TMI Blog2015 (11) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of jurisdictional High Court is binding on all authorities below it. Thus, the reliance placed by the Assessing Officer on the loose papers is not justified at all. Therefore, the question of making any addition is not justified in the absence of other corroborative evidence to that effect. The assessee from the very beginning has denied to have received any such payment from M/s. Dhariwal group through Mr. Sohan Raj Mehta and since no incriminating material was found from the residence of the assessee during the course of search and since the assessee is not dealing with M/s. Dhariwal group in his individual capacity, therefore, respectfully following the decisions cited above and in view of our reasonings given earlier, we are of the considered opinion no addition in the hands of the assessee can be made. Since it is held that the assessee has not received any amount, therefore, the question of taxing the same u/s.56(2)(vi) as held by CIT(A) does not arise. In this view of the matter, we set aside the order of the CIT(A) and direct the Assessing Officer to delete the addition In the present case no corroborative evidence whatsoever was found or brought on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the search. A paper seized at Page No.34 of Annexure A/M/S is on the letter head of All India Shwetamber Sthanakwadi Jain Conference Mahile Shakha, Karnataka is a summary of the unaccounted sales carried out by Shri Sohanraj Mehta, C F of RMD Gutkha for the period April 2003 to August 2006. The left hand side of this paper has the details of sales the right hand side of this paper has the details of payments made out of sale proceeds. As per this paper, an amount of ₹ 4.50 crores was paid to Shri Kantilal Lunkad. Page No.41 42 of Annexure A/M/8 gives similar details for some of the amounts in F.Y. 2003-04. According to which, there is a payment of ₹ 1 crores during the month of July 2003 there is a payment of ₹ 1 crores during the month of November 2003. Thus, the total payment to assessee during F.Y. 2003-04 is ₹ 2 crores. Similarly, Page No.45 of Annexure A/M/8 gives the details for some of the months for F.Y. 2004-05. According to this paper, there is a payment of ₹ 50,00,000/- to the assessee in July 2004 ₹ 2 crores in the month of August 2004 making a total of ₹ 2.50 crores in F.Y. 2004-05. Thus, the payments as indicated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004-05. According to this paper there is payment of ₹ 50 lakhs to the assessee in July 2004 and ₹ 2 crores in the month of August 2004 making a total of ₹ 2.50 crores in F.Y. 2004-05. Thus payments as indicated in pages 42 and 45 tally with the payment amount on page 34 of Annexure A/M/08. In his letter objecting to the reopening of the assessment the assessee has stated that he does not know Shri Sohanraj Mehta of Bangalore and categorically denied having received any amount from Shri Sohanraj Mehta and any of his associates. It was stated that there is no business connections with Shri Sohanraj Mehta. It was argued that the document found in the course of search action on Shri Sohanraj Mehta is not in the hand writing of the assessee and therefore the same cannot be used as evidence against the assessee for reopening the assessment. It was submitted that in the seized documents the name similar to the name of the assessee is appearing without the address or the name of the city except at one place the place of Pune has been written and therefore the presumption that Shri Sohanraj similarly of the name is not correct. 8. It was submitted that there is no ack ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... public consumption and cannot be expected to have lengthy details of the identity of the persons described in such documents. Therefore, he held that the person mentioned as kantilal Lunkad, Pune, Kantilal Lunkadji, Lunkadji, Pune are one and the same. 11. As regards the contention of the assessee that the documents in question are neither in the handwriting of the assessee nor acknowledgement was signed by the assessee, the AO observed that if a document contains details of transactions relating to the assessee along with date and amount, the burden of proof lies on the assessee. The assessee, therefore, cannot disown the transaction simply by saying that the document is not in his handwriting or not acknowledged or signed by him. He has to discharge the onus by proving to the satisfaction that the transaction does not belong to him which the assessee has not been able to prove in this case. 12. As regards the contention of the assessee that the amounts mentioned in the seized document represent the unaccounted sale of RMD Gutkha group and therefore the same should have been added in the income of the RMD group the AO held that the same cannot be commented upon as they are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been reopened u/s.147 of the I.T. Act beyond the expiry of 4 years of assessment. The assessee also argued that the copy of statement of Shri Sohanraj Mehta was not provided nor the AO allowed cross examination of Shri Sohanraj Mehta. 