TMI Blog2024 (3) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... dmissible u/s 34, so as to constitute evidence with respect to transaction mentioned therein being of no evidentiary value. Thus, we affirm the order of ld. CIT(A) on our aforesaid additional observation. Unexplained money and unexplained interest - CIT(A) deleted addition - HELD THAT:- AO on the basis of images recovered from the mobile phone of Naresh Agarwal assumed that the assessee advanced Rs. 13.30 crores and earned interest of Rs. 3.72 crores. The figure of principal amount and interest amount in no why can be correlate with each other. Unless and until such principal amount was lent for years together. Alleged interest figure of Rs. 3.72 crores is more than 30% of alleged principal amount which is beyond imagination. AO added five zeros against the figure of 13.30 and added only two zero against the interest which is again without any rational. Thus, we do not find any justification for making such addition in crores without any independent or corroborative material on record. At least such figure or incriminating material should have been confronted with Naresh Agarwal to explain it in a better way. There is no material on record to suggest that such figure was confronted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Vijay Jain - HELD THAT:- AO neither summoned Vijay Jain nor recorded his statement to ascertain the exact details about the said packet (Image). The ld. CIT(A) held that the addition of Rs. 3.00 lacs is made solely on presumption basis. In fact, this packet was received or not is not clear as it contains the name and address and not to the name and address. CIT(A) held that merely on the basis of figure mentioned on the image of packet cannot be basis for making addition by adding three zeros to the figure and deleted the addition. We find that the addition is based on assumption without verification of fact. We find that the AO has not made any independent investigation or verification whether mobile number written is correct or not. No such effort, if made, is recorded in the assessment order, thus we do not find any reason to interfere with the finding of ld. CIT(A) which we affirm. In the result, this ground of appeal is dismissed. Unexplained money u/s 69A - CIT(A) held that the Assessing Officer merely relied on presumption that noting mentioned on the same page elating to other land in Kuberji group, thus, this land is related to assessee, thus deleted addition - HELD THAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es found therein. (ii) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 17,02,40,000/- (Rs. 13,30,00,000/- - unexplained money and Rs. 3,72,40,000/- unexplained interest) made by the Assessing Officer u/s. 69A of the I. T. Act without appreciating the fact that the incriminating documents extracted from the mobile phone of Shri Naresh Agarwal during the course of search proceedings which clearly mentioned the name of the assessee in short S.N. and N for Shri Naresh Agarwal which showed that the assessee has advanced the loan and earned interest thereon. (iii) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 1,04,39,999/- made on account of unexplained investment u/s. 69B of the I. T. Act without appreciating the fact that the assessee failed to furnish the requisite documentary evidences before the AO and the ld. CIT(A) has not remanded the issue to the AO either u/s. 250(4) of the Act or as per the provisions of Rule 46A of the Income Tax Rules, 1962. (iv) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, 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. (x) 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 leading to making of various additions are that in the search action, various incriminating material was found from the residence of assessee. The assessee filed his return of income for the A.Y. 2020-21 on 30/03/2021 declaring Nil income. The case of assessee was selected for scrutiny. A search action under Section 132 was carried out on Kuberji Group, Surat on 06/02/2020. The assessee is one of the partner in Kuberji Group, thus, the assessee was also covered in the search action. During the search action, various documents of incriminating nature was found and seized. Incriminating documents were also found in the form of digital images in the I-phone of assessee. The case of assessee was centralized under Section 127 of the Act. Assessment was completed under Section 143(3) of the Act on 30/03/2022. The Assessing Officer made total seven additions which includes five additions under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cipal amount as well as interest earned by assessee. The seized mater was recoded from the possession of assessee and as per presumption under Section 292C of the Act, such evidence is admissible against the person in whose possession, such evidence was found. 