TMI Blog2018 (3) TMI 1406X X X X Extracts X X X X X X X X Extracts X X X X ..... AO which is illegal being against the principles of natural justice and against the provisions of I.T. Act, 1961. 2. The Ld. CIT(A) has grossly erred on facts as well as in laws in confirming the addition of ₹ 5,31,217/- on account of alleged interest income on the basis of a seized document which is dumb/ bald. 3. The Ld. CIT(A) has grossly erred on facts as well as in law in confirming the addition by invoking section 292C in spite of the fact that the document was not found either in the possession or control of the appellant. 4. The Ld. CIT(A) has grossly erred on facts as well as in law in holding that the appellant has not discharged the onus of offering suitable explanation. 5. The appellant craves leave to add, alter, modify and withdraw any grounds before or during the course of appellate proceedings. 3. The brief facts of the case are that the original return in this case was filed on 9.2.2009 declaring an income of ₹ 7,50,435/- which was processed u/s. 143(1) of the I.T. Act, 1961. A search and seizure action was conducted in this case u/s. 132(1) of the Act on 7.3.2014. Return u/s. 153A of the Act was filed on 9.10.2015 declaring the same inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low and stated that a document bearing computations of interest @18% on a base quantum of ₹ 12 lacs was found from the residential quarters of the assessee and the calculations are depicting regular periodicity. The assessee has not sought to furnish any explanation in respect of the document and the undeniable fact is that this document was seized from the residential quarters of the assessee. Therefore, the addition in dispute was rightly made and confirmed by the Ld. CIT(A), which does not need any interference. To support his contention, he relied upon the following cases laws decided by the Hon ble Delhi High Court, Hon ble Jharkhand High Court and the Hon ble Kerala High Court wherein the appeal was decided in favour of the Revenue. - Hon ble Delhi High Court in the case of Daya Chand vs. CIT (2001) 117 Taxman 438 (Delhi) - Hon ble Delhi High Court in the case of CIT vs. Nagesh Kumar Aggarwala (2011) 9 taxmann.com 249 (Delhi) - Hon ble Jharkhand High Court in the case of Mahabir Prasad Rungta vs. CIT (2014) 43 taxmann.com 328 - Hon ble Kerala High Court in the case of Bhagheeratha Engineering Ltd. Vs. ACIT (2017) 79 taxmann.com 325 (Kerala). 7. I have hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ress, signatures and handwriting of the assessee. 7. In the backdrop of the aforementioned facts and circumstances, undisputed facts and contentions raised by the parties, the first question arises for determination is :- as to whether addition made by AO and affirmed by CIT (A) at ₹ 98,16,450/- and ₹ 95,27,126/- qua AYs 2003-04 and 2004-05 respectively on the basis of loose paper recovered during search and seizure operation conducted at the residential premises of M/s. Omaxe Limited on 22.09.2005 is not sustainable as alleged by the assessee. 8. Bare perusal of the assessment orders and impugned orders passed by CIT (A) shows that documents seized during search and seizure apparently goes to prove that the assessments in these cases have been made by the AO and affirmed by the CIT (A) on the basis of suspicion, which is not sustainable in the eyes of law for the following reasons :- i. that the first document lying at page 1 of the paper book on the basis of which addition of ₹ 5,00,000/- has been made is categoric enough to disclose that one K.L. Bhatia, S/o Lal Chand Bhatia has taken interest free loan of ₹ 5,00,000/- from the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erification qua invoice no.162133 if issued by Johnson, wherein it is categorically mentioned that the payment has been received by way of cheque. AO has also not traced the cheque as to making the payment of the aforesaid amount form the issuing agency of the invoice in question; vi. that even otherwise, the AO has also not brought on record any material to prove that the assessee was in conscious possession of aforesaid documents on the basis of which addition has been made rather vaguely stated that the document/papers were recovered from the house of assessee. vii. that despite denial of the assessee that the loose papers do not belong to him in any manner, AO invoked the deeming provisions without collecting any corroborative evidence; viii. that the AO has made addition of ₹ 1,00,000/- qua AY 2004-05 as unexplained expenditure u/s 69 of the Act on the basis of paper/document, available at page 1 of the paper book B. Bare perusal of the paper shows that the same does not bear the name of the assessee nor it is in the handwriting of assessee nor does it explain the purpose of making and receiving payment. Merely on the basis of this document, addition cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on drive way, tennis court, garden lights etc. in the left column totaling 9.45 and some other expenses relating to architect, wooden fittings, bathroom fittings, etc. in the right column totaling 13.45 . 5. The explanation offered by the Assessee was that he was a director of Omaxe Ltd., a company in the construction business. He sought to explain that the said paper containing estimates in relation to the Omaxe Plaza project of the company was with him in that capacity. The CIT(A) rejected the above explanation on the ground that seized document nowhere contained the name Omaxe Ltd. Since the said document had been seized from the residence of Assessee, the CIT (A) drew a presumption under Section 292C of the Act was that it belonged to him. Further, the CIT(A) proceeded on the basis that the figure of '8050' was in fact ₹ 80,50,000 and, constituted the unexplained income of the Assessee, since the Assessee had not submitted any evidence like a confirmation letter or any other document to show that expenditure related to Omaxe Ltd. 6. The ITAT in the impugned order noted that the document was silent as to the payer and payee of the amount in question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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