TMI Blog2002 (11) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... ri. All these five appeals are of assessee. Ground Nos. 1 to 3 in all the above five appeals are common which contain single issue disputing the addition of Rs. 1,94,100 in each of the five assessment years under consideration. The learned authorised representative of assessee has made his oral arguments and has also furnished his written submissions. He has contended that in the first round the issue was set aside by learned CIT(A) to AO vide his appellate order dt. 31st March, 1998, with specific directions. He has contended that thereafter the AO made assessment order on 28th March, 2001 whereby he repeated the additions made by his predecessor without carrying out the main directions of the learned CIT(A) given in his appellate order dt. 31st March, 1998. He has contended that now the assessee is in second round before the Tribunal against the impugned order of learned CIT(A), dt. 7th Dec., 2001, whereby he sustained the aforesaid additions. The learned authorised representative of assessee has contended that on 16th Dec., 1993, search under s. 132(1) was conducted against J.K. Industries Ltd. and consequential searches were also carried out against various employees of the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing effective, is not based on any accounts or diaries found or seized from the possession of Shri A.K. Chajjer. He has contended that the addition made in the hands of assessee is based on the basis of loose sheet A-1/71, which nowhere suggests any payments to the assessee or to any of the executives listed on the said paper. He has contended that there is no evidence on record to show that the amount mentioned in the loose sheet was actually paid to the assessee or any other persons. It has also been contended that the Department has dropped reopened proceedings under s. 147 in a number of cases in which the reassessment proceedings under s. 147 were initiated on the basis of this very loose sheet. It has been contended that the said loose sheet does not suggest that any such payment was made. It has been contended that there are no corroborative evidence/vouchers, nor signatures of the persons alleged to have received such payments. It has been contended that from the loose sheet it cannot be inferred that the persons named therein have received payments of the amounts. He has contended that the AO has alleged in his orders about the diaries, but no such diaries have been menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash was established. 10. He has contended that the learned CIT(A) has observed that as regards the failure of AO to record the statements of Shri A.K. Chajjer and to allow the right of examination to the appellant it is on record that he is absconding. He has contended that the learned CIT(A) has not relied on the testimony of Shri A.K. Chajjer but has based this addition on documentary evidence, and that if assessee wanted to rely on Mr. A.K. Chajjer s testimony, he should have brought Shri A.K. Chajjer before AO. It has been contended that it is clear from the cited judgment that no addition could have been made/sustained on the basis of loose sheet found from the possession of third party (Shri A.K. Chajjer), the contents of which have not been proved by independent oral/documentary evidence; and that it is wrong on the part of learned CIT(A) to disregard the ratio of cited decisions and, in particular, the decision of Hon ble Supreme Court in the case of CBI vs. V.C. Shukla. It has been contended that the very basis of addition being the paper, alleged to have been found from the possession of Shri A.K. Chajjer, but there being no explanation nor statement of Shri A.K. Chaj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench); 3. Smt. Purnima Beri vs. Dy. CIT (2002) 76 TTJ (Asr) 467 : (2002) 82 ITD 137 (Asr); 4. Peeyush Construction (P) Ltd. vs. Dy. CIT 28 Tax World 57 (Jp); 5. ITO vs. M.A. Chidambaram (1997) 63 ITD 203 (Mad); 6. Associated Stone Industries (Kota) Ltd. vs. Dy. CIT (1999) 64 TTJ (Jp) 708 : (1999) 68 ITD 312 (Jp); 7. Kishin Chand Chellaram vs. CIT (1980) 19 CTR (SC) 360 : (1980) 125 ITR 713 (SC); 8. Gargidin Jawala Prasad vs. CIT (1974) 96 ITR 97 (All); and 9. Prathana Construction (P) Ltd. vs. Dy. CIT. 14. As against the above, the learned Departmental Representative of Revenue has contended that the of the employer JKI has been to make additional payments over and above the regular salary, recorded in the regular books of accounts. It has been contended that it was during the search conducted on 16th Dec., 1993, that certain loose sheets were found from the possession of Shri A.K. Chajjer wherein various payments to various employees were recorded, and that the addition has been made in accordance with the said documentary evidence. He has contended that the AO examined the household expenses of assessee which were met by additional payment which has been found