AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (5) TMI 1635
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder section 250 of the Income Tax Act, 1961, in so far the same is against the appellant, is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case. 2. Ground Regarding whether the search conducted on the appellant u/s 132 is legal and valid: The appellant denies himself liable to be assessed under section 143(3) r.w.s 153A of the Act by the impugned assessment order upheld by the learned CIT(A) on the ground that: - i. The search initiated in the case of the appellant is illegal and ultra vires the provisions of section 132[1][a], [b] and [c] of the Act; ii. That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion and therefore, the action under section 132[2] is bad in law [224 ITR 19 (SC)] and consequent assessment under section 153A is null and void-ab-initio on the parity of the ratio of the decision of the Hon'ble Apex Court in the case of Ajith Jain, reported in 260 ITR 80. iii. The authorities below have not discharged the burden of proving that there is a valid search under section 132 [1] [a], [b] and [c] of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....omatic invocation of provisions of section 153A which is contrary to well settled principle of law that, it is only on the basis of incriminating material unearthed in the course of search that provisions of section 153A of the Act can be invoked. 4. Grounds regarding: Whether the CIT(A) officer has assumed valid jurisdiction in the absence of issue of notice u/s 129 of the Act. i. The order of assessment is bad in law and void-ab-initio for want of requisite jurisdiction on the facts and circumstances of the case. ii. The learned CIT(A) was precluded from making the assessment in as much as the mandatory notice u/s 129 of the Act was not served on the appellant and consequently there is no valid assumption of jurisdiction on the facts and circumstances of the case. iii. The learned CIT(A) is not justified in shifting the onus to the assessee to raise objections to jurisdiction even in cases where no notice u/s 129 of the Act is issued and effectively holding that there is no requirement of issuance of notice u/s 129 of the Act on the facts and circumstances of the case. 5. Grounds regarding: Whether the assessment order is valid in law ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ant's spouse during the period 01.06.2012 to 31.03.2013 on the facts and circumstances of the case. iii. The learned CIT(A) failed to appreciate that the Lok Ayukta returns filed earlier included the ancestral jewellery of the appellant's undivided family which was in the custody of the appellant and was declared in the said return out of abundant caution on the facts and circumstances of the case. iv. The learned CIT(A) is not justified in disregarding the revised returns filed before the Lok Ayukta which properly depicts the jewellery actually owned by the appellant on the facts and circumstances of the case. v. The learned CIT(A) failed appreciate that the proper explanation was tendered by the appellant for the apparent differences including the reconciliation of the quantum of jewellery as actually found in the course of search and consequently no additions are warranted on the facts and circumstances of the case. vi. Without prejudice, the learned CIT(A) ought to have appreciated that the very provisions of section 69A of the Act are not applicable on the facts and circumstances of the case. 8. Ground regarding: Whether the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d for the advancement of substantial cause of justice and equity. For Assessment Year 2014-15 1. The impugned order of the Commissioner of Income Tax (Appeals) - 15, Bangalore, [for short 'CIT(A)'] passed under section 250 of the Income Tax Act, 1961, in so far the same is against the appellant, is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case. 2. The appellant denies himself liable to be assessed to total income of Rs. 3,29,83,76,880/- as against the returned income of Rs. 8,76,880/- on the facts and circumstances of the case. 3. Ground Regarding whether the search conducted on the appellant u/s 132 is legal and valid: The appellant denies himself liable to be assessed under section 143(3) r.w.s 153A of the Act by the impugned assessment order upheld by the learned CIT(A) on the ground that: - i. The search initiated in the case of the appellant is illegal and ultra vires the provisions of section 132[1][a], [b] and [c] of the Act; ii. That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion....
X X X X Extracts X X X X
X X X X Extracts X X X X
....circumstances of the case. iv. The learned CIT(A) failed to appreciate that in the absence of recording of satisfaction for issue of notice under section 153A of the Act, the entire proceedings are bad in law and hence the assessment requires to be cancelled on the facts and circumstance of the case. v. The learned CIT(A) has proceeded on the premise that in every case of search u/s 132, there has to be automatic invocation of provisions of section 153A which is contrary to well settled principle of law that, it is only on the basis of incriminating material unearthed in the course of search that provisions of section 153A of the Act can be invoked. 5. Grounds regarding: Whether the CIT(A) officer has assumed valid jurisdiction in the absence of issue of notice u/s 129 of the Act. i. The order of assessment is bad in law and void-ab-initio for want of requisite jurisdiction on the facts and circumstances of the case. ii. The learned CIT(A) was precluded from making the assessment in as much as the mandatory notice u/s 129 of the Act was not served on the appellant and consequently there is no valid assumption of jurisdiction on the facts....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he case? i. The learned CIT(A) failed to appreciate that there are several evidence which fortify that the diary was planted and consequently any assessment made on such planted diary is not sustainable on the facts and circumstance of the case. ii. The learned CIT(A) failed to appreciate that there are several interpolations in the planted diary and consequently the assessment passed on such basis is bad in law. iii. The learned CIT(A) failed to appreciate that in the Panchanama the number of pages is stated to be 5 while three new pages has surfaced leading to irrefutable conclusion that there are even interpolations in the planted diary on the facts and circumstance of the case. iv. The learned CIT(A) failed to appreciate that the search official has placed identification marks and it is clear that some writing are there beneath the said identification mark and thus it is clear that there is interpolation even on this count in the planted diary on the facts and circumstance of the case. v. The learned CIT(A) failed to appreciate that the certified scanned copy of the pages which are part of the sworn statement did not contain page no ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ition made on the basis of alleged / disputed dairy is sustainable without there being a fair enquiry or investigation into the same? i. The learned CIT(A) failed to appreciate that the appellant has brought out a host of anomalies in the alleged / disputed diary which are prima facie visible. Further, the appellant has also demonstrated as to how the entries in the alleged diary evolved over a period even when in the custody of the income-tax department in the course of investigation proceedings and therefore, a fair investigation into the origin, veracity and reliability of the same ought to have been undertaken on the facts and circumstances of the case. ii. The learned CIT(A) failed to appreciate that the failure by the department to hold an enquiry into the authenticity of the planted diary leads to an inference that the revenue is not interested in the Truth of the matter and consequently no addition ought to have been made on the facts and circumstance of the case. iii. The learned CIT(A) failed to appreciate that the inaction of the income-tax department in conducting a fair enquiry into the authenticity of the seized diary is fatal to the assessm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lled seized material / disputed diary is in accordance with law? i. The learned CIT(A) is not justified in confirming the addition to the extent of Rs. 262,25,00,000/- out of the original addition in the assessment order of Rs. 329,75,00,000/- as undisclosed income of the appellant merely on the basis of loose notings or scribblings in the so-called seized incriminating material being the disputed diary on the facts and circumstances of the case. ii. The learned CIT(A) erred in not considering that the above addition of undisclosed income is based on material which is unconnected with the appellant and the origin of it is itself doubted and questioned by the appellant on the facts and circumstances of the case. iii. The learned CIT(A) further failed to take note that the additions made in the present case are not on the basis of books of account but on some random scribblings in loose papers and the alleged diary entries which can only be treated as "dumb documents" on the facts and circumstances of the case. iv. The authorities below ought to have realised that "dumb document" cannot be not admissible evidence in law, being documents, which are ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... failed to appreciate that there is nothing in the said disputed diaries which has any nexus with the nature of income generating activities of appellant so as to treat any supposed receipts or payments therein as belonging or pertaining to the appellant. Consequently, the same are not and also cannot be construed as income of the appellant on the facts and circumstances of the case. xi. The learned CIT(A) failed to take note of the well-settled legal position that a non-speaking document without any corroborative material, that is to say some other material or evidence on record in conjunction with which it may be treated as speaking, has to be disregarded in framing of the assessment orders. xii The learned CIT(A) erred in not taking note that the onus was on the department and the AO to demonstrate that the entries in the disputed diary or seized material have resulted in materialised transactions giving rise to income of the assessee on the facts and circumstances of the case. xiii. The learned CIT(A) is not justified in confirming the addition when the inference of income on the basis of the disputed diary in itself is glaringly a figment of imaginat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the material in question apart from not being real income of the appellant do not even constitute deemed income of the appellant under any of the deeming provisions contained in section 68, 69, 69A, 69B, 69C or 69D of the Act. xxi. The CIT(A) also grossly erred in not taking note of the fact that if these amounts were really the income of the appellant, there must have been assets to represent these corresponding incomes which ought to have been unearthed in the course of search proceedings. The very fact that there is nothing such unearthed assets only points to the truth that there are no such incomes in the first place. Thus, there is no corroboration of any undisclosed income even by way of any assets in the hands of the appellant on the facts and circumstances of the case. 12. Grounds regarding: Whether the Presumption u/s 292C of the Act is applicable in respect of the addition made. i. The authorities below erred in misconstruing the statutory presumption u/s 292C of the Act in making the addition in as much as though there is presumption as to belonging and correctness there is no presumption that the content therein indicates the income of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed for the advancement of substantial cause of justice and equity. For Assessment Year 2015-16 1. The impugned order of the Commissioner of Income Tax (Appeals) - 15, Bangalore, [for short 'CIT(A)'] passed under section 250 of the Income Tax Act, 1961, in so far the same is against the appellant, is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case. 2. The appellant denies himself liable to be assessed to total income of Rs. 3,29,83,76,880/- as against the returned income of Rs. 8,76,880/- on the facts and circumstances of the case. 3. Ground Regarding whether the search conducted on the appellant u/s 132 is legal and valid: The appellant denies himself liable to be assessed under section 143(3) r.w.s 153A of the Act by the impugned assessment order upheld by the learned CIT(A) on the ground that :- i. The search initiated in the case of the appellant is illegal and ultra vires the provisions of section 132[1][a], [b] and [c] of the Act; ii. That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... circumstances of the case. iv. The learned CIT(A) failed to appreciate that in the absence of recording of satisfaction for issue of notice under section 153A of the Act, the entire proceedings are bad in law and hence the assessment requires to be cancelled on the facts and circumstance of the case. v. The learned CIT(A) has proceeded on the premise that in every case of search u/s 132, there has to be automatic invocation of provisions of section 153A which is contrary to well settled principle of law that, it is only on the basis of incriminating material unearthed in the course of search that provisions of section 153A of the Act can be invoked. 