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2019 (11) TMI 457

..... .00 lacs on account of incriminating material found during the search, therefore, the transaction of loan between two independent parties even if through the service of the assessee being broker cannot be thrust upon the assessee for want of taxing the same in the hands of the actual parties to the transaction. The reasoning of the A.O. and the ld. CIT(A) for making the addition is that if it is not assessed in the hands of the assessee then it would be 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 .....

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..... ) For The Revenue : Shri Varinder Mehta (CIT-DR) ORDER PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 12/01/2018 of ld. CIT(A)-2, Udaipur for the A.Y. 2013-14. The assessee has raised following grounds of appeal: 1. That on the facts and in the circumstances of the case, the ld. Lower authorities grossly erred in making addition of ₹ 20,00,000/- on account of unexplained advance on the basis of page 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 inc .....

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..... s in the hands of the assessee on the ground that it would be a revenue loss if it is not taxed in the hands of the assessee. The A.O. also made addition of ₹ 20,000/- being brokerage/commission charges @ 1% of the said transaction. The assessee challenged the action of the A.O. before the ld. CIT(A) but could not succeed as the ld. CIT(A) has confirmed the addition made by the A.O. of ₹ 20.00 lacs. However, the ld. CIT(A) has deleted 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 .....

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..... ts while making the addition but accepted that the said letter was on the letter head of Bheru Lal Roshan Lal Sancheti on which complete address and contact details etc. of the person are duly printed and therefore the presumption U/s 292C of the Act is not applicable. The ld counsel has thus contended that when the document is clearly identifiable and there is no ambiguity about the transaction between the parties then the provisions of Section 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 an .....

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..... . 5. I have considered the rival submissions as well as relevant material on record. The A.O. has made the addition in the hands of the assessee on the basis of the seized document which are photo copy of one cheque without any name of the payee and a letter dated 29/06/2012 written by one Shri Roshan Lal Sancheti and addressed to one Shri Naresh Kumar Maheshwari. The said letter is written on the letter head of firm of Shri Sancheti and contains 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 Sanch .....

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..... e ground that a loan cannot be assessed to tax except it is unexplained credit U/s 68 of the Act. Therefore, the assessee being a broker cannot be held liable to pay tax on an income which does not arise or belong to the assessee. At the most, the income for providing the service as a broker can be taxed in the hands of the assessee for the transaction of loan which the assessee has already offered to tax as part of the surrendered income. Since 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 .....

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