TMI Blog2017 (5) TMI 1750X X X X Extracts X X X X X X X X Extracts X X X X ..... names were appearing in the said documents but made the addition by invoking the provisions of Section 263 of the Act. The assessee is earning his income mainly from commission and interest which is evident from the copy of acknowledgment of ITR placed. It is not brought on record that the assessee was engaged in the business of gold or jewellery and earning the income from said business, the addition has been made by the AO by presuming that the assessee had made payments to the certain parties but in those documents which had been relied by the AO nowhere it is mentioned that the assessee purchased the gold and even the nature of the transaction is not clear because against certain payments, some quantity of gold has been written and against the others nothing is mentioned. Therefore, the addition made by the AO is only on the basis of surmises and conjecture without bringing any cogent material on record to substantiate that the assessee was engaged in the business of gold and jewellery and the AO had not brought any material on record to substantiate that the denial of the assessee was false. The contention of the assessee that there was a family function two months ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 153C of I.T. Act in order to ascertain and assess the correct Assessee. 6. The Appellant craves leave to add, alter, amend or forgo any of the grounds of appeal at the time of hearing. 3. From the above grounds, it is gathered that only grievance of the assessee in this appeal relates to the sustenance of addition of ₹ 1,29,82,283/- in respect of alleged unrecorded sales/unrecorded business transactions and unrecorded payments etc. 4. Facts of the case in brief are that a search and seizure operation u/s 132 of the Income Tax Act, 1961 (hereinafter referred to as the Act) was carried out on 09.12.2005 at the residence of the assessee and certain incriminating documents were found and seized. Thereafter, the notice u/s 153A of the Act was issued on 05.09.2007 requiring the assessee to file the return of income. In response the assessee filed the return of income on 12.10.2007 declaring an income of ₹ 1,15,652/- in which the business income was declared at ₹ 87,916/- and the income from other source at ₹ 27,889/-. The AO on the basis of the seized documents asked the assessee to explain the unrecorded sales/business transactions and unrecorded paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pers. It is relevant to mention here that on 08.10.2005 i.e. prior to 2 months of search, there was a family function at the house of assessee as is evident from the seized records and so many people were gathered and one of them could have left these documents at the house of assessee. It is submitted that Page No.46 47 of the seized material also prove that there was function in the family of assessee .These documents are annexed at Page No.22, 23 and 24 of the Paper Book. However, the AO without making any enquiry or issuing any summons u/s 131 of the Act, to the concerned persons has made the addition in the hands of the assessee without any basis. 1.2 Ld Assessing Officer has alleged that since the assessee failed to furnish any explanation in respect of these papers the addition is required to be made in the hands of the assessee. It is submitted that the Assessing Officer failed to appreciate that since the assessee did not know about any of the documents he had not furnished any explanation. It is submitted that furnishing of any explanation in respect of unrelated material would prove the stand of the assessee contradictory in as much as on one hand he was denying the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier years and for the impugned year are correct and reliable. It is true that the scope of the new assessment procedure u/s 153A is wide enough to include all kinds of income. However, it does not mean that the Assessing Officer can add anything on estimate basis. Reliance can be placed on the recent judgment of the ITAT Delhi Bench in the case of Anil Bhatia wherein the ITAT has discussed the scope of section 153A at length. Further reliance can be placed on the judgment of CIT Vs Girish Chaudhry 296 ITR 619 (Del). It is relevant to mention here that the facts of this case were similar to the facts of the case of the assessee's case. Their lordships have affirmed the following finding of the ITAT: In the present case, the Revenue has used its longest arm of search available to the Revenue to unearth unaccounted money or evidence thereof. Having taken above step and as per law, it has to be proved strictly that undisclosed income assessed in the hands of the assessee is undisclosed income beyond a reasonable doubt. As noted earlier in the first page, total of all the five figures is 57.50 but addition of ₹ 48 lakhs was made and not of ₹ 57.50 lakhs. Why figures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of legislature that wherever the legislature intended to continue the presumption under sub- section (4A) of Section 132, it has provided so. It has not been provided that the presumption available under Section 132 (4A) would be available for framing the regular assessment under Section 143 as well. This is also evident from the fact that whereas the legislature under Section 132 (4) has provided that the books of account, money, bullion, jewellery and other valuable articles or things and any statement made by such person during examination may thereafter be used as evidence in any other proceedings under the Act but has not provided so under sub-section (4A) of Section 132. It does not provide that the presumption under Section 134A would be available while framing the regular assessment or for that matter under any other proceeding under the Act except under Section 278D. Section 132 being a complete code in itself cannot intrude into any other provision of the Act. Similarly, other provisions of the Act cannot interfere with the scheme or the working of Section 132 or its provisions. Presumption under Section 132 (4A) is available only in regard to the proceedings f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the High Court of Delhi in Daya Chand (supra) have taken the correct view in holding that the presumption under Section 132(4A) is available only in regard to the proceedings for search and seizure under Section 132. Such presumption shall not be available for framing the regular assessment. The High Court of Karnataka in the impugned judgment has clearly erred in holding to the contrary. Consequently, question No. 1 of the Revenue is answered in the affirmative, i.e. against the Revenue and in favour of the assessee. It may be clarified that through the presumption under section 