5. On the other hand, the ld. AR of the assessee submits that besides challenging the admissibility of digital image, the assessee explained that it was a dump document. The impugned image contained only some calculation wherein some amount of Rs. 20,43,500/- is mentioned, an amount of Rs. 4.00 lacs has been reduced then Rs. 5.00 lacs is reduced for two times and lastly Rs. 5.60 lacs has been reduced and resultantly figure of Rs. 83,500/- and amount of Rs. 4,27,287/- has been added as interest. There is no working period or rate thereof. No narration about nature of transaction, no name of person is mentioned, it does not signify whether amount was received or give. It does not contain the name and signature of assessee or any other person. The ld. CIT(A) on appreciation of submission of assessee, deleted both the additions. No evidence in the search action was found against such loan or advance to any third party. Mere entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r rate of interest, such working does not prove that transaction of advance has been materialized unless there is further evidence to prove that such amount of loan has been taken or given on a particular date. No such evidence was found in the search. The assessee is not engaged in the business of money lending, therefore, working found on paper cannot be treated as sacrosanct evidence. On the basis of such findings, the ld. CIT(A) deleted both the additions. 7. We have independently examined the facts of the case. We find that the Assessing Officer has not recorded in the assessment order whether such image/photo was received by assessee in WhatsApp image or it was sent. The source of image was not investigated by Assessing Officer. Assessing Officer nowhere mentioned whether such image was confronted to the assessee during the search action or his statement was recorded for such image. Thus, in absence of any corroborative evidence, we do not find any justification for making such addition. Hon ble Supreme Court in Common Cause Vs Union of India (2017) 394 ITR 220 SC also held that loose sheets of papers are wholly irrelevant as evidence being not admissible under section 34, so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch image was found from third party namely Naresh Agarwal and no presumption either under Section 132(4A) or Section 292C of the Act can be drawn against the assessee. No statement of such party was recorded against assessee. The assessee has not undertaken any such transaction. Such image does not contain signature of assessee. Similarly, no date of details whether interest was payable by assessee or received by assessee is mentioned. Similarly no detail of nature of particular amount on which interest has been worked out. The ld.CIT(A) on appreciation of facts, deleted the entire addition by appreciating the fact that such image was found in the mobile phone of Naresh Agarwal. Naresh Agarwal was never confronted with the image. Search team has not examined Naresh Agarwal during the assessee about WhatsApp image in question. To support his submissions, the ld AR for the assessee relied on the same case laws as relied against ground No.1. 10. We have considered the submissions of both the parties and have gone through the orders of lower authorities carefully. The Assessing Officer made addition on the basis of images of loose paper/photo found in the mobile phone of Naresh Agarwal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and earned interest of Rs. 3.72 crores. The figure of principal amount and interest amount in no why can be correlate with each other. Unless and until such principal amount was lent for years together. Alleged interest figure of Rs. 3.72 crores is more than 30% of alleged principal amount which is beyond imagination. Moreover, the Assessing Officer added five zeros against the figure of 13.30 and added only two zero against the interest which is again without any rational. Thus, we do not find any justification for making such addition in crores without any independent or corroborative material on record. At least such figure or incriminating material should have been confronted with Naresh Agarwal to explain it in a better way. There is no material on record to suggest that such figure was confronted with Naresh Agarwal nor addition is based on his statement. Thus, with the aforesaid additional observation, we affirm the order of ld. CIT(A). In the result, ground No. 2 of appeal is dismissed. 12. Ground No. 3 of the appeal relates to deleting the addition of Rs. 1.04 crore under Section 69B of the Act. The ld. CIT-DR for the revenue supported the order of Assessing officer. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of family members were also reopened under Section 153C of the Act for the block period and under Section 147 for Bhartiben Hiren Uttamchandani was pending before the same Assessing Officer and the assessee may prepare to give explanation for those cases of female family members of respective assessment proceedings. The Assessing Officer totally ignored such fact. The ld. AR of the assessee further submits that all the jewellery were shown in the wealth tax return of respective female family members and were disclosed before the Settlement Commission. All the details were furnished before the lower authorities. The ld. CIT(A) on appreciation of fact that total jewellery of family members and the diamonds found in the search were less than the declaration in the wealth tax return and before the Settlement Commission. Moreover, entire jewellery items were identified as belonging to three female members/ladies of the assessee during the search itself, therefore, the