TaxTMI 
TaxTMI 
2025 (3) TMI 1490
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....essee was issued and served with the notice u/s. 148 of the Act. After duly recording the reasons to which necessary compliance was made, all the transactions for the year, i.e. A.Y. 2015-16 were examined by the Assessing Officer along with verification of bank statements and other details submitted by the assessee and the assessment was completed u/s. 143(3) r.w.s. 147 of the Act on 27.12.2018 assessing income at Nil. Prior to completion of the assessment proceedings u/s. 143(3) r.w.s. 147 of the Act on 27.12.2018, a survey action was conducted u/s. 133A of the Act by ADIT(Investigation), Aurangabad on 24.08.2018 at the office premises of M/s. Raaj Kasliwal and certain loose papers were found and impounded containing 67 pages. These documents included a statement given by the assessee before the police authority in reference to the complaint filed by one Mr. Pankaj Radheshyam Agrawal on 23.06.2017 in Kranti Chowk Police Station, Aurangabad. As per the police complaint, assessee was alleged to have received a sum of Rs. 8,61,80,284/- from Late Shri Radheshyam Agrawal during F.Y. 2014-15 towards purchase of immovable properties from assessee/partnership firm and the reference was al....
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....unt nor there is purchase of any land or other asset in cash which could corroborate the receipt of such a huge amount. Further it was requested that to verify the veracity of the claim made by Mr. Pankaj Radheshyam Agrawal before the police authorities the Assessing Officer should call for the income-tax return, financial statements, books of account and other details of Mr. Pankaj Radheshyam Agrawal and his father about the source of cash available with them in their books and the proof of the said cash being given to the assessee. However, the reply of the assessee did not find any merit in the view of the Assessing Officer and he concluded the reassessment proceedings observing that the assessee has taken loan against Hundi and thus invoked section 69D of the Act and made addition of the alleged sum and assessed the income at Rs. 8,61,80,284/-. 4. Aggrieved assessee preferred appeal before the ld.CIT(A) and apart from challenging the grounds on merit, the assessee challenged the validity of the reassessment proceedings on the ground that no actual reasons recorded were supplied; reasons were based on wrong assumption of facts; no proper sanction u/s. 151 of the Act; conditions....
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....onsidering the comments of the assessee ld.CIT(A) finally dismissed all the legal grounds. So far as the merits of the case are concerned, the ld.CIT(A) after elaborately discussing the submissions of the assessee as well as the complaint given by Shri Pankaj Radheshyam Agrawal and the statement recorded by the assessee before the police authorities as well as during the course of survey finally came to conclusion that the statement recorded by the police authorities is not an admissible evidence as per the provisions of section 25 of the Indian Evidence Act, 1872 and that the Assessing Officer did not bring any cogent material on record to prove that the assessee has accepted the cash loan against Hundi giving rise to invocation of the provisions of section 69D of the Act and further held that the transaction between the assessee and late Shri Radheshyam Agrawal was in the nature of a business transaction. 8. Aggrieved Revenue is now in appeal before the Tribunal challenging the finding of the ld.CIT(A) deleting the addition on merits by raising the following grounds: "1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and in facts by deleting....
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....en fulfilled. 1.3 In the facts and circumstances of the case and in law, the initiation of reassessment proceedings in the present case is bad in law and therefore the notice issued u/s 148 deserves to be quashed. WITHOUT PREJUDICE TO THE ABOVE 2. THE ASSESSMENT ORDER OASSED IN VIOLATION TO CIRCULAR No. 19/2019 DATED 14.08.2019 2.1 The Ld. CIT(A) has erred in affirming the legality of the assessment order, demand notice u/s 156 passed by the Ld. AO which is contrary to the CBDT Circular No. 19 /2019 dated 14.08.2019. 2.2 In the facts and circumstances of the case and in law, the assessment order passed deserves to be quashed. 3. LIBERTY The Appellant craves leave to add, alter, amend, delete or substitute any of the above grounds of appeal." 10. Since legal issues have been raised by the assessee in the Cross Objection, we will first take up the legal issues and then while dealing with the Revenue's appeal we will deal with the merits of the case. Summarily, the legal issues raised by the assessee in the Cross Objection read as under: "A. The reassessment is bad, illegal and without jurisdiction, as the following conditions necessary for initiation as well as compl....
