TMI Blog2022 (3) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... ory of # equals cash and no unaccounted cash or undisclosed income which was found. On the basis of the above factual finding by the Ld.CIT(A), we can say that the addition was based on the 'rough working and estimates which is prepared by the staff of the brother of the assessee. The presumption made by the Assessing Officer is not self-sufficient and is contradictory to the other seized papers. Thus, the addition made by the Assessing Officer on account of alleged cash payment on family settlement is factually incorrect and we do not see any reason to interfere with the findings of Ld.CIT(A). Accordingly, we dismiss the ground no.1 raised by the revenue. Undisclosed income - HELD THAT:- Addition of ₹.332,415/- based on the cash found during search ie., ₹.18,32,415 and Assessing Officer accepted ₹.15 lakhs, which is out of funds from Scrap Deposit Account, the difference as undisclosed income in the hands of the assessee, observing that assessee could not produce any evidence to substantiate the difference amount. Ld.CIT(A) considered the overall situation and gave relief to the assessee on the basis of his social status and income declared by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ashok Apparels Pvt. Ltd and M/s Bellona Developers Ltd. of Ashok Ruia Group, the details of which are as under: - Share M/s Ashok Apparels Pvt. Ltd M/s Bellona Finevest Limited A.Y. 2007-08 A.Y. 2008-09 A.Y.2007-08 A.Y.2008-09 Phoenix Mills Limited 160,92,19,626 95,89,92,268 Galaxy Entertainment Ltd. 2,90,33,040 R R Pvt. Ltd 1,01,99,96,001 - Senior Holding Pvt. Ltd 4,000 Total 2,62,92,19,627 95,89,92,268 - 2,90,33,040 4. The Bharat Ruia Group had sold it's stake in M/s Phoenix Mills Limited, M/s Galaxy Entertainment Ltd., M/s RR Pvt. Ltd. and M/s Senior Holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e alleged payment has been added in the appellant's income without evidence. The figure of ₹ 381 crores and odd mentioned in the seized papers is not only figure which is estimated by the recipient. Besides, there are two more figure i.e. 360 crores and 377 croes and odd. Hence, then can how the figure ₹ 381 crores and odd is finalized by the department. Hence, we request your honour that a mere entry on loose sheet of papers and where the appellant claims that it was just an estimation done, but not supported by the actual cash when there is no documentary evidence to support the passing of cash and further there is no evidence about the existence of the amount mentioned in the loose sheet of papers as embedded in either cash, jewelry or investment, then the explanation of the appellant cannot be rejected and additions made by the Ld A.O. would, therefore, is not justified. 5. After considering the submissions of the assessee, Ld.CIT(A) allowed the ground raised by the assessee with the following observation: 12.0 I have considered the facts of the case, submissions of the Appellant, the observations of the AO contained in the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Senior Holding Pvt. Ltd 4,000 Total 2,62,92,19,627 95,89,92,268 - 2,90,33,040 12.4 To sum up, the undisputed fact on record is that the Bharat Ruia Group had sold it's stake in M/s Phoenix Mills Limited, M/s Galaxy Entertainment Ltd., M/s RR Pvt. Ltd. and M/s Senior Holding Pvt. Ltd. to the Ashok Ruia Group for a total consideration of ₹ 3,61,72,44,935/-. However, it may be noted that the Appellant has not directly entered into any share transaction with the Bharat Ruia Group. It is clarified here that M/s Ashok Apparels Pvt Ltd and M/s BeIlona Developers Ltd., are concerns of Ashok Ruia Group, which had purchased the stake from the Bharat Ruia Group. Hence, at the outset, the Appellant had contended that since no transaction had been entered into by him in his individual capacity, the question of making an addition of cash in his hands doesn't arise at all. 12.5 A perusal of the seized material placed on record clearly reveals that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ign '#' indicate? Ans. These statements are prepared by Shri B.R.Ruia's staff member/advisor. The statement show rough calculation/working of the amount BRR to receive as per family settlement and sale of Phoenix Shares, R.R. Ltd. Shares etc. The # items are additional claims BRR has raised, which were agreed to be settled by taking over BRR's liabiHties to sisters (i.e. 50% of 34CR.) This is explained as below: Late RR Ruia had 6 children of which 4 are daughters and 2 are sons namely, Shri Ashok Ruia and Shri Bharat Ruia. In the family settlement implemented under a signed Memorandum Of Family Settlement the sisters have been paid ₹ 34 crores i.e. ₹ 8.50 crores each by cheque. Bharat Ruia was refusing to pay ₹ 1 7 crores which was 50% of the amount to be paid to sisters. Ashok Ruia paid the full ₹ 34 crores. Theoretically, each brother should have paid 50% of ₹ 34 crores, or 17 crores so Bharat Ruia's accountants notionally set