2022 (11) TMI 769

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....reason to believe for confirmation of such action of the Assessing Officer of reopening of the case u/s 148. 3. That the Ld. CIT(A) has erred in confirming the addition of Rs. 16,03,000/- on the basis of certain ledger account of the third party. 4. That the CIT(A) has failed to appreciate the fact that the assessee had furnished copies of two registered sale deeds and affidavit of Sh. Kaku Singh, which has been ignored summarily on surmises and conjectures. 5. That the confirmation of addition is against the facts and circumstances of the case. 6. That the appellant craves leave to add or amend the grounds of appeal before the appeal is heard or disposed off." 2. Tersely, we advert the fact of the case, the assessee's case was reopened u/s 148 of the Act. Accordingly the assessment was completed. The reopen was made on basis of the search conducted in the business premises of M/s J.P. Industries, Jalalabad u/s 133A on dated 20.02.2014. As per the ledger account page no. 221 belonging to M/s Surinder Sat Agro Foods, Jalalabad (W) shown that an amount of Rs.16,03,000/- has been credited to the account of the assessee during financial year 2010-....

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....ble to bring any contrary judgment against the fact of the assessee. 5. We heard the rival submission and relied on the documents available in the record. In fact, the reasons recorded of the assessee that there are lacuna in the factual findings and in the PAN No. Respectfully relied on the judgment of Hon'ble Bombay High Court in the case of Zuari Foods and Farms Pvt. Ltd. vs. ACIT, (2018) 408 ITR 279 is held: "10. Thereafter, the reassessment proceedings have been initiated after a period of four years. The first requirement is that there must be failure on the part of the assessee to disclose fully and truly, all material facts. The reasons supplied to the Petitioner do not contain even the usual formal statement that there has been failure to disclose material information by the Petitioner. The legal position is settled that even if such a statement is made, it is only a reproduction of the section and does not necessarily show the existence of this fact. But in the present case, even that statement is missing.................................." 5.1 The issue was already agitated before the ld. CIT(A) but the matter was not taken proper care in relation to the le....

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.... Surinder Agro and Sh. Sher Singh MP. That assessee is a poor layman having no relation with these payments." 6.1 The ld. Counsel further argued and submitted a synopsis the relevant paragraph28 to end of the synopsis is reproduced as under: "28. The AO cannot make any addition on the basis of a document which is found in the premises of third person and which has no base. Reliance in this regard is being placed upon the following Judgment wherein on similar facts, addition u/sec 69C of the Act has been deleted by the Hon'ble Pune Bench in the case of Ekdanta Land Pvt Ltd. Vs ITO in ITA No. 1400/Pun/2015 order dated 17.10.2018: "3. Briefly stated relevant facts include that the assessee is a company engaged in the business of land deals. Assessee filed the original return of income on 21-09-2009 declaring total income of Rs.7,300/-. There was search and seizure action u/s.132 of the Act in the Jai Corp Group of companies, its employees and close associates. ShriDilipDherai is one such person covered in the search and he was incharge of the land acquisition on behalf of the 62 other companies. The search resulted in seizure of various incriminating evidences....

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....6.2017 d) Harsha Land Pvt Ltd. Vs ITO in ITA No. 5666/Mum/2015 order dated 08.11.2017 e) M.M Financers P ltd vs DCIT 107 TTJ 200 (Chennai Bench) "No addition could be made in the hands of assessee on the basis of the statement made by a third party and the unsigned agreement and dumb loose slips seized from his residence, in the absence of any corroborative material to show payment of any undisclosed consideration by the assessee towards purchase of land." f) ManoharLal Rattan Lalvs DCIT 91 TTJ 737 Amritsar Bench "In the absence of any examination of the seller of the property, addition on account of alleged undisclosed investment in the property could not be sustained solely on the basis of a copy of agreement found and seized by the Department, which did not bear signature of the purchaser namely,assessee." g) Omega Estates vs ITO 106 ITD 427 Chennai "Revenue having failed to cogently prove that estimated sale price was the actual sale consideration, nor having taken assistance of valuation cell nor brought out comparative figures, additions made by AO on the basis of letters written to bank or to others showing a hig....

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....HI HIGH COURT, COMMISSIONER OF INCOME TAX VERSUS SANT LAL Income from undisclosed sources- Addition u/s 69A- Material discovered during search of third person- Assessment u/s 153A - undisclosed cash transactions -HELD THAT:- Revenue has not been able to produce any cogent material which could fasten the liability on the respondent. The CIT(A) has also examined the assessment record and has observed that the AO did not make any further enquiry/investigation on the information passed on by the DCIT, Central Circle-19, New Delhi. No attempt or effort was made to gather or corroborate evidence in this relation.In these facts and circumstances, we are not inclined to entertain the present appeal as no substantial question of law arises for our consideration." 29. If the department would make huge additions on the basis of such documents which has no base then any person would fabricate the documents and proceed to complaint without gaining any advantage, it is quite possible that anybody could fabricate entries on some sheets on papers by incorporating some genuine entries also to give a colour of genuineness of such entries. 30. Reliance in this regard is bei....

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.... admitting and stating the facts by filling an affidavit, the same cannot be ignored. 35. The Worthy CIT(A) has dismissed the appeal of the Assessee by holding that the despite the additional evidence documents have been filed, the source of Rs. 16,03,000/- remains unexplained. But in this regard it is duly stated that the Assessee is not concerned with the source of Rs.16,03000/- as he was merely a dealer, earning a small amount of 1%. The AO must have enquired the matter from MP Shersingh or M/s Surinder Sat Agro Foods or Sh kaku Singh. But no such exercise was done during the assessment proceedings. 36. There was no onus upon the Assessee to even explain the said document. The Assessing Officer has never asked anything from party from whose premises from whom the said document was obtained. The Assessing Officer had even not enquired about the said document from M/s Surinder Sat Agro Foods and even not from Mr MP Sher Singh whose name is found at the top i.e parallel to the name of Sh Fauza Singh. 37. The Assessee cannot be penalised for an act which has not been done by the Assessee. So, we request the Hon'ble Bench to kindly delete the addition i....