TMI Blog2023 (7) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... were recorded without recording the dates and full details. It is not even a record of daily transactions. Certainly it does not form part of books of account regularly maintained by it in the course of business. It is not clearly depicted from the said entries on standalone basis that a transaction had taken place, which gives rise to any taxable event for the reason that there is no indication from the entries found therein that a transaction was undertaken during the previous year relevant to the assessment year under consideration giving rise to the taxable event. The entries are non-speaking, it cannot be concluded that it represents the undisclosed income of the assessee for the reason that the entries does not disclose four components required to be satisfied to constitute a taxable event. On mere perusal of the statement recorded of the assessee u/s 132(4) it would be evident that the assessee was examined and confronted on the statements given by Shri Praveen Agarwal, Shri Anuj Agarwal and Shri Jeevendra Mishra recorded during the course of search and seizure proceedings in their case. The assessee was never examined on the notings found in the Diary - Therefore, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of ld. Commissioner of Income Tax (Appeals)-11, Pune dated 29.07.2022 for the assessment years 2012-13 2015-16. The appeal of the assessee in ITA No. 725/PUN/2022 is directed against the order of ld. Commissioner of Income Tax (Appeals)-11, Pune [ the CIT(A) ] dated 29.07.2022 for the assessment year 2018-19. 2. Since the identical facts and common issues are involved in all the above captioned nine cross appeals, we proceed to dispose of the same by this common order. 3. Briefly, the facts of the case are that the assessee is an individual engaged in the business of dealing in the real estate/property and carrying on business under the name and style of M/s. Siddhi Properties (a proprietary concern). The particulars of Returns of Income filed by the assessee u/s 139(1) of the Income Tax Act, 1961 ( the Act ) are detailed below :- A.Y. Date of filing of return u/s 139(1) Returned Income 2012-13 30/09/2012 56,72,948 2013-14 30/09/2013 33,93,088 2014-15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re operations to the assessee, the assessee had confessed that onmoney consideration was paid at the time of purchase of property and they also received on-money consideration at the time of sale of the property. Based on this information, the Assessing Officer issued notices u/s 153A of the Act on 19.01.2018 calling upon the assessee to file the return of income. In response to said notices u/s 153A of the Act, the assessee had filed the returns of income as detailed below :- A.Y. Date of filing of return u/s 153A Income declared in return u/s 153A Additional Income offered, if any 2012-13 24/01/2019 56,72,950 NIL 2013-14 24/01/2019 1,33,93,090 1,00,00,000 2014-15 24/01/2019 1,78,36,710 1,00,00,000 2015-16 24/01/2019 22,27,420 NIL 2016-17 24/01/2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the settled judicial precedents on the issue. e) The Appellant states that the Assessing Officer erred in creating additions of Rs. 6,27,20,500/- and the Appellate Authority erred in partially confirming the unjust additions of Rs. 4,94,20,500/- u/s 69C of the Income Tax Act, 1961 ignoring the fact that the transactions in the diary notings had only partially materialized, out of which the materialized portions were already declared in the balance sheets and tax was paid. Therefore, the authorities erred in upholding addition on transactions which have not even materialized. f) The Appellant craves leave to add, alter, amend, vary, or delete any of the aforesaid grounds. 8. During the course of assessment proceedings, the assessee was called upon vide show-cause notice dated 20.11.2019 to explain the creditworthiness, identity and genuineness of the creditors of unsecured loans received from shell companies based at Kolkata of Rs. 13,27,54,925/-. The details of loans were set out by the Assessing Officer vide para 6 of the assessment order. In response to the show-cause notice, the assessee had filed a detailed explanation in an attempt to establish the genuinene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicating that these loans were fictitious by referring to the page nos. 20 to 22 and 83 of bundle no.11, which according to the Assessing Officer are entries indicating that the assessee had taken accommodation entries by paying cash to Shri Sushil Agarwal. Citing the above circumstances, the Assessing Officer invoking the doctrine of human probabilities applied in the case of CIT vs. Durga Prasad More, 82 ITR 540 (SC) and in the case of Sumati Dayal vs. CIT, 214 ITR 801 (SC) had proceeded to hold that the unsecured loans of Rs. 13,27,54,925/- received during the previous year relevant to the assessment year under consideration are fictitious, bogus and brought to tax as unexplained income of the assessee. 