TaxTMI 
TaxTMI 
2024 (8) TMI 1621
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2. All the aforesaid matter pertains to various assessees of M/s NR Group & M/s Seleno Group, wherein search & seizure u/s 132 of the Act was conducted concurrently on 24.10.2017 in their business and residential premises. The assessees in present case are key persons and Directors in the aforesaid groups, known as Shri Sanjay Agrawal, Shri Mukesh Agrawal & Shri Rajesh Agrawal. Since the issues involved herein are common, interconnected and inextricably interwoven, therefore, for the sake of convenience and brevity, all the aforesaid matter are taken up for adjudication under this common order. 3. ITA No. 108/RPR/2020 has been taken up for adjudication first as the lead case, our decision therein shall have a direct bearing on the issues in the other cases and, therefore, the outcome of the lead case shall be utilized to decide the remaining matters by applying the same mutatis mutandis. 4. Ground of appeal raised by the department in ITA No. 108/RPR/2020 is extracted as under: 1. "On the facts and int he circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 2,10,00,000/- made by the Assessing Officer on account of unexplained investment....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ons of the assessee justifiable as the alleged document "Sauda-Ikrarnama" has a mention of Rs. 25.00 crores as consideration of sale, he, therefore, with his conviction had made the addition on the basis of terms and conditions in para 3 of the "Sauda-Ikrarnama", according to which the assessee was to pay Rs. 70 lac per month starting from January, 2018, therefore, the amount for 3 months i.e., January to March' 2018, in aggregate Rs. 2.10 crore was added as unexplained investment u/s 69 of the Act. 4.2 Aggrieved with the aforesaid addition by the Ld. AO, assessee preferred an appeal before the Ld. CIT(A). Wherein, after deliberations Ld. CIT(A) decided the issue by deleting the addition, under the following observations: 4. After taking into consideration the AO's findings and appellant's oral and written submission made in the course of hearing as well as the facts of the case the issues involved in appeal are discussed and decided as under :- 4.1 Ground No. 1 to 3 (revised):- Through these grounds of appeal the appellant has challenged the addition of Rs. 2,10,00,000/- on account of unexplained investment u/s 69 of the Act. During the course of searc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ails of payments (i.e., loans & advances) made by 'NR Ispat Group' to 'Seleno Steels Group' to pay/ clear the bank loan/ bank CC of 'Seleno Steels Group', are given as under: Sl. No. From (NR Ispat Group) To (Seleno Steels Group) Loan given (in the month of Oct, 17) Loan received/repaid (in the month of April, 18) 1. Sanjay Agrawal S/o Nand Kishore Agrawal Rajesh Agrawal HUE, (Ramnivas Agrawal 44,08,000 On 5-10-17 Ch. N0. 782700 44,08,000 On 24-4-18 2. Sanjay Agrawal S/o Nand Kishore Agrawal Ramnivas Agrawal HUF 58,16,000 On 5-10-17 Ch. N0. 782701 58,16,000 On 24-4-18 3. Sanjay Agrawal S/o Nand Kishore Agrawal Smt. Rukmani Devi Agrawal 24,00,000 On 5-10-17 Ch. N0. 782702 24,00,000 On 23-4-18 4. NR Ferro & Power P Ltd Abha Devi Agrawal 3,00,00,000 On 16-10-17 Ch. N0. 005996 1,14,21,715 On 24-4-18 5. NR Ferro & Power Ltd Abha Devi Agrawal 1,50,00,000 On 15-5-18 6. NR Ferro & Power Ltd Abha Devi Agrawal 9,07,844 On 17-5-18 7. NR Ferro & Power P) Ltd Abha Devi Agrawal 19,39,431 On 18-5-18 8. NR....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Group (i.e., NR Group), which has not been done, it means, not materialized & not honored. Thus, this very condition of the alleged piece of paper has not been fulfilled by the seller Group which means out of land mentioned in the alleged 'Sauda Ikrarnam', 32.50 acres of general land & 2.50 acres of Adiwasi land has not been given/ transferred to the assessee Group, which fact is clearly verifiable from the audited balance sheet of M/s. Seleno Steels Ltd as on 31-3-17, 31-3-18 & 31-3-19 and also from the balance sheet of the assessee as on 31-3-18 & 31-3-19. Further, all the pending statutory dues/ liability, pending returns/ statements and any amount dues, related to income-tax, sales tax, excise, GST, water tax and all other statutory dues till 15-9-17 to be borne by the seller group, but none of the terms & conditions has been fulfilled/ complied with by the seller Group; and thus, no act/ work done by the seller group (i.e., Seleno Steels Ltd) which is in consonance with the terms & conditions mentioned in the alleged 'Sauda Inkrarnama'. Thereafter, on 1-10-17, it was agreed between both the parties that shares of M/s. Seleno Steels Ltd would be transferred to t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....paid the bank loans in the name of M/s. Seleno Steels Ltd and on 25-4-18, 12,71,997 shares of M/s. Seleno Steels Ltd has been transferred @ Rs. 93/- per share to the members of the assessee-Group (i.e., the purchaser group) and Rs. 11,82,95,721 has been paid as 'sales consideration' of 12,71,997 shares of M/s. Seleno Steels Ltd. The details of shares of M/s. Seleno Steels Ltd purchased by family members of 'NR Ispat Group' from the family members & associates of 'Seleno Steels Group' on 25-4-18 are as under: Sl. No. Name of buyer (NR Ispat Group) Name of seller (Seleno Steels Group) Date of transfer of shares Number of shares transferred Sales consideration of shares transferred (Rs.) 1. NR Ferro & Power P Ltd Abha Devi Agrawal 25-4-18 3,75,000 shares @ Rs. 93 per share 3,48,75,000 2. 25-4-18 15,000 shares @ Rs. 93 per share 13,95,000 3. 25-4-18 53,000 shares @Rs.93 per share 49,29,000 4. NR Ferro & Power P Ltd Economy Infra. (P) Ltd 25-4-18 53,571 shares @ Rs. 93 per share 49,82,103 5. NR Ferro & Power P Ltd Sector Infra. (P) Ltd 25-4-18 64,285 shares @ Rs.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Trident Lamipack (P)Ltd 25-4-18 5,600 shares @ Rs. 93 per share 5,20,800 Total 12,71,997 shares @ Rs. 93 per share 11,82,95,721 4.1.3 Lastly, the appellant by taking alternate plea has stated that the AO has completely failed to bring on record independent evidence on record to establish nexus of payment of Rs. 2.10 crores in cash and the additions have been made on sheer assumption and presumption drawn from impugned dumb document. 4.1.4 After considering facts of the case, in-depth explanation of the facts by the appellant and findings of the AO, I am of the considered opinion that neither any of the person/firm/company nor any of the director from either group i.e. purchaser or seller group has ever admitted that the agreement under consideration was materialised and payment of Rs. 2.10 crores was made by the purchaser to the seller and that too in cash. Thus, it can safely be held that no such transaction actually took place and the entire addition has been made on sheer presumption and assumption basis. The seller in his statement recorded on oath has also denied to have any information about these transactions even does not have any kno....