TaxTMI 
TaxTMI 
2023 (3) TMI 1100
X X X X Extracts X X X X
X X X X Extracts X X X X
....n. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in law in deleting the addition of Rs. 1,53,83,960/- u/s 69B of the Income Tax Act on account of unaccounted/ undisclosed cash investment made & interest thereon in names of various parties. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in law in deleting the addition of Rs. 56,05,000/- u/s 69B of the Income Tax Act on account of unaccounted/ undisclosed investment made in cash in C.K. Greens, Burhanpur. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in law in deleting the addition of Rs. 1,07,000/- u/s 69A of the Income Tax Act on account of cash receipts, which is admitted by the assessee in the statements." 2. The assessee is a partner in the partnership firms, M/s Mayur Industries and M/s Motilal Gopikishan. The search and seizure operation under Section 132 of the Act was carried out at the business premises as well as residential premises of MG Oils Group of Khandwa including the assessee and other concerns/ business associates on 23.01.2018. The income-tax return of the assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ustify the source of loans advanced by him to few of the parties on temporary basis. The Ld. Counsel further submitted that interest income of Rs. 85,410/- earned from such advances was actually received on 27.04.2018 i.e. during the F.Y. 2018-19 and accordingly, the said amount of interest income was duly offered for tax in the income-tax return of the assessee for the A.Y. 2019- 20. Accordingly, the Ld. Counsel submitted that there was no justification for making addition to the total income of the assessee on account of alleged amount of cash loans given to various persons and interest calculated thereon. 6. On the other hand, the Ld. DR supported the findings of the Ld. AO. 7. We have heard the respective parties and perused the relevant material available on record. The Revenue is aggrieved with the findings of Ld. CIT(A) in deleting the addition of Rs. 1,88,800/- made on account of alleged amount of cash loans given to various persons and interest calculated thereon. We find that the Ld. CIT(A) while allowing the appeal preferred by the assessee observed as follows: "4.1.1. On perusal of the cash balance as available with the appellant and his other family memb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he findings of the Ld. CIT(A) and accordingly, the deletion of addition of Rs. 1,88,800/- made by the Ld. CIT(A) is just and proper so as to warrant no interference. Hence, Ground No. 1 of the appeal preferred by Revenue is found to be devoid of any merits and, thus, dismissed. Ground No. 2:- 10. The Revenue through this ground of appeal has challenged the deletion of addition of Rs. 1,53,83,960/- made by the Ld. AO on account of alleged amount of unaccounted cash investment made in the name of various parties and interest calculated thereon by treating it as unaccounted/ undisclosed investment under section 69B of the Act. 11. The brief fact leading to the case is this that the Ld. AO on perusal of BS- 01 and BS-02 found and seized during the course of search from the residential premises of the assessee observed that the registers, BS-01 and BS-02 were related to daily cash transactions which contained the details of investment made by the assessee and the nature of such investment was either giving loan to someone or making investment in any project. The Ld. AO thereafter tabulated the day-wise amount mentioned in the name of various parties in the register and treat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ith respect to stock of Toor dal, Moong Mogar, Urad Mogar, Rice and various other products related to the day-to-day business carried on by the firm, M/s Motilal Gopikishan. Hence, the Ld. Counsel vehemently argued that the Ld. AO adopted the approach of 'pick and choose' and picked only few of the transactions from these papers which contained the names of the parties and corresponding amounts and ignored the remaining transactions which contained details with respect to stock of Toor dal, Moong Mogar, Urad Mogar, Rice and various other products related to the day-to-day business carried on by the firm, M/s Motilal Gopikishan which proved that these papers and transactions contained therein actually pertained to the firm, M/s Motilal Gopikishan. The Ld. Counsel further submitted that nothing was found during the course of search to substantiate the fact that these transactions represented the amount actually advanced/ invested by the assessee and that the Ld. AO simply disbelieved the contentions of the assessee without bringing on record any evidence whatsoever to substantiate the fact that the amount mentioned in the seized documents BS-01 and BS-02 represented the amounts actua....