TaxTMI 
TaxTMI 
TaxTMI 
2022 (9) TMI 1440
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....able 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 an addition of Rs 60,07,194/- as long term capital gain on account of sale of property on the basis of rough paper, without considering the submissions of the assessee. 4. 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 disallowing cost of improvement amounting to Rs.8,43,318/- and restricting the same to the extent of Rs.12,77,786/- on assumption and presumption basis and without any logical reasoning. 5. 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. Grounds of appeal in ITA No. 683/Asr/2019:- "1. That the order passed by the Hon'ble CIT(A) dated 05.09.2019 is against the law and facts of the case. 2. 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....
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.... by observing as under: "To decide the issue and to see whether the figures written in the diary were in coded form or not and whether any coding was involved in writing the figures in the diary, the seized document was called from the AO and examined. After examination of the seized document 'Annexure-2', the arguments of the AR are not found acceptable, firstly because the evidence relied upon by the AO are not just jotting on loose papers, in fact, these are part of a diary found & seized during the course, of search. To look at the fact whether any coding was involved in writing the figures in the diary referred by the AO, all the pages of the seized diary Annexure-2 were perused. It is observed that apart from the figures referred by the AO, there are other entries on this other pages i.e. 'page no. 8 (backside)' and also on 'page no. 9' of this seized diary 'Annexure-2' which indicates that coding was used in writing figures in this diary seized as 'Annexure-2'. For reference, the two pages are reproduced below:- The figures on this page is in fact the record of payments in which the amount to SK (i.e. Sh. Susheel Sabharwal), to RK (i.e. Sh. Rakesh Sabharwal)....
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.... House No. 434, New Jawahar Nagar, Jalandhar written in coded form and the figures written vertically on the right hand side of the page whose total is 241 are in fact the amounts in lacs i.e. 1,50,35,95,60 & 241 are to be read as representing 1 lac, 50 lacs, 35 lacs, 60 lacs & 241 lacs. This matches with the figures written vertically on the left and side, whose total also is the same (as the total of the figure on the right hand side i.e. 241 lacs) and the figures written as 115=50 SK, 115=50 RK, 10=00 Nitin and 241=00 are to be read as Rs. 115.50 lacs to Sh. Susheel Sabharwal, Rs. 115.50 to Sh. Rakesh Sabharwal, Rs. 10.00 lacs to Sh. Nitin and Rs. 241.00 lacs (as total sale consideration of the property) respectively. As already mentioned, in the middle, the distribution of amounts received on different occasion as mentioned vertically on the right hand side is given and the amounts received through cheque have been marked by writing CH above the figures of 25 & 30. In fact., the total of ½ + 25 (CH) + 15 + 45 + 30(CH) comes to 115=50 which are to be read as representing Rs. 0.5 lacs + Rs. 25 lacs cheque + Rs. 15 lacs + Rs. 45 lacs + 30 lacs cheque giving a total of Rs. 1....
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.... installment of Rs. 95 lacs received in cash (written as 95 on the right hand side) was also distributed among the three with Rs. 45 lacs each to Sh. Susheel Sabharwal & Sh. Rakesh Sabharwal, and Rs. 5 lacs to Sh. Nitin Sabharwal. The last installment of Rs. 60 lacs received through cheque (written on the right hand side as 60) was also distributed equally between Sh. Susheei Sabharwal and Sh. Rakesh Sabharwal and written as 30 CH in the middle (to be read as Rs. 30 lacs received in cheque by each). To sum-up, the figures on the right side, written vertically, represents the amount received on different occasions whose total is 241 (to be read as Rs. 241 lacs). In the middle, the distribution of the amounts received on different occasion (as written on the right side), among different persons is mentioned along with the mode of receipt for which CH is written for the amounts received through cheque and the amounts without anything written over them representing the cash. On the left hand side the total shares of the three persons is mentioned and the sum of the figures written vertically on the left side also comes to 241=00 (to be read as Rs. 241 lacs). Thus, the figures on the....
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....nd that the noting on the diary found and seized during the search relates to some petty expenses incurred by the assessee for renovation of House No. 434, 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 assessee has received any 'on-money' and that as per the registered deed, done with the Sub-Registrar, Jalandhar, it is clearly mentioned that the property was sold for Rs. 1,10,00,000/-. Thus the Ld. AR contended that the jotting in the diary by no stretch of imagination can be treated as conclusive proof of 'on-money' transactions by the assessee and hence presumption u/s 292C cannot be taken against the assessee. Similarly, for the disallowance of cost of improvement and restricting the same to the extent of Rs. 12,77,786/-, the AR submitted that the AO has drawn a wrong conclusion without any logical reasoning for the same. 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 ....
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....at from the jottings in the seized diary Ld. AO has inferred that that assessee received Rs.65,50,000/- (being his share) over and above the disclosed consideration but nothing has been brought on record to show that purchaser made any payment over and above the disclosed amount. Also nothing has been brought on record from the witnesses end that assessee received any on money. Addition is purely made on diary notings and no authenticated document/deed/agreement is brought on record to prove that assessee received on money. Moreover the Sale Deed is duly registered with Sub Registrar, Jalandhar-1 and Ld. AO duly accepted the Registered Sale Deed dated 09.08.2012 which clearly mentions that assessee along with other co-owner sold property for Rs.1,10,00,000/- and did not raise any doubt on the sale deed. Also Ld. AO wholly and solely relied on diary noting being reproduced on page 2 of assessment order. 3. That the present case is not the case where circle rate or the value as per stamp registration authorities of the impugned property is more than what has been disclosed. 4. That in the impugned diary notting there is name of Nitin Sabharwal also but he had nothing to do the ....