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appellant. The dumb agreement does not even bear and signature, date of execution, date of payment of alleged cash, payer/receiver of cash etc. also, the terms and conditions mentioned in the impunged agreement has not been fulfilled, however, the AO has presumed that the cash of Rs. 2.10 crore has been paid by the appellant neglecting all the other conditions such as transfer of land, discharge of liabilities by the sellers, and various others. The liabilities have been discharged by sellers in April 2018 and thereafter, shares were transferred to the purchaser group members. The impunged loose papers are undated, unsealed and unsigned. Also, the AO does not have any independent corroborative evidence having nexus that the alleged cash payment by the appellant. Absence of these vital details is making the loose papers under consideration as "deaf & dumb document". The onus was solely on the AO to fill such vital gaps by bringing positive evidence on record and prove the allegation about alleged "unaccounted cash payment" by the assessee, which he utterly failed to do so. CBI vs VC Shulda 3 SCC 410 The Hon'ble Supreme Court has held that loose sheets of paper....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the assessee had given a loan of Rs. 22.5 lacs on interest and earned interest income of Rs. 3.55 lacs on it. The Tribunal hold this document as dumb document. The relevant findings of the Tribunal as mentioned in the above order is as under: - "We have ourselves examined the contents of the document and are unable to draw any clear and positive conclusion on the basis of figures noted on it. The letters 'H.S. ', 'T. 2 ' and 'D-Shop 'cannot be explained and no material has been collected to explain the same. Likewise, the figures too are totally unexplained and on the basis of notings and jottings, it cannot be said that these are the transactions carried out by the assessee for advancing money or for taking money. Thus, in our opinion, this is a dumb document. " Hon'ble High Court confirmed the findings of the Tribunal and relevant findings was as under: - "12. It is well settled that 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and was silent about any investment. On the basis of such a dumb document, it cannot be said that there were investments made in fact by the assessee. Heavy onus lay upon the Revenue to prove that the document gives rise to undisclosed investment by the assessee. This onus has not been discharged. Accordingly, no addition of undisclosed income could be made on the basis of such a document. Such a view has also been entertained by the Hon 'ble Allahabad High Court in CIT vs. Dayachand Jain vaidya (1975) 98 ITR 280 (All). The addition so made, therefore, is directed to be deleted. Stanamsingh Chhabra vs. Dy. CIT (2002) 74 TTJ (Lucknow) 976: None of the loose papers seized are in the hand writing of the assessee. There is some jotting by pencil in some coded form on the loose papers made by the surveyed person or some other person. Moreover, no entries are supported by any corroborative evidence; such loose papers cannot be called even the documents as they are simply the rough papers to be thrown in the waste paper basket. In this connection, the assessee relies upon the court decisions. CIT vs. Chandra Chemouse P. Ltd. (2008) 298 ITR 98 (Raj.): it is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../pad but not loose sheets. The following extract being relevant is quoted hereinbelow: - "14. In setting aside the order of the trial court, the High Court accepted the contention of the respondents that the documents were not admissible in evidence under Section 34 with the following words: "An account presupposes the existence of two persons such as a seller and a purchaser, creditor and debtor. Admittedly, the alleged diaries in the present case are not records of the entries arising out of a contract. They do not contain the debits and credits. They can at the most be described as a memorandum kept by a person for his own benefit which will enable him to look into the same whenever the need arises to do so for his future purpose. Admittedly the said diaries were not being maintained on day-to-day basis in the course of business. There is no mention of the dates on which the alleged payments 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 abbreviated form. Only certain 'letters' have been written against their names whi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....P) Ltd vs. DCIT (2007) 107 TTJ (Chennai) 2000 Held that "no addition could be made in the hands of assessee on the basis of the dumb loose slips seized from his residence, in the absence of any corroborative material to show payment of any undisclosed consideration by the assessee towards purchase of land" (ii) Monaa Metals (P) Ltd vs. ACIT 67 TTJ 247 (All. Trib)- Holding that Revenue has to discharge its burden of proof that the figures appearing in the loose papers found from assessee's possession constitute undisclosed income. [In the present case, loose papers were not even seized from assessee 's possession]. (iii) Pooja Bhatt vs. ACIT (2000) 73 ITD 205 (Mum. Trib) Held that where document seized during search was merely a rough noting and not any evidence found that actual expenditures were not recorded in books of account, additions not justified. [In the instant case, similarly no other corroborative evidence was found in search to prove that details/figures mentioned in notings on page 1 17 to 119 of A/ I represent 'on money' payments by the assessee]. (iv) Atual Kumar Jain vs. DCIT (2000) 64 TTJ (Del. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 4.1.7 This is an undisputed fact that neither any incriminating material was found or seized during search proceedings nor any person has ever admitted about payment of cash of Rs. 2.10 crores by the appellant to the seller party. In absence of any corroborative evidence to prove that there was exchange of cash between purchaser and seller group, the AO has no locus to assume that appellant has made paid sum of Rs. 2,10,00,000/- in cash towards purchase of the said company. It is settled law that AO cannot make any addition merely on basis of suspicion, however strong it may be. The AO is not justified in presuming certain facts without having anything to corroborate. Hon'ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v/s CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, still assessment cannot be made on the basis of imagination and guess work. It has been held in the case of Umacharan Saha & Bros co. v/s CIT 37 ITR 21 (SC) that suspicion, however strong cannot take place of evidence. Similar views have been expressed by Apex court in the case of Dhiraj Lai Girdharilal v/s CIT (1954) 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....teel Ltd. was done, however, the amount of consideration was changed on record. Under such circumstances, it is clearly established that the said agreement was the real outline of actual transactions, out of which certain transactions which were to be executed, have been materialized. Out of such transactions, a transaction of payment of Rs. 14/- crores, in 20 instalments of Rs. 70/- lac per month starting from January, 2018, which could not be plausibly explained by the assessee, are considered as unexplained investment of the assessee and, therefore, an addition of three instalments starting from Jan, 2018 ending with March, 2018 which falls within the period of the year consideration are added to the income of the assessee u/s 69 of the I.T. Act. Ld. CIT(A) have not appreciated the facts of the case in right perspective, he absolutely got carried away with the explanations / contentions of the assessee and considered the alleged document as dumb document, whereas on the contrary the assessee had completed the transactions on a consideration lower then the amount shown in the said agreement, it was just an eyewash, to evade taxes on the undisclosed payments made towards the alleg....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ption/ surmises that the alleged cash payments of Rs. 2.10 crores has been paid to Mr. Rajesh & Mukesh Agrawal, the erstwhile directors of M/s. Seleno Steels Ltd, in respect of the impugned proposal/ offer prepared for purchase of the 'plant' of M/s. Seleno Steels Ltd; 1.5. in fact, the shares of 'M/s. Seleno Steels Ltd' has been transferred on 25-4-18, which comes in the AY 19-20, and Rs. 11,82,95,721 has been paid by cheque/ banking channel in the month of April, 2018 (PB-Pg.10, 11), and thus, the alleged purchase of 'Seleno plant' has been eventually materialized in AY 19-20, and not in AY 18-19; 1.6. in AY 18-19, only Rs. 6.08 crores has been given as loans and advances to clear the bank loan of M/s. Seleno Steels, which has been received back in the month of April, 2018, and thus, in AY 18-19, no purchase transaction has been made between the alleged parties; 1.7. the addition of Rs. 2.10 crores has been made by the Id AO is on the basis of a piece of loose paper which is an undated, unsigned proposed 'Sauda-lkrarnama' which was found & seized from the office premises of M/s. NR Ispat & Power; 1.8. in fact, it....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation is objected, is without any creditable supporting and far from truth, submitted as below: 1. The assessee doesn't know above "Sauda Ekrarnama". This was not found from the premises of assessee. As your Honor has mentioned at query No. 5 of above notice, this was found and seized from the office premises of M/s. NR Ispat & Power P Ltd. It is also not know who has written this paper. Assessee denies categorically the execution of above "Sauda Ekrarnama" by assessee. 2. Even by cursory look at above "Sauda Ekrarnama", one can say that this is not a document and does not have any evidentiary value for following reasons: i. This is not executed. None of the executants have signed it. ii. None of the witnesses have signed it. iii.No date of execution mentioned. iv. There are cutting and corrections at many places. v. At para No. 3 and 7 there are interpolation by hand after the typed contentions. Therefore, the presumption of your Honour that there was sale consideration of Rs. 25 crore is not correct. Spontaneous Reply It is submitted that during operation u/s 132 on 24-10-17, my statement was rec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nto 24 pages (PB-Pg. 66 to 88) by the search team and on being asked about alleged "Sauda Ikrarnama", he in Sl. No. 53, clearly denied (PB-Pg. 82) the alleged "Sauda Ikrarnama"; he also stated that the search team has asked question about sale of shares of M/s. Seleno Steels to the assessee Group, he in query No. 57, 58 & 60, very clearly replied (PB-Pg. 82, 83, 84) that sale of shares of M/s. Seleno Steels has been made for Rs. 12.50 crores to the assessee Group members (i.e., copy of statement recorded u/s 132(4) dt. 24-10-17 to 26-10-17 at PB-Pg. 82, Ans. to que No. 54); he stated that in search statement u/s132(4) on 24-10-17 to 26-10-17, he, in clear terms, denied about making of any kind of "Sauda Ikrarnama" and he duly stated that shares has been sold at Rs. 12.50 crores to the assessee Group members; and lastly, he clearly stated that no such amount as mentioned in the so called "Sauda Ikrarnama" which is undated, unsigned, unwitnessed, was received by him from the assessee; 1.14. that however, it is also correct that Rs. 6,08,48,000 has been given by the assessee-Group to various family members of the seller group (i.e., details of loans & advances given are enclo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 11. Rajesh Agrawal S/o Nand Kishore Agrawal Mukesh Agrawal & Family (HUF) 14,08,000 On 4-10-17 Ch. N0. 143823 14,08,000 On 23-4-18 Total 6,08,48,000 6,08,48,000 1.16. the other terms & conditions of the "Sauda Ikrarnama" was also not materialized/ not correct and it was only hypothetically prepared proposal/ offer for the meeting for the alleged deal of 'plant' of M/s. Seleno Steels with the said 2 persons i.e., Mr. Rajesh & Mr. Mukesh, that Rs. 2.50 crores as advance and at the time of handing over -the plant on 15-9-17 again cash payment of Rs. 2.50 crores, both the conditions was unilaterally presumed by the assesseeGroup at the initial stage to negotiate the deal of purchase of plant of M/s. Seleno Steels, which in fact, not executed and the main reason is for its 'non-execution' is that it was an offer/ proposal kept ready unilaterally prepared at initial stage by the assessee-Mr. Sanjay Agrawal & it's totally unawareness of the said person i.e., Mr. Rajesh Agrawal in respect of the alleged "Sauda Ikrarnama" which was unilaterally prepared by the assessee-Sanjay Agrawal on forecast/ estimates/ projected figures/ exp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to the cutoff date i.e., 15-9-17, however, this condition was also not fulfilled by the seller group, and the bank loan has, in fact, been closed up in the month of Mar, 2018 and thus, this condition has also not been complied with by the seller group; 1.20. it was also mentioned in the alleged 'Sauda Inkrarnama' i.e., undated, unsigned and unwitnessed, that all the pending statutory dues/ liability, pending returns/ statements and any amount dues, related to income-tax, sales tax, excise, GST, water tax and all other statutory dues till 15-9-17 to be borne by the seller group, but none of the terms & conditions has been fulfilled/ complied with by the seller Group; and thus, no act/ work done by the seller group (i.e., Seleno Steels) which is in consonance with the terms & conditions mentioned in the alleged 'Sauda Inkrarnama' i.e., undated, unsigned and un-witnessed, and thereafter, as on 1-10-17, it was agreed between both the parties that shares of M/s. Seleno Steels Ltd would be transferred to the family members of the assessee-Group at total sales consideration of Rs. 12.50 crores, which is also evident from the statement recorded on 24-10-17 to 26-10....