10. Further, the Assessing Officer based on the notings found in bundle no.1 of Diary of 2009 and the statement given by assessee u/s 132(4) had concluded that the assessee was paid on-money consideration of Rs. 24,00,000/- in cash in connection with the sale of property at Paud Road. The Assessing Officer referred to the statement given by assessee during the course of search and seizure proceedings u/s 132(4) of the Act, then proceeded to make addition of the said amount, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nand Kumar Jain. B. Without prejudice to the above, it is further contended that in the absence of any incriminating material found as result of search and seizure action, no addition can be made u/s 143(3) r.w.s. 153A placing reliance on the decision of the Hon ble Bombay High Court in the case of CIT vs. Gurinder Singh Bawa, 386 ITR 483 (Bom.) and on the decision of Hon ble Supreme Court in the case of PCIT vs. Meeta Gutgutia, 257 Taxman 441 (SC). C. It was contended that in the absence of any conclusive evidence, no addition can be made merely based on the statement, which was retracted later. It is contended that the assessee had discharged the onus of proving the genuineness, creditworthiness and identity of the creditors by filing the confirmation letters, copies of ledger account, name and address, PAN details etc. The assessee also filed the statement of banks account of the lenders, wherein, the entries showing the lending of money by account payee cheques/RTGS to the assessee. He also pointed out that no cash was deposited in the bank accounts of lenders before money is lent to the assessee. He also filed the profit loss account and balance sheet of the lender com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration of Rs. 24,00,000/-. C. Similarly, the ld. CIT(A) upheld the addition of Rs. 6,27,20,500/- on account of alleged on-money consideration paid at the time of purchase of property. The details of which are set out by the ld. CIT(A) at page no.41 of his order, which reads as under :- Bundle no.1, page no.1 Property Details Cheque payment Cash payment 2 Plot at Paud Road 19,05,000 27,20,500 3 Property at Vadgaon Maval 20,00,000 1,68,00,000 13 Plot at Male 68,00,000 85,00,000 22 Land with Santosh Jain 90,00,000 1,10,00,000 168 Miscellaneous 1,00,00,000 2,37,00,000 Total 6,27,20,500 D. The ld. CIT(A) on analysis of the notings at page no.2, 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statement u/s 132(4) of the Act without bringing on record any corroborative material placing reliance on the following decisions :- (i) PCIT vs. Best Infrastructure (India) (P.) Ltd., 397 ITR 82 (Delhi). D. On merits, he submits that the assessee had discharged the onus of proving the genuineness, creditworthiness and identity of the loan creditors. He also drawn our attention to the financial statements of the lender companies, the balance sheet and profit loss account for the assessment year 2015-16 and also the loan confirmation letters from lenders etc. He also filed the copy of the ledger account of the lenders appearing in his books of account. He further submits that the most of the loans were repaid within the same accounting year through account payee cheques or other banking modes. The interest on these loans was paid after deducting applicable TDS. Thus, he submits that the appellant had discharged the onus lying upon it in terms of provisions of section 68 of the Act. In the circumstances, the AO was not justified in making the addition of unsecured loans. E. As regards, the addition made on account of alleged receipt of on-money consideration in cash, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing High Courts : (i) PCIT vs. Saumya Construction, 387 ITR 529 (Gujarat). (ii) PCIT vs. Dipak Jashvantlal Panchal, 2017 (2) TMI 862 - GUJARAT HIGH COURT (iii) CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd., 374 ITR 645 (Bombay). (iv) PCIT vs. M/s. Delhi International Airport Pvt. Ltd. and Ors., 443 ITR 382 (Karnataka). (v) CIT vs. Kabul Chawala, 380 ITR 573 (Delhi). (vi) PCIT vs. Meeta Gutgutia, 395 ITR 526 (Delhi). (vii) Chintels India Ltd. vs. DCIT, 397 ITR 416 (Delhi). (viii) Sri S.M. Kamal Pasha vs. DCIT, 2022 (8) TMI 966 (Karnataka). (ix) PCIT vs. Jay Infrastructure and Properties Pvt. Ltd., (10) TMI 1022 (Gujarat). (x) Smt. Jami Nirmala vs. PCIT, 437 ITR 573 (Orissa). (xi) Smt. Smrutisudha Nayak vs. Union of India, 439 ITR 193 (Orissa). (xii) CIT vs. Veerprabhu Marketing