9911796707
TMI Blog2025 (5) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... by this consolidated order. 3. At the outset, the ld. AR has submitted that the matter in ITA No. 115/JP/2024 may be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are identical except the difference in the amount disputed in other cases for the A. Y. 2013-14 to 2018-19. The ld. DR did not raise any specific objection against taking that case as a lead case. Therefore, for the purpose of the present discussions, the case of ITA No. 115/JP/2024 is taken as a lead case. 4. At the outset of the hearing the bench noted that registry reported the appeal of the assessee was delayed of 2 days. On this aspect of the matter ld. AR of the assessee submitted that though the order of the ld. CIT(A) is dated 07.12.2023 but the DIN for that order was generated on 11.12.2023 and therefore, considering that date there is no delay. Ld. DR did not controvert this facts and thereby we condone the delay in filling the present appeal. 5. Before moving towards the facts of the case we would like to mention that the assessee has assailed the appeal for assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him vide ground No. (2) & (3) above. 5. The appellant craves permission to add to or amend to any of grounds of appeal or to withdraw any of them. 5.2 In ITA No. 117/JP/2024 the assessee has raised the following grounds: - 1. That on the facts and in the circumstances of the case ld CIT(A) is wrong, unjust and has erred in law in upholding addition of Rs. 2111000/- made by the ld AO to the income of the appellant u/s 69 of the IT Act, 1961 on account of alleged unexplained investment for purchase of agricultural land at vill Swaroopgarh Tehsil Hindoli, Bundi on the basis of page No. 5 to 9 of Exhibit 1 of the seized Annexure AS. 2. That on the facts and in the circumstances of the case the ld CIT(A) is wrong, unjust and has erred in law in confirming addition of Rs. 718000/- made by the AO the income of the appellant on the basis of exhibit 2 and 3 of seized Ann. AS allegedly on the ground that identity, genuineness and creditworthiness of the concerned person is not proved. 3. That the ld CIT(A) is also wrong and has erred in law in confirming addition of Rs. 76000/- made by the AO to the income of the appellant on account of alleged interest paid to/received from parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unjust and has erred in law in confirming addition of Rs. 460000/- made by the AO the income of the appellant on the basis of exhibit-2 and 3 of seized Ann. AS allegedly on the ground that identity, genuineness and creditworthiness of the concerned person is not proved. The ld. CIT(A) is further wrong and has erred in law in upholding charging of this addition to the income of the appellant u/s 115BBE of the IT. Act, 1961 @ 30%. 2. That the ld. CIT(A) is also wrong and has erred in law in confirming addition of Rs. 52000/- made by the AO to the income of the appellant on account of alleged interest paid to/received from parties referred to in ground No. (1) above. 3. That appellant craves permission to add to or amend to any of grounds of appeal or to withdraw any of them." 6. Succinctly, the facts as culled out from the records are that a search and seizure action u/s 132 of the Income Tax Act, 1961 ("the Act") and/or survey action u/s 133A of the Act was carried out by the Income Tax Department on the members of Kiran Fine Jewellers Group on 02-08-2017 of which the Assessee is one of the members. The jurisdiction over the case was assigned to Central Circle-2, Jaipur by PCI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be paid through cheque no. 11-4284 dated 10/10/2013 amounting to Rs. 17,00,000/ drawn on Allahabad Bank, Tonk Road, Jaipur and Rs. 4,25,000/- is reported to have been paid in cash. During the course of search action the statement of the assessee was recorded on oath u/s. 132(4) wherein the assessee was asked to explain the reason for difference in sale consideration of flat at Ground Floor, in Plot No. 35, Chitragupt Nagari, Imliwala Phatak, Jaipur sale agreement dated 03.11.2012 and registered sale deed dated 11.10.2013 executed by him with Shri Chhotu Ram Kumawat, In reply the assessee has categorically stated that Shri Chhotu Ram Kumawat is a builder and he has constructed total 6 flats in Plot No: 34 & 35. Chitragupt Nagar, Jaipur and all the flats have been sold at the rate of Rs. 40 lacs per flat. He has further admitted that the registered sale deeds were executed at the DLC rate, therefore, there is a difference in consideration reported in sale agreement & registered sale deed. In view of the sale agreement seized and statement of the assessee it is evident that the assessee has paid Rs. 40,00,000/- in cash to the builder as consideration of aforesaid flat. According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as Annexure AS, Exhibit -2 & 3. On perusal of the seized annexure, ld. AO found that transactions of cash/cheque loan in the name of various persons were noted along with details of interest. Therefore, vide notice dated 16.09.2019 assessee was asked to explain the nature of transactions recorded on these pages, assessee was