TaxTMI 
TaxTMI 
2023 (9) TMI 441
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....s appeal, the revenue has raised following grounds of appeal: "1. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in treating the MOU in question as dumb document and deleting the addition made of Rs.55,00,000/- on account of unexplained investment. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in treating the incriminating documents seized during the search action u/s. 132 of the Act as dumb document and deleting the addition made of Rs.80,00,000/- on account of unexplained cash receipts. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in treating the incriminating documents seized during the search action u/s. 132 of the Act as dumb documents and deleting the addition made of Rs.70,00,000/- on account of unexplained cash payments. 4. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in deleting the additions on the ground that the A.O. has not allowed the cross examination of the person from whom the incriminating documents was found and seized, ignoring the incriminating evidences on ....
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.... of the Act, proceeded for assessment. The Assessing Officer extracted the relevant clause on MOU and the statement of Shri Aagam V. Vadecha in the assessment order. As per MOU, the assessee was having 24% share in the land and Param Properties was having 4% share. The partner of Param Properties has stated that they made part payment of Rs. 25.00 lacs in cash for 4% of their share. The Assessing officer took his view that 4% share of property is valued at a minimum of Rs. 25.00 lacs then the total actual value of entire property is at least of Rs. 6.25 crores and share of investment in property proportionate to their share would be as under: S.No Name Share Amount Rs. i. Asheshbhai Nanalal Doshi 36% 22500000 ii. Mahendra C Mehta 36% 22500000 iii. Pravinbhai H Shah 24% 15000000 iv. Param Properties 4% 2500000 62500000 4. On the basis of aforesaid observation, the Assessing Officer issued show cause notice to the assessee as to why the transactions reflected in the seized document should not be treated as unexpl....
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....n in the name of assessee. The Assessing Officer made summary of such transaction in the following manner: SHRI ASHESH NANDLAL DOSHI PAYMENTS BY ASHESH N DOSHI RECEIPTS BY ASHESH N DOSHI F.Y. 2014-15 (A.Y. 2015-16) 14.05.14 1000000 FRN A-501 BS-28 3 07.02.15 7500000 FRN G- 901 BS-2 105 25.04.14 2000000 FRN A-501 BS-28 3 19.03.15 500000 FRN F- 901 BS-1 46 28.06.14 2000000 FRN A-501 BS-28 3 30.09.14 2000000 FRN A-501 BS-28 3 30.09.14 2000000 FRN A-501 BS-28 3 Total 7000000 8000000 Particular (Transaction related to Flat No.) Amount (In Rs.) Nature FRN A-501 7000000 Payment FRN G-901 7500000 Receipt FRN F-901 500000 Receipt 6. On the basis of aforesaid summary, the Assessing Officer was of the view that the seized document reveals that the assessee had entered into cash transaction related to purc....
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....essee. 7. The assessing officer further held that seized diary inventorised as BS- 28 in respect of FRN A-501 reflects the name of Ashokbhai Doshi in all probabilities is A.N. Doshi. Partner of the firm Param Property has advertently nor identified Ashok Doshi neither during search nor during assessment proceedings. Notice under Section 133(6) of the Act was issued to partner of Param Properties who neither responded nor filed any reply, hence addition of Rs. 70,00,000/- was made on protective basis in the hand of assessee against flat No. A-501 and on substantive basis in the hand of Param properties, in the assessment order completed under Section 143(3) r.w.s. 153C of the Act on 25/12/2017. 8. Aggrieved by the additions in the assessment order, the assessee filed appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee filed his detailed written submission on all three additions. On the addition of investment as per MOU of Rs. 55.00 lacs, the assessee stated that MOU was not signed by any of the parties. In absence of signature, no document can be relied upon especially when the MOU was seized from third party's premises. The documents without signature of any par....