to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 CTR (SC) 360 : (1980) 125 ITR 713 (SC) it has been held that though proceedings under IT Act are not governed by strict rules of evidence and the letter could be taken into account as evidence even without calling manager of the bank in evidence to prove his letter, but before the IT authorities could rely on the letter they are bound to produce letter before the assessee that the assessee could controvert the statement contained in it by asking for an opportunity to cross-examine the manager of the bank." It has also been held therein that: "On the basis of a mere entry on a loose sheet found from the possession of a third person and a statement given by another third person in connection with search/assessment proceedings of still another third person without the copy of the statement being furnished to assessee and thereby allowing the assessee an opportunity to rebut the contentions made therein as also to cross-examine the witness it cannot justifiably be assumed/inferred that the amount mentioned in the entry on loose sheet was paid to the assessee. In turn the Tribunal deleted the addition." 18. In Kedarnath Jute Mfg. Co. Ltd. vs. CIT, it has been held that entries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son, no addition could be made in the hands of assessee on the basis of diary belonging to others and not belonging to the assessee. 21. In CBI vs. V.C. Shukla, it has been held that independent evidence as to trustworthiness of entries in the diaries is necessary to fasten the liability on the basis of the said entries. It has also been held therein by the Hon ble Supreme Court that loose sheets are not included in the term "book". 22. In Asstt. CIT vs. Shailesh S. Shah (1997) 59 TTJ (Mum) 574 : (1997) 63 ITD 153 (Mum), certain amounts were added to the assessee s income on the basis of loose papers seized from assessee during proceedings under s. 132. In that case the AO neither mentioned any material or evidence to show as to on what basis the figures came to be worked out, nor ss. 69 69D were invoked, nor did he discharge the burden to prove that alleged receipts were assessee s income. In this fact-situation, it was held that the addition could not be sustained merely on the basis of suspicion. 23. In the case of Hemraj Jagetia vs. Dy. CIT being ITA No. 543/Ju/2000 for asst. yr. 1994-95 decided by this Bench on 10th May, 2002, the AO had made an addition on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose sheet, there is not an iota of evidence on record supportive of the findings arrived at by AO, and confirmed by learned CIT(A) to fasten the liability on assessee in respect of the receipt of the amounts mentioned in the entry contained in the loose sheet A-1/71, which too was found not from the possession of assessee but from the possession of a third person whose statement is also not there which, if supportive, could lend some credence to it. As such, considering all the facts and circumstances of the case, the legal position emanating from the cited decisions, and the discussion made by us above, we find that the additions in the hands of assessee made by AO in the five assessment years, as being agitated in five appeals of assessee before us under consideration, on the basis of loose sheet, being Annexure A-1/P-71 are uncalled for and legally not sustainable. We, therefore, delete the said additions in all the five assessment years under consideration. 26. Ground No. 4 in asst. yrs. 1990-91, 1991-92 and 1992-93, involved in ITA Nos. 196 to 198/Del/2002, disputes the validity of initiation of reassessment proceedings under s. 148 of the IT Act. However, this ground has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain additional amounts were paid to various employees of the company including assessee, over and above their regular salaries. Accordingly, the AO made addition of Rs. 3,50,400 in the hands of assessee for the year under appeal. The learned CIT(A) deleted the addition, and so the Department is in appeal against the learned CIT(A) s aforesaid order deleting the addition. 32. From the perusal of record, we find that the learned CIT(A), while deleting the addition made by AO, had mainly relied on the finding of learned CIT(A) in assessee s own case for asst. yr. 1993-94 to the effect that none of the pages bearing Nos. 67, 71 and 80, on which AO relied upon, indicate any payment by company or receipt by the appellant. It has been the contention of the learned authorised representative of assessee-respondent in his written submissions, that the Department has not gone in appeal against the said finding of the learned CIT(A) and the same has become final. However, the facts in the case of present assessee-respondent are identical with those involved in ITA Nos. 189 to 200/Del/2002, discussed above, so we find this case squarely covered by our decision rendered above on similar issue, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