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....g the actual reasons recorded for reopening of the assessment vitiates the entire reassessment proceeding. (Abridged reasons supplied during the assessment proceeding or the actual reasons supplied after the assessment order is passed does not mitigate the jurisdictional defect) (i) There appears to be two sets of reasons, one provided to SK along with the communication dated 27.01.2022 and the other, which was given at the time of remand proceeding (Refer 159 to 161 of the OPB). This gets evident from the following differentiations: (i) CIT v. Videsh Sanchar Nigam Limited (Bom)] [(2012) 340 ITR 66 (ii) CIT v. Trend Electronics - [(2015) 379 ITR 456 (Bom)] (iii) PCIT v. Shodiman Investments P. Ltd. [(2018) 93 taxmann.com 153 (Bom)] (iv) CIT v. IDBI Ltd. [(2016) 76 taxmann.com 227 (Bom)] (v) PCIT v. Hexaware Technologies Ltd.((2020) 191 DTR 73 (Bom)] (vi) PCIT v. V. Ramaiah - [(2019) 103 taxmann.com 201 (Kar)] Sr. No. Purported reasons supplied in the annexure to notice dated 27.01.2022 Actual reasons supplied along with the approval attached to the Remand Report a. Undated Date of recording of reasons not mentioned Dated Reasons recorded on 05.02.2021 b. Name of the ....
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.... In any case, the approval was granted mechanically and without application of mind. (vii) It is a well settled legal position that the notice issued u/s. 148 without obtaining appropriate sanction of the concerned authority u/s. 151 of the Act is invalid. Consequently, it makes the entire re-assessment proceedings u/s. 147 bad in law. Further, while according sanction u/s. 151 of the Act, due application of mind on the part of the sanctioning authority is also must. (i) Chhugmal Rajpal v. S. P. Chaliha - [(1971) 79 ITR 603 (SC)] (ii) German Remedies Ltd. v. DCIT -[(2006) 287 ITR 494 (Bom)) (iii) CIT v. Suman Waman Chaudhary - [(2010) 321 ITR 495 (Bom)] (iv) Sharvah Multitrade Company P. Ltd. V. ITO - [(2022) 134 taxmann.com 134 (Bom)] (v) Nirmal Bang Securities P. Ltd. v. ACT-[W.P. No. 671 of 2022, Order dated 08.02.2022 (Bom HC)] (vi) United Electrical Co. P. Ltd. v. CIT - [(2002) 258 ITR 317 (Del)] 3.1.3 The reasons are recorded on the basis of incorrect facts and, therefore, the very initiation of the reassessment proceeding is (bad in law and illegal. (i) It is now a well settled legal position that initiation of reassessment proceeding based on wrong fact or wrong a....
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....estment in properties. Therefore, there was no question of recording any entry in the books of accounts or declaring income in the return of income. Therefore, there was no failure on the part of SK to fully and truly disclose any material facts. It is a well-settled legal position that no reassessment can be made unless the alleged escapement of income is due to failure on the part of the assessee to disclose fully and duly all material facts necessary for its assessment. (i) IPCA Laboratories Ltd. v. DCIT - [(2001) 251 ITR 416 (Bom)] (ii) Hindustan Lever Ltd. v. CIT [(2004) 268 ITR 339 (Bom)] (iii) Grindwell Norton Ltd. v. CIT - [(2004) 267 ITR 673 (Bom)] (iv) German Remedies Ltd. v. DCIT - [(2006) 287 ITR 494 (Bom)] (v) Aventis Pharma Ltd. v. ACIT - [(2014) 368 ITR 498 (Bom)] 3.2.1 (i) CBDT Circular No. 19/2019 dated 14/08/2019 makes it mandatory to quote DIN on all communications issued by any income tax authority regarding assessments or appeals. (ii) Any communication initiated without DIN is declared to be invalid and never to have been issued by the CBDT. (iii) Paras 2 and 4 of such order has been reproduced ( herewith- "2. In order to prevent such instances and ....
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....d that proper approval u/s. 151 of the Act has been taken and therefore reassessment proceedings are valid and not liable to be quashed. In support of contentions of Revenue, ld. Departmental Representative further referred to the following written submissions : "Subject - Written submission in the above case. 1. Brief facts of the case : The assessee is an individual and a proprietor engaged in the business of builders and developers. He is one of the partners in various firms engaged in the same business. He is also proprietor of M/s Kasliwal Construction. A Survey action u/s 133A of the I.T.Act, 1961 was carried out by the ADIT(Inv.), Aurangabad on 24/08/2018 at the office premise of M/s Raaj Kasliwal at 215-216, Apna Bazar, Jalna Road, Aurangabad. During the course of survey proceedings some loose papers documents were impounded as Annexure-'A' containing total pages 1 to 67. The loose papers numbered at page number 54 to 56 are a copy of the statement given by Shri Sanjay Suganchand Kasliwal before the Police against the complaint filed by Shri Pankaj Radheshyam Agrawal on 23/06/2017 in Kranti Chowk Police Station, Aurangabad. On perusal of the statement, it ....