5. Grounds regarding: Whether the CIT(A) officer has assumed valid jurisdiction in the absence of issue of notice u/s 129 of the Act. i. The order of assessment is bad in law and void-ab-initio for want of requisite jurisdiction on the facts and circumstances of the case. ii. The learned CIT(A) was precluded from making the assessment in as much as the mandatory notice u/s 129 of the Act was not served on the appellant and consequently there is no valid assumption of jurisdiction on the fact....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al may be allowed for the advancement of substantial cause of justice and equity. For Assessment Year 2016-17 1. The impugned order of the Commissioner of Income Tax (Appeals) - 15, Bangalore, [for short 'CIT(A)'] passed under section 250 of the Income Tax Act, 1961, in so far the same is against the appellant, is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case. 2. The appellant denies himself liable to be assessed to total income of Rs. 419,03,12,500/- as against the returned income of Rs. 20,86,630/- on the facts and circumstances of the case. 3. Ground Regarding whether the search conducted on the appellant u/s 132 is legal and valid: The appellant denies himself liable to be assessed under section 143 [3] r.w.s. 153A of the Act under the assessment order on the ground that: - i. The search initiated in the case of the appellant is illegal and ultra vires the provisions of section 132[1][a], [b] and [c] of the Act; ii. That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion and therefore, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o appreciate that the appellant has not been provided with the copy of the planted diary and consequently the assessment order suffers from the violation principles of natural justice. ii. The learned CIT(A) is not justified in making the additions without even affording the appellant opportunity of being heard in respect of the additions made in the assessment on the facts and circumstances of the case. iii. The learned CIT(A) failed to appreciate that mere issuance of a number of notices calling for information alone cannot be the yardstick of affording opportunities of being heard unless, the appellant is made known as to what is the real case that he is called upon to defend. 6. Grounds Regarding whether any addition can be made on the basis of a planted diary: Whether any addition can be made on the basis of a material which the appellant has contended has come under mysterious circumstance and thus can such material be the basis for assessment u/s 153A on the facts and circumstance of the case? i. The learned CIT(A) failed to appreciate that there are several evidence which fortify that the diary was planted and consequently any assessment ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arned CIT(A) erred in law and facts by not bringing record several evidence in favour of the appellant and this deliberate failure of the assessing officer to bring on record the results of the investigation made based on the planted diary and which appear to be in favour of the appellant establishes clear case of bias and on this count alone the assessment order requires to be annulled. xi. The learned CIT(A) ought to have held that there are interpolations in the diary on account of the contents found after the signature of the officer placing identifying marks at the time of search. xii. The learned CIT(A) ought to have held that there are material changes in the number of pages between the date of search as per Panchanama, and the statements recorded and further between the date of statements and the assessment order and hence the addition is one which is clearly on interpolations which requires to be cancelled on the facts and circumstance of the case. 7. Grounds regarding: Whether addition made on the basis of alleged / disputed dairy is sustainable without there being a fair enquiry or investigation into the same? viii. The learned CIT(A) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t taking cognizance of all the material gathered leading to clear fortification that the doctrine of bias has set in and consequently the order of assessment is bad and unsustainable in law on the facts and circumstance of the case. ii. The CIT(A) erred in not appreciating that the learned AO failed in his duty being a quasi-judicial authority to take into consideration all evidence that are in the possession of the department and such failure is fatal to the assessment and consequently the order of assessment requires to be cancelled /annulled on the facts and circumstance of the case. iii. The learned CIT(A) erred in not appreciating that the AO failed to bring on record all the evidence collected by the department which are favorable to the appellant and consequently the order of assessment suffers from the principle of doctrine of bias and thus the order has to be cancelled on the facts and circumstance of the case. 9. Ground Regarding whether the addition made on the basis of the so-called seized material is in accordance with law? i. The learned CIT(A) is not justified in confirming the addition to the extent of Rs. 135,50,00,000/- out of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iary entries in A/KG/3 is fallacious in as much as the material in A/KG/9 itself is a dumb document and is unintelligible and therefore, it cannot be anyone's case that one dumb document can be said to be corroborating another dumb document. viii. The learned CIT(A) failed to appreciate that addition made are unrealistic and further they do not constitute either real income or deemed income under any of the provisions of the Act on the facts and circumstances of the case. ix. The learned CIT(A) failed to take note that any kind of corroboration or correlation between the above two material is purely a case of unnatural force-fitting of some imaginary figures supposedly arrived at by the learned AO to the supposed admission of undisclosed income by the appellant in statement recorded u/s 132(4) with generous use of imagination even when they do not even have any semblance of relationship to each other on the facts and circumstances of the case. x. The learned CIT(A) also failed to appreciate that there is nothing in the said disputed diaries which has any nexus with the nature of income generating activities of appellant so as to treat any supposed rec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the appellant' and such receipt by the appellant is in the nature of 'income of the appellant' on the facts and circumstances of the case. xviii. The CIT(A) grossly erred in not considering that the corroborative evidence ought to have been in the form of recording the statements from the so-called parties with whom the alleged transactions are supposed to have been carried out more so when it is the claim of the department that it has deciphered the names of the parties in these alleged entries. xix. The CIT(A) failed to also consider that certain parties were summoned and statements were recorded from them by the department and it appears that none of them have vouched or confirmed any of the transactions therein and accordingly, the logical result would be to conclude that the alleged diary entries are not corroborated on the facts and circumstances of the case. xx. The CIT(A) ought to have appreciated that the incomes said to be attributable to the contents of the material in question apart from not being real income of the appellant do not even constitute deemed income of the appellant under any of the deeming provisions contained in sect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erred in confirming the additions on the basis of the disputed diary as income of the appellant despite the fact that the disputed diary in itself is only a dumb document. v. The learned CIT(A) also failed to appreciate that unless the nature of the receipts and payments are established and any nexus with the nature of income generating activities of appellant are demonstrated, mere random figures appearing in the disputed diary cannot be employed in quantification of any supposed income of the appellant. vi. The learned CIT(A) failed to take note that the alleged incomes added in the hands of the appellant do not, in fact, emanate from the said disputed diary, and the entire addition is contrary to material on record and consequently additions are entirely perverse on the facts and circumstances of the case. 12. Ground Regarding whether the addition made of Rs. 1,08,49,584/- as unexplained investment in jewellery is in accordance with law? i. The learned assessing officer is not justified in making the addition of Rs. 1,08,49,584/- as unexplained investment in jewellery by the appellant (Rs. 21,54,175/-) and the appellant's spouse (Rs. 86,95....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rned CIT(A) ought to have appreciated that the addition on protective basis could not have been made in an assessment made u/s 153A of the Act on the facts and circumstances of the case. 14. Ground regarding: Whether the manner of quantifying the above addition is in accordance with law? i. Without prejudice, the learned assessing officer grossly erred in quantifying the value of the jewellery in making the above addition on the facts and circumstances of the case. ii. The CIT(A) failed to appreciate that the department can only act upon a valuation report furnished by a Valuation Officer appointed under Section 12A of the Wealth Tax Act. iii. The CIT(A) also consequently failed to appreciate that any valuation adopted for the purposes of assessment has to be solely based on such a report. Consequently, additions which are made not based on a valid report are liable to be deleted on the facts and circumstances of the case. Reliance in this regard is placed on binding decision of the Jurisdictional Karnataka High Court in the case of V.Selvaraj vs DCIT in ITA No. 92/2018 dated 19.08.2021. iv. Without prejudice, the learned assessing offic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ght in allowing receipts made during the year amounting to Rs. 273 crores without any concrete evidence from the assessee to prove the creditworthiness and genuineness of these receipts. (III) Whether on the facts and circumstances of the case, the ld. CIT(A) was correct in deleting the protective assessment considering it as confirmed on the substantive addition made for the AY 2013-14. (IV) Whether on the facts and circumstances of the case, the Id. CIT(A) erred in directing the Assessing Officer to delete the protective assessment of Rs. 8,29,48,070/- made in the hands of the assessee's wife for AY 2016-17 while the assessee's gold jewellery was assessed substantively, whereas his wife's