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2026 (4) TMI 769
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....amed by Ld. AO u/s 143(3) r.w.s. 147 of the Act on 24-03-2025. The grounds of appeal are as under: - 1. The issuance of the Section 148 notice by the Jurisdictional AO is contrary to the mandate laid down in the Notification no.18/2022/F. No. 370142/16/2022-TPL (Part 1), dated 29.03.2022. 2. That the assessment order is null and void as no mandatory approval under section 148B has been take before completion of assessment u/s 143(3) rws 147 of the Income Tax Act. 3. The centralization of the cases is bad as there was not pending scrutiny as on the date on issuance of notices therefore, the transfer of jurisdiction u/s 127 of the Income Tax Act, 1961 is bad in the eyes of law, therefore the assessment order needs to be quashed. 4. That the ld. PCIT has given sanction for issuance of notice u/s 143(2) in mechanical manner and from the approval it is clear that it has been given without recording any satisfaction and only on the basis of search warrants only. 5. The Ld. AO has taken approval in mechanical manner as the quantum escaped mentioned in approval is "0" and on the basis of copy of warrants only. 6. That the CIT(A) has wro....
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....he assessee pursuant to search action u/s 132(1) on assessee group on 04-11- 2022. The assessee being resident individual carried out business in her proprietorship concern namely M/s Kalta Spirits. The case of the assessee belongs to 'M/s Himgiri Beverages and Others' Group of Cases. Post-search, notice u/s 148 was issued by Ld. AO to the Assessee on 29-12-2023 and the assessee furnished return of income declaring income of Rs. 31.13 Lacs. The case was subjected to scrutiny wherein various notices were issued by Ld. AO from time-to-time u/s 142(1) which were duly been responded to by the Assessee. 3.2 The first issue that was identified by Ld. AO was alleged unexplained investment in certain property situated in Omaxe project. The allegation stem from information as received from Deputy Director (Unit -2), Chandigarh that a search and seizure operation was carried out in the case of Omaxe Group wherein as per Annexure A35 / A27, a hard disk was found and seized during those search proceedings. These Annexures allegedly contained details of unaccounted cash transactions by Omaxe group. As per this Annexure, the assessee paid amount of Rs. 90 Lacs in cash other than the registry ....
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....of M/s Himgiri Beverages, total purchase price for Isabella was mentioned for Rs. 2,33,52,805/-. As per Page-13, the assessee received discount of 7%. After allowing the same, net cost comes to Rs. 2,18,18,109/-. After reducing cash component of Rs. 90 Lacs, the net amount comes to Rs. 1,27,18,109/- which is very close the amount of Rs. 1,27,33,074/- as declared by the assessee. Finally, the amount of Rs. 90 Lacs was added in the hands of assessee as unexplained money u/s 69A. 3.5 The second issue as identified by Ld. AO was alleged unaccounted cash purchases from Shri Kapil Gupta. This addition was made on the basis of Annexure A-1, A-2 & A-3 as found and seized from the residential premises of Shri Kapil Gupta of M/s Himgiri Group during search action on 04-11-2022. The search findings on that group revealed that M/s Himgiri Beverages was not maintaining any regular books of account. The business transactions were noted in three diaries as maintained by Shri Kapil Gupta for Calendar Years 2020, 2021 & 2022. These diaries contained date-wise details of accounted and unaccounted purchase and sale transactions by the said group. In these diaries, few entries were mentioned as 'Ka....
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.... Group was recorded by Shri Kapil Gupta in the name of Kalta. Shri Inder Kalta admitted to have made purchases from Shri Kapil Gupta. Therefore, it was to be concluded that these transactions should be assessed in the hands of the present assessee. Accordingly, unaccounted purchases for Rs. 27 Lacs were added to assessee's income on substantive basis as unexplained expenditure u/s 69C. Similar additions were made for AYs 2021-22 to 2023-24. These additions were made on protective basis in the hands of Shri Inder Kalta proprietor of M/s Kalta Wines. 3.7 Though the assessee preferred further appeal, the same did not find favor with Ld.CIT(A) who endorsed the action of Ld. AO in making twin additions in the hands of the assessee. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 4. So far as the addition of alleged on-money for Rs. 90 Lacs is concerned, it could be seen that this addition stem from material found in separate search action in the case of Omaxe Group on 14-03-2022 wherein a hard disk was found and seized. An excel sheet was analyzed as per which the assessee allegedly paid on-money of Rs. 90 Lacs in cash other than the regist....
