TMI Blog2022 (1) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... challenge before us, has again recorded a similar findings, as recorded by the Coordinate Benches in SHRI JUGAL KISHORE GARG (DEREWALA) [ 2021 (5) TMI 814 - ITAT JAIPUR] , that M/s Manglam Builder Developer Ltd had owned up all the N Trading Company data found in cloud as belonging to them and basis the same, it filed settlement petition before Settlement Commission on 28.03.2018 and the On money receipts relating to various real estate projects Pertaining to JEM project has been declared by MBDL and after considering the expenditure incurred, MBDL has offered additional income of ₹ 72.32 cr before the Settlement Commission and which has been accepted by the Settlement Commission in its order dated 16.05.2019 and accordingly, where on-money received in JEM project belong to MBDL and MBDL has offered the same which has been accepted and no evidence was found in search to indicate that the appellant has received any share in on-money , the AO was directed to delete the additions in the hands of the assessee. We therefore find that the facts of the aforesaid case are pari-materia arising out of same search action on M/s Manglam Group and same set of data in form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to On-money were found in N Trading cloud and thus addition of on money was on the basis of incriminating seized data. 5. Whether on the facts and in the circumstances of the case and in law, Ld. CIT(A)-4, Jaipur is justified giving relief to the assessee on the ground that the Manglam Group had owned up the entire entries in the N Trading on cloud data before the Hon ble ITSC. The order of Hon ble ITSC has already been challenged in writ before the Hon ble High Court. 3. Briefly stated, the facts of the case are that the assessee has filed her original return of income u/s 139 on 05.08.2013 at a total income of ₹ 42,89,950/- which was revised u/s 139(5) on 31.05.2015 at a total income of ₹ 1,54,33,880/-. Subsequently, a search and seizure operation u/s 132(1) was carried out on 04.11.2016 at the various premises of M/s Mangalam Group, Jaipur. The residential premises of the assessee were also covered in the said search operation. Thereafter, notice u/s 153A was issued and in respect of the said notice, the assessee furnished her return of income on 31.10.2018 declaring total income of ₹ 1,54,33,880/-. Thereafter, notice u/s 143(2) as well as 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 20.12.2018. Further, our reference was drawn to the findings of the Assessing Officer, after considering the submissions so filed by the assessee, which are contained at para 7.1 to 7.6 of the assessment order which reads as under:- 7.1 Firstly, the assessee has simply denied having any knowledge of the N. Trading Co. Cloud entries found in his name. Now the moot question arises that can denial on the part of the assessee be treated as proof of the fact that the entries found in the cloud do not pertain to him. The answer is No. In order to discharge the burden the assessee needs bring forth something more than simple denial. The denial by the assessee holds no substance when M/s MBDL has itself owned up the entire cloud entries while filing its petition before the Hon'ble ITSC. M/s MBDL has admitted that the contents of the unaccounted tally data found on cloud are correct and has offered it for taxation. When one party of the transactions under consideration has held the contents of the cloud data are correct, then the second party to the transaction (in this case the assessee) needs to bring forth more evidence which could substantiate his stand that no such tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment by resorting to denial. Denial does not have any evidentiary value, on the other hand the incriminating cloud data is a speaking document of evidentiary value, as the same has been owned up in totality by M/s MBDL Pvt. Ltd. before the Hon'ble ITSC. The admission in this case has been made by M/s MBDL Pvt. Ltd. and MBDL has continuously refused to disclose the details of the persons with whom this transaction was made. In such a scenario the N Trading entry under consideration pertain to the assessee. 7.4 The assessee has alleged that the evidence of on money found against him is nothing but a presumption and assumption. However such a presumption is a rebuttable one and the assessee has tried to rebut the presumption by submitting that he has never engaged in any of the on money transactions which are being reflected on the N. Trading Cloud and he has no knowledge of any such transaction. A rebuttable presumption is clearly a rule of evidence which has the effect of shifting the burden of proof by leading the evidence. The word rebuttable here means that the person against whom it lies can rebut it when called upon to prove it, which means that the party w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to day activities relating to this project and all the development work as well as sale, booking, etc. All these work are carried out by MBDL. She neither has any knowledge of the alleged on money collected by the builder nor received any on money from the builder. (ii) The documents and soft data referred by the AO were seized from the business premises of MBDL and not from the residence of the assessee. Hence these data can t be used against the assessee. (iii) During the course of search of assessee, statement of Shri Munna Lal