TMI Blog2020 (4) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... our view, it is the duty of the AO to examine the affidavits and the deponents of the affidavits to find out the truth in the submissions made in the affidavits. Nothing had been done by the AO no adverse material was brought on record by the AO or by the Ld.CIT(A) in the appellate proceedings. It is a settled position of law that the addition cannot be made on the basis of some cogent and reliable evidence and not on the basis of conjectures and surmises. Accordingly, the Ground No.2 of appeal of assessee is allowed. Addition on the basis of third party statements recorded at the back of assessee - HELD THAT:- Despite assessee asking for the statement from the AO and also in the appellate proceedings, neither the statement was provided nor the opportunity to cross-examine Shri Alok Tripati was given to the assessee. Further, we are also of the opinion that the addition of ₹ 2 Lakhs cannot be made merely on the basis of the statement, unless a corroborative evidence/record is found by the AO. For the purpose of the conclusion that no such additions can be made based on the statement given by Mr.AlokTripati as it would be violative of Principle of Natural Justice and rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee to serve his own purpose without any basis. - Decided against assessee. Addition of security deposit payment - contract run by the six persons jointly - HELD THAT:- CIT(A) himself that the aforesaid six notebooks contains similar transactions relating to the business of toll tax collection of the two bridges, the receipts and savings have been divided equally from the contract run by the six persons jointly as above including that by assessee and the payments have been made to PWD equally as mentioned above, there was no justification of adding security deposit payment in the hands of assessee alone. Hence, the addition sustained by CIT(A) at ₹ 1,90,000/- +₹ 2,00,000/- =₹ 3,90,000/- being contrary to the finding given by CIT himself is illegal and arbitrary and may kindly be directed to be treated. Addition for toll bridge contract in which assessee had 167 share - HELD THAT:- Since the addition sustained on account of security at ₹ 1,90,000/- is illegal because the assessee held only 1/6 share. As submitted against Ground No.7 it would be in the interest of equity and justice that the addition which can be made out of ₹ 2,00,000/- + 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfactory the transactions entered on page 1,2, 5,10 to 13 - HELD THAT:- So far as the amount of ₹ 5,00,000/-, ₹ 2,08,750/-, ₹ 16,666/- and ₹ 1,00,000/- totaling to ₹ 8,25,416/- are the payments relating to the earlier assessment years and therefore, the same cannot be added in the present assessment year. This fact has duly been verified by the Ld.CIT-DR during the course of argument. Accordingly, the amount of ₹ 8,25,416/- is deleted. With respect to the remaining amount of ₹ 16,03,470/-, during the course of proceedings before lower authorities, it was not disputed that these entries were not mentioned in the record sheet, recovered from the possession of the assessee. The onus is always on the assessee to prove and discharge that the payments made were relating to the business of Shri Suresh Kumar Pandey and brothers. In our view, the amount paid on the face of it appears to have been paid for the purposes of earning the income therefore, the assessee is entitled to the corresponding benefit which has been earned on account of such expenditure. In the absence of any help from any of the parties before us, we are required to mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was conducted in the premises of the assessee on 03-03-2005. Against the said assessment order, assessee filed an appeal before the Date of Hearing 06-01-2020 Date of Pronouncement 08-01-2020 CIT(A), who partly allowed the appeal of assessee. Aggrieved with the order of the Ld.CIT(A), the assessee is in appeal before the Tribunal, by raising various Grounds. The Ground-wise discussion is as under: 3. Ground No.1pertains to estimation of house hold expenses at ₹ 2,50,000.00 against 1,70,000.00 shown by assessee when assessee is residing in village and supplementing his expenses by agriculture and its by product is arbitrary unjust and excessive: The assessee is in appeal against addition sustained at ₹ 80,000/-. 3.1. The facts are that assessee is a senior citizen, retired from army as a Sipahi. Getting pension duly disclosed at 26,793/- in the return and assessed as suchis basically an agriculturist and belongs to agriculturist family. Income from agriculture duly shown at 3,40,000/- and accepted by CIT(A). Supplementing his lodging expenses from agriculture e.g., wheat corn pulses vegetable ghee and oil etc. boarding is also free because he is residi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t may kindly be appreciated that complete addresses of the depositors along with confirmation stand files supported by the depositions made through affidavit of each depositors. Since the depositors are residing in village situated more than 150km away it is requested that they may kindly be examine by issue of commissions or by deputing your inspector or by issuing summons to them on the address with their complete identity furnished as per affidavit However, the Ld.CIT(A) has confirmed the addition on the ground that these affidavits cannot be admitted as additional evidence as the condition under Rule 46A has not been satisfied and assessee has failed to establish identity as well as creditworthiness. 