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.... assessee nor signed by party specially found from the premises of unconnected person are in the nature of dumb document having no evidentiary value and cannot be a basis of addition of undisclosed income. 10. On the addition of Rs. 70.00 lacs on protective basis, the assessee submitted that diary inventorised as BS-28 contained clearly the name of Ashok Doshi. It contains some figure in coded language. As per Aagam Vadecha for flat No. A-501, even during recording the statement of Aagam Vadecha, he has not mentioned anything which can create any suspicion in the mind of Assessing Officer to treat the Ashok Doshi as Ashesh Doshi. Notice under Section 133(6) of the Act was issued to Param Properties for seeking clarification on AD or Ashok Doshi but no response was made by Param Properties. No summon under Section 131 of the Act was issued by assessing officer. The assessee submitted that the Assessing Officer made addition without any basis. Such loose sheet or paper cannot be used for making addition against the assessee. The assessee also took objection that no opportunity of cross examination was allowed to the assessee. 11. The ld. CIT(A) after considering the submission ....
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....of assessee, thus, cannot be used against the assessee for making addition. Moreover, another partner Pravin H. Shah stated that he has already received back his investment of Rs. 50.00 lacs. Such fact supports the case of assessee that the land was purchased by him for Rs. 5.72 crores and still in his name. The land is agricultural land and no development activities took place till date. The MOU which has been relied by Assessing officer for making addition is nothing but a dumb document so far as the assessee is concerned. The ld. CIT(A) by referring the decision of Hon'ble Apex Court in Common Cause and Others Vs UOI in Writ Petition Civil Appeal No. 505 of 2015 and V.C. Shukla Vs UOI 1998 (3) SCC 410 and Hon'ble Gujarat High Court in CIT Vs. Mauli Kumar K. Shah (2008) 307 ITR 137 (Guj) and PCIT Vs Ajay Sundarbhai Patel (2016) 69 taxmann.com 309 (Guj) held that the addition on the basis of dumb document is not justified. The assessee sought cross examination of Shri Aagam Vadecha which was not provided. The Hon'ble Supreme Court in Kishanchand Chellaram Vs CIT 125 ITR 713 held that in absence of cross examination of persons, whose statement was relied for making addition, cannot....
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....ties during assessment but he has not turned up. Telephonic conversation and storage record cannot be made basis for making addition unless details of talk in is not on record. There is no statement either during the search or post search enquiry or during the statement which can be proved that the transaction in these papers relates to or pertains to assessee. The ld. CIT(A) by referring the decision of Hon'ble Apex Court in V.C. Shukla Vs UOI (supra)and the decision of Hon'ble Gujarat High Court in CIT Vs. Shri Mauli Kumar K. Shah (supra) held that analysis of seized document was not properly made at the time of assessment. When the name of assessee is not clearly mentioned on the seized document, the addition in the hand of assessee is not justified. On the basis of aforesaid finding, the ld. CIT(A) deleted both the addition of Rs. 80.00 lacs on substantive basis and Rs. 70.00 lacs on protective basis. Aggrieved by the order of ld. CIT(A), the revenue has filed present appeal before this Tribunal. 13. We have heard the submissions of the learned Commissioner of Income Tax-Departmental Representative (ld. CIT-DR) for the revenue and Shri Saurabh Soparkar, learned Senior Advoca....
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....f Param Properties is corroborated with the various incriminating documents found during the course of search action which is sufficient to corroborate the evidences found during the course of search. The ld CIT-DR for the revenue submits that from the seized material it was clearly established that the assessee has made investment with Enn Enn Corporation, thus, the finding of ld CIT(A) are liable to be reversed and that the finding of assessing officer be restored. 15. On the other hand, the ld. Sr. Counsel for the assessee supported the order of ld. CIT(A). Learned Sr. Counsel for the assessee submits that during the course of search action on Param Properties, one MOU was found and seized. The said MOU was in respect of agricultural land situated at village-Jothan. The Assessing Officer has scanned part of said MOU in the assessment order. The Assessing Officer has not appreciated the fact that the said MOU does not contain the signature of assessee or any other alleged partner. The said MOU was recovered from the third party. Statement of Aagam Vadecha of Param Properties was recorded who has shown his ignorance about the execution of said MOU. Further the statement of Prav....