off ₹ 17crores in their internal working. Based on this, BRR's accountant/ advisor showed receipt of ₹ 381 crores i.e. ₹ 364 crores which is paid in cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis because of the fact that use of the phrase 'total received' in the statement signifies that the balance part of old deal and amount as per additional deal has actually been received by Shri Bharat R Ruia as on preparation of the statement. Further there is no mention of any word/ phrase, such as, 'draft', 'provisional', etc. on this statement, signifying that this statement is final in nature. The sign'#'(pronounced as hash) clearly signifies that it has been used for showing the amount received in 'cash'. This meaning is also evident from the various phrases used in this statement, such as 'received in # 'share account in #', 'monthly compensation up Sept 07 #' and'50% Saki Naka in # 4,40,00,0000'. It is also important to note that nowhere in this statement anything about share of sisters is mentioned. In light of above, it is evident that total amount received by Shri Bharat R Ruia group on account of family settlement is ₹ 381,39,58,7131- as mentioned in the said statement. Please comment on this. Ans. As already stated in my earlier reply, the statements had been prepared by the Accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 17.00 crores Total ₹ 381.00 crores 12.10 I have also noted that Shri Atul Ruia had clearly stated on oath that Shri Bharat R Ruia and family was ultimately paid ₹ 364 crores, out of ₹ 381 crores payable to him, after duly adjusting his share of ₹ 17 crores payable to four sisters, as per the family settlement agreement. From the Para 4 of the settlement deed, it is evident that the 4 sisters were paid a sum of ₹ 34 crores (₹ 8.50 crores to each sister). The said payment was made by the Appellant, which is evident from the ledger accounts submitted by the Appellant. 12.11 Since, it is a family settlement, it is customary that the two brothers would have to bear equal cost on account of payments to sister. The family settlement documents read along-with the seized material in a coherent manner reveals that the partition of the assets had been done in an extremely fair manner. The assets had been divided on a 50: 50 basis between the two brothers and each of the sister had been paid ₹ 8.5 Crore. It belies logic as to why only one brother shall bea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2009] [184 taxman 421 (Cochin), it had been held as under:- 45. Therefore it is very necessary on the part of the revenue to make out a case on the basis of the search materials so that the revenue can argue that the assessee is liable for capital gains tax. The whole events leading to the present case were occurred before the date of search and it was very evident for anybody reading the details that by the time search was conducted, the full picture of the transaction was clear. The picture is that the agreement to sell was never culminated into a contract of sale and the deed of conveyance was never executed and the proposed transfer of capital asset was aborted. When this final fate of the proposed transaction is apparently clear on the date of search itself, we are unable to understand that how it is possible for the Assessing Officer to read the chronology of events in piece-meal and stop on 31-3-1999. The events up-to 31-3-1999 and the events after 1-4-1999 should be read together. The whole chain of events is open before the authorities at the time of search on 6-8-2003. By the time of search, it is clear that the agreement to sell was not reached to its logical c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read when it becomes disadvantageous to the revenue. In other words, if we do not read the figure of expenditure of ₹ 4,200 against the name of Rajender by doubting the expenditure, then all the receipts mentioned therein also comes under cloud of doubt. It is an accepted principle of interpretation of documents that they should be read as a whole as persons of common prudence will read them. They cannot be read in bits and parts to suit the convenience of one or other party. Therefore, the expenditure of 4,200 will also have to be read on proper appreciation of the document. Such reading gets further fortified by the fact that one Mr. Rajender Agrawal was one of the contractor of the assessee and his bill was placed on page 112 of the paper book. Though the figure of ₹ 4,200 is qualified by the remark approximately in the said papers, the expenditure on that basis will have to be estimated. Such conclusion also gets strength from the fact that the figure is a round figure. Accordingly, it is held that the expenditure of round some of ₹ 40 lakhs becomes admissible to the assessee as cash expenditure in relation to cash receipts of the assessee. Thus, the excess o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Co. [2003] 132 Taxman 99 (Mag.)1[2004] 2 SOT 1 (Mum); Vivek Kumar Kathotia v. Dy. CIT [2013] 32 taxniann.com 3311142 lTD 394 (Kol.