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pacity. The assessing officer brushed aside the explanation of the appellant and treated the same as related to the appellant without assigning any reason which was not the correct approach of the assessing officer. The addition made by the assessing officer in the hand of the appellant when transactions recorded in the BS-01 and BS-02 relates to the firm M/s Motilal Gopikishan is therefore not justified more so when the nature of transactions were duly explained and also found recorded in the books of account of the firm. 4.4.5. The difference of the opening and closing balance of particular day is less than Rs 10,00,000/- and cash balance as per book of the firm M/s Motilal Gopikishan and in the book of the appellant was higher than the difference as calculated. Hence, on this count also the assessing officer was not justified in adding the same to the total income. As explained the said diary was for his follow up purposes and the amount as recorded in the said book was entered in the book of the firm M/s Motilal Gopikishan. On the basis of said diary no inference can be drawn, the same is similar to the dumb documents. Hon'ble Apex Court in the case of Common Cause (A ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s whom the alleged payments were made do not find a mention in full. They have been shown in abbreviated form. Only certain 'letters' have been written against their names which are within the knowledge of only the scribe of the said diaries as to what they stand for and whom they refer to." 19. With respect to evidentiary value of regular account book, this Court has laid down in V.C. Shukla, thus; "37. In Beni v. BisanDayal it was observed that entries in books of account are not by themselves sufficient to charge any person with liability, the reason being that a man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of the parties. There must be independent evidence of the transaction to which the entries relate and in absence of such evidence no relief can be given to the party who relies upon such entries to support his claim against another. In Hira Lal v. Ram Rakha the High Court, while negativing a contention that it having been proved that the books of account were regularly kept in the ordinary course of business and that, therefore, all entries therein should be considered to be relevant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year. In the present case, nothing valuable was found in possession of the appellant. The diary as referred by the assessing officer is a dumb document and therefore the assessing officer was not justified in making any addition to the total income of the appellant under section 69B of the Act. The appellant also succeeds in this ground also. The addition as made by the assessing officer amounting to Rs: 1,53,83,960/- under section 69B of the Act is not justified and hereby Deleted. Therefore, the appeal on this ground is Allowed. Since the additions as made by the assessing officer on account of undisclosed investment u/s 69B of the I.T. Act, 1961 have already been deleted on merit. Therefore, the charging of tax liability as per amended provisions of section 115BBE on these grounds is academic in nature and having no impact on the fate of these grounds." 19. The above find....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the total income of the assessee on account of amounts found noted in the registers, BS-01 and BS-02 against the names of various parties/ projects and notional interest computed thereon by treating it as unaccounted investment of the assessee. 20. We also find force in the alternative contention of the Ld. Counsel that daily balance in the registers found during the course of search and inventorized as BS-01 and BS-02 was either Rs. 10,00,000/- or less on each of these days' and therefore, the addition in dispute before us should have at most been Rs. 10,00,000/- and not Rs. 1,53,83,960/-. We have also gone through the summary chart containing the day-wise balances found noted in BS-01 and BS-02 along with the day-wise availability of cash in the books of M/s Motilal Gopikishan and in the books of the assessee on these days' which was placed on Page No. 225-232 of the Paper Book. On perusal of the summary chart annexed with the Paper Book, we find that the daily cash balance found noted in the register stood duly explained with the cumulative amount of cash balance available in the regular books of accounts of M/s Motilal Gopikishan and the assessee and accordingly, we are of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... any investment being made by the assessee in his name in C K Greens project in those papers. The Ld. Counsel further submitted that those papers merely contained reference of some amounts on the basis of which it was presumed by the Ld. AO that the assessee made investment in cash to retain plot in C K Greens colony. The Ld. Counsel submitted that the assessee during the course of assessment proceedings as well as first appellate proceedings categorically explained that neither he nor any of his family members made any investment towards purchase of plot in C K Greens project related to M/s Rudra Developers, Burhanpur and that the plots in C K Greens project were booked through his