was only assessed protectively. (V) Whether on the facts and circumstances of the case, the ld. CIT(A) erred in directing the deletion of the protective assessment of Rs. 4,00,602/- made on silver jewellery belonging to the assessee's wife for the AY 2016-17 when the same was not made substantively for the AY 20 13-14. (VI) Whether on the facts and circumstances of the case, the id. CIT(A) was correct in deleting the protective assessment witho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tatutory notices were issued to the assessee. During the course of search proceedings, several incriminating documents were found and seized. Out of these seized materials marked as A/KG/3, A/KG/9 and A/KG/10 were considered significant for completing the assessment for the Assessment Years 2013-14 to 2016-17. On verification of seized material marked as A/KG/10 at Pages 12 to 21, a copy of the affidavit furnished along with nomination papers before the Returning Officer dated 01.06.2012 was verified, which is as under; - 7. On the basis of above, the AO treated the ownership of jewellery on the said date and observed that as per the affidavit filed, the assessee did not own any jewellery on 01.06.2012. The AO obtained information under section 133(6) of the Act from the Lokayukta about the assets and liabilities. From the information submitted by the Lokayukta, it was noticed that from period 01.04.2012 to 31.03.2013, the ownership of jewellery is placed at 1500 gms. approx. and inference was drawn that these jewelleries were acquired during the period 01.06.2012 to 31.03.2013 relevant to the Assessment Year 2013-14. Accordingly, the average rate as prescribed by the CBDT was a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... statement filed with the Lokayuktha, it was seen that the assessee had declared that he owned jewelry of 1500 gms and that his wife owned jewelry of 4500 gms as on 31/03/2013. 3. As a natural corollary, on comparison of these two statements, the AO inferred that the assessee and his wife had acquired jewelry of 1500 gms and 4150 gms respectively between 01/06/2012 and 31/03/2013 and brought the same to tax u/s 69A for the assessment year 2013-14. 4. The addition by way of unexplained jewelry u/s 69A said to be belonging to the assessee of Rs. 34,50,000/-, was made substantively in his hands and the addition by way of unexplained jewelry u/s 69A said to be belonging to his wife of Rs. 95,45,000/-, was made protectively in his hands. 5. Aggrieved by these additions, which were subsequently confirmed by the LD. CIT(A), the assessee is in appeal before the ITAT. 6. The Legal Grounds, which are directly applicable to the facts of this case and raised by the Assessee, are as under: A. The addition made is based on material which is not found and seized in the search u/s 132 and hence is bad in law for the reason that an addition can be made i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....utes other information in the possession of the AO, which is not material found and seized in a search. This document does not empower the AO to assume jurisdiction u/s 153A to assess the income for the A.Y. 2013-14. The AO would have been well within his rights to assume jurisdiction u/s 147 of the Act to reopen the assessment for the A.Y. 2013-14, if he relied upon the statements obtained from the Lokayuktha during assessment proceedings but not found in the search u/s 132. (g) The assessee relies upon the binding decision of the Hon'ble Supreme Court in the case of PCIT vs Abhisar Buildwell (P) Ltd 149 taxmann.com 399 (SC), wherein the Hon'ble Supreme Court have clearly laid down the law in the case of assessments u/s 153A for those assessment years which do not abate. The Hon'ble Supreme Court at para 11 held as follows: "However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ision of the coordinate bench of the ITAT Delhi in ITO v. M/s. Fussy Financial Services Pvt Ltd ITA No.4227/DEL/2014 dated 05.06.2017 [page nos. 329 to 337 of Case Laws Compilation], where it was held : "............In this case we find that AO has not made any substantive assessment. There may be substantive assessment without any protective assessment, but there cannot be any protective assessment without there being a substantive assessment." (b) The decision of the coordinate bench of the ITAT Mumbai in Suresh K Jajoo v. ACIT [2010] 39 SOT 514 (MUM.) [page nos. 338 to 363 of Case Laws Compliation] where it was held: "....Secondly, there is no substantive assessment already made treating the capital gain as short-term capital gain. Therefore, there can be no protective assessment." [Para 28] In view of the above judicial precedents, the protective addition of Rs. 95,45,000/- made in the hands of the assessee, in the absence of a substantive addition in the hands of his wife, is also bad in law and needs to be deleted. C. The Third issue is that the AO made additions to income u/s 69A of the Act of unexplained jewelry and the same is e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ll the four Assessment Years for the Assessment Years 2013-14 to 2016-17 which are as under: 1. AY 2013-14 - Ground 2 and AYs 2014-15, 2015-16 & 2016-17 - Ground 3: Search conducted on the appellant u/s 132 is not legal and valid: This ground raised by the appellant is mainly on account of the legality of the search conducted under section 132 of the Income Tax Act and hence appellant denies himself liable to be assessed under section 143 (3) r.w.s 153A of the Act. The appellant also under this ground had alleged that search was conducted not on the basis of any prior information or material but purely on the basis of suspicion. Comments : The above ground does not hold in view of the explanation to Section 132 (1) of the Income Tax Act which is reproduced below: "Explanation: For the removal of doubts it is here by declared that the reason to believe as recorded by the Income tax authority under this sub section shall not be disclosed to any person or any authority or the Appellate Tribunal." In view of the above explanation the appellant cannot raise the ground of the validity and legality of the search operation before the present Hon....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of India & Others (All) 176 ITR 261.Ld CIT(A) also in page 52 under paragraph 9 has decided on this ground as under "The first issue of challenge to the validity of these search cannot be adjudicated by this office. It is pertinent to take note of explanation to Section 132 (1) inserted by the Finance Act 2017 with retrospective effect from 01.04.1962 which clearly declares that the reason to believe which forms the basis for initiating the search under section 131(1) shall not be disclosed to any person or any authority or the Appellate Tribunal. Therefore, it is to be held that this office is not the appropriate forum for challenging the validity of search. Accordingly, the ground number 3 is dismissed." From the above-mentioned provisions of the act and decisions and the reason given by the learned CIT appeal, the above ground may kindly be dismissed. 2. AY 2013-14 - Ground 3 and AYs 2014-15 & 2015-16 - Ground 4: The assessee company raised the ground of the AO passing the order u/s 153A without jurisdiction and liable to be quashed. Comments: This ground also does not hold the ground since, when the search action conducted u/s 132 of the Act ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se of Shri Vijaybhai N Chandrani by the Hon'ble Supreme Court in 357 ITR 713 lays down a principle that any objection to assumption of jurisdiction shall be first placed before the Assessing Officer. Further the Hon'ble Delhi High Court has in the case of CIT v Safetag International P Ltd in 332 ITR 622 held that the assessee forfeits his right to object to the same in the event the objections are not placed before the Assessing Officer. Moreover, the relevant findings of Hon'ble High Court of Bombay in Bansilal B. Raisoni & Sons v/s ACIT, [2019] 101 taxmann.com 20 (Bom.), are reproduced as under: "7. We are also in agreement with the contention of the Counsel for the petitioner that the petitioner's objection to the jurisdiction of the Assessing Officer on the ground that if no search was initiated, notice under Section 153A of the Act could not have been issued, cannot be curtailed on the ground that such objection was raised beyond the period referred to in sub-section (3) of Section 124 of the Act. Section 124 of the Act pertains to jurisdiction of Assessing Officers. Sub-section (1) of Section 124 lays down territorial jurisdiction of the Asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d number 5. 4. AY 2013-14 - Ground 5 and AYs 2014-15 & 2015-16 - Ground 6: This ground is based on the assumption of the assessee company that the assessment order is passed without valid approval u/s 153D. Comments: Ld CIT(A) has given a factual finding that the necessary approval of Joint commissioner of Income Tax is taken for passing of the assessment order. Ld CIT(A) in his order vide page number 52 in paragraph 12 (AY 2014-15) has given the finding as follows: "12.0 The fourth issue pertains to the ground of the appellant that approval u/s 153D is absent. On a perusal of the remand report of the AO dated 15.05.2018, it is seen that copies of the approvals issued by the Joint Commissioner of Income Tax, Central Range 2, Bengaluru is issued. Having perused the same, I am not inclined to accept this ground of appeal of the appellant. Hence, the ground no. 6 is dismissed." Further, a perusal of the Assessment records also revealed that, the necessary approvals u/s 153D has been taken by the Assessing Officer before passing the assessment order. Considering the above factual finding of the CIT(A), this ground of the assessee company may kindly b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ke arrangements for taking the copies but has not responded till date. To put in perspective, the assessee had been diffident to the investigation and assessment process from the outset and had termed the same as harassment, filed petitions before the Hon'ble Finance Minister and even lodged a police complaint. No authorized representative has filed any power of attorney even though notices u/s 143(2) of the IT Act, 1961 and other notices were issued. Shri. Shantaram, Chartered Accountant had constantly appeared along with the assessee and assessee's wife and their son during the course of assessment proceedings, hence, stating that the assessee was not made known as to what was the real case that he is called upon to defend seems far from reality." Learned CIT appeal also has given a clear cut finding on this natural justice ground in his order in page 53 under paragraph 13(AY 2014-15) he has stated as under: "13. The fifth issue pertains to inadequate opportunity and the violation of principles of natural justice. The remand report of the AO dated 15.05.2018 has stated that notices dated 9.08.2017, 14.09.2017 and 27.11.2017 where issued in the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he search proceedings itself, which emboldens the stand of the department that the diary was not planted thereof. It is an unequivocal fact that the said material was found and seized in the residential premises of the assessee as evidenced by the seized material and the panchnama which are duly attested by independent witnesses besides the authorised officer. This being the case, the onus lies with the assessee to establish as to whom it belongs if not him. In addition to the same, claiming the diary being found during the course of search proceedings as mysterious circumstance are not based on facts and are on unfounded grounds. In connection with the same, attention is requested to section 292C of the IT Act, 1961, wherein it is clearly laid down that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search u/s 132 of the IT Act, 1961, it may, in any proceeding under this Act, be presumed to belong or belongs to such person. For sake of ready reference, the section is reproduced as under :. Presumption as to assets, books of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....refutable evidence." The Assessing Officer also in his comments relied on the decisions of Hon'ble High Court of Gujarat has in the cases of Hiren Vasantlal Shah v Asst Commissioner of Income tax held in 19 taxmann.com 241, Alliance Hotels v Asst Commissioner of Income tax -12(1) in 64 SOT 163 Mumbai Bench and Hassan Ali Khan 157 ITD 529Hon'ble ITAT Mumbai. It, therefore, becomes a settled principle even judicially that the onus of establishing that the contents of a seized document rests solely on the assessee which remains undercharged till date.Hence, Hon'ble Tribunal may kindly dismiss the ground. 