14. So far as the addition of ₹ 2 crores made u/s.69A is concerned the assessee reiterated the same arguments as made before the AO. It was argued that the addition has been based on the basis of 4 loose papers wherein the amount of ₹ 2 crores and ₹ 2.5 crores were noted against the name of the assessee. Apart from this no evidence was found to show that the assessee had actually received the said amount or that the assessee had entered into any transaction with the Dhariwal group. It was contended that there was no business relation with Dhariwal group and therefore in absence of any documentary evidence to show the same it would not be presumed that the amounts reflected in the loose papers were the income of the assessee from the Dhariwal group. It was argued that the AO has not brought on record any evidence to show that Dhariwal group had admitted that amounts were paid to the assessee. It was accordingly submitted that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the assessee also appears on the said document. It gives very detailed and minute notings of the transactions entered into by the Dhariwal group through its business line of M/s. Dhariwal Industries Ltd. Further Shri Sohanraj Mehta in his statement recorded u/s.132(4) has admitted to have paid unaccounted money to various persons named in the seized documents. The assessee and the Dhariwal group are known and reputed business persons in the said business field and the assessee had a long business and social association with Dhariwal group. Shri Sohanraj Mehta has admitted to have written the said document in his own hand writing and also explained that most of the pages have been hand written in Marwadi language matching with the statement and the wordings on the seized documents. Shri Mehta had also stated regarding the notings on page 34 and other documents that the various expenditure incurred in connection with the business was also written and also admitted that the money so received had been sent to his Seth from time to time and the money was handed over to the persons as per the directions of Shri Rasiklal M. Dhariwal and his Son Shri Prakash Dhariwal whom he referr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e leaned AO under section 143(3) read with section 147 is nothing but nullity and needs to be quashed. Your honour is requested to consider the facts and the legal position and quashed the assessment order and oblige. 2) On the facts and in the circumstances of the case and in law, the CIT(A) erred confirming the reopening of the assessment by the learned AO under section 147 of the I. T. Act beyond the expiry of 4 years of assessment year under consideration. The order passed under section 143(3) read with section 147 is without the jurisdiction, illegal and is bad in law and is void ab-initio. The appellant hereby prays that the assessment order may please be quashed. 3) On the facts and in the circumstances of the case the honourable CIT(A) erred In confirming the addition of ₹ 2,00,00,000/- made by the learned AO without appreciating the facts of the case in the proper perspective. The appellant hereby prays that the addition may please be deleted. 4) The learned AO has erred in making addition of ₹ 2,00,00,000/- as undisclosed income of the appellant without appreciating the fact that the amount, assuming but not admitting, to have been received b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial and business premises of Shri Sohanraj Mehta, C F Agent of RMD Gutkha group. The CIT(A) deleted the addition and on further appeal by the revenue the Tribunal dismissed the appeal filed by the Revenue relying on decisions of various benches of the Tribunal where such additions made on the basis of seized documents from Shri Sohanraj Mehta were deleted. He submitted that this being a covered matter the addition made by the AO and upheld by the CIT(A) should be deleted. 21. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). He submitted that since loose papers were found during the course of search and seizure action in the case of Shri Sohanraj Mehta which contain the payments of ₹ 2 crores to the assessee for the impugned assessment year and therefore the assessee cannot say that he has not received the money. The assessee has not proved beyond doubt that the entry so recorded is false or untrue. Since the assessee is closely associated with the Dhariwal group and the seized paper contains the payment of ₹ 2 crores to the asessee and since the author of the document has admitted to have made payments to various perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as the submissions of the assessee dismissed the appeal filed by the revenue by observing as under : 37. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the 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 a search u/s.132 of 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- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a small taxpayer, some evidence should have been found from the residence of the assessee to show that in fact he has received such huge amount. It is also the case of the Ld. Counsel for the assessee that the Department itself is treating this as short term advance during the course of search action. Similarly, the statement of Mr. Rasiklal M. Dhariwal is contrary to the finding of the Department. