TMI Blog2016 (5) TMI 1503X X X X Extracts X X X X X X X X Extracts X X X X ..... ch diary. - for verifying the claim of the assessee as regard to the sources of aforesaid ₹ 1,33,37,500/-, we restore the matter to the file of the AO with a specific direction that he would correlate the investment of ₹ 1,33,37,500/- with the funds shown to have been received by the assessee from various persons, either as borrowing or as custodian, as per the diary BS-8. If the sources of such investments are not found correlated, the addition to that extent, subject to maximum of ₹ 1,33,37,500/- shall be maintained in respect of unexplained investment in land at Bhaurasla. Accordingly, the grounds of appeal of the assessee 1(a) and 1(b) are partly allowed and ground No.6 of the Revenue is dismissed. Addition based on loose sheets found in search - HELD THAT:- The various documentary evidences furnished by assessee have not been contravend by the CIT DR. The remaining sum of ₹ 62,41,650/- was paid by the assessee in cash to Shri Mohan Chugh for which, no corroborative evidence was found available with the assessee. The assessee had paid only a sum of ₹ 11,00,000/- to Shri Kamal Kumar. We find that out of sum of ₹ 18,42,50,000/- shown to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngle evidence can be found as regard to making of any investment by the assessee in any property in Dubai. In our country any remittance, out of India, other than through banking channel is an offence and it is not the case of the Revenue that any Enforcement Agency has taken any action against the assessee on allegation of any Hawala transaction. There cannot be two views for the preposition that the funds of ₹ 5,00,00,000/- were very well available with the assessee for making investment in Bhopal land. Thus, there cannot be said to be any infirmity in the CIT(A) s action in granting set-off of a sum of ₹ 4,93,73,000/- to the assessee against the investment in Bhopal Land. In respect of addition of ₹ 2,86,00,000/-, it is the contention of the assessee that a sum of Rs. ₹ 1,00,00,000/- was directly paid by one company named and titled as M/s. MoneyCare Finance Leasing Pvt. Ltd. to the sellers of the land. In support of the above assertion, assessee has filed a copy of audited financial statements as of 31-03- 2008 of the above named company as PB-198. In such balance sheet, two advances of ₹ 87,50,000/- and of ₹ 12,50,000/- have been shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestor money, therefore, this contention of the assessee was rejected by the CIT(A). We hereby modify the direction of the CIT(A) to the extent that the assessee should be given full credit for cash withdrawn by him from his saving bank accounts for explaining the sources of cash deposits made in such accounts. Thus, the grounds of the assessee are partly allowed and that of the Revenue are dismissed. Unexplained investment in the hands of the assessee either under s. 69 or 69B - CIT(A) has held that the document was found from the third party but assessee is director of the said company and as per the submission, ₹ 2 crores were received from Money Care Finance Leasing Ltd. and ₹ 25 lacs from Smt. Roshni Doshi - HELD THAT:- CIT(A) has treated 2 crores as explained deposit, we find that before the CIT(A), the assessee could be able to explain the genuineness of deposit of ₹ 2 crores made by M/s. Money Care Leasing and Finance P. Ltd. by producing all the necessary documentary evidences. We also find that the CIT(A) has directed the AO to inform the concerned AO in respect of introduction of ₹ 2 crores for necessary action. Therefore, on the issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has directed to make the further inquiry which ld. CIT(A) has no powers but looking into the facts and circumstances of the case, we feel it appropriate to direct the AO to make further inquiry as per the directions given elsewhere in this order which powers are well within the jurisdiction of the Tribunal. Therefore, in our opinion, the departmental ground is deserved to be dismissed and hence, it is dismissed. Addition u/s. 68 - whether AO has not established that the assessee has borrowed such loans on Hundi and no Hundi, either live or discharged, was found and seized from any business premises of the group? - HELD THAT:- Provisions of s. 68 cannot be invoked. Even otherwise, The AO himself at various places in the body of the assessment order has firmly stated that the assessee had borrowed funds from various persons and, therefore, having given such finding of genuineness of the borrowing there does not remain any scope for the AO to make any addition in the assessee s hands by regarding the same as his undisclosed income. For such proposition, we rely on the decision of Hon ble ITAT Jodhpur Bench in the case of Sunil Rathi Alias Jitendra Rathi vs. ACIT [ 2007 (9) TMI 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umb documents. These documents do not contain any date or period. These documents also do not contain details that whether these are of nature of receipt or payment. AO has not made any inquiry after loose paper found. The AO has held that some companies like, M/s. Neel I Ltd. and M/s. CS Developers has made investment in their property. We find that ld. CIT(A) has held that the AO has not made any inquiry whether the assessee has made investment in the Dubai property or in M/s. Neel 1 Ltd. or CS Developers who have allegedly made investment in the property. The ld. CIT(A) has further held that if alleged Dubai hawala is made by the assessee, no action has been taken by the other govt. agencies as Enforcement Director, Fema Authorities. CIT(A) has also given the direction to the AO that if the E.D. or Fema Authorities or any authorities regulating the remittance of money from India gives any conclusive finding as regard making of hawala transaction by the assessee then the AO would be free to take action against the assessee in accordance with the provisions of law. We find that when ld. CIT(A) has given the specific direction and the Department is not bringing any evidence that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment allegedly made by the assessee to Shri Chirag Shah - HELD THAT:- As the details enumerated by A.O. clearly evident that payment of ₹ 50,00,000/- was made by assessee, which was duly vouched as detailed by A.O. in the order, hence by no circumstances such duly acknowledged vouchers can be held to be wrong. In view of the same, we consider it proper and appropriate to hold that the addition made by AO of ₹ 50,00,000/- is completely justified and correct. Accordingly the addition so made by A.O. is confirmed. However, we are in agreement with the direction of the ld. CIT(A) that the assessee has already offered additional income of ₹ 1,45,00,000/- as per return filed u/s 153A of the Act, hence, we direct the A.O. to give telescopic credit of such additional income offered against the aforesaid addition - IT(SS)A Nos. 182 to 184/Ind/2013 ITA No.538/Ind/2013, IT(SS)A Nos. 249, 250, 251/Ind/2013 ITA No.563/Ind/2013 - - - Dated:- 17-5-2016 - SHRI D.T. GARASIA, JUDICIAL MEMBER And SHRI B.C. MEENA, ACCOUNTANT MEMBER For the Appellant : Shri Anil Kamal Garg and Shri Arpit Gaur, CAs For the Respondent : Shri Rajeev Varshney and S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciating and accepting the explanation of the appellant. b). That, without prejudice to the above, as an alternative ground, the learned Assessing Officer grossly erred in making the impugned addition of ₹ 10,63,37,500/- in the appellant's income, without giving any set-off to the appellant in respect of availability of funds in his hands, as a custodian of money, which were either borrowed by others on Promissory Notes and remained with the appellant or which were provided by the investors associated with the appellant or which were retained by the appellant out of the plot booking advances received by him on behalf of the companies in which he was one of the directors. 3a). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming addition to the extent of ₹ 2,86,00,000/-, made by the learned AO, in the appellant s income, on account of alleged unexplained investment in certain Agricultural Lands situated at Bhopal. b) That, without prejudice to the above, as an alternative ground, the learned CIT(A) grossly erred in confirming the addition to the extent of ₹ 2,86,00,000/- in the appellant& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rossly erred, both on facts and in law, in confirming addition to the extent of ₹ 25,00,000/-, in respect of the funds arranged by the appellant from one Smt. Roshni Doshi, a Non-Residence Indian, through account payee cheque, for a company namely M/s. Phoenix Devcons Pvt. Ltd. in which the appellant was one of the directors. c) That, without prejudice to the above, the learned CIT(A) grossly erred, in confirming the impugned addition without considering the material fact that in respect of the same share application money a similar addition by making enhancement was made by the same CIT(A) in the hands of M/s. Phoenix Devcons Pvt. Ltd., on substantive basis which resulted in the same addition twice. 6a). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming addition to the extent of ₹ 1,00,00,000/-, made by the learned AO, in the appellant s income, on account of unaccounted receipts made by the appellant from 'M/s. Phoenix Devcons Pvt. Ltd.', without properly considering and accepting the explanation of the appellant. b) That, without prejudice to the above, the learned CIT(A) grossly erred, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of search had details of hundi transactions of Manish Kedia, Sushil Golecha, Rohit Sethi, Nilesh Doshi, Raju Doshi, K.Goyal et. al. and it had narration of entries like name, start date, amount, duration, first renew date, end date, interest, dalali etc. which established the borrowing and repayment on hundies being made in cash as pointed out by the AO in the assessment order. 2.3 While holding so the ld. CIT(A) further erred in holding that the seized dairies cannot be treated as books of accounts whereas in view of the transactions recorded therein being unexplained the said material/diaries fell in the inclusive definition of books of accounts as defined u/s. 2(12A) of the I.T. Act. 2.4 While holding so the ld. CIT (A) grossly erred in not appreciating that to the commissions issued by his office the above named hundi providers were not found at the given addresses. 2.5 On the facts and the circumstances of the case the order of the ld. CIT(A) can be said to be perverse on facts because of the contradictory collusions drawn in the body of the order which could not have been drawn by any reasonable person or authority on such mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT(A) erred in accepting additional documentary evidence in violation of Rule 46A of the I.T. Rules without confronting it to the AO and the order passed on this issue was in violation of principle of natural justice. 