ld. CIT(A) appreciated the facts and allowed relied to the assessee. The ld AR for the assessee submits that he has filed copy of the chart showing the details of the jewelry as per Wealth Tax return and the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han the declared jewellery in the wealth tax return as well as before the Settlement Commission. Thus, the entire jewellery found were not in excess than declared in the wealth tax return and before the Settlement Commission. All three lady members were separately assessed to tax. The Assessing Officer made addition of Rs. 1,04,39,999/-, actually it should be of Rs. 1,04,64,883/- i.e. Rs. 94,39,999 + 4,83,346 + 5,41,538/- made on account of unexplained investment. The assessee has also filed a chart containing jewellery found from residence and lockers in search action under Section 132 of the Act vis a vis jewellery as per wealth tax returns of female members of family and further jewellery as declared before the Settlement Commission in A.Y. 2016-17. Jewellery found is less than and covered by the jewellery as per wealth tax returns and as declared before the Settlement Commission. The ld. CIT(A) on the basis of aforesaid findings, deleted the entire addition. 17. We have independently examined the facts qua the issue in hand. We find that the Assessing Officer made addition ignoring the fact that Panchnama contained the name of all lady members of the family. All three female me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... que whether furniture was really purchased or not is not clear on the image. The Assessing Officer made addition merely on the basis of WhatsApp image without ascertaining whether such furniture was purchased or not, so such addition cannot be sustained. We find that the Assessing Officer has not brought any corroborative evidence to support the addition. Such digital image was not confronted with the assessee or with any other family members. Thus, we do not find any justification of making addition merely on the basis of details found in the digital device particularly in absence whether such image was sent or received by the assessee. Thus, we affirm the order of ld. CIT(A). In the result, this ground of appeal is dismissed. 21. Ground No. 5 relates to deleting the addition of Rs. 3.00 lacs under Section 69A of the Act on account of unexplained money. The ld. CIT-DR for the revenue supported the order of Assessing Officer. The ld. CIT-DR for the revenue submits that the Assessing Officer made addition on the basis of details/image found in the digital device of assessee. Image of which is reproduced by Assessing Officer on page No. 22 of assessment order. On such image, the name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e do not find any reason to interfere with the finding of ld. CIT(A) which we affirm. In the result, this ground of appeal is dismissed. 24. Ground No. 6 of the appeal relates to deleting addition of Rs. 34.56 crores on account of unexplained money under Section 69A of the Act. The ld. CIT-DR for the revenue supported the order of Assessing Officer. The ld. CIT-DR for the revenue submits that during the search action in the office of assessee at Kuberji Corporate House, page No. 4 of Annexure-A4 was found and seized. The Assessing Officer scanned the copy of such page on page No. 25 of assessment order. As per recording on such page, there were some transactions of land. The area of land is mentioned at 5629 square meter alongwith area in square yard i.e. 6733 square yard. The rate of land is also written at 51335/- per vaar. The total consideration of land is written at Rs. 34,56,00,000/- (Rs. 34.56 crores) and during the assessment, on show cause, the assessee simply took a plea that it is a dump document. Document was found from the possession of assessee during the search action and is admissible evidence as per Section 292C of the Act and burden lies on the assessee to rebut t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. We find that before the ld. CIT(A), the assessee while challenging the addition vehemently submitted that the name of person or details thereof or the details of land like survey number, block number, plot number etc. are not mentioned on the said paper. Such paper is not in the handwriting of assessee or his family members as no corroborative evidence was brought on record by Assessing Officer. No such land was ever purchased or sold by assessee. We find that the ld. CIT(A) on considering the submission of assessee held that the Assessing Officer while making addition solely relied on loose paper found in the course of search action. There is no direct evidence found or brought on record that the assessee has ever purchased or sold any land. The ld. CIT(A) specifically noted that in para 11.3 of assessment order, the Assessing Officer accepted that no asset relating to transaction in question is identified by Assessing Officer or by DDIT which could be linked with the transaction/noting during the enquiry conducted. The ld. CIT(A) held that the Assessing Officer merely relied on presumption that noting mentioned on the same page elating to other land in Kuberji group, thus, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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