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... demand of income tax penalty has been created by the ITO-Raigarh on M/s. Seleno Steels Ltd for the AY 10-11, and thus, this statutory liabilities of Rs. 9.4714 crores are to be borne by the Purchaser Group (i.e., the assessee-Group), and thus, by considering this future/ contingent liabilities of income tax and other statutory liabilities to be created on the purchaser group, it was agreed between both the parties that the shares of M/s. Seleno Steels would be transferred to the family members of the assessee Group at a total sales consideration of Rs. 12.50 crores, which will be done after repaying the bank loan in the name of M/s. Seleno Steels Ltd, and that is the reason that Rs. 6.08 crores has been accepted to give as loans & advance to the 'seller group' to repay the bank loan of M/s. Seleno Steels; and for this purpose, thereafter, 1.25. the first payment of Rs. 1,82,24,000 i.e. Rs. 1,68,16,000 and Rs. 14,08,000 to Smt Mamta Devi Agrawal and Mukesh Agrawal & family HUF respectively has been made/ given on 4-1017 as loans and advances to clear/ repay the bank loans of M/s. Seleno Steels Ltd and thereafter, 1.26. the second payment of 1,26,24,000 i.e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....per share 49,82,103 5. NR Ferro & Power P Ltd Sector Infra. (P) Ltd 25-4-18 64,285 shares @ Rs. 93 per share 59,78,505 6. Rajesh Agrawal S/o Nand Kishore A Smt. Mamta Devi Agrawal 25-4-18 2, 10,200 shares @Rs. 93 per share 1,95,48,600 7. Rajesh Agrawal S/o Nand Kishore Mukesh Agrawal & Family, HUF 25-4-18 17,600 shares @ Rs. 93 per share 16,36,800 8. Vijay Agrawal Shri Rajesh Ag S/o Ramnivas Ag 25-4-18 84,400 shares @ Rs. 93 per share 78,49,200 9. Vijay Agrawal Aman Agrawal 25-4-18 4,180 shares @ Rs. 93 per share 3,88,740 10. Vijay Agrawal Shri Mukesh Kumar Agrawal 25-4-18 28,100 shares @ Rs. 93 per share 26,13,300 11. Vijay Agrawal Shri Ramnivas Agrawal 25-4-18 86,300 shares @ Rs. 93 per share 80,25,900 12. Vijay Agrawal Sanjay Gadodia 25-4-18 20,000 shares @ Rs. 93 per share 18,60,000 13. Sanjay Agrawal Shri Rajesh Ag, HUF (Ramnivas) 25-4-18 55, 100 shares @ Rs. 93 per share 51,24,300 14. Sanjay Agrawal Shri Ramnivas Agrawal, HUF 25-4-18 72,700 shares @ Rs. 93 per share 67,61,100 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0, 11); it means, there has not been any transfer of the plant of 'M/s. Seleno Steels' has been materialized in the AY 18-19 as alleged by the Id AO; this fact has also been evident from the statement recorded of the assessee on oath u/s 132(4) on 24-10-17 as well as the statement recorded of the seller on oath u/s 132(4) on 24-10-17 as well as the reply submitted by the seller before the Id AO during the assessment proceedings in response to the notice issued on 16-10-19 (assessment order, Pg. 7, 8); 1.32. Thus, there was no cash payments, as alleged/ misapprehended & presumed by the Id AO, has ever been made by the assessee in respect of the alleged deal of purchase of plant of Seleno steels'; that bank loan has been repaid by M/s. Seleno Steels only in the month of Mar, 2018 out of the loans & advances given by the assessee-Group of Rs. 6,08,48,000 in the month of Oct, 2017; that the seller party Shri Rajesh Agrawal has clearly stated in its reply submitted before the Id AO during the assessment proceeding that he has not received any such amount as alleged by the Id AO in the query raised on 16-10-19 (assessment order, Pg. 7, 8); 1.33. the ld AO ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng asked about the alleged 'agreement to sell', that plant has been sold at Rs. 12.50 crores and he has not received any amount in cash in any manner from the purchaser party. ---After getting above reply from the alleged seller party i.e., Shri Rajesh Agrawal, it is very clear that the Id AO has duly accepted/ relied on the version of the seller party and duly convinced that the assessee has not paid any cash amount to the seller party up to the date of search i.e., 24-10-17; ---While, in the alleged draft 'agreement to sell', it is mentioned about proposal of giving advance of Rs. 2.50 crores & again Rs. 2.50 crores at the time of giving possession of 'plant' on 15-9-17, and since the alleged offer/ proposal has not been materialized for the reasons as mentioned above, the Id AO himself accepted that both the parties have not acted upon/ transacted on the terms and conditions as mentioned in the alleged offer/ draft agreement; ---the ld AO has accepted the fact that no land (i.e., 32.50 acres general land & 2.50 acres Adiwasi land) as mentioned in the alleged offer/ proposal/ draft 'agreement to sell' has been transferred....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n that merely on the strength of the alleged admission in the statement of Dilip Dherai, the additions could not have been made. The concurrent findings of fact would demonstrate that the essential ingredients of sec 69C enabling the additions were not satisfied. This is not a case of 'no explanation'. Rather, the Tribunal concluded that the allegations made by the authorities are not supported by actual cash passing hands. The entire decision is based on the seized documents and no material has been referred which would conclusively show that huge amounts revealed from the seized documents are transferred from one side to another. In that regard, the Tribunal found that the Revenue did not bring on record a single statement of the vendors of the land in different villages. None of the sellers has been examined to substantiate the claim of the Revenue that extra cash has actually changed hands. It is in these circumstances that the Tribunal found that on both counts, namely, the legal issue, as also merits, the additions cannot be sustained. Eventually, the Tribunal held as under: "25. A perusal of the balance-sheet of the assessee show that the authorized, issued ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent was supposed to be signed by another transferor also, i.e., the present assessee, the assessee had not signed this agreement and it was left blank and at the time of seizure was lying with the assessee. When the assessee was asked about this sale, he replied that this agreement was not executed and earnest money has not been received. The AO had added 50% of the earnest money amount in the hands of the assessee on the ground that the money was equally shared by the assessee and his brother. 