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TMI Blog2019 (2) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... undisclosed investment found on the basis of documents recovered in search of one another firm's premises. The investment was said to be on account of purchase of certain landed properties for the purpose of building multistoreyed complexes in a project named Cordial Regency. Assessment was made on M/s.Cordial Developers and on a protective basis, it was made on M/s.Cordial Company, both of which were set aside by the first appellate authority, which order stood confirmed by the Income Tax Appellate Tribunal. 2. The questions of law are re-framed as follows: (1) Whether, on the facts and in the circumstances of the case, the document recovered on search can be presumed to be true and correct under Section 292C of the Income Tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts had handwritten recitals which tallied with the handwriting of one of the partners of the assessee-firms being Sri.N Ayyappan Unnithan. The AO, hence, made an addition of Rs. 80,34,100/- as undisclosed investments under Section 69. Notice was initially issued under Section 68, proposing addition of unexplained credits; but eventually the additions were made under Section 69 as undisclosed investments. There was a further addition made of Rs. 7,48,750/-, which was a cheque payment made by one of the assesseefirms to T.S.Asok, one of its partners, which was said to be refund of advance paid on a property. The same was added on as unexplained credit. 5. The learned Standing Counsel, Government of India (Taxes) would contend that the white ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority that there is absolutely no corroborative evidence disclosed from the said orders. The proposal as extracted in the assessment orders would indicate that the AO had been relying on certain handwritten notes made by one of the partners of the assesseefirms (Sri.Ayyappan Unnithan) as an evidence against the assessee-firms. However, it is not clear as to what was the admitted handwritten document, which was verified by the AO to find that the documents seized from another firm showed the handwriting of one of the partners of the assessee-firms. The learned Standing Counsel would argue that such strict rules of evidence may not apply in the case of assessment for income tax. We do not find any strict rule being applied herein, since what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot, nor can the A.O assume that the sellers or their circumstances, would not disclose payments having been made in excess of that shown in the sale deeds. 9. Again we also observe that the specific bank transactions referred to by the AO, have not been cross verified with the exact amounts shown as investments in the documents seized from M/s.Atech Group. We cannot but find that the assessment has been carried out in a slip-shod manner especially noticing the fact that the firm and the partners individually are seen to have made investments in black in the document recovered from that other firm. There are no proceedings taken against the partners individually. But however, a protective assessment has been made in the name of one anot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e disbelieved by the A.O. The first appellate authority rightly found that the cheque payment was a debit as seen from the accounts of the assessee and there was no reason to assume an unexplained credit. We perfectly agree with that and find no question of law arising therefrom. 12. The first two questions of law has to be answered against the Revenue and in favour of the assessee. Insofar as the first appellate authority having not remanded the matter, on facts it is seen that the first appellate authority specifically called for a remand report from the AO; along with the documents produced by the assessee-firms before the first appellate authority. The AO even then did not carry out a proper enquiry. We, hence, find that the third ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal before the Tribunal. The Tribunal set aside the entire addition on the ground that there was absolutely no corroborative evidence to find any additional sum having been received by the assessee firm. 16. Here we find Section 292C of the Act to be squarely applicable, since the document relied on was with respect to the assessee firm itself. One of the seized documents A34 [page 33 and page 4] showed that Smt.Valsala Raj paid Rs. 40 lakhs by cash and the actual purchase price of the flat was Rs. 1,33,06,300/-. The actual price was evidenced by seized document [A33 page 72], which is a printed sheet giving the details regarding payments received for flat booking of Cordial Tower. In that particular sheet, the amount received by cheque is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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