7. AY 2014-15 - Ground 9 and AY 2016-17 - Ground 7: In this ground the appellant is raising the issue that the addition made on the basis of the diary is not sustainable without a fair enquiry or investigation into the same. Comments: This ground ought to be dismissed outrightly without going into detail as the decision of as to conducting an enquiry or not on the complaints of the appellant is purely an internal and administrative matter of the department. 8. AY 2014-15 - Grounds 10 to 13 and AY 2016-17 - Grounds 8 to 11: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....irst question he addressed is whether the two above mentioned evidence in the form of a spiral diary A/KG/3 and loose sheet marked as A/KG/9 can be relied upon for making the addition. Learn CIT(A) has given factual finding under this question that "The loose sheets seized as per annexure A/KG/9 is admittedly in the appellant's handwriting. There is no dispute regarding this. The appellant has failed to give any satisfactory replies in the statements recorded during the course of search regarding the entries. The seized material in A/KG/3 has been corroborated with A/KG/9 by the assessing officer in the assessment order. It is seen that many entries are cross verified between these two seized materials." The Ld CIT(A) has given a inferential conclusion based on the factual evidence as below: "Therefore, it emerges that the two different seized materials, one that is not accepted by the appellant and the other that is disputed corroborate with each other also. Since, it is not the case of the AO that the disputed diary is only in the handwriting of the appellant, which the appellant's admission for forensic examination of the disputed diary becomes....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctrum of the banking medium, thereby acting in cohort to evade the taxation. Hence, there is enough corroborative evidence brought on record to establish the unexplained payments made and unexplained receipts of sum and their utilization thereof. The provisions u/s 292C of the IT Act, 1961 are very clear in this regard along with the modus operandi, as discussed above further enforces the factum of correctness of the addition made during the assessment proceedings. Therefore, the primary premises of the case laws have been rebutted in the above analysis and therefore the contention of the appellant on the legal basis is rejected. Moreover, if it is deemed fit to delve into the legal position to determine a dumb document; is that a non-speaking document without any corroborative material, evidence/ finding on record from the search and seizure perspective, that the alleged documents have materialized into transactions; such non-speaking seized documents are referred to as dumb documents, which is not in the case of the assessee. Hence the claim of the assessee has no legs to stand on. In addition to the same, The Hon'ble Madras High Court in the case of CIT Vs ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a measure to arrive at income assessable. The Balance Sheet method does not factor in the expenditure that assessee incurs. In case one was to find credit-card expenses evidencing purchases of jewellery and club expenses, it cannot be contended that the Assessing Officer has to only consider the unaccounted jewellery as an asset for taxation while leaving the club expenses which also is met out of undisclosed sources of income. However, if only the invoices of jewellery are found, the Assessing Officer cannot presume that club expenses may also have been incurred. In the latter scenario the asset value is taxed but in the former case the total expenses and investment value is taxed. In a third scenario, the income received is quantified say contract receipts which was not disclosed to the Department, it cannot be said since the corresponding asset is not found, the receipts do not have an income element. In such a case if expenses are incurred to earn such income, then the same if legal and subject to provisions of the Act would be admissible. However, if the same is used for meeting personal expenses, then it becomes an application of funds which would ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0 and 51 of the order for AY 2013-14 also for confirming the addition. The assessing officer also in pages 2,3,4 &5 of the assessment order for AY 2013-14 and pages 43,44,55 and 56 of the assessment order AY 2016-17 has clearly established that the differential amount is unexplained income under section 69A of the Act. The Assessing Officer was called for to give his comments on this ground and the same are mentioned below: "Even after affording adequate opportunities, assessee could not explain the difference between the jewellery found at the premise of the assessee during the course of search action and Lokayukta return, as on 31.03.2016. Instead, the assessee chose to file a revised return before the Lokayukta to bring the jewellery on par with the finding of the search. Considering the fact that it is a statutory return which has been filed and had remained unreconciled for a period of more than one year despite being an issue under consideration, it renders the revised return as an afterthought to defeat the findings of the search. The provisions of section 69A allow for additions if the assessee is found to be the owner of unrecorded money....
X X X X Extracts X X X X
X X X X Extracts X X X X
....placed identification marks on writings of the diary leading to interpolation, Ground 6(v) that the certified scanned copy of the pages which are part of the sworn statement did not contain page no. 1A, 3A and 4A and the numbering is clear case of interpolation in the diary and Ground 6(ix) that no investigation has been carried out in finding the authenticity of the diary.) The comments of the DDIT(Inv.) vide his letter dated 09.10.2024, on these grounds raised by the appellant is attached with this submission. On a perusal of these comments, it is clear that all these grounds are mere allegations and are contrary to the facts and hence needs to be summarily dismissed. 13. The learned DR also referred to the statements recorded under section 131(1A) of the Act on 06.05.2016 where he strongly supported to the question No.30. The learned DR also relied on question and answer No.62 recorded on 18.04.2016 under section 131(1A) of the Act which is as under: Q. 62I am showing you the document seized at your residence during the course of search proceedings u/s. 132 of the I.T.Act, 1961 which is marked as A/KG/9 dated 15.3.2016 at Page No.3. Please explain the same. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2014 continuation of payments made to AICC. DGVS - 3 cr, 4 cr, 8 cr = Digvijay Singh is the Senior Congress Leader from Madhya Pradesh who is in-charge of Karnataka State Congress i.e he is the main representative of AICC to Karnataka who decides about the ministerial berths and other important decisions in the Karnataka State Congress Party. He has received Rs. 15 crores. H.Comm - 3.5 cr = This pertains to hawala commission paid to transporting from one point to another. In this regard Rs. 3.5 crores have been spent. A/KG/03 dated 15.03.2016 Page No. 2 Paid BBMP Elections = Amount paid for party candidates/workers during BBMP elections held during 2015 198 x 25 L - 49.5 cr = Totally 198 party candidates/workers were given Rs .25 lakhs per person which amounted to Rs. 49.5 crores. Media - 7 crores = An amount of Rs. 7 crores has been spent on media during the BBMP elections. Received = Amount received from different state level Congress Party members and Ministers and others for BBMP elections are as under :- KJG + MBP - 32 cr = K J George (MLA of Congress party and sitting Minister of Bengaluru City) and M B Prasanna (Manager/assistant of KJG) have given R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s received the following amounts starting from September 2015 to January 2016 :- September 2015 - Rs. 15 crores October 2015 - Rs. 35 crores November 2015 - Rs. 15 crores December 2015 - Rs. 15 crores January 2016 - Rs. 15 crores AP - 5cr - Oct, 3 cr - Jan = Ahmed Patel who is a very senior Congress MP and is in the core committee of the AICC has received Rs. 8 crores during October 2015 and January 2016. DGS - 6 cr - Nov, 5 cr - Jan = Digvijay Singh is the Senior Congress Leader from Madhya Pradesh who is in-charge of Karnataka State Congress i.e he is the main representative of AICC to Karnataka who decides about the ministerial berths and other important decisions in the Karnataka State Congress Party. He has received Rs. 11 crores in November 2015 and January 2016. HRB - 50 cr = H R Bharadwaj is a senior Congress leader who was also Governor of Karnataka from June 2009 to June 2014 has received Rs. 50 crores A/KG/03 dated 15.03.2016 Page No. 4A RG Office - 8 cr = Rahul Gandhi office. An amount of Rs. 8 crore might have been paid to some person working in Rahul Gandhi office. M Vora (Bihar) - 25 cr = Motilal Vohra is the treasurer of Indian Natio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he penal provisions which have been clearly explained to you in the above statement at Q.No. 3 and 25. This would be the final opportunity to give correct response to Q.No. 29 and 30. Ans. Sir, the answers given to the Q.No. 29 and 30 of this statement are completely correct and I would not like to change any of my answers. 15. On the other hand, the learned DR relied on the Order of the lower authorities and submitted that the documents found during the course of search and seizure in the premises of the assessee which was marked as A/KG/10 is corroborated with the information received under section 133(6) from the Lokayukta by the AO and he observed that there is difference in the jewellery declared. Therefore, the information received from the Lokayukta is part and parcel of the incriminating documents found during the course of search. The assessee has not explained the apparent discrepancies in his own statements on affidavit before the statutory authorities at two different points of time. Therefore, the AO has rightly made addition under section 69A of the Act. He further submitted that assessee is a Member of Legislative Counsel. The declaration given to Lokayuk....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tted that while filing annual statement of assets, the jewellery belonged to his mother and family was included. In the month of January, 2016, his brothers and sisters mutually agreed and received jewellery of 1228.84 gms. Further, on going through the statement recorded under section 131 of the Act dated 18.12.2017 as per question-and-answer Nos.41 and 42, it was stated that reconciliation statement shall be filed and later the assessee has filed reconciliation statement. During the course of search and seizure action under section 132 of the Act, we noted that there was no jewellery seized. Only the AO has made addition on the basis of an affidavit found during the search filed with the Returning Officer marked as A/KG/10 and information received under section 133(6) of the Act from Lokayukta which cannot be treated as incriminating material found during the course of search. The law is now settled by the Supreme Court that for making addition under section 153A of the Act for the unabated / completed assessment, the addition can be made only on the basis of seized material unearthed during the course of search proceedings. The information received from Lokayukta was not found d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ring the search. The affidavit admittedly showed that as on 01.06.2012, the assessee did not own any jewellery and that his wife owned about 350 grms of jewellery. The information contained in the document by itself cannot be considered as incriminating. It will assume the character of being incriminating in nature only when it is compared to any other material found and seized during the search and which prima facie disproved the content of this affidavit filed before the Returning Officer. The AO has compared the contents of these affidavits failed before the Returning Officer with a declaration of assets as on 31.03.2013 as declared by the assessee before the Lokayukta in which the assessee has declared that he owns 1500 gms of jewellery and his wife owns 4500 gms of jewellery as on 31.03.2013. This declaration of assets made before the Lokayukta was obtained by the AO from the Office of the Lokayukta under section 133(6) of the Act during the assessment proceedings subsequently and the same was not found and seized in the search proceedings under section 132 of the Act. This declaration of assets as on 31.03.2013 filed before the Lokayukta not being found during the search part....