12. Coming to the facts of the present case with regard to the addition of Rs. 17,00,892 made by the AO as undisclosed income of the assessee for the block period, we May refer to the findings of the Tribunal on this point and the relevant portion reads as under: "we find that the addition has been made by the Id AO on the basis of surmises and guess work. He has ignored the fact that the agreement was found in the possession of the assessee. Had the vendee made substantial payment of Rs. 34,01,784 he would have taken care of not leaving the documents behind with vendors only. The Id AO has also ignored the fact that the agreement was not complete, in as m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Tribunal held as under: (ii) The CIT(A) ought not to have read the document seized from the computer of Mr. Awasthi piecemeal. If the paper is a projection for the other floors then it could not be used for determining the rate of alleged sold portion. Also, it did not mean that the portions were sold at that rate. (iii) There was no direct evidence available with the AO indicating the sale of flats @ Rs. 4,600 or Rs. 4,800 per sq.ft. by the assessee in VT. On presumptive basis, it cannot be said that assessee has sold all the flats @ Rs. 4,600 or 4,800 per sqft. (iv) On a plain reading of the evidence it cannot be conclusively held that the assessee had received on-money or that the sale was made at a rate higher than the one recorded by the assessee in the document. (v) The AO did not call the vendees of the flats. He did not call Mr. Mrinal Nag for examination. He also did not make any other inquiry in order to corroborate his conclusion. (vi) The CIT(A) erroneously retained the addition at Rs. 5,60,73,380 on the basis of estimated projection made by Mr. Awasthi in the file of "cashflow/ Vatika Triangle" at page No. 30 and 31. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Reliance was also placed on Vivek Aggarwal (2015) (Del HC) to urge that unless the amounts stated in the documents were actually paid, it cannot be presumed that the amount mentioned in the sale deed was not correct. 40. Turning to the case on hand, the document recovered from the file in the computer of Mr. Awasthi, forms the basis of the addition made by the AO, which was further reduced by the CIT(A). This was in the form of a computer printout of three sheets which were unsigned and undated. The first sheet was titled 'Cash-in-flow detail for the Revenue', the next was titled 'revenue details' and the third was titled 'Vatika Triangle, Guargaon.' The notes to the documents are indicative of their being projections. Noting (i) states that "it is presumed that the building will be completed and fully let out in the month of Nov, 2002." Another note states "Further, the sale of the building will took place over a period of nine months." Admittedly, as on the date of the search the construction was still in progress. Flats upto the fourth floor had been sold. The view taken by the Tribunal that mere fact that the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oors of VT. It was also not open to the AO to draw an inference on the basis of the projection in the document, particularly when the assessee offered a plausible explanation for the document. The burden shifted to the Revenue to show, on the basis of some reliable and tangible material...... 47. In the circumstances, the Court is of the view that the Tribunal was justified in coming to the conclusion that the addition of Rs. 5,60,73,380 made by the CIT(A) was not sustainable in law." 2.4. the assessee had never acted upon the agreement to sell; that pursuant to the agreement to sell, no sale deed has been executed in favour of the assessee; that Revenue had failed to bring on record any reliable material to prove that the assessee had made actual investment in cash of Rs. 2.10 crores in the FYI 7-18, addition is unjustified on that count, as in Vivek Prahladbhai Patel (2016) 138 DTR 158 (Guj) dt. 6-11-15, held as under: "5. ...ld counsel for the assessee submitted that the evidence on record clearly reveals that though the agreement to sell was entered into on 18-1-05, it was never acted upon by both the parties. As per the agreement to sell, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessee. However, a perusal of the record of the case shows that no further details have been stated by Somabhai as to who was the person who had come to pay the money and on which dates such amount had been paid. It is an admitted position that pursuant to the agreement to sell, no sale deed has been executed in favour of the assessee and the plots of land which were agreed to be sold to the assessee have ultimately been sold to one Ajay Patel by way of registered sale deeds for a much lower consideration than that reflected in the agreement to sell. In the sale deeds executed in favour of Ajay Patel there is no reference to the agreement to sell executed in favour of the assessee, nor is the assessee a confirming party to such sale deeds. Thus, the Revenue has failed to establish that the assessee had paid any on-money in terms of the consideration reflected in the agreement to sell. A POA executed by Vishnubhai Prajapati in favour of the assessee in relation to one of the plots sold to Ajay Patel permitting him to take necessary steps for entering the name of Ajay Patel in the Revenue record is stated to be the link between Ajay Pate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0 and Rs. 3,25,50,000 in the PYs relevant to AY 05-06, 06-07 and 07-08 respectively. However, to the extent of Rs. 11 lakhs, the Tribunal was of the view that the agreement was material to conclude payment of such amount and that the assessee had failed to show that the amount of Rs. 11 lakhs was paid by him to of 30 Shri Somabhai Prajapati by cheque and not by cash and accordingly confirmed the addition to that extent for AY 05-06. 8. In the opinion of this Court, having regard to the evidence which has come on record, which reveals that there is an agreement to sell executed between the assessee and the sellers, which shows the price of the plots of land in que to be a much higher figure than the documented price and the fact that the sellers have stated that they have received higher amounts by way of on-money and have also shown receipt of such amount in their IT returns, the circumstances do raise a suspicion. However, as held by Daulatram Rawatmull (1964) (SC), even if circumstances raise a suspicion, suspicion cannot take the place of evidence. 2.5. when the alleged document is undated, unsigned, un-witnessed and no corroborations has been brought ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d do not call for interference." 