- Trib.); CIT v. D.D. Gears Ltd. [2012] 25 taxmann.coni 5621211 Taxman 8 (DeThi)(Mag.). 12.19 To sum up, the seized document should be read as a whole if it has to be relied upon. It cannot be read only to the extent it is advantageous to the revenue and not read when it becomes disadvantageous to the revenue. It is an accepted principle of interpretation of documents that they should be read as a whole, as persons of common prudence will read them. They cannot be read in bits and parts to suit the convenience of one party or the other. 12.20 I have noted that the transactions mentioned against the '#' sign have been duly explained during the course of search, as being with reference to the sisters. In order to understand the meaning of the '#' sign, reference may be made to the bottom of the seized Page No. 103, which reflects certain payments received in '#' towards chandu. The Appellant had explained that the said #' payment was made to one Shri Chandru by cheque. It had been clarified by the Appellant tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of any direct material especially when various round of investigation have been carried out, then nothing can be implicated against the assessee . 12.24 Reliance is also placed on the decision of Hon'ble Calcutta High Court in the case of M/s Classic Growers Ltd. vs. CIT [ITA No. 129 of 201 2(Cal)]. In this case, the Assessing Officer found that the evidences produced by the appellant to support huge losses claimed in the transactions of purchase and sale of shares were stage managed. The Hon'ble High Court held that the opinion of the Assessing Officer that the assessee generated a sizeable amount of loss out of prearranged transactions so as to reduce the quantum of income liable for tax might have been the view expressed by the Assessing Officer but he miserably failed to substantiate the same. The High Court held that the transactions were at the prevailing price and therefore the suspicion of the Assessing Officer was misplaced and unsubstantiated. 12.25 Raising of presumption itself does not amount to proof. Presumption however strong, cam-lot take the place of evidence. Reliance is placed on the decisions of Pooja Bhatt 66 TTJ (Mum) 817 D. M. Kamani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dhakeshwari Cotton Mills v. CIT 11954] 26 ITR 775 at 782had observed, as under:- As regards the second contention, we are in entire agreement with the learned Solicitor-General when he says that the Income Tax Officer is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be accepted as evidence in a court of law, but there the agreement ends; because it is equally clear that in making the assessment under sub-section (3) of Section 23 of the Act, the Income Tax Officer is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. There must be something more than bare suspicion to support the assessment under Section 23(3). The rule of law on this subject has, in our opinion, been fairly and rightly stated by the Lahore High Court in the case of Seth Gurinukh Singh v. Commissioner of Income-tax, Punjab. 12.30 The Punjab Haryana High Court in CIT v. Anupam Kapoor [2008] 299 ITR 1 79did not believe on the allegation: A cheque had been taken by the beneficiary i.e. by paying cash equivalent to the cheque amount and the premium thereon . The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seized from the possession of assessee would not come within the compass of the word 'document' and cannot be the basis for treating certain income as undisclosed income of the assessee. D.D. Malijan V. Dy. CIT [2004] 91 TTJ 947(Del.) Addition could not be made on the basis of an unnamed loose paper found at the business premises of the husband of the assessee by treating part of the items noted in the said paper as transactions relating to assessee. Smt. Boni manaSwarnaRekha v. AsstLCIT [2005] 147 Taxman 59 (Visakha.) (Mag.) Dumb documents or documents with no certainty have no evidentiary value for purpose of resorting to deeming provisions of sections 68, 69, 69A to 69D. In the absence of adequate material as to nature and ownership of transaction, undisclosed income cannot be assessed in hands of assessee merely by arithmetically totalling various figures jotted down on loose documents found during search. Bansal Strips (P) Ltd. vs. Asstt. CIT [2006] 99 ITD 177 (Del.) Addition on the basis of loose paper which cannot be treated as books of account cannot be made under section 68. Asstt.CIT v. SatyapaiWassan [2007] 295 ITR (AT) 352 (Jabalpur) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined to the block period. On this basis, the Tribunal held that no addition could be made on the basis of seized papers as material available with the AO is grossly inadequate. 