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2016 (1) TMI 658

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..... not change as admittedly the loan transaction is only capital receipt in the hands of the assessee. Protective assessment - the circumstances under which a protective assessment could be made has not been properly considered by the revenue. There is absolutely no doubt with regard to the fact that the sum of ₹ 8 lakhs has already been added in the hands of the assessee’s brother for the assessment year 1991-92 u/s. 143(3) vide assessment order dated 25-02-1994 by the very same ld.AO.We hold that if an addition has been sustained for the assessment year 1991-92 in the hands of the assessee, it will amount to double addition as substantively it has already been taxed in the hands of the assessee’s brother by the very same ld.AO by giving cogent reasons and based on the seized documents found and seized by the search party in the premises of the assessee’s brother. Hence, there is no justification to make any addition in the hands of the assessee for the very sum of ₹ 8 lakhs as cash credit either on substantive or protective basis in the facts and circumstances of the case - Decided in favour of assessee. - I.T.A Nos. 238 & 239/Kol/09 - - - Dated:- 28-10-2015 - Shr .....

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..... is issue are that the assessee was in receipt of ₹ 8 lakhs from his brother, Shri Nandalal Agarwal. There was a search in the premises of the assessee and his brother on 18-06-1992. During the course of search some loose sheets containing a loan transaction of ₹ 8 lakhs was found and seized by the search party. In the said loose sheets (seized document reference BAN-6 ) is kept in page 57 of the paper book filed by the assessee. The replica of the said seized documents containing the same loan transaction was found in the premises of assessee s brother, Shri Nandalal Agarwal vide seized document Reference LF/17. The said seized document in LF/17 is kept in page 58 of the paper book filed by the assessee. Both the assessee as well as assessee s brother were assessed by the same ld.AO. The ld.AO while completing the assessment of Shri Nandlal Agarwal (assessee s brother) u/s 143(3) of the Act on 25-02-1994 made an addition of ₹ 8 lakhs towards loan advanced by him ( the assessee herein) as unexplained investment among other additions. Hence, there is a clear finding that assessee has only received a loan of ₹ 8 lakhs from his brother. Admittedly, this loan tra .....

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..... e made by him of the goods of C(Pvt) Ltd. The Assessing Officer did not accept the explanation and treated the entire amount of ₹ 60 lakhs as undisclosed income of the assessee which was confirmed by the Commissioner (Appeals). The first point of difference was whether these loose sheets of paper torn out of diary for 1992 could be construed as books for the purpose of section 68. If the loose papers seized in the premises of the assessee were examined in the light of the ratio of the Supreme Court in V.C Shukla s case (supra), it was quite clear that these loose papers could not be termed as books of account an asessee maintained for any previous year. The loose papers appeared to be part of a 1992 diary. However, these loose papers consisted of pages torn out from March, April, November and December. There were no closing balances nor opening balances and there was no reconciliation of these entries. Therefore, these could not be termed as books maintained by the assessee during the previous year. Secondly, the assessee had been explaining that the entries were in the nature of planning. The books of account tallied with the items found at the time of search on .....

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..... has been duly proved by the ld.AO himself and contents of the seized documents. The three essential ingredients of Section 68 of the Act are namely:- a) Identity of the creditor it is proved beyond doubt as the ld.AO himself agrees that the money has been given by the assessee s brother to the assessee in the assessment order of the assessee s brother. b) Genuineness of the transaction- it is proved beyond doubt from the contents of the seized documents available in pages 57-58 of the assessee s paper book, which are not disputed by the revenue. c) Creditworthiness of the creditor- this is proved beyond doubt as ld.AO himself had assessed an income of more than of ₹ 80 lakhs in the hands of the assessee s brother in his own assessement vide assessment u/s. 143(3) dated 25-02-1994. 8.3 We hold that though the loan transaction of ₹ 8 lakhs has been kept outside the books by the assessee. It has been proved beyond doubt based on the findings given hereinabove, that the essential three ingredients of section 68 has been duly proved. Hence, the character of a receipt would not change as admittedly the loan transaction is only capital receipt in the ha .....

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