2.6. when on the date of search on 24-10-17, the assessee has clearly stated in the statement recorded u/s 132(4) that deal of plant has been made at Rs. 12.50 crores and the alleged seller also in his statement recorded u/s 132(4) on 24-10-17 duly stated/ affirmed on oath that the alleged deal has been made at Rs. 12.50 crores and further again, in his reply before the Id AO has clearly stated that no such cash amount has been received for the alleged deal and thus, both the parties have clearly denied about any cash transaction between them, then, without any independent corroborative material evidence brought on record by the revenue for its baseless contention, the alleged addition on that count is unjustified as held in Ved Prakash Choudhary (2008) 305 ITR 245 (Del HC) dt. 19-2-08, held as under: "2. Briefly the facts of the case are that a search was conducted at the residence of the assessee on 10-2-00. During the course of search, 2 MOUs dt. 1-3-99 were recovered. These MOUs were entered into between the assessees, Ravi Talwar and Madhu Talwar. In terms of the MOUs, the assessee had paid Rs. 25 lakhs each to Ravi Talwar and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....been sold to M/s. Delhi Tent and Decorators P Ltd, by Ravi Talwar and Madhu Talwar. This was confirmed by Shri NK Mittal, one of the directors of Ws.Delhi Tent and Decorators P Ltd. Quite clearly, the MoUs did not fructify. 10. Sec 132(4A) uses the expression 'it may be presumed'. It is not obligatory on the AO to make a presumption. Even if a presumption is required to be made, then, as held in SMS Investment Corpn (P) Ltd (1994) (Raj), the presumption is a rebuttable one and relates to a que of fact. While coming to this conclusion, the Raj HC relied upon an earlier decision rendered by it in SMS Investment Corpn (1988) (Raj). 12. Insofar as the present case is concerned, the assessee had stated that infact, there was no transfer of money between him and Ravi Talwar and Madhu Talwar. On the other hand, Ravi Talwar and Madhu Talwar had denied receipt of any money from the assessee. In the fact of these denials, there ought to have been corroborative evidence to show that there was in fact such a transfer of money. Both the CIT(A) as well as the Tribunal have come to the conclusion that there was no such material on record. 13. The AO relied on ce....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... FAA has rightly considered this aspect and deleted the addition." 6. After having heard the counsel for the parties on this issue of the deletion of the addition of Rs. l crore on account of the alleged unexplained investment, we are of the view that the CIT(A) and the Tribunal have deleted the said addition on examination of facts. In our view, no que of law arises for our consideration. The facts, as established on record, do not point conclusively to unexplained investment of Rs. l crore in cash by the assessee particularly because the MOU as well as the receipt in que were unsigned documents and the transaction had not materialized. 7. Insofar as the deletion of the addition of Rs. 57 lakhs on account of the Udyog Vihar property is concerned, the difference is that there was not even an unsigned receipt nor any payment through cheque. Even the agreement was an unsigned document. The Tribunal found that there was not even an iota of evidence to establish the Revenue's contention that any unexplained investment in cash had been made by the assessee in respect of the Udyog Vihar property. We are of the view that the findings of the Tribunal are also pure fin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....estment; it does not even give the AO the option of applying any reasonable yardstick to measure the precise extent of understatement of the investment once the fact of understatement is proved. It appears to us that the AO is not only required to prove understatement of the purchase price, but also to show the precise extent of the understatement. There is no authority given by the section to adopt some reasonable yardstick to measure the extent of understatement. But since it may not be possible in all cases to prove the precise or exact amount of undisclosed investment, it is perhaps reasonable to permit the AO to rely on some acceptable basis of ascertaining the market value of the property to assess the undisclosed investment. Whether the basis adopted by the AO is an acceptable one or not may depend on the facts and circumstances of the particular case. That que may however arise only when actual understatement is first proved by the AO. It is only to this extent that the rigour of the burden placed on the AO may be relaxed in cases where there is evidence to show understatement of the investment, but evidence to show the precise extent thereof is lacking. 14. In Lal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o sell between M/s. Sawan Land Developers (P) Ltd and a group of persons including the assessee for sale of 6 kanal, 6 and 1/6 maria at Kharar on 21-12-06 for Rs. 1,90,00,000. 10. The assessee has filed copies of the seized documents i.e., agreement to sell in the PB, which did not bear signature of the assessee. The assessee specifically pleaded before the CIT(A) that the document is un Ejgggd. The AO has also placed, copies of the seized papers i.e., agreement to sell with the assessment orde r, which supports the contention of the assessee that it is un-signed agreement to sell. Since the assessee has not signed the agreement found during the course of search, no liability could be attributed qua the agreement towards the assessee since he was not a party to the agreement till the assessee has signed the agreement. Kulwant Rai (2007) (Del HC) held as under: "Held, dismissing the appeal, (i) that, admittedly, the assessee had not signed the agreement in que and since he had not signed the agreement, no liability could be attributed qua that agreement towards him since he was not a party to the agreement till he had signed the agreement....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that there are number of cuttings, corrections, hand written insertions etc. in the same and it is not signed by any of the parties. The deal has been finalized by transferring of shares of M/S Shah Buildcon and not by transferring of the said plot by the company. In the signed agreement subsequently submitted by the assessee during the course of assessment proceedings, the consideration mentioned/ amount paid and to be paid are same but there were certain conditions of approval of map for housing project and construction of 17,000 sqft, which were to be fulfilled by the seller party before finally closing the deal. Application for such approval had already been made in the month of Sep, 2006 by the sellers. This agreement is between the existing shareholders/ directors of M/s. Shah Buildcon and the assessee. The assessee has also produced a revised agreement dt.14-3-07. In this agreement, as the sellers could not fulfill the conditions, the amount of consideration and the terms of payment were revised and the payments have been made according to the said terms which are verifiable from the books of account and other records of the company M/S Shah Build....