement with the contention of the ld. counsel for the assessee that the onus was heavily lying upon the AO to establish the contents of the seized loose paper beyond a....
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....rence to any material or evidence at all. Given the above state of law, the Hon'ble Delhi High Court stated that it has no hesitation in so concluding, since the document seized was both undated and unsigned and even taken at face value did not lead to further enquiry on behalf of the AO. The Hon'ble Delhi High Court in the case of CIT Vs Kulwant Rai 291 ITR 36 held as under : "Held, dismissing the appeal, (i) that, admittedly, the assessee had not signed the agreement in question and since he had not signed the agreement, no liability could be attributed qua that that agreement towards him since he was not a party to the agreement till he had signed the agreement. The mere fact that this agreement was found in the possession of the assessee did not lead anywhere. Thus, the addition of Rs.17,00,892 made by the Assessing Officer by way of half share of the assessee in the earnest money was based on surmises and guess work only and was liable to be deleted." 26.4.2 The Coordinate Bench of ITAT Mumbai in the case of Siddhi Gaurav Enterprises vs. DCIT [ITA No. 2302/Mum/2013 Dated 09.09.2015] held as under: "The Assessing Officer has failed to prove that any cash tr....
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....the AO had neither brought any corroborative material on record nor made any independent enquiry from Shri Bhav Singh Rajput to whom the loan has allegedly been given. Thus, considering the facts and circumstances of the case, we do not find any infirmity in the findings of the ld. CIT(A) in deleting the additions of Rs.1,00,00,000/- and Rs.3,00,00,000/- respectively for A.Y. 2012-13 and A.Y. 2013-14, made by the AO, on substantive basis, on account of unaccounted cash loans given to Shri Bhav Singh Rajput. Accordingly, the Ground No. 2 of the Revenue for A.Ys. 2012-13 and 2013-14 is hereby dismissed. 26.6 Further, once it has been held that the assessee did not give any cash loan, there does not arise any question of earning any unaccounted interest income thereon by the assessee. In such eventuality, the additions of Rs.5,50,000/- and Rs.99,00,000/- respectively for A.Y. 2012-13 and A.Y. 2013-14, made by the AO, on substantive basis, on account of unaccounted interest income on the cash loans given to Shri Bhav Singh Rajput has rightly deleted by Ld. CIT(A). Accordingly, the Ground No. 3 of the Revenue for A.Ys. 2012-13 and 2013-14 is also dismissed. 27. Ground No. 4 of the....
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....ocument must be speaking one and without any second interpretation and must reflect all the details about the transactions. The ld. CIT(A) noted that the AO never enquired from persons whose names were written on impugned loose papers. The ld. CIT(A) negated the allegation of the AO to the effect that page no. 21 of LPS-4 was duly signed, by observing that the jotting which was considered as signature by the AO seemed to be written as '1 July'. The ld. CIT(A) further relied upon various case laws and held that the addition cannot be made on the basis of sheer imagination and guess work. The ld. CIT(A) also observed that the repayment schedule and ledger account do not match in entirety. Finally, the ld. CIT(A) deleted the addition of Rs.3,00,00,000/- so made by the AO on account of alleged unaccounted cash loans given by the assessee by holding that the AO was not justified in making additions simply on guess work and solely on the basis of dumb estimated loose papers. 27.4 Aggrieved with the Order of the ld. CIT(A), the revenue is in appeal before us. 27.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO on this issue. 27.6 Per Contra, Le....
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....except solely relying upon the uncorroborated proposed income/expenses sheet, had not conducted any independent enquiry from various persons whose names were stated on the loose papers, by issuing summons u/s. 131 or letter u/s. 133(6) to such persons. - 69 & 70 9 Impugned documents are not speaking one, hence ought to be considered as 'dumb' Page no. 21 is a proposed income/expenses sheet in respect of some project of the assessee. It is just an estimate which might have been prepared by some accountant of the assessee. It is completely unsigned and is undated. Page 19-20 of LPS-4 are in the form of some abstract of some ledger. It is not clear whether the such ledger pertains to the assessee, especially when there is no name of the assessee anywhere. Further, the narrations also do not suggest whether they have been paid by/through the assessee. Entries in such ledger are not corroborated with any other evidence found during search. - 71 28. Before us, the ld. counsel of the assessee contended that the assessee was a builder having multiple projects at various sites and generally, the builders to estimate receipts or expenses in the projects, prepare so....