Limited, 388 ITR 574 (Calcutta). (xiii) PCIT vs. M/s. Salasar Stock Broking Ltd., (8) TMI 1131 (Calcutta). (xiv) PCIT vs. Smt. Daksha Jain, (8) TMI 474 (Rajasthan). (xv) Dr. A. V. Sreekumar vs. CIT, 404 ITR 642 (Kerala). While expressing the disagreement with contrary view taken by the Hon ble Allahabad High Court in the case of PCIT vs. Mehndi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation from the entries found therein that a transaction was undertaken during the previous year relevant to the assessment year under consideration giving rise to the taxable event. More particularly, these entries do not indicate that the loans received from the sundry creditors are fictitious or mere accommodation entries. Thus, the entries are non-speaking, it cannot be concluded that it represents the undisclosed income of the assessee for the reason that the entries does not disclose four components required to be satisfied to constitute a taxable event. The first is the taxable event which attracts the levy, the second is the person on whom the levy is imposed and who is obliged to pay the tax. The third is the assessment year in which charge of income-tax is levied. The fourth is the total income of the previous year and the fifth is the rate or rates at which tax is to be imposed. The rates are prescribed in the annual Finance Act. Therefore, these entries have no value in determining total income on the basis of seized diary. Our view in this regard is supported by the decision of Hon'ble Supreme Court in Govind Saran Ganga Saran v. CST, 155 ITR 144 (SC), wherein, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so called Kolkata based shell companies. 20. Next, we proceed to examine the evidentiary value of the statement given by the assessee u/s 132(4) of the Act. It is true that in reply to question no.24 when the statements of Shri Praveen Agarwal, Shri Anuj Agarwal and Shri Jeevendra Mishra, who were stated to be controller of so called shell companies based at Kolkata recorded by Investigation Wing of the Department, Kolkata, was confronted to the assessee, he stated that the loans from the above parties are in the nature of accommodation entries and also the loans were obtained after giving cash to the middle person, namely, Shri Sushil Agarwal. He also agreed to write off the unsecured loans and the year-wise breakup of the same is as under :- Year Amount of accommodation entry 2010-11 3 2011-12 2 2014-15 3 In reply to question no.25, he stated the modus operandi adopted for obtaining the loans by stating that accommodation entries were received through Shri Sushil Agarwal, who is a mediator by g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of Rs. 13 crores for various years as under :- Year Accommodation entry (in crores) Expenses from undisclosed sources (in crores) Total disclosure (in crores) 2010-11 3 1 4 2011-12 2 - 2 2012-13 - 1 1 2013-14 - 1 1 2014-15 3 - 3 2015-16 - 1 1 2016-17 - 1 1 TOTAL DISCLOSURE 13 I will reconcile all the various facts and figures as found in the Diaries and other incriminating documents. You will appreciate that this figure worked out without getting into specific details and so this is subject to revision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of search would not take within its sweep, statements recorded during the course of search and seizure operations, which is not relatable to the evidence and material found during the course of search. In this connection, reliance can be placed on the decision of the Hon ble Delhi High Court in the case of CIT vs. Harjeev Aggarwal, 70 taxmann.com 95 (Delhi). The relevant paragraphs of the decision of the Hon ble Delhi High Court in the case of Harjeev Aggarwal (supra) are extracted as under :- 19. In view of the settled legal position, the first and foremost issue to be addressed is whether a statement recorded under Section 132 (4) of the Act would by itself be sufficient to assess the income, as disclosed by the Assessee in its statement, under the Provisions of Chapter XIV-B of the Act. 20. In our view, a plain reading of Section 158BB(1) of the Act does not contemplate computing of undisclosed income solely on the basis of a statement recorded during the search. The words evidence found as a result of search would not take within its sweep statements recorded during search and seizure operations. However, the statements recorded would certainly constitute informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unearthed or found during search. In other words, there must be a nexus between the statement recorded and the evidence/material found during search in order to for an assessment to be based on the statement recorded. 