Goyal, family head of assessee was recorded wherein certain questions relating to Jaipur Electronics Market was put to him. In response to these questions, Sh. Munna lal Goyal categorically stated that neither he nor any of his family members are involved in booking/ sale of offices/ shops in JEM. All these activities were looked after by MBDL. His family members have only received their respective share in the sale proceeds as specified in the sale deed as per the development agreement. (iv) In search of the assessee, no document or data or any material or evidence was found to suggest that she or her family members have received any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Prarthana Construction (P) Ltd. Vs. DCIT (2001) 118 Taxman (Magz.) 112 (Ahmedabad) (Trib.) It has been held that loose papers and documents seized from premises of third parties and statement recorded at back of assessee without it being afforded opportunity to interrogate said documents and without bringing on record any supporting evidence, could not be made basis for adding undisclosed income in hands of assessee. ACIT Vs. Miss Lata Mangeshkar (1974) ITR 696 (Mumbai) It has been held that on appreciation of evidence on record, that entries in the ledger of a firm (third party) did not represent assessee's income from undisclosed sources, was finding of the fact not giving rise to any referable question of law. 9. It was further submitted that MBDL has owned up all the data found in cloud as belonging to them. On the basis of the same, it filed settlement petition before Settlement Commission on 28.03.2018. As per the petition filed by MBDL before the Hon ble Settlement Commission, the following on money receipts were considered for computing the income:- Particulars Total Receipts of On money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances of the case and has deleted the additions so made by the AO and our reference was drawn to his findings which read as under: 6. Careful perusal of the order passed by the AO indicates that the Ld. AO has based his decision to make the addition on the basis of the following:- (i) Appellant has not given any proof that no such amount of 'on money' is received. Simply denying the receipt cannot be accepted. (ii) MBDL has owned up the transaction while filing the petition before Settlement Commission. Thus, where one party has accepted the transaction, the same is correct for other also. (iii) As per section 292C, the presumption provides that where any books of accounts, documents etc. are found in the possession or control of any person in course of search u/s 132 then it is presumed that the same belongs to such person. 7. I have perused the written submissions submitted by the Ld. AR and the order of the AO. I have also gone through the various case laws cited by the Ld. AR. I have also gone through the common paper book filed along with the order of the settlement commission in case of MBDL. 8. After carefu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson in whose name such data is recorded. It is not the case of the AO that the director of MBDL has stated that the 'on money' recorded in the tally data has been shared with the assessee. (vii) MBDL has owned up all the data found in cloud as belonging to them. On the basis of the same it filed settlement petition before Settlement Commission on 28.03.2018. As per the petition filed by MBDL before the Hon'ble Settlement Commission the following 'On money' receipts were considered for computing the income:- Particulars Total Receipts of 'On money' Amount of such 'On money' receipts related to JEM as declared by MBDL Booking Receipts 6,90,12,13,000 14,09,03,400 Settled Booking Receipts 3,67,74,14,100 18,76,04,460 Total 10,57,86,27,100 32,85,07,860 From this on money after considering the expenditure incurred, MBDL has offered additional income of ₹ 72. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preceding paragraph of this appeal. The assessee has also filed his return of income on 30-10-2017 for the assessment year 2017-18 declaring total income at ₹ 3,32,32,940/-. Thereafter, the AO completed the assessment u/s 143(3) read with Section 153C of the Act for the respective assessment years 2014-15 to 2017-18 as per the following total income tabulated as under:- AY Dated Assessed income (Rs.) Addition made by the AO 2014-15 28.12.2018 20,21,48,150/- (i) Addition of ₹ 10,34,68,000/- u/s 69 of the Act on account of alleged undisclosed capital employed by the appellant in various projects of Manglam Group on the basis of cloud data. (ii) Addition of ₹ 2,46,25,600/- on account of surplus share profit in projects of Manglam Group on the basis of cloud data. (iii) Addition of ₹ 85,00,000/- on account of interest earned on the basis of cloud data. 2015-16 28.12.2018 8,78 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 15.10 cr. was offered on the basis of cloud data of N. Trading Company. The same is accepted by the Settlement Commission at page 151 of the order dated 16.05.2019. The relevant extract of the final order wherein this issue is discussed is reproduced as under:- Para I of Page. 137-138 of the Hon'ble Settlement Commission order UNACCOUNTED CASH LOANS - CHAPTER VII OF THE RULE 9 REPORT: (page no. 128-180 of the Report):-As offered by the Applicants: Cash Peak Of Cash Loans And Capital Transactions: ₹ 15,10,77,500/- .As was the case with the capital introduction by the partners, in the Data found in tally P1 and P2 