AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (2) TMI 1954
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....appreciating the fact that the entries in the loose papers found and seized from the residential premises of Shri Suresh Bajoria were matching with the entries in the loose papers seized from the residential premises of Shri Ritesh M Agrawal (accountant of Shri Suresh Bajoria) which were actually ledger accounts of the assessee. 3. On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs. 5,33,55,000/- holding that the AO had also not brought out any corroborative evidence to show that the transactions pertained to the assessee without appreciating the fact that during the course of the search Shri Suresh Bajoria at whose premises the loose papers were found tried to destroy the papers and in his statement u/s 132(4) stated that the papers reflected the transactions with the assessee which is enough evidence. 4. On the facts and circumstances, the LD. CIT(A) erred in not appreciation that the statement recorded on oath u/s 132(4) has evidentiary value and need no further corroboration. 5. Any other question to be raised at the time of appeal. 6. It is humbly prayed that the Order of CIT(A) be set ....
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....the amount of Rs. 5,33,55,000, as income from undisclosed sources and added it to the total income of the assessee. 5. On appeal, the learned CIT(A) deleted the addition holding that the name of the assessee was not mentioned in the loose papers and Suresh Shreemohan Bajoria, had also retracted his statement. The Assessing Officer had also not brought out any corroborative evidence to show that the transactions pertained to the assessee. For better appreciation of facts, it is pertinent to extract the detailed findings of the learned CIT(A), vide Para-3 to 5.2 of its order, wherein the learned CIT(A) deleted the addition made by the Assessing Officer:- "3. Aggrieved by the order of the AO, the appellant has filed this appeal with the following grounds of appeal:- "1 That on the facts of the case assessment order passed u/s 143(3) making addition of Rs. 5,33,55,000/- is bad in law. 2) That on the facts and in the circumstances of the case the learned AO has erred in making addition of Rs. 5,33,55,000/- on the basis of document found from the premises of third person. The addition is unjustified, arbitrary and deserves to be deleted. 3) That the....
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.... present case. 4. Based on statement of Sh. Suresh Bajoria taken during the time of search, Assessing Officer sought details of transactions from assessee between himself and Mr. Suresh Bajoria vide Notice dated 17/10/2016. In the Notice AO show caused as follows:- "The amounts reflected in these two papers are not reflected in the books of accounts of Sh. Suresh Bajoria. The total credit on Pg. No. 54 & 55 is Rs. 5,33,550/- (117650+415900). On verification this figure is found to be Rs. 5,33,55,000/-. Thus you are being show caused why Rs. 5,33,55,000/- should not be added to your income on account of undisclosed income." To this, Assessee vide reply dated 07/11/2016 stated as follows:- "2) In this regard, it is submitted that the Assessee has no financial transaction with Sh. Suresh Bajoria. The Assessee has no knowledge about the transactions recorded on Page 54 and 55 found and seized from the residential premises of Sh. Suresh Bajoria. The Assessee would like to know whether Sh. Suresh Bajoria, from whose residence the paper was found and seized has given any statement that this paper is pertaining to transactions made by him with t....
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....dence on record to suggest that Assessee has any previous business relations with Sh. Suresh Bajoria. In absence of any documentary evidence to suggest the same, it could not be presumed that the amounts reflected in the loose papers were income of the Assessee. It is further submitted that there may be many persons by the name "chhotu bhai" and there was no specific evidence to suggest that the said noting pertained to the assessee. The onus to prove authenticity of a transaction is on the Tax transaction has not taken place, and therefore it becomes very person affirming such a transaction. However, a person denying such a transaction has no means to prove that such a difficult for a person to prove absence something which is not there. 8. ADMISSIBILITY OF LOOSE PAPERS AS EVIDENCE The loose papers found at the premises of a third person on basis of which the whole addition is made in assessee's case are prima facie inadmissible as evidence. Assessee has repeatedly stated that he has no financial transaction with Mr. Suresh Bajoria still, AO concluded that the loose papers found at premises of Mr. Suresh Bajoria belonged to assessee just bec....