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....t is submitted that the assessee has issued 15 Hundis and 15 post dated cheques under his own name and signature in favour of Shri Radheyshyam R. Agarwal who is the father of the complainant. The assessee has nowhere denied that he has not issued these hundis and post dated cheques. In the statement before the police authorities he has stated that he received loan on interest against these hundis and he has repaid the loan. Therefore, there is no outstanding amount to be paid to Mr. Pankaj Agarwal. However, before the Income Tax Authorities the assessee has stated that he never received any loan and has given the hundis and post dated cheques in anticipation of loan. This is clearly a contradictory statement and it is self serving and an afterthought. As regards the nature of transaction it is clear that the amount has been received by the assessee against hundi. Therefore, at the time of the transaction it is clearly an amount which is borrowed on a hundi and is clearly hit by the provisions of section 69D of the IT Act, 1961. The Ld. CIT(A) has also relied on the fact that the statement recorded by the police authorities is not admissible evidence as per the provisions of sec....
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....#39; containing total pages 1 to 67. The loose papers numbered at page number 54 to 56 are a copy of the statement given by Shri Sanjay Suganchand Kasliwal before the Police against the complaint filed by Shri Pankaj Radheshyam Agrawal on 23/06/2017 in Kranti Chowk Police Station, Aurangabad. On perusal of the statement it is seen that Shri Sanjay Suganchand Kasliwal had taken loan against hundi from father of Shri Pankaj R. Agrawal Shri Radheshyam Agrawal to the tune of Rs. 8,61,80,284/- on different dated during financial year 2014-15 and on behalf of this amount Hundis issued to Shri Pankaj R. Agrawal by Shri Sanjay Suganchand Kasliwal. 3. Analysis of information collected/received: On verification of documents available with this office, it is seen that Shri. Pankaj Radheshyam Agarwal has filed an FIR against Mr. Sanjay Kasliwal on the issue that Mr. Sanjay Kasliwal has taken loan from his father to the tune of Rs. 8.61 crore but he has failed to repay it. On the contrary, Sanjay Kasliwal as per page No. 54 to 56 of impounded loose paper bundle accepts that he took the cash loan against hundi but he has repaid the same. In this regard Statement of Mr. Pankaj Radheshyam Agarwa....
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....essee to disclose fully and truly all the material facts necessary for its assessment for the year under consideration. Therefore, I have reason to believe that the income chargeable to tax under the provisions has escaped assessment to the extent of Rs. 8,61,80,284/-. 6. Basis of forming reason to believe and details of escapement of income: In this case assessee was a non-filer for the year under consideration and assessment has been completed u/s 143 r.w.s 147 of the Act on 27/12/2018. This fact of acceptance and repayment of cash loan against hundi was not brought before the AO during earlier assessment proceedings. Accordingly, there is failure on the part of the assessee to disclose fully and truly all the material facts necessary for its assessment for the year under consideration hence, is reason to believe that income to the extent of Rs. 8.61 crore has escaped assessment for AY 2015-16. Accordingly, reason to believe has been recorded. 7. Details of escapement of income chargeable to tax in relation to any asset located outside India : Not acceptable. 8. Applicability of provisions of section 147/151 to the facts of the case: In this case, assessee was a non-filer f....
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....ection has been made for the relevant assessment year unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return u/s. 139 or in response to a notice issued under sub-section (1) or section 142 or section 148 had to disclose fully and truly all material facts necessary for his assessment for that assessment year. We note that the assessee though did not file the return of income but has been served with the notice u/s. 148 of the Act during the year 2017 and after carrying out the detailed scrutiny proceedings where also one of the reason of reopening was that there were certain cash deposits/time deposits and sale of immovable properties during the year under consideration. The assessee duly replied to the notice issued by ld. AO and also explained the source of cash deposits and other transactions to the utmost satisfaction of the AO and the assessment order was passed accepting the return of income, i.e. loss declared at Rs. 2,07,72,322/-. These facts prove that the assessee's books of account including financial statements were properly scrutinised and whatever issue for which the asse....