6. On the facts and the circumstances of the case the ld. CIT(A) erred in deleting the protective addition of ₹ 24,51,62,000/- made on account of unexplained expenditure on purchase of land in the absence of any recording to that extent in the seized papers when the AO made the addition of ₹ 41.10 crore for the transaction in said land based on the statement of the sellers as well as the documents and jottings on the loose papers as seized per LPS A-9 and BS-8. 7. It is, therefore, prayed that the order of the CIT(A) may be set aside and the order of the AO may please be restored. 8. The appellant craves to add, alter or amend any of the grounds of appeal The assessee also raised one additional ground which reads as under: That, the learned CIT(A) grossly erred, in law, in directing the addition of ₹ 16,48,38,000/- in the appellant s income, on account of alleged unexplaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale agreements, the company had not come into existence and therefore, he directed to delete such addition in the hands of the company which were made by the AO on substantive basis. However, the CIT(A) was of the view that the payments of the entire sale consideration, as stated in the sale agreements, were made by the assessee and therefore, the CIT(A) issued a show-cause notice of enhancement, dated 22-02-2013, to the assessee under s.251(2) of the Act. A copy of such notice was filed by the assessee at Page No. 238 of his Paper Book. As per such notice, the assessee was required to clarify the matter as to why an enhancement of ₹ 1,33,37,500/- be not made, under s. 251 of the I.T. Act, 1961 in his income on substantive basis. However, while passing the Order, the CIT(A) vide para 16.6 of his Order made an enhancement of ₹ 16,48,38,000/- in the assessee s income, on substantive basis, on account of investment in Bhaurasla land. Against the action of the CIT(A) in making enhancement of ₹ 16,48,38,000/-, on substantive basis, as against the amount of enhancement stated in the show-cause notice at ₹ 1,33,37,500/-, the assessee has raised the additional groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of enhancement in the show-cause notice under s. 251 was merely a typographical error on the part of the CIT(A) and merely for such an error, the enhancement, which is otherwise, in accordance with law, cannot be deleted. The ld. CIT DR further submits that in such an eventuality, at the worst, the entire issue deserves to be restored back to the file of the CIT(A). We have heard the rival contentions of both the parties. We are of the view that the very purpose of giving an opportunity of being heard to an appellant under the provisions of section 251(2) of the I.T. Act, 1961 is to make him aware of the proposed enhancement of income. In this case, we find that having made an addition of a higher amount of ₹ 41,10,00,000/- on the protective basis, the assessee was well aware of the case of the Revenue on the subject issue right from the stage of the assessment. Against such addition, which was made in his assessment on protective basis, the assessee had also raised a specific ground in his appeal before the CIT(A). The very genesis of making a protective addition in someone s hands lies in the theory that if for any reason, the corresponding substantive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO also took note of certain loose papers inventorised as part of Annexure A-1, seized from the residential premises of the assessee. Based upon the jottings on the loose papers seized from the premises of the assessee, the AO arrived at a conclusion that the total amount of investment in the said land was to the extent of ₹ 41,10,00,000/- and not only of ₹ 16,48,38,000/- as found mentioned in the various sale agreements seized from the business premises of PDPL. The AO also drawn reference from one diary seized from the assessee s premises and inventorized as BS- 8 in which certain payments against the said land were shown. Accordingly, the AO made the addition of ₹ 41,10,00,000/- in the PDPL s income under the head unexplained expenditure in Bhourasla land on substantive basis with the corresponding addition in the hands of the assessee on protective basis. The relevant findings of the Assessing Officer are recorded at Para 8.1 to Para 8.18 from Page No. 9 to 23 of the assessment order. Matter carried to CIT(A) and CIT(A) has confirmed the addition of ₹ 16,48,38,000/- and deleted the addition of ₹ 24,51,62,000/-, therefore, Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cept of making a cash payment of ₹ 1,33,37,500/- for Bhaursala land deal. The appellant also claimed that said payment of ₹ 1,33,37,500/- was made out of on-money earned by the appellant. However in view of detailed discussion made by A.O. specifically of facts noted from para-8.2 to 8.10 of the order, wherein the statements of the sellers were noted and wherein they have specifically accepted of executing the same in favour of M/s PDPL. Not only this event the circumstantial evidence which is found in the form of LPS-A/9 and also annexure A-1 from residential premises of the appellant from Mumbai and the BS-8 diary from where the details of payment has been co-related by the A.O. in a very specific manner and detailed in para-8.11 to 8.14 of the said order, I am of the considered view that the appellant s request of not making any investment in Bhaursala Land cannot be accepted in the given facts of the appellant s case. In my considered view as the Vikray Anubhand Patra were signed by the sellers in the favour of M/s PDPL, which were duly counter signed by witnesses for the said transaction is a substantial evidence for such assertion. Not only this, the details of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tered by the appellant, which is evident from the statement of the sellers, as enumerated and extracted by A.O. in para-8.4 to 8.10 of the order. In view of the same, I consider it proper and appropriate to confirm the addition of ₹ 16,48,38,000/- in the hands of the appellant on substantive basis, as the details of such payment and documents were seized from the possession of the appellant. Besides this, the appellant is a director of M/s PDPL and actively involved in the business transaction of M/s PDPL, which is evident from the details noted in LPS-A/9 and BS-8 diary as well as page-91 to 95 of Annexure A-1, which was seized from appellant s residential premises at Mumbai. In the result, the addition made by the A.O. to the extent of ₹ 16,48,38,000/- is confirmed. Thus, appellant s these grounds of appeal are partly allowed. The ld. AR has filed the following written submission on the above issue: In the instant case, the learned CIT(A) has confirmed the impugned addition merely on the basis of certain incomplete, unsigned, undated and unexecuted agreements allegedly found from a third party s premises i.e. from M/s. Phoenix Devcons Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] iii) ACIT vs. Radheshyam Poddar (1992) 41 ITD (Kol) 449 [JCB Page No. 69 to 73] iv) Addl. CIT vs. Miss Lata Mangeshkar (1974) 97 ITR 696 (Bom.) It is submitted that if any document is to be relied upon as an evidence then its entire contents have to be read and interpreted in its totality and part reference on pick-and-choose method should not be permitted. From a perusal of the sale agreements, and summary thereof placed on page No.263 of the assessee s paper-book, it would be observed by Your Honours that as per these agreements only a sum of ₹ 39,37,500/-, ₹ 3,72,500/-, ₹ 41,02,500/-, ₹ 8,36,250/- and ₹ 40,88,750/- have been stated to have been paid, on 03-09-2007, respectively to Shri Babulal Khati, Shri Malkhan Khati, Shri Badrilal Khati, Smt. Surajbai Khati and Shri Kedar Khati aggregating to a sum of ₹ 1,33,37,500/-. For the remaining consideration, there is mention of payment of schedule for future dates with the narration shall be paid . It shall be appreciated that the ld. AO has not given any finding to the effect that any evidence was found by him as regard to making of the payment by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents to the sellers, as noted by the AO vide para 8.14 of the assessment order, have been made from the bank accounts of Shri Ranveer Singh Chhabra. By producing the bank statements/financial statements/audited records, we could be able to establish the genuineness and existence of both the companies . It is submitted that even in the case of M/s. Arcadia Devcons Pvt. Ltd. assessment u/s 148/143(3) was framed for A.Y. 2010-11 by ITO-3(1) and during the course of such assessment, the sources of such company for purchase of the subject land were examined by the AO. The fact remained that the assessee had initially made the agreements for purchase of subject lands by paying an aggregate sum of ₹ 1,33,37,500/- in cash out of his own resources (his constituents funds) as token advance and subsequently, the assessee had sold the entire deal to M/s. M.R. Devcons Pvt. Ltd. and M/s. Arcadia Devcons Pvt. Ltd.. Accordingly, these two companies, after making subsequent payments from time to time, from their own resources, got the subject land registered in their own name and became the owners. From the computer print outs or other loose papers referred to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - was made by the assessee not from his own money but it was made by him only as a mediator on behalf of his various investors by receiving funds either directly from the investors themselves or from various persons as borrowing on behalf of the investors. The details of receipts of such funds are evident from the BS-8 diary which was found and seized from the assessee s premises. It is further submitted that at various places like at para 12.5 of the assessment order, the AO himself has given clear finding that the assessee had borrowed funds from Shri Manish Kedia, Shri Sushil Golecha, Shri Rohit Sethi, etc. Therefore, once the borrowing of the funds by the assessee is admitted by the revenue itself, its availability for making investment by the assessee in various assets cannot be ruled out. It is further submitted that in the BS-8 diary, the receipt of funds by the assessee from various persons have clearly been reflected and the authenticity of such diary was duly accepted in so many words by the AO himself, in the body of the assessment order itself, therefore, following the principle of complete reliance on one document, due weightage deserves to be given to the sources of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecause details of 41.10 crore are given specifically on the seized documents of page 91 and 95 of Ann. A/1 which was found seized from residence of Shri Nelesh Ajmera at Bombay and also on excel sheet, taken from assessee's computer against which assessee could not submit any satisfactory evidences/explanation and thus, it cannot be said that the amount of 41.10 crore was taken by AO on estimated basis. Moreover contents of those seized documents have also been correlated with main seized document of LPS A/9 and thus, it is clearly proved that actual payment was made of ₹ 41.10 crore and therefore, findings of CIT (A) to that extend is not justified and same may kindly be set aside. We have heard rival contentions of both the parties. This is the search case wherein as per the AO, in the premises of one of the companies namely M/s. Phoenix Devcons Ltd. in which the assessee is one of the directors, certain sale agreements