22. In CIT v. Shri Ramdas Motor Transport [1999] 238 ITR 177/102 Taxman 300, a Division Bench of Andhra Pradesh High Court, reading the provision of Section 132(4) of the Act in the context of discovering undisclosed income, explained that in cases where no unaccounted documents or incriminating material is found, the powers under Section 132(4) of the Act cannot be invoked. The relevant passage from the aforesaid judgment is quoted below: A plain reading of sub-section (4) shows that the authorised officer during the course of raid is empowered to examine any person if he is found to be in possession or control of any undisclosed books of account, documents, money or other valuable articles or things, elicit information from such person with regard to such account books or money which are in his possession and can record a statement to that effect. Under this provision, such statements can be used in evidence in any subsequent proceeding initiated agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expose assessees to arbitrary assessments based only on the statements, which we are conscious are sometimes extracted by exerting undue influence or by coercion. Sometimes statements are recorded by officers in circumstances which can most charitably be described as oppressive and in most such cases, are subsequently retracted. Therefore, it is necessary to ensure that such statements, which are retracted subsequently, do not form the sole basis for computing undisclosed income of an assessee. 25. In CIT v. Naresh Kumar Agarwal [2014] 369 ITR 171/[2015] 53 taxmann.com 306, a Division Bench of Telangana and Andhra Pradesh High Court held that a statement recorded under Section 132(4) of the Act which is retracted cannot constitute a basis for an order under Section 158BC of the Act. The relevant extract from the said judgement is quoted below: 17. The circumstances under which a statement is recorded from an assessee, in the course of search and seizure, are not difficult to imagine. He is virtually put under pressure and is denied of access to external advice or opportunity to think independently. A battalion of officers, who hardly feel any limits on their power, pou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment framed pursuant to notice issued u/s 153A of the Act. Reference can be made on the decision of the Hon ble Delhi High Court in the case of PCIT vs. Pilot Industries Ltd., 146 taxmann.com 233 (Delhi), PCIT vs. Best Infrastructure (India) (P.) Ltd. 397 ITR 82 (Delhi), CIT vs Harjeev Aggarwal 70 taxmann.com 95 (Delhi) and PCIT vs. Agson Global (P.) Ltd, 441 ITR 550 (Delhi). In the present case, as held by us supra, there is no material found as a result of search and seizure action indicating that the unsecured loans received by the assessee are fictitious or bogus representing the undisclosed income of the assessee brought into books in the form of unsecured loans. Therefore, mere statement of the assessee cannot form the basis to make addition in the assessment under 153A r.w.s. 143(3) of the Act. 23. Now, next question that is required to be considered by us is whether or not the statements given by Shri Praveen Agarwal, Shri Anuj Agarwal and Shri Jeevendra Mishra during the course of search and seizure proceedings in their hands, constitutes a incriminating material for the purpose of assessment u/s 153A of the Act. In the present case, undisputedly the foundati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis to make the addition u/s 153A of the Act (iv) appreciate that the statement recorded u/s 132(4) is not related to the material found as result of search and seizure operations, cannot be called as incriminating material . The ld. CIT(A) also had seriously fell in error in applying the proposition of law that the onus lies upon the assessee to prove the genuineness, creditworthiness and identity of the lenders companies placing reliance on the certain judicial precedent. In the assessment made u/s 153A, onus of proving the genuineness, creditworthiness and identity of the lenders shifts to the assessee only upon the fulfilment jurisdiction fact i.e. existence of incriminating material found as a result of search and seizure actions by the Assessing Officer to make the addition in the assessment framed pursuant to the notice issued u/s 153A of the Act. And also when the Revenue discharged the burden of proving that the apparent is not real. The reliance placed by the ld. CIT(A) on the decision of the Hon ble Delhi High Court in the case of Bhagirath Agarwal vs. CIT, 351 ITR 143 (Delhi) and CIT vs. M. S. Agarwal, 93 taxmann.com 247 is misplaced, inasmuch as, these decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of purchase of properties, details of which are given at page no.17 of the assessment order and, accordingly, brought to tax as unexplained expenditure