TMI Blog2015 (10) TMI 2243X X X X Extracts X X X X X X X X Extracts X X X X ..... directed the AO to assess the same in A.Y. 2005-06 since the seized documents show that the amount has been paid to the assessee on 09-07-2004. We find an identical issue had come up before the Tribunal in the case of Shri Vinit Ranawat Vs. ACIT vide [2015 (6) TMI 608 - ITAT PUNE] wherein additions were made on the basis of seized documents found from the residence of Shri Sohanraj Mehta, C&F Agent of RMD Gutkha Group during the course of search and after considering the various submissions made by both the sides, the Tribunal deleted the addition concluding that the presumption u/s 132(4A) is available only in respect of the person from whom the paper is seized. It could not be applied against a third party and hence, no addition could be made on the basis of the evidence found with third party - Decided in favour of assessee. Revision u/s 263 - Held that:- We find in the instant case the AO did not make any addition in the hands of the assessee in the impugned assessment year holding that he has already made the addition of ₹ 1 crore in A.Y. 2004-05. This was done by the AO despite the fact brought before him that the seized documents relates to A.Y. 2005-06 and not A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of assessment proceedings, the assessee was provided with the reasons of reopening on 09-11-2011. The assessee was also provided a copy of the seized material and was requested to explain as to why the payment of ₹ 1 crore made to him by Shri Sohanraj Mehta should not be treated as his income. 3. In response to the query raised by the AO the assessee made the following submission which have been reproduced by the AO in the assessment order and which read as under : 1. The seized document handed over to me compromises of two pages-one on the letter head of Al India Shwetambar Jain Conference Mahila Shakha Karnataka which contains a summary of some receipts and payments and the other is a summary of receipts broken into three periods. The copies of same are enclosed herewith. 2. On perusal of the sasme, I do not find any specific mention of who the said papers belong or of the name of Shri Sohanraj Mehta referred to in the reasons provide by you. 3. Further, the document does not even state that this amount is paid to me and on what account. 4. Further, the document does not bear my signature as acknowledge of the receipt of the said amount. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 worth ₹ 345.85 crores and has distributed a part of such unaccounted sale proceeds to his friends who are into real estate business. In the seized document, it is clearly mentioned that the assessee Shri Suhas Mantri has received cash worth ₹ 1 crore in July 2004 for which no repayment liability is mentioned in the seized document. He therefore treated this amount of ₹ 1 crores as unexplained money u/s.69A of the I.T. Act and made addition to the total income of the assessee. 5. Before CIT(A) the assessee challenged the validity of assumption of jurisdiction by the AO u/s.148. It was stated that it is apparent from the reasons recorded for reopening where it has been stated that out of the unaccounted sales carried out by Shri Sohanraj Mehta an amount of ₹ 1 crore has been deployed to Shri Suhas Mantri. However, the AO failed to provide any reason for treating such deployment as income which is chargeable to tax and has escaped assessment. It was argued that there was no tangible material before the AO on the basis of which he could form a reason to believe that income chargeable to tax has escaped assessment. It was argued that powers for reopening of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of opinion. For the above proposition he relied on the decision of Hon ble Supreme Court in the case of ACIT Vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. reported in 291 ITR 500. He noted that since the AO has received information from ACIT, Central Circle-1(2), Pune regarding certain entries in asessee s name found in the documents seized during the search action by the income-tax department on Shri Sohanraj Mehta, C F Agent of RMD Gutkha group, therefore, the AO had prima-facie reasons to believe that income had escaped assessment. Therefore, there is no infirmity or illegality in the reassessment proceedings initiated by the AO. 8. The CIT(A) was also not satisfied with the explanation given by the assessee so far as the addition of ₹ 1 crore is concerned. He observed that an analysis of the seized documents filed by the assessee in the paper book show that the assessee s name figures in both the pages, i.e. one being summary of cash receipts and payments for the period April 2003 to August 2006 and the second being the month-wise summary of cash receipts and payments found during the course of search. As per the said document, the assessee could be said to be the owne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld.CIT(A) upheld the addition made by the AO u/s.69A of the I.T. Act. 10. However, since the documents show that the amount has been paid to the assessee on 09-07-2004 and the AO has assessed the same in A.Y. 2004-05, therefore, he directed the AO to assess the income for the A.Y. 2005-06 by taking recourse to the provisions of section 150(1) of the I.T. Act. 11. Aggrieved with such order of the CIT(A) the assessee is in appeal before us with the following grounds : 1. The Ld.CIT(A) has erred in law and on facts in confirming the Assessing Officer s assumption of jurisdiction u/s.148. 