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....nt in the transaction. The whole case of Ld. AO stem from search action on the seller group coupled with statement of officers recorded therein. Apparently, one excel sheet has been found which allegedly contain details of cash payment on sale transaction. In the excel sheet, the assessee is shown to have made payment of Rs. 8 Lacs on the impugned transaction. However, the assessee has denied the same and contended that all the payments were made pursuant to written agreement and the payments were through banking channels only. The details of such payment have duly been furnished to Ld. AO. No opportunity of cross-examination has ever been provided to the assessee which is in violation of principle of natural justice. In my considered opinion, the onus was on Ld. AO to prove with cogent evidence that cash was exchanged in the transaction. The assessee has furnished all the documentary evidences as available with him to support the contention that all the payments were made through banking channels only. The confirmation of payment has duly been furnished by the assessee from M/s Omaxe Ltd. which is kept on Page No.30 of the paper book. The payments are duly supported by bank statem....
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....stated that these purchases were not accounted for in the books of various concerns of Kalta Group. However, he did not specify the name of entity / concern which made such out-of-books purchases. The assessee vehemently opposed any such addition merely on the basis of loose sheets as found from the premises of Shri Kapil Gupta. The presumption of Sec.292C would not apply to assessee in such a case since the diaries have been found from the premises of Shri Kapil Gupta. The assessee denied having any such transactions with Shri Kapil Gupta. It was also contended that the word 'Ranjana' was nowhere been found mentioned in the seized Annexures. The said argument stood rejected by Ld. AO on the ground that a ledger in the name of M/s Himgiri Beverages was found in the books of M/s Kalta Spirits and therefore, the unaccounted transactions must also be belonging to the assessee. However, there is no concrete evidence brought on record by Ld. AO to co-relate the fact that entries found mentioned as 'Kalta' by Shri Kapil Gupta actually pertained to assessee's concern. It is trite law that no addition could be made on mere presumption, assumption and surmises. Unless it was established wit....
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....only for a person in whose possession the material was found and not against any other person. The presumption u/s 132(4A) in respect of any document or books of accounts found is restricted to the person from whose possession books of accounts or other document were found and not against any other person. Further, presumption u/s 132(4A) is a rebuttable presumption and not a conclusive one. On the given facts of the case, it could be seen that the seized material has been found from the possession of Shri Kapil Gupta and therefore, the presumption of Sec.292C would not apply to the present assessee. Secondly, there is no correlation between the entries as found mentioned in the seized dairies with that of assessee's proprietorship concern. It is also to be accepted that M/s Kalta Spirits was engaged as a wholesaler only and it was completely prohibited from making any unaccounted purchases or sales. It could only transact with manufacturers and liquor vendors as per extant excise laws. Pertinently, no trace of any unaccounted sales has been found for the present assessee. It is quite logical that unaccounted purchases would be followed by unaccounted sales. However, no such eviden....
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....as in the shape of Agreement to sell dated 18-10-2021 as shared by Shri Inder Kalta with Shri Dipen Gupta. The same was soft copy of agreement between Shri Ravinder Singh Sabharwal and Shri Inder Kalta. The agreement mentioned the consideration of Rs. 430 Lacs out of which payment of Rs. 105 Lacs had already been made to the seller. However, as per assessee's submissions, the property was registered for Rs. 200 Lacs as against Rs. 430 Lacs as mentioned in the Agreement to Sell. The Ld. AO also referred to certain whatsapp chat on 21-11-2021 (three days before registration of the said property) between Shri Inder Kalta and Shri Dipen Gupta with respect to this property. Shri Inder Kalta shared 5 images of agreement to sell wherein the consideration was shown to be Rs. 200 Lacs. He also shared with him one picture of one of the signed pages of agreement to sell wherein consideration was shown for Rs. 430 Lacs. The Ld. AO alleged that the amount of Rs. 230 Lacs was paid in cash. The Ld. AO also referred to valuation report drafted by Sharma Associates which was unsigned copy shared on 23-03-2022. The signed copy was found from Kalta Niwas which was found and seized as Annexure A-1. Th....
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....fore, the protective addition, in assessee's hands, was deleted. Aggrieved by aforesaid directions, the assessee is in further appeal before us. 12. Upon careful consideration of relevant facts, it could be seen that the whole case of Ld. AO is based on an unsigned and unregistered agreement to sell which is found in Whatsapp chat between Shri Inder Kalta and Shri Dipen Gupta. The said document is an unenforceable document and the same is not between actual buyer (Smt. Ranjana Kalta) of the property. The agreement does not mention about any cash component in the deal. In such a case, no reliance could be placed on such a bald document. Pertinently, no enquiry is shown to have been made by Ld. AO from the seller Shri Rajinder Sabharwal and the allegation of Ld. AO does not have any corroboration. The two separate valuation reports as found and seized are substantially contradictory in nature and the same are merely an opinion of the valuer. No cognizance of the same, therefore, could be taken into account while making addition of alleged payment of cash component. The unsigned and unregistered agreement to sell between Shri Inder Kalta and Shri Rajinder Sabharwal has no relevance....
