9911796707
TMI Blog2016 (10) TMI 1157X X X X Extracts X X X X X X X X Extracts X X X X ..... . General Facts The brief facts of the case that the proceedings u/s 153A of the Act was initiated consequent to the search u/s 132 conducted on 25.2.2009 at the residential and business premises of "Saltee Group" promoted and owned largely with his family members by Mr. Surya Prakash Bagla. The assessee through its associate concern is engaged mainly in the business of Real Estate & Civil Construction. Consequent to search u/s 132 of the Act, notice u/s 153A of the Act was issued for Asst Years 2003-04 to 2008-09 and assessments framed u/s 153A of the Act thereon and for the Asst Year 2009-10, being the year of search, assessment was framed u/s 143(3) of the Act. The assessee's appeal is mainly containing the validity of the search and the grounds of appeal in all the years can be summarized as follows : 1. For that in view of the facts and in the circumstances, the assessment order made by the AO was wholly bad, illegal and void abinitio both on points of law and in view of the facts and in the circumstances the ld CIT(A) was wholly unjustified in confirming the action of the AO as far as legal issues were concerned and the Ld. CIT(A) was wholly unjustified in holding that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ground No. 2 - The Ld. CIT(A) has erred in not appreciating the fact that the applicant Shri S.P. Bagla himself has not treated the cash receipt of Rs. 6,00,90,000/- as Capital Gain from sale of shares, rather, he has taken it as undisclosed income from other sources in A.Y.2010-11. 3. Ground No. 3 - The Ld. CIT(A) has erred in holding that capital gain arising on the 100% sale of shares of M/s. Graphitech is taxable in 2010-11 and not in the year in which MOU (contract for Sale) i.e. /F.Y. 2005-06 relevant for A.Y.2006-07 was signed and that the order of Ld. CIT(A) is in contravention to the circular No. 704 dated 28/04/1995 of CBDT. 4. Ground No. 4 -The Ld. CIT (A) erred in directing A.O. to take the consideration as 14,01,00,000/- for sale of shares of Graphitech as against sale value of Rs. 6,51,00,000/- mentioned in MOU (sale contract) 5. Ground No. 5 - The Ld. CIT (A) has further erred in holding that the sale consideration for the sale of shares is to be taken as Rs. 14,01,00,000/- and the date of sale as 25/05/2009. A.Y 2007-08: (Department's appeal - ITA No. 35/K/2012) 1. Ground No. 1 - The Ld. CIT (A) erred in holding that Rs. 14,00,00,000/- received in cash by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was holding 100% shares in M/s Graphitech India Ltd, a company incorporated under the Companies Act, 1956. One Mr. Surya Prakash Bagla (assessee herein) is its director. M/s Graphitech India Ltd has long term lease on a piece of land measuring about 60 cottahs and there was no legal impediment to construct commercial building on the said land. There was a Memorandum Of Understanding (MOU) on 4.8.2005 between Saltee Infotech Pvt Ltd represented by its Director Mr. Surya Prakash Bagla and one Mr. Vivek Kathotia, with a recital that the shareholders of M/s Graphitech India Ltd went to transfer their 100% holding in M/s Graphitech India Ltd to Mr. Vivek Kathotia for a consideration of Rs. 16,51,00,000/-. In the said MOU there was a recital to the effect that all the original share certificates and transfer deed shall be deposited with Mr. B. K. Jain Advocate in trust and the same shall be handed over to the transferee on making their full and final payment of the consideration amount. Further, vide clause 4 in liabilities and responsibilities of the transferor, it was stipulated that the transferor at his cost and efforts, shall be responsible to get building plans which shall be prepa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of such letters and a decree for perpetual injunction restraining the transferee from demanding delivery of possession of the shares and from giving effect to the MOU dated 04.08.2005. In the said suit it was pleaded that pursuant to the MOU the original share certificates were deposited with Advocate Shri B. K. Jain and subsequently all the steps were taken to see that the terms of MOU are implemented, but inspite of various corrections made from time to time to the building plan got prepared by the transferee, the same could not be accomplished and Bidhannagar Municipality refused to approve the plan as such, the transferee ultimately decided to abandon the project and with mutual consent, the contract was rescinded but to the surprise of the transferor, a letter was received from Mr. B. K. Jain, Advocate, wherein the rescinding of contract was disputed and delivery of shares was insisted. In those circumstances, the declaratory suit came to be filed. 4.1.3. The transferee also filed another suit in T.S. No. 222 of 2007 before the Civil Judge (Sr. Division), 2nd Court at Barasat disputing the recession of contract and praying for specific performance thereof. According to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of transfer, provided it is followed up by actual delivery of shares and the transfer deeds. In view of this circular, the date of contract for sale assumes importance. According to the revenue, the date of contract for sale is the date of MOU whereas, according to the assessee, the date of subsequent compromise by way of which the condition as to the approvals by different authorities was got rid of. Further according to the Revenue, the sale consideration is the entire Rs. 16.51 Cr whereas the Assessee claims it to be only 14.01 Cr as reduced in the compromise decree by way of adjustment. 4.2. The assssee offered capital gains for sale of shares in Asst Year 2010-11 on the basis of transfer of shares that happened pursuant to decree and revised MOU dated 25.5.2009. The assessee also offered the sums of Rs. 7,40,90,000/- in the revised return for Asst Year 2010- 11 under the head 'income from other sources' being the cash component received on sale of shares. But during the course of assessment proceedings, the assessee pleaded before the ld AO to treat the sums of Rs. 7,40,90,000/- as part of share sale consideration and assess capital gains accordingly. This request was rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me although the transaction but the liability of the transferor for compensation only intervened. He, therefore, argued that the date of MOU is the date of contract for sale and the sale consideration is the entire amount of Rs. 16,51,00,000/-. On this premise, Ld. Counsel argued that the sale consideration of shares of the assessee is Rs. 16.51 cr. and following the CBDT circular 704 dated 28.04.1995, such date (i.e the date of MOU dt 4.8.2005) will be treated as the date of transfer, since, it is only pursuant to the terms of the MOU, the delivery took place. He placed reliance on a decision reported in AJAY GULIYA vs. ASSISTANT COMMISSIONER OF INCOME TAX (2012) 209 TAXMAN 0295 (Del) wherein it was observed that,- The reasoning of the Tribunal is premised upon the fact that capital assets were transferred on a particular date the assessee passed on the execution of the agreement. There is no material on the record or in the agreement suggesting that even if the entire consideration or part is not paid the title to the shares will revert to the seller. In that sense the controlling expression of "transfer" in the present case is conclusive as to the true nature of the transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book No. 2 and pointed out that even as per the Board's Circular, taxability of shares arise only in the year of transfer of share certificates. The ld AR took us to pg 48 of PB No. 2 which is the MOU dt. 4.8.2005 and in the "consideration" part of such MOU at Clause 5 it has been categorically mentioned