TMI Blog2014 (2) TMI 1299X X X X Extracts X X X X X X X X Extracts X X X X ..... R R. K. Panda (Accountant Member) This appeal filed by the assessee is directed against the order dated 01-09-2011 of the CIT(A)-I, Pune relating to Assessment Year 2000-01. 2. Facts of the case, in brief, are that the assessee is an HUF and derives income from money lending. The Assessing Officer issued notice u/s.148 to the assessee on the basis of a search operation in the case of Shri Shriram H. Soni during which certain papers were impounded in which the name of the assessee was appearing according to which the assessee has invested at least an amount of ₹ 15 lakhs in money lending as on 31-03-2000. The assessee replied that the original return filed on 13-03-2001 vide Acknowledgement No.1217 may be treated as return filed in response to notice u/s.148 under protest. Thereafter, the Assessing Officer supplied the reasons recorded for issue of notice u/s.148 to which the assessee objected. After disposing of the objections the Assessing Officer proceeded to complete the assessment. 2.1 The Assessing Officer noted that during the course of the search operation u/s.132 in the case of Shri Shriram H. Soni on 29.07.2003, a large number of seized documents, book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses and occasions, such cash amounts received from the investors, are received by Shri Soni after the interest has already been deducted. Such advances remain in the business, till the investor/depositor desires. The investor keeps receiving the interest, on the loan amounts till redeemed in a cycle of 90 days. 2.4 The AO observed that the documents at Bn. 98 and 99 show the amount, (to be read as multiples of 1000 of the figure mentioned therein) advanced/invested and outstanding on a given date by the assessee and rate of interest (per month) payable by the borrowers, whose names are also indicated. These advances are unaccounted and undisclosed investment of the assessee which may be taxed. The hand-written entries I/P and date indicates the event of interest payment on such dates to Shri Jagannath E. Lahoti, which will have to be worked out for determining the undisclosed interest income on such unaccounted investments. 2.5 The AO observed that the assessee s name appears in the seized documents in abbreviated and/or distorted form (Jagusheth Lati or J.R. Lati, Jagannath Lahoti), which was intended to conceal the identity of such persons. Shri Soni has declined to ide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and interest received thereon is properly accounted for in the regular books of accounts. 4. It is submitted that apart from above I have not given any loan to these persons. 5. In view of above it is submitted that there is no question of making any addition in my hands either u/s.69 on account of alleged unexplained investments and/or alleged unaccounted interest received. 6. As regard brokerage it is submitted the brokerage is always paid by the borrower and not by the investors and therefore there is no question of making any additions u/s.69C in my hands . 3. However, the Assessing Officer was not satisfied with the explanation given by the assessee. He observed that sufficient opportunity had been given to the assessee by providing all the relevant documents/informations. The cash book seized from the premises of Mr.Shriram H.Soni during the search operation clearly reveals name of the assessee enlisted among the name of the borrowers and lenders. The evidence found during the course of search operation in the case of Mr. Soni proves that the assessee has invested cash through Mr. Shriram Soni. Rejecting the various explanations given by the assessee and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach and every investor/each operator in the statement recorded u/s.132(4A)/131. In view of this he noted that his predecessor while deciding the appeal of Mr. Shriram Soni has reversed the finding given by the Assessing Officer and held that the credits appearing in the seized diaries in the name of different investor has to be treated as undisclosed income of Mr. Shriram Soni as he has refused to identify each and every name in the statement of oath. However, the Pune Bench of the Tribunal while deciding the case of Mr. Shriram Soni has held that the persons are identifiable and all the materials available clearly show that Mr. Shriram Soni has only earned commission. Based on the order of the Tribunal in the case of Mr. Shriram Soni and observing that the name of the assessee Mr.Jagannath Eknath Lahoti clearly appear in the seized documents and the Assessing Officer has established this relationship with the transactions which have been found to be relating to him, the Ld.CIT(A) upheld the addition made by the Assessing Officer. 5. Aggrieved with such order of the CIT(A) the assessee is in appeal before us with the following grounds : On facts and in law, 1. The Ld.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hriram Soni from whose premises the documents were seized has not identified that the entries belong to the assessee. Referring to the order of the Tribunal in the case of Shriram Soni he submitted that the addition in the hands of Shriram Soni was deleted by the Tribunal. Referring to the reply given by the assessee to the Assessing Officer during the course of assessment proceedings he submitted that the assessee has categorically stated that he is not the same person as appearing in the seized documents. Still the Assessing Officer proceeded against the assessee on the basis of names appearing in the Telephone Directory without any further corroborative evidence. He submitted that no promissory note or security in the name of the assessee was found from the premises of Shriram Soni. No confirmation or any other document was foundfrom the premises of Mr. Soni so as to confirm that the name appearing in the seized document infact belong to the assessee. Under these facts and circumstances, it is very difficult for the Department to accuse the assessee that he is the same person. Referring to page 120 to 122 and various other pages of the paper book he submitted that the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was treated as undisclosed income of Mr. Shriram H. Soni by the CIT(A), however, the Tribunal vide order dated 17- 06-2010 has reversed the same by holding that persons are identifiable and all the materials available clearly show that Mr. Shriram H. Soni has only earned commission. Be that as it may be, Mr. Shriram H. Soni had refused to identify each and every person. We find the seized diaries/papers clearly show different names such as Jagannath Lahoti and Jaguseth Lati . However, we find no addition has been made on account of entries appearing in the name of the assessee, i.e. Jagannath Lahoti. Even the entries appearing in the name of the assessee for subsequent years has also not been brought to tax by reopening the assessment, a statement made by Ld. Authorised Representative and not controverted by the Ld. Departmental Representative. We, therefore, find merit in the submission of the Ld. Counsel for the assessee that the Department by not reopening the assessment in the subsequent year has accepted that Jagannath Lahoti is different from Jaguseth Lati . Further, the assessee from the very beginning was denying that he is the same person. We find neither any promiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs found were in respect of the assessee. No corroborative material is found. In our opinion, the Ld.CIT(A) has rightly deleted the entire addition as there is no evidence against the assessee. We find no merit in the appeal filed by the Revenue. Accordingly, the same is dismissed. 8.2 Since identity of the assessee was not proved by Mr. Shriram H. Soni at any point of time nor any corroborative evidence was found from the residence of Mr.Shriram H. Soni so as to prove that the assessee is the same person as per the name appearing in the seized document, therefore, respectfully following the decision of the Coordinate Bench of the Tribunal in the case of Ashok Keshvlal Oswal (Supra) and in absence of any contrary material brought to our notice, we set-aside the order of the CIT(A) and direct the Assessing Officer to delete the addition. 9. Since we have deleted the addition made by the Assessing Officer and upheld by the CIT(A), therefore, the ground relating to the validity of the re-assessment proceedings u/s.147 and applicability of section 153C become academic in nature and therefore is not being adjudicated. 10. In the result, the appeal filed by the assessee is al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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