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....t merit in the contention of the assessee that the very basic and vital details such as loan beneficiary, agreement of loan, terms and conditions of loan, date of loan, mode of loan in cash/cheque/kind were completely missing in these loose papers. We also noted that the subject loose papers are completely unsigned and the presumption of the AO for signature on page no. 21 appears to be '1 July'. We also find sufficient merit in the contention of the ld. counsel for the assessee that if the page no. 19 & 20 of LPS-4 are presumed to be related with recovery of any loan, then as per the accounting principles, the entries should have been on credit side and not on the debit side. 29.3 We find that the AO has failed to bring on record any single corroborative material or evidence from which it could be established that the cash loan of Rs.3,00,00,000/- was actually given by the assessee. We find sufficient force in the contention of the ld. counsel for the assessee that the onus was heavily lying upon the AO to establish the contents of the seized loose papers beyond all doubts and the AO has miserably failed to do so. We also find that the AO, except solely relying upon the uncorro....
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....before us, but, since the aforesaid legal issue is quite vital, the assessee made an application to raise the same before us under Rule 27 of the Income-Tax Rules, 1963. For making the application under Rule 27, the ld. counsel for the assessee relied upon the decision of the Hon'ble Delhi High Court in the case of Sanjay Sawhney [2020] 116 taxmann.com 701 (Delhi) and the decision of this Tribunal in the case of DCIT-5(1), Indore vs. M/s. Sunderdeep Construction Pvt. Ltd. (2021) 41 ITJ 221 (Trib.Indore). 30.2 We consider it appropriate to admit the application made by the assessee before us. However, we are not inclined to accept the contention of the assessee that no warrant of authorization was issued in his name. We find that at para (3.0) of the Assessment Order, the AO has clearly stated that a Warrant of Authorization was issued for carrying out search operations u/s. 132 of the Act at residential premises of the assessee at A-61, Indrapuri, Bhopal on 12.08.2014 and bank locker no. 104, Central Bank of India, Narela Shankri Branch, Bhopal on 13.08.2014. Thus, the plea raised by the assessee is devoid of any merit. We, therefore, do not find any infirmity in the findings of....
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....e issues raised are common, they were heard together and are being disposed off by this common order for sake of convenience and brevity. 36. Ground No. 1 of the Assessee for A.Y. 2009-10 36.1 Through this ground of appeal, the assessee has challenged the action of the ld. CIT(A) in sustaining the addition to the extent of Rs.19,12,832/- out of the total addition of Rs.43,55,072/- made by the AO on account of unaccounted investment in construction of hostel building u/s. 69B for A.Y. 2009-10. 36.2 Briefly stated facts of the issue, as culled out from the records, are that during the course of search and post-search proceedings, it was noticed that the assessee had made huge investment in hostel building located at 208 & 209, Indrapuri, Sector-C, Bhopal. Accordingly, during the course of the assessment proceedings, the AO made a reference to DVO, Bhopal. The AO, as per DVO's report dated 07-11-2016, noted that the assessee had made huge investment in construction of hostel building and the same had not been declared by the assessee in her books. The AO further noted that as against the investment declared by the assessee at Rs.37,85,728/-, the DVO had assessed the same at R....
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....Further, the ld. CIT(A) has observed that the case laws relied upon by the AO are not applicable to the case of the assessee. The ld. CIT(A) observed that the AO failed to appreciate the vital fact that the assessee is a member of Regal Homes group which is engaged in the business of real estate for the last many years. Thus, they have economies of scale for material and labour obtained in wholesale which save them atleast 20-25% of the cost to an ordinary contractor. Finally, the ld. CIT(A), at para (4.1.9) on page no. 49 of his Order, has allowed the margin of 30% (25% for difference in CPWD & PWD rates and 5% for selfsupervision) and prepared a comparative picture of investment shown by the assessee and that estimated by the DVO. Accordingly, the ld. CIT(A) deleted the partial addition to the tune of Rs.24,42,240/- and confirmed the remaining addition of Rs.19,12,832/-. 36.4 Aggrieved with the Order of the ld. CIT(A), the assessee is in appeal before us. 36.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO on this issue. The learned CIT(DR) also filed a Paper Book containing the judgments in favour of the Revenue on the issue of addition ....