that share transfer deed were to be deposited with Mr. B. K. Jain (Advocate) in trust and were transferred to transferee (i.e. Vivek Kathotia) only on full and final payment of consideration. The ld AR further took us to the letter written by the assessee to the Solicitor Mr. B. K. Jain (Paper Book No.2 page 48) which shows that the Solicitor was holding such share certificates only in trust in terms of the MOU dt. 4.8.2005 and the shares were never transferred to Mr. Vivek Kathotia and/ or his assignees/ associates as mentioned in MOU. The ld AR further took us to ROC returns for Asst Years 2006-07 & 2007-08 as well as for Asst Year 2010-11 which are placed at pages 151 to 245 of the Paper Book No.2 and contended that since the share certificates have been transferred by the assessee and recorded in the Financial Year 2009-10 relevant to Asst Year 2010-11, the fact so contended b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m or demand performance of contract from other party. By way of stipulation in the MOU by way of Clause 13 thereof, viz, if the Transferor fails to get plan sanctioned then the transferor shall refund the entire amount received from Transferee within one month, the parties adopted a mechanism in the MOU that till the transferor gets the required permissions and clearances, the amounts paid by the transferee would remain as advance only, and it is only on the accomplishment of this pre requisite condition, further steps would be taken. This intention is very clear from the MOU itself. 4.7.2. It is not in dispute that, for one reason or the other, permissions were not granted by the authorities and there was litigation. By the date of filing of the title suit No 222/2007 by the transferee seeking specific performance, transferee claims to have paid a sum of Rs. 13,91,90,000/- from time to time, and only a sum of Rs. 2,59,10,000/- was due and as such the transferee demanded the delivery of shares following by filing of such suit. It is only by way of settlement deed, pursuant to which compromise decree was passed, the term relating to obtaining the permissions was removed and the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh stock exchanges, the date of contract for sale as declared by the parties shall be treated as the date of transfer, provided it is followed up by actual delivery of shares and the transfer deeds. In this case according to the assessee, date of contract for sale is the date of compromise and compromise decree i.e 25.5.2009. For the reasons set forth in the preceding paragraphs, we find that the date of MOU cannot be taken as the date of contract for sale because unless and until the condition in Cl 13 is fulfilled the understanding does not assume the character of agreement for sale, and it is only on that event the amount becomes the part consideration. Till such time it is only an advance amount only, not liable for tax under the head of capital gains. 4.7.5. Next question that arises is as to what exactly the sale consideration was, whether it was Rs. 16,51,00,000/- as contemplated in the MOU or Rs. 14,01,00,000/- as adjusted in Cl 12 (a) read with Cl 11 of the Terms of Settlement reached by parties and taken cognizance by the Court vide Compromise Decree in TS No 222 of 2007. We have carefully gone through the MOU dated 4.8.2005, subsequent court proceedings including the Pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s non conclusive as to the true nature of the transaction till the condition is fulfilled and then the date of fulfillment of such condition shall be taken as date of contract for sale within the meaning of Circular No. 704 dated 28.04.1995 with reference to section 2(42A) and the amounts paid by the transferee till the fulfillment of such condition would remain as advance only, but not as part for sale consideration for the purpose of reckoning the capital gains. Further, in the absence of any express contract between the parties, any liability of the parties in the form of costs etc due to some intervening circumstances, would not in any manner detract from the chargeability of total sale consideration. At best those costs would be expenses relating to the sale or purchase as the case may be, which in any case, would be eligible for deduction while computing capital gains. 4.7.8. As regards the handing over of the share scripts to the Solicitor Mr. B. K. Jain, it is seen that it was not accompanied with the transfer deeds and indeed the transfer deeds have been executed only in May 2009 when the decree has been passed and the effect of which has been observed in the Annual Retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erwise cannot be upheld in any manner even in Asst Year 2010-11. In any case, the said receipt cannot be taxed in Asst Years 2006-07 and 2007-08 separately. 4.7.9. As discussed earlier, transfer having taken place only in Financial Year 2009-10 relevant to Asst Year 2010-11, when executed transfer deeds along with share certificates were handed over Mr. Kathotia and when transfer pursuant to order of Court was completed, the entire capital gain is taxable in Asst Year 2010-11 only and cash components in this regard received earlier cannot be taxed in the Asst Years 2006-07 and 2007-08. 4.7.10. As a result, we hold as follows : Asst year Appeal No. Ground Nos. Result 2006-07 34/K/12 1 to 5 Dismissed 2007-08 35/K/12 1 to 5 Dismissed 2010-11 857/K/14 1 to 4 Dismissed Hence, these grounds are disposed accordingly. 5. ADDITION MADE BASED ON SEIZED DOCUMENT MARKED SSG/1 A.Y 2008-09: IT(SS) 36/Kol/2012 1. Ground No. 2 - The Ld. CIT(A) has erred in treating the addition of undisclosed receipt of Rs. 3,03,65,126/- as per seized document SSG/1 as unexplained expenditure. 2. Ground No. 3 - The Ld. CIT(A) has further erred in directing the the A.O. to consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 28,12,000/- pertaining to the seized document No. SSG/1 at page 9 has been added by the AO twice and as such, such amount having been considered twice by AO, the appellant's income has been increased by such amount wrongly and in view of the facts and in the circumstances it may kindly be held accordingly. Addl. Ground No.3 -For that in view of the facts and in the circumstances and without prejudice to the Ground No. 1 above, treating Rs. 3,03,65,126/- as unexplained expenditure, the AO and Ld. CIT(A) failed to appreciate the facts that the amount considered on the basis of SSG/1 at pages 29-30 has been wrongly considered at Rs. 1,16,00,000/- without considering the figures appearing in the books of account and on consideration of such amount as appearing in the books of account, the addition in respect of the such seized documents will reduce to 'Zero' and in view of the facts and in the circumstances it may kindly be held accordingly. The additional ground raised in assessee's appeal in ITA No.1419/K/12 have not been repeated since the assessee has submitted that such grounds are same as that in additional ground in Cross-objection and they have been raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corded in the books of account. The ld AO treated the difference of Rs. 3,03,65,126/- as undisclosed receipt of the assessee which was assessable as his undisclosed income in A.Y 2008-09. The ld AO also found that the seized material shows receipt of cut money of Rs. 46,34,960/- and Rs. 27,92,230/- which was assessable in the case of the assessee as his undisclosed income in Asst Year 2008-09. The ld AO has mentioned in the assessment order that the assessee had already admitted the cut money of Rs. 45,54,460/- and has also included the same in his statement of cash flow. The ld AO further noted that page 54 of SSG/1 shows undisclosed expenditure of Rs. 1,25,000/- on account of legal expenses and that of Rs. 3,05,272/- on account of land development cost which was assessable as undisclosed expenditure in Asst Year 2006-07. 