4.3. Finally, Ld.Counsel argued that it is settled law as per Hon'ble Allahabad High Court decision that where the CIT(A) has called for the remand report from the AO, the CIT (A) has exercised his powers mentioned in section 250 (4) and there is no violation of Rule 46 A [vide Remand Report Para 3(CIT Lucknow Vs Akash Construction (P) Ltd ITA No. 8 of 2011 dated 23.01.2012) and the ITAT Agra Bench decisions in the case of the DCIT vs. Mukesh kumar Agarwal ITA No.374/Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to such cash credit, the assessee's burden does not extend beyond proving the existence of creditors and further proving that such creditors own us to have advanced the amount credited in the account of assessee. The burden does not go beyond to put the assessee under any obligation to further prove that where from the creditors has got or procured the money to advance to the assessee. Addition under section 68 cannot be made unless it can be shown by the department that the source of such money comes from the assessee himself or such source could be traced to the assessee itself Hon'ble Allahabad High Court judgment in the case of Nathu Ram Prem Vs. CIT 49 ITR 561 has held that it is the duty of the Income Tax Officer to enforce theattendance of the witness if his evidence is material in exercise of his powers u/s 37(1) of the ITAct read with Order Xvl, rule IO of the civil Procedure Code. Thus, in view of the submissions made as above and the legal position, Ld.Counsel submitted that the addition sustained by CIT(A) being illegal and arbitrary and the same may kindly be directed to be deleted. 4.4. Ld.DR for the Revenue, opposed the contentions raised by L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by him. The security raised with the department is in the name of Alok Tripathi and not Assessee. Ld.Counsel also submitted that further the CIT(A) while referring to the statement made by Harnarayan Tripathi he has not provided opportunity to the assessee to cross examine him. It was his duty to have allowed the assessee to cross examine such a witness.The Hon'ble Apex Court in the case of Union of India vs. TR Verma reported in AIR 1957 (SO 882 has held when the AO recorded a statement behind the back of the assessee, it was his duty to have allowed the assessee to cross examine such a witness. Statement of person cannot be used against the assessee. It was not for the assessee to demand cross examinations but was for the AO to allow cross examinations if the statement of the witness were to be made the basis of addition. Similar is the ratio laid down by the Hon'ble Supreme Court in the case of Shri KishinchandChellaram vs CIT (125 ITR 137) MAD where it has been held that - Before the IT Authorities could rely upon a piece of evidence, they were bound to produce it before the assessee so that assessee could controvert the statement contained in it. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his order. 6.1. Before us Ld.Counsel submitted that the AO has made the addition of ₹ 3,12,700/- for principle and ₹ 1,12,572/- for interest totaling to ₹ 4,25,272/- on the ground that the advance was made during the year when in fact none of the advance was made during AY.2005-06 or any entry is found to be relating to AY.2005-06. The amount of 3,12,700/- has been taken by the AO from page 24 of BK - 15 which represent balances brought forward from different pages and relates to the period as mentioned below against each: Name Amount Period Page Awasthi Munim 2000/- 31-05-2003 52/Item No. 9 RaghvendraAjitmal 19,000/- 31-05-2003 52/ItemNo. 16 Mansha Ram BijalPur 2,000/- 31-05-2003 52/Item No. 18 Kamlesh Chobey 12,500/- 15-06-1999 47,46 Item No. 1 GokarnDadi 6,000/- 31-05-2003 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/-) pertaining to AY.2005-06 which has not been found recorded in the seized diary any where may kindly be directed to be deleted. Finally, Ld.Counsel argued that no addition on mere presumption can be made unless supported by documentary evidence. 6.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee. 6.3. We have heard the rival contentions and perused the material available on record. The matter is initially partly-heard on 03-01-2020, on that date, the time was granted to the CIT-DR to verify from the record whether the entries mentioned in BK-1 subject matter of the present ground pertains to the assessment year under consideration or not. The Ld.CIT-DR clearly had submitted that the entries which are subject matter of the Ground No.4, does not pertain to the assessment year under consideration. We have ourselves also examined the record and the paper book filed by the assessee and we found the force in the submissions of the assessee, which was seconded by the Ld.DR. As the addition sought to be added by the AO pertains to the earlier assessment year, therefore, keeping in mind the principle of accrual as mentioned in Section 4 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t CIT(A) has erred on facts and in law in sustaining the addition of ₹ 8,62,125/- for unexplained cash duly recorded in the books of M/s Suresh Kumar Pandey and Brothers Bijalpur Corroborated by the statement receded u/s.132 of the Act on 03-03-2005. 