son, Shri Rahul Bansal but not actually by him. The Ld. Counsel also pointed out to the fact that the Ld. AO herself while passing the assessment order in the case of Shri Rahul Bansal made addition on account of alleged unaccounted cash investment made towards booking of plot situated at C K Greens, Burhanpur in the Assessment Year 2015- 16 and accordingly, there was no justification for taxing the amount of sale proceeds in the hands of the assessee even when cost of investment made in such plot had b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent Year 2018-19. Copy of show cause notice dated 13-11-2019 as issued during the course of search assessment proceedings have already been filed on page nos. 49-90 of paper book filed before the Hon'ble Bench. 3.2.2] The respondent categorically stated during the course of search assessment proceedings and also during the course of appellate proceedings that neither the respondent nor any of his family members made any investment towards purchase of plot in C K Greens project related to M/s Rudra Developers, Burhanpur. It was categorically explained that plots in C K Greens project were booked through the son of the respondent, Shri Rahul Bansal but not actually by him. The screenshot of the relevant extract of the submission filed during the course of search assessment proceedings is reproduced hereunder for ready reference of the Hon'ble Bench: 3.2.3] On perusal of Page No. 1 to 4 of LPS-11, it would be quite clear that there was no reference regarding booking of any plots in these papers. However, the respondent on the basis of loose papers found during the course of search in the case of Shri Rahul Bansal opined that these papers might be related to Plot No. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n received or paid. The screenshot of the relevant extract of the assessment order is also reproduced hereunder for ready reference of the Hon'ble Bench: 3.3.3] On perusal of the screenshot as reproduced hereinabove, it would be abundantly clear that the assessing officer made the addition merely on the basis of guess work and presumption since she herself was not sure as to whether the amount of Rs. 53.20 mentioned in the loose papers comprised of the amount received or paid by the respondent. Hence, it is beyond our understanding as to how the assessing officer made addition of Rs. 53,20,000/- to the total income of the respondent merely on the basis of a dumb document which contained no information whatsoever except for an amount of Rs. 53.20 which was mentioned on such loose paper. 3.3.4] Moreover, it also seems on perusal of the assessment order that the assessing officer was herself not sure as to whether the addition of Rs. 53,20,000/- as made to the total income of the respondent was on account of unaccounted investment in cash for booking of plot at C K Greens, Burhanpur or was on account of amount received on sale of such plot which in itself proves the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n account of alleged unaccounted investment made in cash in C K Greens, Burhanpur of Rs. 53,20,000/- and profit earned thereon on sale of such investment of Rs. 2,85,000/- was neither legal nor proper and Ld CIT(A) was correct in deleting the aforesaid addition as made to the total income of the respondent. 3.4.1] It is worth mentioning that C K Greens colony was developed by M/s Rudra Developers in which Smt. Richa Bansal, daughter-in-law of the respondent was one of the partners. The Plot No. 21 and Plot No. 23 in C K Greens colony were booked through the son of the respondent, Shri Rahul Bansal. It was for this reason that papers related to the said plots were found in possession of the respondent. However, as stated above, the neither the respondent nor any of his family members made any investment towards booking of plot at C K Greens, Burhanpur. 3.4.2] Detail of Plot No. 21 and Plot No. 23 sold in C K Greens project related to M/s Rudra Developers, Burhanpur is as under: S. No Description of plots Name of the seller Name of the buyer Date of sale Sales consideration [in Rs.] 1 Plot No. 21 M/s Rudra Developers Shri Swapnil ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct. Further, the assessing officer also added investment of Plot in C K Greens Burhanpur in the hands of Shri Rahul Bansal, in that case, how sale can be added in the hand of the appellant. The assessing officer herself was not clear in which file she wants to add, the investment on the basis of loose paper was added in the case of Shri Rahul Bansal and also added in the case of the appellant. The said approach of the assessing officer was not correct. It is the duty of the assessing officer to collect information from the owner M/s Rudra Developers about the investment by the appellant or any other members of the appellant. In absence of any corroborative evidences, the assessing officer was not justified in making addition. Therefore, the addition as made by the AO amounting to Rs 56,05,000/- is Deleted. Since the additions as made by the assessing officer on account of undisclosed investment u/s 69B of the I.T. Act, 1961 have already been deleted on merit. Therefore, the charging of tax liability as per amended provisions of section 115BBE on these grounds is academic in nature and having no impact on the fate of these grounds." 