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TMI Blog2016 (11) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... in law and on the facts of the case in applying Sec. 292C of the Income Tax Act merely because some papers were found from the premises of the assessee while ignoring vital facts and contentions of the assessee. 4. The Ld. CIT (Appeals) has grossly erred in law and on the facts of the case in confirming the addition of Rs. 5.671acs (Five lacs Sixty Seven thousand) in the hands of the assessee as unexplained jewelle:y u/s 698 of the Income Tax Act. 5) The appellant craves leave to add, alter, demand, supplement or raise fresh grounds of appeal, if considered expedient and advisable at the time of hearing of appeal. It is prayed that the appellant appeal be allowed. 3. The grounds raised in Assessee's ITA No. 5515/Del/2013 (AY 2009-10) 1) That the Ld. CIT(A) grossly erred in law and facts of the case in confirming the penalty of Rs. 10,16,700/- (Rupees Ten Lacs Sixteen Thousand Seven Hundred) under section 271AAA of the Income Tax Act, 1961 without appreciating facts of the case. There was no undisclosed income of the assessee during the previous year and the addition had been made arbitrarily on the basis of a computer printout. 2) The appellant craves leave to add, alter, dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ands of the assessee as unexplained jewellery u/s 698 of the Income Tax Act. In support of his above said contentions, he stated that the case of the assessee is squarely covered by the various decisions of the Hon'ble High Court of Delhi and the Coordinate Benches of the ITAT and accordingly he relied upon the following decisions:- - Vatika Landbase Pvt. Ltd. - 383 IT 320 (ITA No. 670/2014 dated 26.2.2016)- Delhi High Court. - M/s Delco India Pvt. Ltd. (ITA No. 116/2016) dated 10.2.2016 - Delhi High Court. - P. Koteshwara Rao order dated 12.8.2016 of the ITAT, Visakhapatnam (ITA No. 251 & 252Vizag/2012 (Ayrs. 2007-08 & 2008-09) - K.V Lakshmi Savitri Devi vs. ACIT (2012) 148 TTJ 157, ITAT Hyderabad Benches. - Hon'ble A.P. High Court in the case of K Lakshmi Savitri Devi (Supra) in ITA No. 563 of 2011 has upheld the order of the Tribunal. - CBI vs. VC Shukla (1998) 3 SCC 410) - CIT vs. PV Kalyansundaram (294 ITR 49) - CIT vs. Girish Chaudhary (2008) 296 ITR 619 (Delhi) - Delhi High Court. - ACIT vs. Sharad Chaudhary (2014) 165 TTJ 0145) (Delhi) - Sunita Dhadda vs. DCIT (2012) 71 DTR 0033 Jaipur 7.1 On the other hand, Ld. CIT(DR) relied upon the order of the Ld. CIT(A) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal was correct in Law in deleting the addition of Rs. 25,40,36,454 out of the total addition of Rs. 31,01,09,834 made by the AO on account of undisclosed receipt (from sale of space flats in Vatika Triangle? 2. Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was correct in law in deleting of Rs. 11.49,55,096 (i.e. Rs. 11,34,05,096 plus Rs. 15.50,000) out of the total addition of Rs. 13,84,20.000 made by the AD on account of undisclosed income not declared by the Assessee in its books of account? 3. Whether on the (acts and circumstances of the case, the Income Tax Appellate Tribunal was correct in law in deleting the addition of Rs. 1,04,39,000 made by the AO on account of accommodation entries taken by the Assessee? 4. Whether on the facts and circumstances of the case, the order of the ITAT is not perverse as it has failed to consider that in this case, the AO made the addition on the basis of the relevant searched material gathered from the Assessee during the course of the search proceedings?" 29. However, by an order dated 20th May 2015 the only question that was framed for consideration by the ITAT was as under: "Did t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absence o{independent corroboration could not possibly have been relied upon as a substantive piece of evidence to determine the actual rates at which the flats were sold. Further as pointed out in Commissioner of Income Tax v. D.K. Gupta (supra) merely because there are notings of figures on slips of paper, it did not mean that those transactions actually took place. Likewise in Commissioner of Income Girish Chaudhary (supra), the Court termed a loose sheet containing some notings of figures as a 'dumb document' since there was no material to show as to on what basis the AO had reached a conclusion that the figure '48' occurring in one of them was to be read as Rs. 48 lakhs. 46. In the present case, there was again no material on the basis of which the AO could have applied a standard rate of Rs. 4,800 per sq ft for all the floors of VT. It was also not open to the AO to draw an inference on the basis of the projection in the document, particularly when the Assessee offered a plausible explanation for the document. The burden shifted to the Revenue to show, on the basis of some reliable and tangible material, how rate at which the flats on the second and third fl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. M.V.V. Builders, is a loose sheet wherein certain financial transactions were recorded in the name of the assessee. Though, Sri M.V.V. Satyanarayana stated that he had paid a sum ofRs.50 lakhs and Rs. 25 lakhs in the financial year relevant to assessment year 2007-08 & 2008-09, to Sri P. Koteswara Rao towards land dispute settlement, nowhere it is stated that he had paid on money to the assessee towards purchase of site. The assessee right from the beginning stated that he had not received any on money from M/s. M.V.V. Builders towards sale of site. Besides, loose sheets found in the premises of M/s. M.V.V. Builders, the A.O. does not have any other document to show that the assessee has received on money from the purchaser. The A.O. has not made out any attempt to find out some reliable cogent material evidence on record to support his findings or to corroborate the statement of the purchaser. The assessee denied having received any on money over and above what was stated in the sale deed. The assessee rightly claimed that the sale transaction has been completed on 7.6.2006. The sale transaction has been completed by way of registered sale agreement-cum-GPA. The assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o tax as undisclosed income. The A.O. is required to bring further evidence on record to show that actual money is exchanged between the parties, but literally failed to do so. The AO did not conduct any independent enquiry relating to value of the property, instead merely relied upon statement given by the purchase of the property which is not covered. Further, there is no evidence with the A.O. that money has been exchanged between purchaser and seller. Therefore, we are of the view that the A. 0. is not correct in making additions towards on money without there being any evidence to show that the assessee has received anv money over and above what was stated in the sale deed. ......... 