and also in the seized cash book, all seized pursuant to search, there were found recorded entries with regard to cash loans introduced in the business shown to have been received from various persons directly as well as through certain finance brokers. Repayment of the said loans along with interest on the same was also all found recorded in the Tally data. The line of business of the Applicant group, as has been discussed earlier, was such that required huge sums of cash. For purposes of the said, huge sums of unsecured loans in cash were thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the contention of the applicants that in computation of Peak the debit entries must also be considered. The contention of the Pr. CIT that the applicants are not entitled for any benefit of debit entries in calculation of peak values does not hold ground. The position of the Applicants get further force from the fact that the entries based on which applicants have computed the Peak value, are recorded in the data found in search and seizure. Based on the above the contention of the applicants on the quantum of the peak as offered as undisclosed income of ₹ 15,10,77,600/- is hereby accepted. 3.11 In respect of surplus, the ld. CIT(A) observed that it may point out that as per the petition filed by MBDL before the Hon'ble Settlement Commission the 'on money' of received by the Group on its various projects was considered for computing the income. In its admissions made before the Hon'ble Settlement Commission, MBDL has explained the nature of such 'surplus' which was credited to the partner's accounts. .In fact the same represent 'on money'. Accordingly income of ₹ 80.07 cr. (₹ 72.33 cr. + ₹ 7.75 cr.) was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he settled receipts to the Surplus A/c, the said on money was transferred to the partners/directors of the Group by debiting the said Surplus Account and crediting the Partners Accounts with the description being surplus after deletion credited to partners . Thus the Partners were given control of the funds for its proper utilisation for purposes of the Projects. The Term Surplus was a nomenclature used to identify the Settled on money which was put under the control of the Partners/Directors. o These entire receipts thus are booking receipts, which are revenue in nature and have already been considered and offered as revenue on-money income in our working. o Further regarding the utilization of the funds as pointed out the Ld. PCIT, it is submitted that above-mentioned surplus, being revenue in nature (earned by way of on money), was utilized was meeting various expenditures like utilization of land, for other construction cost and all other expenses related to business. Para 6.8 of Page. 57 of the Hon'ble Settlement Commission order Based on the above the total undisclosed income of the applicants of the Group is settled at ₹ 80,07,69 99 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MBDL and basis the same, income of ₹ 80.07 cr was offered on the basis of cloud data of N trading Company and which was finally accepted by the Settlement Commission in its order dated 16.05.2019 and accordingly, where the amounts have been subjected to tax in the hands of MBDL and related entities, there is no infirmity in action of the ld CIT(A) in deleting the same in the hands of the assessee and appeals of the Revenue for all the three years were dismissed. 15. In the instant case as well, we find that pursuant to search action in case of M/s Manglam Group and where the assessee s premises were also searched, the action was taken in the hands of the assessee u/s 153A of the Act based on transactions in N Trading Company found on cloud data found and seized during the course of search at the office premises of M/s MBDL and the assessment was completed u/s 143(3) r/w 153A wherein addition on account of on money found in N Trading Company cloud data relating to JEM project amounting to ₹ 1,90,08,157/- were made by the Assessing officer. On appeal by the assessee, the ld CIT(A), while adjudicating the merits of the case and which are under challenge before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tayed by the Hon ble Rajasthan High Court or not. Where the decision of the Coordinate Bench is not acceptable to the Revenue, the Revenue is well within its right to pursue the matter before the Hon ble Rajasthan Court and however, till such time, the order of the Coordinate Bench is not stayed or overruled by the Hon ble Rajasthan High Court, the assessee is well within his rights to draw support from the said decision. Where the matter is adjudicated by the Hon ble Rajasthan High Court in favour of the Revenue, the Revenue is not without recourse and is free to take action as per law. Therefore, following the principle of consistency, where the Coordinate Jaipur Benches have already taken a view in the matter under identical set of facts and circumstances of the case and no restriction has been placed by the Hon ble Rajasthan High Court in terms of effect and operation of the said order of the Coordinate Benches including following the same in other cases as facts and circumstances so justify as in the instant case, we see no justifiable reason to deviate and take a different view in the matter and following the same, addition so made in the hands of the assessee is hereby held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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