TaxTMI 
TaxTMI 
2026 (9) TMI 2041
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....the Act was carried out by the Income Tax Department at the various premises of Kuldeep Bishnoi Group of cases and its associates including the assessee on 23.07.2019. During the course of search at Shop No. 106-107, Anazmandi, Adampur, Hisar, Haryana a note book was found and seized as Annexure A-4. According to Assessing Officer the note book appears to be records of expenses made by the assessee during Lok Sabha Election 2019 contested from Hisar Parliamentary Constituency. Accordingly, a notice u/s. 142(1) of the Act was issued to the assessee on 13.09.2021 wherein the assessee was requested to explain the details mentioned in Annexure A-4 which contains the total expenditure of Rs. 7,64,90,689/- made by the assessee during election campaign in various villages of his constituency i.e. Hisar, Haryana in Lok Sabha Election 2019. The assessee was asked to explain the details of expenditure carried out, name and addresses of the parties to whom these payments have been made, mode and source of payment made and bills and vouchers of these expenditure. The Assessing Officer noted from the seized documents AnnexureA-4 i.e. note book consisting of 90 pages that sheets no. 1-41 of the ....
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....(A) finally confirmed the action of the AO vide para nos. 13.3 and 13.4 which read as under:- "13.3 As per AO, the seized document was found at the appellant's residence and pertained directly to him. Under Sections 132(4A) and 292C of the Income Tax Act, there is a statutory presumption that documents found in possession of a person belong to them, and the contents are true unless rebutted with evidence. The statement of Mr. Sukumar, who prepared the document, holds significant evidentiary value. He explained the entries in detail, including the division of amounts received in cash and cheque, which were corroborated by circumstantial evidence, such as the appellant's role in election management. The appellant admitted that the document related to payment received for election purposes. This admission, combined with the corroborative statement of Mr. Sukumar, substantiates the claim that the appellant had custody of the funds. The claim that the seized document was a "dumb document" is untenable. The entries are specific, detailed, and supported by corroborative statements and evidence. The seized document is not vague or uncorroborated, unlike cases cited by the appellan....
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....l as Ld. CIT(A) erred in law in not considering the same. In this case, the assessment for making addition is without jurisdiction and bad in law in respect of the said notebook. Learned counsel for the assessee further explained and strengthen his arguments by submitting that the statement recorded of the assessee under Section 132(4) of the Act and from perusal of the same, it shall be clear that there is no reference in regard to the said notebook. In other words, no question in regard to the said notebook has been put to Sh. Bhavya Bishnoi, despite the fact that AO has not confronted or nobody stopped him from confronting the contents of the said diary to the assessee, in case he has any doubt. It was contended by learned counsel that while recording the statement of the Sh. Kuldeep Bishnoi, there is no reference of the notebook found at shop number 106-107, AnajMandi Adampur, i.e. Annexure-A4. From the perusal of the statement of Sh. Kuldeep Bishnoi recorded under Section 132(4) of the Act, it shall be clear that in the same also there is no reference or whisper at all in regard to the said notebook. In other words, no question in regard to this notebook has been put to Sh. Ku....
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....O has rightly interpreted that the notebook contains several entries carries remarks such as "Payment Ho Chuka Hai", along with the tick marks against various entries that the expenditure had already been incurred by the assessee. She explained that the explanation furnished by the assessee is inconsistent with the contents of seized document and also changing stand time and again. Accordingly, she contended that the seized document, Annexure A4, as well as explanation furnished by the assessee and surrounding facts and circumstances of the case, after considering, the AO concluded that the notebook represents actual expenditure incurred for the purpose of election of Lok Sabha 2019 and hence, CIT(A) has rightly confirmed the addition made by AO of Rs. 7,64,90,689/- u/s. 69C of the Act. 8. We have heard rival contention on this first facet of argument on merit that the notebook found and seized during the course of search at shop number 106-107, AnajMandi, Adampur, Hisar, Haryana, marked as Annexure A4 relates to assessee in regard to expenditure incurred during Lok Sabha Election 2019, or it is relating to trading business of Kuldeep Bishnoi. The said notebook was found from sh....