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..... The ld. Sr. Counsel for the assessee relied upon the decision of Hon'ble Jurisdictional High Court in PCIT Vs Mukesh Keshavlal Patel in Tax Appeal No. 838 and 840 of 2019 dated 25/02/2020 wherein the Hon'ble High Court has held that declaration made by third party before the Settlement Commission is not binding on the assessee. No addition can be made in absence of independent material. To support such contention, the ld. Sr. Counsel for the assessee relied upon the following decisions: (i) CIT Vs Dhiranlal Durlabhbhai Patel HUF, Tax Appeal No. 579 of 2009 dated 28/06/2010 (ii) Rajeev Tractors (P) Ltd. Vs ACIT (2022) 143 taxmann.com 330 (Ahmedabad Trib) (iii) Rajesh Babubhai Damania Vs ITO (2002) 122 Taxman 614 (Guj) and (iv) CIT Vs Mukesh Keshav Lal Patel ( Tax Appeal No. 838 & 840 of 2019 dated 25.02.2020. 17. We have considered the rival submissions of both the parties and with their active assistance has gone through the orders of lower authorities carefully. We have also deliberated on various case laws relied by learned Senior Counsel for the assessee. Ground No. 1 relates to the deleting the addition of Rs. 55.00 lacks. We find that the assessing off....
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....f Rs. 1.50 Crore, at the hand of Praveen Chandra Hiralal Shah, however, on appeal before ld CIT(A), the addition was deleted vide order dated 30.03.2021. And on further appeal by revenue before Tribunal the order of ld CIT(A) was upheld in IT(SS) No. 33/Srt/ 2021 dated 13/06/2022. 20. The ld CIT-DR for the revenue raised additional plea before us that Param Property, on whom search action was carried out has accepted all the transaction in the Petition filed before Income Tax Settlement Commission (ITSC) including on the transaction mentioned in the MOU found during search. We find that Hon'ble Gujarat High Court in PCIT Vs Mukesh Keshav Lal Patel (supra), while relying on the decision of Delhi High Court in CIT Vs Vineeta Gupta (2014) 46 taxmann.com 439 (Delhi) held that declaration made by another party before ITSC is not binding upon the assessee, therefore, no addition can be made in absence of independent material. Thus, in view of the afforesaid factual and legal discussions, we do not find any infirmity or illegality in the order passed by ld CIT(A), which we affirm with our aforesaid observation. In the result, ground No. 1 of the appeal of revenue is dismissed. 21. G....
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....ssessing officer. The ld CIT(A) on considering such contentions held that the documents relied by the Assessing Officer for making these additions were not found at the premises of assessee but found from the premises of Param Properties which is a third party. Similarly, the documents are not in the handwriting of assessee, nor signed by any one. The assessee claimed that in these papers, flat No. G-901 and F-901 have been shown in the name of A.N. Doshi and linking of assessee (Ashesh Nanalal Doshi) is not justified. For flat No. A-501, the seized material clearly contents the name of Ashokbhai Doshi and not the name of assessee, therefore, the addition in his name is not justified. During assessment notice under Section 133(6) was issued to Param Properties but he has not responded. The Assessing Officer relied upon the dumb document. The ld. CIT(A) was of the view that it is an undisputed fact that the documents relied upon for making additions were found from the third party. Such documents are not signed by any one, not in the writing of assessee. In the statement recorded under Section 132(4), Aagam Vadecha has not mentioned the name of assessee. Notice under Section 133(6) ....
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.... and needs no adjudication. 25. In the result, the appeal of revenue for AY 2015-16 in ITA No. 07/Srt/2021 is dismissed. ITA No. 32/Srt/2021 for AY 2016-17 by Revenue. 26. The revenue has raised following grounds of appeal; (1) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in treating the incriminating documents seized during the search action u/s. 132 of the Act as dumb document and deleting the addition made of Rs.1,24,72,295/- on account of unexplained cash receipts. (2) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in treating the incriminating documents seized during the search action u/s. 132 of the Act as dumb documents and deleting the addition made of Rs.1,20,00,000/- on account of unexplained cash payments. (3) On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in deleting the additions on the ground that the A.O. has not allowed the cross examination of the person from whom the incriminating documents was found and seized, ignoring the incriminating evidences on record and without affording an opportunity of cross exami....