12.34 In Elite Developers v. DCIT (2000) 73 lTD 379, it was held that where seized documents evidencing receipt of on money by the assessee were not speaking documents as they did not contain any narration or description about different figures noted thereon and department having failed to bring on record any material or evidence to corroborate allegation regarding receipt of on money, then presumption on the basis of documents could not be raised. 12.35 The crux of the various judicial decisions is that a document found during the course of search must be a speaking one and without any second interpretation, must reflect all the details about the transaction of the assessee in the relevant assessment year. Any gap in various components, as mentioned in Section 4 of the I.T. Act must be filled up by the AO through investigations and correlations. It is also a settled law that addition cannot be made on the basis of loose documents, unless and until there are corroborative evidences. 12.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the loose sheet does not represent any expenditure incurred by the appellant and dismissed this ground of the Revenue by holding as follows : 27. A propos ground No. 2, we find that the inscription contained various names like farms house, resort, Mussoorie project, office, etc. There is neither any description of any expenditure in respect of any particular head or item, the figures are round figures and do not bear description of lakhs or thousands. The Commissioner of Income-tax (Appeals) has considered the explanation of the appellant against each and every entry. We have already indicated that each and every paper found may not represent undisclosed income or expenditure. The entries in question belonged to VTPL inasmuch as the appellant could explain from the books of VTPL that these projects were under taken by it. In view thereof, we uphold the findings of the Commissioner of Income-tax (Appeals) holding that the loose sheet does not represent any expenditure incurred by the appellant. This ground of the Revenue is dismissed. 12.37 The matter went to Hon'ble Delhi High Court in CIT vs. Anil Bhalla (2010) 38 DTR 0113 : (2010) 322 ITR 0191, wherein the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils, no addition can be made. 12.40 The Hon'ble ITAT, Delhi, in the case of Amarjit Singh Bakshi (HUF) vs. ACIT in 263 ITR 75, held that there is no documentary evidence to support the passing of cash and further there is no evidence about the existence of the amount mentioned in the loose sheets of paper as embedded in other cash, jewellery or investment. 12.41 In view of the above facts and circumstances as also the several judicial precedents, the addition of ₹ 17,26,55,984/- made by the AO is hereby deleted. Accordingly, the Ground No.2 raised by the appellant is allowed. 6. With regard to Ground No. 2, during the assessment proceedings AO observed that cash amount ₹.15 lakhs belonged to the company M/s. PML evident from the Scrap Deposit account produced during the proceedings, the assesse could not produce evidences for the rest of the amount i.e., (₹.18,32,415 ₹.15,00,000) ₹.3,32,415. Assessing Officer observed that during the statement u/s. 132(4) of the Act, the assessee stated that the cash amounting to ₹.3 lacs belonged to his wife Mrs. Amla Ruia and the balance to his personal savings. On perusal of the balan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dates on account of scrap deposits during the year. It was also submitted and stated that the amount of ₹ 15 lacs (approx) was kept by the appellant on account of Security reasons, since it was a huge amount. Further, appellant stated that the said amount had been accounted in the books of M/s. Phoenix Mills Ltd. and further the same had already belong offered to tax in the future years as and when the scrap sales were made. The said contention of the appellant has accepted by the department and no addition on account of cash seized amounting to ₹ 15 lacs had been made. In relation to balance amount of ₹ 3 lacs (approx.) it was submitted that the same belong to appellant and Mrs. Amla Ruia, who is the wife of the appellant and this amount was his and her saving over the years. However, the contention of the appellant has not been accepted by the department and made the addition on account of unaccounted cash u/s 69A. In regards to the above addition we would like to submit that since the seized cash was the saving of appellant and his wife, we need to discuss the appellant and his wife's source of income, there status in the society. Further, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,311/- For the A.Y. 2007-08 - Computation of Income as per Assessment Order dated 29.12.2010 COMPUTATION OF TAXABLE INCOME Rs. Rs. INCOME FROM SALARY 6,93,380/- INCOME FROM HOUSE 1,30,92,615/- PROPERTY PR OFITS FROM BUSINESS (-)25,17,43,549/- Add: Disallowance U/S.14A 5,18,699/- (-)25,12,24,850/- INCOME FROM CAPITAL GAINS 5,51,10,245/- INCOME FROM OTHER SOURCES 16,500/- GROSS TOTAL INCOME 6,93,380/- TOTAL INCOME ROUNDED OFF U/S.288A 6,93,380/- For the A.Y. 2008-09 - Computation of Income as per Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8-09 we would