TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 239
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....ued by M/s Amrapali Sapphire Developers Pvt. Ltd. and Ultra Home Construction Pvt. LTd. were found. The above three PDCs are issued against the cash payment made by the assessee for acquiring different properties/spaces in the projects of M/s Amrapali Group. The sources of the investment are unexplained on the part of the assessee. (ii) It is established that the assessee had made payment to Amrapali Sapphire Pvt. Ltd., since the assessee had made payment of Rs. 10.00 lacs through cheques (bearing no. 185206 & 185205 dated 05.08.2014 of Rs. 5,00,000/- each) which are verifiable from the bank account of the assessee. (iii) The assessee has first paid towards her investment with M/s Amrapali Group which has not been disclosed to the extent of Rs. 2,45,00,000/-. The returns of investment of Rs. 2,55,00,000/- was received as PDCs state above. 3. That the order of the CIT(A) is perverse, erroneous and is not tenable on facts and in law. 4. That the grounds of appeal are without prejudice to each other. 5. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time hearing of the appeal." 2. Facts, in brief, are that in th....
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....under: "8.4 I have considered the facts and circumstances of the case, submission of the appellant and perused the AO's order. The A.O. has made the addition of Rs. 2,45,00,000/- solely on the basis of the three seized PDCs issued in the name of the appellant by two companies of the Amrapali Group. The addition has been made by the A.O. by rejecting the explanation furnished by the assessee and by drawing a presumption that the appellant must have made unaccounted investments with the Amrapali Group against which the three PDCs would have been issued by the two companies of the Amrapali Group in the name of the appellant. On the other hand, the appellant has furnished detailed explanation in respect of the three seized PDCs to explain how three seized PDCs do not relate to any unaccounted income/ investments made by her. The appellant has contended that the said explanation is substantiated by documentary evidences mainly in the form of MOU dated 08/07/2014 entered between PSK and UHCPL which was seized during the course of search action and payments made by PSK to UHCPL through banking channel in terms of the seized MOU and hence, the A.O. is not justified in rejecting the e....
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....her. The appellant has also substantiated the said explanation by way of documentary evidences in the form of MOU which was seized during search action and bank payments made by PSK as per the terms of the said MOU. The A.O. has rejected the said explanation furnished by the appellant and thereafter, she has drawn a presumption on the basis of the three seized PDCs without bringing any corroborative evidence on record in support of the presumption drawn by her. Now, the first issue which needs to be addressed is whether on the facts of the instant case, the A.O. was justified in rejecting the explanation furnished by the appellant in respect of the three seized PDCs even though the same was substantiated by documentary evidences. The second issue which needs to be addressed is that if it is found that the explanation furnished by the appellant is not acceptable, then is the A.O. justified in drawing the above presumption against the appellant solely on the basis of the three PDCs when the presumption drawn by the A.O. is not supported by any corroborative evidence. 8.6 The explanation offered by the appellant in respect of the PDC of Rs. 2 Crores issued by ASDPL marked as page no....
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....e PDC has been issued by ASDPL, even though the amount of Rs. 2 Crores was advanced by PSK to UHCPL in terms of the MOU, the appellant has explained that both the companies, i.e. UHCPL and ASDPL were belonging to the same 'Amrapali' Realty Group and this fact has also been stated in the MOU. The appellant has also furnished documentary evidences in the form of records downloaded from MCA portal to demonstrate that both these companies were established and run under the common leadership of the founder director of the Amrapali Group, Mr. Anil Kumar Sharma. The appellant has explained that at the relevant point of time, the Amrapali Group was facing liquidity issues and hence, they may have issued the PDC from ASDPL instead of UHCPL as part of their internal fund management. It has been explained that the assessee group was only concerned with getting into its custody a PDC of Rs. 2 Cr. from the Amrapali Group which would safeguard its interests. Thus, the fact that the PDC was issued from account of ASDPL instead of the account of UHCPL was not material to the assessee group since it had received the security as promised by the Amrapali Group/ UHCPL in the MOU. Similarly, wi....
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....ind considerable force in the above argument advanced by the Id. A.R. for the appellant. It is further observed that the period of repayment stated in the seized MOU also matches with the dates of amount advanced by PSK and date of the seized PDC. In my considered opinion, all the above facts lead to an inevitable conclusion that the explanation furnished by the appellant is substantiated by documentary evidences in the form of seized MOU and bank payments made by PSK and hence, the same cannot be rejected solely on the basis of presumptions and surmises. 8.6.3 With regards to the objection raised by the A.O. that the appellant has failed to furnish confirmation from the Amrapali Group in support of the above explanation, it is noticed that in the course of the asstt. proceedings, the appellant had requested the A.O. to verify the said facts from the records of Amrapali Group. The A.O. had issued notices u/s 133(6) and summons u/s 131 to ASDPL and UHCPL. However, there was no response from any of the two companies of the Amrapali Group against the same. Further, the appellant was also not able to furnish confirmation from the Amrapali Group in the course of the asstt. proceedings....
