TMI Blog2024 (1) TMI 1002X X X X Extracts X X X X X X X X Extracts X X X X ..... evidences to show that the said cash was utilized for the purpose of payment of on-money. In our considered view, the findings of the AO regarding payment of on-money based on a dumb document is purely on suspicion, conjecture and surmise manner, but not based on any evidences. In this regard, it is pertinent to refer to the decision CIT v. Daulatram Rawatmull [ 1964 (3) TMI 14 - SUPREME COURT] where it has been clearly held that suspicion however so strong, but suspicion cannot take the place of evidence. Therefore, we are of the considered view that the AO is erred in making additions towards on-money u/s. 69A of the Act, without reference to any material which suggest payment of on-money merely on the basis of suspicion and surmise. Legal presumption u/s. 132(4A) s.292C - whether cannot be given restrictive interpretation so as to consider applicable only to the searched person and not to other person? - As the impugned excel sheet representing cash book containing the entry regarding carrying of cash to Bangalore was found and seized during the course of search of a third party i.e. M/s.Polisetty Somasundaram. Further, said incriminating material was not seized du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised the following grounds of appeal: 1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law. 2. The Ld.CIT(A) erred in deleting the addition of Rs. 51,53,55,000/- made u/s. 69A of the Act towards receipt of unaccounted money on sale of property based on the material seized in the search case of M/s.PolisettySomasundarm. 2.1 The Ld, CIT(A) observed that Shri.YelluriChandrasekara Rao, representative of M/s.PoiisettySomasundararn explained that cash was carried to purchase tobacco from farmers and dealers in Bangalore and not referred the property transaction with assessee. The CIT(A) failed to appreciate that he had not substantiated his claim with evidence like details of farmers/agents from whom tobacco was purchased, invoices and payment details etc. The credibility of the statement that such a huge amount was sent for purchasing tobacco on a single day is questionable. 2.2 The Ld.CIT(A) observed that Shri.YelluriChandrasekara Rao admitted on money payment in respect of certain property transactions in Bangalore, but not made any reference to the property sold by the assessee. The CIT(A) failed to appreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions entered in the cash book shown that on 31.12.2015 Bangalore cash payment made Rs. 51,53,55,000/- and also cash carrying charges to Bangalore , Rs. 10,75,000/-. On further enquiry, it was found that M/s.Polisetty Somasundaram Group had purchased an immovable property at Bangalore on 23.12.2015 for a consideration of Rs. 99 Crs. from the assessee vide registered Sale Deed dated 23.12.2015. During the course of search, u/s. 132 of the Act, in the case of M/s.Polisetty Somasundaram, a sworn statement of Shri. Yeluri Chandrasekhar Rao, Authorized Representative of M/s.Polisetty Somasundaram, was recorded on 05.03.2020 and confronted with the impounded excel sheet cash book. Shri. Yeluri Chandrasekhar Rao had given explanation to cash book entries dated 31.12.2015 and stated that the firm has sent Rs. 51,53,55,000/- cash to Bangalore for purchase of tobacco from farmers in the Mysore region. He further admitted that onmoney has been paid in connection with one property transactions at Bangalore. However, clearly denied that entries recorded on 31.12.2015, cash payment to Bangalore, is nothing to do with property transactions with M/s.Vibgyor Net Connections. Further, dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that he has admitted in the statement recorded u/s. 132(4) of the Act, that on-money has been paid in respect of some property transactions made at Bangalore. However, categorically denied that cash of Rs. 51,53,55,000/- sent to Bangalore for purchase of property with M/s.Vibgyor Net Connections, even though, the date of payment of cash to Bangalore and purchase of property from M/s.Vibgyor Net Connections, is within a week. Therefore, the AO opined that the assessee itself agreed that the actual sale value is much more than the guideline value of the property, which indirectly confirms the possibility of receiving on-money payment. Thus, rejected arguments of the assessee and made addition of Rs. 51,53,55,000/- as unexplained money u/s. 69A of the Act. 6. Being aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee has filed detailed written submissions on the issue which has been extracted in Para No.16 on Page Nos.9-24 of the order of the Ld.CIT(A). The sum and substances of the arguments of the assessee before the Ld.CIT(A) are that additions made by the AO towards unexplained money u/s. 69A of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed during the course of search. Therefore, the