5.2. On a perusal of the ld AO's order it is observed as under :- "Page 1 to 30 of the seized documents marked SSG/1 reflect land development expenses of Rs. 5,07,50,375/- and cut money of Rs. 45,55,460/-. SSG/1 Page No. Name Amount (in Rs) 1 & 2 Saltee Citizone (Continuous Serials 1-66) 37,18,000/- 3 Saltee Buildcon (Land Development accounted for) 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,939 377,459 3,192,480 23 & 24 Saltee Village (Details starts from page 23 and end at 24) 1,664,485 287,702 1,366,783 25 Ankit Plantation 2,282,030 1,710,462 574,568 26 Dewan Export 2,659,970 1,078,250 1,581,720 29 & 30 Marine Park (Statement started page 30 and B/F 26,70,967 and end page 29) 3,143,788 - 3,143,788 50,750,375 20,385,249 30,365,126 The difference is treated as the undisclosed income of the assessee. Therefore, the sum of Rs. 3,03,65,126/- on account of 'Land Development Cost' receipt and Rs. 74,27,109/- on account of 'Cut Money' receipt totaling to Rs. 3,77,92,236/- is added as assessee's undisclosed income for Asst Year 2008-09. It was further observed that Page 54 of SSG/1 shows some undisclosed expenditure of Rs. 1,25,000/- and Rs. 3,05,272/- on account of legal expenses and land development costs, which have been accepted as undisclosed. [Undisclosed income for Asst Year 2008-09 - Rs. 3,77,92,235/-] [Undisclosed expenditure for Asst Year 2006-07 - Rs. 4,30,272/-] 5.3. The ld CITA in his order had observed the following:- "I have perused the assessment order wherein the AO has discussed the material fact in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant as charges for the services rendered by him. In view of the above, the AO made total addition of Rs. 3,77,92,235/- (Rs. 3,03,65,126/- plus Rs. 74,27,109/-) on account of undisclosed receipts in A.Y 2008-09. The Ld. A.R has argued that the seized documents were recovered from the custody and possession of the company Saltee Construction Co. Pvt. Ltd. and also the AO has brought no material or evidence on record to show that such seized documents were in the handwriting of the appellant or his accountant. Under the circumstances no addition could be made in the case of the appellant. The Ld. A.R contended that the land development cost as contained in the seized documents merely represented estimates, and, that the actual expenses incurred which was much lesser, was recorded in the books of account. It was also argued that the land development cost was incurred by the group companies who were the actual owners of the land and such expenditure was also accounted for by them in their regular books of account. Consequently, the excess expenditure, if any, on account of land development cost cannot be treated as undisclosed expenditure of the appellant, and so, no addition can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 27,92,230/- is assessed as undisclosed receipt, then consequential effect has to be given in as much as such receipt has to be considered as being available for use towards any unexplained expenditure made by the appellant. I have considered the submission made on behalf of the appellant that the land development cost, which is mentioned on an average basis @ Rs. 5000/- per cottah in the seized document, cannot be the same for all kinds of land and as such it should be considered as estimate only. However, the appellant on his part has failed to adduce any separate evidence in this regard. In this factual background, I am of the considered view that the difference of Rs. 3,03,65,126/- has to be treated unexplained expenditure incurred by the appellant on behalf of the group companies, and consequently the sum of Rs. 3,03,65,126/- is confirmed as unexplained expenditure. Similarly, the addition of Rs. 4,30,272/- in A.Y 2006-07 which was made on account of undisclosed expenses as contained on page 54 of the seized document SSG/1 is also confirmed for the same reason. However the AO is directed to consider the receipt of the cut money of Rs. 74,27,109/- along with the cash rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee's appeal being addition of Rs. 1,16,00,000/-. The ld AR drew our attention to the fact that such transaction pertains to Marine Park Ltd. details of which are at page 611 of the Paper Book (Volume 4). The ld AR then submitted that the land development expenses as per books has been considered at Nil by ld AO, whereas the same is Rs. 1,16,56,247/-. As such there could not be any addition on such account. 5.4.1. The ld AR then referred to Additional Ground No.3 of C.O and Additional Ground No.3 of assessee's appeal being addition of Rs. 28,12,000/-. The ld AR drew our attention to the fact that such transaction pertains to Cozy Enclave (P) Ltd. details of which are at page 441 of Paper Book (Volume 4). Page 9 of SSG/1 reflects that the ld AO had added the brought forward amount of land development expenses Rs. 28,12,303/- twice and hence the same amounted to double addition. 5.4.2. As regards the ld CITA's action in allowing the set off of the expenses so incurred by assessee and / or its associates, it was submitted by ld AR that there is no dispute in the fact that assessee had received cash on account of "transaction with Fort" to the tune of Rs. 7,40,90,000/- and al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt only. 5.7.1. As regards the sum of Rs. 3,03,65,126/- pertaining to pages 1 - 30 of SSG-1, we find assessee's contention is that the same is an estimate of expenses. On a perusal of the document , we find that there is a much variation of such sums as reflected in seized documents and such sum is not merely Rs. 5,000/- per Cottah. The assessee's contention in such seized documents pages 1-30 of SSG/1 cannot be accepted. However, the ld AR has successfully pointed out that in some documents such amount has been mentioned whereas nothing has mentioned in the books of account and hence it has to be necessarily followed that such sums are expenses incurred by the assessee and the actual expenses have been booked in the respective companies. Moreover, we find that the ld AO has chosen to treat the said sums as undisclosed income merely on assumption without any evidence being in his possession nor he examined such companies. Hence the assumption has to be followed that since some of such companies are assessee's associate concern as observed by ld CITA and which has also not been disputed by revenue in its appeal at any stage. Hence the necessary corollary of these facts is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the Ld. CIT(A) erred in confirming the action of the AO in treating Rs. 18,00,000/- as undisclosed expenditure of the appellant on the basis of the alleged document SSG - 3 and in view of the facts and in the circumstances the action of the Ld. CIT(A) in such regard is without appreciating the facts and in the circumstances it may be kindly be held accordingly. A.Y 2008-09 C.O. 147/Kol/2012 Ground No.6 - For that in view of the facts and circumstances the Ld. CIT(A) erred in confirming the action of the AO in treating Rs. 37,25,000/- as undisclosed expenditure of the appellant on the basis of alleged document SSG-3 and in view of the facts and in the circumstances the action of Ld. CIT(A) in such regard is without appreciating the facts in the matter properly and in view of the facts and in the circumstances it may kindly be held accordingly. A.Y 2009-10 C.O. 148/Kol/2012 Ground No.8 - For that in view of the facts and circumstances the Ld. CIT(A) erred in confirming the action of the AO in treating Rs. 10.00,000/- & Rs. 84,66.224/- as undisclosed expenditure of the appellant on the basis of alleged document SSG-3 and in view of the facts and in the circumstances