TMI Blog2017 (12) TMI 1344X X X X Extracts X X X X X X X X Extracts X X X X ..... page No. 6 of Annexure A-1 are outstanding debtors of M/s Rashiwa International Ltd., need to be examined thoroughly. Accordingly, we restore the issue-in-dispute to the file of the Assessing Officer for deciding afresh, with the direction to the assessee to produce all the necessary document/evidence in support of its claim. The Assessing Officer may also examine/verify the books of accounts of the parties appearing in page No. 6 of Annexure A-1 of seized documents for cross-verification of the claim of the assessee. Accordingly, the ground No.1 is allowed for statistical purposes. Addition of undisclosed intercorporate deposits (ICDs) - Held that:- Assessee itself has admitted that amount in question are in lakhs, which shows that the assessee is aware of the transactions recorded in the paper and it cannot shift its responsibility onto the Revenue. We also note that the Assessing Officer has not recorded in the impugned assessment order , as which are those seized documents having handwriting similar to the paper in question. In view of the above circumstances, we feel it appropriate to restore the issue in dispute to the file of the Assessing Officer for deciding afresh, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000. The assessee filed concise grounds of appeal during the hearing, which are reproduced as under: 1. Ld CIT(A) -XXXII, New Delhi has erred by confirming the addition of ₹ 2543192/- added to income by Assessing Officer in assessment year 1997-98 on the basis of seized document marked as page no. 6 of Annexure-A-1 is unexplained expenditure, which is unjust, arbitrary, illegal and in sheer disregard of the facts and documentary evidences. 2. Ld CIT(A) -XXXII, New Delhi has erred by confirming the addition of ₹ 4078000/- in assessment year 1994-95 on the basis of a rough noting on page no. 2 of Annexure A-2, added by Assessing Officer on account of undisclosed ICDs which is arbitrary, unjust and against the facts of the case. 3. CIT(A) -XXXII, New Delhi has erred by confirming the addition of ₹ 133,22590/- in assessment year 1996-97 on the basis of Annexure A-40, added by Assessing Officer on account of unexplained source of repayment of Loan which is arbitrary, unjust and against the facts of the case. 4. CIT(A) -XXXII, New Delhi has erred by confirming the addition of ₹ 3750000/- (in assessment year 1996-97 ₹ 1500000/- and in 1997- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010 and set aside the order of the Assessing Officer dated 30/07/2001 and restored the matter back to the file of the Assessing Officer. 3.1 Complying the direction of the Ld. Commissioner of Income Tax, the Assessing Officer issued notice under section 158BC of the Act which was served on 12/09/2011. In response, the assessee submitted that return originally filed by the assessee might be treated as return filed under section 158BC of the Act. Subsequently, statuary notices were issued and complied with. The assessment was completed on 30/12/2011 determining total undisclosed income for the block period from 1989-90 to 1999-2000 at ₹ 4,41,35,732/-. Aggrieved, the assessee filed appeal before the Ld. CIT-(A) and filed certain additional evidences. The Ld. CIT-(A) forwarded those additional evidences to the Assessing Officer. The Assessing Officer did not object for admitting the additional evidences and accordingly, after taking into account the additional evidences and submission of the assessee, the Ld. CIT-(A) allowed part relief to the assessee. Aggrieved, both the assessee and the Revenue are in appeal raising their respective grounds in their appeal. IT(SS)A No.22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contrary, Ld. CIT(DR), relied on the finding of the lower authorities and submitted that the assessee itself failed to submit/produce further explanation in support of its claim before the learned CIT-(A) and, therefore, the Ld. CIT-(A) was justified in sustaining the addition. 5.3 We have heard the rival submission and perused the relevant material on record. According to the assessee, the amount in dispute is outstanding debtors of M/s Rashiwa International Ltd. as on 05/12/1998, whereas according to the lower authorities, the assessee failed to explain with evidences that the amount in question is outstanding debtors of M/s Rashiva International Ltd. Before the Ld. CIT-(A), the assessee produced trial balance of M/s Rasiwa International Ltd. as on 05/12/1998 and general Ledgers of the parties appearing in the books of accounts of M/s Rashiwa International Ltd, however, the Ld. CIT-(A) observed that the claim of the assessee could not be reconciled with the documents submitted by the assessee. In our opinion, the trial balance dated 05/12/1998 and Ledger of parties, which were not audited by any Chartered Accountant, cannot be reconciled in isolation. The