like to submit that the appellant had earned the income of ₹ 10,28,98,430 (16,17,82,192 - 5,88,83,762 set off previous year loss). Further, the appellant has earned the exempt dividend income of ₹ 1,10,46,113 during the year 2008-09. It is further submitted that in respect to the AY 2006-07 and A.Y. 2007-08, the addition was made on the tune of disallowance u/s 14A r.w.r 3D. In this regards, it is submitted that the disallowance u/s 14A r.w.r 8D is nothing but the disallowance on the basis of change of opinion. At this juncture we would like to submit that from the observation of the Assessment Orders, it can be concluded that the appellant does not have any other undisclosed income/undisclosed investments. From the above narrated facts, it can be safely depicted that the appellant has not been taxed for any income from any undisclosed sources in any of the preceding years and in view of the same it can be inferred that the cash found during the year is not from any undisclosed sources but from regularly filed returns of the appellant and his wife. Hence, we request to your honour to consider the fact that cash found during the search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the same, we would like to submit that from very beginning the appellant had contended that the cash found during search is out of personal saving of the appellant and his wife from the various years. Therefore, the said cash nowhere belonged to his business operation. It is further submitted that cash reflected in the balance sheet consist only business related cash. Hence, the Ld. AO has erred in comparing the balance of cash as stood in balance sheet and the cash found at the residence of the appellant. At this juncture, we would like to draw your honour's kind attention to the normal journal accounting practice followed by the each and every appellant of India in the case of drawing. In India double accounting entry system has been followed. Thus, in the case when the appellant withdraw the amount from its business then as per the method of double accounting entries system, capital as well as cash both should be reduce from the books of account. Therefore, the view of the AO that the cash in hand is Rs NIL is incomprehensible to the appellant. Therefore, we request to your Honour to consider the above factual position and request your Honour's that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;.3,32,415/- made on account of unaccounted cast u/s 69A of the Act. 10. At the time of hearing, Ld. DR submitted a detailed submissions and filed a written copy by email. It is reproduced below: - During the course of search on 20/02/2008 in the Phoenix Group, managed and controlled by the Ruia Family, certain loose papers were seized from the corporate office of Phoenix Mill Ltd. on 14/03/2008 and 28/03/2008, which were numbered as page numbers 99-103 of Annexure 1 and page numbers. 2,4,5 of A-1, respectively. These pages are reproduced on page number 10-17 of the assessment order. A brief narration of the contents of these papers is also available on page 18 of the assessment order. To put it briefly, the details and noting made on these papers are pertaining to the consideration received / receivable towards family settlement between the two groups of the Ruia family, one of them led by Shri Ashok R Ruia and the other led by his brother Shri Bharat R Ruia. As emanating from the facts on record, the assessee and his brother has entered into a family settlement whereby the assessee had purchased the share of Shri Bharat R Ruia in Phoenix Mill Ltd and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor any co-relation is established by the AO regarding the year of taxability Reference be made to para 7.3 of the CIT(A) s order on page 34 , wherein the assessee states that the learned AO briefly states that the seized documents reflect the actual transactions , but fails to support the said statement with any further evidences. No demonstrative and actual link between the seized papers and the actual transactions has been stated by the learned AO in the assessment order and accordingly it is very unclear as to how he proceeds to declare that the seized documents reflect the actual transactions In this regard , attention is drawn to the number of shares purchased by the ARR group of Galaxy Entertainment Ltd. and Phoenix Mills Ltd., which as per the details of shares purchased provided on page 18 of the paper book are 275488 shares of Galaxy transferred in April 2007;and 601580 shares of Phoenix Mill Ltd transferred in April 2007. Same figures are reflected on page 99(10 of AO), 101(12),103(14),2(15), 4(17)( (Galaxy); page 100(11) ( PML) The documents also mention certain amounts against the narration 50% Sakinaka in by inflation in price 8,15,50,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly one third of the actual transaction amount. Shri Atul Ruia also disclosed an amount of ₹ 3.85 crore as the additional income of M/s Phoenix Mills Ltd. If the same ratio of