Ld.CIT(A) opined that despite absence of incriminating evidences in the seized materials or any admission of on-money transactions in the sworn statement u/s. 132(4) of the Act, the AO arrived at a conclusion regarding payment of on-money only on the basis of proximity of 9 days between the date of registration of property at Bangalore and the date of sending cash to Bangalore. Therefore, the Ld.CIT(A) opined that such findings by the AO without any other material/evidences to show that said cash was utilized for the purpose of payment of on-money is nothing but a mere suspicion, conjecture and surmise. The Ld.CIT(A) further held that findings of the AO that recorded sale consideration in the registered Sale Deed, is much more higher than the guideline value of the property has indirectly confirmed the possibility of receiving on-money payment is irrational and clearly in the nature of surmise. Had recorded sale consideration being less than the SRO guideline value, there could have been suspicion that the sales transaction has been suppressed on record and on-money payment has been made, but there is no scope for such suspicion when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption of correctness of any document or contents therein, because, the AO has reasonably arrived at a conclusion of receipt of onmoney on sale of property considering the circumstantial evidences in nature like date of transaction mentioned in the seized material, date of registration of property, non-submission of proof by the assessee in support of purchase of tobacco, etc. Therefore, the Ld.DR submitted that additions made by the AO towards on-money u/s. 69A of the Act, should be sustained. 9. The Ld. Counsel for the assessee, Shri M.V.Prasad, CA, supporting the order of the Ld.CIT(A) submitted that the Ld.CIT(A) has rightly apprised the facts in light of various reasons given by the AO to make addition u/s. 69A of the Act, when the AO has not given any valid reason to arrive at a conclusion that the assessee has received on-money for sale of property at Bangalore. The Ld.Counsel for the assessee referring to statements of Shri Yeluri Chandrasekhar Rao and Shri S. Mahalingam submitted that neither Shri Yeluri Chandrasekhar Rao, has admitted payment of on-money to the assessee nor Shri S. Mahalingam has accepted receipt of on-money from M/s.Polisetty Somasundaram. The so-ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tobacco from farmers at Mysore region. He further stated that said cash payment at Bangalore is nothing to do with purchase of property from M/s.Vibgyor Net Connections on 23.12.2015. Further, impounded cash book from the search of M/s.Polisetty Somasundaram has been confronted to Shri S. Mahalingam,Managing Partner of the assessee s firm during the course of search and a statement u/s. 132(4) of the Act, was recorded on 05.03.2020, in which, the Managing Partner of the assessee s firm has denied receipt of any on-money for sale of property at Bangalore. The AO made additions towards purported on- money u/s. 69A of the Act, in the hands of the assessee on the ground that there is a close proximity between date of sale of property on 23.12.2015 and reference of cash payment at Bangalore in the seized cash book on 31.12.2015. According to the AO, although, both parties have denied exchange of on-money for sale of property, but the circumstantial evidences clearly suggest that there is a possibility of payment of on-money for purchase of property. Therefore, the AO opined that the assessee has received on-money of Rs. 51,53,55,000/- towards sale of property, and thus, made additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent to Bangalore on 31.12.2015 for the purpose of purchase of tobacco in Mysore region and that the said cash is not connected in any way to the immovable property transactions dated 23.12.2015 with the assessee. Further, Shri S. Mahalingam, the Managing Partner of the assessee s firm had also denied receiving any on-money in cash from M/s.Polisetty Somasundaram in respect of the property transaction dated 23.12.2015. From the above, it is evident that the sworn statement recorded during the course of search also do not reveal receipt of on-money of the assessee and they do not facilitate drawing any adverse inference against the assessee. Despite, absence of any incriminating evidences in the seized materials or any admission of on-money in the sworn statement, the AO arrived at his findings regarding receipt of on-money for sale of property only on the basis of proximity of 9 days between the date of registration of property and date of sending cash to Bangalore, without any other material/evidences to show that the said cash was utilized for the purpose of payment of on-money. In our considered view, the findings of the AO regarding payment of on-money based on a dumb docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted to have paid on-money