TaxTMI 
TaxTMI 
2024 (3) TMI 540
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....of the case, the CIT(A) erred by ignoring the fact that as per seized documents (copy of agreement) seized from the residence of Sh. Yashpal Mendiratta, the assessee has purchased the same property at and around the same period and thus, the CIT(A) was incorrect in considering the consideration of not sale Rs. 40,06,00,000/- as stated in the said incriminating document" 3. "On the facts and in the circumstances of the case, the CIT(A) failed to appreciate that the document based on which the addition was made was with respect to the house property purchased by the Appellant and was also found during the course of search in the case of Sh. Yashpal Mendiratta. The CIT(A) ought to have considered the circumstantial evidence." 4. "On the facts and in the circumstances of the case, the CIT(A) failed to appreciate that the assessee has not been able to adduce any evidence before the AO or even before the CIT(A) which could prove or justify the fall in the fair market value of the property by 40% within a short time span of 3-4 months. That on the facts and in the circumstances of the case, the CIT(A) failed to appreciate the fact that the house property with respect to ....
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....is bad in law. 5. That on the facts and circumstances of the case and in law CIT(A) has erred in not appreciating that no show cause notice proposing the addition under section 69 of the Act was issued by AO before passing the impugned assessment order. Hence, the addition made is illegal, bad in law and without jurisdiction. 6. That on the facts and circumstances of the case and in law, provisions of Section 69 are not applicable as the basic conditions/ingredients of the said section are not fulfilled. 7. That the alleged approval u/s 153D of the Act is illegal, bad in law and without any application of mind and the Assessment order passed without obtaining valid approval is liable to be quashed. 8. That the assessment order passed without valid approval U/s 153D of the Act is illegal, bad in law and without jurisdiction and the CIT(A) has erred in law and on facts in upholding the same. 9. That without prejudice, the AO has wrongly and illegally applied the provisions of Section 115BBE and charged higher rate of tax. The amendment made in Section 115BBE in December 2016 is also not applicable to this case. 10. That the eviden....
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.... the Agreement to Sale and the Sale Deed. The price of the property as mentioned in the Agreement to Sale is Rs. 40.06 crores whereas the price as per the sale deed is Rs. 16 crores only, for the same property at West Punjabi Bagh, New Delhi. The Assessing Officer held that agreement to sell mentions dealing in cash as well as cheque and the receipt of payments in cash are duly authenticated through signature on revenue stamp. Since the cheque payment and the cash payment have been made through the same document, therefore, the transaction amount of Rs. 40.06 crores as mentioned in the agreement to sell cannot be denied. The Assessing Officer held that when the cheque number along with the cheque amount mentioned in the Agreement to Sell is being corroborated with the bank statement of Shri Brij Kumar then the cash portion mentioned in the Agreement to Sell also get authenticated thereby giving credence to the fact that the purchase price as per the Agreement to Sell is Rs. 40.06 crores only and that the actual consideration which has got exchanged for purchase of the property was infact Rs. 40.06 crores as against Rs. 16 crores for which Sale Deed has been executed. 9. The Asse....
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....ee has contended that it has no relation with the document seized and that it is not aware how it came about at his residence. During the course of last hearing, with regard to the links that connect the assessee to the ATS, it was argued as under: 1. A copy of the Agreement to Sale was found and seized from the residential premises of the assessee. The ATS which was executed in July 2015, was seized after a gap of 3 years from the residential premises of the assessee. The contention of the assessee that it is not a party to the ATS and that it is not aware how it came to his premises is absurd considering the fact that it was seized from the assessee's premises after a gap of 3 years and after major renovation of the property for residential use by the assessee since its acquisition. Undoubtedly, the ATS has been kept/retained by the assessee at his premises even after 3 years. 2. Shri R. K. Chawla, who was one of the original buyers and signatory of the ATS was a Witness in the registered agreement for purchase of property by the assessee. As is evident from the dates of execution of ATS and the registered deed, there is a gap of only 6 mon....