the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flow statement. The ld AO thus made addition of Rs. 10,00,000/- in Asst Year 2009-10 as undisclosed receipt and additions of Rs. 18,00,000/-, Rs. 37,25,000/- and Rs. 84,66,724/- (Rs. 16,20,000/- plus Rs. 17,63,994/- plus Rs. 36,53,564/- plus Rs. 6,51,288/- plus Rs. 7,77,878/-) in Asst Years 2007-08, 2008-09 and 2009-10 as undisclosed expenditure on the basis of the seized documents marked SSG/3. The order of the ld AO is reproduced as under :- "This seized document consists of loose bunch of documents containing original money receipts in cash and cheque. During the assessment proceedings, the assessee has admitted Rs. 71,45,000/- as undisclosed expenditure vide Annexures - D and D-1 read with date wise undisclosed cash flow statement as per Annexure - X and statement of undisclosed expenditure as per Annexure - U, which are integral part of assessee's letter dt. 11.11.2010. The year-wise undisclosed expenditure comes as follows : A.Y 2007-08 Rs. 18,00,000/- A.Y 2008-09 Rs. 37,25,000/- A.Y 2009-10 Rs. 16,20,000/- The assessee further disclosed a sum of Rs. 10,00,000/- as received out of books for the F.Y 2008-09 relevant to A.Y 2009-10 as per page 3 of the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the unexplained expenses of Rs. 18,00,000/-, Rs. 37,25,000/-, Rs. 16,20,000/- , Rs. 17,63,994/-, Rs. 36,53,564/-, Rs. 6,51,288/- and Rs. 7,77,878/- , if any, for the purposes of addition. 6.3. The ld AR argued the following:- (i) He contended that the money receipts are not in the name of the assessee, and so, no addition can be made in his case. It was also argued that the seized material was not found from the possession or custody of the assessee. (ii) The ld AO had made the addition on the basis of the confessional statement of the assessee without bringing any cogent material on record. (iii) From a perusal of the assessment order and page 18 of the assessment order, it will be seen that the ld AO had proposed the additions of Rs. 18,00,000/ -, Rs. 37,25,000/ -, Rs. 10,00,000/- & Rs. 84,66,724/- in Asst Years 2007-08, 2008-09, 2009-10 & 2009-10 respectively on the basis of the seized documents at SSG-3. (iv) As will appear from the assessment order, the ld AO has made such additions on account of different money receipts issued by different persons in respect of payments made by them to different persons. The ld AO has treated such payments as unaccounted payments of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of page 33 and undisclosed expenses in respect of pages 3,8,33 and other pages as mentioned . Hence, we find merit in the action of revenue and assessee's grounds in that regard fails and are confirmed as undisclosed expenses / income accordingly. As regards the revenue's ground in treating Rs. 18,00,000/-, Rs. 37,25,000/- & Rs. 84,66,724/- out of available cash, we find merit in the fact that the ld AO himself has allowed such set off in the assessment order, so revenue cannot be allowed to change its stand now. Even otherwise, the revenue is not in possession of any evidence nor it has furnished any such fact on record that the sums expended were other than out of sum earned / received as cash by the assessee. Hence, we concur with the order of ld CITA in allowing sums as part of cash flow and as such the revenue's ground fails on such account. As a result, we hold as follows : Asst year Appeal No. Ground Nos. Result 2007-08 146/K/12 5 Dismissed 35/K/12 7 Dismissed 2008-09 147/K/12 6 Dismissed 36/K/12 5 Dismissed 2009-10 148/K/12 8 Dismissed 37/K/12 3 Dismissed Hence these grounds are disposed accordingly. 7. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition. 7.3. We have heard the rival submissions and perused the materials available on record including the paper book filed in that regard. We find no merit in assessee's appeal. However, as regards revenue's appeal, we hold that as regards the ld CITA's action in allowing the set off of the expenses so incurred by assessee and / or its associates, it was submitted by the ld AR that there is no dispute in the fact that assessee had received cash on account of "transaction with Fort" to the tune of Rs. 7,40,90,000/- and also other receipts which was available with assessee and the expenses were out of such sums only and hence the ld CITA was fully justified in allowing such set off. As regards the revenue's ground in treating Rs. 6,00,000/- as available for set off in cash flow and also allowing set off of Rs. 3,55,080/- out of available cash, we find merit in the fact that that ld AO himself has allowed such set off in the assessment order so revenue cannot be allowed to change its stand now. Even otherwise, the revenue is not in possession of any evidence nor it has furnished any such fact on record that the sums expended were other than out of sum earned / received as cash b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nging the an evidence on record as to the shareholding of such company vested with the appellant and consequently the observation by the Ld. CIT(A) in such respect may kindly be deleted accordingly. A.Y 2006-07 IT(SS) 34/Kol/2012 Ground No. 8 - The Ld. CIT(A) is erred in directing the A.O. to consider the unexplained expenditure of Rs. 10,00,000/- made on the basis of seized document SSG/8 against the cash receipt shown in cash flow statement during the hearing and that the order of Ld. CIT(A) is in contravention of the Section 69C of IT Act. A.Y 2008-09 IT(SS) 36/Kol/2012 Ground No.6 - The Ld. CIT(A) erred in directing the A.O. to consider the unexplained expenditure of Rs. 50,000/- as per seized document SSG/8 against the unaccounted cash receipt of the assessee. A.Y 2009-10 IT(SS) 36/Kol/2012 Ground No.5 - The Ld. CIT(A) has erred in deleting the addition of Rs. 27,03,31,000/- as undisclosed investment for purchase of Land of 2950.56 cottoh in Phase-1, Phase-2, Mohammadpur, Jamalpura. The Ld. CIT(A) has erred in not appreciating the pages 31,32,37 of the seized document-SSG/44 (correct SSG/8) Ground No.6 - The Ld. CIT(A) has erred in directing the A.O. to con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 2007-08 2008-09 50,000/- 2008-09 2009-10 1,67,000/- It appears that page - 31 of SSG/8 contains the details of land purchased upto 15.12.2008 under the head written as "Account as on 15th December, 2008". The figures on this page is apparently written in lakh of Rupees. As per this page, a total land of 2950.56 Cottah was purchased for Rs. 36,09,98,700/- in phase -1, phase-2, Mohammad Pur, Jamalpara. [Also refer pages -31, 32, 37 of SSG-44]. From the lower part of the table appearing in page - 31 of SSG-8, it appears that a total amount of Rs. 37.64 crores had been received by the assessee out of which Rs. 70 lakhs had been claimed to have paid and Rs. 36.09 crores had been spent on land a/c. leaving balance of Rs. 85 lakhs. The assessee admitted undisclosed expenditure to the tune of Rs. 36,09,987/- vide letter dt. 11.11.2008. The assessee was asked to substantiate the same. The assessee submitted vide letter dated 14.12.2010:- "In the last hearing, your goodself had asked us to substantiate the land filing charges vis-a-vis the regular books of accounts. In this connection, it is submitted that this page is an account given by the contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closed investment. [Undisclosed expenditure for A.Y 2006-07 Rs. 10,00,000/-] [Undisclosed expenditure for A.Y 2009-10 Rs. 50,000/-] [Undisclosed expenditure for A.Y 2007-08 Rs. 27,03,31,000/-] 8.2. The ld CITA observed as follows:- I have perused the assessment order and the remand report of the AO. I have also considered the submissions of the appellant and the material on record. The AO has mentioned in the assessment order that the seized documents SSG/8 contain money receipts of Rs. 10,00,000/-, Rs. 