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2019 (11) TMI 457

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..... a revenue loss as the complete particulars of Shri Naresh Kumar Maheshwari were not furnished by the assessee and therefore, the assessee is responsible for the loss of the revenue and liable to pay tax. There is no provision in the Act to deem such income which is otherwise not an income of the assessee. The documents in question clearly manifest the nature of the transaction and the parties to the transaction. Particulars of one of the parties were already available on the seized material and the revenue has already attempted to tax the said income in the hands of Shri Roshal Lal Sancheti but the ld. CIT(A) has deleted the said addition on the ground that a loan cannot be assessed to tax except it is unexplained credit U/s 68 of the Act. .....

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..... e No. 13 and 14 of seized Annexure-A (Exihibit-5). 2. The appellant craves leave to add, alter, modify or amend any ground on or before the date of hearing. 2. The assessee is an individual and engaged in the business of finance broker and property broker. The assessee has not filed his return of income for the year under consideration U/s 139(1) of the Income Tax Act, 1961 (in short, the Act). There was a search and seizure action U/s 132 of the Act on 26/09/2012 at the residential premises of the assessee and survey U/s 133A of the Act at the business premises of the assessee. During the course of search and seizure action, cash of ₹ 6.00 lacs as well as other incriminating material were found. Incriminating material found during th .....

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..... d the addition made by the A.O. on account of brokerage/commission charges of ₹ 20,000/-. 3. Before the Tribunal, the ld counsel for the assessee has referred the statements of the assessee and submitted that the assessee explained the nature of his business being broker in finance and property dealings. The A.O. has also not disputed the business of the assessee. He has also explained the documents found as Exihibit-5 page 13-14 of Annexure-A during his statement recorded. Thus, the ld counsel has submitted that part from question No. 18, no further query was raised by the department at the time of search or post search inquiries. The assessee made surrender of ₹ 30.00 lacs covering all the transactions recorded in the seized m .....

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..... 292C of the Act cannot be invoked. The A.O. has, on one hand, accepted that the document is written on 29/6/2012 by Shri Roshan Lal Sancheti to Shri Naresh Kumar Maheshwari and gives the details of both the parties. On the other hand, the A.O. has invoked the provisions of Section 292C of the Act and presumed the document of the assessee. Thus, the ld counsel has submitted that once the parties to the transactions are not in dispute then the income, if any, on account of the said transaction cannot be assessed in the hands of the assessee except the commission/brokerage income. The assessee is neither lender nor the borrower and engaged in the capacity of finance broker on commission basis, therefore, the addition made by the A.O. by invok .....

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..... s all the details and address of Shri Roshan Lal Sancheti. The details of the documents at page 13 and 14 of Exihibit-5 of Annexure-A are as under: From perusal of these documents, it is manifest that these are prepared in respect of loan transaction of ₹ 20.00 lacs by one Shri Roshal Lal Sancheti from Shri Naresh Kumar Maheshwari. This fact is also accepted by the A.O. in the assessment order. Even the assessee explained these documents and nature of transaction in his statement recorded by the department in the post search enquiries and the relevant part of the statement is in question No. 18 is as under: It is not in dispute that the assessee surrendered a sum of ₹ 30.00 lacs on account of incriminating material found during .....

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..... the revenue failed to assess the said amount in the hands of the parties to the transaction, therefore, it was attempted to tax in the hands of the assessee on the basis of presumptive provisions of Section 292C of the Act. Once the seized documents are free from any ambiguity and the transaction is between the two independent parties then in such a situation, the said document reveals the transaction of loan cannot be presumed to be the document belongs to the assessee for the purpose of assessing the income being unexplained loan. Hence, in the facts and circumstances of the case, the addition made by the A.O. and sustained by the ld. CIT(A) is not justified and the same is deleted. 6. In the result, appeal of the assessee is allowed. Or .....

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