over and above registered value in respect of some property transactions made at Bangalore, but he has categorically denied making any on-money payment to the assessee. This is further fortified by the findings of the AO that the recorded sale consideration in the registered document at Rs. 99 Crs. is much more than the guideline value of the property at Rs. 43.31 Crs. and this position has indirectly confirmed or indicated the stand of the assessee that there is no possibility of receipt of on-money. In our considered view, the AO is clearly erred in coming to the conclusion that there is a possibility of receipt of on-money on the basis of recorded sale consideration as per sale deed and guideline value by the SRO, even though, the facts are contrary to the observations of the AO. Had it been the case of the AO that recorded sale consideration was lesser than the SRO guideline value, then there could have been a suspicion that the sale consideration has been suppressed on record and on-money payment has been made. However, in the present case, there is no scope for such suspicion, because, the recorded sale consideration is almost double the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on-money for sale of property. In our considered view, the conclusion arrived at by the AO is purely on suspicion and surmise manner, because, said document does not contain the nature of transaction nor the purpose, for which, money has been sent to Bangalore. Therefore, we are of the considered view that no arbitrary addition to the income can be made by the AO based on a dumb document or a vague notings unless any other corroborative evidences which shows that the entries contained in dumb document are true and correct. This legal position is supported by the Hon ble Delhi High Court in the case of CIT v. D.K.Gupta reported in [2008] 174 taxman 476 (Delhi), wherein, it was held that a dumb document without any corroborative evidence or finding that the alleged document have materialized into transaction giving rise to income cannot be used as evidence for making addition to the income. This legal position is further fortified by the decision of the Hon ble Bombay High Court in the case of CIT v. Umesh Ishrani reported in [2019] 108 taxmann.com 437 (Bombay). A similar view has been taken by the co-ordinate Bench of ITAT Chennai, in the case of DCIT v.Mr. A. Johnkumar, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee or the concerned property at Bangalore in the relevant entry in the seized cash book. Therefore, we are of the considered view that provisions of Sec.132(4A) s.292C of the Act, at best lead to a rebuttal presumption that carrying of cash to the said extent by M/s.Polisetty Somasundaram is true and correct. But, the rebuttal presumption cannot extend to the receipt of such cash by the assessee in absence of any reference to the name of the assessee or the concerned property at Bangalore in the relevant document. Thus, we reject the ground taken by the Revenue. 15. At this stage, it is pertinent to refer certain judicial precedents relied upon by the Ld.Counsel for the assessee. The Ld.Counsel for the assessee has relied upon the decision of ITAT Chennai Bench in the case of Mr.Nadessan Sivapragasam v. ACIT in ITA No.112 to 114/Chny/2021. The Tribunal under identical set of facts, has held as under: 27, The Hon'ble Jurisdictional Tribunal held in the case of NadessanSivapragasam Vs. ACIT in ITA Nos. 112 to 114/ CHNY/2021 that where nothing can be discernible from the document relied upon by the AO regarding earning of income and spending for expenditure, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ai under identical set of facts, has held as under: 28. In the case of MM Financiers (P) Limited Vs DCIT (2007) 107 TTJ 200 (Chennai), the Hon'ble Jurisdictional Tribunal held that dumb documents or documents with no certainty have no evidentiary value for the purpose of resorting to deeming provisions. The relevant portion of the decision of the Hon'ble Tribunal is extracted as under: 24. In the case of Bansal Strips (P.) Ltd. (supra), while considering the issue of seized loose papers from the residence of the assessee during the search operation though the loose papers were not in the handwriting of the assessee and belonged to the assessee, the Tribunal held that: There was force in the contention of the assessee that there was no provision of law under which the impugned addition could be made to the income declared by the assessee. It is trite law that if an income not admitted by an assessee is to be assessed in the hands of the assessee, the burden to establish that there is such income chargeable to tax is on the Assessing Officer. With a view to assist the Assessing Officer and to reduce the rigour of the burden that lay upon the Assessing Officer, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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