50,000 and Rs. 1,67,000/- which was admitted by the appellant as his undisclosed expenses in A.Ys 2006-07, 2008-09 and 2009-10; and has also been included in his statement of cash flow. The AO has thus made additions of Rs. 10,00,000/-, Rs. 50,000 and Rs. 1,67,000/- as undisclosed expenses in A.Ys 2006-07, 2008-09 and 2009-10. I uphold the order of the AO that these expenses are to be treated as part of the cash flow statement and the AO is directed to consider the net of expenses, if any, for the purposes of addition. The AO has referred to page - 31 of SSG/8 which contains details under the head "Account as on 15th December, 2008". I find merit in the argument that wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the land that was already owned by the group companies for which investment of Rs. 11 crores was also shown in the regular books of account. The seized document actually contained account given by the contractor for land filling expenses incurred by him as on 15.12.2008. The figure of 3609.987 actually represented Rs. 36,09,987/- the amount that was incurred by the contractor towards land filling charges. As advance of Rs. 37,64,000/- was already given to the contractor, he had returned Rs. 70,000/- and the balance of Rs. 84,013/- was pending. As the land filing expenses of Rs. 36,09,987/- was not recorded in the regular books of account of the group companies, the same was admitted as undisclosed income and was also included in the statement of cash flow. But, the explanation as made by the appellant was rejected by AO more on presumptions than on factual ground. The decision of the AO is not based on proper findings. While interpreting the seized document at page 31 of SSG/ 8, the AO has made too many presumptions which are totally arbitrary and without any basis. The observations of the AO are not based on any material fact or documentary evidence. As assessment h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ER, 2008". It was argued that the ld AO has made too many presumptions and assumptions about the seized document. The ld AO has presumed that the seized document contains details regarding purchase of land which is nowhere mentioned on the seized document. The seized document has simply mentioned "ACCOUNT AS ON 15TH DECEMBER, 2008". It has nowhere mentioned that the account relates to purchase of land. (v) The ld AR contended that the observation made by the ld AO was factually incorrect. The use of words like "appears" or "apparently" clearly suggests that the ld AO was himself not sure about the facts. It was explained before the ld AO that the seized document was related to land filling charges for existing land that was owned by the group companies for which investment of Rs. 11 crores was also shown in their regular books of account. The seized document actually contained account given by the contractor for land filling expenses purported to have been incurred by him as on 15.12.2008. The figure of 3609.987 actually represented Rs. 36,09,987/-, the amount that was incurred by the contractor towards land filling charges. As advance of Rs. 37,64,000/- was already given to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - SSG/8 the land area is 2950.56 Cottah the land value has been considered by ld AO at Rs. 36,09,98,700/- (as on 15.12.2008) and it is only mere presumption by the ld AO . This also clearly shows that said figure of "3609.987" is only land filling charges of Rs. 36,09,987/- and it has to be considered accordingly. 8.4. In response to this, the ld DR argued that such page 31 of SSG/8 represented the land purchased by assessee which was never reflected in books of account of the assessee , failed to prove such presumption of the ld AO. The ld DR also submitted that since assessee was engaged in real estate and such document read with pg 31 & 33 of SSG/44 proved that assessee has made such purchases in his group Companies, as such the same was undisclosed expenses of assessee. 8.5. We have heard the rival submissions and perused the materials available on record including the paper book of the assessee filed in that regard. We have gone through the material placed particularly the following seized documents along with other document was placed in paper book as well as order of the lower authorities :-. SSG/8 Pgs 21 & 22 Rs.10,00,000/- Pg 19 Rs. 50,000/- SSG/8 Pg 31 R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Rs. 50,000/-, Rs. 1,67,000/- & Rs. 36,09,987/- out of available cash , we find merit in the fact that that ld AO himself has allowed such set off in the assessment order, so revenue cannot be allowed to change its stand now. Even otherwise, the revenue is not in possession of any evidence nor it has furnished any such fact on record that the sums expended were other than out of sum earned / received as cash by the assessee. Hence, we concur with the order of the ld CITA in allowing sums as part of cash flow and as such the revenue's ground fails on such account. As a result, we hold as follows: Asst year Appeal No. Ground Nos. Result 2006-07 145/K/12 6 Dismissed 34/K/12 8 Dismissed 2008-09 147/K/12 7 Dismissed 36/K/12 6 Dismissed 2009-10 148/K/12 10 Dismissed 37/K/12 5 Dismissed 6 Dismissed Addl. Ground in C.O 148/K/12 1 Dismissed Addl. Ground in 1419/ K/12 1 Dismissed 9. ADDITION MADE BASED ON SEIZED DOCUMENT MARKED SSG /9-39 A.Y 2006-07 C.O 145/Kol/2012 Ground No. 7 - For that in view of the facts and circumstances the Ld. CIT(A) erred in confirming the action of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diture of Rs. 8,61,581/- added on the basis of seized document SSG/9-39 against the undisclosed cash receipt and that the order is against the 69C of the Act. A.Y 2007-08 IT(SS) 35/Kol/2012 Ground No.8 - The Ld. CIT(A) is erred in directing the A.O. to consider the unexplained expenditure of Rs. 6,94,299/- made on the basis of seized document SSG/9-39 against the unaccounted cash receipt. This is against the Section 69C of Act. A.Y 2008-09 IT(SS) 36/Kol/2012 Ground No.7 - The Ld. CIT(A) has erred in directing the A.O. to consider the unexplained expenditure of Rs. 6,28,500/- as per seized document SSG/9-39 against the unaccounted cash receipt of the assessee. A.Y 2009-10 IT(SS) 37/Kol/2012 Ground No. 7 - The Ld. CIT(A) has erred in directing the A.O. to consider the unexplained expenditure as per seized document SSG/9-39 of Rs. 86,257/- against accounted cash receipt of the assessee. 9.1. The brief facts of this issue are that the ld AO found that the seized material marked SSG/9 to SSG/39 is small pocket diaries containing detail of payments made to different labour contractors in respect of projects undertaken by the group companies which was not recorded in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- Rs.8,61,581/- Therefore, total undisclosed expenses are worked out : Undisclosed Application/Expenses F.Y A.Y As per assessee's admission vide letter dt. 11.11.10 As per discussion Total 2002-03 2003-04 20,000/- - 20,000/- 2003-04 2004-05 1,45,000/- - 1,45,000/- 2004-05 2005-06 3,80,500/- 15,55,000/- 19,35,000/- 2005-06 2006-07 3,70,5010/- 8,61,581/- 12,32,081/- 2006-07 2007-08 6,94,299/- - 6,94,299/- 2007-08 2008-09 6,28,500/- - 6,28,500/- 2008-09 2009-10 86,257/- - 86,257/- [Undisclosed expenditure for A.Y 2003-04 Rs. 20,000/-] [Undisclosed expenditure for A.Y 2004-05 Rs. 1,45,000/-] [Undisclosed expenditure for A.Y 2005-06 Rs. 19,35,000/-] [Undisclosed expenditure for A.Y 2006-07 Rs. 12,32,081/-] [Undisclosed expenditure for A.Y 2007-08 Rs. 6,94,299/-] [Undisclosed expenditure for A.Y 2008-09 Rs. 6,28,500/-] [Undisclosed expenditure for A.Y 2009-10 Rs. 86,257/-] 9.2. The ld CITA observed the following:- I have perused the assessment order and considered the submissions of the appellant, and also, the material on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade out of undisclosed receipts as shown by the appellant, and also accepted by the AO. The cash flow statement .had been filed before .the AO in respect of the unaccounted income which mainly comprised of cash received on different dates from the Fort Group in connection with the sale of shares. As there is undisclosed receipts in AY 2005-06, the addition of Rs. 15,55,000/- in AY 2005-06 is sustained. However, the AO is directed to consider the net of the unexplained expenses of Rs. 8,61,581/-, if any, for the purposes of addition. 