17. Considering the facts and circumstances of this case and also applying the ratios of the judgements cited above, we are of the view that the A.O. is not correct in coming to the conclusion that on money exchanged between the parties based on a loose sheet found in the premises of a third party and also statement given by a third person. To sustain the addition, the A.O. should have taken an independent enquiry about the value of the property and ascertain whether any under valuation is done, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and the loose document was found at the premises of a third party. The burden on the Department to prove conclusively that the loose document belongs to the assessee. There is no presumption in law that the assessee has actually paid Rs. 1651akhs towards purchase of the property. The undisclosed income in this case is to be computed by the AO on the basis of the available material on record. It should not be based on conjectures and surmises. As of now, the material considered by the AO for making the addition of Rs. 1 crore is seized material marked a 'A/CRK104' and the statement of 5. This loose sheet found at the premises of CRK is not enough material to sustain this addition. The seized material found during the course of search and the statement recorded are some piece of evidence to make the addition. The AD has to establish the link between the seized material and other books of account to the assessee. The seized material and statement of CRK cannot be conclusive evidence to make this addition. The entire case herein is depending upon the rule of evidence. There is no conclusive presumption to say that actual consideration passed on between the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property is on the Revenue. Considering the entire facts of the case, the Revenue has failed to discharge its duty, instead made up a case on surmises and conjectures which cannot be allowed. Under these circumstances, there is no reason to confirm the addition of Rs. 100 lakhs towards on-money payment. Accordingly, the addition of Rs. 100 lakhs is deleted. CIT vs. P. V. Kalyanasundaram (2006) 203 CTR (Mad) 449: (2006) 282ITR 259 (Mad) relied on". 8.4.1 The Hon'ble A.P. High Court in the case of K Lakshmi Savitri Devi (Supra) in ITA No. 563 of 2011 has upheld the order of the Tribunal. "We are of the view that the Tribunal has rightly held that the registered document dt. 21.8.2006 under which the respondent purchased the above property showed that only Rs. 65. 00 lakhs was paid to the vendor by the respondent: that there was no evidence to show that the respondent had paid Rs.l. 00 crore in cash also to the vendor; that no presumption of such payment of Rs. 1.00 crore in cash can be drawn on the basis of an entry found in a diary loose sheet in the premises of C. Radha Krishna Kumar which is not in the respondents handwriting and which did not contain the name of the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corroborated by the date of cheque transaction. We do not found any cheque transaction where assessee is involved in the present transaction which is allegedly taxed in the hands of the assessee. Much to say that there was no date of cash transaction as alleged then it is surprised how AO has correlated the date with other transaction. Even otherwise when the assessee had denied the transactions, AO should have examined the recipient of search stated in that document and then confronted the assessee with the same. All these exercise have not at all been carried out by the AO. Furthermore, the presumption stated u/s. 292C of the I.T. Act is a rebuttal presumption. Therefore, when the assessee herself denied any such transaction, it cannot be stated that the actual transaction has taken place between the assessee and the person concerned whose name mentioned therein. Further the Circular No. 24 of 2015 dated 31.12.2015 also supports the case of the assessee that satisfaction should have been recorded in the case of the appellant u/s. 153A of the I.T. Act. As the Ld. Counsel for the assessee has also argued that no satisfaction has been recorded. The CBDT Circular which is based on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Board hereby directs that pending litigation with regard to recording of satisfaction note under section 158BD/153C should be withdrawn/not pressed if it does not meet the guidelines laid down by the Apex Court. 9.1 The above Circular states that even if the AO of the search person is one and the same then he should also record the satisfaction. Leaving aside the matter on satisfaction in this case the assessment has also been made disregarding the provisions of the search as provided under Chapter XIV-B of the Act. Once again at the cost of repetition the date of search is 6.11.2008 and the assessment year involves before us is assessment year 2009-10 and further addition has been made on the basis of the document impounded during the course of search at the residence of the assessee. The AO has proceeded to make an assessment u/s. 143(3) of the I.T. Act. Therefore, the Appellant succeeds on the issue of satisfaction in view of the CBDT's Circular stated above and also on the merit as the sole addition has been based on the document in which one transaction is allegedly sold without mentioning the date and further no corroborative evidence of any investment made by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deleted) an addition to jewellery Rs. 5.67 lacs was confirmed as made out of unaccounted income. Accordingly, Ld. CIT(A) has directed the AO to give part relief to the assessee. However, Ld. Counsel of the assessee has stated that assessee had received all the aforesaid jewellery as gift on the occasion of her marriage on 13.11.1998 from her parents and relatives. The value of jewellery has appreciated over a period of ten years from approx. Rs. 9.93 lacs to Rs. 29.18 lacs. He stated that there is no evidence whatsoever nature with the department to prove that out of total jewellery of Rs. 29,18,395/- with the assessee, jewellery wroth Rs. 17,62,445/- seized by the Department is unexplained which is purely on arbitrary assumption. Therefore, the Ld. CIT(A) has gave part relief to the assessee and confirmed the addition of Rs. 5.67 lacs. From the above, we also find that both the authorities below have made the additions and confirmed part addition without any basis and the same is totally based on assumption only which is not sustainable in the eyes of law. It is a settled law that addition on assumption is not permissible under the law. Even otherwise, the Appellant succeeds on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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