TaxTMI 
TaxTMI 
2024 (10) TMI 29
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....staying in the same building sharing the floors at RZ-54/4, First Floor, Gali No. 5, Raj Nagar-II, Palam Colony, New Delhi - 110 073. Both the assessee had filed their return of income on 28.3.2018 declaring income. Notice u/s. 143(2) was issued on 26.09.2018 and was served accordingly. Later on, notice u/s. 142(1) issued on 28.09.2018 and hearing was fixed for 08.10.2018. In compliance to the said notice, assessee did not furnish any submission. Another notice u/s. 142(1) was issued on 27.11.2018 requiring the assessee to furnish information required for completion of assessment. AO noted that during the search proceedings of the assessee, the following were found :- i) bunch of lose papers (numbered page 18, 19, 23, 29 of Annexure A-1); ii) cash amounting to Rs. 1,30,000/- was found at RZ 54/4 Raj Nagar- 2, Palam Colony, New Delhi - 110 073 and Rs. 14,31,500/- was found at F.59/3, Punjabi Bazaar, Kotla Mubarakpur, New Delhi; iii) Jewellery of Rs. 28,22,906/- from RZ 54/4, Raj Nagar-2, Palam Colony, New Delhi - 110 073; iv) Jewellery of Rs. 22,54,131/- from Bank Locker No. 87, State Bank of India, Palam Colony Branch, New Delhi - 110 077; ....
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.... at sl.no.(v) to (vii) in para 4 above and accordingly, allowed the part relief to Mr. Vijay Gupta. 6. Whereas in the case of Vikas Gupta, ld. CIT (A) sustained the addition made by the AO of Rs. 14,31,500/- made under section 69A of the Act relating to the cash found at the premises of Mr. Vijay Gupta. 7. Aggrieved, the assessee, (Vijay Gupta) is in appeal before us raising following grounds of appeal :- "1. The Ld. CIT(Appeals) has erred in law and on facts in confirming the arbitrary additions made by Assessing Officer on the basis of scribblings in loose/dumb papers, seized & marked as Annexure A-l page 1 to 47, which were not found from the appellant alleging it to be belonging to the appellant ignoring the well settled principle of law that addition can only be made in the hands of a person from whom the documents are seized. Therefore, the action of the Ld. CIT(Appeals) in confirming the additions is arbitrary, unjustified, illegal based upon mere conjecture & surmises and bad in law. 2. That the Ld. CIT(Appeals) erred in law and on facts in confirming the additions made on the basis of loose/dumb papers not found from the appellant ignoring the denia....
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.... 2&7 as Rs. 2 lacs and Rs. 7 lacs respectively) on the basis of loose papers seized & marked as Page-29 of Annexure-A-1, not found from the appellant alleging it to be unaccounted receipts from DULIP and Radheshyam which is arbitrary, unjustified and against the provisions of law. 8. Without prejudice to above, the Ld. CIT(Appeals) has erred in law and on facts in not fully considering the submissions made by the appellant from time to time during the course of hearing. 9. The Ld. CIT(Appeals) has erred in law and on facts in ignoring the principles laid down in the judgments of various High-Court(s) /Apex Court denying natural justice to the appellant, which is arbitrary, unjustified, invalid and bad in law. 10. That the above grounds of appeal are without prejudice to one another. 11. That the appellant prays for the liberty to raise such further grounds of appeal arising from the facts of the case, as may enable the appellant to seek justice and to assist Your Honors' in upholding the majesty of law. PRAYER It is prayed that all the additions confirmed by the Ld. Commissioner of Income Tax (Appeals) may kindly be deleted ....
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.... appellant, which is arbitrary, unjustified, invalid, and bad in law. 6. That the above grounds of appeal are without prejudice to one another. 7. That the appellant prays for the liberty to raise, such further grounds of appeal arising from the facts of the case, as may enable the appellant to seek justice and to assist Your Honors in upholding the majesty of law. PRAYER It is prayed that the addition on account of unexplained cash confirmed by the Ld. Commissioner of Income Tax (Appeals) may kindly be deleted, and full relief be allowed to the appellant. Basically challenged the addition on account of cash found during the search at the premises of his brother of Rs. 14,31,500/- u/s 69A of the Act. 9. At the time of hearing, ld. AR for the assessee made oral submissions as well as filed written submissions, which are reproduced below:- ITA No.248/Del/2023 in the case of Vijay Gupta "A. General Background: * Assessee, an individual, assisted his brother Vikas Gupta in supplying cigarettes to colony pan shops and roadside pan kiosks through latter's proprietary concern M/s Virender Cigarette Store (VCS). * ....