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the above Order passed under section 153A r.w.s. 143(3) of the Act. 24. Briefly stated, the facts of the case are that the assessee filled return of income under section 139(1) for the following three Assessment Years as under: Sl. No. Assessment Years Date of filing of return under section 139(1) of the Act Income declared (in Rs.) 1. 2014-15 06.02.2015 8,00,900/- 2. 2015-16 11.02.2016 10,30,780/- 3. 2016-17 04.08.2016 20,96,630/- 25. There was search conducted in the case of the assessee from 15.03.2016 to 17.03.2016 at his residence and on 15.03.2016 at Room No. 306, Hotel CIDADE-DE- GOA. During the course of search several incriminating documents were found and seized and marked as A/KG/31, A/KG/9 and A/KG/10. During the course of assessment proceedings, the assessment for all the years were based on the above three documents found and seized. During the course of search proceedings, a diary was found where various figures and some narrations were noted. 26. The issue involved in these appeals are very same and the addition made by the AO is only based on the material marked as A/KG/3 AND A/KG/9 found during the course ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0. The above total was not drawn in the material found. On aggregating the sum, the same totals to Rs.135 Crores. Thus, the AO observed that:- (a) the two seized materials are interconnected (b) transactions are financial in nature (c) the amounts are in crores and further made comparison of page 9 of A/KG/9 with page 3 and 3A of A/KG/3 and drew a table as under: A/KG/3 A/KG/3 A/KG/9 A/KG/9 Steel Bridge 65 65.5 MBP 15 37 HCM 13 10 KJG 30 10 MBP DKS 12 12.5 135 135 31. The AO also comes to a conclusion that on comparison of the figures placed at the first and the last are tallied except for a difference of 0.50 in cash. Thus, it became clear that A/KG/9 had an estimate of receipt of 135 against which a working had been made with the actual 135 received is recorded in A/KG/3. Thus, the evidence found and seized from the residence of the assessee which is marked as A/KG/3 was assumed as credibly significant for making addition. The transactions for previous year ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the evidence would suffice especially in the light of the fact that some of the entries match with the entries contained in the other material marked as A/KG/9 as brought out hereinabove. This being the case, the onus lies with the assessee to establish as to whom it belongs to if not to him and how is it that these entries match with the entries made by him in A/KG/9. The consistent mode of denial is merely an act of non-cooperation which can only lead to adverse inference being drawn. 33. The AO after examining the entire documents marked as A/KG/3 and A/KG/9 where receipts and payments are listed, the receipts have not been evidently explained relating to any source nor it has been incontrovertibly being established as belonging to another person making the applicability of provisions of section 132(4A) and section 292C of the Act inevitable and it was put to the assessee on 30.01.2017. Question No.34 was relied on by the AO on 25.05.2016. Further a proposal placed before the assessee in the light of provisions of section 292C is also placed hereunder: Q 41 As per A/KG/03 in which a detailed description and conclusion was drawn at Q No. 30, there are quite a few rece....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ven though notice under section 143(2) of the Act and other notices were issued. The assessee appeared and he contested the admission of Rs.15 Crores on the ground that (a) no undisclosed assets / investments have been found (b) the statement given was under coercion and it was filed on 22.08.2017 in writing. 38. The various statements recorded on these materials from 15.03.2016 are listed hereunder: a) Statement recorded u/s 132(4) on 15-3-2016 b) Statement recorded u/s 132(4) on 16-3-2016 c) Statement recorded u/s 132(4) on 17-3-2016 d) Statement recorded u/s 131(1A) on 18-04-2016 e) Statement recorded u/s 131[1A) on 25-04-2016 f) Statement recorded u/s 131(1A) on 26-04-2016 g) Statement recorded u/s 132(4) on 14-05-2016 h) Statement recorded u/s 131(1A) on 25-05-2016 i) Statement recorded u/s 131 on 30-01-2017 j) Statement recorded u/s 131 on 11-02-2017 k) Statement recorded u/s 131 on 10-11-2017 l) Statement recorded u/s 131 on 08-12-2017 m) Statement recorded u/s 131 on 18-12-2017 39. Thus, after giving various opportunities listed above, the assessee fail....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the assessee, the entire sum of Rs. 408.50 was treated as income and applied section 69C of the Act and provisions of Section 115BBE of the Act was applied. 46. Further, during the course of search under section 132 of the Act, the gold jewellery and silver were found and inventorized. In the course of proceedings, the assessee's wife filed letter dated 27.09.2017 accompanied by affidavit of the assessee, Shri. Ashwin Raj, Smt. Hamsaraj and Smt. Chitra, sister-in-law of assessee. As per these affidavits, the jewellery found during the course of search belonging to each of the persons is tabulated as follows: Assessee Gold Jewellery in gms Silverware in Kgs Shri K Govindaraj 632.250 Nil Smt Hamsaraj 845.90 2.50 Smt Chitra 70.94 Nil 47. The AO observed from the statement before the Lokayukta that the position as on 31.03.2016 was as under: Assessee Gold Jewellery Silver Shri K Govindaraj 1500 5 Kg Smt Hamsaraj 4500 10.73 Kg 48. From the affidavit filed and other documents available, the AO calculated the value in the hands of the assessee and treated as unexplained investments under section 69A of the Act as un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3 and A/KG/9 and termed them to be incriminating in nature. The document identified as A/KG/9 (extracted at pg. 2 of assessment order for AY 2014-15) appears to be loose notings and scribblings which admittedly is in the handwriting of the appellant. The document identified as A/KG/3 (extracted at pg. 8 onwards of assessment order for AY 2014-15) appears to be a diary which does not belong to him and it is an admitted by the Revenue that the entries therein are not written by the appellant. 1. The AO has made an addition of Rs. 329,75,00,000/- based on the entries found in this diary, substantively in the A.Y. 2014-15 and protectively in the A.Y. 2015-16, based on the very same entries as the AO is not sure about the Assessment Year, to which these entries relate to. 2. Apart from the above addition of Rs. 329,75,000/- the AO has made an addition of Rs. 408,50,00,000/- in the A.Y 2016-17. 3. The AO has also made an addition of Rs. 1,08,49,584/- by way of unexplained jewellery, u/s 69A of the Act for the A.Y. 2016-17. 4. The submissions of the Appellant on the issue of additions made on the basis of entries in a Diary found during the search are a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the course of business and the entries therein are correct. It is further incumbent upon the person relying upon those entries to prove that they were in accordance with facts. Para 38 in Page 44 of the compilation The evidentiary value of entries relevant under Section 34 was also considered in Hiralal Mahabir Pershad, (supra) I. D. Dua, J. (as he then was) speaking for the Court observed that such entries though relevant were only corroborative evidence and it is to be shown further by some independent evidence that the entries represent honest and real transactions and that monies were paid in accordance with those entries." In Para 39, in Page 44 of the compilation, the Hon'ble Supreme Court observes as under: "A conspectus of the above decisions make it evident that even correct and authentic entries in books of accounts, cannot without independent evidence of their trustworthiness, fix a liability upon a person." When applied to the fact of the case of the present appellant it is clear that the Diary, even if considered as being part of books of account maintained by the appellant, the entries therein cannot be relied upon to fast....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n law, the AO has no jurisdiction to even issue a notice u/s 153A under these facts and circumstance, let alone make an addition to income based on such diary entries which have no corroborative evidence. This decision is also squarely applicable to the facts of the appellant's case. (iv) Sri Tarun Kumar Goyal v. ACIT ITA No.456/Hyd/20 dt. 20.04.2021:[page nos. 91-127 of Case Laws Compilation] Para 13 in Page 125 of the compilation "Lastly comes the crucial issue as to whether the impugned seized material / 'Excel' sheet (not mentioning the assessees' names) forms a dumb document or not. We make it clear that the department has failed to corroborate the impugned seized document indicating assessee's alleged on money payment over and above the sale price itself. All it has done is to rely on their father's name only. It is nowhere clear as to whether it is an alleged document forming part of the books of account maintained in the regular course of business either by the vendor or vendee side. All it contains therefore is rough notings and jottings only. This tribunal co-ordinate bench's decision Nishan Constructions Vs. ACIT ITA No.1502/Ahd/2015; ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....disclosed transactions of the assessee to make an addition basing the decision on such loose sheets trough it is a dumb document and not to be considered while making such assessment in search cases as they are not preliminary evidence to prove that any unaccounted transactions has been carried on by the assessee." Para 13.18 in Page 166 of the compilation "In the case of CIT v. M/S Khosla Ice and General Mills 2013 (1) TMI 451 - Punjab and Haryana High Court, the Hon'ble Court held that assessee rightly contended that the impugned document was a non-speaking document in as much as it does not contain any intelligible narration in support of the inference drawn by the Assessing Officer that it reflected unaccounted transactions carried out by the assessee outside the regular books of account. When a dumb document, is to be made the basis to fasten tax liability on the assessee, the burden is on the AO to establish with corroborative evidence that the nature of entries contained therein reflect income and also that such income was in the control of the assessee. Thus, AO has to establish, with necessary corroborative evidence, that various entries contained in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ded statements from the persons who are alleged to have paid monies to the appellant, confirming the said payments and also purpose of these payments. In these circumstances, the additions made by relying on diary entries need to be deleted. (vi) Sri Devaraj Urs Educational Trust for Backward Classes (Regd.) v. ACIT in ITA Nos.500 to 506/Bang/2020 