TMI Blog2013 (9) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... on u/s.132 of the Act which was carried out against one Shri Shriram H. Soni on 29-07-2003 and number of documents and books of accounts were seized. It was revealed that Sri Shriram H. Soni was in the Finance/brokerage business. Many of the cash transactions were revealed from the document seized during the course of search in the residence of Shriram H. Soni. The blank as well as signed promissory notes/bills of exchanges, blank undated cheques and amounts of loan mentioned, beside the entries in the cash book, check list of the borrowers indicating the due date of payment of interest and brokerage paid to Shriram H. Soni were found in the documents seized. 2.2 It was noticed that name of one Ashok Oswal was appearing in the seized document in abbreviated/distorted form and as per the document there was an indication that the said person has invested nearly 22 lakhs as on 31-03-2000. The AO brought to tax the said amount which was towards the principal and interest amount of ₹ 7,721/- u/s.69 for the A.Y. 2000-01 but said year is not before us. In the A.Y. 2001-02, the AO worked out the peak of investment on the basis of loans refunded and loans advanced as per the seiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period 27-09-1998 and the Assessing Officer recorded that no loan transactions were found. It appears that in this case AO has recorded the statement of 5 to 7 persons whose names are Ashok Oswal and the statements were forwarded to the Ld.CIT(A). As per the statements recorded names of those persons are as under : 1. Shri Ashok Hansraj Oswal 2. Shri Ashok Kantilal Oswal 3. Shri Ashok Kundanmal Oswal 4. Shri Ashok Hirachand Oswal 5. Shri Ashok Kanhaiyalal Oswal 4.1 As per the remand report sent by the AO on verification of the seized material, it was noticed that no promissory note/blank cheques in the name of Ashok Oswal was found. The AO also reported that even if the name Oswal Ashok was appearing in the investor column in the diary, there were no signatures. The Ld.CIT(A) accepted the plea of the assessee that the assessee is not the same Oswal Ashok whose name is appearing in the seized documents. The reasons given by the Ld.CIT(A) are as under : 3.10 I have considered the submissions of the appellant, all the remand reports received, counter comments of the appellant and material available on record. The appellant has raised one ground of ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income for assessment years 2000-01 and 2001-02. 3.12 During the appellate proceedings the Ld. Counsel of the appellant submitted that the appellant had no connection with Shri Shriram H. Soni as the appellant is a person having a small grocery business and that he has no assets, property or any investment, and that the financial position of the appellant is not very good and, therefore, he was not capable of advancing such huge amounts to anybody. It was also explained that the appellant was given a copy of the seized material on the basis of which additions were sought to be made and on reference to the said material, it can be seen that wherever the name 'Ashok Oswal' appears, there is no mention of middle name. There is no signature of the appellant except on page 3 of bundle no. 7 of Panchanama dated 02.08.2003 where there are signatures of the respective persons named therein and the signature against the name 'Ashok Oswal' is different than the signature of the present appellant. It was, therefore, emphasized that, the fact that the signature of the person on the said page does not match with the present appellant shows that the person whose name ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 18.07.2011 to locate any corroborative evidence in the form of signed blank cheques, promissory notes etc. to establish the connection of the appellant with Shri S.H. Soni as found in other related cases during the search action u/s 132. In the said remand report dated 01.08.2011 it was stated by the A.O. that on verification of the seized material contained in Bundle No. 98, no promissory notes or blank cheques in the name of 'Ashok Oswal' were found and that only in the copy of the checklist the name of 'Oswal Ashok' appeared in the 'Investor' column of the page, however, no signatures against the above entries of 'Oswal Ashok' were found in the seized documents. The appellant had also submitted affidavit on 01.11.2010 stating that there was no business connection or any transaction with Shri S.H. Soni. 3.14 The copies of all the remand reports received were given to tie appellant for comments and vide letter dated 02.09.2011 it was submitted that the remand reports were called for to establish the identity of the appellant w.th reference to the seized material apart from the name as appearing in the seized documents. It was stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no corroborative evidence had been found or has been brought on record by the A.O. during the assessment proceedings to substantiate the notings on the document found during the search action in the case of Shriram Soni. The appellant has categorically denied to have made any transaction with Shriram H. Soni and had also filed affidavit to that effect denying any such transaction with Shri Soni. The appellant has also contended that no independent evidence to support the paper entries that the appellant firm had taken cash loans and incurred expenditure in cash have been found or brought on record by the A.O. In the remand report dated 28.07.2011, the A.O. has categorically mentioned that after verification of the seized material and as per record no blank cheques or any 'promisory note' were found in the case of the appellant. It has also been mentioned that, wherever, the name 'ASHOK Oswal' appears there are no signatures. These specific findings clearly indicate that the A.O. has not identified whether 'Ashok Oswal' mentioned in the seized papers is the same as the appellant. On perusal of the assessment order also, it is apparent that no enquiry in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No. 1700/PN/07 dated 03.10.2008, where seized papers and incriminating material in the form of ledger account in the books of Ranka Jewellers found from the premises of la third person and on the papers only one name 'Kirti' has reflected. The Tribunal held that the paper shows only one word 'Kirti', which by itself does not lead to the inference that it was the account of the account of the assessee. The assessee had clearly denied any relation in respect of such transaction. Even Ranka Jewellers had nowhere stated that this account referred to the assessee. The address given was found to be a vague statement which could not be related to the assessee. The Tribunal held that no inference can be drawn from, facts from record that transaction from seized material related to the assessee and, therefore, the addition was not justified. In the other cases cited by the appellant Court/Tribunal held that addition cannot be made in cases where books of account/documents have been seized from the third persons premises and where no corroborative material has been brought on record. 3.17.2 In the case of CBI Vs V C Shukla Others, AIR 1998 Supreme Court 1406 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 158BD or 153C of the Act. It was such initiation which was questioned successfully in the case of Amarjot Singh Bakshi (HUF) Vs ACIT (2003) 263 ITR (AT) 75 (Del) where, what was if found against the third party was a mere noting in a slip of paper. Such slip indicated as per the A.O., sale consideration received and an addition was made. The matter was referred to a third member on difference between the members of the Bench, the Third Member agreed that, though Indian Evidence Act has no strict application, its principles require consideration. If the noting was in regular books of account, it would have some relevance. But what was found on a; slip of paper or loose sheet is not covered by any rule under the Evidence Act. In absence of anything more to corroborate the inference drawn on the basis of noting on a slip of paper, the addition could not be sustained and the statements recorded were also not subjected to cross examination. 3.19 In the present case, however, there was not even the existence of any promissory note or blank cheque signed by any of the partners of the appellant firm. This is also revealed from the remand reports of the A.O. which was obtained dur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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