TMI Blog2021 (7) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... orities that the assessee has paid on-money to the sellers of the property because the two evidence relied by the Ld. Revenue Authorities viz., the data retrieved from the Pen-drive and the admission by the vendors of the property though may have a persuasive value but will not have much substantive evidentiary value in order to make additions in the hands of the assessee. Therefore, in the interest of justice, we hereby direct the Ld. AO to delete the addition made in the hands of the assessee towards on-money paid for the purchase of the residential property. - ITA No. 783/Hyd/2020 - - - Dated:- 8-7-2021 - Shri A. Mohan Alankamony, Accountant Member And Shri S.S. Godara, Judicial Member For the Assessee : Shri P. Murali Mohan Rao For the Revenue : Smt. Nivedita Biswas, DR ORDER PER A. MOHAN ALANKAMONY, A.M: This appeal is filed by the assessee against the order of the Ld. CIT(A)-11, Hyderabad in appeal No. 10281/2019-20, dated 04/09/2020 passed U/s. 143(3) r.w.s 153A of the Act for the A.Y. 2015-16. 2. At the outset, Ld. AR submitted before us that there is a delay of 03 days in filing the appeal before the Tribunal. In this regard, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he business of investing in real estate and undertaking infrastructure projects etc. Shri Ajaz Farooqi is the Director of the assessee company who had predominant control over the company. The assessee company filed its original return of income on 19/11/2015 for the AY 2015-16 declaring total income of ₹ 2,83,810/- and the same was processed U/s. 143(1) of the Act on 30/06/2018. Thereafter, search and seizure operations U/s. 132 of the Act was conducted in the case of the assessee company and its related persons and concerns on 4/7/2017. Subsequently, the assessment U/s. 143(3) r.w.s 153A of the Act was completed vide order dated 28/12/2019 wherein the Ld. AO made several additions along with the addition mentioned in the grounds herein above. 6. Ground No.1: Addition of ₹ 95 lakhs towards unaccounted commission: 7. The Ld. AR at the outset submitted before us that the Ld. AO had made the addition of ₹ 95 lakhs U/s. 69C of the Act on the presumption that the assessee had paid commission in order to obtain accommodation entries of ₹ 18,60,00,000/-. The Ld. AR further submitted that the Ld. CIT (A) had deleted the addition made by the Ld. AO for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) Terinl Enterprises Ltd. ii) Dwinger Agents P Ltd iii) Rochhard Enterprises P Ltd iv) Verbena Developers P Ltd. v) KD Stock broking p ltd vi) Micron precision engineering p ltd. Q4. What are the other companies operated from this address i.e 3/14A, Ist Floor, Double Storey, Vijaya Nagar. Ans: The following companies are operated from this premises: S. No Name of the company Nature of activity 1 Efficient Industrial Finance Ltd Investments in shares and debentures 2 Goose Shares and Securities P Ltd Investments and finance 3 Karpo Real Estate P Ltd Real estate investments 4 Karpo Builders P Ltd Real estate investments 5 Jasnath Infrastructure P Ltd Real estate investments 6 Tarini Enterp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Corporate office i.e 20-B, Old Gupta Colony, Delhi. Q8. On verification it is found that the building at the above address is being demolished and no office was found functioning there. Please explain. Ans: Yes, the premise is under renovation. So we have shifted the relevant records temporarily to 3/14A, 1st Floor, Double Storey, Vijay nagar colony, Delhi. However, books of accounts are not readily available at this office. Back up of the accounts was taken up and kept with our auditor. I will furnish the books of accounts as and when required. Q9. Who are the directors of the above companies? Ans: They are all my relatives and friends and will furnish list of all directors of the above companies by post. Q.10. Have the above companies made any advances/investments in the following companies/individuals? , S. No. Name of the company 1 Zainab Investments P Ltd 2 Zara Investments P Ltd 3 S.V. Multi Logitech P Ltd 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3000000 Goose Shares and Securities P ltd 2015-16 54000000 Total 57000000 iv) Mrs. Laxmi Raman Name of the company FY Amount invested Jasnath 2014-15 1500000 Gaiety 2014-15 3000000 Minimum 2014-15 500000 Total 5000000 I am furnishing herewith the confirmation letters, the copies of bank transactions and copies of balance sheets in relation to the above transactions for your verification. Q.11. What are the sources of above investments? Ans: The investments have been made out of the share capital/investments. Q12. Please furnish the details of the share holders of the above companies with full address with PAN. Ans: I will compile and forward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same is, accordingly, deleted. 8. The Ld. AR further submitted before us that though the Ld. CIT (A) had deleted the addition with respect to ₹ 18,60,00,000/- however, omitted to adjudicate the ground raised with respect to the addition made towards the presumed commission paid for arranging accommodation entries for ₹ 18,60,00,000/- amounting to ₹ 95 lakhs which is interrelated. The Ld. AR further argued stating that when the addition made for ₹ 18,60,00,000/- towards the accommodation entries itself is deleted then addition made for ₹ 95 lakhs on the presumption that the assessee would have paid commission for obtaining the aforesaid accommodation entries does not have any legs to stand. The Ld. AR therefore submitted that the addition made for ₹ 95 lakhs towards the payment of commission for obtaining accommodation entries may be deleted. The Ld. DR could not controvert to the submission of the assessee. 