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2009 (10) TMI 900 - AT - Income TaxPayment of 'on money' for investment in flat - Undisclosed sources of income - unexplained payment made by the assessee to the developer - search and seizure operation carried - reliance on amount written in the seized document - AO in view of clinching evidences in the form of seized loose paper and also in the light of the statement made by Shri Ketan O. Der, there was no doubt about the payment of 'on money' made by the assessee and added the said amount to the total income treating the same as payment made out of undisclosed income - CIT(A) confirmed the addition - HELD THAT:- We find that in the instant case the assessee has purchased one flat from M/s Ohm Developers in which case a search and seizure operation was carried out on 29.10.99. In the course of the search a book marked was found and on this book name of the assessee was written and against his name it was written amount received upto 31-3-99 Rs. 4,83,101/-. Further partner of M/s. Ohm Developers has in his statement admitted to have received this amount from assessee in respect of sale of flat. However, the assessee has claimed to have made payment of Rs. 1,01,687/- only upto 31-3-99 and has consistently taken the stand that it has not paid balance amount of Rs. 3,81,414/- as stated in the seized document. We find that no evidence could be brought on record by the Revenue to show that in fact the assessee only had paid the amount of Rs. 3,81,414/- to Ohm developers. No document containing signature of the assessee or handwriting of the assessee to corroborate the above making of payment by the assessee was found during the course of the search. We find that the Hon'ble Supreme Court in the case of K.P.Varghese [1981 (9) TMI 1 - SUPREME COURT] had held that mere seizure of note books or documents at the personal residence of an employee would not conclude the issue against the employer company that on money has been received by the employer company. The onus of proving the charging of on money lies on the department. We find that even at time of cross examination by the assessee the partner of M/s. Ohm Developers could not produce any evidence that the amount written in the seized document was in fact received from the assessee. In the instant case as the assessee has categorically denied to have made any payment in excess of Rs. 101,687/- upto 31-3-99 in respect of purchase of flat in our considered view the said denial cannot be brushed aside without bringing any positive material on record. Merely recording made by a third party or statement of a third party cannot be treated as so sacrosanct so as to read as a positive material against the assessee. Decided in favour of assessee.
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