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Shri Umesh I. Ishrani and Others Versus The ACIT, Central Circle-24 and 26, Mumbai and Others

2015 (12) TMI 456 - ITAT MUMBAI

Unaccounted funds - addition made in the hands of the partnership firm - CIT(A) directed AO to delete the protective addition made on the basis of entries found in the loose papers - Held that:- The addition have been made on protective basis to safeguard the interest of the Revenue. The Ld. CIT(A) found that the additions cannot be made in the hands of the partnership firm and therefore the additions were deleted. We do not find any reason to interfere with the findings of the Ld. CIT(A). The a .....

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set of facts in issues and are therefore decided by this common order for the sake of convenience and brevity. 2. We will first take up ITA No. 8552/M/2010 which is an appeal by the Revenue against the order of the Ld. CIT(A)-39 dated 9.9.2010 pertaining to A.Y. 2005-06. 3. The impugned assessee is a partnership firm. A search was conducted on 8.5.2007 at the residential/business premises of one Mr. Rohira who happens to be a partner in the assessee firm. During the course of search at the prem .....

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by Shri Laxmichand Rohira. To safeguard the interest of the Revenue, the AO proceeded by making a protective addition of ₹ 3,44,02,000/-. The protective assessment was made u/s. 143(3) of the Act r.w. Section 153A vide order dated 23.12.2009. 4. Aggrieved, the assessee carried the matter before the Ld. CIT(A). It was vehemently argued before the Ld. CIT(A) that the loose papers have no connection with the assessee. The loose papers referred to purchase of 4 shops for the firm by the partne .....

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the Revenue. The Ld. CIT(A) found that the additions cannot be made in the hands of the partnership firm and therefore the additions were deleted. We do not find any reason to interfere with the findings of the Ld. CIT(A). The appeal filed by the Revenue is accordingly dismissed. 7. ITA Nos. 8793/M/10 & 507/M/2011 are the appeals by the assessee against two separate orders of the Ld. CIT(A)-39 Mumbai dated 9.9.2010 pertaining to two different assessees viz., Mr. Ghanshyam L. Bodani & Sh .....

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substantive additions in the hands of these partners. As per the facts mentioned in ITA No. 8552/M/2010, a search was conducted on 8.5.2007 at the residential /business premises of Shri Laxmichand Rohira who also happens to be a partner alongwith these two partners in the firm M/s. Satnam Sakhi Associates. 9. Before going into the factual matrix of the cases in hand, it would be pertinent to understand the provisions of Sec. 132(4A) and 292(C) of the Act. The provisions read as under: Sec. 132 ( .....

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of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. Sec. 292(C) (1) Where any books of account, other documents, money, b .....

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of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person s handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. (2) Where any books of account, other documents or assets have been delive .....

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ly show that these provisions are applicable in respect of anything found in the possession or control of any person in the course of a search. The undisputed fact is that the search was conducted at the premises of Shri Laxmichand Rohira and not at the premises of Mr. Ghanshyam L. Bodani & Shri Umesh I. Ishrani. The scanned copy of the relevant loose paper used against the assessees by the AO is attached as Annexure-I 11. The entire addition has been made on the analysis of the loose paper .....

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hands of Shri Umesh I. Ishrani and ₹ 1,23,84,720/- in the hands of Mr. Ghanshyam L. Bodani being 36% of ₹ 3,44,02,000/-. 12.1. When these loose papers were confronted to the assessee during the course of the assessment proceedings, the assessee completely denied of having any knowledge in respect of these loose papers. It was strongly contended that since these papers were not found from the possession of the assessee, no adverse inference can be drawn against the assessee. 13. We ha .....

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nts regarding payments was not sufficient as there was no guarantee that the entries were genuine. The entire addition have been made on the basis of the entries found in loose sheets being alleged payment on account of shop purchased from one M/s. Everest Developer. Surprisingly and for the reasons best known to the Revenue authorities, no enquiries have been made from M/s. Everest Developer. There is not even a whisper of any reference to any enquiry/verification from the seller of the shops a .....

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Sikander Khan (Accountant Member) (dissenting) 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 the law of evidence 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 .....

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he is to be allowed an opportunity of cross-examination. In the present reference the document in question had not been found from the assessee s possession, but from the possession of A and undoubtedly no opportunity of cross examination had been allowed to the assessee and it had clearly emerged from the record that the testimony of A was not credible at all since in three separate statements he had indicated different figures, his secretary, G, had given yet another figure and in proceedings .....

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nce to support the Revenue s case that a huge figure whatever be its quantum over and above the figure booked in the records and accounts changed hands between the parties. No addition could therefore be made to the income of the assessee. 15. Considering the peculiar facts of the case that the impugned loose papers were found from the premises of a third party, in our considered opinion, the additions made in the hands of the assessees without bringing any corroborative evidence on record and w .....

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