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10, however, I have never recorded the amount mentioned from Shri Sohanraj Mehta hence the said payment are not recorded in my books. Q.35 The statement of Shri Sohanraj Mehta recorded u/s.132(4) on 09- 10-2009 has been confirmed by Shri Prakash Dhariwal in the statement recorded u/s.132(4) on 20-01-2010. Thus, both Shri Sohanraj Mehta and Shri Prakash R. Dhariwal have stated on oath that payments 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 rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eets serially numbered 1-61 and state the contents written over these loose sheets? Ans : I have gone through the exhibit marked A/M/29. I have placed my signature on page ho. 24 of this exhibit in confirmation of having seen it. This exhibit contains loose slips serially number 1-61. Slips marked as sl.no. 4 to 8, 49 to 50, 58 arid 59 contain the notings of Mr.Raskilal Manikchand Dhariwal and his 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself is treating the same at one place as short term advance, therefore, the question of treating the same as income of the assessee does not arise. It is also an admitted fact that the papers were found with Mr. Sohan Raj Mehta at Bangalore. Therefore u/s.132(4A) they can be presumed to be true, genuine and correct only in the case of the searched person, i.e. Mr. Sohan Raj Mehta who has admitted 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal entries in the accounts and were admissible to prove the payment of loan given. The suit was decreed by the trial Court and the appeal preferred against it was dismissed by the High Court. In setting aside the decree this Court observed that in the face of the positive case made out by Chandradhar that he did not ever borrow any sum from the Bank, the Bank had to prove that fact of such payment 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 learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f business re relevant whenever they refer to a matter in which the court has to enquire was subject to the salient proviso that such entries shall not alone be sufficient evidence to charge any person with liability. It is not, therefore, enough merely to prove that the books have been regularly kept in the course of business and the entries therein are correct. It is further incumbent upon the person relying 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents was treated as unaccounted receipt in the hands of the assessee and, accordingly, added to the income of the assessee for the period under consideration by the AO which has been subsequently sustained by the learned CIT (A) for the detailed reasons recorded in his appellate order which is under scrutiny. 7.1. Admittedly, the whole proceedings were initiated on the strength of a statement of a third 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 q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efer: Pages 225 - 27 of the assessee's submission dt.12.12.2012]. 7.4. Thus, there is force in the assessee's contention that he should have been afforded an opportunity to cross-examine the third party [ Shri Shohanraj Mehta] since his statements on oath were coupled with inconsistency, he retracted his earlier statements and, thus, not above the board. 7.5. Moreover, the assessee'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 appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reliance could be placed upon the statements of the said persons as the assessee had no opportunity to cross-examine them. The statements made by the aforesaid persons would have no evidentiary value and as such, would not be admissible in evidence. Further, though the said MV has stated that he has paid ₹ 60 lakhs to the assessee on behalf of one GC, the said amount has not been taxed in the hands of 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 referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord, which findings have not been dislodged by the revenue by pointing out any evidence to the contrary, therefore, does not warrant any interference. 7.9. Taking into account the submissions of the assessee, the stand of the AO, reasoning of the CIT (A) in sustaining the action of the AO and also in conformity with the rulings of the Hon'ble jurisdictional High Court (supra), we are of the considered 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 Dhari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. We have considered the submissions of the learned DR. It is seen that the document in question was seized from the possession of one Mr. Sohanraj Mehta. The seized document makes a reference to the name of the assessee and a figure of ₹ 22.75 lakhs appears against his name. As to whether this document evidences payment of ₹ 22.75 lakhs to the assessee is a moot question. There is no basis set 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of hearing, a specific query was raised from the ld. D.R. as to what evidence they have collected during the course of search or thereafter, on the basis of which the Assessing Officer has formed a belief that the income chargeable to tax has escaped assessment in the hands of the assessee. No satisfactory answer was furnished by the ld. D.R. We have also carefully perused the seized documents and we find 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of fact arrived at by the authority concerned and the primary facts upon which the conclusion is based. The use of extraneous and irrelevant material in arriving at that conclusion would vitiate the conclusion of facts.............................. In the result, the appeal is allowed. 