TMI Blog2020 (5) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... e are of the view that the value as adopted by the AO for ₹ 4.65 crores treating the sale consideration is not sustainable. The impugned transaction cannot be treated as colourable device adopted by the assessee to escape from the income tax liability. Accordingly we are of the opinion that the principles laid down in the case of McDowells[ 1985 (4) TMI 64 - SUPREME COURT] cannot be applied in the case on hand. In view of the above, the ground of appeal of the Revenue is dismissed. Addition being the income admitted during the search action - whether the amount mention in the seized documents represents the income of the assessee as alleged by the AO? - HELD THAT:- Information contained in the seized documents are just the information without any support and therefore no credentials can be given to such information until and unless it is based on some materials. As such, seized loose documents found during the search should be read in association with the other materials before reaching to the conclusion that such seized material represent the income of the assessee. We also note that the lose paper found during the course of search did hold evidentiary value unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd style of Hitraj Traders. There was a search carried out at the premises of the assessee dated 15/09/2009. During the course of search certain documents were unearthed marked as annexure- BS-10. On the basis of these documents certain facts emerged for the sale of the land situated at Mota mava Survey No. 38, Rajkot District on Satakhat basis as summarised under: Annexure BS-10 Page no. 36 to 39 33 to 35 27 to 32 Satakhat made between Shri Hitesh M Bagdai (Seller) Rajat Finance Public Ltd. (Purchaser) Cancellation of satakhat Shri Hitesh M Bagdai (Seller) Rajat Finance Public Ltd. (Purchaser) Hitraj Developers Pvt. Ltd. Director Hitesh M Bagdai (Seller) Rajat Finance Public Ltd. Director Punamben H Bagdai (Purchaser) Land Size 12.609.08 Sq. Mtrs 12.609.08 Sq. Mtrs 12,672.57 Sq. Mtrs Amount (Rs.) 4,65,00,000 4,65,00,000 4,65,00,000 Adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings u/s.271(1)(c) of the Act is initiated for concealment of income. The capital gain is accordingly reworked out as under: Sale price of the land ₹ 4,65,00,000/- (-) Indexed cost of acquisition ₹ 9,70,582/- Capital gain ₹ 4,55,29,418/- (-) Capital gain declared by the assessee ₹ 2,90,418/- Addition on account of long term capital gain ₹ 4,52,39,000/- Aggrieved assessee preferred an appeal to the learned CIT (A) 4. The assessee before the learned CIT (A) submitted that the consideration received by him is of ₹ 12.61 lakhs as per this agreement which has to be taken as Full value of consideration for computing the capital gain as provided under section 48 of the Act. The assessee reiterated the submissions as made before the learned CIT (A). 4.1 The learned CIT (A) after considering the submission of the assessee observed that the provisions of section 48 of the Act requires to take the sale consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO for making the addition was based on Sanakhat found during the course of search. But the AO has not brought anything on record for any movement of the fund received by the assessee over and above the value declared in the registered documents. Regarding the receipt of money of ₹2.65 crores from Rajat Finance private Ltd, we find that such money was returned back by the assessee in the subsequent year and this fact was not doubted by the authorities below. Accordingly, the receipt of such money cannot be treated as consideration received by the assessee against the transfer of the land. 6.3 Even the value determined by the DVO suggest the fair market value at ₹ 13.87 Lacs only. Thus we are of the view that the value as adopted by the AO for ₹ 4.65 crores treating the sale consideration is not sustainable. 6.3 In view of the above, we hold that the impugned transaction cannot be treated as colourable device adopted by the assessee to escape from the income tax liability. Accordingly we are of the opinion that the principles laid down in the case of McDowells (supra) cannot be applied in the case on hand. In view of the above, the ground of appeal of the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was a seized document at page No. 75 of annexure-BS-10, duly signed by the assessee dated 26 June 2008, evidencing the receipt of cash of ₹ 2 crores from M/s J.Y. Resources Pvt. Ltd. As such the assessee has issued two cheques bearing No. 703971 and 703972 dated 26 June 2008 as shareholder deposits to the company M/s J.Y. Resources Pvt. Ltd. and received cash of ₹ 2 crores from the company. As such the assessee based on this documentary evidence made an adhoc disclosure of ₹ 2.50 crores in the manner as discussed above. In view of the above the AO treated the sum of ₹ 2.10 crores as income for the year under consideration and a sum of ₹ 40 lakhs for the assessment year year 2010-11 as disclosed in the statement furnished under section 132(4) of the Act and added the same to the total income of the assessee. Aggrieved assessee preferred an appeal to the learned CIT (A) 10. The assessee before the learned CIT (A) submitted that the search was conducted on 15 September 2009 which was continued for 39 hours. But the assessee was not found to be the owner of any unaccounted money, bullion, jewellery or any other valuable article. In fact search t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt found during the course of search is correct. 11.1 The learned CIT (A) further observed that the receipt in the present case cannot be treated as income of the assessee. It is because the receipt was against the money provided by the assessee to the company M/s J.Y. Resources Pvt. Ltd. which is undisputed fact. 11.2 The learned CIT (A) also observed that the additions of ₹ 2.50 crores for both the years was based merely on the statement furnished under section 132(4) of the Act without the support of any corroborative evidence. Accordingly the learned CIT (A) concluded that the addition cannot be made merely on the basis of the statement. Thus the learned CIT (A) deleted the addition made by the AO for the both the assessment years by observing as under: 7.9 Considering the entire facts and circumstances of the case, I am of the considered opinion that the addition that vests only on the basis of statement without corroborative material cannot be justified. Therefore, the addition made by the Assessing Officer of ₹ 2.10 crores and ₹ 40lakhs for AY 2009-10 and AY 2010-11 respectively is hereby deleted. 7.10 So far as alternative contention of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anced to the party has shown interest income which has been accepted by the revenue. 13.4 The learned AR at the time of hearing also claimed that the assessee has received money back from the party in the subsequent year which was adjusted against the shareholder deposits and the same was also accepted by the revenue. 13.5 We also note that the information contained in the seized documents are just the information without any support and therefore no credentials can be given to such information until and unless it is based on some materials. As such, seized loose documents found during the search should be read in association with the other materials before reaching to the conclusion that such seized material represent the income of the assessee. We also note that in the case of CBI v. V.C. Shukla 1998 taxmann.com 2155 (SC), the Hon ble Apex Court has observed that loose sheets have been ruled out as of any evidentiary value. Loose sheets cannot be accounts books of a party. Even if it is taken as an informal accounting it is not the record of the assessee. Even assuming such entries as correct and authentic they cannot without independent evidence fix a liability upon a pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e do not find any reason to interfere in the order of the ld. CIT-A and direct the AO to delete the addition made by him. Hence the ground of appeal of the Revenue is dismissed and the ground raised by the assessee in the CO is allowed. 13.7 The other grounds raised by the assessee in the CO does not survive as the main ground has been decided by us in his favour. Hence we dismiss the same. In the result the appeal filed by the revenue is dismissed and the CO filed by the assessee is partly allowed. 14. Coming to the ITA No. 30/RJ T/2013, an appeal by the revenue. The revenue has raised following grounds of appeals. 1. The Ld.CIT9A) has erred in law and on facts in deleting the addition of ₹ 40 lakhs made being the income admitted during the search action. 1.1 In the process, the Ld.CIT(A) failed to take cognizance of the fact that income of ₹ 40.00 lakhs was admitted in the statement recorded on oath at the time of search action and assessee has failed to submit plausible explanation of other evidences discovered at the time of search action. 2. On the facts and in the circumstances of the case, the Ld.CIT(A) ught to have upheld the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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