TMI Blog2009 (10) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... Developers has in his statement admitted to have received this amount from assessee in respect of sale of flat. However, the assessee has claimed to have made payment of Rs. 1,01,687/- only upto 31-3-99 and has consistently taken the stand that it has not paid balance amount of Rs. 3,81,414/- as stated in the seized document. We find that no evidence could be brought on record by the Revenue to show that in fact the assessee only had paid the amount of Rs. 3,81,414/- to Ohm developers. No document containing signature of the assessee or handwriting of the assessee to corroborate the above making of payment by the assessee was found during the course of the search. We find that the Hon'ble Supreme Court in the case of K.P.Varghese [ 1981 (9) TMI 1 - SUPREME COURT] had held that mere seizure of note books or documents at the personal residence of an employee would not conclude the issue against the employer company that on money has been received by the employer company. The onus of proving the charging of on money lies on the department. We find that even at time of cross examination by the assessee the partner of M/s. Ohm Developers could not produce any evidence that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Ketan O.Der which was allowed and during the course of cross examination also, it was admitted by Shri Ketan O.Der to had received on money. After this, the assessee made a final submission wherein he denied out rightly to have made any payment of on money for purchase of flat in Chandanpark society developed by M/s. Ohm Developers. The Learned Assessing Officer did not accept the submission of the assessee and concluded that in view of clinching evidences in the form of seized lose paper and also in the light of the statement made by Shri Ketan O.Der, there was no doubt about the payment of on money made by the assessee and added the said amount to the total income treating the same as payment made out of undisclosed income. 4. In appeal before the Learned Commissioner of Income Tax(Appeals), the assessee submitted that during the course of cross examination of Shri Ketan O. Der had categorically admitted that in the lose paper seized during search, the assessee nor any of the persons from the site of the assessee had written as any thing offered there and accordingly, the said page was prepared by the concerned employee of the firm M/s. Ohm Developers at the instance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it pointed out that the ledger containing the said entries had not been produced before it, that no corresponding entries were there in the day-book of the relevant period and that Vasu Films did not rely on this ledger in the course of its own assessment proceedings but for its own assessment proceedings different set of books had been relied upon as genuine set of books. As regards the evidence of the two witnesses on which reliance was placed by the Department, the Tribunal has pointed out that so far as N. Vasudev Menon was concerned, he had no personal knowledge of the actual payments made to the assessee and, therefore, his evidence could not carry the case of the Department any further and so far as the Bombay manager, C. S. Kumar, was concerned it came to the conclusion that though he purported to say that he had made the payments in black to the assessee payments corresponding to the entries to be found in the ledger his evidence suffered from serious infirmities, which have been pointed out by the Tribunal in its reasons. It pointed out that as the Bombay manager he used to receive amounts from Madras from out of which he used to make disbursements in Bombay but he mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sence of that, mere production of ledger entries would be of no avail, as there would be no guarantee about the truthfulness or genuineness of the entries in the ledger. Moreover, entries in books of account whether in day-book or in the ledger are merely corroborative evidence and in the absence of proper corroborative evidence the primary direct evidence would alone be required to be scrutinized and that evidence in this case consisted of the testimony of C. S. Kumar and the evidence of that witness was found to be thoroughly unreliable by the Tribunal. After all, the entries in the daybook or the ledger would be a corroborative piece of evidence and once the direct evidence of the person who is said to have made payments in black to the assessee is disbelieved, we do not think that any value could be attached to the entries in the ledger or to the entries in the daybook even if one had been produced. In the circumstances, we feel that the questions which are sought to be referred arise out of a finding of fact recorded by the Tribunal on pure appreciation of evidence. 7. He also relied on the decision of Ahmedabad Bench of the Tribunal in the case of Assistant Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that he had received the sum of Rs. 4,83,101/- from the assessee. The Learned Assessing Officer treated the said sum of Rs. 4,83,101/- as on money paid for purchase of flat and added the same to the income of the assessee as unexplained investment. In appeal, the Learned Commissioner of Income Tax(Appeals) observed that the assessee has shown payment of Rs. 1,01,687/- to M/s. Ohm Developers and the difference amount of Rs. 3,81,414/- was not shown in the books of account maintained by the assessee. Therefore, he restricted the addition on account of on money to Rs. 3,81,414/-. The contention of the Learned Authorised Representative of the Assessee is that the seized document at the premises of M/s. Ohm Developers is neither in the hand writing of the Assessee or any of its persons. The same is written by the accountant of M/s. Ohm Developers. Further, besides the seized documents, there was no other corroborative evidence which shows that assessee has made payment of on money of Rs. 3,81,414/- to M/s. Ohm Developers for purchase of flat. Therefore, the addition made cannot be sustained in law. We find that in the instant case the assessee has purchased one flat from M/s O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee-firm to H. Mere entries in the accounts of a third party was not sufficient to prove that the assessee had indulged in such transactions as there was no guarantee that the entries were genuine.- Decision of the Tribunal in the case of Patel Oil Mills Ginning Factory (ITA No. 803/Ahd/99) followed; Addl. CIT vs. Lata Mangeskar (1974) 97 ITR 696 (Bom) relied on; Decision of the Tribunal in the case of Rajdeep Sales Agency (ITA No. 1837/Ahd/1990) distinguished 11. We find that even at time of cross examination by the assessee the partner of M/s. Ohm Developers could not produce any evidence that the amount written in the seized document was in fact received from the assessee. In the instant case as the assessee has categorically denied to have made any payment in excess of Rs. 101,687/- upto 31-3-99 in respect of purchase of flat in our considered view the said denial cannot be brushed aside without bringing any positive material on record. Merely recording made by a third party or statement of a third party cannot be treated as so sacrosanct so as to read as a positive material against the assessee. In view of the above in our considered view the CIT(A) was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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