5. Since we do not find any infirmity in the order of the ld. CIT(A), we confirm his order. 52. Similarly the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Kanpur and thereafter summarily rejected the reply of the appellant as not satisfactory. Learned counsel for the assessee, on the other hand, contends that neither the said Shri Shobhan Raj Mehta was allowed to be cross-examined nor a copy of his statement was given despite several requests. The AO's contention to the effect that the contents of the statement were made known to the assessee, is not a compliance 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the chits found at the premises of some third party with whom the assessee has no business dealing, it cannot be presumed that the assessee is making sales outside books. Moreover, as per chits found from Shri Sohan Raj Mehta, the payment made to the assessee is only ₹ 9 lakhs and not ₹ 9 crores. The department has also relied upon the statement of Shri Sohan Raj Mehta. It was pointed out by the 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 cross-examine 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 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Shri Sohan Raj Mehta has retracted his retraction also. Considering the totality of above facts, we entirely agree with the learned CIT(A) that the statement of Shri Sohan Raj Mehta cannot be used against the assessee and, similarly, the chits found from the third party, with which the assessee has no dealing, cannot be used against the assessee in the absence of any corroborative evidence. That merely because 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made in the case of the assessee are in the form of two loose papers wherein amounts of ₹ 4.80 Crores and ₹ 30 lacs were noted against the name Mr. Pradeep Runwal . Apart from this, no evidence has been found to suggest that the assessee had actually received the said amount or that the assessee had entered into any transaction with Dhariwal Group. There is no evidence on record to suggest that the 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the evidence which could be and is not produced would, if produced be unfavourable to the person who withholds it. It is pertinent to mention this rule applies to the cases wherein it is evident or an established fact that a particular evidence or document was in possession of the assessee. For example, an owner of a land may well be expected to be in possession of a 7/12 extract of the said land in order 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 eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income from the assessee as in the cases relied by the Assessing Officer. This fact has not been established in the case of assessee, therefore, the case laws relied by the Assessing Officer are clearly distinguishable on facts and hence, not applicable to the case of the assessee. 5.10 According to CIT(A), the name of the assessee appears on the seized papers and seized documents give a detailed and minute 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 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of cheque paid was tallying with the books and therefore, it was held that cash was paid as noted on the paper. Mr. Tanna had also accepted the fact that cash was paid to the assessee. In these facts, ITAT held that since there was transaction between assessee and Shri Tanna and also the fact that the amounts paid by cheque tallied, the addition was rightly made. The assessee rightly submitted that the said 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... co related to the seized documents. The A.O. was not justified in rejecting the contents of the affidavit as mentioned above. The A.O. further relied on the presumptions u/s 132(4A) of the Act on the ground that this section was very clear that the contents of book of account and other documents may be presumed to be true and presumption can be drawn even on the third person who was not searched u/s 132 of the 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and ₹ 20 crores for A.Y. 2007-08. Grounds raised by the assessee on this issue are accordingly allowed. 56. Since the assessee succeeds on merit, therefore, the ground relating to validity of assessment u/s.143(3) r.w.s. 153A become academic in nature and therefore the same is not being adjudicated. 57. In the result, both the appeals filed by the assessee are allowed. 26. Since the facts of the instant case are identical to that of the case decided by the Tribunal in the case of Shri Vinit Ranawat (Supra), therefore, following the same reasonings we are of the considered opinion that no addition u/s.69A is called for in the hands of the assessee. We accordingly set aside the order of the CIT(A) and direct the AO to delete the addition of ₹ 2 crores made by him in the hands of the assessee for the impugned assessment year. The grounds raised by the assessee are accordingly allowed. ITA No.726/PN/2014 (A.Y. 2005-06) : 27. The Ld. Counsel for the assessee did not press Grounds of appeal No. 1 2 challenging the validity of reassessment proceedings for which the Ld. Departmental Representative has no objection. Accordingly, the above 2 grounds are ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
