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2022 (9) TMI 1440
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....he facts and circumstances of the 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 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 circums....
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....94/-, restricting cost of improvement at Rs. 12,77,776/-. 6. In appeal, the Ld. CIT(A) has confirmed the addition 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....
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....was right in concluding that the figures on the 'backside of Page no. 8' of the seized diary Annexure-2 represents the actual sale consideration of 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) ....
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....35 on the right hand side) was distributed as Rs. as Rs. 15 lacs each to Sh. Susheel Sabharwal & Sh. Rakesh Sabharwal and Rs. 5 lacs to Sh. Nitin. The subsequent 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 th....
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....een made on the basis of rough paper without considering the submission of the assessee; that the appellant has correctly declared the capital gains in its return of income filed and 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 rea....
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....learly visible from the registered sale deed dated 09.08.2012. Thus assessee cannot be called upon to explain the rough calculations of diary when the registered sale deed clearly shows that the same was registered for Rs.1,10,00,000/-. 2. That 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....
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....ed as conclusive proof of on money transaction by the assessee. Hence, in the background, presumption u/s 292C of the Act cannot be taken against the assessee. 9. Ld. AO has made identical addition in the hands of Sh. Susheel Sabharwal wherein on page 3 point 1 of the Assessment Order states 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 th....
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....n 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 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 ....
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.... law-Issue was whether the additions made to the income of the assessee for the said AYs u/s 2(22)(e) was not sustainable because no incriminating material concerning such additions were found during the course of search and further no assessments for such years were pending on the date of search-Held, present appeals concerned AYs, 2002-03, 2005-06 and 200607-On the date of the search 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 ass....
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....pital Gains on sale of property by restricting cost of improvement at Rs. 12 lacs. The Ld. CIT (A) has confirmed the said addition of Rs 74,57,194/- and Rs 60,07,194/- in the hands Rakesh Sabharwal and Sushil Sabharwal respectively besides cost of improvement of Rs. 12, 86,776/- in each hand by observing and interpreting coding and decoding of rough jotting as 'RK' stands for Rakesh Sabharwal and 'SK' stands for Sushil Sabharwal and doubted 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 ....
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....at the Sale Deed registered with Sub Registrar, Jalandhar-1 has been duly accepted by the AO, that assessee along with other co-owner sold property for sale consideration of Rs.1,10,00,000/- and that the authorities below had not raised any doubt on the sale consideration, viz-a-viz the circle rate or the value as per stamp registration authorities of the impugned property as what has been disclosed in the sale deed, was as per circle rates as 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 corrobor....
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....0786 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." 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 fo....
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....e case of "Krishna Kumar Mittal Vs. DCIT (Supra), we hold that in the absence of incriminating material, disallowance of Rs.12,77,786/- made on account of the cost of improvement expense is deleted. 23. The facts of the matter in I.T.A. No. 682/Asr/2019, in respect of the Assessment Year: 2013-14 are identical to the facts in I.T.A. No. 683/Asr/2019, in respect of the Assessment Year: 2013-14. Therefore, our observation and finding given in I.T.A. No. 683/Asr/2019, in respect of the Assessment Year: 2013-14 shall be applicable in mutatis mutandis to the matter in I.T.A. No. 682/Asr/2019, in respect of the Assessment Year: 2013-14. 24. In the backdrop of the aforesaid discussion, the subject appeals are disposed of in the terms indicated as above. Order pronounced in the open court on 16.09.2022. ============= Document 1 2. For reference, m Friday 434 OCTOBER 2009 Saturday 115=30 SK Nitin 5 434 5 2415* PABLO " 33 Porore) 382 oral JAY 29155) / 386 1650 OCTOBER 2009 850 3450 31,50 301711 2/87/2 164,849 OCTOBER 2009 OCTOBER 2009 8/6/09 39 Ser. 1/14/09 194 59472 7/10/89 296 18 500 1/10/0....