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....deed of the property was executed within 6 months of the ATS and financial transactions took place with erstwhile buyers and they also participated in the registering of the property. The surrounding circumstances clearly establish the link of assessee to the ATS. It is humbly submitted that while purchasing a property, the usual market practice is to pay the consideration in cash and in cheque. The ratio may vary, but is usually around 60% cash and 40% cheque. In the present case, the transaction amount in ATS was Rs. 40 crore, whereas it was registered for Rs. 16 crore by the assessee. As can be seen, the cheque amount of Rs. 16 crore is approximately 40% of the entire transaction amount of Rs. 40 crore. The AO has rightly added this difference amount of Rs. 24 crore equally between the assessee and his wife. The ld. CIT(A) has deleted the addition by disregarding this connection and holding Shri R. K. Chawla to be a weak link. However, he has not factored the banking transactions of the assessee with Shri Brij Kumar. In view of the facts as mentioned above, it is humbly submitted that the mesesses are connected with the ATS, wherein the original buyer, Shri R. ....
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....ess to ATS. 7. That in the ATS, details of certain payments by way of cheques have been recorded. It is evident that there is no allegation of the AO that these cheques were issued by the Appellant or the spouse of the Appellant. 8. That the parties whose names are appearing as purported buyers in the purported incriminating document (i.e. Sh. Brij Kumar and Sh. R.K. Chawla) had refused to identify the purported agreement. 9. That the purported buyers in the ATS (i.e. Sh. Brij Kumar and Sh. R.K.Chawla) had expressly denied that they had never ever entered into any such purported agreement. They had denied having ever put their signature on the purported agreement. 10. That the one of party whose names is appearing as purported buyer in the ATS (i.e. Sh. Brij Kumar) had denied that the money paid by him to the purported seller was on account of sale consideration towards property. 11. That there is no evidence that the persons whose names have been stated as witnesses in the ATS were ever examined by the Investigation wing or by the AO and they have confirmed that signatures of this ATS by A,B,C,D were put in their presence. 12. ....
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....ompletely denied that they knew each other personally. c) That, both Sh. Brij Kumar and Sh. R.K. Chawla have specifically confirmed that had never entered into any transaction related to sale of property situated at 10/42, West Punjabi Bagh, New Delhi with Sh. Sunil Kumar and Sh. Praveen Kumar. d) That, both Sh. Brij Kumar and Sh. R.K. Chawla had specifically stated that they had never ever made any payments to Sh. Sunil Kumar and Sh. Praveen Kumar regarding the purchase of property situated at 10/42, Punjabi Bagh West, New Delhi. e) That, both Sh. Brij Kumar as well as Sh. R.K. Chawla had specifically stated that they had never ever signed the purported incriminating document (i.e. Pages 10 to 19 of Annexure A1 Party BW). f) That, Sh. Brij Kumar in response to question no. 34 of his statement and Sh. R.K. Chawla in response to question no. 14 of his statement, had specifically stated that he has nothing to do with the ATS. g) That, Sh. Brij Kumar in response to question no. 35 of his statement and Sh. R.K. Chawla in response to question no. 15 of his statement, had specifically stated that the signatures appearing on the ATS were not th....
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....Sh. Brij Kumar to Sh. Sunil Kumar and Sh. Praveen Kumar as loans (Rs.75lakhs each) and not as sale consideration for purchase of any property. In his case, it may be a called a self serving statement of Sh. Brij Kumar as these cheque nos. are mentioned in the ATS as well as in receipts seized. This can corroborate the fact that he may be hiding the facts about his signatures on ATS to avoid any tax implications in his case. It had been ascertained from the sellers that the amount of Rs 1.5 Cr taken by them from Sh. Brij Kumar had been repaid back on 10.12.2015 from their respective bank accounts, much before the execution of the sale deed of the appellant/his wife with these sellers. (iii) Sh. R. K. Chawla had claimed that it had not made any payment reflected in ATS. In the absence of any cheque payment, proportion to his proposed 25% share made by him in ATS, absence of his name as purchaser on stamp paper of ATS and the fact that the receipts issued by the proposed sellers do not bear his signatures, the cash portion paid by him cannot be established and only can be presumed provided the signature on ATS are proved to be of him. In these facts and discussion, i....
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....een held as under: "The very use of the word 'material' in section 143(3) clearly shows that the Assessing Officer is not fettered by the technical rules of evidence and the like and that he may act on material which may not, strictly speaking, be accepted as evidence in a court of law. Photostat copies of documents, in the absence of their original constitute material in the hands of the Assessing Officer if they are relevant for the purpose of assessment and if they are not successfully rebutted by the assessee." In view of the above decision wherein it is held that photocopies of documents do constitute "material", the plea of the appellant is rejected. However, the material is rebuttable and for use against the assessee it had to be corroborated with other evidences/statements. 11.2 It is observed the buyers C & D ( through statements) who are the parties to alleged agreement to sell, have denied the execution of agreement to sell. Sellers A & B have not been confronted on this ATS. The buyers C & D have denied to put the signatures on this agreement and the forensic of a photocopy of a document is not possible. Therefore only corroborative evidences ....