assessee was requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee and accepted the amounts as in lakhs. But he did not accept the submission that these papers did not belong to the assessee. In view of the Assessing Officer, in terms of section132(4A) the papers were presumed to be belonging to the assessee as same were found from premises of the assessee and the onus was on the assessee to establish that those transaction did not belong to the assessee. The Assessing Officer held that the assessee failed to furnish any evidence to support the explanation that the transaction did not belong to it, accordingly he made addition of the amount of ₹ 40.78 Lacs to the income of the assessee. Before the Ld. CIT-(A), the assessee repeated the same submission that it was a rough document and did not belong to the assessee. The Ld. CIT(A) observed that the Ld. AR merely repeated the earlier contention that the transaction did not belong to it. According to him, such contention of the assessee without any substantiation, was having no meaning in view of the provision of section 132(4A) of the Act and accordingly upheld the addition. 6.1 Before us, the learned counsel referred to page -25 of the paper book, which is a copy of page No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the course of search, it is the onus of the assessee to disclose to whom the paper belongs. Merely by stating that the said paper did not belong to the assessee, it cannot be said that the assessee discharged its onus and rebutted the presumption provided in section 132(4A) of the Act. The contention of the Ld. counsel that the paper in question is a dumb document is also not correct. The document contains amount, date and particulars as inter-corporate deposits (ICDs). Name of the parties are also mentioned in coded form. The judgments relied upon by the Ld. counsel are also of no assistance to the assessee. In the case of S.M. Aggarwal (supra), the assessee stated that accounts belongs to his daughter, though she denied in her statement. The assessee was not allowed the opportunity to cross-examining his daughter and therefore the Tribunal held that if the evidence collected against the person has not been confronted, it could not be utilized against him. In view of the facts, the Hon ble High Court held that no substantial question of law arises in the said case. In the said case figures too were totally unexplained and thus the Hon ble High Court held that the document was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce/loan received and how those loans were settled or squared up. The assessee submitted that those documents were prepared in connection with proposal for taking unsecured loan from the parties in question and for which the documents as desired by the parties were prepared to be delivered at the time of actual deal/receive payment from those parties, however, those deal did not materialize and amount was not received. According to the assessee due to non-materialization of the deal, all the original post dated cheques as well as promissory note were found and seized from the premises of the Director of the company. The Assessing Officer held that the assessee failed to furnish third-party confirmation, documentary evidence to establish that the loan transaction did not materialize and documentary evidence to establish the source of repayment to the parties and accordingly, he made addition of ₹ 1,33,22,590/- to the income of the assessee. Before the Ld. CIT-(A) also, the assessee repeated same arguments and submitted that the Assessing Officer did not make any inquiry from the respective parties in whose name post dated cheques were found during the search proceedings. The Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued by the assessee company and submitted that the assessee engaged intermediary/agents for obtaining loans for temporary period and accordingly, prepared documents, however, the deal was not materialized and therefore, the question of repayment of loans in cash, did not arise. He submitted that the post dated cheques were already cancelled and addition has been made merely on the basis of presumption without any evidence in support thereof. According to him no credit found to corroborate the receipt of loans and also no evidence found to corroborate the repayment. He also submitted that no direct enquiry was made from the parties whose name and address mentioned on those papers. 7.3 The Ld. CIT(DR), on the other hand, submitted that original assessment proceeding, the assessee did not comply various notices issued and the assessment was completed ex parte. She submitted that assessment was set aside in terms of section 264 of the Act by the Commissioner of income tax after a period of almost 10 years and thus it was the onus of the assessee to produce those parties for confirming the facts appearing in seized documents. She further submitted that in those documents only names o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT-(A) out of the addition of ₹ 65,62,500/- made by the Assessing Officer for disallowance of interest corresponding to the loan utilized for illegal purposes. 