9.3. The ld AR merely submitted that the undisclosed expenditure be allowed to be set off from cash available out of undisclosed income as per the date of expenses and availability of cash. The ld DR opposed the contention of ld AR for reasons mentioned earlier. 9.4. We have heard the rival submissions and perused the materials available on record including the paper book submitted by the assessee in that regard. As regards the revenue's ground in treating Rs. 8,61,500/-, Rs. 3,60,500/-, Rs. 6,28,500/- & Rs. 86,257/- out of available cash, we find merit in the fact that that the ld AO himself has allowed such set off in the assessment order so revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... volves undisclosed investment of Rs. 7,19,47,000/- (comprising Rs. 5,89,47,000/- in Asst Year 2008-09 and Rs. 1,30,00,000/- in Asst Year 2009-10). He noted that it was for the assessee to explain the nature of the transactions as recorded in the seized document as it was recovered from him. As there was no proof regarding the genuineness of Kishanji, the ld AO held that the sum of Rs. 7,19,47,000/- had to be treated as undisclosed investment of the assessee. The ld AO thus made addition of Rs. 5,89,47,000/- in Asst Year 2008-09 and Rs. 1,30,00,000/- in Asst Year 2009-10 on account of undisclosed investment. 10.2. The ld AO further noted that page 4 of SSG/42 contains detail of expenditure incurred upto 20.3.2008 in Jessore Road Project. The ld AO has mentioned in the assessment order that the assessee has admitted undisclosed expenses of Rs. 12,64,383/- which was included in the statement of cash flow. However, the same was determined by reducing sum of Rs. 38,00,000/- on the ground that the same had already been considered as undisclosed income under the seized document SSG/3. The ld AO observed that the entries in SSG/3 did not match and consequently no set off for Rs. 38,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [Undisclosed expenditure for A.Y 2008-09 Rs. 5,89,92,456/-] [Undisclosed expenditure for A.Y 2009-10 Rs. 1,30,00,000/-] 10.3. The ld CITA observed as follows:- I have perused the assessment order and considered the submissions of the appellant, and also, the material on record. The AO has mentioned in the assessment order that page 4 of the seized documents SSG/42 contain detail of expenses of Rs. 12,64,383/-, and, that page 23 to 37 record expenses of Rs. 45,456/- which was admitted by the .appellant as undisclosed expenses in AY 2007-08 and 2008-09, and, was also included in the statement of cash flow. The AO has also noted that expenses of Rs. 12,64,383/- was arrived at by reducing Rs. 38,00,000/- on the ground that it was already considered in SSG/3. The appellant has produced no evidence to substantiate his claim. I am therefore unable to accept the argument that Rs. 38,00,000/- had already been considered under SSG/3. However, as undisclosed expenses are to be considered against undisclosed income, the AO is directed to treat the undisclosed expenses of Rs. 50,64,383/- (Rs.12,64,383/- plus Rs. 38,00,000/-) and Rs. 45,456/- as part of the cash flow statement, and then, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any nexus, the AO cannot presume that the account of Kishanji was related to the investment made by the appellant. The seized document does not mention the name of the appellant or his group companies. On the contrary, it specifically mentions that the account pertains to Kishanji. In this factual background, the AO had no legal sanction or authority to presume that the period seized document relates to the appellant without bringing any corroborative material or evidence on record. Also, there is no material to show that the seized document actually represents detail of investment. It is only the presumption of the AO that the figures written on page 4 of SSG/42 are in lakhs of rupees. The conclusion of the AO that the appellant has made undisclosed investment of Rs. 7,19,47,000/- is not supported by any material or evidence on record; on the contrary, it is based only on the imagination of the AO. The decisions made by the AO are not based on proper findings. The AO has made his conclusions more from his presumptions and assumptions than from material facts. In view of the above, I am of the opinion that the addition of Rs. 7,19,47,000/- (comprising Rs. 5,89,47,000/- in A.Y 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A No. 70/ Kol/2009 dt. 25.6.2010. (vi) He concluded by stating that page 6 is rather a dumb document and addition in such respect by treating the same as "unexplained expenditure" is bad in law. (vii) As regards the ld CITA's action in allowing the set off of the expenses so incurred by assessee and / or its associates, it was submitted by the ld AR that there is no dispute in the fact that assessee had received cash on account of "transaction with Fort" to the tune of Rs. 7,40,90,000/- and also other receipts which was available with assessee and the expenses were out of such sums only and hence the ld CITA was fully justified in allowing such set off. He also submitted that on a perusal of assessment order itself , it can be observed that the ld AO himself has allowed such set off and now the revenue is disputing such action which amounts to disputing its own earlier action and which is not permissible as per law. 10.5. In response to this, the ld DR argued that the assessee is accepting one part of the said documents SSG/42 as its own and denying the ownership and content of another part i.e. page 6 of SSG/42 which is an anomaly by itself and such conduct proves that the docum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts. No evidence is allowed to be produced with a view to combating that effect. In this sense, this is an irrebuttable presumption. The words in sub-section (4A) of section 132 are "may be presumed". The presumption under sub-section (4A), therefore, is a rebuttable presumption. The finding recorded by the High Court in the impugned judgement that the presumption under sub-section (4A) is a irrebuttable presumption in so far as it relates to the passing of an order under sub-section (5) of section 132 and rebuttable presumption for the purpose of framing a regular assessment is not correct. There is nothing either in section 132 or any other provisions of the Act which could warrant such an inference or finding." 