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....ion u/s 69 of the IT Act 1961. In the case of Maneka Gandhi vs. Union of India [on 25 January, 1978; 1978 AIR 597, 1978 SCR (2) 621], It was held by the Hon'ble Supreme Court as under: "It is well established that even where there is no specific provision in a statute or rules made thereunder for showing cause against action proposed to be taken against an individual, which affects the rights of that individual, the duty to give reasonable opportunity to be heard will be implied from the nature of the function to be performed by the authority which has the power to take punitive or damaging action." However, in the case of CIT vs Rajinder Nath [(1972) 85 ITR 296 Delhi], on the very issue of reference to a wrong section, the Hon'ble Delhi High Court had held as under: "It is a well settled principle of law that the exercise of a power would be referable to a jurisdiction which confers validity upon it and merely because the Income-tax Officer while proceeding to assess the assessed, has quoted a wrong section, the assessment cannot be rendered invalid". Thus, from the conspectus of the above facts and legal position, it is observed that th....
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....of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. (2) Where any books of account, other documents or assets have been delivered to the requisitioning officer in accordance with the provisions of section 132A, then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of subsection (1) of section 132A, had been found in the possession or control of that....
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....dingly - There was nothing on record to suggest that assessee had underestimated value of property and violated circle rate as prescribed by government - Even diary admittedly did not belong to assessee, and noting of same were also not in handwriting of assessee - Furthermore, entry recorded in diary qua amount of sale was not confirmed from buyers of property - Whether since Assessing Officer had drawn presumptions only on basis of notings of diary without making independent exercise; and entry found in diary was without any corroborative evidence and had no authenticity, no additions could be made in assessee's income - Held, yes [Paras 11 and 13]" The facts of the case of the appellant are much stronger. In the above case, the fact was that the diary was found from the house of the appellant maintained by her husband wherein the higher sales consideration than the amounts in the sale deed was mentioned. In the case of the appellant, there is no evidence found relating to appellant to suggest that the purchase consideration of the property was higher. The seized ATS does not relate to the transaction of the appellant. (ii) In the case of Dy. Cit- 2(1), Raip....
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....lue of Rs. 297.87 lacs was found. However, as per the registered sale deed these lands were purchased for Rs. 31 lakhs and Rs. 29 lakhs. The assessing officer made the addition on the basis of the agreement to sell on the ground that subsequently the transaction has actually took place, the parties to the agreement were same and even the cheque payment as per the agreement to sell was also reflected in the bank account of the assessee and the same was mentioned in the registered sale deed. The CIT(A) deleted all the addition except amount of Rs. 50 lacs which was mentioned in the agreement to sell as the cash amount paid by the assessee to the sellers. On further appeal to ITAT by the assessee as well as the AO the ITAT confirmed the deletion of addition by the CIT(A) by holding that there was no evidence that the assessee has actually paid the consideration of Rs. 297.87 lacs as mentioned in the agreement to sell. With regard to addition of Rs. 50 lacs confirmed by CIT(A), the ITAT set aside the issue to the file of the AO to verify the contention of the assessee that the agreement to sell was never acted upon and there was to exchange of money of Rs. 50 lacs between the assessee ....
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....nsactions entered into by the assessee with R and M for drawing a presumption in respect of the transfer of money but the Tribunal rightly held that those were independent transactions and had nothing to do with the memorandums of understanding. No substantial question of law arose." The facts of the case of the appellant are much stronger that the facts in the above case. In the aforesaid case, the MOU and registered sale deed was between the same parties i.e. the assessee and the sellers whereas in the present case of the appellant, there is no MOU or ATS between the appellant and the seller. In the aforesaid case, there was mention of cash payment by the assessee to the seller in the MOU, whereas in the present case of the appellant, there is no mention of any cash payment by the appellant. In the aforesaid case there was mention of cash payments by the assessee to the seller and in spite of this, it was held that once the buyers and sellers have denied about receipt of any such cash amount, there ought to have been corroborative evidence to show that there was in fact such a transfer of money. In the present case of the appellant, there is neither any admission by the ....