2. The Ld.CIT(A) has further erred in facts and in law in not providing a proper opportunity of hearing and thus violating the laws of natural justice. 3. The Ld.CIT(A) has erred in law and on facts in invoking the provisions of section 292C of the Income Tax Act, 1961 for a document not seized from the appellant s premises. 4. The Ld.CIT(A) has erred in law and on facts in confirming the addition of Rs. One crore u/s.69A of the Income Tax Act, 1961. 5. The Ld.CIT(A) has erred in law and on facts in issuing directions to assess the income of Rs.One crore u/s.69A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. Counsel for the assessee referring to pages 49,57,59 and 74 submitted that although the assessee had made various submissions during the course of assessment proceedings, however, the AO has not dealt with any of his objections. Neither the statement of Shri Sohanraj Mehta was provided to the assessee nor cross examination of the person was allowed. Referring to the decision of the Delhi Bench of the Tribunal in the case of Share Brokers Ltd. Vs. DCIT reported in 109 TTJ 700 he submitted that the Tribunal in the said decision has held that addition in block assessment against assessee having been made on the basis of statement of M N recorded at the back of the assessee without giving assessee an opportunity of cross examining them despite repeated requests, the block assessment suffers from violation of principles of natural justice. He accordingly submitted that since the assessee was not provided with proper opportunity of hearing and violates the principle of natural justice, therefore, the entire order should be quashed. 15. So far as ground of appeal No.3 is concerned, the Ld. Counsel for the assessee drew the attention of the Bench to the provisions of section 292 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the person whose name appeared in the seized papers. He accordingly submitted that the facts of the case being identical to the facts in the case of Pradeep Amrutlal Runwal (Supra) decided by the Pune Bench of the Tribunal, therefore, the addition made by the AO should be deleted. He also relied on the following decisions : 1. General Motors India (P) Ltd Vs. DCIT 354 ITR 244 2. Jawaharbhai Atmaram Hathiwala Vs. ITO 128 TTJ 36 3. N.K. Malhan Vs. DCIT 91 TTJ 938 4. ACIT Vs. Ashok Kumar Vig 106 TTJ 422 5. Consolidated Doffee Ltd. Vs. ITO 155 ITR 729 6. Peico Electronics Electricals Electricals Ltd. Vs. DCIT Others 210 ITR 991 18. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). So far as the decision of the Tribunal in the case of Pradeep Amrutlal Runwal (Supra) is concerned he submitted that in the said decision there was no nexus between the assessee and Rasiklal M. Dhariwal. But here in the instant case, the Ld.CIT(A) has given categorical findings that the seized documents reflects the name of the assessee. The date of handing over of the money is also mentioned. Therefore, the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the I.T. Act was conducted at the premises of Mr. Mittulal at Bangalore on 09-10-2009 wherein certain incriminating documents were found belonging to the Dhariwal group. Those documents were maintained by one Shri Sohan Raj Mehta, C F agent of M/s. Dhariwal Industries Ltd. In his statement recorded u/s.132(4) Mr. Mehta had stated that he was effecting unaccounted sales of Gutkha of Dhariwal Industries Ltd. and the sale proceeds were deployed as per the instructions of Shri Rasiklal M. Dhariwal and his son Shri Prakash M. Dhariwal. In some of the seized papers name of certain persons are appearing which contain the name either Vinit or Vinit Ranawat . On the basis of those names and entries against said names, the Assessing Officer deciphered the amount as ₹ 1 crore for A.Y. 2006-07 and ₹ 20 crores for A.Y. 2007-08 as received by the assessee Shri Vinit Ranawat. Although Mr. Mehta in his statement recorded u/s.132(4) has stated that this amount was paid by Dhariwal Industries to Shri Vinit Ranawat through him, however, the statement appears to have been retracted as per the findings given by the Ahmedabad Bench of the Tribunal in the case of Mustafamiya H. Sheikh. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. It is also the submission of the Ld. Counsel for the assessee that different Benches of the Tribunal under identical facts and circumstances have deleted the addition made by the Assessing Officer on the basis of notings found from the premises of Mr. Sohan Raj Mehta. 40. We find some force in the submission of the Ld. Counsel for the assessee. The assessee in the instant case is an individual and proprietor of M/s. S. Chains which is engaged in the business of job work in gold ornaments. M/s. S.D.D. Agencies is the C F Agent of M/s. Dhariwal Industries Ltd. in the State of Maharashtra for their Gutkha and Pan Masala business. A search and seizure action on the premises of Mr. Mittulal at Bangalore was carried on 09-10-2009 wherein documents maintained by Mr. Sohan Raj Mehta, C F Agent of M/s. Dhariwal Industries Ltd were found. The assessee s premises was also searched on 20-01-2010, i.e. after a period of about 3 months and 10 days. During the course of search at the premises of the assessee he was questioned about the documents found from the premises of Mr. Mittulal which contain documents maintained by Mr. Sohan Raj Mehta. The assessee at the time of search had completely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in cash of ₹ 21.22 cr has been made to you at the direction of Shri Rasiklal Dhariwal by Shri Sohanraj Mehta. As the statements have been given by them on oath, you are therefore once again requested to go through the above referred documents/statement and state whether the said cash receipts are reflected and recorded in your regular books of accounts. A.35 As already stated earlier, I have never received any cash from Sohanraj Mehta at the instant of Shri Rasiklal Dhariwal or Prakash Dhariwal. Hence, no such cash is recorded in my regular books of accounts. 41. It is also pertinent to note here that the search party during the course of search at the premises of the assessee has not found any evidence whatsoever to substantiate that the assessee has in fact received any amount either from Mr. Sohan Raj Mehta or from Mr/ Rasiklal Manikchand Dhariwal/Mr. Prakash M. Dhariwal or M/s. Dhariwal Industries Ltd. No unaccounted asset, investment or loose paper evidencing such huge receipt has been found. Further, we find from the query raised during the course of search that the authorised officer has treated the same as short term advance given to the assessee. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is son Mr; Mr. Prakash. The notings on these slips contain their directions to me to handover the amount mentioned in the slip to the person who brings the slip. Sometimes, they do not write any name on the slip, I have to handover the money mentioned in the slip to the bearer of the slips. Most of the times, I may not know the person but still I make payment to them as I have standing instructions from Mr.Raskilal Manikchand Dhariwal and his son Mr. Prakash to handover the money to the bearer of the slip. The money is paid out of the collections received from the distributors towards unaccounted sales. Q. 34 Do you obtain any receipt from the parties to whom you hand over Cash as per the instructions of Mr.Raskilal Manikchand Dhariwal and his son Mr. Prakash Ans : No. It is not required. After receipt of Cash, they leave the slip with me. That is considered as evidence. 43. From the above it is seen that Mr. Sohan Raj Mehta has never identified the assessee. It is also an admitted fact that the request of the assessee to cross examine Mr. Sohan Raj Mehta was not granted on the ground that the same will not serve any purpose. 44. We further find Mr. Rasikla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the papers belong to him. Therefore, we find force in the submission of the Ld. Counsel for the assessee that on the basis of the papers found with some third party addition cannot be made in the hands of the assessee particularly when there is no business connection between the assessee and that party. 47. The Hon ble Bombay High Court in the case of Addl.CIT Vs. Lata Mangeshkar reported in 97 ITR 696 has held that mere entries in the accounts regarding payment to the assessee was not sufficient as there was no guarantee that the entries were genuine in absence of any corroborative evidence. In that case, the income-tax authorities sought to assessee certain income as income from undisclosed sources received by the assessee on the basis of statement by 2 persons that they had paid money in black to the assessee and entries in books belonging to them regarding alleged payment to the assessee. The Tribunal examined the statement made by the 2 persons and found that the evidence tendered by them suffered from serious infirmities. It held that mere entries in the accounts regarding payments to the assessee was not sufficient as there