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Naren Premchand Nagda Versus Income Tax Officer 22 (3) (3) , Mumbai

Addition u/s 69 - cash payment towards purchase of shop, over and above the price settled - whether the addition made on the basis of paper seized in the case of search on the Siddhi Group and not on the assessee and also on the basis of statement made by Shri Kantilal M Patel, the key person of Siddhi Group, is justifiable and in accordance with law - Held that:- In the absence of any incriminating documentary material/ evidence found against the assessee to prove that the alleged investment of .....

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8223;s appeal for assessment year 2009-10 challenging the order of ld.CIT(A) dated 31.3.2015 confirming the addition of ₹ 37,00,000/- made under section 69 of the Income Tax act, 1961. 2. A search and seizure action was conducted in the case of the Siddhi Group on 19.2.2009 by the Investigation Wing, Thane. During the course of search action one paper was seized. This paper reveals that the assessee had booked a shop No.118 admeasuring 909 sq. ft jointly with his wife Mrs.Tushra N Nagda, S .....

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reement the said payment has been paid by the assessee during the year under consideration. The statement of Shri Kantilal M Patel, key person of the Siddhi group was recorded under oath u/s 131 on 2.4.2009 by the ADIT (Inv)-1, Thane. Shri Kantilal M Patel stated that the amount of ₹ 12.05 crores had been received in cash, which was not accounted for in the books of Siddhi Group. This amount was stated to have been received in cash over and above the agreement value. The statement of Mr.Ka .....

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e assessee had paid ₹ 37 lakhs to the builder in cash while acquiring the shop. The ld. CIT(A) confirmed the addition by observing as follows: 2.2. The appellant has made the following written submission during the appellate proceedings: " ... The appellant has filed return of income for the AY 2009-10 on 20/2/2010 declaring total income of ₹ 141780/-. Subsequently the assessment was reopened u/s.147 vide notice dated 5/10/2012 u/s.148. A search was conducted in the case of M/s. .....

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cash. Based on this, A.0. took the view as mentioned in para 4 of the order u/s.143(3) rws 147 that assessee had paid cash of ₹ 3700000/ - to the builder M/s.Siddhi Group for acquiring the shop. In response during the course of assessment proceedings, the A.0 asked the appellant to explain the same. The appellant vide letter dated 26.11.2013 denied any such payment being made to the builder M/s. Siddhi Group and also submitted bank statement tracing purchase consideration paid to them. Th .....

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the books of account, if any, maintained by him of nay source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the A.0. satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year. The section thus clearly shows that it was for the AO too first establish that the assessee has made certain investments and then that the same has not been .....

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quot; 2.3 I have considered the assessment order and submissions of the appellant carefully. It is undisputed fact that appellant purchased immovable property from one Siddhi group for a consideration shown to be at ₹ 50,00,000/-. During the course of the search operation on Siddhi group, a paper was seized wherein it was recorded that assessee had paid cash of ₹ 37,00,000/- over and above ₹ 50,00,000/- towards purchase of the property. This fact is confirmed by Key Person of t .....

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e instant case there is direct evidence against the appellant which he failed to rebut with corroborative documents either before AO or me. The paper found during the course of search on Siddhi group is direct evidence which indicates clearly factum of undisclosed income and onus lies on the part of the appellant by furnishing details /evidences to disprove contents of the statement recorded. The burden shifts to revenue only when the assessee explains the entry with some evidence. Appellant cho .....

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hich the cheque payment of ₹ 50 lakhs made; that the Investigation Wing of Department had forwarded a note that the assessee had paid ₹ 37 lakhs for the purchase of property, as allegedly evidenced by the paper seized during the course of search and seizure on the Siddhi Group; that apart from the paper and the statement of Mr.Kantilal M Patel, no other evidence was found against the assessee; and that therefore, the addition made is illegal. The assessee placed reliance on the follo .....

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Y-2001-02) dated 21.2.2014; H) Aarti S Khetwani V/s ITO in ITA No.5882/Mum/2011 (AY-2000-01) dated 30.4.2014. 4. On the other hand, the ld. DR has placed strong reliance on the impugned order. 5. I have heard the rival contentions in the light of the material placed on record. The facts are not in dispute. The issue is as to whether the addition made on the basis of paper seized in the case of search on the Siddhi Group and not on the assessee and also on the basis of statement made by Shri Kant .....

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books belonging to them regarding the alleged payment, the AO made addition to the assessee‟s total income as income from undisclosed sources . The Tribunal, having found that the evidence tendered suffered from serious infirmities, held that mere entries in accounts regarding payments to assessee were not sufficient to prove that assessee had received money in black' for which, she did not issue a receipt. The additions were deleted. The Hon‟ble High Court held that entries in .....

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essee, there is no evidence to implicate the assessee, so far as regards the alleged payment of ₹ 37 lakhs over and above the credited amount. Merely, on this basis, in my considered opinion and in the light of the principle laid down in the case of Lata Mangeshkar (supra) the addition is unsustainable in law. 6. In the case of Jitendrakumar Shantilal Sheth (supra), information was received from DCIT, where the search and seizure operations were carried out in the case of M, M Stated that .....

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ence; that the AO did not make any attempt to confirm that such money was paid by the assessee; that mere statement of third party could not be made the basis for making the addition; that nothing was found on record to suggest that the assessee had made payment of on money in the investment in land. The facts of the present case are in para-materia with those in the case of Jitendrakumar Shantilal Sheth (supra). Here also, other than the foretasted evidence, nothing has been employed by the aut .....

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