u/s 69C of the Act. The Assessing Officer also observed that the appellant had failed to discharge the onus of rebuttal of presumption raised u/s 292C of the Act. On appeal before the ld. CIT(A), the findings of the Assessing Officer were confirmed, rejecting the argument of the assessee that they were dumb documents and by holding that the assessee had failed to discharge the onus of disproving the contents of the seized documents. However, he restricted the addition for the assessment year under consideration to the extent of Rs. 4,94,20,500/- and the balance of addition was shifted for the assessment year 2013-14, as it was found that so much of on-money was paid during the previous relevant to the assessment year 2013-14. 27. Being aggrieved, the assessee is in appeal before us in the present appeal. 28. The whole basis of addition made by the Assessing Officer is the statement given by the assessee u/s 132(4) of the Act and the notings found in the Diary of 2009 which is seized and found as a result of search and sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kalyansundaram (P.V.), 294 ITR 49 (SC) endorsed the decision of the Hon ble Madras High Court confirming the findings of the Tribunal that no on-money payment was made though the other party to the transaction accepted the receipts of on-money consideration in the absence of any prima-facie a case made by the Department. The Hon ble Bombay High Court in the case of PCIT vs. Umesh Ishrani, 108 taxmann.com 437 (Bom.) confirmed the findings of the Tribunal, wherein the Tribunal had deleted the addition made on the basis of loose papers and nowhere shows that any payments made by the same person and no enquiry or verification was made with the seller of the properties. Further reliance in this regard, can be placed on the following decisions :- i) CIT vs. Atam Valves (P.) Ltd. (2009) 184 Taxman 6 (P H) ii) CIT vs. Maulikkumar K. Shah (2008) 307 ITR 137 (Guj) iii) CIT vs. C.L. Khatri (2006) 282 ITR 97 (MP) iv) Pr.CIT vs. Kamlesh Prahladbhai Modi (2018) 94 taxmann.com 356 (Guj) v) CIT vs. Shri Girish Chaudhary (2008) 296 ITR 619 (Del) vi) CIT vs. Vivek Aggarwal (2015) 56 taxmann.com 7 (Del) vii) CIT vs. Salek Chand Agarwal (2008) 300 ITR 426 (All) viii) CIT vs. Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble Supreme Court in the case of K.P. Varghese vs. ITO (1981) 131 ITR 597 (SC) held that the capital gains is intended to tax the gains of assessee not what an assessee might have gained and what is not gained cannot be computed as gain and the assessee cannot fastened with the liability on a fictional income. Similarly, the Hon'ble Supreme Court in the case of CIT Vs. Shivakami Co. (P.) Ltd. (1986) 159 ITR 71 (SC) held that unless there is evidence that more than what was stated was received, no higher price can be taken to be the basis for making addition. In the present case, the Assessing Officer had failed to make a prima-facie case against the assessee that the assessee had paid on-money payment at the time of purchase of land by the assessee. 32. As regards to the discharge of onus of rebuttal of presumption raised u/s 292C of the Act, such presumption is raised against the assessee, only in case when the documents are speaking one, reflects the complete transaction or the gaps in the components that are required must be filled up by the Assessing Officer through investigation and other material found during the course of search or investigation. In the present case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roller of shell company M/s Divyadrishti Merchants Private Limited. 4. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in allowing adjustment of Rs. 2,50,00,000/- in quantifying undisclosed income in the form of accommodation entries of unsecured loan without appreciating the fact that during the year under consideration the assessee had taken accommodation entries of Rs. 4,94,50,000/- in the form of unsecured loan from M/s Divyadrishti Merchants Private Limited. 5. The appellant craves leave to add, amend, modify or alter any of the grounds. B. The Revenue filed the above grounds of appeal being aggrieved by that part of the order of the ld. CIT(A), wherein, the ld. CIT(A) had directed the AO to delete the addition of Rs. 2,50,00,000/- stated to be opening balance of M/s Divyadrishti Merchants Private Limited as on 01.04.2011. However, from the material on record, it is clear that there was no opening balance as on 01.04.2011, the findings of the ld. CIT(A) to this extent are reversed. However, in view of our findings in the assessee s appeal in IT(SS)A No. 91/PUN/2022 for A.Y. 2012-13 that in the absence of any incriminating ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities. f) The Appellant craves leave to add, alter, amend, vary, or delete any of the aforesaid grounds. 