having been executed between abovenamed company and seller of the land situated at Village Bhaurasala for total consideration of ₹ 164838000 were found and seized. However, ld. CIT(A) has confirmed the addition of ₹ 164838000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing funds either directly from the investors or from various persons as borrowings from the investors.In view of the above facts, in our opinion, though the document was found from the possession of the assessee, the assessee has not made the entire investment in the Bhaurasala land. We are of the view that the strict rules of evidence are not applicable in income-tax proceedings and we hold that assessee had entered into agreement with six agreements for purchase of 11.592 hectares land situated at village Bhourasala with Shri Kedar Patel and others for a total consideration of ₹ 16,48,38,000/-. We also find from the copies of the agreements filed by the assessee at page nos. 239 to 262 of the paper book that these agreements were entered into by the assessee on 03.9.2007 and we also find that the co. M/s. PDPL, on whose behalf these agreements were purported to have been executed, had come into existence on 24.9.2007. From the agreements, we noted that the first payments to the sellers were made in cash and thus there cannot be any doubt that such payments were made by the assessee and not by the company. During the course of hearing, we directed the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of schedule for future dates with the narration shall be paid . We find that ld. AO has not given any finding to the effect that any evidence was found as regard to making of the payment to the sellers of the land on the various dates subsequent to the first payment date i.e. 03-09-2007. We find that even from the bank statements of the sellers of the land, as referred to by the AO, at para 8.14 of his order, no finding as regard to making of payment by the assessee to the sellers of the land was noted by the AO. After having paid the advance of ₹ 1,33,37,500/-, as noted in the sale agreements, the assessee could not make any further payment to the sellers of the land with the result that the sellers had ultimately sold the land to some third parties. In our considered view, it is not in dispute that the assessee did not own the subject land at any point of time and even from the statements of the sellers as recorded by the AO, under s. 131 of the Act, the above fact has clearly emerged out. Such fact further gets fortified from the findings given by the AO himself at para 8.15 of the impugned order in which he has clearly said that the registries of the said land were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the contrary, as per the AO s own findings the payments stated in such diary against the subject land were to the extent of ₹ 52,00,000/- only. In nutshell, the excel sheet referred to by the AO does not pertain to the Bhourasla land in respect of which sale agreements were found. Accordingly, in our view, there was absolutely no justification for the AO to estimate the investment in the Bhourasla land at ₹ 41,10,00,000/- by committing a patent error of linking the agreements pertaining to Bhourasla land with the excel sheets pertaining to some other project/land. We accordingly find that the assessee had made payments aggregating to a sum of ₹ 1,33,37,500/- only, during the previous year under consideration, for the purchase of the land at Bhourasla. Accordingly, the same is liable for addition u/s 69/69B of the Income-Tax Act. Assessee has taken a plea that even such investment of ₹ 1,33,37,500/- was made by the assessee on behalf of his various investors by receiving funds either directly from the investors themselves or from various persons as borrowing on behalf of the investors. The details of receipts of such funds are evident from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Piplya Kumar, near Bombay Hospital, Indore and it was a residential project spanning the area of over 2 lakh square feet. The AO further noted that from the various loose papers found during the course of search, it was found that the assessee had paid certain amount for acquiring the land at village Piplya Kumar but recorded only a part of expenditure in the books of M/s. Phoenix Leisure Lifestyle Pvt. Ltd. The AO required the above named company to furnish the details regarding investment made in the purchase of the land and sources of the investment in such land. In reply, the above named company submitted before the AO that since the Phoenix Green Project was being carried out under a ratio deal agreement and, therefore, it was not required to make any purchases of the land. Subsequently, the AO issued a summons under s. 131 to the assessee. The assessee, while making the statement before the AO, also stated the same facts i.e. Phoenix Green Project was on ratio deal basis. The assessee also stated in person before the AO that the ratio deal was subsequently cancelled and no payment was required to be made either by himself or by M/s. Phoenix Leisure Lifestyles Pvt. Ltd. t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of ₹ 21,26,75,000/- which comprises cost of purchases from Shri Mohan Chugh and Shri Kamal Kumar respectively at ₹ 18,73,00,000/- and ₹ 2,53,75,000/-. According to the AO, there was no clear-cut demarcation as to in which year the investments have been made and, therefore, the AO assumed that the payments were made equally in two assessment years i.e. in A.Y. 2008-09 and A.Y. 2009-10 and, consequently, addition to the extent of ₹ 10,63,37,500/- was made in the income of the assessee in each of the two assessment years. It is submitted that in the instant case, the impugned addition so made is a result of bald estimation and guess work of the learned AO inasmuch the learned AO himself, without being sure about the actual previous year of the alleged transactions, divided the total addition of ₹ 21,26,75,000/-, equally, in two assessment years viz. A.Y. 2008-09 and A.Y. 2009-10. It is submitted that the very first and foremost condition for invoking the provisions of section 69/69B of the Act are that assessee must be found to have made certain investments in the financial year immediately preceding the relevant assessment year and witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year under consideration i.e. A.Y. 2008-09, the assessee, in the capacity of the promoter and director of a company named and titled as M/s. Phoenix Leisure Lifestyle Pvt. Ltd. [for the sake of brevity referred to as PLLPL ], had entered into one MOU for development of certain pieces of land admeasuring nearly 1.023 hectares situated at village Piplya Kumar near Bombay Hospital, Indore with the owner of such land namely M/s. Shivalika Realities Pvt. Ltd. [for the sake of brevity referred to as SRPL ]. As per the MOU, certain residential multi-storey building blocks were proposed to be constructed by PLLPL at its own cost on the land owned by SRPL. In consideration, the SRPL was to receive 35% share in the constructed property and PLLPL was to receive 65% share in the constructed property. The PLLPL started constructing the residential buildings on the said land and also started booking of the flats. From booking of the flats, the assessee received some on-money which has been separately added by the AO in the assessment of M/s. Phoenix Leisure Lifestyle Pvt. Ltd.. The receipt of on-money, in the individual capacity, was admitted by the assessee as well as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chugh and Shri Kamal Kumar. It may be noted that on such loose paper under the column of area there is a mention of 2,04,800 sq. fts. which is the total area of the project under reference. It is submitted that when there are ample of documentary evidences as regard to payment made to Shri Mohan Chugh but except the noting made in above referred excel sheet inventorized as LPS-A/23 page No.182, 184 and 186, as regard to payment of ₹ 11,00,000/- there is no other evidence in respect of any other payment made to Shri Kamal Kumar In all these excel sheets, payments to Shri Kamal Kumar have been shown at ₹ 11,00,000/- only and remaining ₹ 2,42,75,000/- have been shown as due. It is a settled law that in the assessment there is no scope for any bald estimation and, further, it is also a settled law that any document has to be relied upon in its entirety and, therefore, based upon LPS-A/23 page No.182, 184 and 186, it has to be inferred that the payments made to Shri Kamal Kumar were not to the extent of ₹ 2,53,75,000/- but these were to the extent of ₹ 11,00,000/- only as noted above. It is submitted that LPS-A/3 page No.21 [PB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ₹ 2,35,91,432/-. As against such booking receipts of ₹ 7,43,70,652/-, payments towards indirect expenses and development expenses have been shown respectively at ₹ 38,43,113/- and ₹ 2,17,69,190/- aggregating to ₹ 2,56,12,303/-. Thus, after making the payments, there can remain availability of funds for making any other payment to the extent of ₹ 4,87,58,349/- only but in the said account a sum of ₹ 18,42,50,000/- has been shown to have been paid to Shri Mohanlal Chugh and because of showing of such payment, there is reflecting a negative cash balance i.e. deficiency of ₹ 13,54,91,651/- at the bottom of the said receipt payment account. Such negative cash balance proves that the receipt and payment account was not correct. In fact, the aforesaid sum of ₹ 18,42,50,000/- was proposed to be given by the assessee Shri Mohan Chugh in three modes (i) ₹ 8,00,00,000/- in form of plot belonging to Shri Nitish Doshi situated in Dubai; (ii) a sum of ₹ 7,80,00,000/- in form of cash and cheque; and (iii) remaining ₹ 2,62,50,000/- in form of Shri Mohan Chugh s share in the flats of the project which was to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book. The various documentary evidences furnished by us have not been contravend by the CIT DR. The remaining sum of ₹ 62,41,650/- was paid by the assessee in cash to Shri Mohan Chugh for which, presently, no corroborative evidences are available with the assessee. To sum up, it is submitted that the assessee had paid only a sum of ₹ 11,00,000/- to Shri Kamal Kumar. Further, out of sum of ₹ 18,42,50,000/- shown to have been paid to Shri Mohan Chugh at page No.25 of LPS-A/3, a sum of ₹ 8,00,00,000/- and ₹ 2,62,50,000/- were respectively purported to have been given in the form of plot in Dubai and flats in the projects. For such purported payments in kind, no case of unexplained investment can be made against the assessee. The assessee had paid only a sum of ₹ 7,80,00,000/-, in form of cash/ cheque, out of which a sum of ₹ 2,30,00,000/- was paid through explained sources i.e. through cheques of the companies and the remaining ₹ 5,50,00,000/- was paid in form of cash. Again out of ₹ 5,50,00,000/- a sum of ₹ 4,87,58,350/- was made out of the onmoney received against booking of flats in the project Phoenix Green ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm of some computer printouts taken during the course of the search in the premises of a company named styled as 'M/s. Phoenix Devcons Pvt. Ltd.Such fact is evident from the findings given by the AO himself