8.1 From the pages 27 to 28 of Annexure A-2 seized from A9/27, Vasant Vihar, New Delhi, the Assessing Officer observed that for getting packing credit limit from the Bank of Rajasthan, the assessee company made deposits of ₹ 1.5 crores as intercorporate deposits to private companies of the chairman of the Bank i.e. Mr. Keshav Banger. The seized document is a copy of letter written by the director of the assessee company to crime and vigilance, New Delhi. The Assessing Officer was of the view that this deposit advanced out of the packing credit limit availed was for illegal purposes and therefore, the interest corresponding to the intercorporate deposit of ₹ 1.5 crores was disallowed by the Assessing Officer in various years as under: F.Y. 1996-97 ₹ 15,00,000 F.Y.1997-98 ₹ 22,50,000 F.Y.1998-99 ₹ 22,50,000 F.Y.1999-2000 upto 2.7.99 ₹ 5,62,500 8.2 The Ld. CIT-(A) upheld the disallowance of ₹ 37,50,000/-for financial year 1996-97 and 1997-98, holding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee company to crime and vigilance and submitted that the packing credit limit was granted on the condition that assessee would deposit ₹ 1.5 crore as intercorporate deposits into the companies of chairman of the Bank, i.e., Mr Keshav Bangur . According to her, since the intercorporate deposit of ₹ 1.5 crore has been made as part of the deal of the packing credit obtained from the bank of Rajasthan, it was in the nature of illegal advances . She submitted that assessee has failed to establish that this intercorporate deposit was for any business purpose. According to her, in view of the fact the disallowance sustained by the Ld. CIT-(A) was justified. 8.5 We have heard the rival submission and perused the relevant material on record. The relevant part of the letter of the Director of the assessee company seized during the course of search at page 27 to 28 of the Annexure A-2 is reproduced as under: Ours is an export trading house established in 1995. To execute orders, we have been granted Packing Credit Limit facilities by the Bank of Rajasthan Ltd., Kamla Nagar Branch, Delhi 110007 of ₹ 3.0 crores on 08.11.95 and the first order was execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we take up the appeal of the Revenue in IT(SS)A No 23/Del/2013. The sole ground relates to addition of ₹ 1,76,29,450/- made by the AO on account of sale agreement seized during the course of search. 11. According to the Assessing Officer, Annexure - 36 and - 37 seized during the course of search at C-2, SDA Complex, New Delhi are a copy of sale agreement of first floor of Bhardwaj Plaza, New Delhi valuing ₹ 4.9 lacs as against dues of M/s Tartans Infomark Ltd. Assessing Officer has further mentioned that printout taken from the laptop computer revealed that total consideration of ₹ 1,81,19,450/- was due to the assessee from M/s Tartans Infomark Ltd. 12. The assessee explained that it exported goods to Singapore through M/s Tartan Infomark Ltd., who was an export agent and due to non-realization of the sale proceeds, the assessee tried to taking control of the property owned by M/s Tartan Infomark Ltd. but had been unsuccessful. The Assessing Officer was not convinced with the submission and he made the addition for the amount of ₹ 1,76,29,450/- (1,81,19,450- 4,90,000). 13. Before the Ld. CIT-(A), the assessee submitted detail of the transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer, rejoinder of the assessee and the factual finding of the Ld. CIT(A), it emerge that assessee company procured an export order through M/s Tartans InfoMark Ltd., but after export of the goods worth ₹ 1,81,19,450/-, the assessee company could not realize the sale amount. According to the assessee, the amount of ₹ 1,81,19,450/- was appearing as debtor. On the basis of the seized document, the Assessing Officer reduced ₹ 4.90 Lacs from this amount as received (even though according to the assessee this amount was not received) and made addition for the balance figure of ₹ 1,76,29,450/-. 15. In our opinion, if the assessee has already credited the sale of ₹ 1,81,19,450/- in its books of accounts, no further addition could be made in respect of the amount receivable. Since from the facts mentioned by the Assessing Officer and the learned CIT-(A), it is not clear whether the fact of sale of ₹ 1,81,19,450/- and appearing of the said amount as receivable in the balance sheet has been verified by the lower authorities. If this fact could be verified from the books of accounts of the assessee or financial statements, then no addition could b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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