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....ent proceedings concluded on 27.12.2018 and no addition was made in the hands of assessee. It means that till that date, no information was available with the AO about the alleged transaction of assessee having taken loan from Shri Radheshyam Agrawal. 17. Now turning to the reasons recorded for the second round of reassessment proceedings, ld. AO should have taken note of the fact that this is not a general enquiry but it is a case where first round of assessment proceedings have been carried out u/s143(3) r.w.s. 147 of the Act and now to again assess the income of the assessee by serving with the notice u/s. 148 of the Act for carrying out the reassessment proceedings there should be some material information which the assessee has not disclosed in his regular return or any information which could prove that income has escaped assessment. However, ld. AO has straight away taken the basis of the statement of the assessee given before the police authorities and without even making further enquiry from the complaint given by Shri Pankaj Radheshyam Agrawal about the source of cash available with him or his father Shri Radheshyam Agrawal for giving alleged loan to the assessee. Furthe....
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.... granting approval it was obligatory on part of Commissioner to verify whether there was any failure on the part of the assessee to disclose full and true facts in the return of income. Similarly in the case of Aventis Pharma Ltd. Vs. ACIT (2014) 368 ITR 498 (Bom.) the Hon'ble Jurisdictional High Court held that the while admittedly the reopening carried out after four years there was no facts which would indicate failure on the part of the assessee to submit truly and fully all material facts. 19. In the light of the above judgments and also considering the facts of the case, we find that in the instant case firstly ld. AO has not mentioned any failure of the assessee of not disclosing the material facts truly and fully in its income-tax return because there is no transaction reported by the assessee which were not disclosed by the assessee in the books of account. There was no documents except the statement of the assessee that too unsigned by the assessee before the police authorities and further the contentions were denied in the statement recorded u/s. 131 of the Act. There was no cross examination of Shri Pankaj Radheshyam Agrawal who has filed the complaint and ld. AO has o....
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....ss Objections are partly allowed as per terms indicated above. 20. Now we take up the grounds of appeal raised by the Revenue on merits. On going through the grounds, it emerges that the only issue raised for our consideration is that whether ld.CIT(A) erred in holding that ld. AO was not justified in invoking section 69D of the Act and further erred in holding that the alleged sum of Rs. 8,61,80,284/- was not received in cash as loan against Hundi by the assessee from Late Shri Radheshyam Agrawal. 21. Ld. Departmental Representative vehemently argued referring to the detailed observation of the AO and also referring to the statement of the assessee given before the police authorities along with referring to the alleged document referred to as Hundi mentioned at pages 3 and 4 of the assessment order and 15 cheques allegedly issued by the assessee for various sums totalling to Rs. 8,61,80,284/-. Ld. DR stated that the cheques issued by the assessee clearly prove that they were given as security against the loan taken by the assessee from Late Shri Radheshyam Agrawal and the amounts are mentioned in the documents allegedly named as Hundis and therefore it proves that the assessee h....
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....anking amount (stamp duty) Rs. 49.85 Lakhs on 27.03.2015, on confirmation by SMS at my mob number on 9325002909 sent by Mr. Sanjay Kasliwal dated 25.03.2015 from his number 9326361555. The copies of stamp duty challans, email and SMS will be submitted within two days in support of my say.' 4. From the aforesaid statement it is clearly evident that the allegation leveled against me by Mr. Agrawal is of advance given against the purchase of the properties and nowhere he has stated and neither confirmed that the cash loan was given to me against the hundi. 5. Further during course of the assessment proceedings, the Ld. AO issued a notice u/s 142(1) dated 22.02.2022 and show cause notice dated 12.03.2022, wherein he asked to explain why addition of Rs. 8,61,80,284/- should not be made u/s 69D of the Act. 6. In response to the same, I filed a reply dated 14.03.2022, wherein I once again denied the contents of the statement found during the survey and also explained the facts that it is not allegations of Mr. Agarwal that he has given cash loan against hundi. Along with the submission, I filed the copy of charge sheet filed by the police authorities, copy of FIR, copy of petiti....
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....ade to the communication by police station, Kranti Chowk, Aurangabad, addressed to the Ld. AO, in response to notice u/s 133(6) of the Act vide letter dated 28.03.2022. In the said communication also the police authority- has stated that the allegation against me is of the cash given against the investment in properties. There is absolutely no mention about the cash loan against the hundi. Therefore, neither the police authorities have any findings that there is cash loan given and neither there is allegation of Mr. Agarwal against me regarding cash loan given against hundi. This itself shows that there is no evidentiary value to the said statement recorded by the police authority. 13. In none of the statement, petition, FIR filed by Mr. Agrawal it has been alleged that cash was given to me towards to loan against the hundi. Therefore, the findings of the Ld. AO in Para 4 that 'FIR has been filed by Mr. Agrawal against me on the issue that I have taken cash from father of Mr. Agrawal and failed to repay it' is absolutely baseless and without application of mind. 14. Interestingly, the Ld. AO has doubted the allegations of Mr. Agrawal itself and has also gone to justif....