at para 15.5.1 at page no. 95 of the assessment order. It is a settled law that presumption as contemplated under s.292C and s.132(4A) is not available in respect of the documents not found in the premises of the assessee but in the premises of someone else. The AO relied on one loose paper inventorized as Page No. 25 of LPS-A/3 [filed at Page No. 320 of the paper book] for making the impugned addition by alleging that the assessee had made payment amounting to ₹ 18,42,50,000/- to Shri Mohan Chugh out of his undisclosed income. Such loose paper is purported to be in the form of receipts and payments. However, on a perusal of such purported receipt payment statement, it is observed that there is resulting excess of payments over receipts by a sum of ₹ 13,54,91,650/-. However, the sources of meeting such deficiencies have not been mentioned on such statement. In any receipt payment account, without having any opening cash balance, the aggregate of payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rea, there is mention of 2,04,800 sq.ft. which is total area of project. As regards to payment made to Shri Mohan Chugh, there are ample documentary evidences but except the noting made in above referred excel sheet inventorized as LPS-A/23 page No.182, 184 and 186, as regard to payment of ₹ 11,00,000/- there is no other evidence in respect of any other payment made to Shri Kamal Kumar. In all these excel sheets, payments to Shri Kamal Kumar have been shown at ₹ 11,00,000/- only and remaining ₹ 2,42,75,000/- have been shown as due. It is a settled law that in the assessment there is no scope for any bald estimation and, further, it is also a settled law that any document has to be relied upon in its entirety and, therefore, based upon LPSA/ 23 page No.182, 184 and 186, it has to be inferred that the payments made to Shri Kamal Kumar were not to the extent of ₹ 2,53,75,000/- but these were to the extent of ₹ 11,00,000/- only as noted above. LPS-A/3 page No.21 [PB 317] contains the complete details of the subject deal and as also the mode, manner and amount paid by the assessee towards the subject deal. As per such loose paper, the ratio of Shri Mohan Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking any other payment to the extent of ₹ 4,87,58,349/- only but in the said account a sum of ₹ 18,42,50,000/- has been shown to have been paid to Shri Mohanlal Chugh and because of showing of such payment, there is reflecting a negative cash balance i.e. deficiency of ₹ 13,54,91,651/- at the bottom of the said receipt payment account. Such negative cash balance proves that the receipt and payment account was not correct. From the evidences on record, it transpires that the aforesaid sum of ₹ 18,42,50,000/- was proposed to be given by the assessee to Shri Mohan Chugh in three modes (i) ₹ 8,00,00,000/- in form of plot belonging to Shri Nitish Doshi situated in Dubai; (ii) a sum of ₹ 7,80,00,000/- in form of cash and cheque; and (iii) remaining ₹ 2,62,50,000/- in form of Shri Mohan Chugh s share in the flats of the project which was to be constructed under the ratio deal. Since eventually the deal came to an end, the proposal for giving plot of Shri Nitish Doshi to Shri Mohan Chugh could also not get materialized.Out of the aforesaid payment of ₹ 7,80,00,000/- made to Shri Mohan Chugh/his company SRPL, through cash/ cheque, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been paid to Shri Mohan Chugh at page No.25 of LPS-A/3, a sum of ₹ 8,00,00,000/- and ₹ 2,62,50,000/- were respectively purported to have been given in the form of plot in Dubai and flats in the projects. For such purported payments in kind, no case of unexplained investment can be made against the assessee. The assessee had paid only a sum of ₹ 7,80,00,000/-, in form of cash/ cheque, out of which a sum of ₹ 2,30,00,000/- was paid through explained sources i.e. through cheques of the companies and the remaining ₹ 5,50,00,000/- was paid in form of cash. Again out of ₹ 5,50,00,000/- a sum of ₹ 4,87,58,350/- was made out of the on-money received against booking of flats in the project Phoenix Green for which separate additions have already been made by the AO in the hands of M/s. Phoenix Leisure Lifestyle Pvt. Ltd. For remaining ₹ 62,41,650/- paid to Shri Mohan Chugh, the assessee has no concrete evidence or explanation. Finally, the assessee could be said to have made unexplained investment to the extent of ₹ 73,41,650/- only [i.e. ₹ 11,00,000 + ₹ 62,41,650] equally in two assessment years and to this extent only, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se name the registry of the land was ultimately executed. The assessee further submitted before the AO that a sum of ₹ 100.00 lakhs was paid through account payee cheques issued by M/s. Money Care Leasing Finance Pvt. Ltd.. According to the assessee s submission before the AO, the remaining sum was paid either out of the funds received by the assessee from his Mumbai based customers or out of the booking advances of ₹ 5,00,00,000/- received by the assessee on behalf of another company namely M/s. Phoenix Devcons Pvt. Ltd. in which the assessee was one of the directors. However, the AO could not get himself satisfied with the explanation of the assessee regarding the sources of investment in the subject land. Finally, the AO made an addition of ₹ 7,79,73,000/- [total investment ₹ 8,51,58,000 ₹ 71,85,000 shown in the balance-sheet of M/s. Phoenix Leisure Life Styles Pvt. Ltd.] in the assessee s hands, on substantive basis, by holding the making of unexplained investment in the subject land and making the similar addition in the hands of M/s. Phoenix Leisure Lifestyles Pvt. Ltd. on protective basis. Matter carried to CIT(A) and the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Particulars of sources of payment Amount (Rs.) Mode Remarks M/s. Phoenix Leisure Lifestyle Pvt. Ltd. 71,85,000 Through cheque Duly Recorded in the books of account of M/s. Phoenix Leisure Lifestyle Pvt. Ltd. -do- 16,00,000 Through cash -do- M/s. Money Care Leasing Finance Pvt. Ltd. 1,00,00,000 Through cheque -do- Funds provided by Shri Nitesh Doshi/Shri Raju Doshi/Shri K. Goyal 1,70,00,000 Through cash Shri Nilesh Ajmera (Appellant) out of the funds of ₹ 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000/- to the appellant have been brought on record. In such circumstances, I find no merit in the appellant s explanation regarding the claim of ₹ 1,70,00,000/- in respect of receipt of funds from Shri Nitesh Doshi/Shri Raju Doshi/Shri K. Goyal for making impugned investment. It is a fact on record that the A.O. has every categorically mentioned that the appellant could not substantiate in any form either through confirmation letter or adducing PAN Number or giving any details of such transactions, which is claimed to be entered by the appellant through Shri Nitesh Doshi, Shri Raju Doshi and Shri K. Goyal. In this perspective of the appellant s case even I am of the considered view that the appellant s alternate ground of claiming set off fund availability with the appellant as custodian of the money of such investors is completely absurd and unfounded. Hence the appellant s request on this score cannot be accepted. 13.9 However, I find substance in the claim of the appellant as regard to payment of a sum of ₹ 4,93,73,000/- out of the funds of Rs,5,00,00,000/- received by him out of plot advance booking receipts on behalf of M/s. Phoenix Devcons Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction of payment of ₹ 5,00,00,000/- to the appellant for the purposes, as detailed above. Therefore, in my considered view, unless and until it is brought on record by any positive evidence that the sum so received by the appellant was utilized by him for some other purposes than claimed herein, there seems to be no logic and rationality in not accepting the appellant s explanation that out of such sum of ₹ 5,00,00,000/-, he had made payment of ₹ 4,93,73,000/- towards the purchase consideration of the said land at Bhopal. My view also gets support from the decision of the Hon ble Delhi high Court in the case of CIT vs. Five Star Holidays (2007) 294 ITR 54 (Del), wherein it has held that once a transaction of payment is admitted as correct in the hands of the payer, the same has also to be taken as correct in the hands of the payee. Further the Hon ble High Court of Kerala in the case of CIT (Central) Cochin vs. P.D. Abraham @ Appachan (2012) 252 CTR (Ker) 407 has laid down the ratio that there must be a complete reliance on any seized material and department cannot discard a part of the entries by relying upon the other part of entries noted on the same seized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons Pvt. Ltd. had shown the purpose of retention of sum of ₹ 5,00,00,000/- for making some investment in properties in Dubai through his one other company namely M/s. Phoenix Leisure Lifestyle Pvt. Ltd. but due to non-approval of the necessary government permissions, the same could not be made and eventually such funds were utilized by the assessee for making investment in purchase of land at Bhopal. Even from perusal of assessee s BS-8 diary, it may be found that the assessee had made payment for purchase of land in Bhopal but no single evidence can be found as regard to making of any investment by the assessee in any property in Dubai. It would further be appreciated that in our country any remittance, out of India, other than through banking channel is an offence and it is not the case of the Revenue that any Enforcement Agency has taken any action against the assessee on allegation of any Hawala transaction. Thus, there cannot be two views for the preposition that the funds of ₹ 5,00,00,000/- were very well available with the assessee for making investment in Bhopal land. Thus, there cannot be said to be any infirmity in the CIT(A) s action in granting set-off of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N. Doshi and at the backside of the same page, there is a mention of payment of a sum of ₹ 49,87,500/- to Dr. Yadav in Bhopal. It is submitted that likewise, there is mention of payment of ₹ 50,00,000/- and ₹ 4,00,000/- as per page no. 122 (back) and page no. 124 to Dr. Yadav. It is submitted that the veracity and authenticity of the transactions recorded in such BS-8 have been relied upon by the Revenue for making various additions in the assessee s case and therefore, the assertion of the assessee as regard to receipt of funds from Shri N. Doshi and others gets self established from such BS-8. In view of the above facts and circumstances, it is submitted that based upon various notings made in BS-8 Diary and other loose papers, which suggest receipt of certain funds by the assessee from other investors, it may be held that the remaining sum of ₹ 1,70,00,000/- had been paid by the assessee for purchase of land at Bhopal out of the funds received from others and consequently, the same may not be regarded as unexplained investment of the assessee. Out of the total payment of ₹ 2,86,00,000/- in respect of which addition has been confirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a sum of ₹ 5,00,00,000/- to the assessee, there stands no reason as to why the availability of such funds in the hands of the payee i.e. the assessee should not