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....es that ".....the assessee submitted that the expense written on relevant page of diary relates to period 2008-09 whereas lot of entries in this diary are of later periods also............" , in this regard your attention is drawn to the relevant page where all the entries are of the period 2008-09 and none of the entries relates to the subsequent period. Ld. AO on assumption and presumption basis and on random basis is stating that it contains entries of the later period, but has not specifically stated that which entry is relating to the impugned assessment year. Even if the other pages of the diary contains some transactions of the later period then also this baseless conclusion cannot be drawn that the relevant page might also include transaction of the later period, more so when no dates of the later period are mentioned on the relevant page. Reliance is further placed on the following decisions: 1. The apex Court in Central Bureau of Investigation vs. V. C. Shukla [1998] 3 SCC 410 has laid down that :- "File containing loose sheets of papers are not 'book' and hence entries therein are not admissible under s. 34 of the Evidence Act, 1872." 2. CIT v/s Sh. P....
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....t 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 4. 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 any material on record to show that the figures related to sale or purchase of property-He made no enquiry from the purchaser-Said paper does not fall within the definition 'books of account' or document-Paper seized had no evidentiary value and it does not prove that consideration was understated-Same cannot form the basis for assessing the undisclosed income Addition on account of Cost of Improvement Sir, it is further s....
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....the said assessments already stood completed-Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed-Question framed by the Court was answered in favour of the assessee and against the Revenue-Revenue's appeal dismissed Smt. Sanjana Mittal Vs. DCIT ITA No. 487/Asr/2018, wherein the jurisdictional bench of Hon'ble ITAT, Amritsar held as under: ".......no incriminating material has been found, no assessment proceedings were pending on the date of search proceedings, therefore, it was held by the bench that in a case, where no incriminating material is found during course of search proceedings and the assessment proceedings remain un-abated as on the said date, no addition cane be made validly in the hands of assessee...." 2. That Ld. AO has drawn a baseless conclusion which bring bringing on record any logical reasoning for the same. 3. That expense to be incurred depends upon and also varies from person to person, how can the same be restricted to an extent incurred by some other person. 4. That assessee has provided the details of expenses incurred on the improvement of the property sold and th....
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....bted the real transaction as per registered deed as if in Indian style and other figures of rough papers as "On money" transaction in international style. However, no observation has been made as regards to the rough jotted figure mentioned 10 against Mr. Nitin and 115 against each RK and SK, making it to 240 and not 241 figure and thereafter interpreting same figures by the lower authorities in their own way presuming as international style to crores without bringing on record, the required corroborative documentary evidences. Thus, neither the AO nor the CIT(A) could establish the factual nexus of receipt of alleged disputed on money decoded by way of bringing relevant corroborative documentary evidences to establish the veracity of the receipt of "On money" if any and improvement cost qua the loose papers viz -a- viz rough diary allegedly seized, during the search from the assessee's premises. 10. From the registered sale deed, it is evident that the subject property situated at 434, New Jawahar Nagar, Jalandhar was sold for the total consideration of Rs.1,10,00,000/- on 09.08.2012. It is admitted fact on record that this property was inherited by the assessee along with brothe....
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....s on date of registration of the subject property. 13. It can be seen that there was a noting on the same paper of diary in name of Nitin Sabharwal who had had nothing to do with the property as the property belongs to Rakesh Sabharwal and Susheel Sabharwal, but the AO, states on presumption that Nitin Sabharwal may have been given gift of Rs.10,00,000/- by both Susheel Sabharwal and Rakesh Sabharwal without establishing the facts with support of relevant documentary evidence on record. Thus, without substantiating the content of the noting in the diary, the value adopted by way of decoding by the authorities below based on assumption, presumption and guess work is illegal and against the law. Since, the diary jottings have not been corroborated from any relevant material documentary evidence and hence, the jottings in the diary by no stretch of imagination can be accepted as an evidence or conclusive proof of 'on money' transaction by the assessee for the purpose of presumption u/s 292C of the Act against the assessee. 14. In case of "Central Bureau of Investigation vs. V. C. Shukla" (Supra), the Hon'ble Apex Court observed that "File containing loose sheets of papers are not &#....
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....ought any material on record to show that the figures related to sale or purchase of property-He made no enquiry from the purchaser-Said paper does not fall within the definition 'books of account' or document-Paper seized had no evidentiary value and it does not prove that consideration was understated-Same cannot form the basis for assessing the undisclosed income." 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 and conjectures without bringing any corroborative material evidence in support for such assumption of the decoded figures is not justified. Further, the AO had made no enquiry from the purchaser on the said rough noting of the paper of diary which does not fall within the definition of 'books of account' or document. Even if, a rough diary paper seized without being corroborated with relevant documentary evidence to the effect of understatement of the sale consideration had no evidentiary value and it would not prove that consideration was und....