8.1. Ld.Counsel for the assessee submitted that the AO has made the addition ignoring the categorical statement made u/s.132(4) by Santosh Kumar Pandey that Cash Recovered belongs to Suresh Kumar Pandey and Brothers without assigning any reason and by mentioning that at the time of search no such stand was taken whereas as per copy of statement recorded u/s 132 (PB Page - 80) a detailed statement to this effect was made u/s.132 (4) of the Act, which is of evidentiary value and cannot be ignored. Hence the addition made by AO is based on conjectures and surmises even the challan filled in the name of Suresh Kumar Pandey and brother accompanying the cash was found in the search at the spot. During the course of such statement of Shri Santosh Kumar Pandey was recorded on 03.03.2005, a copy of which is praised as per PB Page 80. In reply to Question No.2 it has been specifically stated by Santosh Kumar Pandey u/s.132(4) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such as per categorical statement recorded (Page - 80). Hence the authenticity of statement recorded on oath under section 132 (4) cannot be brushed aside on one ground or the other in a general manner. Therefore, Ld.Counsel requested the Bench that the addition made may kindly be directed to be deleted. 8.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee. 8.3. We have heard the rival contentions and perused the material available on record. The cash was recovered from the possession of the assessee and the assessee sought to explain the recovery of the cash as a payment required to be paid by the assessee on behalf of another firm of his brother pertaining to sand contract. It is difficult to comprehend that when the assessee was neither the partner nor the director nor the owner of the said company then how the cash can be said to be belonging to a third party. In our opinion, this is a plea taken by the assessee just to explain the cash the said plea is required to be rejected as the said plea has been made by the assessee to serve his own purpose without any basis. Accordingly, Ground No.6 of the assessee s appeal is dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that they are in the form of six note books maintained in the name of 6 different persons relating to the business of toll tax collection of shergarh bridge and pudin bridge. From, these six note books, it is very clear that this business was being run by the assessee jointly with other five persons. After examination of all these six note books relating to the business of toll tax collection of two bridges and therefore I found force in the arguments of the Ld AR that since six persons were involved in this business, the accountant has maintained six separate note books, one not books for each persons however as per the transaction recorded in these note books following computation of income has been found from the business of tool tax collection as mentioned by the Ld. AR in his written submission and the same is reproduced as under:- Saving from Shergarh Bridge 2,48,2027- Savingfrom Pudin Bridge 47,3107- Total Saving from Shargarh and Pudin 2,95,5127- as per diary Add: Income from April to May 2004 99,9757- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in running of toll tax collection business of shergarh Pudin Bridge . In view of facts as conceded by the CIT(A) himself that the afore said six notebooks contains similar transactions relating to the business of toll tax collection of the two bridges, the receipts and savings have been divided equally from the contract run by the six persons jointly as above including that by assessee and the payments have been made to PWD equally as mentioned above, there was no justification of adding security deposit payment in the hands of assessee alone. Hence, the addition sustained by CIT(A) at ₹ 1,90,000/- +₹ 2,00,000/- =₹ 3,90,000/- being contrary to the finding given by CIT himself is illegal and arbitrary and may kindly be directed to be treated. 10. The assessee has raised in Ground No.8that the CIT(A) has erred on facts and in law in sustaining addition of ₹ 2,35,832/- for toll bridge contract in which assessee had 167 share. 10.1. Ld.Counsel submitted that the CIT (A) has confirmed addition of ₹ 2,00,000/- against Ground No. 4 in respect of security of shergarh bridge ignoring the fact that assessee had 1/6 share in the contract of shergarh b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ris and Tahir are mentioned and the assessee has disown the same vide reply dated 16-01-2006. As per reply dated 23-08-2006 it was explained that DM Auriya awarded contract of fish to Tahir and Idris in support of which a letter from DM was also seized. The Assessee has no concern with the contract under taken by the aforesaid persons. It was specifically requested to AO that both the persons may be asked about these papers. Similar request was made in respect of Shailendra Singh Chauhan, Shri Sridhar Pandey the brother of the assessee was examined on oath by the AO and in the statement recorded on 14.11.2006 he has disowned these papers which were relating to Shailendra Singh Chauhan and a specific request was made to summon and examine him regarding the contents of paper found in the name of Shri Shailendra Singh Chauhan. It was also made clear that on page 65 to 68 no where the name of assessee appear. The matter was subjected to remand report and AO in his report without making any further inquiry to the submissions made by assessee has rested his remand report to what the AO has said in the assessment order (see Para 6 Page 2 of remand report PB 125). The AO has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 1/6th amount found as per the claim of the assessee which in the estimation would come to ₹ 45,832/-. In fact, the similar entries were found in all the six note books found during the course of survey pertaining to toll tax collection of two bridges. In our view, though the assessee claimed that he was entitled for 1/6th share in the toll tax collection of the bridges, but we failed to understand why 6 separate note books were maintained by the