TaxTMI 
TaxTMI 
2025 (9) TMI 1311
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....ng two proprietorship concern namely; M/s M.P. Industries and M/s M.P. Industries (FSEZ). A survey u/s 133A of the Income-tax Act, 1961 (the Act) was conducted on the assessee on 19.02.2020 as well as on M/s Citizen Umbrella Mfg. ltd and Suresh Kumar Banthia. The AO noted that some incriminating documents marked as USK/1 to USK/31 containing the loan transactions arranged through brokers were seized during the search action u/s 132 of the Act on Shri Uma Shanker Kasera and documents marked as AKK/1 to AKK/12 were seized from the flat of his son Shri Anil Kumar Kesara. Similarly, document marked as JBS/1 to JBS/25 were seized from the business premises of Shri Jai Bhagwan Sanwaria. These documents were stated to have contained the details of cash transactions. The total number of 88 pages seized documents which contained the details of unaccounted cash loan transactions pertaining to the assessee shri Suresh Kumar Banthia. Allegation during the survey was that during the above search on the house of finance brokers namely 'Kaseras', 'Sanwaria' on 30.11.2018, some incriminating material/documents were found which revealed that assessee / citizen group has made cash loan/ advances to ....
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....sessee raised legal grounds against the reopening u/s 147 of the IT Act with reference to AY 2016-17 & 2017-18. The assessee raised objection for the AO's reopening u/s 147 of the Act and contended that the assessments for the AY 2016-17 & 2017-18 should have been considered u/s 153C of the Act instead of 147 because the assessee is covered by the provisions of 153C of the Act as 'Other person' on whom no warrant was executed and material found at the search premises of persons covered u/s 132 of the Act on whom warrant was executed. The objections raised by the assessee on legal grounds were allowed and the assessments for AY 2016-17 & 2017-18 were annulled by the undersigned. To protect the interest of revenue, an enhancement notice for the AY 2020-21 has been issued to the assessee by considering all the impounded incriminating material. In respect of the said enhancement, a show-cause notice was issued to the assessee on 03.12.2024, relevant portion of the same is as under: "It is observed that a survey operation was conducted in your case on 19.02.2020 and several materials with Id mark SKB/01, SKB/02, CUML/1 to CUML/8 & CUML/HD/1 were impounded during the....
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.... the highest peak on single day comes to Rs 11,35,00,000/- Therefore, without admitting, it is submitted that the investment never exceeded the aforesaid figures even if whatever stated by the AO with regard to the investment for It may also be seen that the initial investment which the AO has calculated was always available apart from the interest which entered into the cycle of the investments cannot has to be considered and separate addition cannot be made more so when the aforesaid peak is kept in mind It may also be stated that the Ld. AO has given a finding that the amount was generated out of business activities. Thus, the provisions of sec 115BBE cannot be applied and the addition can only be considered as income from business and for the purpose of computation of tax. the provisions of sec 115BBE may not be applied. In view of the above there is also no case for initiation or imposition of penalty in this case" 7.3.15. The assessee in his submissions he had informed that these loans were given for short period and the duration of such cash loans as could be gathered from the brokers in 'cash loan financial markets' ranges between....
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....y evidences before the IO in support of his claim, however, contrary to that the assessee duly submitted that the said entries were irrelevant for which there could not have been any evidences. The ld. AR submitted that negative could not be proved. The ld. AR argued that it was for the Ld. AO to prove that the entries were relevant with reference to the material and corroborative evidences on record and that investment had in fact been made. 06. It is submitted that some jottings were found in the impounded papers but for which there was no corroborative evidences. The Ld. AO stated the name of Shri Gajraj Choraria and Shri Pawan Mundra on the basis of statement recorded u/s 133A. The Ld. AO did not issue any summon to Shri Gajraj Choraria and Shri Pawan Mundra even though phone no of both of them were given to the Survey party as well as to the Ld. AO. The ld. AR argued that they were not examined to corroborate the statement recorded from the assessee. However apart from the statement and jottings in the impounded papers, no other corroborative material was found to show that the assessee made any cash loans to any person and that too through the said brokers Mundra and Chora....
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....ore, the appeal of the assessee may kindly be dismissed by upholding the order of the ld. CIT (A). 08. After hearing the rival contentions and perusing the materials available on record, we find that undisputedly there was search on finance broker 'Kaseras' and 'Sanwaria' during which certain documents were seized which are stated to have contained the details of cash transactions/ loans by the assessee. The said search took place on 30.11.2018. Thereafter, a survey was conducted on the assessee and M/s Citizen Umbrella Mfg. ltd. during which the statement of the assessee was recorded u/s 131 of the Act. Admittedly, the search was conducted on a date which falls prior to the start of the assessment year i.e. A.Y. 2020-21 and even the start of the financial year relevant to A.Y. 2020-21. Therefore, material found during the course of said search on 'Kaseras' and 'Sanwaria' has nothing to do with the assessment of income in the assessment of the assessee. Therefore, we hold that finding recorded by the ld. AO at pages no. 1 to 4 and 20 to 45 are not relevant for the purpose of assessment of income for the year under consideration. We also note that the assessee retracted his state....
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....directed the revenue to avoid obtaining admission of undisclosed income without evidences. 010. We also note that the ld. AO has noted that the assessee has received and re-invested through Satish but nowhere the ld. AO has stated that from where he has picked up the said name. We note that from the papers impounded from M/s Citizen Umbrella Mfg. ltd. that there is no mention of assessee's name that there was debit as well as credit entries in the name of Satish on the same day but there was no mentioning about any interest or investments and there was no justification for adding two zeros to the said figures. Therefore, considering the facts and circumstances of the case and the nature of documents which contains only jotting, we are of the view that there can be best described as dumb document as there was no corroborative material to support the entries made in the said documents and therefore, no adverse inference could be drawn against the assessee. The case of the assessee is squarely covered by series of decision; (i) Satyapal Wassan (supra) (ii) VC Shukla (supra) (iii) Rakesh Goyal (supra) (iv) Mohan Foods Ltd. (v) SM Agarwal (supra) (vi)Chandra Chemouse P. Ltd.(supra) (....