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....se of the assessee that the property was purchased at the rate of Rs. 8,000 per cent, had been accepted. Thus, the Tribunal allowed the appeal. The sale deed showed that the price was Rs. 8,000 per cent while the agreement showed that the parties agreed to purchase the property at Rs. 12,951 per cent. A receipt was also relied on in the form of a fetter to show that the property was agreed to be purchased at Rs. 12,951 per cent. When a document shows a fixed price, there would be a presumption that it is the correct price agreed upon by the parties. It is true that on the basis of the agreement, the sale deed is executed. But it is not necessary that the price stated in the agreement will be the price shown in the sale deed. Sometimes, it may be higher and sometimes it may be lower. Sometimes intentionally a lesser value may be shown in the sale deed. Even if it is assumed to be so, unless it is proved that the agreement was acted upon and unless the amount stated in the agreement was paid for the sale, none can come to the conclusion that the price mentioned in the sale deed is not correct. In the instant case, in the assessment of the purchaser, it was finally found that....
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....6] 65 taxmann.com 69 (Delhi), the Hon'ble Delhi High Court has held as under:- "14. At this stage it is necessary to refer to Section 69 of the Act, which reads as under:- "69. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year." 15. It is apparent from the plain language of Section 69 of the Act that in order for any addition to be made under Section 69 of the Act, the following conditions must be met: (a) It is established as a fact that the Assessee has made an investment; b) That the investment made is not recorded in the books of the Accounts, if so maintained; and (c) The Assessee offers no explanation as to the nature and source of investment made or the explanation offered by the Assessee is, in the....
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....f search and seizure is too general and vague. It does not indicate anything. When the provision requires fulfillment of certain prerequisite conditions before the assessee can be called upon to explain, the Tribunal has to record its finding on this issue in a specific manner, because the case of the assessee all along has been that in the first place the seized documents do not reflect any investments, in the second place, even if the entries could be treated as investments made by the assessee, it was further necessary to show that such investments have been made by the assessee in the financial year immediately preceding the assessment year and are not recorded in the books maintained by the assessee. The Tribunal's order does not record any finding. In fact, the Tribunal is hardly aware, it appears, as to what the requirements of section 69 are, and if it is aware, it has consciously chosen to ignore the same. It could not have done so in the face of the finding recorded by the Commissioner (Appeals) on this issue." The ratio of the aforesaid decision is squarely applicable to the facts of the present case of the appellant. The AO has not been able to establish th....
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....ve the amount recorded in the registered sale deed. Applying the ratio of the aforesaid decision on the present case of the appellant, the AO could not have drawn any adverse inference. (xii) The Hon'ble Supreme Court in the case of P.R. Metrani vs CIT (Appeal (civil) 5673-5675 of 2002 dated 15/11/2006) held as under: "A presumption is an inference of fact drawn from other known or proved facts. It is a rule of law under which courts are authorized to draw a particular inference from a particular fact. It is of three types, (i) "may presume", (ii) "shall presume" and (iii) "conclusive proof". "May presume" leaves it to the discretion of the Court to make the presumption according to the circumstances of the case. "Shall presume" leaves no option with the Court not to make the presumption. The Court is bound to take the fact as proved until evidence is given to disprove it. In this sense such presumption is also rebuttable. "Conclusive proof' gives an artificial probative effect by the law to certain facts. No evidence is allowed to be produced with a view to combating that effect. In this sense, this is irrebuttable presumption. The words in sub-s....
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....at such books or documents belong to such person. Undisputedly, such presumption is rebuttable." As per this judgment, the presumption u/s 292C and 132 are rebuttable. (xiv) The ITAT Mumbai Bench in the case of Sh. Pandoo P. Naig vs ACIT in ITA Nos. 7089 & 7364/Mum/2011 and ITA No. 6671 &. 6672/Mum/2012 (supra) vide order dated 24.06.2016 had held as under: "14. We find that the wording of the section 292C which supposes the presumption to be taken is qualified with the words 'may be', hence, it may or may not be presumed that such documents belong to the person searched. Firstly, the section uses the word "may presume' and not 'shall presume', hence the presumption of facts under section 292C is not a mandatory or compulsory presumption, but, a discretionary presumption; secondly, such a presumption is not a conclusive presumption but is a rebuttable presumption because it is a presumption of fact not a presumption of law." The presumption u/s 292C and 132 are not presumption of law, but facts and are rebuttable. (xv) In the case of Vijay Kumar Aggarwal vs. ACIT, Central Circle12, New Delhi [No.- ITA No. 1182/Del/201....