assessee in respect to the same business. The plausible answer would be in our understanding that the assessee was maintaining six separate note books with a view to suppress the actual toll collection or the six note books were maintained for the individual shareholders. The onus is on the assessee to prove that six note books were maintained for six partners and simultaneously the onus was also on the Revenue to prove that six note books were maintained for suppressing the toll collection. Therefore, a guess work is required to be done by the Bench and considering the totality of the circumstances and also peculiar facts of the present case, we restrict the addition to ₹ 1,90,000/-. Thus, the assessee gets the relief of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord. We have gone through the order passed by the Ld.CIT(A) and the Ld.CIT(A) had passed a reasoned order, dealing with the contention now raised before us. Therefore, the ground of the assessee is dismissed. 13. Vide Ground Nos.11 12 the assessee urged that the addition of ₹ 1,15,000/- sustained for house hold goods is arbitrary unjust. 13.1. Ld.Counsel submitted that the CIT(A) has acted against principle of natural justice in presuming that Appellant who is pensioner and co sharer of 300 bighas of agriculture land after leading 40 years of active life had no capacity in acquiring household goods of ₹ 1,15,000/- prior to 2005-06. The AO has made the addition of the ground that the expenses made in AC, TB, VCD, and Computer set and fridge to the tune of about ₹ 1,15,000/- remain unexplained. He has made the addition by saying that it is presumed the other items might have been received or purchase much earlier than 6 years. The AO has found no Material in the course of such that these items were purchased in AY.2005-06 when he himself says that other items might have been purchased prior to six year. No description has been given. The aforesaid ite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he transactions entered on page 1,2, 5,10 to 13. It cannot be made out that how the explanation given by the assessee is found to be unexplained without assigning any reason. Such an addition being devoid of any merit deserves to be struck down instantly. The explanation given by assessee is that entries on page 1 mentioning ₹ 70,000/- is the total of ₹ 40,000/- + ₹ 30,000/- which relate to rough calculation without any description. These papers are related to M/s Suresh Kumar Pandey and Brothers where the total turnover has been disclosed at ₹ 2,41,30,000/- and these might have been the rough jottings recorded by some persons relating to expenditure incurred out of the total receipts derived at ₹ 2.41 Crore since these are deaf and dumb entries no adverse inference can be drawn. Also no supporting material has been brought on record to substantiate the addition even in remand proceedings Regarding the Page No 2 Which is reproduced as under: 5,00,000/- Shri chotey Pandey ₹ 2,08,750/-, ₹ 16,666/- , ₹ 1,00,000/- , ₹ 8,25,416/- Shri Chotey Pandey is the partner of M/s Suresh Kumar Pandey and Brothers. There is no date mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ify his claim that the said expenditure belongs to M/s.Suresh Kumar Pandey and others. Ironically, the assessee failed to prove and produce his case before the lower authorities and also before us. During the course of proceedings before lower authorities, it was not disputed that these entries were not mentioned in the record sheet, recovered from the possession of the assessee. The onus is always on the assessee to prove and discharge that the payments made were relating to the business of Shri Suresh Kumar Pandey and brothers. In our view, the amount paid on the face of it appears to have been paid for the purposes of earning the income therefore, the assessee is entitled to the corresponding benefit which has been earned on account of such expenditure. In the absence of any help from any of the parties before us, we are required to make the guess of income which can be included for incurring the expenditure of ₹ 16,03,470/-. In our view, the overall circumstances of the case and more particularly the assessment year 2005-06 no purpose would be served to remand the matter back to the CIT(A) for granting a fresh opportunity for producing the books of account of M/s.Sures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06 it was made clear to the AO vide Para 7 that the papers found in the name of Radha Dubey W/o K.K. Dubey relate to purchase of vehicle by her and the vehicle does not pertain to appellant her husband is working in LIC and for the purpose of taking LIC premium from the Appellant and his family. He might have left these papers. Even in the remand report as mentioned in Para 22.03 of CIT (A) The AO has not brought any material to support the addition. Also the CIT(A) except taking shelter of section 132(4A) without bringing any Corroborative material has confirmed the addition under section 132 (4A) which in absence of any material to support, is illegal. Finally,Ld.Counsel argued that the addition made therefore being devoid of any merit and illegal may kindly be directed to be deleted. 15.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee. 15.3. We have heard the rival contentions and perused the material available on record. The additions were made by the lower authorities on the basis of the sale document found during the course of search. The documents on the face clearly gives the name and addresses of the instrument showing the ow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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