10.6.2. In our considered opinion, this is the judgement which made the introduction of Section 292C of the Act with retrospective effect necessary as a matter of clarification. Nevertheless, the limited conclusion is that the language of section 132(4A) of the Act and of section 292C of the Act use the common expression "may be presumed". Consequently the opinion of the Hon'ble Supreme Court about the presumption being a rebuttable presumption in the light of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n about the undisclosed expenditure, the assessee is based on inadequate or irrelevant material. Under the circumstances this ground of appeal is dismissed. As regards the revenue's ground in treating Rs. 50,64,383/- out of available cash, we find merit in the fact that that the ld AO himself has allowed such set off in the assessment order, so revenue cannot be allowed to change its stand now. Even otherwise, the revenue is not in possession of any evidence nor it has furnished any such fact on record that the sums expended were other than out of sum earned / received as cash by the assessee. Hence, we concur with the order of the ld CITA in allowing sums as part of cash flow and as such the revenue's ground fails on such account. As a result, we hold as follows: Asst year Appeal No. Ground Nos. Result 2007-08 146/K/12 7 Dismissed 35/K/12 9 Dismissed 2008-09 36/K/12 8 Dismissed 2009-10 37/K/12 8 Dismissed 11. ADDITION MADE BASED ON SEIZED DOCUMENT MARKED AS SSG / 45 A.Y 2007-08 C.O 146/Kol/2012 Ground no. 8 - For that in view of the facts and circumstances the Ld.CIT(A) was wholly unjustified in confirming the addition of Rs. 79,82,640 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosed transactions being Annexure - X of letter dated 11.11.2010 and vide Annexure - U being breakup of undisclosed income admitted Rs. 79,83,640/- as undisclosed expenditure of A.Y 2007-08. For the remaining amount, the assessee explained it to be part of regular books of various companies mentioned therein. The assessee produced bank statement of various companies including their audited final accounts and copy of IT returns, Cash flow statements. It was submitted that cash for land purchases were done by withdrawals of cash from bank itself and wherever the assessee could not link the cash expenditures with bank withdrawals, necessary disclosures have been made. "SSG/45, Page 43 is an account given by a broker. The left side shows amount received by the broker and the right side shows the amount expended by the broker. The receipt side and inter-alia shows Cash received by broker of Rs. 6,60,00,000/- . This figures has been reconciled period wise from the account of various Companies and as evident from workings of Annexure P2 of letter dt.11.11.2010, a sum of Rs. 6,08,50,000/- was withdrawn from Bank Account of five companies on whose name the land was acquired, as mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Saltee Infrastructure on 5.9.2007 is also perfect match cheque portion of Rs. 1.04 crores written against 'SPB' in this page 40 of SSG/45. The assessee has not provided any details regarding this company nor any evidence to prove that the company was not taken over and no transactions were made. Therefore, the figure of Rs. 5 Crores written against the assessee is treated undisclosed investment of the assessee in cash for A.Y 2009-10. [Undisclosed expenditure for A.Y 2007-08 Rs. 79,82,640/-] [Undisclosed expenditure for A.Y 2008-09 Rs. 5 Crores] 11.3. The ld CITA observed as follows:- I have perused the assessment order and considered the submissions of the appellant and also, the material on record. The AO has mentioned in the assessment order that page 43 of the seized documents SSG/45 contain detail of undisclosed payments Rs. 79,.82,640/- which was admitted by the appellant as undisclosed expenses in A.Y 2007-08, and, was also included in the; statement of cash flow. I uphold the order of the AO that the payments of Rs. 79,82,640/- was to be considered in the case of the appellant as undisclosed expenses. However, as undisclosed expenses are to be considered against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt of the cheque with reference to the books of account or the bank statement of the appellant. I find from the assessment order that the AO has made addition of Rs. 5 crores, with reference to the seized document at page 40 of SSG/45 on the ground that the appellant along with other persons had taken over a company. The AO has noted in the assessment order that no evidence was produced before him to show that there was no take-over of the company or to show that no transaction was actually made. But then, such non-compliance cannot be made the basis for concluding that there was take-over of a company, Whether or not a company was taken-over is a matter of fact, and also, a matter of public record. The AO could have called for the annual return of the companies filed before the ROC. The A.O could have verified from the.list of share-holders whether or not there was any change in the share-holding pattern of the concerned companies. But, the AO has made no efforts to ascertain the facts. The AO bas brought no positive material or evidence on record to establish that there was take-over of any company by the appellant. The AO has simply presumed, without any basis, that .the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequently, he has concluded that the assessee along with other persons had taken over a company by investing sum of Rs. 8.71 Crores. The ld AO has also made many observations which are totally irrelevant to the facts of the case. The ld AO has mentioned in the assessment order that no evidence was produced before him to show that there was no takeover of the company or that no transaction was actually made. But then, what material the ld AO had brought on record to establish that a company was taken over by the assessee? The companies are required to file annual returns with the ROC which could have been summoned by the ld AO. The ld AO could have easily verified that no company was taken over as there was no change in the shareholding pattern. The ld AO made no efforts to ascertain the facts or to verify the contention of the assessee. The ld AO has simply presumed, without any basis, that the assessee had taken over a company, and then, concluded by stating that the figure of Rs. 5 crores written against 'SPB' along with others is treated as undisclosed investment made by him in cash in Asst Year 2009-10. The ld AR contended that there was no positive material on record to sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized in the name of SPB it is only Rs. 2/- which the ld AO has presumed to be Rs. 2 Crores whereas another 2 appears in the name of KEJ and Re.1/- in the name of RAM and hence the assessee fails to understand as to how the entire 1 + 2 + 2 could be treated as unaccounted expenditure of SPB. Under no circumstances, in the case of SPB it could exceed Rs. 2/- but that SPB was not the assessee. 11.4.6. The ld AR also drew the attention to pages 1279, 1280, 1281, 1282, 1283 and then 1317, 1395, 1475, 1555 of paper book No.10 to strengthen his contention that there is no change in shareholding of such companies and hence the ld AO's contention is even otherwise only an assumption. 11.4.7. As regards the ld CITA's action in allowing the set off of the expenses so incurred by assessee and / or its associates, it was submitted by the ld AR that there is no dispute in the fact that assessee had received cash on account of "transaction with Fort" to the tune of Rs. 7,40,90,000/- and also other receipts which was available with assessee and the expenses were out of such sums only and hence the ld CITA was fully justified in allowing such set off. The ld AR also submitted that on a perusal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition of Rs. of Rs. 5,91,83,392/- made on the basis of page No. 1 and 21 of seized document SSG/48. A.Y 2009-10 C.O. 148/Kol/2012 Ground No.12 - For that in view of the facts and circumstances the Ld. ClT(A) was wholly unjustified in confirming the addition of Rs. 2,57,984/- on the basis of SSG-48 and in view of the facts and in the circumstances it may kindly be held accordingly. This ground is being taken without prejudice to the fact of the AO had been directed to delete the addition on the basis of the rotation statement. IT(SS) 37/Kol/2012 Ground No.9 - The Ld. CIT(A) has erred in directing the A.O. to consider the unepxlianed expenditure of Rs. 2,57,984/- made on the basis of seized document SSG / 45 against unaccounted cash receipt of the assessee. 