be accepted. It is submitted that in the case of M/s. Phoenix Devcons Pvt. Ltd., the AO as well as the CIT(A), both, have given a finding that such company had paid a sum of ₹ 5,00,00,000/- to the assessee out of their unaccounted receipts. The AO in the case of M/s. Phoenix Devcons Pvt. Ltd. has added such payment as undisclosed income in the hands of such company while making their assessment under s. 153A of the Act. The CIT(A) has also confirmed the action of the AO with the modification that the addition in the hands of M/s. Phoenix Devcons Pvt. Ltd. in respect of payment made to the assessee at ₹ 5,00,00,000/- should be restricted to the amount paid over and above the amount of on-money received by such company from its customers. It is a settled law that if a transaction is considered to be genuine in the hands of the payer then it also deserves to be accepted in the hands of the payee as well. So, the receipt of payment of ₹ 5,00,00,000/- by the assessee from M/s. Phoenix Devcons Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such financial statements and restore this issue of receipt of ₹ 1 crore back to the file of the AO to decide the matter afresh after verifying the financial statements of the company Money Care Finance Leasing Co. Thus, the issue is allowed for statistical purposes. The remaining sum of ₹ 1,70,00,000/- was paid by the assessee to the sellers of the Bhopal land, from time to time, by procuring funds from Shri Nitish Doshi and others. Since the funds were given by the investors and the same were not result of any undisclosed income of the assessee, it could not be regarded as unexplained investment of the assessee under the provisions of section 69/69B of the Act. In Questionnaire under s.142(1) of the Act dated 28-11-2011 issued by the AO to the assessee [PB-84], by giving a table of the various entries found recorded in a BS-8 diary [a diary belonging to the assessee, which was seized from the premises of M/s. Phoenix Devcons Pvt. Ltd.], the assessee was required to explain the sources and nature of payments stated in such diary. According to the item No. 30 of the said table, at page No. 97 of BS-8, the assessee had taken a sum of ₹ 50,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unexplained cash credit for the relevant assessment year. Matter carried to CIT(A) and the CIT(A), after considering the submission of the assessee, set aside the addition of ₹ 94,18,510/- ₹ 6,40,000/- by giving his findings at para 12.4 to 12.6, which reads as under: 12.4 I have considered the A.O. s order as well as the appellant s A/R submission. Having considered both, I find that the appellant has made cash deposit with Citibank for ₹ 6,40,000/- the Bank of Rajasthan Ltd. For ₹ 94,18,510/- respectively. The A.O. has made the addition of cash deposits made in Citi Bank as well as with Bank of Rajasthan Ltd. as per detailed reasoning given in para-5 6 of the assessment order. Both the bank accounts were jointly hold by the appellant along with his wife Smt. Sonali Ajmera. However the appellant owned up the entire deposit made in his account by himself. The perusal of the assessment order clearly suggest that the appellant was not aware about the cash deposit made in Citibank, whereas in respect of Bank of Rajasthan Ltd. more or less the same source were shown as submitted in the appellate proceedings extracted as above. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h which the appellant intend to explain the source of cash deposits in the same bank account. The A.O. is directed to verify the credit entry in the said bank account and also to take note of fact that whether the said bank account was disclosed by the appellant prior to search through filing return of income. If the appellant could explain the source of deposit in the said bank account in relation to the appellant s returned income or business income then only the source of cash withdrawal as claimed by the appellant of ₹ 39,75,000 can be taken into account as explained source for explaining the cash deposit in the bank of account of appellant maintained with Bank of Rajasthan ltd. In this perspective, if the appellant could adduce the source of deposit in the said bank account in relation to his return of income or source of income then the A.O. should treat the said deposit as explained, in case of failure on the part of the appellant the same should be held otherwise. With this observation, the appellant s this ground of appeal is adjudicated. Accordingly the A.O. should determine the source of cash deposit in the light of aforesaid directions in the appellant s case and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration which would inter-alia include the cash withdrawal made by the assessee from the various bank accounts. Ld. DR relied upon the order of the Assessing Officer and also agitated the action of the CIT(A) in restoring the matter back to the file of the Assessing Officer. We have heard rival contentions of both the parties and have perused the material available on record. We find from the order of the CIT(A) that assessee tried to prove the source of deposit from current year income as disclosed by the assessee as per return u/s 153A of the Act. The CIT(A) has held that the assessee did not prove the source of cash deposit, therefore, assessee did not prove the source of investor money, therefore, this contention of the assessee was rejected by the CIT(A). We hereby modify the direction of the CIT(A) to the extent that the assessee should be given full credit for cash withdrawn by him from his saving bank accounts for explaining the sources of cash deposits made in such accounts. Thus, the grounds of the assessee are partly allowed and that of the Revenue are dismissed. ASSESSEE S GROUND NO. 5(a), 5(b) 5(c) AND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Pvt. Ltd, and ₹ 25,00,000/- from Smt. Roshni Doshi. The appellant s A/R claims that the details of such sum have been found duly recorded in the books of M/s Phoenix Devcon Pvt. Ltd. Accordingly the appellant s A/R requested that as the source of sum of ₹ 2,25,00,000/- is explained as arranged from two different entities as detailed in the submission extracted as above, hence said source should be considered as explained in the hands of the appellant. 14.5 However having taken note of submission available on record, I am not inclined to accept the appellant s request in the background of fact that till day, the appellant could not establish the identity of Smt. Roshni Doshi in the form of confirmation letter or through adducing the PAN number of Smt. Roshni Doshi, which could establish the identity of person. Not only this, the appellant also could not even file any cogent evidence or document to prove the identity, capacity, genuineness of the said transaction entered by her with the appellant. I find that the courts have held that merely a transaction through cheques will not establish genuineness of transaction unless until identity and genuineness o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 25,00,000/- respectively from M/s. Money Care Finance Leasing Pvt. Ltd. and Smt. Roshni Doshi. It is submitted that such funds aggregating to ₹ 2,25,00,000/- were not invested in the above name company in form of cash and even the above named company, while explaining its unexplained investments in cash, had not claimed set-off for the receipt of ₹ 6,00,00,000/-. It is submitted that it has never been a case of the revenue that the assessee provided funds to the two depositors for making investment in the above named company. It is submitted that in respect of funds of ₹ 25,00,000/- given by Smt. Roshni Doshi to M/s. Phoenix Devcons Pvt. Ltd., ld. CIT(A) has made an enhancement in the hands of the above named company and, therefore, the same addition cannot be retained in the hands of the assessee. Since, the funds were not found credited in the books of the assessee, no addition under s. 68 can be legitimately made in the hands of the assessee. Since, the entire funds, which inter-alia include receipt of funds from M/s. MoneyCare Leasing Finance Pvt. Ltd. and Smt. Roshni Doshi, were duly recorded in the regular books of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee are allowed and that of the Department are dismissed. ASSESSEE S GROUND NO. 6(a), 6(b) 6(c) The facts relating to the grounds, as noted by the AO in the assessment order are that during the course of the search proceedings in the group, a loose paper inventorized as page no. 15 of LPS A/4 was seized from the premises of M/s. Phoenix Devcons Pvt. Ltd.. The AO further noted that on such loose paper, there is a noting with the narration Nilesh Sir Hawala Against Land Payment of ₹ 1,00,00,000/-. Thereafter, the AO required the assessee to give the complete details of the above said noting with the relevant documents. In reply, the assessee submitted that the above stated payment of ₹ 1,00,00,000/- was taken by him through account payee cheque bearing No.1460101427487 dated 24.12.2007 drawn on the bank of above named company. The assessee further submitted that the funds received from the company were ultimately utilized towards payments to various farmers for purchase of land on behalf of the assessee company. The AO, from the bank statement of the assessee, noticed that the credit for the remittance received by the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the account of the assessee with the aforesaid payment of ₹ 1,00,00,000/-, closing debit balance as on 31-03- 2008 in the name of assessee is getting appeared which fully tallies with the amount shown under the head director advance in the audited balance-sheet of M/s. Phoenix Devcons Pvt. Ltd. as filed at page No.195 in the paper book of the above named company for its appeal before this Bench for A.Y. 2008-09 in appeal No.IT-197/IND/2013. It is therefore submitted that once such amount is shown as a recoverable by the payer company its nature has to be regarded as that of capital only [a liability] and, therefore, it cannot be regarded as an income much less a taxable income of the assessee. It is not the case of the revenue that the amount taken by the assessee from the company was falling within the mischief of provisions of s.2(22)(e) of the Act. In such circumstances, it is submitted that irrespective of the purpose of taking the sum by the assessee from the company and its ultimate deployment, it cannot be regarded as income of the assessee. Accordingly, the addition made by the AO and confirmed by the CIT(A) deserves to be deleted. The ld. DR rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also to the concerning assessing officer. It is submitted that no form has been statutorily prescribed either under the Income-Tax Act, 1961 or Income- Tax Rules, 1962 for issuance of the notice contemplated under s. 250. However, upon receipt of the appeal from the side of assessee, as per the CBDT s instructions, a form titled as ITNS-51, seeking willingness of the AO to appear at the appellate stage, is issued and thereupon the assessing officer has to communicate his willingness to the CIT (A) within 10 days from the receipt of such ITNS-51. Further, a copy of the appeal memo in the prescribed Form No.35 along with the grounds of appeal taken before