dt. 16.08.2021: Para 240 of the decision "In our opinion, the unsubstantiated and uncorroborated seized material alone cannot be considered as conclusive evidence to frame these assessments. The revenue authorities cannot draw inference on the basis of suspicion, conjectures and surmises. Suspicion, however strong, cannot take place the material in place of evidence of the AO. The AO should act in a judicial manner, proceed in a judicial spirit and come to the judicial conclusions. The AO is required to act fairly as a reasonable person, not arbitrarily and capriciously. The AO without examining the students / parents who have paid the capitation fees cannot come to the conclusion that the assessee has received unaccounted capitation fees. The basis for donation is notebook / loose sheet. This notebook or loose ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... In this above decision also which is rendered by a coordinate bench of this Tribunal, it is seen that the Tribunal observes that entries relied upon to make addition to income are supported by any corroborative evidence, there are no statements recorded from those who have alleged to have paid monies to the assessee, to confirm the veracity of the entries. The tribunal observes that suspicion, however strong, cannot be the basis of making additions, in the absence of independent proof. The Tribunal also holds that there is a duty cast upon the AO to establish with necessary corroborative evidence that the entries relied upon to make additions to income are unaccounted transactions actually carried out by the assessee. In the absence of these necessary ingredients, the additions were deleted. It is seen from the facts of this appellant's case, the AO has not established the veracity of the diary entries with necessary corroborative evidence. He has also not recorded statements from the persons who are alleged to have paid monies to the appellant, confirming the said payments and also purpose of these payments. In these circumstances, the additions made by relying on diar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....atutory Appellate Authorities ought to have concluded that unexplained expenditure reflected in the aforesaid document constituted undisclosed income of the assessee and such conclusion was inevitable. We, however, find applying the ratio of the judgment of the Supreme Court in the case of P. R. Metrani (supra),that the legislature in employing the expression may be presumed left it to the discretion of the statutory bodies to decide as to whether the fact sought to be established by the Revenue is to be presumed or not in the manner the Revenue wants to. It is not legislative mandate to impute duty on the authority to presume certain fact which may be the case where the law requires that an authority shall presume certain facts. So far as the subject-document is concerned, both the Statutory Appellate Authorities found insufficient evidence to link the document with the assessee in the first place. Thus, primary fact was not established from which presumption could be drawn. In Para 10 at Page 206 of the compilation "In the subject proceeding, two Statutory Appellate Authorities have exercised their discretion against the Revenue and in favour of the assessee. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n competent to give evidence on the truthfulness of the contents of the document is the writer thereof. So, unless and until the contents of the document are proved against a person, the possession of the document or handwriting of that person, on such document by itself cannot prove the contents of the document. These are the findings of fact recorded by both the authorities, i.e., Commissioner of Income-tax (Appeals) and the Tribunal." It is also an undisputed fact in the case of the Appellant that the author of the entries in the Diary (A/KG/3) is unknown and that the appellant is not its author. The Appellant has also denied any knowledge of the same or its contents. Under these circumstances the AO was entirely wrong in treating the figures in the Diary to be representing the undisclosed income of the Appellant. Furthermore, if these amounts were really the income of the appellant, there must have been assets to represent these corresponding incomes which ought to have been unearthed in the course of search proceedings. The very fact that there is no such unearthed assets only points to the truth that there are no such incomes in the first place. Thus, there ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on, that in view of the uncontroverted facts ie. the AO has not established the veracity of the entries in the diary (A/KG/3) relied upon to make additions of Rs. 329,75,00,000/- to income of the Assessment Years 204- 15 of (Substantively), and 2015-16 (Protectively) and an addition of Rs. 408,50,00,000/- for the A.Y. 2016-17 (Substantively), in the absence any tangible corroborative evidence, whatsoever and further without any confirmations from any of the parties to the alleged transactions, these additions deserve to be deleted. 5. The AO has made addition of Rs. 1,08,49,584/- as unexplained investment in jewellery for AY 2016-17. This comprises of the difference in gold jewellery value said to belong to the appellant of Rs. 19,69,225/- and another sum of Rs. 82,94,807/- said to belong to the spouse of the appellant which is added protectively. Further, the addition on account of silver jewellery said to belong to the appellant is of Rs. 1,84,950/- and of the spouse of the appellant of Rs. 4,00,602/-. (These figures as rectified by the rectification order u/s 154 of the Act dated 20.02.2018.). The details are as under: Gold Particulars Found in course of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... which was found during Search u/s 132 stands unexplained. The search took place on 15.03.2016 and every bit of jewellery which was found at the time of search stands explained and no addition is made on this count. (g) The addition which is restricted to the value of excess jewellery as per statement before Lokayuktha cannot be added u/s 69A. The Appellant cannot be held to be owning and possessing jewellery which does not exist at all. It is most respectfully submitted that the provisions of section 69A of the Act does not apply to the present case for the A.Y. 2016-17 and therefore the addition is to be deleted for advancement of substantial cause of justice. (h) The appellant further submits that the return filed before the Lokayuktha as at 31.03.2013 consists of the appellant's and the spouse of the appellant jewellery. It also consists of the ancestral jewellery of the appellant's undivided family which came into the custody of the appellant on his mother's death. Out of abundant caution, the appellant was advised to declare this also in the return filed before the Lokayuktha. However, mere declaration that the appellant 'has' the jewellery in the Lokayuktha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e following judicial precedents: (c) The decision of the coordinate bench of the ITAT Delhi in ITO v. M/s. Fussy Financial Services Pvt Ltd ITA No.4227/DEL/2014 dated 05.06.2017 [page nos. 329 to 337 of Case Laws Compilation], where it was held : Para 7.1 in Page 337 of the compilation ( last 5 lines of the para) "............In this case we find that AO has not made any substantive assessment. There may be substantive assessment without any protective assessment, but there cannot be any protective assessment without there being a substantive assessment." (d) The decision of the coordinate bench of the ITAT Mumbai in Suresh K Jajoo v. ACIT [2010] 39 SOT 514 (MUM.) [page nos. 338 to 363 of Case Laws Compliation] where it was held: Para 28 in page 350 of the compilation (6^th and 7^th line from the top of the Para) "....Secondly, there is no substantive assessment already made treating the capital gain as short-term capital gain. Therefore, there can be no protective assessment." In view of the above judicial precedents, the entire protective addition of Rs. 86,95,409/- made in the hands of the assessee, in the absence of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ter commencement of search, by the authorized officer or by the assessing officer will not be valid in law. Submissions in relation to revenue appeals in respect of partial relief allowed by the CIT(Appeals) on additions arising out of disputed diary: A. Without prejudice, the net resulting surplus of the receipts and payments alone could have been brought to tax and not the entire receipts as done by the AO. If the material in question is to be relied on, it has to be relied on in entirety and not selectively. Thus, the outflows have also to be considered and cannot be disregarded and therefore only the resulting balance could have been brought to tax. This is what the learned CIT(Appeals) has done in the appellate order. B. Without prejudice, the appellant submits that there is no basis to treat the receipts as income in a year and the payments in subsequent years again as undisclosed income of the appellant. It naturally follows that if these are supposed to be interconnected transactions as stated by the learned AO, then the payments in subsequent years are naturally out of the receipts in preceding year. Therefore, to tax the receipt and the payment ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essment order for Assessment Year 2014-15) appears to be a diary which admittedly is not in the hand writing of the assessee. The AO has made an addition of Rs. 329,75,00,000/-, substantively for the Assessment Year 2014-15, based on the entries found in the diary, seized during search and marked as A/KG/3 (extracted at pg. 8 onwards of assessment order for AY 2014-15). He has added the same amount of Rs. 329,75,00,000/-, protectively for the Assessment Year 2015-16, based on the very same entries, as the AO is not sure about the Assessment Year to which these entries relate to. Apart from the above addition of Rs. 329,75,00,000/- the AO has made an addition of Rs. 408,50,00,000/- in the Assessment Year 2016-17 based on entries found in the same diary. 56. The learned CIT(A) has confirmed the addition in principle but has given telescoping to the extent of Rs. 64,50,00,000/- on account of entries which are said to represent out flows out of Rs. 329,75,00,000/- brought to tax by the AO and after this set off of Rs. 265,25,00,000/- the learned CIT(A) has held that the net sum of Rs. 262,25,00,000/- is to be brought to tax, thus giving a relief of Rs. 64,50,00,000/-, has confirmed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rroborative evidence which prove these entries to be true and the transactions which the AO believes to have taken place. 59. The AO has relied upon a seized material A/KG/9, which contain entries made by the assessee in his own hand writing, to explain the entries in the seized material A/KG/3. It is an admitted fact, by both the assessee and the Revenue, that the entries in material A/KG/9 are in the handwriting of the assessee and the entries in the seized material A/KG/3 are not in the handwriting of the assessee and the author of the same is unknown. The assessee on his part has always denied any knowledge about the ownership of the Diary A/KG/3 or the contents thereof, right through the search proceeding and also during the assessment proceeding. The same question and answer are reproduced in the DR's submissions noted above. 60. The Assessee has also denied the allegation that the entries in the seized material A/KG/9 represent undisclosed income and expenditure of the assessee. The explanation given by him has not been accepted by the AO. The AO, however, has not made any addition based on the entries in seized material A/KG/9. He has only relied upon this seized mate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ited supra, after analysing several decisions rendered by itself and different High Courts came to the conclusion in Para 39 of its order, as under: "A conspectus of the above decisions make it evident that even correct and authentic entries in books of accounts, cannot without independent evidence of their trustworthiness, fix a liability upon a person." 