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TMI Blog2018 (6) TMI 1224X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of search, evidence in the form of original blank cheques and original promissory notes, which were obtained by the assessee from the customers towards security for advancing the loans were found and seized. He observed that a cheque drawn on SBH, Kavadiguda branch is a blank signed cheque dated 08.02.2006 given by the proprietor of M/s Sri Raja Rajeshwari Steel Traders for an amount of Rs. 10 lakhs and that the cheque did not contain the details of the payee. The assessee was asked to explain as to why the blank cheques were lying with him during the course of search itself and the assessee stated that this cheque belonged to the person, who intended to obtain loan from him and also further deposed that he has not advanced any amounts to them. 3.1 During the course of assessment proceedings, summons u/s 131 of the IT Act were issued to Sri G. Rajeswara Rao, proprietor of M/s. Sri Raja Rajeswari Steel Traders, who did not appear. Therefore summons were issued to close relative of Shri Rajeswara Rao, Shri G. Ram Mohan, who stated that shri Rajeswara Rao borrowed huge amounts and due to heavy pressure for repayment of loans, he has run away from Hyderabad and his whereabouts ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk statements and submitted that the bills for purchase and sales are not available with him. The A.O observed that the assessee has not maintained books of accounts even though his turnover exceeded Rs. 40 lakhs for some of the years. He, therefore, held that the books of accounts maintained by the assessee are not reliable and accordingly rejected the same and estimated the net profit at a uniform rate of 6% for all the years. Accordingly, he brought a sum of Rs. 76,600/- to tax for the relevant assessment year. 3.4 The A.O also observed from the computation of income, that the assessee has claimed the deduction u/s 80U of the IT Act of Rs. 50,000/- for physical disability and submitted a certificate issued by the Civil Surgeon, Gandhi Hospital in support of his claim. However, when he was asked to prove the genuineness of the certificate , the assessee had agreed to withdraw the claim made u/s 80U of the IT Act. Accordingly, the same was disallowed and brought it to tax. 4. Aggrieved by all the above disallowance and additions, the assessee preferred an appeal before the CIT(A), who confirmed the order of the A.O and the assessee is in second appeal before us by raising the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in conf irming the addition made by the A.O without f ollowing the decision of Hon'ble ITAT in the appellant's own case f or the A.Ys 2005-06 and 2007-08 in ITA Nos 1390, 1391/Hyd/2010 dated 17.06.2015. Where in it has been held that, it is trite law that in the absence of any incriminating material suggesting that book results should be rejected the addition cannot be made on estimate basis in the assessment made u/s 153A. 15. The Ld. CIT(A) erred in conf irming the disallowance of deduction claimed u/s 80U of the Act f or Rs. 50,000/-. 16. The Ld. CIT(A) erred in conf irming the disallowance of Rs. 50,000/- claimed u/s 80U of the Act in the asst. completed u/s 143(3) r.w.s 153A even though there is no incriminating material suggesting the disallowance. 17. The assessee may add, alter, or modif y or substitute any other points to the grounds of appeal at any time bef ore or at the time of hearing of appeal. 4.1 Further, the assessee has also raised the above grounds as only additional grounds of appeal along with an application for admission of the same stating as under: "In respect of the ground of appeal f iled from serial No. 1 to 17 in respect of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rite law that in the absence of any incriminating material suggesting that book results should be rejected the addition cannot be made on estimate basis in the assessment made u/s 153A. Accordingly, the addition is deleted. Hence, this ground of appeal f iled by the assessee is allowed". 9.1 Respectfully following the same, the grounds of appeal No. 12 to 14 are allowed and the addition after estimation of income @ 6% by the A.O and CIT(A) is deleted. 9.2 As regards the addition of Rs. 10 lakhs in grounds 4 to 7 are concerned, I find that the during the course of search, certain blank signed cheques were found in the possession of the assessee, however, the proprietor of Shri Raja Rajeswari Steel Traders could not be traced and the signatures on the cheques were only confirmed by the relative of Shri G. Rajeswar Rao i.e Shri G. Ram Mohan. The transaction of the loan has not been proved either by Shri Rajeswar Rao or by Shri G. Ram Mohan. Further, similar issue had arisen in the assessee's own case for the A.Y 2005-06, wherein at para 6 of the order, the Tribunal has deleted the additions by observing as under: "6. The next ground relates to the addition of Rs. 2,15,000/- based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant, the addition should be upheld. 9. We heard the rival parties. We noticed that the addition was made by the AO based on the Xerox copies of blank signed cheques and promissory notes issued by the f ollowing: S. No. Date of Cheque Cheque No. Name of person issued Amount mentioned on cheque 1. 12.04.2004 499869 M/s. Diamond Steel Corporation 1,15,000 2 23.07.2004 300051 Md. Shameen 1,00,000 Total: 2,15,000 The statement given by the proprietor of M/s. Diamond Steel Corporation was not confronted with the appellant and whereas the statement given by Mr. Md. Shamim that no loan was obtained by him remains un-controverted. Thus, there is no conclusive evidence on record in support of the allegation that the appellant had advanced the money to these two parties and the original seized photo copies and material are not brought on record nor traced. In these circumstances, we are not in a position to uphold the addition. Hence, this ground of appeal is deleted. 9.3 In the relevant assessment year before us also, the alleged loan given to Sri Rajeswar Rao has not been proved. Respectfully following the above decisions on similar set ..... X X X X Extracts X X X X X X X X Extracts X X X X
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