TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1181
X X X X Extracts X X X X
X X X X Extracts X X X X
....eived by M/s Metrocity Homes. 2. On the facts and in the circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs. 31,64,450/- made by the AO which was based on the seized Document No. B/6 (pages 1 to 55), and the said document have the evidentiary and the said document have the evidentiary value. 3. On the facts and in the circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs. 64,03,400/- made by the AO which was based on the seized Document No. B-2/31, and the said document have the evidentiary value. 4. On the facts and in the circumstances of the case, Ld. CIT(A) failed to appreciate the facts that during the course of search/survey loose paper or any incriminating documents hold that high value and the same would be treated as base of making any addition. 5. On the facts and in the circumstances of the case, Ld. CIT(A) failed to appreciate the fact that noting on the loose paper done by the employee of the assesee i.e. M/s Metrocity Homes and the onus to explain the noting on the loose paper lies on the assessee. 6 On the facts and in the circumstances of the case, Ld. CIT(A) failed to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "Ground no. 3 and 4 are regarding the addition of Rs. 98,18,540/- u/s 69A as per para 3 & 4 of the assessment order. I have perused the submission of the appellant and the assessment order. On verification it is found that the details regarding "booking chart cum instalment schedule" prepared by marketing executive for various customers. Also, the booking form were prepared on the basis of estimated area to be sold to the customers. It is clear that the booking form are prepared on estimated and should not be considered for ascertaining the actual sale consideration. There is also no evidence of money trail of the money receipt. Further the appellant 69A of the Act has made various Judicial reference in the submission regarding addition u/s 69a of the Act. "Ownership is one of the major Considerations for making addition under Section 69A dealing with money, etc., owned by the assessee and found in his possession. -Durga Kamal Rice Mills v. CIT [2003} 130 Taxman 553 (cal.). In the instant case, there has been no money, bullion found during the search and survey action. Neither jewellery or valuable items found from possession of the assessee, nor it is found t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of booking by the customers. The said form is filled to fix the moral responsibility of the customers. The said form is filled on the basis of estimated area and the sale price per Sq. Ft. of the flat, which can be evident from the following chart. Page No. Name of Customer Flat No. Area as per Booking Form Sq. Ft. Area as per Sale Deed Sq. Ft. Difference in Area Rate as per Booking Form 1 2 3 4 5 6 7 35 to 37 Malti Kathale 301-C 1300 991.88 308.12 3177 32 to 34 Deepak Sudhalwar 302-C 1300 1000.41 299.59 3350 24 & 28 Sumati Salve 103-A 1150 662.4 487.6 3000 21 & 23 Sandhya S Uttarwar 202-C 1285 See Note Below 3274 18 to 20 Alok Sharma 602-B 1115 604.94 510.06 3230 14 to 17 Ravindrasing Patil 705-A 950 491.4 458.6 3145 13 Vijay Raut 201-C 1285 985.2 299.8 3350 10 to 12 Akshay Kondawar 401-C 1285 700.47 584.53 3250 6 to 8 Bijal N Malani 102-C 1200 913.01 286.99 3275 In these cases only booking form is available, there is no booking of these customers ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the assessee had not truly disclosed his income. 11. We have given a thoughtful consideration to the arguments made by the rival parties and perused the material available on record. We find force in the observations made by the learned CIT(A) that there has been no money, bullion found during the search and survey action. Neither jewellery and/or valuable items found from possession of the assessee nor it is found the assessee is the owner of any kind of money, bullion, jewellery etc. The limbs of section 69A are not getting satisfied at all. We find force in the observations so made by the learned CIT(A). In support of such observation, learned CIT(A) has perfectly placed reliance upon the case law cited supra. We also find no evidence of money trail of the booking chart cum instalment schedule. The learned Counsel for the assessee putforth his arguments very precisely by bringing out the facts justifying the deletion of addition made by the learned CIT(A) as aforesaid and we agree with him. In view of the undeniable observations made by the learned CIT(A) as reproduced above, we left with no choice but to uphold the impugned order passed by the learned CIT(A) by dismissing ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 4 1285 5 6 7 3270 See Note Below 2.3.5 Omprakash Kakade 603-A 1250 See Note Below 3250 In these cases only booking form is available, there is no booking of these customers In the above cases there is no booking of the above customers in the project but only booking form is available. The reply of assessee was not considered by AO." The learned Counsel for the assessee thus prayed for upholding the order of the learned CIT(A) on this issue. 16. We have given a thoughtful consideration to the arguments made by the rival parties and perused the material available on record. While going through the record, we find that basically the addition made by the Assessing Officer is on account of difference between estimated sale consideration in booking form of the customers and the final sale deed value, however, the Assessing Officer was not justified in making addition when there is no booking by the customer and hence the addition can sustain on the basis of booking by the customer. As can be seen from the chart tabulated above, there is no booking by the customers ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gs in the booking form are not matching with the actual transactions and cannot be relied upon. Page No. Name Flat No. Amount Remark 10 Malti Kathale 301-C 1000000 Already added in Para 3, Ground No. 1 Rs. 11,30,000/- 13 Atul Salve 103-A 1450000 Already added in Para 3, Ground No. 1 Rs. 14,50,000/- 14 Alok Sharma 602-B 901450 Already added in Para 3, Ground No. 1 Rs. 6,01,450/- 15 Ravindra Patil 705-A 300000 Already added in Para 3, Ground No. 1 Rs. 3,00,000/- 16 Vijay Raut 201-C 500000 Already