9. After hearing both sides, we find merit in the submission of the Ld. AR. When the addition made for ₹ 18,60,00,000/- for obtaining accommodation entries itself is deleted then there cannot be any scope for sustaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ans: I confirm that the printout page no.1 of Annexure: A/JKD/Res/05 (taken from HP Pen-drive No.1 seized under the annexure: A/JKD/Res/04 from the path PEN-D/ZAINAB INVESTMENT-House Constr.xls. which is found in my house. The details available in the page re cost of the property and the payment details for the same. The page contains the details of payments made towards the purchase of house property situated at Jubilee Hills Cooperative House Building Society Limited, Jubilee Hills, Hyderabad of ₹ 33,50,00,000. ₹ 19,40,75,000/- was paid through demand drafts to Smt. A. Bhanu Rekha (₹ 9,60,30,000) and Smt. Adala Indira Priyadarshini (₹ 9,80,45,000). The remaining component of ₹ 14,09,25,000/- was details of cash payment in two instalments (₹ 12,00,00,000 and ₹ 2,09,25,000). *** Q.No.50. I am showing he printouts (taken from the Pen-drive.1 from the path pen/D/Receipts.xls) seized vide page no.4 to 8 under the annexure A/JKD/Res/05. Kindly confirm an explain the contents? Ans: Yes. I confirm that the print out was taken from the pen-drive found in my house. The details available in the page are receipts for cash payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts are collaborated by the statement of the person from whose possession the document is seized and the acceptance of seller of the property as to cash receipts. In view of the above factual position, the ratio laid down in the decisions relied on by the appellant are not applicable. The facts of the case as brought out by A.O. are different from the cases relied on by the appellant. In view of the above, the addition as made by the A.O. is confirmed. The grounds raised are rejected. 14. The Ld. AR submitted before us that the Pen-drive relied on by the Revenue is neither books of account nor a document, but it is only a digital device. The Ld. AR further argued by stating that any digital evidence should be corroborated with some physical evidence seized during the course of search, otherwise no conclusive conclusion can be drawn and in the case of the assessee no such physical evidence was seized during the course of the search, or any material was found with the assessee subsequently. The ld. AR further submitted that the printout of the digital data did not bear the signature of the party and there were no signature of witness in order to prove the integrity of the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DCIT vs. Shri Mahesh Bansal in ITA No. 499/Ind/2018 vide order dated 12/6/2019 for the AY 2010-11. It was therefore pleaded that the addition made by the Ld. AO for ₹ 14,09,25,000/- which was further sustained by the Ld. CIT (A) may be deleted. The ld. DR on the other hand argued in support of the order of the ld. Revenue Authorities and prayed for confirming the same. 15. We have heard the rival submissions and carefully perused the materials on record. Page No. 54 of the assessment order contains the print-out extract of the data retrieved from the Pen-drive which is supposed to be seized from the premises of the assessee s employee, being the summary of payment made for purchase of an area of 2855 sq ft. The same is signed by the employee of the assessee stating that the printout is taken from the Pen-drive G:\PEN-D\ZAINAB INVESTMENT-HOUSE CONST.xls . Other than that, nothing is penned in the print-out. Further as pointed out by the Ld. AR neither these documents are signed by the Ld.Revenue Officers or by any witness. Moreover since, the data is retrieved from a digital device certificate U/s. 65B(4) of the Evidence Act is essential to prove the authenticity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the oral statements such addition was made in the hands of the sellers which is not appropriate. The final outcome of those assessment Orders is also not brought to our notice. It is obvious that addition cannot be made in the hands of the assessee on the basis of mere statements of the third parties viz., the sellers of the property from whom the assessee has purchased the property. In this circumstance when there are no other cogent corroborate evidence, we fail to understand as to how such addition can be made in the hands of the buyers as well as the sellers of the property. Therefore, we are not inclined to place much reliance on the observations made by the Ld. AO. In the case of the assessee the purchase of the property is concluded by a way of a Registered Sale Deed stating that the sale consideration is ₹ 19,40,75,000/- which were paid by Demand Draft. In a similar circumstance the Hon ble Apex Court in the case K.P. Varghese vs. ITO [1981] reported in 131 ITR 597 had categorically held that no addition can be made on the plea of understatement of sale consideration unless it is established that physically money has been received over and above the declared consider ..... X X X X Extracts X X X X X X X X Extracts X X X X
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