cash and cheque transactions is applied to the surrender of tenancy rights of Sakinaka, since the total consideration received by cheque is ₹ 16.45 crore, the cash component works to around ₹ 8 .20 crore approximately and the share of the BRR group being half of the same would be around 4 crore. This figure coincides with the amount of ₹ 4.40 crore mentioned as 50% Sakinaka in # 44,000,000.00. Thus, it can be concluded that # is cash. The above findings also counters the assessee s contention that no undisclosed source was found by the department to substantiate the generation of the alleged cash. As regards the assessee s assertion that no undisclosed assets were found by the department in the case of recipient to substantiate the utilization of alleged cash, it may be mentioned that in the case of Bharat R Ruia HUF, the recipient, additions were made on account of unexplained cash deposits and unexplained jewellery for AY 2008-09 and earlier years. Moreover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o para 7.4 on page 35 of the CIT(A) s order where in the assessee mentions three figures regarding the stake sale: 1. ₹ 377,46,60,021/- as per page 102(13). The paper is dated 13/04/2017. As per the details available on this page, the total amount to be received is shown as ₹ 321,33,45,696.50, out of which the amount already received by the BRR Group is ₹ 283,58,79,675.49 and the balance to be received is shown as ₹ 37,74,66,021.01.it however seems that the assessee has inadvertently read the balance receivable amount of ₹ 37.746 crore as 377.46 crore. 2. ₹ 360,69,71,895/- as per page 101(12) 3. ₹ 381,39,58,713/- as per page 103(14). Though no date is mentioned on this page, it may be noted that the figure is similar to that reflected on page 5 4 which are dated 21/06/2007. Hence it reflects the total stake consideration including the additional deal. Firstly, it needs to be appreciated that not all the documents are dated. Secondly the share price changes over a period of time. The documents seem to be prepared during April to June 2007. Hence, the difference in the figures in the absence of any date being speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid argument of the assessee was not accepted by the AO for reasons reproduced on page 37 of the CIT(A) s order. Moreover, nothing has been placed by the assessee to support the above contention that the payment to the sisters were made by Ashok Ruia on behalf of Shri Bharat Ruia. Perusal of the Family Settlement deed, which is submitted by the assessee as part of its paper book does not indicate any such liability towards the sisters on the BRR Group. The Ld. AR may kindly be asked to point out the relevant clauses of the Family Settlement Deed in support of his contention. Attention of the Bench is drawn to clause 13 15 of the Family Settlement Deal, available on page 14 of the paper book. The assessee has also put forward an argument that since the acquisition of the shares held by Bharat Ruia and the signing of the Family Settlement Deed was contemporaneous, it can be fairly inferred that the ₹ 17 crore was considered as notional payment out of the total deal value of ₹ 381 crore. One however fails to understand that when the family members had the wisdom of having a written deed for the division of assets of their deceased parents and for settling the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Sakinaka property was also executed on 03.07.2007. Therefore, the addition is rightly made in the A.Y.2008-09 by the AO. Summary of CIT(A) s decision: Para page CIT(A) s Observations DR s remarks 12 54 No addition can be made in the hands of the individual It is reiterated that in the absence of any written deed or terms of settlement presented by the assessee, there's nothing to support the assessee s contention that the cash payment is to be met by the companies. In fact, no document is placed on record by the assessee which shows that the shares were decided to be purchased by Ashok Apparels Pvt. Ltd. M/s Bellona Developers Ltd. the family settlement deed, also mentions about settlement between group of individuals, one headed by a ARR and the other by BRR. So it s very logical to conclude that the cash payments were made by Shri Ashok R Ruia. 12.5 56 3 different figures reflected in the seized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly, it has been considered in the ₹ 10 crore# received in cash on account of shares. (iii) since no # was marked against entry related to Chandu, on seized document 4(page 17 of the assessment order) or in the main table on seized document no. 103(Page 14 of the assessment order), the sum of ₹ 15 lacs was not considered for addition by the AO. (iv) as regards payment of ₹ 52, 62, 346/- towards interest, here again since no # was marked against the said entry in the main table on seized document no. 103(Page 14 of the assessment order), the same was not considered for addition by the AO. 12.15-12.19 61-64 a seized document should be read as