63. The Hon'ble Supreme Court in the case of Common Cause Vs. UOI [2017] 394 ITR 220 (SC), in Para 20 of this judgement, reiterating its decision in the case of V.C. Shukla (supra), ruled as under: "It is apparent from the aforesaid discussion that loose sheets of papers are wholly irrelevant as evidence being not admissible under Section 34 so as to constitute evidence with respect to the transactions mentioned therein being of no evidentiary value." 64. The Jurisdictional Karnataka High Court in a recent judgement in the case of DCIT Vs. Sunil Kumar Sharma [2024] 159 taxmann.com 179 (Karnataka), held as under:- "21. Both the Appellant-Revenue and Respondent-Assessee entered appearance and submitted their arguments extensively. On hearing the learned counsel for both the parties, this Court finds ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year." The lack of corroborative evidence to show how the loose sheets found at the house of Sri K Rajandran are connected to the Respondents herein, or their occupation, is evident from the panchanama provided by the Assessing Officer. 22. The entire allegation is made out on the basis of loose sheets of documents, which does not come under the ambit and scope of 'books of entry' or as 'evidence' under the Indian Evidence Act. 23. In view of the aforementioned aspects, we have carefully examined the law declared by the Hon'ble Apex Court with regard to acceptance of diaries/loose sheets by the respondent-Revenue. In the case of V.C. Shukla (supra), at paragraphs 16 to 18 of the judgment, it is observed thus: "16. To appreciate the contentions raised before us by the learned counsel for the parties it will be necessary at this stage to refer to the material provisions of the Act. Section 3 declares that a fact a relevant to another when it is connected with the other in any of the ways referred to in the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....anner which cannot be disturbed or altered except by tearing apart. The binding is of a kind which is not intended to the moveable in the sense of being undone and put together again. A collection of papers in a portfolio, or clip, or strung together on a piece of twine which is intended to be untied at will, would not, in ordinary English, be called a book...I think the term "book" in S. 34 aforesaid may properly' be taken to signify, ordinarily, a collection of sheets of paper bound together with the intention that such binding shall be permanent and the papers used collectively in one volume. It is easier however to say what is not a book for the purposes of S. 34, and I have no hesitation in holding that unbound sheets of paper in whatever quantity, though filled up with one continuous account, are not a book of account within the purview of S.34." 24. The aforesaid approach is in accordance with good reasoning and we are in full agreement with it. Applying the above tests, it must be held that the two spiral note books (MR 68/91 and 71/91) and the two spiral pads (MR 69/91 and MR 70/91) are "books" within the meaning of Section 34, but not the loose sheets of pape....
X X X X Extracts X X X X
X X X X Extracts X X X X
....alleged payment were made. In fact the entries there in are on monthly basis. Even the names of the persons whom the alleged payments were made do not find a mention in full. they have been shown in abreviated form. Only certain 'letters' have been written against their names which are within the knowledge of only the scribe of the said diaries as to what they stand for and whom they refer to." 20. Mr. Sibal, the learned counsel for the Jains, did not dispute that the spiral note books and the small pads are 'books' within the meaning of Section 34. He, however, strongly disputed the admissibility of those books in evidence under the aforesaid section on the ground that they were neither books of account nor they were regularly kept in the course of business. he submitted that at best it could be said that those books were memoranda kept by a person for his own benefit. According to Mr. Sibal, in business parlance 'account' means a formal statement of money transactions between parties arising out of contractual or fiduciary relationship. Since the books in question did not reflect any such relationship and, on the contrary, only contained entries of monies ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....accordance with facts. 282. It is apparent from the aforesaid discussion that loose sheets of papers are wholly irrelevant as evidence being not admissible under section 34 so as to constitute evidence with respect to the transactions mentioned therein being of no evidentiary value. The entire prosecution based upon such entries which led to the investigation was quashed by this Court." 26. It is established in law by the Hon'ble Apex Court that a sheet of paper containing typed entries and in loose form, not shown to form part of the books of accounts regularly maintained by the assessee or his business entities, do not constitute material evidence. Following the law declared by the Hon'ble Apex Court, we are of the view that the action taken by the respondent/Revenue against the Assessee based on the material contained in the diaries/loose sheets, are contrary to the law declared by the Hon'ble Apex Court. In that view of the matter, impugned notices issued under section 153C of the Act, based on the loose sheets/diaries are contrary to law, which require to be set aside in these writ appeals, as the same are void and illegal." 65. In the above ci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....under the jurisdiction of the Karnataka High Court. 67. A Coordinate Bangalore Bench of the ITAT in the case of ITO Vs. Ramachandra Settyand Sons [2024] 163 taxmann.com 666 (Bangalore - Trib.), after relying on various judgments, held that Dumb sheets which have no relevance are not authentic to rely upon on its face value. Such loose sheets and scribblings cannot be the primary evidence to base the assessment upon. These sheets also cannot be relied upon to hold that the assessee has earned any undisclosed income. The Bench relied upon a decision in the case of CIT Vs. M/S Khosla Ice and General Mills 2013 (1) TMI 451 - Punjab and Haryana High Court, where the Hon'ble High Court held that "assessee rightly contended that the impugned document was a non-speaking document in as much as it does not contain any intelligible narration in support of the inference drawn by the Assessing Officer that it reflected unaccounted transactions carried out by the assessee outside the regular books of account. When a dumb document, is to be made the basis to fasten tax liability on the assessee, the burden is on the AO to establish with corroborative evidence that the nature of entries con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nclusions. The AO is required to act fairly as a reasonable person, not arbitrarily and capriciously. The AO without examining the students / parents who have paid the capitation fees cannot come to the conclusion that the assessee has received unaccounted capitation fees. The basis for donation is notebook / loose sheet. This notebook or loose sheets found during the course of search is only circumstantial evidence and not full proof evidence to sustain the addition. No addition can be made in the absence of any corroborative material. If it is circumstantial evidence in the form of loose sheets and notebook, it is not sufficient to come to the conclusion that there is conclusive evidence to hold that assessee has collected unaccounted capitation fees. The notes in the diary/loose sheets are required to be supported by corroborative material. Since there was no examination or cross-examination of persons concerned, the entire addition in the hands of the assessee on the basis of uncorroborated writings in the loose papers found during the course of search cannot be sustained. The evidence on record is not sufficient to uphold the stand of revenue that assessee is collecting huge u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nnot be relied upon as evidence against the assessee with the help of section 292C of the Act in the absence of supporting evidence. Further, the presumption under section 292C of the Act is rebuttable presumption and the assessee has explained before the authorities below that the diary does not belong to the assessee. The AO has scanned the diary marked as A/KG/3. All the relevant papers in this regard were available before both the authorities below. When such facts were pleaded before the AO and the learnd CIT(A), even at that stage, the Revenue Department should have investigated as to whose names were appearing in the seized papers to verify if they paid any money to the assessee or received any monies from the assessee. In the absence of any proper investigation into the matter, we are of the view that the provisions of section 292C of the Act should not have been applied against the assessee. The purpose and object of the income tax laws is to bring to tax real income and not any hypothetical or fictional income. The provisions of the Act contain several instances of deeming fiction namely under sections 68,69,69A,69B,69C and 69D. In all these cases, the deeming fiction cre....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the only person competent to give evidence on the truthfulness of the contents of the document is the writer thereof. So, unless and until the contents of the document are proved against a person, the possession of the document or hand writing of that person, on such document by itself cannot prove the contents of the document. These are the findings of fact recorded by both the authorities, i.e., Commissioner of Income-tax(Appeals) and the Tribunal." 75. In the case of Smt. Harmohindar Kar Vs. DCIT CC-2 Jalandhar reported in (2021) 124 taxmann.com 60 (Amritsar- Trib) after relying upon the Judgments of the Hon'ble Apex Court, High Court and Coordinate Bench of ITAT held as under:- "4. Having heard the parties at length and perused the material available on record. As per Revenue case, during the search, a diary was found and seized as Annexure A-9 from the residence of the assessee and page 13 of the diary has noting which shows the actual sale consideration received qua property sold by the husband of the assessee was Rs. 1,15,00,000/- as against the amount of Rs. 29,50,000/- which had been shown as total consideration during the course of assessment proceedings. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in 'letters' have been written against their names which are within the knowledge of only the scribe of the said diaries as to what they stand for and whom they refer to." ** ** 17. From a plain reading of the Section it is manifest that to make there under it must be shown that it has been made in a book, that book is a book of account and that book....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e tests it must be held that the two spiral note books (MR 68/91 and MR 71/91) and the two spiral pads (MR 69/91 and MR 70/91) are "books" within the meaning of section 34, but not the loose sheets of papers contained in the two files (Mrs 72/91 and 73/91).' 6. Further in the case of the Common Cause (A Registered Society) v. Union of India [2017] 77 taxmann.com 245/245 Taxman 214/394 ITR 220, the Apex Court dealt with the loose sheets and was pleased to held that,- 'It is apparent from the aforesaid discussion that loose sheets of paper are wholly irrelevant as evidence being not admissible U/s 34 so as to constitute evidence with respect to the transactions mentioned therein being of no evidentiary value. Further the Apex Court in para No. 22 was pleased to held that: "In case of Sahara, in addition we have the adjudication by the Income-tax Settlement Commission. The order has been placed on record along with I.A. No. 4. The Settlement Commission has observed that the scrutiny of entries on loose papers, computer prints, hard disk, pen drives etc. have revealed that the transactions noted on documents were not genuine and have no evide....