was no guarantee that the entries wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and could not rely on mere entries in the books of account even if they were regularily kept in the corse of business in view of the clear language of Section 34 of the Act. This Court further observed that where the entries were not admitted it was the duty of the Bank, if it relied on such entries to charge any person with liability, to produce evidence in support of the entries to show that the money was advanced as indicated therein and thereafter the entries would be of use as corroborative evidence. The same question came up for consideration before different High Court on a number of occasions but to eschew prolixity we would confine our attention to some of the judgements on which Mr. Sibal relied. In Yesuvadiyan Vs. Subba Naicker [A. I. R. 1919 Madras 132] one of the learned judges constituting the Bench had this to say: S.34, Evidence Act, lays down that the entries in books of account, regularly kept in the course of business are relevant, but such a statement will not alone e be sufficient to charge any person with liability. That merely means that the plaintiff cannot obtain a decree by merely proving the existence of certain entries in his books of account even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying upon those entries to prove that the were in accordance with facts. The evidentiary value of entries relevant under Section 34 was also considered in Hiralal Mahabir Pershad (supra ) I.D. Dua, ]. (as he then was) speaking for the Court observed that such entries though relevant were only corroborative evidence and it is to be shown further by some independent evidence that the entries represent honest and real transactions and that monies were paid in accordance with those entries. A conspectus of the above decisions makes it evident that even correct and authentic entries in books of account cannot without independent evidence of their trustworthiness, fix a liability upon a person. Keeping in view the above principles, even if we proceed on the assumption that the entries made in MR 71/91 are correct and the entries in the other books and loose sheets which we have already found to be not admissible in evidence under Section 34) are admissible under Section 9 of the Act to support an inference about the formers' correctness still those entries would not be sufficient to charge Shri Advani and Shri Shukla with the accusations levelled against them for there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ird party (Shri Sohanraj Mehta). The purported seizure of slips, loose sheets etc. at the premises of a third party contained only the names, but, not other details such as their identity, addresses, contact numbers etc. On a perusal of the statement, it is clear that the payments made were to the persons whose names were appearing on the right side of the papers (sheets) which were paid to those persons on the instructions of PRD RD. Moreover, against the names of Mustufa Taufik, it was specifically written as (PRD) expenditure in respect of PRD was given by Shri Sohanraj Mehta as per the telephonic and written instruction of Prakash Rasikal Dhasriwal and Rasiklal Manikchand Dhariwal as per the Statement of Sri Sohanraj Mehta dated 21.10.2009 [Refer: Page 99 of PB AR]. To a question No.14 Exhibit A/M/8/dated 9.10.2009 which contained a bunch of loose sheets serially numbered from 01 to 58 to explain the contents, Shri Sohanraj Mehta answered thus - Page 34 records receipt of Gutkha consignment from Dhariwal Industries Ltd., during April 2003 to Jan. 2006 totalling to ₹ 218,00,91,198/- (which is recorded on the left hand side of the page). On the right hand side of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s plea for permission to cross examine Shri Sohanraj Mehta at the assessment stage was not conceded by the AO on the ground that - [On page 9 CIT (A)] 2.8........................................................................... Comments of the AO: (ii) Opportunity of cross examination of Shri Sohanraj Mehta: 'The assessee was provided with the copy of the statement of Shri Sohanraj Mehta recorded by the ADIT (Inv), Pune, along with documents on which his statement was recorded. Due to paucity of time the cross examination could not be granted. 