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....9. Despite I filed various documents to prove that the allegation of Mr. Agrawal against me is not of the cash loan given but the allegation is about cash given for the investment in immovable property purpose, the Ld. AO has not dealt with these documents much less not even referred to these documents and has completely ignored those documents. 20. In the above circumstances. I humbly submit that I have proved with all the documents available on record including the copy of petition filed by Mr. Agrawal before the Court against me and the communication of the police authority to the Ld. AO itself proves that the allegation was of the cash given against the investment in the properties. Even in the said petition there is allegation that the cash was given to me against the investment in properties. Therefore, there is no question of attracting of the provisions of section 69D in the present case. 21. I also submitted before the Ld. AO that I have not received any cash from Mr. Agrawal or his father and to verify my submission, I requested to Ld. AO to verify the income tax return, books of account and financial statements of Mr. Agrawal, father of Mr. Agrawal and their relative....
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....d that the sole basis for making an addition in the hands of the Assessee is a statement of the Assessee as well as Shri Navneet Kumar Singhania recorded by the CBI. The ITAT observed that the settled position of law is that the statements recorded by the CBI or police authorities/investigating authorities cannot be made the sole basis for making additions. Moreover, the statement recorded by the police authorities are not admissible as evidence as per provisions of Section 25 of Indian Evidence Act, 1982 and also in the light of judgment of the Supreme Court in the case of Zwinglee Ariel Vs. State of MP. For making addition, some more efforts were to be required on the part of the AO. In the present case, AO did not bring any material on record to show that Assessee has made the investment in Jagati Publications Ltd., by acquiring its shares during the impugned assessment year. Except such statements, the AO has not brought anything on record to establish that assessee had made such investment in Jagati Publications through Shri. Navneet Kumar Singhania and the same was not declared in its return of income. In the light of these facts, we are of the considered opinion that additio....
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....ces, the huge addition made deserves to be deleted as illegal. These are our preliminary submissions. If Your Honour still intends to confirm the action of the A.O., we request Your Honour to grant us a further opportunity of being heard to enable us to put further submissions. Needless to say, in the meanwhile, if any further clarification or information is sought, the same shall be supplied immediately upon intimation." 3.2 In continuation to the above, the appellant filed a rejoinder on 29.02.2024 as under. "3. Addl. Ground: 3 The reopening notice issued without application of mind and wrong assumption of facts 3.1 In the submission filed before Your Honour, it was submitted that at the time of recording of the reasons for reopening, the Ld. AO had unsigned copy of my statement recorded before the Police Authorities and other documents as mentioned in Para 3.2 of the submission dated 31.10.2023. Further, by placing reliance on my unsigned statement recorded before the police authority, FIR and statement recorded u/s 131 of Mr. Agrawal the Ld. AO erroneously concluded that Mr. Agrawal has filed an FIR against me alleging that I have taken loan from Mr. Agrawal's fathe....
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....ement recorded by the police authority wherein under duress and tremendous pressure I have been compelled to accept that I have obtained a cash loan against hundi from Mr. Pankaj Agrawal [Mr. Agrawal'] and his father. 3. During the assessment proceedings, following documents were filed to prove no cash loan against hundi was taken by me from Mi'. Agrawal: a. Copy of First Information Report (FIR) filed by Mr. Agrawal against me. [Ref: Pg. No. 32 to 36 of the PB] b. Statement recorded of Mr. Agrawal u/s 131 of the Income-tax Act, 1961 ['the Act'] [Ref: Pg. No. 78 to 81 of the PB] C. Copy of suit filed by Mr. Agrawal before the Hon'ble Civil Court Senior Division, Aurangabad [Ref: Pg. No. 38 to 52 of the PB] d. Interim order of the Hon'ble Civil Court Senior Division, Aurangabad. [Ref: Pg. No. 62 to 67 of the PB] e. Chargesheet filed by the police authority before the MPID Court, Aurangabad [Ref: Pg. No. 68 to 72 of the PBJ f. A communication dated 28.03.2022 from the police authority to the Ld. AO in response to the notice issued u/s 133(6) [Ref: Pg. No. 82 of the PB] 4. In all the aforesaid documents, the allegation levelled against me is tha....