the CIT(A) are also provided by the CIT (A) to the concerning assessing officer. In the instant case, undisputedly, a notice in ITNS-51 was issued and served upon the concerning assessing officer. A copy of the appeal memo along with the grounds of appeal were also provided to the concerning assessing officer. It is also undisputed that the assessing officer did not express his willingness to make his personal appearance before the CIT (A) during the course of the appellate proceedings. In the similar ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have heard the rival contentions of both the parties and have perused the material available on record. We find that in the instant case, the notice was issued to the concerned AO. The AO did not remain present before ld. CIT(A) during assessment proceedings. The CIT(A)has called for the remand report and AO has not made any compliance. The ld. CIT(A) has directed to make the further inquiry which ld. CIT(A) has no powers but looking into the facts and circumstances of the case, we feel it appropriate to direct the AO to make further inquiry as per the directions given elsewhere in this order which powers are well within the jurisdiction of the Tribunal. Therefore, in our opinion, the departmental ground is deserved to be dismissed and hence, it is dismissed. DEPARTMENTAL GROUND Nos.2 to 2.5 The Revenue has taken these grounds of appeal against the action of the ld. CIT(A) in holding that the addition u/s. 69D was not justified because AO has not established that the assessee has borrowed such loans on Hundi and no Hundi, either live or discharged, was found and seized from any business premises of the group and deleted the additions of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting to ₹ 92,24,410/-, ₹ 47,00,000/- ₹ 12,50,000/- and ₹ 35,25,000/- taken by the assessee in his income. The relevant findings of the Assessing Officer are recorded at Para 7.1 to Para 7.7 from Page No.7 to 9; Para 12.1 to Para 12.6 from Page No. 68 to 76; Para 13.1 to Para 13.6 from Page No. 77 to 86; Para 14.1 to Para 14.6 from Page No. 86 to 91 of the assessment order. Matter carried to CIT(A) and the CIT(A), after considering the submission of the assessee, deleted the additions of ₹ 92,24,410/-, ₹ 47,00,000/- ₹ 12,50,000/- and ₹ 35,25,000/- by giving his findings at para 7.4, 7.5, 8.2, 8.3, 9.4, 9.5, 10.4 10.5 of his Order, which reads as under: 7.4 having considered the A.O. s order as well as the appellant s A/R submissions and also taking note of the fact that on similar set of facts and circumstances, the issue involved in the ground of appeal has already been decided by me vide my order No.CIT(A)- 7/IT-920/11-2 dated 28/03/2013 in the appellant s own case for A.Y.-07-08. For the sake of clarity of issue, I consider it proper and appropriate to extract the relevant portion of the said order her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant s case and also after taking note of the decision of Madras High Court in the case of CIT vs. Paranjothi Salt co. (1995) 211 ITR 141 (Mad.) the decision of S.K.S. Rajamani Nadar vs. CIT (1995) 216 ITR 696 (Mad) and other judicial pronouncements cited by the appellant s A/R specially Delhi High Court decision reported in 170 taxman 5, I am of the considered view that the addition made by the A.O. even alternatively u/s 69D of the Act is also not justified and correct. Accordingly in my considered view, the A.O. s action is incorrect and unjustified on this score also 7.5 In view of my decision above in A.Y.-07-08 in the appellant s own case, I consider it proper and appropriate to hold that the A.O. was not justified in making the addition of ₹ 90,24,410/- to the income of the appellant on both the scores i.e. u/s 68 and u/s 69D of the Act. Accordingly the addition so made by the A.O. is deleted. In addition to this, I also find that in the year under consideration, I also find substance in the appellant s A/R contention that all the seven receipts, as noted by the AO himself at para-7.1 of the impugned order, have been made during the peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I find that the similar issue i.e. borrowing on Hundi has been decided by me in favour of the appellant vide my order No.CIT(A)-IT- 920/11-12 dated 28/03/2013 for A.Y.-07-08. Since the facts of the case are similar to the facts as in A.Y.-07-08, I am of the considered view that the A.O. was not justified in making the aforesaid addition to the income of the appellant. 10.5 Thus, following the rule of consistency, I consider it proper and appropriate to hold that the A.O. was not justified and correct in his action. Thus, the addition so made by the A.O. is deleted, as in this ground of appeal raised by the appellant, the issue is the same and also the similar facts have been noted by A.O., hence this ground of appeal is allowed. The ld. AR has made oral submission as well as written submission as under: It is submitted that the entire action of the AO in making the addition in the assessee s income u/s 69D is based upon certain excel sheets and one diary i.e. BS-8 found and seized during the course of search. In such excel sheets, the details of borrowings by the assessee from various persons with the caption Hundi details have been giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 of the Negotiable Instruments Act, 1881. The term 'Bill of Exchange' is defined under section 5 of the Negotiable Instruments Act, 1881 as under: 5. A bill of Exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument. On a comparison of the Expressions Promissory Note and Bills of Exchange , as given under the Negotiable Instruments Act, 1881, one can find that while there is a similarity in both the instruments as regard to the payment of a certain sum of money by a person to some other there is a clear distinction in both the instruments as regard to the signatory of the instrument and number of parties involved. In the case of Promissory Note, it is the borrower only who is required to put his signature on the instrument and the signature of the lender is not required. Further, in the case of Promissory Note, the borrower promises to pay a certain sum either to the lender or the bearer of the instrument. However, in the case of Bills of Exchange , it is the lender ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings, not a single hundi was found, therefore, in our opinion, the issue in controversy is covered by the decision of Hon ble High Court of Madras in the case of CIT vs. Paranjothi Salt Co. (1995) 211 ITR 141 (Mad.) wherein it was held that for the purpose of invoking the provisions of s. 69D there must be an existence of Hundi and unless and until one document fulfills the characteristics of a Hundi, no addition u/s 69D can be made in the assessee s income . The Hon ble High Court of Andhra Pradesh in the case of CIT vs. Dexan Pharmaceuticals (P) Ltd. (1995) 214 ITR 576 (AP) has held that there are always three parties to Hundi transactions and if a transaction is bilateral it is a very strong indication to show that it is not a Hundi transaction. The Coordinate Mumbai F Bench in the case of ACIT vs. Om Prakash Co. (2004) 87 TTJ 183 (Mum.), at para 60 has held that the existence of Hundi is a must for invoking the provisions of s. 69D of the Act. Further, this Hon ble Bench in the case of Ghanshyam Cloth Syndicate vs. ITO (1984) 19 TTJ (Ind.)569 has held that once there is a finding that there was no execution of any Hundi the provisions of s. 69D cannot be invoked. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As stated above, this book pertains to Mr. Paras Ram Rohira, therefore, the same has been written by him for keeping his accounts. In this note book only two pages are written, which can also be easily removed. This is a rough note book, the pages of, which can also be easily removed. Therefore, it cannot be considered as a book as the sheets of this note book can be easily detached and replaced. Even if it is considered as a book of account no addition can be made on the basis of the amounts mentioned in this note book as we have discussed above in detail. Thus, the provisions of s. 68 of the Act are not applicable to this case. Further, the ITAT, Mumbai Bench in the case of Biren V. Savla vs. ACIT (2006) 100 TTJ 1006 (Mum.) has held that the memorandum of transactions between lenders and borrowers entered in a diary cannot be regarded as cash book or ledger and, therefore, on the basis of such notings the provisions of s. 68 cannot be invoked. In view of the facts and circumstances of the case, and various judicial pronouncements, the provisions of s. 68 cannot be invoked. Even otherwise, The AO himself at various places in the body of the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO. 2. On the facts and the circumstances of the case, the ld. CIT(A) erred in holding that addition u/s. 69D was not justified because AO has not established that the appellant has borrowed such loans on Hundi and no Hundi, either live or discharged, was found and seized from the business premises of the group and deleted the addition of ₹ 5,00,000/- whereas, documents seized clearly mentioned of the Hundi dealings and the assessee failed to prove before the AO otherwise with evidences. 2.1 While holding so the ld. CIT(A) failed to appreciate that the transactions in hundies were confirmed in the statements of not only Shri Nilesh Ajmera, the assessee, but his employee Shri Pankaj Joshi also and Shri Nilesh Ajmera admitted and even disclosed income of ₹ 1.45 crore as being received from one Shri Manish Kedia, Hundi Provider, as his undisclosed income in A.Y. 2010-11. 2.2 While holding so the ld. CIT(A) failed to consider that various loose papers found during the course of search had details of hundi transactions of Manish Kedia and it had narration of entries like name, start date, amount, duration, first renew date, end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in the certain property around the Indore through assessee. We find that the assessee has also received ₹ 5 lacs from Shri Manish Kediya. The assessee has not given any evidence before the AO and ld. CIT(A) for establishing the nexus of cash deposits of ₹ 5,00,000/- with City Bank out of funds received from Shri Manish Kediya. The assessee is directed to give the evidence before the AO and AO is directed to verify the claim of ₹ 5,00,000/- with reference to BS-8 diary and documents seized during course of search. Rest of the addition (₹ 15,26,500 ₹ 5,00,000) i.e. ₹ 10,26,500/- is confirmed. Accordingly, ground is partly allowed for statistical purposes. DEPARTMENTAL GROUND NO. 1 The Revenue has taken this ground of appeal against the action of the ld. CIT(A) in deciding the appeal against the principles of natural justice, without affording any opportunity to the AO or remanding it back in violation of the departmental instruction that in search assessments appeal order be passed either based on remand report or after hearing the AO. It was submitted before us by both sides that this ground of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an of money, which were either borrowed by others on Promissory Notes and remained with the appellant or which were provided by the investors associated with the appellant or which were retained by the appellant out of the plot booking advances received by him on behalf of the companies in which he was one of the directors. 