7.6. The CIT (A) had also turned down the assessee's request for crossexamination on the ground that - (On page 53) 2.25................It has also been indicated, as borne out on records, that the appellant had asked for cross examination of the party for the first time only on 14.12.2011. The appellant was also fully aware that the limitation to pass reassessment order in the case expires on 31.12.2011. Thus, between 29.3.2011 till 14.12.2011, the appellant did not make any request to the AO that an opportunity of cross examination is required by him. Fully knowing that it would not be possible for the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f GC. Moreover, no evidence has been adduced to indicate that any transaction in relation to the land in question has actually taken place. The Tribunal has rightly found that the basis for making the addition in the case of the assessee is merely a bald statement of MV, which is not corroborated with any documentary evidence found at the time of search, either in the case of S or MV or the assessee. No plea to the effect that the impugned order of the Tribunal suffers from any perversity has been raised. The Tribunal having based its conclusion on findings of fact recorded by it after appreciation of the evidence on record, it cannot be stated that the impugned order of the Tribunal suffers from any legal infirmity............ (ii) During the course of hearing of a reference application of the Revenue in the case of DCIT (Asst) v. Prarthana Construction Pvt. Ltd [Tax Appeal No.79 of 2000 dated 25.3.2001] before the Hon'ble jurisdictional High Court, the learned Counsel for the assessee submitted that the documents in question have been found from the premises of a third party. The loose papers cannot be stated to be books of account in the light of the decision of the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered view that that learned CIT (A) was not justified in sustaining the addition of ₹ 57.5 lakhs made by the AO in the hands of the assessee for the following reasons: (i) that the learned AO had solely depended upon the information received from the Investigation Wing of Pune; (ii) that the AO had failed to substantiate the same with any credible documentary evidence to the effect that the assessee had indeed received the alleged cash payment of ₹ 57.5 lakhs from Shri Sohanraj Mehta as the assessee had categorically pleaded before the AO that he was making purchases through Ambika Distributors who were the C F Agents for Gujarat Region; (iii) that the total unaccounted sales effected by Shri Sohanraj Mehta C F of RMD Gutkha on behalf of Dhariwal Industries Limited for the period of April 2003 to Feb 2008 was ₹ 345.72 crores (approx). The unaccounted income for the AY 2004-05 was arrived at ₹ 40,88,32,514/-, the same was added substantively in the case of M/s. Dharival Industries Limited and concluded the assessment for the AY 2004-05 u/s 153A r.w.s. 143 (3) of the Act, dated 29.12.2011 by the ACIT, C.C. 1(1), Pune [Courtesy: P 231 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et out in the order of the AO for coming to the conclusion that the seized document evidences receipt of money by the assessee from Sohanraj Mehta. The presumption u/s. 292C of the Act is only with reference to the person searched and it cannot be extended to the assessee. There is no corroborative evidence or statement of Sohanraj Mehta relied upon by the AO, to the effect that a sum of ₹ 22.75 lakhs was paid to the assessee. The assessee has categorically denied having received any payment from Sohanraj Mehta. Even in the proceedings before the AO, when the assessee was examined, he had taken the same stand. The details called for in the scrutiny assessment did not call for any specific details on the seized document or receipt of cash based on the seized document. 14. In the light of these circumstances, the CIT(Appeals) was justified in coming to the conclusion that no evidence has been brought on record to prove that the assessee received the sum of ₹ 22.75 lakhs from Sohanraj Mehta. The addition made by the AO was therefore rightly deleted by the CIT(A). We do not find any ground to interfere with the order of the CIT(Appeals). 51. We find the Lucknow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is a debit entry of ₹ 50 lakhs in the name of Mlik Kannauj, but this entry does not indicate that the amount of ₹ 50 lakhs was given to the Managing Director of the assessee. There may be hundred of Malik in Kannauj but on the basis of this dumb document, the reopening of assessment in the hands of the assessee is not permissible. Moreover, the searched party has also examined Shri. Sohanraj Gupta and the statement is also placed on record and at nowhere Shri. Sohanraj Gupta has deposed about payment of ₹ 50 lakhs to the assessee. In the absence of any relevant material, the reopening of assessment in the hands of the assessee is not proper. The ld. CIT(A) has given valid reasons while holding that the reopening is bad. The relevant observations of the ld. CIT(A) are extracted hereunder:- 5.1.6 From all the aforesaid correspondence, it is obvious that there is no clue as to how the identity of MALIK Kannauj as appearing in the seized document (supra) was interpreted as Shri Abdul Malik, MD of the appellant company. In the statement given by Shri Sohanraj Gupta, there is no mention of any Malik. Further, in