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....35 to 40 of appeal order) on account of jottings in loose papers by wrongly holding the family of his brother and that of assessee as 'a joint family' and by wrongly stating that even the jewellery of the whole family was kept together without any segregation and therefore by implication assumed that papers found from the ground floor of the house belonged to assessee (Para 8.3.4 on page 36 of Appeal Order). The documents held to be belonging to assessee, presumption of section 292C invoked, assessee held to be responsible for explaining documents (Para 8.4 page 36 & 37 of appeal order) Documents held to be not dumb (Para 8.5 page 36 of appeal order)) Duster car addition finding in para 8.8.5 page 39. Finding on other additions on the basis of loose papers in paras 8.9 on page 40. F. Written Submissions made: * Ld. CIT (A) invoked presumption of Section 292 C on the basis of following wrong and incorrect facts : i) The factum of separate residences of assessee and that of his brother Vikas Gupta is proved by maintenance of separate establishments including kitchens on ground floor and First floor of the house (finding of Ld. CIT ....
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....r. Bhardwaj but failed to produce books. * During search cash of Rs. 14.31 lakh was found from the brother of assessee living on first floor of the house whereas assessee lived on the ground floor as assessee had to proactively participate in the business of VCS due to ill health of Mr. Vikas Gupta. * Both assessee ( reply to question no.7 on page20 of PB) and his brother (reply to question no.6 on page 38 of PB) in their separately recorded statements u/s 132(4) stated the cash of Rs. 14.311akh found during the search belonged to business of VCS, though assessee estimated the cash amount to be approximately around Rs. 8 Lakh B. Material submitted before AO : * By reply dated 26.12.2018, assessee inter-alia submitted following documents: i) The income tax return filed in Form 3 along with Trading & Profit & Loss Account and Tax Audit Report ii) Copy of return of income along with P& L Account, Balance sheet & Tax Audit Report iii) Details of Month wise sales & purchases made during the year iv) Details of GP & NP rates for the year v) Details of unsecured loan taken from Induslnd Bank vi) Deta....
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....amount- once as sales and again as unexplained income and the addition therefore deserves to be deleted on this ground also. 10. On the other hand, Ld DR brought to our notice page 38 of the First Appellate Order of Vijay Gupta, wherein Ld CIT(A) has discussed the issue of New Car in the possession of the assessee. At the same time, Ld DR agreed that the RC is not registered in the name of the assessee. She submitted that the assessee was in complete possession of the vehicle and information written in the loose paper found during the search shows that it is belongs to the assessee. She relied on the findings of the lower authorities. 11. With regard to other additions made on the basis of loose papers found during the search, she submitted that the assessee fails to explain the details contained in the loose papers. These are financial transactions of the assessee and submitted that the additions sustained by the Ld CIT(A) are proper. Therefore, she relied on the findings of lower authorities. 12. With regard to the appeal filed by Mr. Vikas Gupta, she brought to our notice para 5.6 of Appellate Order and submitted that the cash found during the search belongs to the asse....
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....ses of Mr Vikas or it is related to business of VCS. Therefore, this addition also directed to deleted in the hands of Mr. Vijay. 14. At page 19, the information recorded are in thousands and in the page 23, the informations are jotted with certain amounts in numerical like 15, 3, 8 etc along with certain percentages. For this, AO has presumed that these are in lakhs. This is considered as undisclosed investments in the hands of Mr. Vijay but it is found at the residence place of Mr. Vikas. As discussed earlier, this could be transactions relating to proprietary concern VCS. The AO has wrongly considered as transactions belongs to Mr. Vijay. There is no means of income or business identified or carried by Mr.Vijay, it is not proper to presume that it is belongs to Mr. Vijay. Hence, this addition also directed to be deleted in the hands of Mr. Vijay. 15. Next addition relating to income earned of Rs. 9 lakhs, in our views this income also belongs to the business of Mr. Vikas and there is sufficient funds available and most of the transactions carried on by Mr. Vikas is in cash only, the payment by cash and sells the cigarettes by cash. Therefore, the information found in the l....