TMI Blog2016 (7) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... is return of income for the impugned assessment year declaring a total income of ₹ 5,38,177/-. The return was initially processed u/s 143(1) of the Act and was later picked up for scrutiny as an outcome of a search action carried out in the case of MDH group on 22.11.2006. The assessee was an Executive Director of the company M/s Mahashian Di Hatti (P) Ltd. (for short MDH) and he was also subjected to the search mounted against the group on 22.11.2006. Allegedly, incriminating documents were found and seized from his residence at E-13/14, IInd Floor, Vasant Vihar, New Delhi. During the search, cash of ₹ 48,400/- and jewellery of ₹ 4,02,679/- were found. Further, assessee s locker No. 39 with Punjab National Bank, Udyog Vihar, Gurgaon jointly held in the name of Shri R.K. Gupta and Nutan Gupta was also opened and searched on 15.01.2007 wherein cash amounting to ₹ 8,50,000/-, NSCs/KVPs worth ₹ 1,10,000/- and LIC policy payment receipts amounting to ₹ 5,40,000/- were found and seized. It is seen from the records that all other items recovered from the locker barring cash of ₹ 8,50,000/- have already been offered to taxation during assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Securities Ltd. kept cash of more than ₹ 11 lacs in the office of the company for years. ii. That the balance sheet of the said company as on 31/03/06 shows cash bank balances of ₹ 8,91,38,789/- and as on 31/03/07 shows bank balance of ₹ 58,066/- only. Further, since the company had a bank balance of ₹ 8,91,38,789/- it is unacceptable that the company should make advance payment of ₹ 11,00,000/- in cash and not through cheque. iii. That the said company did not enter into any formal agreement to sell or did not obtain any authentic cash receipt while advancing the sum of ₹ 11,00,000/- to the assessee. Had there been any such agreement, the relevant document would have been found during the search operation. 2.3 In second round of appeal before the Ld. CIT (A) also, the assessee failed and the addition was confirmed again. 3. Now, the assessee has again approached the Tribunal in this appeal and is contesting the impugned addition of ₹ 8.50 lakhs. 3.1 The Ld. AR submitted that the Assessing Officer has rejected the explanation of the appellant regarding source of ₹ 8.50 lacs found in cash from his bank locker by no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO of that company in the assessment proceedings undertaken u/s 143(3) of the Act for AY 2007-08 and it stood accepted by him. Therefore, it cannot be doubted now merely on preponderance of probabilities by the assessee s AO. It was further submitted that whether the company had kept its investments in shares in the physical form of share certificates or in a Demat A/c was immaterial as far as the advancing of ₹ 11 lacs in cash to the assessee was concerned. Since the existence of said investment had stood confirmed in the scrutiny assessments of M/s Patliputra Credit Securities Ltd. and, therefore, the explanation of Mr. Anil Sanghi could not be doubted. The Ld. AR also submitted that the assessee s AO had referred to a figure of ₹ 8,91,38,789/- in the balance sheet of M/s Patliputra Credit Securities Ltd. and stated that the same represented the closing balance of Cash and Bank as on 31/03/06, thus, challenging the veracity of the statement given by Mr. Anil Sanghi that the company did not have any bank account as on that date. Whereas it can be verified from the said balance sheet that this figure of ₹ 8,91,38,789/- was the amount of Income Tax Deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s PCSL on 31.3.2007 and placed at page 17 of the paper book. Copy of cash account, bank account and account pertaining to advance against flat are also on record and they support the contention of the assessee and it is indeed surprising that in the face of such huge amount of evidence, the Ld. CIT (A) chose to adjudicate the issue on a fictional preponderance of probabilities without bringing any cogent material on record to contradict the claim of the assessee. Even in the appeal before us, the Department could not point out any defect in the evidences/documents but simply relied on the orders of the authorities below. The Hon'ble Punjab Haryana High Court in a recent judgement in the case of CIT vs Jawaharlal Oswal and Others (I.T.A. No. 49 of 1999, Judgment delivered on 29.01.2016) dismissed the Department s appeal by holding that suspicion and doubt may be the starting point of an investigation but cannot, at the final stage of assessment, take the place of relevant facts, particularly when deeming provision is sought to be invoked. The Hon ble Court has observed , ...The principle that governs a deeming provision is that the initial onus lies upon the revenue to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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