his statement under oath before the AD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Lucknow Bench of the Tribunal in the case of DCIT Vs. Pawan Kumar Agarwal (Supra) has held as under : 5. We have considered the rival submissions. We find that the issue in dispute was decided by learned CIT(A) as per para 7 7.1 of his order, which is reproduced below for the sake of ready reference:- 7. That vide grounds No. 3 to 7, assessee has challenged the additions of ₹ 1,13,40,000/- made on account of alleged undisclosed income. I have carefully considered the rival submissions and perused the material on record. I have also gone through the order of the A.O. It was contended by the learned AR before me that mere jottings and notings should not be the basis for making any addition in the returned income, more particularly when A.O has not allowed the opportunity of Cross Examination of Mr. Shobhan Raj Mehta. The material provided/gathered by the department has also been produced before me. In this paper, it is seen that name of assessee is appearing. It was vehemently argued before me that how the department comes into conclusion that name Pawan Agarwal as appearing in the seized material is appellant. The name of appellant is very common and it is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of mandatory requirement to provide the assessee incriminating material to defend its own case and therefore it can categorically be held that: (i) Statement of Shri Shobhan Raj Mehta was not given to the assessee. (ii) Beyond the belief of presumption on the information supplied by the ADIT(Inv.)-III, Kanpur, further evidences are not found to corroborate the additions. (iii) Cross-examination of Shri Shobhan Raj Mehta was not allowed. (iv) The assessee firm had strongly denied having any financial and business transactions with Mr. Shobhan Raj Mehta. In view of these factual exigencies, it is held that the addition made by the AO, without any corroborative evidence, was unjustified and accordingly deleted. Accordingly, ground No. 3 to 7 raised by appellant are allowed. 5.1 From the above Para from the order of CIT(A), we find that a categorical finding has been given by him that statement of Shri Shobhan Raj Mehta was not given to the assessee and beyond the belief of presumption on the information supplied by the ADIT(Inv.)-III, Kanpur, further evidences are not found to corroborate the additions. He has also given a finding that Cross-ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel that Shri Sohan Raj Mehta retracted his statement. However, as per Revenue, Shri Sohan Raj Mehta has retracted his retraction affirming the original statement. On these facts, the learned CIT(A) has come to the conclusion that the statement of Shri Sohan Raj Mehta cannot be relied upon because he is frequently retracting his statement. Moreover, a statement of a third party cannot be used against the assessee unless the assessee is allowed an opportunity to crossexamine him. Now, we find that during the assessment proceedings, the assessee specifically requested for allowing opportunity to cross-examine Shri Sohan Raj Mehta also and requested the Assessing Officer to supply the copy of retraction of his statement. The Assessing Officer has reproduced the assessee's letter, paragraph No.11 of which, reads as under:- 11. The assessee had requested your good self to provide the following documents: (a) Copy of the Sworn Statement of Sh. Sohanraj Mehta. (b) Copy of written statements or Affidavits obtained from Sh. Mehta wherein he has mentioned that ₹ 9 crore was payable to the assessee. (c) Copy of subsequent retraction of the statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se some excess stock was found in the survey for which separate addition has already been made, it cannot be further presumed that the assessee made sales outside the books, specially when the survey was followed by the search and neither during the course of survey nor during the course of search, any evidence of sale outside the books was found. In view of the totality of above facts, we do not find any justification to interfere with the order of learned CIT(A). The same is sustained. 