a whole 12.20 64 hash sign has been duly explained during the course of search as being with reference to sisters No corroborative document filed by the assessee in support of his explanation. attention of the benches once again drawn to the clauses of the family settlement deed and earlier arguments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sr.No Ld. CIT DR s arguments Ld. AR s rebuttal 1. The entries of seized material not hypothetical It is not the case of the assessee that all the entries on the seized material are imaginary and hypothetical. The manner in which the notings have been made on various pages are as per the understanding of the person preparing the same and hence the same cannot be completely relied upon without having corroborative evidence. 2. Nowhere it is mentioned that the respondent is liable to discharge the liability of Bharat Ruia towards his sisters. In case of family settlement it was mutually agreed that the liability of the sisters to be shared by both the brothers. That way it is nowhere written on the seized page that # is cash. 3. Bharat Ruia had declared undisclosed income and opted for VSV scheme These facts are not relevant. Since allegation is that the assessee has paid cash, there ought to be source of income in the hands of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Limited, RR Private Limited and Senior Holding Private Limited. These shares were initially valued for a consideration of ₹.361.72 crores and these transactions were entered thru the two companies of the Ashok Ruia Group i.e., Ashok Apparels Pvt Limited and Bellona Developers Ltd. No individuals were involved in the above said acquisition of shares of Bharat Ruia Group. During Search operation, revenue officials came across certain loose sheets which contained the details of settlement between the groups. These sheets were seized and it contained the details of three settlement amounts like ₹.381.39 crores, ₹ 360.69 crores and ₹.321.33 crores. It is claimed that the actual settlement amount between the group is ₹.364 crores. The Assessing Officer considered the various working contained in the above said seized documents and came to conclusion that the assessee has settled the difference between the highest value found in the seized papers and the actual settlement amount i.e., ₹.381 crores and ₹.364 crores in the form of cash, which according to him coincides with the documents found during the search, which are marked and identified wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilarly, the amount of sale consideration of 2,75,488 shares of galaxy has been recorded at ₹ 6,88,72,000/- (pg. 15 of assessment order) whereas actual amount is ₹ 2,90,33,040/- (PB page 18). 14. We observe from the observations made by Assessing Officer, who developed the theory # equals to Cash and found that to be based on presumption, we formed our view from the following points: (i). At the time of search itself, explanation about # sign was given by the searched parties. (PB page no. 49, Q. no 16) It was stated that The symbol # or * have different meaning depending on the context in which they are used . The said explanation, which was pertaining to the transaction of Vamona Developers Pvt Ltd, has been accepted and no addition has been made, Further, no evidence has been brought on record by AO to disprove this explanation except a presumption that # is cash. (ii). As per page no 37 of the Assessment order, AO considered the # transactions did not have any underlying cheque transactions, it is cash transaction. As rightly observed by the Ld CIT(A) that none of the amounts aggregating ₹ 381 crores (page 15 of A.O.) has underlying cheque tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pages, no inquiry by Investigation wing or the Assessing Officer, no confessional statement available with the department, inconsistent approach of the Assessing Officer i.e., some other transactions with # has not been treated as cash transactions, no corroboration of evidence to support the theory of # equals cash and no unaccounted cash or undisclosed income which was found. On the basis of the above factual finding by the Ld.CIT(A), we can say that the addition was based on the 'rough working and estimates which is prepared by the staff of the brother of the assessee. The presumption made by the Assessing Officer is not self-sufficient and is contradictory to the other seized papers. Thus, the addition made by the Assessing Officer on account of alleged cash payment on family settlement is factually incorrect and we do not see any reason to interfere with the findings of Ld.CIT(A). Accordingly, we dismiss the ground no.1 raised by the revenue. 16. With regard to ground no.2, We observe that the Assessing Officer made the addition of ₹.332,415/- based on the cash found during search ie., ₹.18,32,415 and Assessing Officer accepted ₹.15 lakhs, which is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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