TMI Blog2011 (7) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... m Shivam Corporation certain documents (Annexure A-4 page 369 -379, 339 347) were seized which pertained to the assessee. After recording the satisfaction note, notice u/s 153C of the IT Act was issued on 08-11-2005. No return was filed by the assessee in response. Show cause notice was issued, in response thereto the assessee stated that original return filed should be considered as filed in response to notice u/s 153C of the IT Act. The original return was filed on 31-07-2001 at an income of ₹ 1,51,615/-. The assessee during the pendency of the proceedings filed return on 06-01-2006 declaring a total income of ₹ 78,70,700/- in response to the notice u/s 153C of the IT Act. The AO considered the issue of addition on account o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... post-dated cheques amounting to ₹ 30,93,000/- and if the same is added to ₹ 86,37,000/- accepted by the assessee, the total would be exactly ₹ 1,17,30,000/- which is mentioned in the seized documents. The AO, therefore, noted that it is apparent that the assessee has accepted cash in lieu of return of the cheques. Addition of ₹ 30,93,000/- was made. 2.1 It was submitted before the learned CIT(A) that no search/survey was carried out in the case of the assessee and no document is available with the AO to show that any cash had changed hands in the matter. Only cheques were found in the search but no evidence was found at the time of search that M/s. Om Shivam Corporation had paid any amount in cash to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 Pages 369-379 seized from premises of M/s. Om Shivam Corporation). As per this agreement, an amount of ₹ 73.8 lacs was paid to the Appellant Shri Babulal H. Parikh on account of relinquishment of right of land and a further amount of ₹ 43.5 Lacs was paid to him for road/pathway through post dated cheques. 2.3 The appellant has failed to give any explanation regarding cheques either during assessment stage or during present Appellate stage. Therefore, it can be safely inferred that the Appellant had received amount equivalent to cheques in Cash on the basis of which only cheques were returned back. It is further substantiated by the fact that when total amount of two cheques is added to the disclosed income by the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the agreement dated 29-06-2000 was executed. As per the agreement ₹ 73,80,000/- was paid to the assessee as security and further amount of ₹ 43,50,000/- was to be paid. The amount was paid for relinquishing the right of the assessee in the property and further the amount was to be paid subject to realization of compensation from Baroda Municipal Corporation. He has submitted that the post-dated cheques were never encashed and the details of the same are given in the agreement in question. The postdated cheque of ₹ 16,43,000/- pertained to dated 31-12-2000 and another post-dated cheque of ₹ 14,50,000/- pertained to dated 31-12-2001. He has, therefore, submitted that since the cheques were not found from the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch carried out on 04-03-2005. Thus, till the date of search both the post-dated cheques were not encashed by the assessee. Accordingly to law dealing with negotiable instruments, the validity of both the cheques would have expired on the date of search, therefore, the same could not have been encashed by the assessee even in future. Since the dates of the cheques shows these were not valid on the date of the search in 2005, therefore, it would not be considered as cheques under the law which could be enforced for payments. The AO merely presumed on the basis of recovery of these post-dated cheques that the assessee received cash in lieu of return of these post-dated cheques to M/s. Om Shivam Corporation. However, the AO has not broug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d receipt of cash by the assessee, the authorities below were unjustified in making and confirming the addition. In the absence of any evidence incriminating in nature against the assessee, we do not justify the addition. We accordingly, set aside the orders of the authorities below and delete the addition of ₹ 30,93,000/-. In the result, grounds No.2 and 3 of the appeal of the assessee are allowed. 6. The assessee also raised ground No.1 which reads as under: 1. The C. I. T. (Appeals) failed to appreciate that sec. 153C order on the appellant is bad in law as also on facts because the satisfaction was not recorded by the Assessing Officer of the assessee who was searched and that the satisfaction if recorded was not valid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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