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2013 (11) TMI 513

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....nts were recovered from the residential premises of one, Shri Nudruddin B. Ajani and Shri Dawoodali N. Israni. One such was a 'Note' dated 04.04.2004 (copy on record), written in the hand of Shri Nuruddin B. Ajani, which reads as under:- "Regarding Office at Byculla"      We have taken 60 lakhs against the office from Nazmun Jamal. We sold the office to him for 56 lakhs. Bal.4 lakhs I had promised him that I would pay him on 31st April and I would give him the possession of the office on 21st March (Navroz) Rangara and Salim Merchant were the arbitrators. He had called up for the possession which I was Supposed to give him on 21st March. I told him that would give him possession after 15th April.      As per the said Note, Shri Nuruddin B. Azani had taken Rs.60 lakhs in cash from the assessee for the transfer of a tenanted property at fourth floor, Warden Bldg., 340, Byculla. The assessee's name also appeared at pgs.8 & 9 of Annexure-1 (of the papers seized, and a computer print-out taken from the house of Shri Nuruddin B. Ajani during search), both reflecting financial transactions. The said information by the investigation wing of the De....

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....g to the Note itself being supposed to be given on 21.03.2004. The appellant had not been given the copy of the statement by the Ajanis for cross-examination, so that it was also not clear if the amount had been disclosed by them in their respective returns. There was also no corroborative evidence to show that the assessee was in possession of such a huge amount, which could have been passed on to the Ajanis. In view of the same, the said addition stood deleted by the ld. CIT(A). Aggrieved, the Revenue is in appeal. 3. We have heard the parties, and perused the material on record. 3.1 Sections 69/69A of the Act seeks to bring to tax any investment made by, or of money, which the assessee is found to be the owner of, which is not recorded in the books of account, if any, maintained by him for any source of income, where the assessee offers no explanation about the nature and source of the said investment, money, etc., as the case may be, or the explanation offered by him is, in the opinion of the A.O., not satisfactory. The value of such investment or money is deemed to be the income of the assessee for such financial year, i.e., the year in which the investment is found to have ....

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.... the Note states of the possession being supposed to be given on 21st March. However, the words subsequent to the said date in the Note would show that the possession could not be given by 21st March, and that a revised date for giving possession was set, i.e., 15th April, 2004, which is apparent from the words "I told him that would give him possession after 15th April." Further, the date of possession by itself may not be very material, for even if the money is paid before or after the same, it is the date on which the money stands paid, which would be relevant. Also, if the exact date is not forthcoming from the document/s, it is only the inference based on the circumstantial evidence, and which again has to be reasonable and consistent with the facts of the case, which would hold. This is not to say that the date (of payment) is not relevant, which without doubt it is, but the occasion for the assessee to lead evidence in its respect would arise only where the transaction (of payment) is admitted and, further, could only be on the basis of materials, as the date of payment, even as apparent from the Note itself, may not be the same as that of transfer of possession itself. And ....

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....therwise fairly reflected in the Note dated 04.04.2004, so that the said explanation is, as afore-noted, corroborative. However, that would only be with regard to the nature of the amount paid, i.e., toward a purchase consideration or for taking possession of property, and not with regard to its source. 3.5 Next, the assessee contends of being a man of no means, so that he could not have possibly paid this huge amount, and that neither any corroborative evidence with regard to its possession had been found by the Revenue. The argument, though not completely irrelevant, is largely misplaced or has limited applicability, even as found by the hon'ble court in the case of Surendra M. Khandhar (supra), where the same was also advanced with reference to the decision by the apex court in the case of CIT v. Noorjahan (P.K.)[1999] 237 ITR 570 (SC). This is as the deeming of sections 69/69A is based on the principles of common law jurisprudence as incorporated in section 110 of the Evidence Act, even as explained by the hon'ble apex court in the case of Chuharmal v CIT [1988]172 ITR 250 (SC). As such, a presumption of ownership would follow the discovery of any valuable with the assessee, b....