132(4A) is not available to the authorities while framing the regular assessment the material seized can be used as a piece of evidence in any other proceedings under the Act, all contentions are left open. The appellant had denied the ownership of the seized paper Annexure-A Page 31, 32 and 33 etc from the very beginning and stated that these paper were not related to the assessee. No statement was recorded by the search party regarding the ownership of these papers and the content thereof at the time of search No enquiry was made either by the authorized officer or the AO from the parties who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or clause (b) or clause (c), as the case may be, of subsection (1) of section 132A. had been found in the possession or control of that person in the course of a search under section 132]. The said provision has been inserted by Finance Act 2007 w.e.f. 1.10.75. As per the said provision Where any books of account, other documents are found in the possession or control of any person in the course of search, it may, in any proceeding under this Act be presumed that such books of accounts / other document belongs to such person, the content of such documents are true etc. In regard to the seized documents Annexure A-4 page 31, 32 and 33 the AO had not found any corroborative evidence during the course of search and assessment proceedings. However, from the said seized documents the figure of ₹ 12982873/- is clear. It was for the assessee to explain the noting in those seized documents but the assessee has only denied the ownership of those documents and no explanation have been filed about the notings. As per the provision of section 292C cited above these document has to be presumed to belong to the appellant as these were recovered from his control at the time of search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 590 (Del. C Bench) ACIT Vs Satyapal Wassan (2008) 5 DTR (Jab. Trib.) 202 Rakesh Goyal Vs ACIT (2004) 87 TTJ 151 (Del.) N. K. Malhan Vs DCIT (2004) 91 TTJ 938 (Del.) Jagdamba Rice Mills Vs ACIT (2000) 67 TTJ 838 (Chd.) Ashwani Kumar Vs ITO (1992) 42 TTJ 644 (Del.) ACIT Vs Ashok Kumar Vig. (2007) 106 TTJ 422 (Ranchi) Chander Mohan Mehta Vs ACIT (Inv.) (1999) 65 TTJ 327 (Pune) M.M. Financiers (P) Ltd. Vs DCIT (2007) 107 TTJ 2000 (Chennai) Hissaria Bros Vs ACIT 22 Taxworld 684 (ITAT Jaipur) ITO Vs Mannalal 22 Taxworld 551 (ITAT Jaipur) Ashwani Kumar Bhardwaj Vs DCIT 21 Taxworld 358 (ITAT Jaipur) Mohd. Lllias Choudhary Vs DCIT 25 Taxworld 394 (ITAT Jaipur) Moonga Metals Pvt. Ltd. Vs ACIT 67 TTJ 247 (All.) 7. In his rival submissions the ld. DR supported the orders of the authorities below and further submitted that during the course of assessment proceedings, the assessee was asked to furnish the explanation relating to page nos. 31, 32 33 of Annexure A in respect of payments of ₹ 1,29,82,873/- made to various parties as on 26.12.2004 and to explain the source of payment by furnishing the necessary evidence as to whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of facts is discharged or not has to be seen from the replies of the assessee based on facts. However, the law is well settled that the presumption is rebuttable. In the facts of the present case, the assessee has denied having any transactions with M/s Smridhi Sponge and has also denied consequently the contents of the seized document as relatable to it; the denial as per the assessment order is also on an affidavit; the particulars available in the public domain procured through the internet searches from the ROC and the official income tax sites as per print outs of the downloads are relied upon. The fact that these were unimpeachable third party evidences that too from the official government sites goes without saying. In these facts, merely sending notices to the addresses provided on the ROC site cannot be said to be rebutting the evidence on record namely that M/s Smridhi Sponge, assessed to tax in a specific jurisdiction in Kolkata manufacturing M.S. Ingot and Sponge Iron, having specific address as per ROC site receiving payments in cash and cheque as per the seized documents qua which presumption u/s 292C operates towards their correctness; wherein two specific cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot disputed that the Assessee had clearly denied having any dealing with M/s Smridhi Sponge Limited and had also filed an affidavit to that effect. The ITAT found, as a matter of fact, that the Assessee on its part had made the necessary enquiries and also provided final accounts of M/s Smridhi Sponge Limited; confirmation from the Director of M/s Smridhi Sponge Limited; details of the bank accounts; final accounts; Director's Report; PAN Number etc. which sufficiently discharged the burden cast on the Assessee. The ITAT also found that the Assessee had provided the necessary information for the AO to make the requisite enquiries from M/s Smridhi Sponge Limited as well as M/s Galaxy Exports Pvt. Ltd. In our view, no interference with the order of the ITAT is called for under Section 260A of the Act since the findings of the ITAT are essentially factual. Further, we find no infirmity with the findings returned by the ITAT and in any event the same cannot be held to be perverse by any stretch. 18. In the circumstances, no substantial question of law arises and the appeals are, accordingly, dismissed. 11. Similarly, the ITAT Mumbai Bench in the case of Sh. Pandoo P. Naig Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buttable presumption and not a conclusive presumption because it is a presumption of fact not a presumption of law. In the present case, the assessee from the very beginning stated that the documents found during the course of search did not belong to him. The documents relied by the AO i.e. to page nos. 31, 32 33 of Annexure A are placed at page nos. 9 to 11 of the assessee s paper book, in those documents nowhere name of the assessee is mentioned. The assessee is earning his income mainly from commission and interest which is evident from the copy of acknowledgment of ITR placed at page no. 1 of the assessee s paper book. In the present case, it is not brought on record that the assessee was engaged in the business of gold or jewellery and earning the income from said business, the addition has been made by the AO by presuming that the assessee had made payments to the certain parties but in those documents which had been relied by the AO nowhere it is mentioned that the assessee purchased the gold and even the nature of the transaction is not clear because against certain payments, some quantity of gold has been written and against the others nothing is mentioned. Therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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