TMI Blog2023 (9) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... es which was used by them for making various bookings in each project - HELD THAT:- On the observation of AO with regard to back up of I-Phone of Shri Agam V. Vadecha, the ld. CIT(A) held that storing the assessee s phone number and other persons mobile number cannot be the basis for making addition, particularly even after taking backup of I-Phone, no communication was found which remotely indicate that the assessee has undertaken such transaction recorded in the seized material. AO s finding in treating the abbreviation M.C. pertaining to the assessee is not justified and deleted the entire addition. We also find that the AO has not made any independent investigation nor brought any adverse material on record to connect with the assessee with the seized material. Once, the person whose possession, such document, on the basis of which the Assessing Officer has drawn his belief has not taken the name of assessee while explaining M.C. as Mahendra C. Mehta rather explained it Manojbhai, the Assessing Officer was not justified in drawing conclusion that MC means Mahendra C. Mehta. In view of the aforesaid factual discussion, we do not find any justification for making add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in treating the MOU in question as dumb document and deleting the addition made of Rs. 2,25,00,000/- on account of unexplained investment. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in treating the incriminating documents seized during the search action u/s. 132 of the Act in the case of Param Properties and deleting the addition made of Rs. 20,00,000/- on account of unexplained cash payments treating the documents seized as dumb document. 3. It is, therefore, prayed that the order the Ld. CIT(A)-4, Surat may be set aside and that of the AO may be restored to the above extent. 4. The appellant craves leave to add, alter, amend and/or withdraw any ground(s) of appeal either before or during the course of hearing of the appeal. 2. Brief facts of the case are that the assessee is individual, engaged in the business of diamond trading, filed his return of income for A.Y. 2015-16 on 28/09/2015 declaring income of Rs. 18,70,610/-. A search action under Section 132 of the Income Tax Act, 1961 (in short, the Act) was carried out on 04/09/2015 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer issued show cause notice to the assessee as to why amount of Rs. 2.25 crores should not be treated as unexplained expenditure. In response to show cause notice, the assessee filed his reply dated 08/12/2017. In the reply, the assessee stated that he never entered into any type of such MOU or dealt with anybody with regard to said agricultural land. The unsigned MOU cannot be relied upon for drawing any inference. The MOU is unsigned and has no evidentiary value. The reply of assessee was not accepted by Assessing Officer. The Assessing Officer held that the MOU in question is correctly and accurately contained the details of property. The land in question is actually registered in the name of one of the partner whose name appears in the MOU and thirdly as per MOU, the partners of property shall carry out development work in the land and if in future, in case the property is sold, they will divide the sale consideration after deducting the expenses. In the statement recorded in search action, partner of Param Properties stated that the assessee was having share of 36%. MOU was seized from the premises of Param Properties. Their partner admitted about the deed for purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back up of i-phone of Shri Agam V. Vadecha. The documents seized in the course of search action has strong evidential value and it was firmly corroborated from the back up of i-phone of Agam V. Vadecha. As per enquiry and evidence gathered by department during the search and post search proceedings, it is established beyond reasonable doubt that the documents seized from Param Properties is related with assessee. The admission of partner of Param Properties cannot be brushed aside. The Assessing Officer on the basis of his aforesaid observation, made addition of Rs. 20.00 lacs in the hands of Param Properties on protective basis and in the hands of assessee on substantive basis. 6. Aggrieved by the additions in the assessment order, the assessee filed appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee filed his detailed written submissions on all the additions. On the addition, on the basis of MOU of Rs. 2.25 crores, the assessee stated that the documents of MOU is seized from the third party, is unsigned MOU/partnership deed. The same is on plain paper. It does not contain any consideration whatsoever to have been passed/invested by assessee. There is no statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2C is not available against the assessee. Further the said third party clearly in his statement stated that M.C. is pertaining to broker Manojbhai. Again the seized paper does not contain full name of assessee nor his signature nor the entry of the seized paper in the assessee s handwriting and hence no inference whatsoever can be drawn against the assessee. Lastly the Assessing Officer has not brought any corroborative evidence to prove that the assessee has entered into any such transaction with Param Properties. The assessee also stated that the addition was made on the basis of documents seized from third party without providing opportunity of cross examination of said third party which is absolutely illegal, bad in law and required outright annulment. To support all his submission, the assessee relied upon the decision of Hon'ble Apex Court in Andaman Timber Industries V CCE (2015) 281 CTR 0241 (SC), Hon'ble Gujarat High Court in DCIT Vs Mahendra Ambalal Patel (2010) 40 DTR 0243 (Guj), CBI Vs V.C. Shukla AIT 1998 SC 1406, Common Cause Others Vs UOI Ors. (2017) 98 CCH 0028 (SC), Hon'ble Bombay High Court in CIT Vs Lavanya Land Pvt. Ltd. (2017) 397 ITR 0246 (Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it wherein the cash is written in coded form ignoring last three digits applying such three digits coded form. The ld. CIT(A) held that it is undisputed fact that the documents relied by Assessing officer for making addition were found from the premises of Param Properties which is a third party. The document is not in the handwriting of assessee nor signed by assessee. On specific question by Investigating Officer to identify the name of person written on this paper, the partner of Param Properties while replying to question No. 5 stated that abbreviation M.C. refers to a broker Manojbhai and not the assessee. Further Shri Agam v. Vadecha while filing written submission