2(a). That, the learned CIT(A), while adjudicating the grounds relating to the alleged unexplained cash deposits in the bank account of the appellant, grossly erred, both on facts and in law, in issuing the direction to the AO to verify that whether or not the subject bank account was disclosed by the appellant prior to search through filing return of income without appreciating the material fact that there was no mechanism prevalent through which an assessee could have disclosed his bank account through the return of income. (b) That, without prejudice to the above, the learned CIT(A), while adjudicating the grounds relating to the alleged unexplained cash deposits in the bank account of the appellant, grossly erred in not considering the material fact that the appellant was eligible for explaining the sources of cash deposits made i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 While holding so the ld. CIT(A) further erred in holding that the seized dairies cannot be treated as books of accounts whereas in view of the transactions recorded therein being unexplained the said material/dairies fell in the inclusive definition of books of accounts as defined u/s. 2(12A) of the I.T. Act. 3. On the facts and the circumstances of the case the ld. CIT(A) has erred in directing the AO to verify the source of cash deposits of ₹ 86,30,000/- added by the AO as unexplained cash credits u/s 68 of the I.T. Act in the bank accounts of the assessee. 3.1 While directing the verification of the cash deposits to be carried out by the AO the ld. CIT(A) travelled beyond his power of confirming, reducing, enhancing or annulling the addition. 3.2 While holding so the ld. CIT(A) grossly erred in accepting the additional arguments taken by the assessee before him by giving a direction to verify the said deposits out of the withdrawals made from the different bank accounts maintained by the assessee as said was not the plea of the assessee before the AO. 3.3 While holding so the ld. CIT(A) wrongly directed to the AO to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and the order of the AO may please be restored. ASSESSEE S GROUND NO. 1(a) 1(b) This ground of appeal is similar to that of Ground Nos. 2(a) 2(b) taken by the assessee in his appeal for A.Y. 2008-09 (Appeal No. IT(SS)A-183/Ind/2013), therefore, our finding given in the abovesaid appeal will also be applicable in the present case. Thus, by following the same, the assessee s appeal on this issue is partly allowed. ASSESSEE S GROUND NO. 2(a), 2(b) 2(c) AND DEPARTMENTAL GROUND NO. 3 to 3.3 These grounds of appeal pertain to the additions of ₹ 86,30,000/- made in the hands of the assessee on account of cash deposits in The Bank of Rajasthan Ltd.. The relevant findings of the Assessing Officer are recorded at Para 9.1 to Para 9.4 from Page No.42 to 43 of the assessment order. The brief facts relating to the grounds are that during the course of the assessment proceedings, from the bank statements of the assessee, the AO noted that the assessee had deposited cash amounting to ₹ 86,30,000/- on different dates in bank account with the Bank of Rajasthan Ltd.. Before the AO, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said return of the appellant was filed subsequent to search operation and i.e. on 26/11/07, thus, in my considered view after payment of tax the appellant has left with merely of ₹ 19,00,000/- in his hand approximately. After taking note of certain payments by the appellant towards house hold expenses and other financial commitments the possibility of availability of cash should be ascertained by the A.O. taking note of the appellant s disclosure of additional income. Further, as far as the source of cash withdrawals from Bank of Rajasthan Ltd. is concerned, I consider it proper and appropriate to direct the A.O. to verify the nature of deposits in the said bank account before withdrawal through which the appellant intend to explain the source of cash deposits in the same bank account. The A.O. is directed to verify the credit entry in the said bank account and also to take note of fact that whether the said bank account was disclosed by the appellant prior to search through filing return of income. If the appellant could explain the source of deposit in the said bank account in relation to the appellant s returned income or business income then only the source of cash wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, the fact remained that the assessee had filed the return of income after the search and the entire tax was also paid by him after the search and, therefore, the question of utilization of cash towards payment of taxes does not arise with the result that the entire income, disclosed by the assessee in his return, after meeting reasonable household expenses was available to the assessee for making deposits in bank accounts. There is also no justification in the CIT(A) s finding that credit for withdrawal of cash from the same bank account should be given to the assessee only if the said bank account was disclosed in the regular return filed by the assessee. It is submitted that when an addition is made in respect of cash deposit made in one bank account, then the necessary consideration will be required to be given in respect of the cash withdrawn from the same bank account irrespective of the fact that whether or not such bank account was disclosed by the assessee in his return filed prior to search. It is submitted that for determining any undisclosed income of an assessee on the basis of certain documents the entire document has to be considered in its enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As regards availability of cash out of income of ₹ 30,00,000/- shown by the assessee in his return of income, for the assessment year under appeal, we find substance in the arguments of ld. Counsel of the assessee that tax on such income was paid by the assessee in subsequent years and not during the relevant year. Considering the fact that the assessee might have spent a sum of ₹ 5,00,000/- towards his household expenses, credit for remaining ₹ 25 lacs also deserves to be given to the assessee for explaining sources of cash deposits. Thus, the Assessing Officer is directed to verify the claim of the assessee as regard to cash withdrawals from the same bank accounts and after verification, credit for such cash withdrawals along with ₹ 25 lacs be granted to the assessee. We adjudicate accordingly. . 17. DEPARTMENTAL GROUND NO. 1 The Revenue has taken this ground of appeal against the action of the ld. CIT(A) in deciding the appeal against the principles of natural justice, without affording any opportunity to the AO or remanding it back in violation of the departmental instruction that in search assessments appeal order be pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itresh Mehta have made substantial investment in the project The World at Dubai. Thereafter, the AO by holding unexplained investment in Dubai project by Shri Ritesh Ajmera and the assessee respectively at ₹ 15,40,00,000/- and ₹ 5,60,50,000/- made an addition of ₹ 5,60,50,000/- in the assessee s income for the assessment year under consideration under the head Dubai Hawala . The relevant findings of the Assessing Officer are recorded at Para 7.1 to 7.7 at page No.22 to 35 of the assessment order. The ld. CIT(A), after considering the submission of the assessee, deleted the addition of ₹ 5,60,50,000/- by giving his findings at para 12.4 to 12.18 of his Order. Findings are reproduced hereunder: 12.4 I have considered the AO s order as well as the appellant s A/R submission and also various documents placed on record. Considering all the factual position of the case, I am of the considered view that the impugned addition has been made by the AO without having any cogent material or corroborative evidence on record. Therefore, I find no substance in the impugned addition being devoid of any merit. 12.5 In addition to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. For this proposition, my view also gets support from the pronouncement of Hon ble High Court of Kerala in the case of CIT vs. K. Mahim Udma (2000) 242 ITR 133 (Ker.). 12.6 Further I find substance in the submission of appellant s A/R that the only basis taken by the AO for making the impugned addition is certain loose papers/ computer printouts which were not recovered from the possession or control of the appellant but the same were recovered only from a company namely M/s. Phoenix Devcons Pvt. Ltd., in which the appellant was merely one of the directors. The AO could not bring any evidence on record that the loose papers so found were either in the handwriting of the appellant or they were prepared under the instruction of the appellant. In such circumstances, in my considered view, the provisions of section 292C giving presumption as regard to the trueness of such documents would have no application. 12.7 I find that the provisions of s.292C have been inserted in the statute by the Finance Act, 2007 w.r.e.f. 1.10.1975 to empower the Income Tax Authorities to make certain presumptions on books of account, other documents, money, bullion, jewellery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in the contention of the appellant s A/R that the loose papers inventorised as page No.75 to 78 of LPS-33 (Xerox copies whereof have been given by the AO himself at page no.29 to 32 of the impugned order), which are basically in the nature of computerized excel sheet printouts only, no significant details have been given by A.O. in the assessment order. I further find that in one of the above said loose papers there is any reference of any date/ month or year. Therefore, it cannot be perceived from such loose papers that to which period such loose papers pertain. 12.10 Further from a perusal of such computerized sheets, the vital details such as the very purpose of preparing such sheets, the name of the person punching the data in computer for making such sheets, the name of the person or the entity for which such data s were fed in the computer are also not discernible. Further, it is not clear that whether such data s pertain to the receipt of money or payment of money. It is a settled law that no addition can be made on the basis of any non-speaking document. The Hon ble High Court of Delhi, in the case of CIT vs. Girish Chaudhary (2008) 296 ITR 619 (Del) held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosed income cannot be assessed in the hands of the assessee merely by arithmetically totaling various figures jotted down on the loose documents. In other words for the purpose of resorting to deeming provisions, dumb documents or documents with no certainty have no evidentiary value .. 