54. We find the Pune Bench of the Tribunal in the case of Pradeep Amrutlal Runwal reported in 149 ITR 548 while deleting addition under identical facts and circumstances has observed as under : 5. After going through the rival submissions and material on record, we find that the issue before us is regarding the addition of ₹ 5,10,00,000/-. As stated earlier, during the search proceedings in the case of Dhariwal Group, some loose papers were seized wherein certain amounts were written against the name of 'Pradeep Runwal'. Hence, the case of the assessee was reopened u/s 148 of the Income Tax Act. It was explained to the learned Assessing Officer that the assessee had not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee has previous business relations with the Dhariwal Group. In the absence of any documentary evidence to suggest the same, it could not be presumed that the amounts reflected in the loose papers were the income of the assessee received from Dhariwal Group. It has been the consistent stand of the assessee that there may be many persons of the name Pradeep Runwal in Pune and there was no specific evidence to suggest that the said notings pertained to the assessee. Hence, it was not justified as to how, in the absence of any other corroborative details, the Assessing Officer has assumed that the amounts reflected the income of the assessee himself, while the assessee has no business dealings of his with Dhariwal Group. The Assessing Officer has not brought on record any evidence to suggest that Dhariwal Group has admitted that the amounts were paid to the assessee. Hence, simply because the name of the assessee is noted on the seized papers does not mean that the addition could be made in the hands of the assessee. Since no evidence was found relating to the existence of any transaction between the assessee and Dhariwal Group and in the absence of any corroborative evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to check whether the said land was used for agricultural purposes. In the present case, the provisions relied by the Assessing Officer are not applicable, the assessee is not withholding any documents. The case of department is that the amount mentioned on the seized paper found with the Dhariwal Group indicates that the assessee has received the amount, therefore, the burden was on the Assessing Officer to establish the same. The reliance placed on the provisions of section 114 of Indian Evidence Act is misplaced. 5.7 As stated above, it has been consistent stand of the assessee that the assessee has had no business relations whatsoever with the Dhariwal Group. Further, apart from the noting on paper with the name 'Pradeep Runwal, there is no corroborative evidence in this regard against the assessee. In such circumstances, where the assessee has not entered into any transaction with the Dhariwal Group, one certainly could not expect the assessee to be in possession of any evidence to suggest that it has not entered into any such transaction except for his books of account which have already been verified by the concerned Assessing Officer. Hence, the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nute noting of the transactions of Dhariwal Group. He has stated that Shri Sohanraj Mehta has admitted that the documents were written by him and most of the papers were written in marwadi language. The CIT(A) referred to the fact that Shri Mehta had admitted that the papers belonged to Dhariwal Group. In para 4.3, the CIT(A) states that when the author of the paper has accepted the notings made by him, in that event, the document is having great evidentiary value and could not be rejected. As regards, the objection of the assessee that no evidence was found to indicate that the assessee had received the amount, the CIT(A) referred to the fact of acceptance of the paper by Shri Mehta and considering the fact that the modus operandi was clarified by Shri Mehta, the addition was rightly made by the Assessing Officer, has been held by CIT(A). He has referred to various decisions in support of the addition made. Firstly, he has relied upon the decision of ITAT Third Member in the case of Khopade Kisanrao Manikrao [74 ITD 25]. In this regard, the stand of assessee is that the decision in the case before Third Member was not applicable to the facts of the present case. In the said case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision is not applicable to the facts of the present case. Firstly, there is no transaction between the assessee and Dhariwal Group. Secondly, there is no corroborative evidence found which could suggest that the assessee had received any amount. The Assessing Officer and CIT(A) have also not brought on record any evidence to suggest that the payment was made to the assessee. Accordingly, considering the factual position, the decision in the case of Dhunjibhoy Stud and Agricultural Farm is not applicable in the case of assessee. 5.13 The CIT(A) has relied on the decision in the case of Vasantibai N. Shah Vs. CIT [(1995) 213 ITR 805 (Bom)]. In this case, the issue was regarding validity of reassessment proceedings. The assessee had made a false disclosure. Subsequently, the case was reopened. Hon'ble High Court held that the reopening was valid since the assessee herself had made a false disclosure. Thus, the facts are totally different from the present case and hence, the ratio of Vasantibai N. Shah (supra) is not applicable to the assessee's case. The CIT(A) further relied on the decision in the case of Green Valley Builder v. CIT [(2008) 296 ITR 225 (Ker)]. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The A.O. further rejected the submissions given by the assessee in his paper book dated 28.12.2007 reiterating the same stand. The A.O. has drawn inferences and presupposes relying on surmises and conjectures. The ITAT Mumbai Bench in their decision in the case of Straptex (India) Pvt. Ltd. [84 ITD 320 (Mum), clearly held that the presumption u/s 132(4A) is applicable only against the person from whom possession the books of accounts or other documentary were found and not against any other person. It is held that as per Section 132(4A) where any books of account or document is found in the possession and control of any person in the course of the search, it is to be presumed that they belong to such person . Thus, clearly the presumption is in respect of the person from whom they were found. The use of the word to such person in the said Section means the person from whom the books of account or documents were found. Clause (ii) of Section 132 (4A) provides that the contents of such books of account or documents are true. This presumption can be applied only against the person from whose possession the books of account or the document were found. Therefore, the A.O. was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the instant case are identical to the facts in the case of Shri Vinit Ranawat (Supra) to which both of us are parties, therefore, following our decision, we hold that addition u/s.69A is not warranted in the hands of the assessee either for A.Y. 2004-05 or for A.Y. 2005-06. In view of the above, we set aside the order of the CIT(A). 22. Since the assessee succeeds on merit the other grounds raised by the assessee being academic in nature are not being adjudicated. ITA No.916/PN/2014 (A.Y.2005-06) : 23. Grounds raised by the assessee are as under : 1. The Ld.CIT(A) erred on facts and in law in assuming the jurisdiction u/s.263 of the Income Tax Act, 1961. 2. The Ld.CIT(A) erred on facts and in law in treating the amount of ₹ 100,00,000/- as income of the appellant. 3. The appellant may kindly be permitted to add to or alter any of grounds of appeal, if deemed necessary. 24. Facts of the case, in brief, are that the assessee filed his return of income for the impugned assessment year on 28-10-2005 declaring total income of ₹ 9,34,847/-. The AO reopened the assessment u/s.148 on the basis of seized documents found during the course of sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before him brought the amount to tax in A.Y. 2004- 05 vide order passed on 17-12-2011, i.e. on the same day on which the order was passed for A.Y. 2005-06. Thus, there is clear application of mind on the part of the AO in so far as the year of taxation is concerned having chosen to tax it in the earlier year. It was argued that the seized document merely indicates only deployment of funds and it does not indicate that income has accrued or arisen to the present assessee. Relying on various decisions it was submitted that although the order can be termed as erroneous but the same is not prejudicial to the interest of the revenue since the amount has already been brought to tax in the preceding assessment year. 27. However, the Ld.CIT was not satisfied with the explanation given by the assessee. He observed that the relevant date for deploying funds as per the seized paper was 09-07-2004 and therefore addition cannot be made in the A.Y. 2004-05 and has to be made in A.Y. 2005- 06. Further, the assessee has filed an appeal before the CIT(A) for A.Y. 2004-05 contending that the transaction is relating to A.Y. 2005-06 and cannot be taxed in A.Y. 2004-05. Relying on various decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that the AO while passing the assessment order has not given any reason at all as to why he is making the addition in A.Y. 2004-05 instead of A.Y. 2005-06. Therefore, the order is erroneous as well as prejudicial to the interest of the revenue. The AO in the instant case has omitted to make proper application of mind. Even the CIT(A) has also held that the income pertains to A.Y. 2005-06. Therefore, the order of the CIT invoking jurisdiction u/s.263 is justified. 31. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find in the instant case the AO did not make any addition in the hands of the assessee in the impugned assessment year holding that he has already made the addition of ₹ 1 crore in A.Y. 2004-05. This was done by the AO despite the fact brought before him that the seized documents relates to A.Y. 2005-06 and not A.Y. 2004-05. Therefore, the AO in a clear application of mind and in a conscious manner made the addition in A.Y. 2004-05 and not in A.Y. 2005-06. Therefore, it cannot be said t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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