38. The appellant had filed the originally Return of Income under the provisions of section 139(1) of the Act in pursuant to notice u/s 153A disclosing an additional income of Rs. 1 crore. Against the said return of income, the assessment was completed by the Assessing Officer vide order dated 13.12.2019 passed u/s 143(3) r.w.s. 153A of the Act at a total income of Rs. 1,92,93,090/-. While doing so, the Assessing Officer made an addition of Rs. 59,00,000/- alleging that the appellant assessee had paid on-money consideration of Rs. 1,59,00,000/- on purchase of property based on the notings found in page nos. 62, 63 and 68 of bundle no.1. The scanned images of page nos. 62, 63 and 68 were reproduced by the Assessing Officer at page nos. 5, 6 and 7 of the assessment order. On analysis of these notings found in the above-said pages and based on the statement given by the assessee u/s 132(4) of the Act, the Assessing Officer concluded that the assessee had paid onmoney consideration of Rs. 1,59,00,000/- at the time of purchase of land and after reducing the amount of ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and we find that the notings does not contain any date, name of the persons, as well as four components required to be satisfied to constitute a taxable event, cannot be discerned from such notings. The first is the taxable event which attracts the levy, the second is the person on whom the levy is imposed and who is obliged to pay the tax. The third is the assessment year in which charge of income-tax is levied. The fourth is the total income of the previous year and the fifth is the rate or rates at which tax is to be imposed. The rates are prescribed in the annual Finance Act. Therefore, this component has no value in determining total income on the basis of seized document. Therefore, we are of the considered opinion that these entries/notings found in diary at page nos. 62, 63 and 68 of bundle no.1 can be safely terms as dumb documents in view of the legal position discussed by us in the assessee s own appeal for the assessment year 2012-13 that a dumb document cannot form a basis for the addition. Accordingly, we direct the Assessing Officer to delete the addition of Rs. 59,00,000/- made for the year under consideration. 44. As regards, the enhancement made by the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incriminating corroborative evidence in support of the unjust additions. f) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in confirming the unjust additions on surmises ignoring the detailed documentary evidence and legal propositions including judicial precedents advanced before such authorities. g) The Appellant craves leave to add, alter amend, vary, or delete any of the aforesaid grounds. 47. The assessee had filed the return of income pursuant to notice u/s 153A disclosing additional income of Rs. 1 crore. Against the said return of income, the assessment was completed by the Assessing Officer vide order dated 31.12.2019 passed u/s 153A r.w.s. 143(3) of the Act at a total income of Rs. 3,84,34,210/-. While doing so, the Assessing Officer made addition of Rs. 70,97,500/- by alleging that the assessee had paid on-money consideration in cash at the time of purchase of property situated at Village- Male based on the notings found at page nos. 13, 70 and 71 of bundle no.1 and the statement given by the assessee u/s 132(4) of the Act. The scanned images of the said page nos. 13, 70 and 71 of bundle no.1 were repro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecoded u/s 132(4) cannot be construed as confessional statement for the reasons stated therein. Therefore, the statements recorded u/s 132(4) have no evidentiary value. Then, what remains to be dealt with the notings found in diary at page nos. 18 and 94 of bundle no.1. We have carefully examined the said notings and we find that the notings does not contain any date, name of the assessee as well as four components required to be satisfied to constitute a taxable event. The first is the taxable event which attracts the levy, the second is the person on whom the levy is imposed and who is obliged to pay the tax. The third is the assessment year in which charge of income-tax is levied. The fourth is the total income of the previous year and the fifth is the rate or rates at which tax is to be imposed. The rates are prescribed in the annual Finance Act. Therefore, this component has no value in determining total income on the basis of seized document. Therefore, we are of the considered opinion that these entries/notings found in diary at page nos. 18 add 94 of bundle no.1 can be safely terms as dumb documents in view of the legal position discussed by us in the assessee s own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loose papers and loose diaries contrary to the settled judicial precedents on the issue. e) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in confirming the unjust additions of Rs. 3,82,50,000/- u/s 69A of the Income Tax Act, 1961 ignoring the fact that the transactions in the diary notings had only partially materialized, out of which die materialized portions were already declared in the balance sheets and tax was paid. Therefore, the authorities erred in upholding addition on transactions which have not even materialized. f) The Appellant craves leave to add, alter amend, vary, or delete any of the aforesaid grounds. 