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h is undated, unsigned, un-witnessed, did not relate to cash payment of Rs. 2.10 crores during the FYI 7-18, then in absence of any other supportive corroborative material evidence, this 'Sauda Ikrarnama' by itself was not found to be enough and justified basis to make addition; the seized 'Sauda Ikrarnama' which is papers being not corroborated by any independent evidence/ material cannot be considered as a reliable document as a proof of investment in alleged plant, as held in Sharad Chaudhary (2014) 165 TTJ 145 (Del-Trib) ITA No. 933/Del/2012, dt.25-7-14, held as under: "22. The CIT(A) has also relied on Satyapal Wassan (Jab-Trib) wherein elucidating with respect to the same issue, the Tribunal has held as under: "The crux of these decisions is that a document found during the course of search must be a speaking one and without any second interpretation, must reflect all the details about the transactions of the assessee in the relevant AY. Any gap in the various components as mentioned in sec 4 must be filled up by the AO through investigations and correlations with the other material found either during the course of the search or on investigation. As ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he guiding ratio laid down by their Lordships is that when the loose papers did not relate to certain payment during the relevant period in que, then in absence of any other supportive material or evidence these loose sheets by itself were not found to be enough and justified basis to make addition. 26. In this case, it was also held that the seized papers being not corroborated by any independent evidence cannot be considered as a reliable document as a proof of investment in house property and accordingly, this kind of paper is liable to be ignored and addition made on the basis of this document is not sustainable. 27. In view of foregoing discussions, we are of the view that in the present case, the AO made addition on the basis of notings on Annex-A-1. As we have already stated and concluded earlier that on logical analysis of the notings contents of Annex-A-1, we reach to a conclusion that only Annex-A-l stand alone is not sufficient to draw an inference that the assessee made investment of Rs. 4,47,00,000 in purchase of land out of books of accounts and statement of investments and assets furnished before Revenue authorities by using income earned from undis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onents in the statement recorded on 24-10-17 u/s 132(4) before the search team in Ans. No. 54 and clearly recorded that the plant has been sold at Rs. 12.50 crores to Mr. Sanjay Agrawal as well as in the reply given before the Id AO during the assessment proceedings in response to the notice issued on 16-10-19, again he has stated that plant has been sold to Mr. Sanjay Agrawal at Rs. 12.50 crores only and no cash has been received in any manner in respect of the deal (assessment order, Pg. 7, 8); addition made by the Id AO merely on presumption & surmises without bringing any corroborative material evidence on record to substantiate his baseless contention, is not justified on that count, as held in Smt. Renu Agarwal (2017) 185 TTJ 9 (JaiTrib) ITA N0. 746/Jp/2014, cit. 14-2-17, held as under: "3.5. The Deptt carried out search and seizure operations on 22-9-10. After going through available records before us, the facts emerge that during the year u/c the assessee purchased a plot No. B-281, 10B Scheme, Gopalpura Bye Pass, Jaipur. This was a vacant plot which was purchased by the assessee for Rs. 65 lakhs vide registered sale deed dt. 27-6-08. The Deptt found and seized the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....A N0. 291/Hyd/201, dt.29-11-13, held as under: "6. During the course of search operations, an unsigned and undated letter was found in the premises of Shri Ch.Srinivas, VP of DLF. On perusal of the said letter, the AO observed that the said letter-was written by the assessee; that an amount of Rs. 32 crores was paid by the assessee to the landlords and the claimant before the date of registration and that the assessee got back the said money from DEMI Realtors after registration of lands. When confronted with the said letter, the assessee, vide detailed explanation dt.5-12-09 submitted that the said letter was never written by him; and neither he paid Rs. 32 crores in advance of the registration, nor subsequently got back the same from DEMI Realtors. The AO, however, was not convinced with the explanation of the assessee, and added the said amount of Rs. 32 crores to the income disclosed by the assessee. 7. On appeal, the CIT(A) after due consideration of the detailed arguments of the assessee, observed that Shri C Srinivas, VP of DLF, from whose residence, the hand-written letter, which led to the impugned addition was made, was seized, in the statement recorded ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ritten by him to the dictation of his Executive Director, so as to have it issued by the assessee to DLF. That being so, in the absence of any corroborative evidence brought on record to disprove the version of Shri Srinivas, there is no scope for making any addition in the hands of the assessee. Further, the letter in question is an unsigned dumb document, based on which no addition could be made without bringing on record any corroborative evidence to substantiate the contents of such letter. In this view of the matter, the CIT(A) in our considered opinion, was justified in deleting the addition made by the AO." 2.15. that (i) no identification of 32.50 acres & 2.50 adiwasi land as mentioned in the so called 'Sauda Ikrarnama'; (ii) bank loan has not been cleared up to the date 15-9-17 by the seller party as mentioned in the so called 'Sauda Ikrarnama'; (iii) stock of raw material & finished goods has not been reached at 'nil' level as on 15-9-17 as mentioned in the alleged 'Sauda Ikrarnama'; and thus, in other words, the alleged agreement did not have any proper identification of the land proposed to be sold; No specific ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the alleged 32.50 acres of general land & 2.50 acre of adiwasi land as mentioned in the 'Sauda Ikrarnama' from the alleged seller; hence, the claim that it was a proposal later on not carried through and cancelled is having sufficient cogency; when scribbling in loose paper found on search and the same is a proposal which was not carried through cannot be brushed aside in light of the confirmation from the parties involved; as held in Ms Priyanka Chopra (2018) 171 ITD 437 (Mum-Trib), ITA No. 4601/ Mum/2015, dt.1-618, held as under: "14. ...this addition has been made on the basis of loose papers found at assessee's premises numbered as page No. 114-117 of Annex-A-l showing cash payment of Rs. 3.5 crores, out of an amount totaling to Rs. 7.65 crores on account of purchase of commercial unit of 5,100 sqft from one M/s. Arjun Realtors (P) Ltd. During the course of hearing the assessee has explained and substantiated with documents that such transaction was cancelled and not completed at all. It was only a proposal carried out through one broker, namely, Mr. Goldie Ahuja. The assessee also explained and substantiated that cheques issued to Mr. Goldie Ahuj....