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2023 (4) TMI 498
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....he case and is not sustainable on various legal and factual grounds. 3. That having regard to the facts and circumstances of the case, Hon'ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs. 4,50,000/-, on account of unexplained expenditure in cash u/s 69C of the Act, on the renovation of her house no. 435, New Jawahar Nagar on the basis of rough page. (a) That having regard to the facts and circumstances of the case, Hon'ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition without considering the submission of assessee that the total of cash expenses of Rs. 36,000/- was incurred against renovation and not Rs. 36 Lakhs as alleged by the Ld. Assessing officer and had not used any codes i.e Rupee =Paise to mention the cash expenses. 4. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other." 3. Ground of appeal in ITA No. 628/Asr/2019 "1. That the order passed by the Hon'ble CIT(A) u/s 143(3) r.w.s 153A of the Act dated 29.07.2019....
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.... erred in law and on facts in confirming the action of Ld. AO in making addition without considering the submission of assessee that the total of cash expenses of Rs. 21,850/- was incurred against renovation and not Rs. 21,85,000/- Lakhs as alleged by the Ld. Assessing officer and had not used any codes i.e Rupee =Paise to mention the cash expenses. 4. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other." 5. There are identical grounds involving common issue except variation of figures in these three appeals challenging the impugned orders of the Ld CIT (A) in confirming the addition on account of unexplained expenditure in cash on the renovation of her house no. 435, New Jawahar Nagar. Therefore, we decided to hear these three appeals together and disposed of by this common order for brevity. We have chosen to take ITA No. 627/Asr/2019, Assessment Year: 2012-13 as a lead case for facts and discussion. 6. Briefly the facts as per record are that the assessee is an individual, who filed his original return declaring an income of Rs.4,44,040....
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....al) and Sh. Nitin Sabharwal have been mentioned as 115=50, 115=50 and 10=00 respectively out of total 241=00. On the right side, the figures represent payments on different occasions. 1 represents 34 each to SK & RK. 50 represent 25 each to SK & RK. 35 represent 15 each to SK & RK and 5 to Nitin. 95 represents, 45 each to SK & RK and 5 to Nitin. 60 represents, 30 each to SK & RK. These payments are partly through cheque for which 'CH' is written above the figures. In fact, the figures of 25 & 30 above which 'CH' is written, represents the amount of Rupees twenty five lacs (Rs. 25,00,000/-) and Rupees thirty lacs (Rs. 30,00,000/-) each received by Sh. Sushil Sabharwal & Sh. Rakesh Sabharwal through cheques as detailed below:- Cheque No. Amount Name 093989 dt. 03.05.2012 Rs. 25,00,000/- Sh. Sushil Sabharwal 093990 dt. 03.05.2012 Rs. 25,00,000/- Sh. Rakesh Sabharwal 093995 dt. 31.07.2012 Rs. 30,00,000/- Sh. Rakesh Sabharwal 093999 dt. 31.07.2012 Rs. 30,00,000/- Sh. Sushil Sabharwal Since, the payments made through cheque are verifiable from the records, it cannot be denied that the writings of above figures are in c....
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.... (one lacs) will be written as 1000=00 and the figure of Rs. 10,000 (ten thousand) will be written as 100=00 similarly figure of Rs. 36,00,000/- (thirty six lacs) will be written as 36000=00. Thus, it is concluded that the AO was right in his inference that the amounts recorded in seized annexure A-2 are written in coded form and the code to be applied to read the figures and to arrive the actual amount is to be inferred, as per the other noting, by putting '00' after the figure written in coded form. Hence, the figures written as '36000=00' is to be read as Rs. 36,00,000/-. The argument of the AR that the amount represents only Rs. 36000=00 relating to daily wages payments to Labour for renovation of house is not found acceptable because the pattern of payments also does not support the above contention since the labour is to be paid either on weekly or monthly basis which is not so in this case. Had it been the case of labour payment, then the figure for each month/week should have appeared on regular basis that also without the abnormal variations from month to month basis as is noted in the present case. In view of the discussion above, it is held that ....
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....uring the search relates to some petty expenses incurred by the assessee for renovation of House No. 435, New Jawahar Nagar, Jalandhar, during the period October, 2009. The AR repeatedly contended that these do not pertain to the year under consideration. The Ld. AR further argued that nothing has been brought on record to show that the amount was not actual but coded as alleged with corroborative evidence to multiply figure with 00. Thus the Ld. AR contended that the jotting in the diary by no stretch of imagination can be treated as conclusive proof of alleged unexplained expenditure by the assessee and hence presumption u/s 292C cannot be taken against the assessee. The AR argued that the expense cannot be restricted to an extent incurred by some other persons, on the basis of presumptions, conjectures & surmises only. In support, he filed a written brief note which reads as under: 1. That the addition made by Ld. AO is not based on corroborative evidence which could substantiate the claim of Ld. AO that assessee used any coding. 2. That Ld. AO on his own has deciphered the figures on the paper by adding '00' at his whim and caprice based on presumption and con....
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....g on record the material found as a result of search of show that there is an undisclosed income-AO treated Rs. 48 lakhs as assessee's undisclosed income on the basis of seizure of a document which showed certain unexplained entries totalling '48'-Not justified-There is no material on record to show as to an what basis the AO has reached the conclusion that the figure '48' is to be read as Rs. 48 lacs-Said document is a dumb document and leads to now here- Addition rightly deleted by the Tribunal-There is no error in the order of the Tribunal and it does not give rise to a question of law, much less a substantial question of law 3. Atul Kumar Jain V/s DCIT, Hon'ble Delhi ITAT, (1999) 64 TTJ 0786 in which it was held as under: Search and seizure-Block assessment-Computation of undisclosed income-Addition on the basis of uncorroborated chit of paper-AO has deciphered the figures on the paper by adding '00', '000' or '0000' at his whim and caprice based on presumption and conjectures without bringing any corroborative material evidence in support for adding the zeros-Not justified- He has not examined the assessee or the author of the said paper-AO has not brought an....
