TMI Blog2017 (8) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... Durga Dutt, D.R. ORDER PER RAVISH SOOD, JUDICIAL MEMBER The present appeal is directed against the order passed by the CIT(A)-35, Mumbai, dated 14.12.2012, which in itself arises from the assessment framed by the A.O u/s 143(3) r.w.s. 254 of the Income Tax Act, 1961 (in short the Act ), dated 29/12/2008. The assessee assailing the order of the CIT(A) had raised before us the following grounds of appeal:- 1 . Addition on account of alleged unexplained investment Rs . 5,08,870 /- ( a ) The Id . CIT ( A ) erred in confirming alleged addition out of loose paper being seized material without appreciating that when the observation of Assessing Officer in Remand Report states that the said amount of the parties could not be correlated with the other seized material to ascertain whether it is a case of loan given or taken, the confirmation of addition is not justified when the Appellant has disowned the seized paper . ( b ) Without prejudice to the above, the finding in the original assessment proceeding as good as an ex - parte basis looses it colour on the face of Remand Report having passed with duly accorded oppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roup of cases, and the assessee was covered in the same. The assessment order was initially framed by the A.O on 27.03.1998 and the income of the assessee was assessed at ₹ 33,34,380/-. The assessee assailed the said assessment order before the CIT(A). The CIT(A) directed the A.O to recompute the income of the assessee in respect of certain issues, which inter alia included the addition of ₹ 5,64,562/- made in the hands of the assessee on account of loan and interest. The revenue being aggrieved with the restoring of the assessment by the CIT(A) to the file of the A.O, therein filed an appeal with the Tribunal on 25.05.1999. The A.O in the mean time gave effect to the directions of the Tribunal, vide his order passed u/s. 143(3) r.w.s. 254, dated 30.03.2001. The A.O in his aforesaid order referred to the seized annexure, viz. a loose sheet , marked as Annexure A/12 - Page No. 128, and being of the view that the amount of ₹ 4,60,000/- (as was gathered by the A.O on decoding the contents thereof) pertained to the loans advanced by the assessee to various parties, while for the amount of ₹ 48,868/- mentioned in the said document was the interest received b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er consideration, i . e . assessment year 1995 - 96 . Accordingly, the Assessing Officer is directed to pass a fresh order after affording opportunity to the assessee . The A.O pursuant to the aforesaid directions of the Tribunal, initiated fresh assessment proceedings and issued a Notice u/s. 143(2) on 04.06.2008. The assessee submitted before the A.O that as he had filed a Miscellaneous application before the Tribunal in respect of the latters order dated 06.02.2008, therefore, the assessment proceedings may be kept in abeyance till the disposal of the said application. The A.O however not finding favour with the said request of the assessee proceeded with the assessment proceedings. The A.O while framing the fresh assessment observed that as the advance/loans were not found reflected on the assets side of the balance sheet of earlier years, therefore, the amount of loan of ₹ 4,60,000/- alongwith the interest of ₹ 48,868/- could safely be related to the year under consideration, viz. A.Y. 1995-96, in the hands of the assessee. Thus, the A.O while framing the aforesaid assessment endorsed the observations of his predecessor and retained the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me could safely be related to the assessee. The A.O in his remand report conceded that it remained as a matter of fact that the amount of ₹ 4,60,000/-(supra) and the parties mentioned in the aforesaid seized document, viz. Page 128 could not be correlated with the other seized material , therefore, it could not be ascertained as to whether the same represented loan taken or loan given . The A.O in the backdrop of the aforesaid facts stated that the assessee had failed to provide any explanation as regards the amount of ₹ 5,08,868/- (supra) during the course of the assessment proceedings. The CIT(A) after deliberating on the remand report of the A.O observed that as the document was seized from the assessee and the same referred to A/C KMT , therefore, the assessee could not be allowed to distance himself from the aforesaid document. Though the CIT(A) observed that the A.O had accepted that the amount of ₹ 4,60,000/-(supra) could not be correlated with the seized records , nor it could be verified that whether the same represented loan given or loan taken , but as the assessee had failed to provide any explanation in respect of the amount of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. A.R further took us through the relevant extracts of the remand report of the A.O. The ld. A.R drew our attention to Para 3.1.4 of the remand report (Page 72 of APB), wherein the A.O had fairly admitted that neither the amount of ₹ 4,60,000/-(supra), nor the parties mentioned in the seized document, viz. Page 128 could be correlated with the other seized material , failing which it could not be ascertained as to whether the amounts mentioned therein were loans given or taken. That in the backdrop of the aforesaid facts it was vehemently averred by the ld. A.R that the assessee had suffered an addition of ₹ 5,08,868/-(supra) despite absence of any evidence which could go to justify drawing of such adverse inferences in his hands. The ld. A.R. relying on a judgment of the Hon ble Supreme Court in the case of Common Cause ( Registered Society ) and Others Vs . Union of India and Others ( CWP No . 505 of 2015 ) , dated 11 . 01 . 2017 , submitted that the Hon ble Apex Court in the aforesaid judgment had clearly held that random sheets and loose papers in the absence of any corroborative material would have no evidentiary value. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but such restoration had only occasioned for the reason that it was pleaded by the revenue before the Tribunal that the CIT(A) while deleting the additions had not afforded any opportunity to the A.O. We are of the considered view that the observations of the Tribunal that the amount of ₹ 48,868/-(supra) pertained to A.Y. 1996-97 and not the year under consideration had not been dislodged by the department till date by placing on record any material to the contrary, therefore, the same holds the ground as on date and cannot be summarily brushed aside. We find that the Tribunal while restoring the matter to the file of the A.O had gone by the observations of the A.O that the income may relate to A.Y. 1994-95 and A.Y: 1995-96, and considering the same had specifically directed that if the investments were found to be made in A.Y. 1994-95, then no addition was liable to be made in the hands of the assessee during the year under consideration, i.e. A.Y. 1995-96. We find that as stands gathered from the records, it remains as a matter of fact that since inception, viz. order passed by the A.O u/s 143(3) on 27.03.1998, the revenue had remained confused as to whether the amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an safely be concluded that till date it remains an unsolved mystery for the revenue as to whether the same represented loans given or taken. We further find that even otherwise there is no date mentioned in the seized document , viz. Page 128 on the basis of which the same could be related to the year under consideration. We are unable to comprehend that as to how the A.O who had taken a view that the contents of the seized document , viz. Page 128 represented loans taken by the assessee, would therein be justified in holding to the contrary that the same represented loans advanced by the assessee to various parties, only for the reason that the assessee had distanced himself from the said impugned document and the contents thereof. We are further absolutely not at all impressed by the claim of the lower authorities that as the term A/C KMT appeared on the impugned document, therefore, it could safely be held that the same referred to the name of the assessee, viz. Shri Kauntey M. Tanna. We thus in light of our aforesaid observations, being of the considered view that there is no material before us which could go to persuade us to uphold the addition of ₹ 5,08,868/- ..... 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