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....ibunal has rightly held that the registered document date 21-8-2006 under which the respondent purchased the above property showed that only Rs. 65.00 lakhs was paid to the vendor by the respondent; that there was no evidence to show that the respondent had paid Rs. 1.00 crore in cash also to the vendor; that no presumption of such payment of Rs. 1.00 crore in cash can be drawn on the basis of an entry found in a diary/loose sheet in the premises of C. Radha Krishna Kumar which is not in the respondent's handwriting and which did not contain the name of the respondent or any date of payment or the name of the person who made the payments. It rightly held that the Revenue failed to establish the nexus of the seized material to the respondent and had drawn inferences based on suspicion, conjectures and surmises which cannot take the place of proof. We also agree with the Tribunal that the assessing officer did not conduct any independent enquiry relating to the value of the property purchased and the burden of proving the actual consideration in the purchase of the property is on the Revenue and it had failed to discharge the said burden." The facts of the case ....
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....ed 28.9.2012 held that (a) Section 69B in terms requires the assessing officer to first prove that the assessee has actually expended an amount which he has not fully recorded in his books of account; (b) there has to be a finding that such amount was actually paid by the assessee over and above the declared consideration and the extra amount was not recorded in the assessees books of account; (c) the provisions of the Wealth Tax Act and Schedule III thereto cannot be imported into the provisions of Section 69B because the enquiry under the Wealth Tax Act is towards estimating the market value of the property which is different from the actual price paid for the property; (d) Section 69B does not permit an inference to be drawn from the circumstances surrounding the transaction that the purchaser of the property must have paid more than what was actually recorded in this books of account, because such an inference could be very subjective and could lead to the taxation of notional or fictitious income contrary to the strict provisions of Article 265 of the Constitution of India as held by the Supreme Court in the case of KP Verghese \/s. ITO (1981) 131 ITR 597." (xx) In th....
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....in question and since the Assessee had not signed the agreement, no liability can be attributed qua that agreement towards the Assessee since he is not party to the agreement till he had signed the same. The mere fact that this agreement was found in the possession of the Assessee does not lead us anywhere. We find no hesitation in holding that this addition of Rs. 17,00,892/- made by Assessing Officer is based on surmises and guess work and on this point case of Dhakeswari Cotton Mills Ltd v. Commissioner of Income Tax, (1954) 26 ITR 775, may be referred to..." (xxii) The Hon'ble Delhi High Court in the case of CIT vs. Ved Parkash Chaudhary reported in 305 ITR 245 held that even where a MOU was found then too in view of the denial of the parties to the MOU, it was held that, no addition is tenable in view of the nonavailability of the corroborative evidence. Infact, in the above case, it was held by Their Lordships as under: "12. In so far as the present case is concerned, the Assessee had stated that in fact there was no transfer of money between him and Ravi Talwar and MadhuTalwar. On the other hand, Ravi Talwar and Madhu Talwar had denied receipt ....
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....viso, therefore, introduces a fiction. What is not a profit in the previous year is deemed to be a profit in that year. The previous year is that year in which such moneys were received. The fiction is an indivisible one. It cannot be enlarged by importing another fiction, namely; that if an amount was receivable during the previous year it must be deemed to have been received during that year. So too, in the instant case, the fiction serves the purpose, if the said compensation was deemed to be the profits of the previous year or of the year in which it was received. This fiction cannot be enlarged by giving the expression "received" a technical meaning which it may bear in the mercantile system of accountancy." (xxv) In the case of ACIT vs. M/s Vatika Greenfield (P) Ltd. ITR 113 (AT) (Del), the court had held as under:- "21. A conjoint reading of the above decisions suggests that taxing statutes have to be interpreted strictly. In the deeming provision what is prescribed is to be deemed and deeming provision cannot be extended beyond the legislative scope. The presumption as envisaged in s. 292C is limited to the correctness of the documents found at th....