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....orm to corroborate the theory, that it is actually the assessee, who has actually paid or received or spent the amount stated in the assessment order in cash and none of the alleged recipients of the cash towards alleged election expenses, were ever summoned by the department to question over such transaction, and hence the same cannot be attributed to assessee, as the alleged notebook, after denial of assessee, is remained unproved. In our view, no attempt has been made by the AO to provide any cogent explanation and admissible evidence with regard to the source, possession, transaction, use or application of such cash. Hence the departmental authorities failed to correlate the income of the assessee with the amount that has been spent for election expenses as alleged by the AO that have been borne by the assessee for the election, but AO failed to examine the nexus between the entries and that the assessee. 10. The above explanation regarding page number 5, 8, 11 and 18 of the seized notebook, Annexure A4, we have gone through the page numbers 1, 2, 82, 83, 84, 85 and noted that these pages were of some date, like 1.3.2019, 22.1.2019 & 27.1.2019, but these contain only name of....
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....legations have been levelled was in fact involved in the matter or he has done some act during that period, which may have co-relations with the random entries. In case we do not insist for all these, the process of law can be abused against all and sundry very easily to achieve ulterior goals and then no democracy can survive in case investigations are lightly set in motion against important constitutional functionaries on the basis of fictitious entries, in absence of cogent and admissible material on record, lest liberty of an individual be compromised unnecessarily." 12. Similarly, in the Hon'ble Delhi High Court in the case of CIT vs. Girish Chaudhary [2007] 163 Taxman 608 (Delhi), has held as under:- 8. Section 158B of the Act is a part of Chapter XIVB dealing with special procedure for assessment of search cases. The Chapter contains section 158B to section 158H. "Block period" and "undisclosed income" have been defined in clauses (a) and (b) to section 158B, for the purpose of the Chapter. We are concerned with the definition of "undisclosed income". The provision in its entirely reads as follow: "(b) 'undisclosed income' includes any money, bullion, je....
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....n in Haryana i.e. in Hisar constituency for Lok Sabha polling date was 12th May 2019, that is corresponding to Financial Year 2019-20, relevant to Assessment Year 2020-21. The assessee has filed affidavit before the Election Commission of India for expenses in the month of May 2019. When these facts were confronted to the learned CIT-DR, she argued that the dates of election campaign are available, referred by the AO in regard to election schedule, i.e. 1st March 2019, 27th March 2019, 22nd March 2019. In terms of this learned CIT(DR), stated that assessee's case falls under Assessment Year 2019-20 and not in Assessment Year 2020-21, as contended by the assessee. 14. We have heard the rival contention, gone through the facts and circumstances of the case. We noted from the seized documents, which is part of assessment records, that the AO has segregated the seized notebook containing 90 pages into two parts. The first part contains page 1-41, that is page 1-2, is recording the name of villages written, and pages 3-41 are payments received or paid relating to particular village or city mentioned in each page. He has drawn only assumption and not sure that these expenses may b....
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....e any addition in the hands of Sh. Kuldeep Bishnoi and instead have chosen to make the addition in the hands of Sh. Bhavya Bishnoi, the assessee to which the notebook does not belong. Even there is no reference of the said notebook in the statement recorded of Sh. Bhavya Bishnoi and Shri Kuldeep Bishnoi under Section 132(4A) of the Act that this notebook belongs to Sh. Bhavya Bishnoi, the assessee. Admittedly, assessee contested the Lok Sabha election of 2019 from Hisar constituency and candidate was permitted to spend up to Rs. 50 lakhs for commercial expenses as per the Code of Conduct declared by the Election Commission of India. Election-related expenses by the assessee were funded by the Indian National Congress in terms of Model Code of Conduct issued by the Election Commission of India, and assessee received this money for election expenses from Indian National Congress in his bank account by way of RTGS on 01.05.2019. Further, there is no complaint of violation of Model Code of Conduct regarding the expenses for the limit set out by the Election Commission of India whatsoever against the assessee. Admittedly, the seized notebook does not mention assessee's name, it does....
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....s of the assessee nor in the hand writing of the assessee any third person may write the name of any person at his sweet will, in such circumstances assessee cannot be put to any liability on the action of the third person, the same has to be corroborated by the Revenue which has not been done in the present case. In the circumstances and facts of the case, we do not find any infirmity in the order of the Ld. CIT(A) who has rightly deleted the additions so made by the AO. Accordingly, all the grounds of the Revenue are dismissed." 12. In case of the Commissioner of Income Tax v. Mahabir Prasad Gupta (supra), this Court has examined the facts and concluded that the concurrent finding of the facts cannot be disturbed as there was no material which could justify the assessment order. The relevant portion of the said order which reads as under: "13. The above submissions fail to persuade this Court to interfere with the matter. Concurrent findings of fact have been rendered by the CIT (A) as well as by the ITAT. Nothing has been pleaded in the memorandum of appeal to persuade the Court to hold that those findings are perverse or contrary to the facts on record. Second....