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....erits to be accepted. 8.6.5 In the above paragraph, Ihave already held that the A.O. is not justified in rejecting the explanation furnished by the appellant with regards to the seized PDC of Rs. 2 Crores. I further find that even otherwise, the presumption drawn by the A.O. on the basis of the above seized PDC is not supported by any corroborative evidence and it looks unwarranted and unrealistic on the facts of the case. The A.O. has presumed that the appellant must have made unaccounted investment of Rs. 2 Crores with the Amrapali Group i.e. ASDPL against which the said PDC may have been issued by ASDPL. I find force in the contention of the A.R. for the appellant that if the appellant would have made such huge unaccounted investment of Rs. 2 Crs. with ASDPL, then at least some evidence in the form of notings, jottings etc. would have been found in the course of extensive search proceedings conducted by the Dept. which covered the various residential as well as commercial premises of the appellant group in New Delhi as well as Bengaluru. However, it is noticed that not an iota of evidence has been found in the course of search to indicate that the appellant has made any unacco....
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..... is directed to delete the said addition. 9. With regards to the other limb of addition made on the basis of the two seized PDCs of Rs. 50 lacsdated 25/08/2015 and Rs. 5 lacsdated 23/08/2015 issued by UHCPL in the name of the assessee marked as seized page nos.101 & 102 of Annexure A3, the appellant has explained that these two PDCs totalling to Rs. 55 lacs were issued by UHCPL to the assessee group as a security against the proposed service charge of Rs. 55 lacs agreed to be paid by Amrapali Group to PSK Group against the arrangement of funds of Rs. 20 Crores to be made by PSK in pursuance of the seized MOU. In this regard, the appellant has explained that as per the seized MOU dated 08/07/2014 entered between PSK and UHCPL, it was agreed that PSK would arrange funds to the extent of Rs. 20 Crores for UHCPL. It has been submitted that out of the total funds of Rs. 20 Crs. promised to be raised as per the MOU, PSK had advanced total funds of Rs. 2 Crs. to UHCPL by way of four cheque nos.010315, 010316, 010317 & 010318, all dated 01.07.2014 of Rs. 50 lacs each. Thereafter the MOU dated 08.07.2014 was entered between the parties. In the said MOU, it was agreed that the final agree....
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....ment of service charge is not supported by any documentary evidence. In this respect, it is noticed that the seized MOU dated 08/07/2014 does not mention about any such service charge payable by UHCPL to PSK @ 2.75% on the total funds of Rs. 20 crores to be arranged by PSK. However, it is equally true that the said MOU dated 08/07/2014 appears to be a preliminary MOU entered at the time when only the amount of Rs. 2 crores out of the total amount of Rs. 20 crores was paid by PSK to UHCPL and in the seized MOU itself, it has been stated that the final agreement/ MOU would be entered only after the entire funds of Rs. 20 crores as agreed between the parties, would be arranged and advanced by PSK to UHCPL. Further, it is also a fact on record that huge financial crises was faced by UHCPL/ Amrapali Group in the subsequent period and thereafter, UHCPL has also been subjected to public insolvency process. It is also truism of fact that UHCPL has not responded to the notices u/s 133(6) and 131 issued by the A.O. although these notices were served on the said company. Further, considering the turmoil of Amrapali Group and the fact that the promoter directors of the said Group were also tak....
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....unted income of Rs. 55 lakhs and therefore, the presumption drawn by the A.O. also fails on this ground of probability. In view of the above facts, I am of the considered view that the presumption drawn by the A.O. by rejecting the explanation furnished by the appellant in respect of the seized PDCS of Rs. 50 lakhs and Rs. 5 lakhs marked as S.No.101 & 102 of Annex. A-3 is not supported by any corroborative material and hence, no addition can be made on the basis of surmises and conjectures on the basis of the above PDCs. 9.4 Further, it may be important to take note of the ratio laid down by Hon'ble Delhi High Court in the case of CIT v. Girish Chaudhary [296 ITR 619]. In the said case, it has been held that where the Revenue uses its longest arm of search available to the Revenue to unearth unaccounted money or evidence thereof, then it has to be proved strictly that undisclosed income assessed in the hands of the assessee is undisclosed income belonging to such assessee beyond a reasonable doubt. It has been held that no addition can be made in the hands of the assessee merely on the basis of the notings made on a loose paper seized during search action in the absence of an....