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....e. In absence of any evidence to prove that chhotubhai appearing on the documents is the Assessee and the transactions noted therein actually pertains to him, addition in case of Assessee is completely arbitrary and deserves to be deleted. Hon'ble Pune bench of ITAT in case of Pradeep Runwal v/s TRO [ITA 334/PN/2013 dt. 30/05/2014] has held as follows:- "According to us, the additions made by the Assessing Officer were not justified in the facts and circumstances vis-a-vis of the assessee. As discussed earlier, during the course of search in the case of Dhariwal Group, the only documents found on the basis of which the addition u/s 69A has been made in the case of the assessee are in the form of two loose papers wherein amounts of Rs. 4.80 Crores and f 30 lacs were noted against the name "Mr. Pradeep Runwal". Apart from this, no evidence has been found to-suggest that the assessee had actually received the said amount or that the assessee had entered into any transaction with Dhariwal Group. There is no evidence on record to suggest that the assessee has previous business relations with the Dhariwal Group. In the absence of any documentary evidence to suggest the same,....
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....dition of an undisclosed income can be made, the AO has to bring on record the material found as a result of search to show that there is an undisclosed income- AO treated Rs. 48 lakhs as Assessee's undisclosed income on the basis of seizure of a document which showed certain unexplained entries totalling to "48"- not justified- There is no material on record to show as to what basis the AO has reached the conclusion that the figure "48" is to be read as Rs. 48 lakhs- Said document is a dumb document and leads to nowhere- Addition rightly deleted by the Tribunal There is no error in the order of the Tribunal and it does not give rise to a question of law, much less a substantial question of law." 12. NO CORROBORATIVE EVIDENCE TO PRESUMPTION OF AO SUPPORT One aspect of the case must be given due acknowledgement that on the same date of search at residence of Mr. Suresh Bajoria, search was also conducted in the premises of Assessee. Had there been any business/financial dealing between Mr. Bajoria and Assessee, some traces of the samecould have been found at the premises of the Assessee also. In absence of any document or any other corroborative evidence, the pr....
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....ure and source of such investments. Mere jottings in codified from on a sheet of paper do not lead to the presumption that such entries or jottings are investments hit by s. 69 of the IT Act." ii. Thakkar Developers v/s ACIT [ITA No. 581/ PN/08) "The presumption u/s. 132(4A) is applicable only against the person from whose possession the books of accounts or other documents were found and not against any other person." iii. ACIT v/s Lata Mangeshkar ((Bom.) 97 ITR 696] "Mere entries in the accounts regarding payment to the assessee was not sufficient as there was no guarantee that the entries were genuine in absence of any corroborative evidence." PRAYER: In view of above submissions, it is humbly requested before Your Honour to kindly delete the addition made in the Assessment Order of Rs. 5,33,55,000/- in the interest of justice." 5. I have gone through the assessment order, the grounds of appeal and admission made by the appellant. From perusal of facts of the case, lowing point emerges: i) During the course of search proceedings in the case of Bajoria-Agrawal group on 02/12/2014, certain documents were found....
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....this document. ix) The AO has taken into account the retraction of statement by Shri Suresh Bajoria and surrender of an amount of Rs 5,33,550/- in the hands of Shri Suresh Bajoria. Based on these fact, the AO substantively also added sum of Rs. 5,33,55,000/- in the hands of Shri Suresh Bajoria. x) The appellant has relied on various judicial pronouncements to demonstrate that in similar circumstances without any further corroborative material no addition can be made in the hands of the appellant. The appellant has relied on the following judgments: * Common cause Vs. Union of India [WP (Civil) No. 505/15]; * CBI Vs. V.C. Shukla [Hon'ble Supreme Court]; * Pradeep Runwal Vs. TRO [ITA 334/PN/2013 dt. 30/05/2014]; * Embee Clearing & Shipping Services P.L. Vs. ACIT [(2006) 25 CCH 676]; * Thakkar Developers Vs. ACIT [ITA No. 581/PN/08]; * ACIT Vs. Lata Mangeshkar [(Bom.) 97 ITR 696]. 5.1 The detailed submission made by the appellant are already reproduced earlier. After going through the facts of the case, the submission made by the appellant and contents of the documents, I am of the opinion that there ....