27. The above findings of the Ld. CIT(....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion on account of alleged unaccounted cash investment made towards booking of plot situated at C K Greens, Burhanpur in the Assessment Year 2015-16 and accordingly, we are of the opinion that there was no rationale for taxing the amount of sale proceeds in the hands of the assessee since cost of investment made in such plot had been taxed in the hands of Shri Rahul Bansal and as a corollary, the assessee could not have sold the plot which was never purchased by him. Looking to the totality of the facts involved in the present case, we are in agreement with the contentions of the Ld. Counsel that the assessee did not make any investment towards purchase of plot in C K Greens, Burhanpur and consequently, there arises no occasion for fallaciously presuming that the assessee might have sold the plot in C K Greens, Burhanpur and earned profit thereon. 29. Thus, considering the entire aspect of the matter, we are of the considered opinion that there was no justification for making addition of Rs. 56,05,000/- to the total income of the assessee on account of alleged investment made in cash in C K Greens, Burhanpur and profit calculated thereon on sale of such investment by treating it ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... been taxed as his income only when the sale deed would have been subsequently executed. Accordingly, the Ld. Counsel submitted that there was no justification for making addition to the total income of the assessee on account of alleged amount of cash receipt. 33. The Ld. DR supported the findings of the Ld. AO. 34. We have heard the respective parties and perused the relevant material available on record. The Revenue is aggrieved with the findings of Ld. CIT(A) in deleting the addition of Rs. 1,07,000/- made on account of alleged amount of cash receipt. We find that the Ld. CIT(A) while allowing the appeal preferred by the assessee observed as follows: "4.6. Ground No. 4 for A.Y. 2018-19:- Through this ground of appeal the appellant has challenged the addition made by the AO amounting to Rs: 1,07,000/- on account of unexplained/undisclosed investment u/s 69A of the I.T. Act, 1961 and charging of tax liability at higher rate as per amended provision of section 115BBE of the Act. During the course of appellate proceeding, it was explained by the appellant that the said amount of Rs 1,07,000/- was received against the sale of Plot in Phase II of Pranam City. It was ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... even if the amount of advance received by the assessee ought to have been taxed in his hands, such amount of advance could have been taxed only in the year in which sale registry was executed. However, the Ld. AO has failed to bring on record any material to show that actual sale of plot was made by the assessee and that too during the year under consideration. In absence of such findings, we are unable to the accept the contentions of the Ld. AO and accordingly, we are in agreement with the findings of the Ld. CIT(A) having no rationale for making addition to the total income of the assessee on account of alleged amount of cash receipt. The order of the Ld. CIT(A) is, therefore, upheld. This ground of appeal preferred by the Revenue is, thus, dismissed. 36. In the result, appeal filed by the Revenue is dismissed. This Order pronounced on 15/03/2023 ============= Document 1 Shree Rajendra Banasal Ganz Bazar, Khandwa ABSPB5125E Detail of Loose Paper found on Residential Premises :- Sr. No. туре 1 BS-01 Page No. Descriptions 1 TO 31 2 BS-02 1 TO 8 This are the summary of the day to day transactions related to the partne....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 17,66,334 4,14,055 16,60,791 6,22,442 22,83,233 18,69,178 16 23-04-2017 16,85,780 21,56,216 4,70,436 20,50,673 6,22,442 26,73,115 22,02,679 17 24-04-2017 16,86,227 20,87,355 4,01,128 19,81,812 6,22,442 26,04,254 22,03,126 18 25-04-2017 15,23,885 19,57,893 4,34,008 18,52,350 6,22,442 24,74,792 20,40,784 Document 3 Page Nos LPS-111 1 to 4 Detail related to the sale of Plot at Ck Greens through Shri Rajendra Bansal. Initially the plot was booked in the name of Ramesh Chand Goyal | Page Nos 35 & 36 of LPS-10]. The papers as found on Page Nos 1 to 3 of LPS 13 also relates to that Plot No 21. Since, the amount was deposited through my son. Hence, receipt was issued in his name. These plots were later on sold and profit of Rs 28,500/- was earned. [Page No 1 to 4 of LPS-11]. The said profit actually belonging to the owner of the plot who booked the said plot, Copy of registry of Plot Nos 21 and 23 at CK Greens are enclosed in support that these plots were not actually booked by either Shri Rajendra Kumar Bansal or his other family members. That part amount was only....