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2,995.70 sq.ft. for Rs. 4.65 crores. Assessee has duly submitted confirmation of payment and agreement for the new project. The cancellation of the cheques given for the earlier project have also been shown and confirmed. The sole basis of this addition is the above said document found. In our considered opinion, the above said document cannot be said to be a conclusive proof of cash payment of Rs. 3.5 crores. The assessee's plea that the same is a proposal which was not carried through cannot be brushed aside in light of the confirmation from the parties involved. It is also on record that the assessee never purchased estate property of 5,100 sq.ft. from the said builder. Hence, the claim that it was a proposal later on not carried through and cancelled is having sufficient cogency. In similar circumstances PV kalyanasundaram (SC) had affirmed the deletion of similar addition. Accordingly, in light of the aforesaid discussion and precedent, we do not find any infirmity in the order of the ld CIT(A)." 7. Backed by aforesaid submissions, it was the prayer by Ld. AR that the document found during the search was just a draft proposal wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t unaccounted cash involved in the purchase was without any basis. Ld. AR argued that the addition made was under presumptions, arbitrarily without any corroborative material evidence on record that the amount of Rs. 2.10 have changed hands. Ld. AR placed his reliance on various judgments on this aspect referred to supra. It was the contention of Ld. AR that certain conditions of the proposed unsigned agreement found during the search are not acted upon by the parties which is an admitted fact on the record accepted by the revenue, that the transaction of land was not materialized, liabilities were not settled by the sellers, advance amount of 2.50 crores was not paid by the assessee, moreover, the basis of addition that as per para 3 of the alleged document, the assessee was supposed to pay Rs. 70 lac per month for 20 months to the sellers was not seriously believed and acted upon by the revenue, as no adverse action was taken or addition on this account was made by the department on the assessee in the subsequent assessment years, all such facts shows that the document found during the search was only a proposed draft, terms of which were under discussion and the same was not exe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion of facts have not been disputed by the revenue. Apart from, such terms and conditions, which were not pursued by the parties, the income tax liability of the seller group have been taken over by the assessee (the buyer). The statement of directors of seller group recorded on oath u/s 132(4), wherein the alleged document was confronted, and explanation was sought, Mr. Rajesh Agrawal, seller had categorically refused to have knowledge of any such document and about any action based on terms & conditions therein, he answered that the consideration was agreed at Rs. 12.50 crores only. The Ld. AO was of the opinion that the response of Shri Rajesh Agrawal and Shri Sanjay Agrawal was contradicting in nature but was unable to expose such inconsistency, he placed his belief on the particular clause mentioned in the alleged agreement that the total consideration is Rs. 25 crores, out of which Rs. 12.00 crores are to be paid by cheque and Rs. 13.00 crore to be paid in cash. Ld. AO had firmly picked para 3 of the alleged document "Sauda-Ikrarnama", that the seller will pay 20 instalments of Rs. 70 lac each to the buyer starting from 01.01.2018, accordingly, addition for first three month....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the assessee challenging the validity of approval granted u/s 153D of the Act in the aforesaid application u/r 27, the same thus, is left as open. 11. CO No. 01/RPR/ 2021 (arising out of ITA No. 108/RPR/2020) by the assessee: 11.1 The grounds of appeal raised by the assessee in this CO are as under: 1. On the facts and circumstances of the case and in law, the ld CIT(A) has erred in not considering the fact that search assessment made u/s 143(3) rws 153A is invalid, since approval granted u/s 153D is in mechanical & routine manner without application of mind by Jt. CIT in a hasty manner, merely a formality, an empty ritual; in absence of valid approval as mandated by law u/s 153D as per sec 153B(1)(b), the alleged search assessment u/s 143(3) rws 153A be treated as invalid and is liable to be quashed. 11.2 As the appeal of the department in ITA No. 108/RPR/2020 against the deletion of addition by the Ld. CIT(A) is rendered as dismissed, in terms of our aforesaid observations. We refrain ourselves to adjudicate the ground in CO filed by the assessee challenging the validity of approval granted u/s 153D of the Act, the same therefore, is left as open. 12. In re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....any corroborative evidence to prove that there was exchange of cash between purchaser and seller group, the AO has no locus to assume that appellant has received sum of Rs. 1,05,00,000/- in cash towards purchase of the said company. It is settled law that AO cannot make any addition merely on basis of suspicion, however strong it may be. The AO is not justified in presuming certain facts without having anything to corroborate. Hon'ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v/s CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, still assessment cannot be made on the basis of imagination and guess work. It has been held in the case of Umacharan Saha & Bros co. v/s CIT 37 ITR 21 (SC) that suspicion, however strong cannot take place of evidence. Similar views have been expressed by Apex court in the case of Dhiraj Lai Girdharilal v/s CIT (1954) 26 ITR 736 (SC). 14. In view of aforesaid observations, we affirm the view of Ld. CIT(A) on the similar lines in terms of our decision in the case of Shri Sanjay Agrawal, the buyer, in ITA No. 108/RPR/2020, therefore, the appeal of the department, ITA ....