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....he said statement is attached herewith is Annexure tAl Even in the statement recorded by the Court, Mr. Agrawal alleged that he and his father has given cash to me against investment in the row house and plots etc. 9. In the aforesaid circumstances, it is humbly submitted that I have not taken / received any loan against hundi from Mr. Agrawal this fact is not in dispute and this is no one's allegation or finding that is neither of Mr. Agarwal or of police authority or nor of the Court. The dispute pending before the Court is whether I have received cash against the investment in the property from Mr. Agrawal or not. Therefore, the decision of the court on either of the side would not affect the finding of Your Honour. 10. In the aforesaid circumstances, it is humbly submitted that the Ld. AO has made the addition on the basis of transactions which never took place and despite proving the same to the Ld. AO by filing various documents, the Ld. AO chose to ignore the same and made a huge addition u/s 69D and the same is illegal and therefore deserves to be deleted." 23. Further, he referred to the number of points summarising the contents on merits during the previous dates....
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....lleged loan given; that to for two years. Before filing the police complaint, there was not even a formal notice issued. Obviously, therefore, the sole intention was to catch the Assessee in the state of total surprise/ unguarded /unpreparedness, and pressurize the Assessee, a prominent name in the community, with police complaint and harassments. 11. Mr. Agrawal has also misled the Stamp Authorities by filing forged sale deed while obtaining stamp duty refund. More particularly, Mr. Agrawal himself had stated in the statement recorded before the stamp authorities that due to shortage of fund the transaction is not completed and no transaction will be made in future. 12. The sale deed sent through email also contains other parties as a purchaser that is Beejsheetal Research Pvt. Ltd and Sanchit B. Rajpal, however none of the said parties has filed any complaint as filed by Mr. Agrawal. This shows that this completely false story created by Mr. Agrawal with malafide intention of misusing the documents available with him. 13. Re: the hundis / cheques (i) At the outset, the documents cannot be regarded as 'hundi' in the eyes of law and for the purpose of section 69 D o....
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....ce to the above, as per Mr. Agarwal, the amount was given towards acquiring row houses / bungalows being construed by M/sKasliwal Empire. As a natural corollary, the receiver of the amount, for the purpose of section 69 D of the Act has to be that firm and not the Assessee in his individual/personal capacity. The firm, being an artificial jurisdictional entity, has to conduct its activities through its partners." 24. Further at the time of conclusion of hearing, the assessee was directed to file a detailed written synopsis and the same was filed with Registry on 03.03.2025 wherein also on merit it has been contended that the complaint made by Shri Pankaj Radheshyam Agrawal was not only false but was also motivated for ulterior motives and Shri Pankaj Radheshyam Agrawal has not only misguided the police but also the income-tax department misleading the averments made on oath. He stated that absolutely there is no proof with Shri Pankaj Radheshyam Agrawal about alleged sum being given by his father Late Shri Radheshyam Agrawal to Shri Sanjay Kasliwal (the assessee). The sole evidence that the AO has is the statement given by the assessee before the police authority which has no evid....
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.... 249 to 251/Rjt/2015, order dated 17.04.2024 for the proposition laid down by this Tribunal that addition cannot be made in the hands of assessee merely on the basis of chargesheet filed by CBI since the investigations against the assessee were in the court of law and there being no other evidence found against the assessee and that no opportunity of cross examination was provided to the assessee. 26. We have heard rival contentions and perused the records placed before us. The sole issue raised by the Revenue for our adjudication is that whether during the impugned year assessee has taken cash loan against Hundi of Rs. 8,61,80,284/- from Late Shri Radheshyam Agrawal and that whether ld.CIT(A) erred in holding that section 69D of the Act cannot be invoked in the instant case by the AO. Though the facts have been dealt in detail in the preceding paragraphs, we recapitulate and observe that the assessee is into business of Builder and Developer and also is a partner in other firms which are engaged in the Builder Developer business. Assessee was having good relations with one Shri Radheshyam Agrawal who expired on 03.03.2015. The dispute in the instant case arose when Mr. Pankaj Rad....