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....in certain terms the period of transactions, it was not possible to infer that they belonged to assessment year in question-It is also not possible to infer the quantum of income from the face of the document without there being any investigation-There is no evidence on record to show that the assessee or his LRs took any steps to recover the amounts or the AO has taxed the amounts as wealth of the assessee-Addition could not be sustained under s. 68 also because on the one hand, the AO had made addition under s. 69 and on the other, the document being only a loose paper could not be construed as 'book' within the meaning of s. 68-For the same reasons, additions of Rs. 20,000 and Rs. 90,000 on the basis of yet another dumb document were also uncalled for-Consequently, there is no question of charging of tax on notional interest on such amounts-However, in respect of document showing name of assessee, 50 items in different quantities at different rates purchased also showing expenditure quantified at Rs. 1,31,736 bearing date, lower authorities were justified in treating the amount as expenditure/investment and making addition in the absence of any evidence brought by the assessee t....
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....iguity, perversity or any other valid reason to interfere with conclusion and findings of CIT(A)-Revenue's Appeal dismissed 7. CIT V/s S.M. Agagrwal, Hon'ble Delhi High Court (2007) 293 ITR 0043 in which it was held as under: Appeal (High Court)-Substantial question of law-Block assessment-Both CIT(A) and Tribunal having deleted addition in block assessment by concurrent findings that document relied on by Revenue was dumb document, such findings were essentially of fact not giving rise to any substantial question of law-Appeal dismissed Sir, it is submitted that Ld. AO made similar addition on the basis of alleged coding in the case of husband of assessee Sh. Susheel Sabharwal and that casehas been decided inn favour of assessee by the Hon'ble ITAT Amritsar vide order dated 16.09.2022 in ITA no.68//ASR/2019, copy of order is enclosed herewith in which it was held as under: 17. In the present case, the addition was being made on the basis of uncorroborated rough noting of paper/diary. The Ld. CIT(A) has deciphered the figures on the paper by decoding in the form of Indian style and international style at his whim and caprice based on presumption ....
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....ding of rough jotting numeral to be multiplied by 00 by doubting and suspician the real transaction without support of any corroborative evidence on record to in rebuttal to the claim of the appellant assesse. 11. It is seen that the rough noting/jotting in the diary, found during search, appears to be pertains to estimation of expenses regarding house renovation. It is not deciphered that the figures/jotting in the alleged Diary were in multiple of 100 as presumed by the authorities below by way of multiplying with 00 (Double Zero) without support of corroborative evidence on records that the amounts were actually in lakhs as against thousands claimed by the appellant. 12. The Ld. AR argued that neither of the authorities below had drawn independent nor collective meaning of noting/entries written in the rough diary to supported the conclusion/findings. He contended that the contents of the diary thereof are not capable of describing the transactions the way A.O. and the Ld. CIT(A) have deciphered them. He further contended that since the diary jottings have not been corroborated with the any supporting material evidence on record from any other findings on alleged renovatio....
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....g as multiple of 100. Meaning thereby, the interpretation of the noting of entries/jotting in the diary by multiple of 100 has no basis therein and such an interpretation made on the basis of assumption, presumption and conjectures in absence of supporting corroborative evidence such application of money for alleged expenditure, renovation/construction material bills, payment of labor or even Department Valuation Officer report in order to estimate the expenditure is not tenable and cannot be approved. 15. From the above, it is evident that the addition was being made on the basis of uncorroborated rough noting in a diary. The Ld. CIT(A) has deciphered the figures by decoding in the form of Indian style and international style at his whim and caprice based on presumption and conjectures without bringing any corroborative material evidence in support for such assumption of the decoded figures to multiple of 00 (stands 100) is not justified. Further, the AO had made no enquiry regarding the alleged disputed expenditure based on rough blank figure/jotting in a diary that what are the renovation/construction material bills, payment of labor or even not referred Department Valuation ....
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....oned three appeals of the assessee are allowed. Order pronounced in the open court on 20.02.2023 ============= Document 1 Thursday 24 434, Sol CH -/+4+3 = 115.50.5k OCTOBER 2009. Saturday 434 -- Marco Hiliz Ex q OCTOBER 2009 16,50 1000 850 3450 31,50 30/7112 31,850 16489 196669 Friday •Sulle 179105 77681 9] 17/4/2 183 Germa 24/10/12 183 9acce 12/11458 374 29155 29/11/08 3861am 77/7/4 13 24.2533 37325.213 8/6/09 39: 1500o 7/10/19 394 50472 7/10/89 796 18 500 01/10/19 397 36.473- OCTOBER 2009 OCTOBER 2009 आयà¥à¤•à¥à¤¤ Incom At this page, the figures are written in two styles: Style No. 1 (अपील ox Appealsts 16,50 10,00 850 3450 \-> 300 31,50 LUDHIANA लà¥à¤§à¤¿à¤¯à¤¾à¤¨à¤¾ 15 Smt. Suman Sabharwal, New Jawahar Nagar, Jalanana A. No. 171, 172 & 174/IT/CIT (A)-5 /LDH/2018-19 A. Y. 2012-13, 2013-14 & 2014-15, u/ s 153A/143(3 ) Style No. 2. 30/1/12 31,850 2/8/12 164,819 196669 From the above, it is apparent that the n....