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....estment is spread over many years. 6 Books along with bills duly produced before AO & DVO The assessee had duly produced the necessary bills, vouchers, records etc. both before the AO & DVO but, neither the DVO nor AO pointed out any specific defect or discrepancy in the records. Hence, no addition can be made. ITO vs. Dreamland Enterprises 80 Taxman 143 (ITAT Ahd) - - 7 Books of Account not rejected by the AO The AO, neither at the time of making reference to the DVO nor after receipt of the DVO's report, rejected the books of account of the assessee u/s. 145(3) of the Act before making the subject additions. - - 8 Supporting documents not provided by DVO Despite making specific request by the assessee, the necessary documents, information, methods, basis, etc., were not provided by the DVO/AO. - - 9 Independent Valuation Report obtained by the assessee The assessee obtained a valuation report dated 15-04-2016 from an Independent Registered Valuer Shri Sunil Joshi. As per the valuation report, the cost of building was valued at Rs.74,14,129/- as against Rs.70,66,321/- uptill 2015-16. Such valuation report....
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....ence of the assessee group in this line of business which would bring them economies of scale in the cost of material and labour. 37.2 The Ld. Counsel for the assessee argued that a valuation report was also obtained from the Government approved registered valuer and the same was filed before the AO wherein cost of construction was estimated close to the amount of actual cost of construction incurred by the assessee. The Ld. Counsel vehemently argued that DVO prepared the valuation report by applying CPWD rates completely ignoring the fact that the hostel building was constructed in Bhopal, Madhya Pradesh and therefore, valuation ought to have been done using the local PWD rates and not using the CPWD rates. 37.3 The Ld. Counsel for the assessee also argued that addition on account of undisclosed investment in construction of hostel building was made by the Ld. Assessing Officer solely on the basis of valuation report of the DVO without having recourse to any incriminating material found or seized during the course of search and this fact alone has made the entire addition unsustainable in view of the settled position of the law. The ld. Counsel of the assessee vehemently sub....
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....line 869 (Delhi): (2016) 380 ITR 573: (2015) 281 CTR 45: (2015) 234 Taxman 300 and also decision of Pr. CIT vs. Meetagutgutia (2020) 8 ITJ online 273 (Delhi): (2017) 395 ITR 526, we are of the considered view that proceedings initiated u/s 153A of the Act for A.Y. 2009-10 being non-abated and completed assessments deserved to be quashed since no incriminating material was found during the course of search thereby warranting initiation of proceedings u/s 153A of the Act for these years. Thus, following the settled judicial precedence which are squarely applicable on the instant issue, we are of the view that no addition could have been made by the AO in the assessee's income without having recourse to any incriminating material. Accordingly, we are inclined to uphold the deletion of the addition of Rs.24,42,240/- so made by the ld. CIT(A) and are also inclined to hold that in the facts and circumstances of the case, the addition of Rs.19,12,832/- sustained by the ld. CIT(A) is also liable to be deleted. Accordingly, the ground No. 1 raised by the assessee on this issue for the A.Y. 2009-10 is hereby allowed. 39. Ground No. 1 of the Revenue for A.Ys. 2010-11, 2012-13 & 2013-14 ....