56. The assessee had filed original return of income for the assessment year 2015-16 on 29.10.2015 declaring total income of Rs. 22,27,420/-. The said return of income was processed u/s 143(1) on 05.05.2016 and there was no scrutiny assessment. Subsequently, based on the search and seizure operations conducted on the assessee, a notice u/s 153A was issued on 19.01.2018. In response to the said notice, the assessee filed the return of income declared same income as declared in the original return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Y. 2012-13 shall apply mutatis mutandis to the present appeal of the assessee in ITA No. 94/PUN/2022 for A.Y. 2015-16. Thus, the ground of appeal nos. (a), (b) and (c) filed by the assessee stands allowed. 60. Ground of appal nos. (d) and (e) raised seeking relief from the addition of Rs. 3,82,50,000/- made on account of receipt of alleged on-money consideration on sale of property. The Assessing Officer based on the notings found at page nos. 60, 93, 94 and 101 of bungle no.1, the scanned images of the said pages were reproduced at page nos. 17 and 18 of the assessment order, had concluded that the assessee had received on-money consideration of Rs. 3,82,50,000/- and made addition based on the statement given by the assessee u/s 132(4) of the Act. 61. On appeal before the ld. CIT(A), the ld. CIT(A) confirmed the action of the Assessing Officer. 62. Being aggrieved, the assessee is in appeal before us in the present appeal. 63. Before us, the assessee submits that without any post-search enquiry, no addition can be made based on the notings found in the loose sheets placing reliance on the certain judicial precedents. 64. On the other hand, ld. CIT-DR submits that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ete the addition of Rs. 3,82,50,000/- made for the year under consideration. 66. In the result, the appeal filed by the assessee in IT(SS)A No. 94/PUN/2022 for A.Y. 2015-16 stands allowed. IT(SS)A No. 98/PUN/2022, A.Y. 2015-16 By Revenue : 67. The Revenue raised the following grounds of appeal :- 1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in applying peak theory and determining peak credit in respect of accommodation entries of unsecured loan from M/s Grammy Agencies which is proven shell/paper proprietary concern and doing no real business, 2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in not appreciating the fact that peak credit theory is not applicable where deposits remain unexplained under section 68 of the Income-tax Act, 1961 and particular withdrawal/repayment is not available on the date of subsequent credit. 3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in not appreciating the fact that the assessee in his statement recorded u/s 132(4) has admitted that he had taken accommodation entries in the form of unsecured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in unjustly upholding the additions of Rs. 14,00,000/- u/s 69A of the Income Tax Act, 1961 solely based on loose papers, loose documents and loose diaries despite the fact that such transactions have not at all materialized. c) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in unjustly upholding the additions of Rs. 14,00,000/- u/s 69A of the Income Tax Act, 1961 ignoring the fact that the transactions have only partially materialized and the portion which has materialized has been recorded in the balance sheet and books of accounts on which tax has already been paid. Therefore, the authorities erred in upholding additions on transactions which have not at all materialized. d) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in partially confirming the unjust additions u/s 69A of the Income Tax Act, 1961 solely relying upon a statement which was subsequently retracted by the Appellant without bringing forth any incriminating corroborative evidence in support of the unjust additions. e) The Appellant states that die Assessing Officer erred in creating and the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- was confirmed. However, the ld. CIT(A) deleted the addition made on account of loss of Dabba Trading of Rs. 3,04,144/- and the addition of Rs. 20,00,000/- made on account of cash loan given to Mr. Devendra Shingavi by granting the benefit of telescoping against the addition on account of receipt of on-money consideration. 