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....ds partly allowed. 16. All the four appeals of Smt. Ranjana Kalta stand partly allowed. Shri Inder Kalta : AY 2021-22 17. This appeal arises out of an order of Ld. CIT(A) dated 31-07- 2025. Shri Inder Kalta was running his business in the name of M/s Kalta Wines which act as wholesaler of English Liquor. Post search action, notice u/s 148 was issued to this assessee on 29-12-2023 and the assessee declared total income of Rs. 86.31 Lacs. The issues that fall for our consideration during AYs 2021-22 to 2023-24 could be tabulated as under: - Amt (Rs.) AY 2021-22 AY 2022-23 AY 2023-24 Substantive Additions Undisclosed Rental Income Rs.2,88,400/- Rs.4,73.200/- Rs,3,31,240/- Addition on account of purchase of property u/s 69A / 69 ----- Rs.3,31,00,000/- ---- Addition of unaccounted cash sales u/s 28 for short stock ---- ---- Rs.16,430/- Addition on account of unexplained investment in Bullion u/s 69A ---- ---- Rs.5,00,000/- Addition on account of unexplained expenditure u/s 69C ---- ---- Rs.14,50,000/- Protective Additions Additio....
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....ies of Shri Kapil Gupta and the word 'Inder' has nowhere been found mentioned in the seized Annexures. Moreover, no ledger has been found in the name of M/s Himgiri Beverages in the books of M/s Kalta Wines. No concrete evidence has been brought on record by Ld. AO to co-relate the fact that entries found mentioned as 'Kalta' by Shri Kapil Gupta actually pertained to assessee's concern. It is trite law that no addition could be made on mere presumption, assumption and surmises. Unless it was established with concrete evidence that these entries pertained to the present assessee only, no such presumption could be raised against the assessee. The presumption u/s 132(4A) & 292C is applicable only for the person which is subjected to the search and not in the case of the assessee since incriminating material has been found during third-party search. It is another undisputed fact that M/s Kalta Wines has been engaged as a wholesaler which work in fully regulated conditions. Like M/s Kalta Spirits, this concern purchased country liquor from manufacturer and sold the same to retail liquor vendors. The sales and purchases are carried out through excise permits under regulated conditions. U....
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....s subject to rider that if the stand was taken that this income pertained to the assessee, the addition would stand sustained. Aggrieved by aforesaid directions, the assessee is in further appeal before us. 21. The enumerated facts would clearly show that Shri Munish has acted as salesman of M/s Kalta Liquors which is a partnership firm. The same is clearly evident from the fact that Ld. AO has made substantive addition in the hands of M/s Kalta Liquors only. It is also the stand of the assessee that this issue would fall in the case of M/s Kalta Liquors only. Therefore, the addition so made on protective basis in the hands of Shri Inder Kalta would not stand at all. Accordingly, we modify the directions of Ld. CIT(A) and delete the protective addition as made by Ld. AO on merits. This issue arises in AYs 2022-23 and 2023-24 also and stand disposed-off in favor of the assessee accordingly. 22. The third issue is of undisclosed rental income. The same was based on the statement of Shri Hempal Kalta u/s 132(4) wherein he made admission of receipt of rental income from shops in village Khaltunala at Rs. 1500/- per shop per month which was divided between three brothers including....
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....5 to 201 were related to the entries recorded in respect of cash transactions with Shri Inder Kalta. The transaction was also confirmed by Shri Ashish Rajta prop. of M/s Rajta Wines. The Ld. AO observed that no ledger relating to Shri Rajesh Thakur was found in Tally Data of assessee's three concerns viz. M/s Kalta Spirits, M/s Kalta Wines and M/s Kalta Liquors. One image was found from the mobile phone of the assessee which was titled as 'Rajesh Solan' and the same contained date-wise details of cash transactions. The assessee, in response to showcause notice of Ld. AO, refuted the allegation of Ld. AO and stated that he had no such relation with Rajesh Thakur & Rajesh Kumar & Co. These transactions had no relation with the assessee in individual capacity and the same would be relevant in case of M/s Kalta Liquor only. The Ld. AO noted that in Annexure A-8, the entries were mentioned as 'Kalta'. Since M/s Kalta Liquors carried out retail business, substantive addition was made in the hands of M/s Kalta Liquors. However, Shri Inder Kalta was responsible for managing all the businesses of Kalta group and therefore, the possibility of unaccounted purchases by the assessee through his....