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....ting health. Subsequently, the stamp duty paid to the authorities for purchasing the property was claimed as refund and the said sum was duly received in the bank account of Shri Pankaj Radheshyam Agrawal/Late Radheshyam Agrawal. Thereafter, assessee asked Shri Radheshyam Agrawal to give back the cheques and the promissory notes/document alleged as Hundi but the same were stated to be misplaced and finally Shri Radheshyam Agrawal expired on 03.03.2015. Almost after 2 ½ years, Shri Pankaj Radheshyam Agrawal based on the documents available with him filed a complaint before the police authorities alleging that the assessee has received the said sum from his father. The assessee during the course of hearing before the lower authorities has been contending that if it is presumed that the assessee has received the amount from Shri Radheshyam Agrawal then the source of cash available with him should have been enquired but no such evidence was filed. Even when Shri Pankaj Radheshyam Agrawal stated that the alleged sum was withdrawn from various business concern, but no evidence whatsoever has been filed till date nor the Revenue authorities has called for any such details from Shri....
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....tion dated 25.01.2024, on the aforesaid submission of the appellant commented as under. "In this regard, it is submitted that the concerned Police Station has recorded the statement of assessee on 26/06/2017 after filing of FIR by Mr. Agrawal on the matter of cash transaction with his father late Sh. Radheshyam R. Agrawal. The statement bears the signature of the assessee on the perusal of the statement, it is clear. that the assessee has accepted the cash loan of Rs. 8,61,80,284/-from Shri Pankaj R. Agrawal and Late Radheshyam R. Agrawal on cheques and hundis. A copy of the statements of the assessee dated 26/06/2017 and relevant part of the statement of the assessee dated 22/08/2018 are enclosed herewith as per Annexure 'C' for kind perusal. In the view of the above, the assessee has made false allegation that the reasons was recorded by the AO without application of Mind and on the basis of the unsigned copy of statement before the Police authority. Then A.O. has information in physical form and the then A.O., has after due application of mind and facts available on record, framed the reasons to believe for reopening of the assessment proceedings in the assessee's ....
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....mail and SMS will be submitted within two days in support of my say." 4.1.7 From the aforesaid documents, which were available before the AO at the time of recording the reasons before issuing notice u/s 148, it is clear that the allegation of Shri Agrawal against the appellant was that he and his father had given cash of Rs. 8.61 crores to the appellant towards investment in the immovable properties. The finding of the AO vide Para 3 of the reasons to believe are reproduced as under. "3. Analysis of information collected/received: On verification of documents available with this office, it is seen that Shri. Pankaj Radheshyam Agarwal has filed an FIR against Mr. Sanjay Kasliwal on the issue that Mr. Sanjay Kasliwal has taken loan from his father to the tune of Rs. 8.61 crore but he has failed to repay it. On the contrary, Sanjay Kasliwal as per page No. 54 to 56 of impounded loose paper bundle accepts that he took the cash loan against hundi but he has repaid the same. In this regard Statement of Mr. Pankaj Radheshyam Agarwal was recorded u/s 131 by Office of DDIT(Inv.) Aurangabad. In the statement Pankaj Agarwal has stated that the amount of Rs. 8.61 crore was advanced to San....
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....61 crores towards investment in immovable property. 4.1.11 Further, during the assessment proceedings the appellant had filed the copy of the petition filed by Shri Agarwal against the appellant before the Civil Court, Senior Division, Aurangabad. It is clear that in the said suit as well the allegation levelled against the appellant is that Rs. 8.61 crores were given by the father of the appellant towards investment in immovable properties and the said properties have not been transferred in the name of Shri Agrawal. Further, the copy of the interim order of the Hon'ble Civil Court, Senior Division, Aurangabad was also filed before the AO, wherein at Para 10 of the interim order, the Hon'ble Court had also recorded that the dispute in the suit filed by Mr. Agrawal is that the allegation levelled against Shri Kasliwal is that his father had given Rs. 8.61 crores towards investment in immovable property. 4.1.12 All the aforesaid documents filed before the AO during the assessment proceedings depict that the allegation of Shri Agrawal against the appellant is that his father had given advance to the appellant towards investment in property and it is not the allegation of ....
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.... properties. 4.1.17 The AO in the assessment order is completely silent about such hefty documents filed by the appellant to prove that there is no allegation against the appellant that he has taken cash loan against hundi from Shri Agrawal. The AO in the assessment order states that "after dispute between them, Mr. Agrawal has took stand that he has given cash to the appellant to purchase properties." Merely by this statement he denied all the contentions of the appellant. However, there are no documents brought on record by the AO to prove that Shri Agrawal has changed his stand. 4.2 On perusal of the documents filed and the factual and legal submissions made before me, it is noted that- i) The only issue for adjudication is that whether the appellant has accepted the cash loans against hundi in contravention of the provisions of section 69D of the Act. ii) The AO while recording the reasons to believe has mentioned that Shri Agrawal had filed FIR against the appellant on the issue that the appellant has taken loan from his father. In fact, in the said FIR there is no mention about the loan given to the appellant. iii) The appellant filed the copies of the charge sheet ....