X X X X Extracts X X X X
X X X X Extracts X X X X
....07-2005 "Agreement with S. G. Jain on Chhatarpur area" B-1/A-13/71 dated 16-08-2005 "Deliver cash to Jain/Bhatti (20L)" B-1/A-13/75 dated 20-08-2005 "Give 15 L & all cleared for Bhatti + 5L Cheque" 16. We note that the said seized material in the shape of diary did not belong to the assessee. It belonged to the assessee's brother. He has not at all been confronted with the contents of the said diary. Assessee cannot be called upon to explain the contents of diary which belonged to the assessee's brother and was found from the brother. 17. We also note that there is no mention of the assessee's name in the particulars of diary as contained hereinabove. Though there is mention of the farm house belonging to the assessee, there is no mention of the total price paid etc. From the jottings as above, Assessing Officer has inferred that assessee has paid Rs. 35 lacs over and above the disclosed consideration to the seller. Now we find that the seller has denied having taken any money over and above the disclosed sale consideration. It is also not the case that seized material were in the hand writing of the assessee or the seller or were sei....
X X X X Extracts X X X X
X X X X Extracts X X X X
....CIT (A) rejected the above explanation. Since the said document had been seized from the residence of Assessee, the CIT (A) drew a presumption under section 292C of the Act was that it belonged to him. Further, the CIT(A) proceeded to hold that Rs. 49 lakhs constituted the unexplained income of the Assessee since the Assessee had not submitted any evidence like a confirmation letter or any other document to show that expenditure related to any project of the aforementioned company. 5. The ITAT in the impugned order noted that the said document "does not indicate if it pertains to the assessee nor the address and location of the property is mentioned therein nor such property has been located by the AO during the assessment proceedings. The AO has also not brought on record any forensic evidence to prove the handwriting of the loose paper relied upon by him to make the addition, which is exclusively made on the basis of suspicion and guesswork. Even no corroborative material has brought on record by the AO to substantiate the addition nor the CIT(A) has called for any remand report seeking corroborative evidence, if any." 9. Now coming to the instant case, as it ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re is nothing on record to suggest that the assessee has under estimated the value of the property and violated the circle rate as prescribed by the Government and acted against the Indian Stamp Act, 1899. The Assessing officer allegedly corroborated the entries on page no. 10 and 13 of the diary by reproducing the copies in the assessment order and by observing" that the heading on the top of the page no. 13 'DIV- 3' indicate that these payments pertain to sale of the property near Chowki Divison-3. Further total amount of Rs. 1,15,00,000/-has been received on sale consideration of this plot which is also proved when these entries are seen along with entries on page no. 10 of the same diary. The AO further mentioned that this page shows amount of cash actually with Sh. Ruby (i.e. Sh. Balwinder Singh Kohli, the son of the assessee) and the figure of Rs. 28,50,000/- pertains to another unaccounted sale consideration of shop in MBD Mall. The co-relation of the other entries on these pages and the dates mentioned against the two entries as 25th and 26th February at place Goraya for receipt of cash from the purchaser. On the basis of the documents, a total cash of Rs. 1,15,00,0....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., cannot be made basis of addition. The authorities below in the instant case, made the addition only on the basis of surmises, suspicion and guess work. Hence, respectively following the judgments referred above we are unable to sustain the addition made by the Assessing Officer and affirmed by the Ld. CIT(A). Consequently we are inclined to delete the same, resultantly the appeal of the assessee is liable to be allowed." 76. If one were to examine the facts of the case on hand keeping the ratio of the above cited decisions, it is not in dispute that the entries in Diary (A/KG/3) is not in the handwriting of the assessee and further the author of the same is unknown. The assessee has also denied any knowledge of its ownership and its contents. Under these circumstances the AO cannot rely upon the provisions of Section 292C of the Act to come to a conclusion that the figures in the Diary represent the undisclosed income of the assessee, without any corroborative evidence to support. In the case of this assessee it is clear that even though the Revenue is of the opinion that the assessee has not given a satisfactory explanation of the contents of the Diary found in residence but ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rm of landed property, building, investments, money, bullion, jewellery or any kind of movable or immovable asset. The only asset which has suffered tax by way of undisclosed investment is jewellery belonging to the assessee and his wife. The total addition made on this issue is Rs.1,08,49,594/- and the same is dealt with separately in the later portion of this Order. This addition is not based on any excess jewellery actually found with the assessee at the time of search. In fact, no portion of the addition made is attributable to jewellery actually found in search. 80. Further, the AO has not recorded any statement from any person who in the opinion of the AO is a party to the transactions which are supposed to represent the entries in the seized materials A/KG/3 and A/KG/9 to prove the truthfulness of the entries. The explanations and the narrative given by the AO to explain the transactions which are indicated by the entries in both the seized materials A/KG/3 and A/KG/9, are his own and do not emanate from any seized material or any statement/s recorded from any person/s who are supposed to be a party to the transaction/s. The narrative given by the AO, however interesting,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Lokayuktha as on 31/03/2016, is the same as declared before them as on 31/03/2014 and 31/03/2015. In other words, as per the statement filed before Lokayuktha, there is no addition to jewellery in the Assessment Years 2014-15, 2015-16 and 2016-17. Further it is also not in dispute that no unexplained jewellery was physically found in the search under section 132 of the Act. The AO has not made any addition on the ground that jewellery physically found is in excess of what is declared. The AO has accepted that Jewellery physically found stands explained and no addition is made on this count. 84. The addition made is on account of the fact that the AO took a view that the jewellery declared in the statement filed before the Lokayuktha being more than what was found in the search, the excess of the jewellery as per statement before Lokayuktha over and above what was found in the search represents unexplained jewellery and he proceeded to add the value of such excess jewellery to the income of the assessee under section 69A of the Act. It is also not in dispute that the assessee has filed a revised statement of assets before the Lokayuktha as on 31/03/2016, on the ground that the or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e addition made in the hands of the assessee's spouse, as unexplained investment in jewellery under section 69A of the Act for Assessment Year 2016-17 are hereby deleted. As regards the observation of the learned CIT(A) that additions on account of jewellery have been confirmed by him for the Assessment Year 2013-14, we have deleted the same for want of requisite jurisdiction to assess the same in the Assessment Year 2013-14 under section 153A of the Act, in our Order in ITA No.1021/Bang/2014, of even date. 89. In view of the fact that both the additions on account of entries in seized material A/KG/3, A/KG/9 and undisclosed jewellery being deleted, we have decided the issue only on the arguments advanced by both the parties. The other grounds raised by the assessee are academic in nature and are kept open. 90. Since, we have deleted the additions made by the AO in entirely; therefore, it is not required to adjudicate separately the Revenue's appeal. In the result the appeals of the assessee in ITA No's 1022 to 1024/Bang/2024, for the Assessment Years 2014-15, 2015-16 and 2016-17 are allowed and the appeals of the Revenue in ITA Nos.1290 to 1292/Bang/2024 are dismissed. 91....