74. Being aggrieved, the assessee in appeal before us in the present appeal challenging the upholding of addition of Rs. 14,00,000/- made on account of receipt of on-money consideration. The addition was made by the Assessing Officer based on the notings found in page nos. 20, 102 and 109 of bundle no.1 and the statement given by the assessee u/s 132(4) of the Act. The scanned images of the said notings were reproduced by the Assessing Officer in the assessment order. The entire assessment order is hinged upon two things : (i) the statement recorded from the assessee u/s 132(4) of the Act and (ii) the notings found in the diary at page nos. 20, 102 and 105 of bundle no.1. We dealt with in great detail on the evidentiary value of the statement recorded from the assessee u/s 132(4) in assessee s own appeal for the assessment year 2012-13, we held that the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rialized. c) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in unjustly upholding the additions of Rs. 45,34,000/- u/s 69A of the Income Tax Act, 1961 ignoring the fact that the transactions have only partially materialized and the portion which has materialized has been recorded in the balance sheet and books of accounts on which tax has already been paid. Therefore, the authorities erred in upholding additions on transactions which have not at all materialized. d) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in partially confirming the unjust additions u/s 69A of the Income Tax Act, 1961 solely relying upon a statement which was subsequently retracted by the Appellant without bringing forth any incriminating corroborative evidence in support of the unjust additions. e) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in confirming the unjust additions on surmises ignoring the detailed documentary evidence and legal propositions including judicial precedents advanced before such authorities. f) The Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.4 and 5 of the assessment order. We dealt with in great detail on the evidentiary value of the statement recorded from the assessee u/s 132(4) in assessee s own appeal for the assessment year 2012-13, we held that the statement recoded u/s 132(4) cannot be construed as confessional statement for the reasons stated therein. Therefore, the statements recorded u/s 132(4) have no evidentiary value. Then, what remains to be dealt with by us is interpretation of the notings found in diary at page nos. 111, 116 and 118 of bundle no.1. We have carefully examined the said notings and we find that the notings does not contain any date, name of the assessee as well as four components required to be satisfied to constitute a taxable event. The first is the taxable event which attracts the levy, the second is the person on whom the levy is imposed and who is obliged to pay the tax. The third is the assessment year in which charge of income-tax is levied. The fourth is the total income of the previous year and the fifth is the rate or rates at which tax is to be imposed. The rates are prescribed in the annual Finance Act. Therefore, this component has no value in determining total income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 2018-19 on 09.02.2019 declaring total income of Rs. 23,53,680/-. Against the said return of income, the assessment was completed by the Assessing Officer vide order dated 31.12.2019 at a total income of Rs. 33,53,680/-. While doing so, the Assessing Officer made addition of Rs. 10,00,000/- by holding that during the course of search and seizure proceedings, the assessee had incurred loss of Rs. 10,00,000/- in Dabba Trading. The source of said loss was not explained. The Assessing Officer had come to this conclusion based on the entries found in the note books of bundle nos. 11 and 12 and the statement given by the assessee during the course of search proceedings u/s 132(4) of the Act. 84. Being aggrieved by the above addition, an appeal was filed before the ld. CIT(A), who vide impugned order confirmed the action of the Assessing Officer. 85. Being aggrieved, the assessee is in appeal before us in the present appeal. 86. We have carefully gone through the assessment order and even without going into the merits of the addition made by the Assessing Officer, suffice to hold that the addition is not warranted as the assessee himself declared income of Rs. 23,53,680 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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