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....e of the person borrowing or repaying the amount aforesaid for the previous year in which the amount was borrowed or repaid, as the case may be : Provided that, if in any case any amount borrowed on a hundi has been deemed under the provisions of this section to be the income of any person, such person shall not be liable to be assessed again in respect of such amount under the provisions of this section on repayment of such amount. Explanation.-For the purposes of this section, the amount repaid shall include the amount of interest paid on the amount borrowed." 30. From going through the above provision, we notice that the most important part of this section is that where any amount is "borrowed" and the next is amount due thereon is repaid. The first and foremost condition is that section 69D is invoked where any amount is "borrowed" on a "Hundi". The word "Hundi" comes later to the word "borrowed". It has been consistently held by the Hon'ble Courts that in case of the allegation by the department of the assessee earning undisclosed income, the burden is on the department to prove that such undisclosed income as referred in section 69 to 69D has been earned by the assessee.....
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....le price was fixed in a meeting orally and accordingly I have received sale deed draft on my email ([email protected]) on 29.03.2015 from email address of Sanjay Kasliwal ([email protected]) at 09.03 pm. I have also paid franking amount (stamp duty) Rs. 49.85 Lakhs on 27.03.2015, on confirmation by SMS at my mobile number on 9325002909 sent by Mr. Sanjay Kasliwal dated 25.03.2015 from his number 9326361555. The copies of stamp duty challans, email and SMS will be submitted within two days in support of my say Q.8 Please state as to whether you have any proof of advance such as receipt etc. If yes, please produce the copy of the same. Ans. Sir, we have cheques and receipts (hundis) duly signed by Mr. Sanjay Kasliwal in support of proof of advance, I have made to him. I will submit the copies of those cheques and hundis within two days. Original cheques and hundis are with the Police authorities for investigation purpose. Q.9 In reply to above question you have stated that you have given advance of Rs. 8,61,80,284/-. Please furnish the mode of such advance. Ans. Sir, I have made payment in cash. Q. 10 Please give the sources of advance given by you for Rs. 8,6....
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.... transaction or purchase of immovable property and not of giving cash loan to the assessee gets fortified with the fact that the draft sale deed as referred above was further acted upon by both the sides and stamp duty of Rs. 42.00 lakh was paid by Shri Pankaj Radheshyam Agrawal but thereafter since Shri Radheshyam Agrawal was passing through poor health and also they were having scarcity of funds and finally Shri Radheshyam Agrawal expired on 03.03.2015 the transaction could not move further and Shri Pankaj Radheshyam Agrawal applied for the refund of stamp duty paid by him for the purchase of immovable properties from Kasliwal Enterprises. Page 316 of the paper book proves that refund of Rs. 41,99,000/- was issued to Shri Pankaj Radheshyam Agrawal. The draft sale deed and the transaction of refund of stamp duty to Shri Pankaj Radheshyam Agrawal also throws light on important fact that the transaction was entered into between Shri Pankaj Radheshyam Agrawal and Kasliwal Empire through its partner Sanjay Kasliwal and the transaction if any was between Kasliwal Empire and Shri Pankaj Radheshyam Agrawal and not with the assessee. 33. Coming back to the dispute before us, from the rec....
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....t shows that Shri Pankaj Radheshyam Agrawal who was part of the transaction entered into in the registration of sale deed during March 2015 and was aware of the refund of stamp duty paid for the transaction of purchase of immovable property from Kasliwal Empire and therefore was a part of the transaction of purchase of immovable properties. But interestingly, for around 2 ½ years, he did not take any action and somewhere in the end of 2018 he filed a complaint based on the cheques and document alleged to be Hundi. It seems that the alleged Hundi and cheques which were stated by Late Shri Radheshyam Agrawal as misplaced and were not given to the assessee when asked for after the transaction of immovable property was declined on account of scarcity of funds with Shri Radheshyam Agrawal and Shri Pankaj Radheshyam Agrawal but after long period when these misplaced documents came in hand of Shri Pankaj Radheshyam Agrawal, he seems to have made planning to file the complaint and accordingly took course of action discussed above. It therefore means that if such documents were not located or would not have come into the possession of Shri Pankaj Radheshyam Agrawal he would have neve....