TMI Blog2013 (4) TMI 749X X X X Extracts X X X X X X X X Extracts X X X X ..... r was not justified in making the addition of ₹ 31,50,000/- in case of assessee and same has been rightly deleted. - Decided in favour of assessee. - ITA.No.988/PN/2011 AND CO.No.133/PN/2012 - - - Dated:- 29-4-2013 - Shri Shailendra Kumar Yadav, Judicial Member And Shri G.S.Pannu, Accountant Member. For the Petitioner : Shri S.N. Doshi For the Respondent : Ms. Ann Kapthuama ORDER PER SHAILENDRA KUMAR YADAV, JM: This appeal has been filed by the Revenue against the order of the CIT(A) on the following grounds: 1. On the facts and in the circumstances of the case, the learned CIT(A)-I, Nashik erred in deleting the addition made by the A.O. in the assessment order on account of loans advances as per Promissory Notes amounting to ₹ 31,50,000/-. 2. On the facts and in the circumstances of the case, the learned CIT(A)-I, Nashik erred in deleting the addition of ₹ 31,50,000/- without appreciating the fact that the promissory Notes in question bear the names of the assessee and his mother. 3. On the facts and in the circumstances of the case, the learned CIT(A)-I, Nashik erred in deleting the addition of ₹ 31,50,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e premises of Deegesh Construction Pvt. Ltd., Deegesh Tower, Gangapur Road, Nashik and item No. marked A-25 seized from the office premises of Haria Travels Pvt. Ltd., Santacruz (West), Mumbai. During the course of assessment proceedings Shri Amit Digvijay Singh was specifically asked to explain the purpose of such promissory notes lying in his business premises. In his reply he stated that the promissory notes written in his name and in the name of other persons including Malini Dayanand Irshid, mother of the assessee issued by Mandar Kelkar remained with him as no payment was directly received form Mandar Kelkar who had business transactions with him. He also stated that as regards to source of money given to Mandar Kelkar by these persons, the same can be explained by respective parties and he is not concerned in whatsoever manner with regard to source of money advanced by these parties. In the draft order dated 24/11/2009 it was clearly proposed to make the addition on account of unexplained promissory notes in the hands of the assessee but the assessee did not respond to the draft order and therefore it was concluded that the assessee has nothing to explain in the matter and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. The CIT(A) having considered the remand report and written submissions in response to the same, has decided the issue in favour of the assessee by observing as under: 7.5 I have carefully considered the facts of the case, the rival submissions and the position of law on this subject. In the impugned assessment order the Ld. AO has not given sufficient reasons for making the impugned addition of ₹ 31,00,000/-, therefore, in remand proceedings he was specifically asked to consider the appellant's objections in this regard. The impugned addition of ₹ 31,00,000/- consists of the following amounts:- i) Promissory note in the name of mother of the appellant Smt. Malini D. Irshid signed by one person viz. Shri Mandar Kelkar - ₹ 9,00,000/- and ₹ 12,50,000/-. (ii) Promissory note in the name of the appellant signed by one Shri Sandeep Khosla - ₹ 10,00,000/-. Thus all the evidences were discovered and seized from the premises of Shri Amit Digvijay Singh. During the course of assessment proceedings in that case the Assessing Officer examined the said person and he replied that he had no explanation in respect of these three p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have been executed or attested. 7.7 It is admitted that these documents were seized from the possession of Shri Amit Digvijay Singh who has denied the knowledge thereof and disassociated himself by saving that these belong to the appellant. The appellant was an employee of Shri Amit D. Singh at the time of issue of the promissory notes. Shri. Amit D. Singh therefore, was in a position whereby he could dictate his terms to the appellant. As mentioned in para 4 of the AO's remand report dated 07/02/2011, Shri Amit D. Singh has stated in his reply to the AO, that promissory notes given in his name and in the name of other persons, including Mrs. Malini D. Irshid, mother of the assessee, issued by Shri Mandar Kelkar remained with him as no payment was directly received from the said person who had business transactions with him. Shri Amit D. Singh has, thus, accepted that: 1. He has business transactions with Shri Mandar Kelkar. 2. The promissory notes were in the possession of Shri Amit D. Singh as no payment was directly received from Shri Mandar Kelkar. 3. He had possession of the promissory notes for collection of money shown as payable in the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned additions, therefore, are baseless and unwarranted, which cannot be sustained. 7.8 In the case under appeal the AO has applied the presumption u/s 132(4A) to the appellant. In fact the said presumption is applicable to the person from whose possession the document is found in the course of search action. It is settled law that the presumption under section 132(4A) is available only against the person from whose possession the document is found and not to the third person. This proposition of law is supported by following decisions:- Rama Traders vs. First ITO (1988) 32 TTJ (PAT) 483 (TM); Smt. Bommana Swarna Rekha vs. ACIT (2005) 94 TTJ (Visakha) 885; and Straptex (India) (P) Ltd. vs. DCIT (2003) 79 TTJ (Mumbai) 228. Therefore, there is a merit in the submissions of the ld. AR that so far as the appellant is concerned these are dumb papers and do not anywhere corroborate the findings of the Assessing Officer that the appellant has lent these amounts totalling ₹ 31,00,000/- to the above two persons viz. Shri Mandar Kelkar and Shri Sunil D. Kosla. In view of these facts and the circumstances of this case, it is found that these additions are without any bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice during the assessment proceedings, the impugned addition was made. The Assessing Officer has not denied the fact of relationship of an employee-employer between the assessee and Shri Amit D. Singh in the remand proceedings. Further, there was no cross examination of any witnesses in this case even though the Assessing Officer was specifically directed vide para 6 of the Remand Order dated 28/10/2010. The Assessing Officer has not commented on the presumption raised u/s l32(4A) in respect of the seized document from the possession of person during action u/s 132(1), which reads as under: Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed- (i) that such books of account, other documents, money, bullion, jewellery Or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble presumption, depending on facts and circumstances. As the document was found from the possession of Shri Amit Digvijay Singh who has denied the knowledge thereof, however, by denying the same before the Assessing Officer in his own case he has not produced any cogent material to rebut the same. Except mention of assessee and his mother s name on this note, the Assessing Officer has not brought on record any further evidences either during the assessment proceedings or during the remand proceedings to substantiate the impugned addition in the assessee s case. In the impugned assessment order and the remand report, the Assessing Officer has observed that assessee did not respond to the show cause notice dated 24.11.2009. However, the Ld. Authorised Representative placed before the CIT(A) a copy of assessee's letter dated 29.12.2009 duly acknowledged by the Assessing Officer in his Tapal on the same date in which the assessee has claimed to have clarified the impugned issue by stating that he has not signed any promissory note to Mr. Sunil D. Khosla, neither he knew any such individual. Similarly, his mother Malani D. Irshid had not taken any promissory note from any Shri Mand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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