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....from the statement of Sh. Brij Kumar and evidences of return of cheque amounts mentioned in this ATS by sellers to him. (iii) The AO had initiated 153C proceedings in the case of sellers & buyers mentioned in ATS, thereby himself admitting that this agreement and the transactions mentioned therein belong/pertain to the persons mentioned in this ATS and not the appellant. In fact, on the basis of cash transactions reflected in the seized documents, the addition of Rs 6 Cr had been made by the AO, in the case of Sh. Brij Kumar (one of the buyers in ATS) in the, 153C order passed on 06.08.2021. (iv) This property was later registered at value of Rs. 16 crores in the name of the appellant and his wife and no evidence of any payment proposed or made over & above this amount had been brought on record by the AO. However, the AO had presumed on the basis of the value mentioned in the ATS that the actual value of the property could be at Rs. 40.06 crores. 16.2 As discussed above, the presumption u/s 292C is rebuttable and the appellant had rebutted the value of property mentioned in the photocopy of ATS of third parties with following the evidences: (i) ....
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....ATS and the value of property mentioned therein. (iv) The agreement to sell is a proposed contract between the parties and in this particular case; the appellant is not a party to this ATS. In the situation where the ATS has been denied by all the parties to it and the contents & purpose of this partly executed ATS is not fully established, the presumption u/s 292C, for the fair market value of this property at Rs. 40.06 crores, as mentioned in the ATS cannot be taken on the face value. There could be a case where buyers of ATS might have negotiated at higher value than the market value of the property or some issues might have cropped up which led to the cancellation of this agreement at mutually agreed terms between the buyers & sellers of this ATS and the penal terms of the ATS were not invoked. At the most, this information of value of Rs. 40.06 crore mentioned in the agreement could have been the starting point of Investigation to bring on record evidences of a different value than mentioned in the sale deed of the appellant. (v) The value mentioned in the registered sale deed of Rs. 16 crore with the Govt. Authorities, without any evidence on record, of any ....
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....nt had made investment during the above assessment year. Section 69 cannot be invoked on the basis of suspicion. It is for the AO to prove that assessee has made the payment over and above the amount mentioned in the purchase deed. b) That the said investment was not recorded in the books of accounts, if any, maintained by the Appellant for any source of income, & c) That the Appellant has either not offered any explanation as to the nature and source of investment OR the explanation offered by the Appellant is not satisfactory in the opinion of the AO. In the present case, the assessment order is completely silent as to how and in which manner the AO had invoked the provisions of Section 69 of the Act. There are no details in the assessment order of the unexplained investment added by the AO. No material has been brought on record, except for presuming probability that the appellant must have purchased the residential house property atleast for the amounts stated in the photocopy of the ATS. There is no other evidence on record that anything over and above, as mentioned in the registered sale deed, is paid by the appellant. (ix) From the above d....
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....n found during the search on the appellant. As held in the case of CIT, Delhi-V vs. Provestment Securities (P.) Ltd (Supra), that for invoking section 69, there is precondition to bring evidence that the appellant had made investment, which had not been recorded in the books. In the case of Dy. CIT-2(1), Raipur (Cg) vs Shri Chhaganlal Mundra,, Raipur (supra), the ITAT had held that "I find that before invoking the provisions of Section S9C, it has to be proved beyond all shadows of doubt that the expenditure has been incurred as the words "in the opinion of the Assessing Officer" do not precede the phrase "an assessee has incurred any expenditure". The opinion of the A.O is material and relevant only with regard to the explanation of the appellant and not with regard to the incurrence of the expenditure. In the instant case, the A.O has not come across even a single bill or voucher or delivery challan to even indicate that the appellant incurred any expenditure as alleged by the A.O. It is not the case of the A.O that the parties whose name have been found recorded in the diary have confirmed having received the payments from the appellant even remotely or indirectly". In the case ....
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....d investment etc., which cannot take the place of a finding of the AO towards unexplained investment." Similarly in the case of CIT vs. Kulwant Rai (Supra), the Jurisdictional Delhi High Court had held that " since the Assessee had not signed the agreement, no liability can be attributed qua that agreement towards the Assessee since he is not party to the agreement till he had signed the same. The mere fact that this agreement was found in the possession of the Assessee does not lead us anywhere. We find no hesitation in holding that this addition of Rs. 17,00,892/- made by Assessing Officer is based on surmises and guess work. The Hon'ble Supreme Court in Commissioner of Income tax v. Daulatram Rawatmull, (Supra), had held that even if circumstances raise a suspicion, suspicion cannot take the place of evidence. In view of these facts and position of law it is observed that the circumstantial evidences in the case of non executed ATS of third party, cannot take the place of evidence in the case of the appellant. The AO had not brought any evidence of any payment made by the appellant/his wife over & above the amount reflected in the sale deed of the appellant/wife. The pr....