added in Para 3, Ground No. 1 Rs. 5,00,000/- 20 Manish Malviya - 1601950 Further the additions made in above grounds, i.e. Ground No. 1 to Ground No. 3 are on the basis of On-Money received from the customers by the assessee. There was no action taken on the customers as after receiving summons u/s. 131 of the Income Tax Act, 1961, from the Investigation Department, the customers have categorically denied having paid any cash amount as on-money to the assessee. The Investigation Department has accepted their reply but added the same amount in the income of the assessee wit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ound during the search and survey action. Neither jewellery or valuable items found from possession of the assessee, nor it is found the assesse is the owner of any kind of money, bullion, jewellery etc. The limbs of Sec 69A is not getting satisfied at all. Further, whatever documents are found are loose papers and dumb documents. No reliance can be placed on such loose papers. Addition u/s 69A can only be made when the assessee found to be in possession of money, bullion, jewellery, etc. not recorded in the books of accounts of the assessee. Therefore, in the present case the addition which is not premised on any cash, bullion, jewelry or other valuable item but is purely based on some vague noting cannot be a source for making additions under Sec 69A of the Income Tax Act, 1961. The addition made by the Assessing Officer based on the loose paper, which is not conclusive evidence and, therefore, the same is not sufficient to make the addition. No addition can be made on the basis of dumb documents/note book/loose slips in the absence of any other material to show that the assessee has received on-money from customers over and above the sale deed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cuments having no evidentiary value and cannot be taken as sole basis for determination of undisclosed income of the assessee. No addition ought to be made simply on the basis of uncorroborated noting and scribbling on loose sheets of papers. It was further stated that the loose papers based on which the Ld AO has made the addition are merely projections and cannot partake the character of undisclosed income of the assessee without any further evidences. Also, During post search enquiries, The Deputy Director of Income Tax (Investigation) had called for information from customers and cross-examined whose agreement to sale was found or whose notings were found on loose paper during search and seizure. The notice issued to one of the customer has been enclosed herewith for your kind perusal, where the DDIT has asked them to submit copy of sale deed with proof of payment made. Statement of all the "customers" of assessee were recorded by the Deputy Director of Income Tax (Investigation) wherein they had stated that all the payments were made as per sale deed and no cash has been paid over and above the agreed sale consideration as per sale deed. Thus, the cross examination of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2, ACIT vs. Shri Sharad Choudhary it was observed that coming to the legal position as to the person/party on whom the burden lies to refute the facts recorded in a document, in my considered view, in a case where AO is of the view that the assessee's explanation is not acceptable or satisfactory regarding the contents of the document seized from his premises/possession (the notings being unintelligible and cryptic in nature) then the burden to substantiate or prove the contents of the document shifts over to the person who is making such assertion, that is the assessing officer in this case. 6. Hon'ble ITAT Jaipur in the case of Shri Ganpati Developers Kota vs ACIT it was observed that the A.O. has not been able to adduce or bring on record any corroborative evidence to show that higher consideration was actually received by the assessee outside the books of accounts to match with the figures of difference appearing in the loose sheet. In fact he did not even cross check with the partner Sh. Anil Mundra & others regarding the same to establish any difference in their version given at the time of search. 7. Hon'ble Delhi High Court Order in the case of CIT vs. S. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ince the impugned seized papers are undated, have no acceptable narration and do not bear the signature of the assessee or any other party, they are in the nature of dumb documents having no evidentiary value and cannot be taken as a sole basis for determination of undisclosed income of the assessee. When dumb documents like the present loose sheets of papers are recovered and the Revenue wants to make use of it, the onus rests on the Revenue to collect cogent evidence to corroborate the noting therein. The Revenue has failed to corroborate the noting by bringing some cogent material on record to prove conclusively that the noting in the seized papers reveal the unaccounted on-money receipts of the assessee. Further, no circumstantial evidence in the form of any unaccounted cash, jewellery or investments outside the books of account was found in course of search in the case of assessee. Thus, the impugned addition was made by the AO on grossly inadequate material or rather no material at all and as such, deserves to be deleted. Hence, we are of the view that an assessment carried out in pursuance of search, no addition can be made simply on the basis of uncorroborated noting in loo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the basis of dumb documents/note book/loose slips in the absence of any other material to show that the assessee has carried on money lending business. Noting on the note book/diary/loose sheets are required to be supported/ corroborated by other evidence and are also include the statement of a person who admittedly is a party to the noting and statement from all the persons whose names there on the note book/loose slips and their statements to be recorded and then such statement undoubtedly should be confronted to the assessee and he has to be allowed to cross examine the parties. In the present case, undoubtedly no statement from the parties whose names found in the note book/loose slips has been brought to our notice and as such entire addition in the hands of the assessee on the basis of uncorroborated writings in the loose papers found during the course of search is not possible. 