TMI Blog2012 (11) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... anner to attract time limit of 6 years by recording an erroneous reason that this transaction has been kept outside the books of accounts by the assessee. It implies that the reasons recorded lack bona fide in terms of recording the correct facts. Since the reasons have been recorded without application of mind and proper bona fides, they are not tenable. Thus, the reassessment proceedings initiated on the basis of untenable reasons are ab initio void and are quashed accordingly – Decided in favor of assessee. - ITA No. 3817/Del/2010 & C.O. No. 412/Del/10 - - - Dated:- 20-7-2012 - SHRI R.P. TOLANI AND SHRI T.S. KAPOOR JJ. Department by : Sh. Sanjay Pandey Sr. DR Assessee by : Shri K. Sampath Adv. Sh. V. Raj Kumar Adv. O R D E R PER R.P. TOLANI, J.M: These are revenue s appeal and assessee s cross-objections against CIT(A) s order dated 6-5-2010 for A.Yr. 2001-02, assailing their respective grievances. They are heard together and being disposed of by a consolidated order for the sake of convenience. Respective grounds raised are as under: ITA No. 3817/Del/2010 ( Revenue s appeal): 1. On the facts and circumstances of the case and in law, the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mb was not written by assessee. The document in question was a dumb document, which did not contain true details about the transaction. (iii) Assessing Officer confronted these documents to said Shri Ashwani Mahajan, whose name was found on the paper as Ash Mahajan . He denied any knowledge about the MOU dated 24-12- 1997 written by Mr. Jhamb. The property was purchased in March 2000 and June 2000. 2.2. He expressed his ignorance about the writing of Mr. Jhamb as Ash and Mahajan and chqe of 38.00 . Assessing Officer, however, held that assessee in fact had purchased plot no. 42, Sector 6, Faridabad which is owned by it for a consideration of Rs. 38 lacs in the year 2000 on which cash of Rs. 1,38,810/- was paid by assessee. 2.3. According to Assessing Officer, the words Ash and Mahajan meant Ashwani Mahajan, who was director of the company in abbreviation form and chqe of 38.00 represented Rs. 38 lacs paid by the assessee. 2.4. The plot was purchased in fact for Rs. 1,68,38,610/-, which was actual consideration and not Rs. 38 lacs. Consequently, balance of Rs. 1,30,38,610/- was added as undisclosed income of the assessee. 2.5. Aggrieved, assessee preferred first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n his statement. I have also gone through the documents seized. Admittedly this MOU dated 24.12.1997 is not related to the purchase of this property by assessee since it was purchased by him in the year 2000-01. Further, documents seized vide pages 50-52 appears to be some rough working and in absence of any independent documentary evidence, the same has no sanctity and may be described as dumb documents. I may mention that the provisions of the Indian Evidence Act are not strictly applicable to the proceedings under the Income-tax Act, but the broad principles of law and evidence do apply to such proceedings. Further an entry in the books of account maintained in the regular course of business is relevant for purposes of considering the nature and impact of a transaction, but notings on slips of paper or loose sheets of paper cannot fall in this category. Notings on loose sheet of papers are required to be supported/ corroborated by other evidence and which may include the statement of a person, who admittedly is a party to the notings. In this case, no such evidence was brought on record by AO. It cannot be disputed that the burden to establish that the appellant has made inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased by Shri Ashwani Mahajan during the financial year 2000-01 relevant to the assessment year 2001-02 in the name of a company, namely M/s Avon Tube tech Pvt. Ltd. (PAN AACCA1235C), wherein he is a director. Perusal of Schedule-E (Fixed Assets as on 31-03-2001 to the Balance Sheet reveals that though the above said plot had been purchased by the assessee company, it was not reflected in the details of Fixed Assets . Thus, it is evident that the assessee company has kept the transaction outside its books of accounts, which do not disclose fully and truly all material facts necessary for its assessment for that assessment . 3.4. It is pleaded that Assessing Officer on realizing that the time limit of 4 years has already expired, twisted the facts so as to apply 6 years of time limit and has recorded that this transaction is not at all shown. Reasons recorded by Assessing Officer are self contradictory as on one hand it says that the Schedule E though reveals that the above said plot has been purchased by the assessee, this was not reflected in the details of the fixed assets. This clearly implies that Assessing Officer though accepts that details about purchase of proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his part. 6.2 In this regard we note that it is also not the case that the seller has made any statement or had accepted the receipt of on money i.e. consideration over and above that disclosed. It is also not the case that the seized documents were in the handwriting of the assessee or the seller or were seized from the premises of seller and purchaser. Ld. Commissioner of Income Tax (Appeals) has brought out various discrepancies in the seized documents relied upon by the revenue and striking feature of these anomalies is that in the seized documents, it has been mentioned that the impugned plot was not sold. Thus, the working and the figures mentioned therein can at best be said to be tentative or expected amount. This by no stretch of imagination can be treated as conclusive proofs of on money transactions. Moreover, it is an admitted fact that the documents being relied upon showed account as on 31.10.2001, while as per the registered sale deed the plot was sold on 23.5.2002. Under the circumstances, these additions have been made on the basis of documents found during search at the place of a third party which at best only showed the tentative /projected purchase consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the expiry of 4 years. From the balance sheet in the year ending 31-3-2000 and 31-3-2001 it emerges that assessee has recorded the transaction in its books of accounts. In our view when the assessee has recorded a transaction in its books of accounts and the assessment is completed u/s 143(3), the assessee has disclosed primary facts relating to the transaction. The assessee s original assessment having been completed u/s 143(3), no action of reassessment can be taken after the expiry of 4 years from the end of the relevant assessment year unless any income chargeable to tax has escaped on the part of the failure of the assessee to disclose fully and truly all material facts necessary for the assessment. In our view, Assessing Officer has recorded the reasons in a manner to attract time limit of 6 years by recording an erroneous reason that this transaction has been kept outside the books of accounts by the assessee. It implies that the reasons recorded lack bona fide in terms of recording the correct facts. Thus, we find merit in the argument of learned counsel for the assessee that the recording of reasons is without application of mind and has been selectively recorded so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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