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....s accordingly directed to delete the addition of Rs. 5,33,55,000/-. The grounds of appeal are accordingly allowed." 6. Before us, the learned Departmental Representative, Shri Sandipkumar Salunke, submitted that there is enough evidence on record to suggest that the impugned addition made by the AO is justified and submitted that the statement of Mr. Suresh Bajoria in pursuance to cross-examination by assessee was just an afterthought and he strongly supported the order of Assessing Officer. 7. The learned Counsel for the assessee, Shri Kapil Hirani, appearing on behalf of the assessee reiterated the fact of the case that during the course of Search at Mr. Bajoria, two pages identified as Page no.54 and 55 of Annexure B-3 were found and seized which were a ledger account of some transaction with title "Chotubhai". The pages showed a total credit of Rs. 5,33,550, which could not be explained by Shri Bajoria, and therefore in the statement recorded at the time of search he admitted it as his income. However, by applying some magical hypothesis which is not explained in the assessment order, the Assessing Officer concluded that these figures as declared by Shri Bajoria, are redu....
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....person to prove absence something which is not there. v) The loose papers found at the premises of a third person on basis of which the whole addition is made in assessee's case are prima facie inadmissible as evidence. Reliance placed on judgment of the Hon'ble Supreme Court in Common Cause v/s Union of India [WP (Civil) No. 505/15], wherein the Hon'ble Supreme Court rejected the admissibility of loose papers as evidence. vi) Reliance is further placed on the decision of the Co-ordinate Bench of the Tribunal, Pune Bency, in Pradeep Runwal v/s TRO, ITA 334/Pn./2013, order dated 30/05/2014. vii) Statement retracted by Shri Suresh Bajoria cannot be relied upon for the purpose of making any addition in hands of the assessee without any corroborative evidence in support. Reliance placed on the judgment of the Hon'ble Jurisdictional High Court in Sir Mohd. Yosuf reported in AIR 1968 Bom. 112. viii) No corroborative evidence to support presumption of Assessing Officer. ix) Presumption of document found during search under section 132(4A) of the Act is only confined to the person on whose premises search is conducted. Reliance placed on Pradeep....
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.... is only on the basis of certain assumptions made by the Assessing Officer that he has assumed that this so-called "chhotubhai" is assessee himself without there being any evidence corroborative or otherwise to prove that the name of the person mentioned in the impugned document i.e., "chhotubhai" is in fact the assessee. We are further in agreement with the arguments made that the onus to prove authenticity of a transaction is on the person affirming such a transaction. We agree that person denying such a transaction has no means to prove that such a transaction has not taken place and, therefore, it becomes very difficult for a person to prove absence of something which is not the. The law does not expect a person to prove the negative or prove something which has never happened. The responsibility to justify the happening of an event is on the person who is claiming that such an event has actually happened which in this case is the Assessing Officer. It would be very wrong to expect the assessee to prove that he is not undertaken a transaction which would amount to asking the assessee to prove something which has never happened which is contrary to the settled principles of law.....
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....are relied up results in breach of principles of natural justice. The assessee thus had every right to cross-examine Shri Bajoria. Once law has granted the right of cross examination the same has to be adhered to including its final results which in the present case is a statement denying any transaction with the assessee. In case the Assessing Officer was of the view that this is an afterthought or for any reason he had reason to believe that such statement recorded during cross examination cannot be admissible then he had every right to re-examine Shri Bajoria, and prove that the content of the original statement were in fact true which has not been done by the Assessing Officer. As such the statement of Shri Bajori,a recorded during cross examination does have evidentiary value and cannot be ignored as has illegally been done by the Assessing Officer. This in itself is a ground valid unto itself to delete the entire addition apart from the other findings mentioned herein. We find force in the argument of the assessee that the presumption of document found during search under section 132(4A) of the Act is only confined to the person on whose premises search is conducted and which....