12.12 The Hon ble ITAT, Patna in the case of ACIT vs. Dr. Kamla Prasad Singh (2010) 3 ITR (Trib) 533 (Pat) has also held that no additions can be sustained in the following words: Having considered the rival submissions, the provisions relating to assessment for the block period under Chapter XIV-B of the Act and the assessee s case including the documents under reference, which have been made annexure to this order also, we are of the opinion that it is now well settled that undisclosed income for the purpose of block assessment has to be computed solely on the basis of seized material and any enquiry made by the AO thereafter relatable to such material; meaning thereby neither any enquiry report nor any document procured either before or after the search can be considered while computing the undisclosed income. Similarly, it is also settled law that any documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and that such investments had been made in the financial year immediately preceding the assessment year in question and without satisfying the pre-requisite conditions of s. 69 of the Act, AO cannot make any addition by invoking the provisions of s.132(4A) of the Act. 12.15 I also find substance in the appellant s A/R s contention that the various loose papers of LPS-33, as discussed by the AO at paras 7.4.1 to para 7.4.5 have no live link or nexus with the key page i.e. page No.76 of LPS-33 at which there is a mentikon with the narration Nilesh Ajmera ₹ 5,55,00,000 and 55,000; 50,00,000 and 50,000 DHS Cash . I find that on such page the total under the column of DHS has been stated at 3,38,16,050 which do not tally with any of the figures stated at para 7.4.5 (i) of the AO s order. In my considered view, the AO could not establish that the subject loose paper, i.e. page No.76 of LPS-33, pertains only to the project The World as referred to by the AO at various parts of the order. In my considered view, the AO has made the impugned addition merely on assumption/hypothesis only. In such circumstances, relying upon the decision of the Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position of the case, in my considered view, the impugned addition made by the AO on account of Dubai Hawala at ₹ 5,60,50,000/- is devoid of any merit. Accordingly, the addition so made by the A.O. is deleted. In the result, appellant s appeal is allowed. However, I would like to mention very categorically that if in future, the Enforcement Directorate or FEM Authorities or any other authorities regulating the remittance of money from India gives any conclusive finding as regard to making of the impugned hawala transaction by the appellant, then the A.O. would be free to take necessary action in accordance with the provision of law. The ld. AR has made oral submission as well as written submission as under: At the outset, we wish to place reliance on the various findings given by the learned CIT(A) in his Order. It may be appreciated that the DRs could not controvert any of the findings of the CIT(A). On a perusal of the loose papers inventorized as page No. 75, 76 77 of LPS-33, as placed at page No.131 to 133 of the paper book, [copies whereof have also been made part of the assessment order], it may be observed that such loo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ently the ground No.4 and 4.1 of the Revenue deserves to be dismissed in limine. Ld. DR relied on the order of the AO. We have heard the rival contentions of both the parties and have perused the material available on record. We find that during the course of search, a loose paper inventorised as page no.75, 76 and 77 of LPS-33 which is placed on paper book as pages 131 to 133 was seized. The ld. CIT(A) has held that these documents are dumb documents. These documents do not contain any date or period. These documents also do not contain details that whether these are of nature of receipt or payment. The AO has not made any inquiry after loose paper found. The AO has held that some companies like, M/s. Neel I Ltd. and M/s. CS Developers has made investment in their property. We find that ld. CIT(A) has held that the AO has not made any inquiry whether the assessee has made investment in the Dubai property or in M/s. Neel 1 Ltd. or CS Developers who have allegedly made investment in the property. The ld. CIT(A) has further held that if alleged Dubai hawala is made by the assessee, no action has been taken by the other govt. agencies as Enforcement Directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eted by July, 2008 by a company named as M/s. Wealth Care Investments Ltd. The AO also noted that the assessee was holding 100% shares in the various overseas concerns. The AO also noted that the assessee and his wife had completely denied having any property in Dubia and on the basis of such denial, the AO formed the belief that the flats in the building were sold to some other concerns. The AO presumed that the assessee must have sold the apartments in above building during the relevant previous year for AED 70,30,045 and thereafter estimating the margin of 20% of the purchase value i.e. at AED 14,06,009 made an addition of ₹ 1,54,66,099/- in the assessee s income on account of sale of flats in the above said building. The AO further found that certain flats in the above building were sold to some M/s. Sir Holdings Ltd. by Wealthcare Investments Ltd., BVI and according to the AO, from such deal, the seller company and the assessee might have got handsome profit of AED 5 Million. The AO, also estimated an income of ₹ 55,00,000/- of the assessee on this deal. Finally, the AO made total addition of ₹ 2,09,66,099/- in the assessee s income from real estate trading i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not make reference of any loose paper or document or any other material on the basis of which the addition made by the AO could be said to be justified. Merely because at some point of time the assessee was non-resident, it cannot be presumed, without having any material on record, that during the previous year under consideration too the assessee carried out property transactions abroad. It may be observed that the assessee has shown carrying out property transactions in India and has shown the income from such transactions in his return of income filed post-search. In nutshell, the presumption of the AO as regard carrying out property transactions by the assessee abroad and deriving of income from such transaction, without any single documentary evidence, is baseless and as such, it was rightly deleted by the CIT(A). Accordingly, the grounds No.5 and 5.1 of the Department deserve to be dismissed. Ld. DR has relied on the order of the AO. We have heard the rival contentions of both the parties and have perused the material available on record. We find from the ld. CIT(A) s order that AO has held that sales and purchases transactions were taken be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k in violation of the departmental instruction that in search assessments appeal order be passed either based on remand report or after hearing the AO. 2. On the facts and the circumstances of the case, the ld. CIT(A) erred in holding that addition u/s. 69D was not justified because AO has not established that the appellant has borrowed such loans on Hundi and no Hundi, either live or discharged, was found and seized from the business premises of the group and deleted the addition of ₹ 1,45,00,000/- ₹ 4,00,000/- and 1,00,00,000/- whereas, documents seized clearly mentioned of the Hundi dealings and the assessee failed to prove before the AO otherwise with evidences. 2.1 While holding so the ld. CIT(A) failed to appreciate that the transactions in hundies were confirmed in the statements of not only Shri Nilesh Ajmera, the assessee, but his employee Sh. Pankaj Joshi also and Sh. Nilesh Ajmera admitted and even disclosed income of ₹ 1.45 crore as being received from one Sh. Manish Kedia, Hundi Provider, as his undisclosed income in A.Y. 2010-11. 2.2 While holding so the ld. CIT(A) failed to consider that various loose paper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the profit on sale of subject land at ₹ 1,48,42,000/- [₹ 10,00,00,000 (-) ₹ 8,51,58,000] and out of this estimated profit, after giving credit for profit of ₹ 13,76,000/- shown by the aforesaid company in its return of income, made an addition of ₹ 1,34,66,000/- [₹ 1,48,42,000 (-) ₹ 13,76,000] in the assessee s income on substantive basis, with a corresponding addition on protective basis in the hands of M/s. Phoenix Leisure Lifestyle Pvt. Ltd.. The relevant findings of the Assessing Officer are recorded at Para 7.1 to Para 7.14 from Page No. 6 to 48 of the assessment order. The ld. CIT(A), after considering the submission of the assessee, confirmed the addition of ₹ 1,34,66,000/-. The ld. AR has made oral submission as well as written submission as under: The subject property at Bhopal was owned not by the assessee but by a company named and titled as M/s. Phoenix Leisure Lifestyle Pvt. Ltd. It shall be appreciated that during the course of entire search not a single document or any other evidence was found from any of the premises which could have suggested the sales of the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale price at ₹ 110.50 lacs only. In view of the same, as the assessee has actively participated and made the payment of sale consideration of ₹ 851.58 lacs in the purchase of Bhopal Land. In view of the same and also on the basis of reasons assigned by A.O. given in para-7.13.1 to 7.14 of the order for such estimation for determining the profit out of sale of Bhopal Land is correct and justified. Accordingly the addition so made by A.O. is held to be justified and correct. Accordingly the addition so made by the A.O. is confirmed. The appeal of the assessee on this issue is dismissed. However, we are in agreement with the contention of the ld. AR of the assessee that if action of the lower authorities in making the addition is confirmed, the assessee be given credit for availability of cash through receipt of onmoney on sale of land for explaining his other investments/payments. ASSESSEE S GROUND NO. 2 This ground of appeal pertains to the addition of ₹ 50,00,000/- made in the hands of the assessee on account of unexplained payment allegedly made by the assessee to Shri Chirag Shah. The brief facts relating to the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the entire amount to M/s. Phoenix Devcons Pvt. Ltd. in the very same year. In other words, the appellant was not in anyway connected with the subject transaction. Without prejudice to the above, it is submitted, presuming but not admitting, that the appellant made the alleged payment of ₹ 50,00,000/- to Shri Chirag Shah, even then in such a situation it is submitted that during the relevant previous year the appellant has earned an income of ₹ 1,45,15,000/- which includes an additional income of ₹ 1,45,00,000/- and, therefore, even if for the sake of argument it is presumed that the appellant made the alleged investment, the same being out of the additional income of ₹ 1,45,00,000/-, no further addition on this count was warranted. It is submitted that during the course of assessment proceedings, the appellant had claimed utilization of the income earned during the relevant previous year at ₹ 42,21,257/- only, i.e. ₹ 2,96,000 for making cash deposits in bank, ₹ 5,50,000 cash kept in bank locker and ₹ 33,75,257 unexplained investment in jewellery. It shall be appreciated by Your Honours that even the learned AO has not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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