12.1. The brief facts of this issue are that the ld AO found that pages 1 and 21 of the seized document SSG/48 contain detail of unexplained expenses of Rs. 1,85,08,949/- & Rs. 2,57,984/- which had been admitted by the assessee, and, was also included in the statement of cash flow. The ld AO thus made addition of Rs. 1,85,08,949/- & Rs. 2,57,984/- as undisclosed expenses in Asst Years 2008-09 and 2009-10 on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closed". Besides this, this page contains other receipts by broker of Rs. 81,18,509/- which could not be reconciled with regular books and hence the same was also offered as "undisclosed". As such a sum of Rs. 1,85,08,949/- was treated as undisclosed on the basis of receipts side of SSG/48, page 1. The left side of this page shows land value and other expenses incurred by broker which was reconciled with the books. A sum of Rs. 86,95,799/- could not be reconciled. The bottom side (showing expenses incurred by broker) below the tabular form was also reconciled with the books and a sum of Rs. 33,58,229/-could not be reconciled and hence the same was treated as "undisclosed". Thus the broker accounts shows undisclosed payments of Rs. 1,85,08,949/- which was more than undisclosed expenditure of Rs. 1,20,54,028/- made by him. As such a sum of Rs. 1,85,08,949/- has been treated as "undisclosed expenditure" in the working of undisclosed income filed vide letter dt. 11.11.2010. Page 21 of SSG/48 contains account with Sanat. In this respect, the assessee admitted undisclosed expenses of Rs. 2,57,984/- for A.Y 2009-10. Pages 7, 8 and 9 contain the detail of purchase and sale of land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 and 9 of the seized documents SSG/48. It was explained that page 8 and 9 contain detail of investment made in land by the said-companies which is duly recorded in their books of account: and, which has also been acknowledged by the AO in the assessment order. It was contended that page 7 contained estimates or rough working and there was no actual sale of land by the companies as alleged by the AO. The AO has mentioned in the assessment order that no detail of the other persons was filed. But then, the name of the companies was available on the seized document. The AO could have examined those companies to ascertain the facts, and also, to verify the nature of entries as made in the seized document. I find from the assessment order that it was explained before the AO at the assessment stage that page 70 of the seized document SSG/48 only contained' estimates or rough workings; and, that there was no actual sale of land. In course of the appellate proceedings, I had required the appellant to produce copy of the profit & loss account and balance sheet of the concerned companies for the year ending 31.3.2008, 31.3.2009 and 31.3.2010. The appellant has produced the said documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - SSG/48 Rs. 1,85,08,949/- b) Pages 7, 8 & 9 Rs.5,91,83,392/- 12.4.1. He submitted hat addition on the basis of page 1 -Rs. 1,85,08,949/- is merely on confessional statement and as such addition may kindly be not sustainable. 12.4.2. He submitted that Rs. 5,91,83,392/- has been added on basis of page 7, 8 & 9 of SSG/48. As far as page 9 is concerned, it represents the land owned by different companies, the name of which are duly appearing therein, and such amount being duly reflected in respective companies books of account, and hence no adverse inference can be drawn in that regard. Similarly, page 8 simply shows certain balance sheet items of those companies and in that regard also, no adverse inference can be drawn. As regards pg 7 kindly appreciate that it does not contain anywhere the name of the assessee except the word "SP" and simply on such basis it cannot be presumed that the same belongs/ pertains to the assessee. Further the said document was merely a planning document and deal not having materialized such companies continue to hold such land in their books and hence no adverse inference can be drawn in that regard as well. Without prejudice to the earlie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons the entire addition is bad in law. In the facts of the matter we do not find any merit in ld AO's contention and hence the entire addition of Rs. 5,91,83,392/- cannot be sustained and such ground of revenue fails. 12.6.2. As regards the revenue's ground in treating Rs. 1,85,08,949/- out of available cash, we find merit in the fact that that ld AO himself has allowed such set off in the assessment order , so revenue cannot be allowed to change its stand now. Even otherwise, the revenue is not in possession of any evidence nor it has furnished any such fact on record that the sums expended were other than out of sum earned / received as cash by the assessee. Hence, we concur with the order of ld CITA in allowing sums as part of cash flow and as such the revenue's ground fails on such account. As a result, we hold as follows: Asst year Appeal No. Ground Nos. Result 2008-09 36/K/12 11 & 12 Dismissed 147/K/12 9 Dismissed 2009-10 37/K/12 9 Dismissed 148/K/12 12 Dismissed 13. ADDITION TOWARDS CASH, JEWELLERY & UNDISCLOSED BANK ACCOUNTS A.Y 2006-07 IT(SS) 34/Kol/ 2012 Ground No. 6 - The Ld. CIT(A) is erred in directing the A.O. to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made in the hands of the wife of the appellant only. However, the Ld. CIT(A) without appreciating the fact sustained the addition so made and such action of the Ld. CIT(A) is liable to be quashed / cancelled / set aside. IT(SS) 36/Kol/2012 Ground No.1 - The Ld. CIT(A) is erred in directing the A.O. to consider the unexplained cash deposit of Rs. 69,882/- in the Bank account of the wife of assessee against unaccounted cash receipt of the assessee. A.Y 2009-10 C.O. 148/Kol/2012 Ground No. 5 - For that in view of the facts and circumstances the Ld. CIT(A) erred in confirming the action of the AO in treating Rs. 3,74.170/- as undisclosed assets of the appellant, although such sum was seized from the premises which does not belong to the appellant and as such the action of the Ld. CIT(A) in confirming the action of the AO is completely bad & illegal and in view of the facts and in the circumstances such action of the Ld. CIT(A) is liable to be quashed/ cancelled/ set aside. This ground is without prejudice to the fact that the appellant has shown the same as application of the income offered by it and hence it may kindly be considered accordingly. Ground No.6 - For that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submitted by the ld AR that there is no dispute in the fact that assessee had received cash on account of "transaction with Fort" to the tune of Rs. 7,40,90,000/- and also other receipts which was available with assessee and as such the cash found or the jewellery and / or the undisclosed bank account were out of such sums only and hence the ld CITA was fully justified in allowing such set off. He also submitted that on a perusal of assessment order itself, it can be observed that the ld AO himself has allowed such set off and now the revenue is disputing such action which amounts to disputing its own earlier action and which is not permissible as per law. On merits, the ld AR did not submit anything in particular. 13.2. In response to this, the ld DR objected to such contention of the ld AR and requested for affirming the addition. 13.3. We have heard the rival submissions and perused the materials available on record including the paper book of the assessee submitted in this regard. As regards assessee's ground on merits, we do not find any substance nor the ld AR was able to point out any mistake in the order of the ld AO in that regard. Hence assessee's ground in the respec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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