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....s, on account of unaccounted cash receipts from partnership firm M/s. K.L. Sharma & Sunita Maheshwari. Accordingly, the Ground No. 1 of the Revenue for A.Ys. 2010-11, 2012-13 and 2013-14 are hereby dismissed. 40. Ground No. 2 and Ground No. 3 of the Revenue for A.Y. 2012-13 and A.Y. 2013-14 40.1 Through the Ground No. 2, the revenue has challenged the action of the ld. CIT(A) in deleting the additions of Rs.1,00,00,000/- and Rs.3,00,00,000/- made by the AO respectively for A.Y. 2012-13 and A.Y. 2013-14, on protective basis, on account of unaccounted cash loans given to Shri Bhav Singh Rajput. Further, through the Ground No.3, the revenue has challenged the action of the ld. CIT(A) in deleting the additions of Rs.5,50,000/- and Rs.99,00,000/- made by the AO respectively for A.Y. 2012-13 and A.Y. 2013-14, on protective basis, on account of unaccounted interest income from cash loans given to Shri Bhav Singh Rajput. 40.2 We find that the issue relating to the loan to Shri Bhav Singh Rajput has already been discussed at length by us in the preceding paras while dealing with the revenue's appeals in the case of the husband of the assessee 'Shri Suresh Kumar Maheshwari', where w....
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....copies of his financial statements for the previous years relevant to the assessment years under consideration. Subsequently, Notices under s. 143(2) & 142(1) were issued to the assessee from time to time by the AO. In response to the Notices so issued, the assessee furnished his written replies along with the documentary evidences. Finally, the Assessing Officer framed the assessments for the relevant assessment years u/s. 153C r.w.s. 143(3) of the Act by passing a common Order dated 15.12.2016 by making certain additions. 42. Aggrieved assessee preferred separate appeals for both the assessment years under consideration before Ld. CIT(A). The ld. CIT(A), vide his common Order dated 09.11.2020 adjudicated the appeals of the assessee thereby giving partial relief and also confirming certain additions for the assessment years under consideration. 43. Now, aggrieved by additions confirmed by the ld. CIT(A) for the assessment years under consideration, the assessee is in appeal before us. 44. As both the appeals relate to the same assessee and the issues raised are common, they were heard together and are being disposed off by this common order for sake of convenience and bre....
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....f addition made in the completed year of assessment in a completed year of assessment. 45.6 Per Contra, Learned Counsel for the assessee has filed written synopsis. The relevant portion of such synopsis is being reproduced as under: "C. Key Points of Assessee's Submission and Relevant Pages of Paper Book: S. No. Marginal Notes Submission in Brief Relevant Pages of PB 1 No reference of any incriminating material The AO has not made any single reference of any incriminating material for making the impugned addition of Rs.8,00,000/-. [refer para (6.1) on page no. 10 of the assessment order] - 2 Return u/s. 139 duly filed For the A.Y. 2013-14, the assessee had duly filed his return u/s. 139 of the Act on 19-03-2014. 10 3 Completed /Non-abated year Since the return for A.Y. 2013-14 was duly filed on 19-03-2014, any notice u/s. 143(2) for selection of case under scrutiny could have been issued by the AO uptill 30-09-2014. However, no such notice was issued to the assessee for the A.Y. 2013-14. In this case, no search was conducted in the premises of the assessee and therefore, the case of the assessee is that of the other person....
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....ale of house. Shri Pushpraj in his confirmation had clearly stated that he had given advance against sale of house. 28 2 Confirmation letter filed The assessee duly filed a confirmation letter from Shri Pushpraj Singh in which the complete name and address of Shri Pushpraj was given. 28 3 Through banking channel The advance of Rs.8,00,000/- was received through banking channel which was received in the saving bank account of the assessee maintained with Canara Bank, on 24-04-2012 29 4 Identity, Creditworthiness and Genuineness proved The assessee duly furnished confirmation letter of Shri Pushpraj Singh containing his complete name, phone no. and address. Further, Shri Pushpraj had certified to have given the said amount from sale of agricultural land. Furthermore, the amount was paid through banking channel. 28 & 29 5 No enquiry by the AO The AO could have issued a summons u/s. 131 or notice u/s. 133(6) to Shri Pushpraj Singh to verify the claim of the assessee. The AO merely alleged the confirmation to be a bald confirmation. The onus was lying upon the AO to disprove the claim of the assessee. However, no independent enquiry was....