dated 08/12/2015 before the Investigation Wing reported that M.C. is a broker whose name is Manojbhai with whom they carried out resale deal transaction. On the aforesaid basis, the ld. CIT(A) concluded that the documents are neither in the handwriting of assessee nor signed by assessee were found from the third party. The third party identified M.C. as some other person Manojbhai and not the assessee. The complete name of assessee is not written on such papers. Such fact clearly shows that the documents are du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shah in IT(SS)A No. 33/Srt/2021 and we find that on the basis of MOU found at the premises of Param Properties, the Assessing Officer made similar addition of Rs. 1.50 crore on the basis of share allegedly mentioned on MOU which was deleted by ld. CIT(A) and on further appeal before the Tribunal, the combination of this bench has passed following order: 9. We have considered the rival submissions of the parties and have gone through the orders of the lower authorities carefully. The Assessing Officer made addition by taking a view that as per MOU, the assessee was having 24% share in the land and Param Properties was having 4% share. The partner of param Properties has stated that they made part payment of Rs. 25.00 lacs in cash for 4% of their share. The Assessing officer took his view that 4% share of property is valued at a minimum of Rs. 25.00 lacs then the total actual value of entire property would be of Rs. 6.25 crores. The Assessing Officer noted that the assessee questioned the sanctity of MOU on the ground that it is not signed and has no evidentiary value. The Assessing Officer held that the MOU in question correctly and accurately described the property, the land i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. CIT(A) noted that extrapolation on the basis of part period or part value is not permissible. The ld. CIT(A) further noted that no evidence during the course of search or statement of any person which proved that the assessee had paid Rs. 1.50 crore for purchase of land. The Assessing Officer made addition without having any documentary or oral evidence. The Assessing Officer made addition without any basis of evidence. There is no document found during the course of search which may contain details of payment of Rs. 1.50 crore paid by assessee for purchase of land. On the basis of the said observation, the ld. CIT(A) deleted the entire addition. We find that the Ld. CIT(A) on proper appreciation of fact correctly held that the additions made by the assessing officer is not based on evidence on record. No contrary facts or law is brought to our notice to take other view, hence, we affirm the order of Ld. CIT(A). in the result, the grounds of appeal raised by the revenue are dismissed. 13. Considering the aforesaid categorical decision of this Bench on the basis of same set of fact with respect to same document, seized from the premises of Param Property, wherein similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer ignored the statement of Agam V. Vadecha. The ld. AR of the assessee submits that no adverse inference can be drawn against the assessee on the basis of documents seized from the premises of third party in absence of corroborative evidence. Further no independent investigation was carried out to connect the assessee. The assessee with the alleged loose papers with regard to unaccounted investment against the assessee. The ld. AR of the assessee relied on similar case laws as relied against ground No. 1 of the appeal as well as the following case laws: K.P. Varshese Vs ITO 7 Taxman 13 (SC) Common Cause (A Registered Society) Vs UOI (2017) 394 ITR 220 (SC) CIT Vs P.V. Kalyanasundaram (2007) 294 ITR 49 (SC) Umacharan Shaw Bros Vs CIT (1973) 37 ITR 271 (SC) Lalchand Bhagat Ambica Ram Vs CIT (1959) 37 ITR 288 (SC) Dhakeshwari Cotton Mills Ltd. Vs CIT (1954) 26 ITR 775 (SC) CIT Vs Maulikumar K. Shah 307 ITR 137 (Guj) Govindbhai N. Patel Vs DCIT 41 taxmann.com 147 (Guj) CIT Vs Lavanya Land (P) Ltd. (2017) 83 taxmann.com 161 (Bom) ACIT Vs Miss Lata Mangeshkar (1974) 97 ITR 696 (Bom) CIT Vs Anil Khandelwal (2015) 93 CCH 0042 (Del) CIT Vs S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a broker whose name is Manojjbhai with whom they had carried out resale deal transaction. On such observation, the ld. CIT(A) concluded that neither the document is signed nor found from the possession of assessee, the party from whom documents were found, identified M.C. as some other person i.e. Manojbhai and not the assessee. On such observation, the ld. CIT(A) held that the Assessing Officer was not justified in relating this document or transaction with the assessee. Complete name of assessee is not mentioned on these papers. Other names are also written on these papers. The ld. CIT(A) treated such paper as dump document and by referring the decision of Hon'ble Supreme Court in CBI Vs V.S. Shukla and Common Cause Others Vs UOI Ors. (supra) wherein it was held that when documents were found from third party and entries were not confirmed that those entries belong to assessee, there was no question of any assumption or believe that such entry belongs to assessee and no addition can be made. On the observation of Assessing Officer with regard to back up of I-Phone of Shri Agam V. Vadecha, the ld. CIT(A) held that storing the assessee s phone number and other persons mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while framing assessment order for AY 2016-17 made addition of Rs. 5.21 crores on account of unexplained cash receipt and Rs. 1.47 crore on account of unexplained cash payment. The ld. CIT(A) deleted the addition of Rs. 1.47 crore with same observation as observed while deleting addition of Rs. 20.00 lacs in appeal for A.Y. 2015-16. The ld. CIT(A) also held that none of the entries in the books of assessee is matches with the seized material. There is no cheque entry dealing with the bank account of assessee. There is no such reference in the assessment order. The assessee or his relative have not made any booking or shown purchases through Param Properties in Star Galaxy, Florence or SNS Interio as featured in the seized document from Param Properties. Thus, addition of unaccounted payment of Rs. 1.47 crore was deleted. So far as deleting the addition of Rs. 5.21 crores on accounted receipt, the ld. CIT(A) held that the Assessing Officer has considered duplicate entry to the extent of Rs. 1.52 crore, hence, such total addition needs to be deleted. Further none of the flat, shop as mentioned in the seized document, was purchased or booked by assessee. The ld. CIT(A) by reiterating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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