15. Hon'ble Delhi High Court Order in the case of CIT vs. D.K. Gupta it was observed that the diaries found with the assessee contained various reminders, appointments, notings / jottings which any businessman in normal course would make note of in respect of offers received and what he int....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Court that a sheet of paper containing typed entries and in loose form, not shown to form part of the books of accounts regularly maintained by the assessee or his business entities, do not constitute material evidence. Following the law declared by the Hon'ble Apex Court, we are of the view that the action taken by the respondent/Revenue against the Assessee based on the material contained in the diaries/loose sheets, are contrary to the law declared by the Hon'ble Apex Court. In that view of the matter, impugned notices issued under section 153C of the Act, based on the loose sheets/diaries are contrary to law, which require to be set aside in these writ appeals, as the same are void and illegal." 23. We have given a thoughtful consideration to the arguments made by the rival parties and perused the material available on record. In fact, what have been observed by us is, the Assessing Officer made addition on the basis of whatsapp images obtained from I-Phone of Shri Prashant Bongirwar. No monetary transactions are existed which makes it clear that the booking forms are estimated which are even not matching with the actual transaction. The addition was made by the Asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of the Hon'ble High Court of Karnataka in Sunil Kumar Sharma (supra), contained in Para-21 to 26 as below:- "21. Both the Appellant-Revenue and Respondent-Assessee entered appearance and submitted their arguments extensively. On hearing the learned counsel for both the parties, this Court finds it relevant to examine the following questions that arises for consideration in these writ appeals, which are as under: 1) Whether 'Loose Sheets' and 'Diary' have any evidentiary value? 2) Whether Centralization is in violation of Section 127 of the Income Tax Act, 1961, is valid? 3) Whether the Notice under Section 153C of the Income Tax Act, 1961 is valid herein? As regards Question No.1: Upon reading the material provided and the order of the learned Single Judge delivered on 12.08.2022, it is evident that the income that has escaped assessment and notices under Section 153C of the Income Tax Act, 1961, were solely issued based on loose sheets and documents which are termed as 'diaries' found during the search. The applicability of Section 69A of the Act arises only when the principles laid down under....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 18 of the judgment, it is observed thus: "16. To appreciate the contentions raised before us by the learned counsel for the parties it will be necessary at this stage to refer to the material provisions of the Act. Section 3 declares that a fact a relevant to another when it is connected with the other in any of the ways referred to in the provisions of the Act relating to the relevancy of facts; and those provisions are to be found in Section 6 to 55 appearing in Chapter II. Section 5, with which Chapter II opens, expressly provides that evidence may be given in any suit or proceeding of the existence or non-existence of every fact in issue and the facts declared relevant in the aforesaid section, and of no otheRs. Section 34 of the Act reads as under:- "34. Entries in books of account when relevant - Entries in book of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the court has to inquire but such statements shall not alone be sufficient evidence to charge any person with liability." 17. From a plain reading of the Section it is manifest that to make an entry relevant thereunder it must be sh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....within the purview of S.34." 24. The aforesaid approach is in accordance with good reasoning and we are in full agreement with it. Applying the above tests, it must be held that the two spiral note books (MR 68/91 and 71/91) and the two spiral pads (MR 69/91 and MR 70/91) are "books" within the meaning of Section 34, but not the loose sheets of papers contained in the two files (MR 72/91 and MR 73/91)." 25. The Hon'ble Supreme Court in the case of COMMON CAUSE AND OTHERS v. UNION OF INDIA, reported in (2017) 11 SCC 731, at paragraphs 278 to 282 of the judgment, has observed thus: "278. With respect to the kind of materials which have been placed on record, this Court in V.C. Shukla case has dealt with the matter though at the stage of discharge when investigation had been completed by same is relevant for the purpose of decision of this case also. This court has considered the entries in Jain Hawala Diaries, note books and file containing loose sheets of papers not in the form of "books of accounts" and has held that such entries in loose papers/sheets are irrelevant and not admissible under Section 34 of the Evidence Act, and that only where the entr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e submitted that at best it could be said that those books were memoranda kept by a person for his own benefit. According to Mr. Sibal, in business parlance 'account' means a formal statement of money transactions between parties arising out of contractual or fiduciary relationship. Since the books in question did not reflect any such relationship and, on the contrary, only contained entries of monies received from one set of persons and payment thereof to another set of persons it could not be said, by any stretch of imagination that they were books of account, argued Mr. Sibal. He next contended that even if it was assumed for argument's sake that the above books were books of account relating to a business still they would not be admissible under Section 34 as they were not regularly kept. It was urged by him that the words 'regularly kept' mean that the entries in the books were contemporaneously made at the time the transactions took place but a cursory glance of the books would show that the entries were made therein long after the purported transactions took place. In support of his contentions he also relied upon the dictionary meanings of the words '....