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....iction over the assessee. We find sufficient force in the contention of the ld. Counsel for the assessee that in the case of the assessee, the date of search would be construed as 22-07-2016 i.e. the date on which Order u/s. 127 was passed by the CIT for transferring jurisdiction to the AO. We also find ourselves in agreement with the contention of the ld. Counsel for the assessee that in the instant case, the date of recording of reason i.e. on 05-07-2016 is irrelevant as by such time, the AO did not have any valid jurisdiction over the case of assessee. 46.3 We find that this Tribunal in the case of M/s. Golden Realities & Ors. vs. ACIT (2021) 42 ITJ 544 (Indore Trib.) has considered and discussed at length the applicability of the first proviso to sub-section (1) of section 153C of the Act for making a reference to the date of search in the case of third person and has accordingly allowed the legal grounds raised by the aforesaid assessee in that case. 46.4 Thus, we find that in response to the return of income furnished by the assessee u/s. 139 of the Act on 19-03-2014, no notice u/s. 143(2) of the Act was issued in the case of the assessee and therefore, the income so sh....
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....eal and the assessee himself has not made any specific submission in respect of this ground of appeal. Therefore, no adjudication is considered necessary and accordingly, this ground of appeal of the assessee is dismissed. 48. Ground Nos. 2 and 3(a) & 3(b) of the Assessee for A.Y. 2014-15 48.1 Through these grounds of appeal, the assessee has challenged the action of the ld. CIT(A) in upholding the addition of Rs.20,30,000/- made by the AO on account of unexplained cash loan given to Shri R.B. Singh for A.Y. 2014-15. 48.2 Briefly stated facts of the issue, as culled out from the records, are that during the course of the search, page no.48 of LPS-6 was seized. From such loose paper, the AO noted that it was an acknowledgment by Shri R.B. Singh wherein he stated that on 03.01.2014, Rs.20.30 lacs were taken as loan from Shri Vijay Maheshwari (assessee) which would be repaid on 30.04.2014 and in case, he was not able to repay the amount on due date, then he will repay Rs.21,70,000/- on 30.06.2014. A copy of the loose paper has been scanned by the AO at page no. 3 of his Order. The AO required the assessee to explain the loose paper and in response, the assessee vide letter da....
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....oose paper cannot be said to be belonging to the assessee. Since the loose paper is not signed by the assessee, the same can also not be said to be pertaining to the assessee. 27 4 Decision of SC in Super Malls Pvt. Ltd. The Hon'ble Supreme Court in the case of Super Malls Pvt. Ltd. vs. PCIT (2020) 423 ITR 0281 (SC), have laid down the law that before issuing notice under Section 153C, the Assessing Officer of the searched person must be "satisfied" that any document seized or requisitioned "belongs to" a person other than the searched person. Since the loose paper was not belonging/ pertaining to the assessee, the AO was not justified to issue notice u/s. 153C of the Act for the A.Y. 2014-15. In such eventuality, the assessment order so passed by the AO u/s. 153C of the Act deserves to be knocked down on this legal ground alone. - S. No. Marginal Notes Submission in Brief Relevant PB Page 1 Transaction had not taken place. Draft promissory note. Shri R.B. Singh did not obtain funds from assessee eventually. The said promissory note was a draft. Shri R.B. Singh intended to obtain some loan from Shri S.K. Maheshwari. Sinc....
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....he said promissory note remained a mere draft and was unsigned by any of the parties. The ld. Counsel for the assessee contended that the AO could have made an enquiry from Shri R.B. Singh by issuing summons u/s. 131 or notice u/s. 133(6) which was not done. Further, the AO did not bring any corroborative material on record to establish that any such loan was actually given by the assessee to Shri R.B. Singh. 50.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of lower authorities and written and oral submissions made from both the sides and also gone through the judgments and decisions referred to and relied upon by the Ld. Counsel for the assessee. 50.2 As regard the legal ground raised by the assessee that the impugned loose paper was not relating to him, we do not find any merit in such a contention of the assessee. We find that the loose paper was containing the name of the assessee. We further find that the subject loose paper was found from the residence of Shri Suresh Maheshwari and the assessee is a nephew of Shri Suresh Maheshwari. In such circumstances, the loose ....