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.... stated to be purchased for Rs. 2 Crores. The amount of Rs. 1 Crores was paid through bank account with Punjab & Sind Bank and the balance amount was stated to be paid through bank loan from Punjab & Sind Bank. No cash payment was stated to be involved in the transaction. This issue was confronted to Smt. Ranjana Kalta who furnished ledgers highlighting the transactions. The ledger extract revealed the payment of Rs. 88 Lacs was sourced out of gift from Shri Inder Kalta. The amount of Rs. 1 Crores was taken as housing loan, the amount of Rs. 12 Lacs was transferred by M/s Kalta Spirits through banking channels and the amount of Rs. 13 Lacs was transferred by Shri Inder Kalta to the account of Mrs. Ranjana Kalta as margin money. The Ld. AO then referred to soft data as extracted from digital evidence found and seized which include extraction of data from mobile phone of Shri Inder Kalta. The Ld. AO referred to a chat between Inder Kalta and Shri Dipen Gupta which was in the shape of Agreement to Sell dated 18-10-2021 as shared by Shri Inder Kalta with Shri Dipen Gupta. The same was soft copy of agreement between Shri Ravinder Singh Sabharwal and Shri Inder Kalta. The agreement menti....
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..... There was no corroborative material that the assessee had paid such money in cash. There is no reference of any cash payment in the agreement. The whatsapp chat as referred to by Ld. AO has no relevance. The whole case of Ld. AO is based on an unsigned and unregistered agreement to sell which is found in Whatsapp chat between Shri Inder Kalta and Shri Dipen Gupta. The said document is an unenforceable document and the same is not between actual buyer (Smt. Ranjana Kalta) of the property. The agreement does not mention about any cash component in the deal. In such a case, no reliance could be placed on such a bald document. Pertinently, no enquiry is shown to have been made by Ld. AO from the seller Shri Rajinder Sabharwal and the allegation of Ld. AO does not have any corroboration. The two separate valuation reports as found and seized are substantially contradictory in nature and the same are merely an opinion of the valuer. No cognizance of the same, therefore, could be taken into account while making addition of alleged payment of cash component. The purported agreement does not hold any evidentiary value. This agreement is not signed by any of the party and the same even do ....
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.... any stage of proceedings. This being so, the impugned addition is quite reasonable and logical one. Therefore, we confirm the same. 33. The next addition is for Rs. 5 Lacs on account of unexplained investment by the assessee in bullion. During search, one rough slip was found which was marked as Page 182 of Annexure-1. The same was confronted to the assessee in statement u/s 132(4). The assessee stated to have purchased 2 gold coins of 100 grams each at the rate of Rs. 55,000/-. The same were stated to be purchased on 22- 10-2022. The assessee admitted to have paid cash of Rs. 5 Lacs to M/s Sheel Jewellers of Shimla and the balance amount of Rs. 11.50 Lacs was stated to be pending. The source of Rs. 5 Lacs was withdrawal from partnership firm M/s Kalta Liquors on 22-10-2022. However, no plausible information was received from M/s Sheel Jewellers. During assessment proceedings, the assessee established that it withdrew sum of Rs. 5 Lacs from capital account as held with firm M/s Kalta Liquors and the balance amount was paid through banking channels vide cheque no.000878 dated 23-02-2023. The copy of the bill was also furnished. The entries were reflected in regular books of acco....
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.... Undisclosed cash Sales Rs.7,46,186/- Rs.30,09,253/- Rs.46,05,829/- Addition on account of cash expenditure u/s 69A/ 69C ---- Rs.1,82,0000/- Rs.3,56,12,000/- 38. Based on whatsapp chat between assessee's employee Shri Munish and Shri Inder Kalta, Ld. AO concluded that the assessee made unaccounted purchase from concerns of Shri Kapil Gupta. Shri Inder Kalta admitted to have received cash collection from Shri Munish. Considering the same, Ld. AO raised presumption of Sec.132(4A) and Sec.292C and proceeded to estimate Gross Profit on these unaccounted purchases. The regular average GP rate as shown by the assessee for FYs 2018-19 to 2020-21 was worked out at 5.59% and the same was applied to unaccounted sales of Rs. 1,33,48,595/-. This resulted into substantive addition of Rs. 7,46,186/- as business income u/s 28. The Ld. CIT(A) confirmed the addition against which the assessee is in further appeal before us. 39. We find that the impugned addition is based on digital evidences as well as the admission of the assessee u/s 132(4). Therefore, the presumption of Sec.132(4A) and Sec.292C has rightly been invoked by Ld. AO. No plausib....