also asked to produce/provide whereabouts of the persons whose name was found recorded in seized annexure. In response, the assessee filed reply on 13.11.2019. The assessee in furtherance of his reply submitted an affidavit sworn by him on 18.12.2019, claiming that the transactions noted on seized Annexure AS Exhibit-2 & 3 do not pertain to him and he merely acted as a middleman. Apart from assessee's own affidavit, he further furnished affidavits of various persons wherein such person have sworn that they have entered into such transactions and assessee merely acted as middleman. Assessee also furnished identity proofs of few persons. Assessee again on 23.12.2019 furnished an affidavit sworn by him, containing name; address and PAN of few person for whom assessee acted as middleman. In the statement recorded on oath u/s 131 on 23.12.2019 assessee vehemently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Krishan Kant Sanadhya 07/08/2013 500,000.00 2014-15 33 Shri Krishan Kant Sanadhya 31/08/2013 500,000.00 2014-15 35 Shri Nawal Ji 02/09/2013 200,000.00 2014-15 2,950,000.00 26 Shri Chinnu 11/04/2014 20,000.00 2015-16 57 Shri Ghanshyam 05/05/2014 50,000.00 2015-16 58 Shri Rajendra Deshnok 07/07/2014 150,000.00 2015-16 26 Ashok 17/07/2014 8,000.00 2015-16 36 Shri Roop singh Jhohinda 15/08/2014 200,000.00 2015-16 37 Shri Raju Shanti Nagar 01/11/2014 25,000.00 2015-16 61 Shri Ramchandra Saini 01/11/2014 50,000.00 2015-16 26 Ashok 12/11/2014 15,000.00 2015-16 36 Shri Roop singh Jhohinda 15/11/2014 200,000.00 2015-16 718,000.00 37 Shri Raju Shanti Nagar May-15 21,000.00 2016-17 54 Shri Ratan Sigh 13/01/2016 500,000.00 2016-17 56 Shri Durga Jija 20/01/2016 100,000.00 2016-17 54 Shri Ratan Singh 23/01/2016 200,000.00 2016-17 54 Shri Ratan Singh 21/03/2016 200,000.00 2016-17 1,041,000.00 43 Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Plot No. 35, Chitragupta Nagar-1, Irmliwala Phatak, Jaipur since last more than 25 years. The said residential house was earlier owned by one Smt. Vidhya Mathur wife of Shri Basant Behari Mathur. In the month of October, 2012 the said house was purchased by Shri Chotu Ram Kumawat through a Registered Sale Deed from Smt. Vidaya Mathur & Others for construction of residential flats thereon. Since the appellant and one Shri Satyapal Singh were tenants in the said house and there was a pending litigation from the year 2006 filed by the appellant, co-tenant Shri Satyapal Singh against the house owner Shri Basant Behari Mathur for not de-possessing/vacation @ the said house by the tenants. To withdraw and settle down the above said dispute already going on amongst the above said persons, Shri Chotu Ram Kumawat approached the appellant and co-tenant Shri Satyapal Singh. Appellant further claimed that it was mutually agreed by and between Shri Chotu Rans Kumawat and the tenants that an Agreement to Sale cam Memorandum of Understanding should be executed for a residential flat st ground floor out of the multi-storied residential apartment to be constructed by Shri Chotu Ram Kumawat. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n para 7.3 starting page 3 of the assessment order. Further as noted by the Ld. AD and as not disputed in appeal, Shri Chhotu Kumawat recorded u/s 131 of the Act dated 11-12-2017 wherein at question No. 12 he Acknowledge the sale agreement under consideration which clearly established the sanctity of the seized sale agreement and the cash payment of Rs. 40,00,000/- is also found to be true. The assessee has not furnished any documentary evidence as such which can substantiate that no cash amount was paid whereas in the seized sale agreement it has been categorically mentioned that the seller has received Rs. 40,00,000/- from the assessee in cash. The explanation submitted by the appellant later on and during the appeal proceedings is merely an afterthought that the said agreement was executed at Rs 40 lakhs for the purpose of obtaining bank loan for buying the property is also not correct factually. As per appellant's own submission appellant took bank loan of only Rs. 17 lakhs with respect to the impugned property which is not comparable to the value of Rs. 40 lakhs. Registration of the property has been done after one year in Oct. 2013 whereas the agreement in questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is argued that affidavits of Shii Suresh, Shri Ashok Jat and Shri Padam Kumar Jain were also filed, in which they have stated on oath that they did not own any land and therefore there did not arise any question of their accepting any advance from the assessee. Learned counsel referred to Instruction No. 286/2003-IT(Inv.) dated 10.03.2003 issued by the Central Board of Direct Taxes which acknowledges the fact that in certain cases, assessees are forced to disclosed the income during the course of search, seizure and survey operations. It was advised therein that there should be focus and concentration on collection of evidence of income which lead to information of what has not been disclosed or is not likely to be disclosed before the Income Tax Department, and no attempt should be made to obtain confession as to any disclosed income. Circumstances in which the assessee had to give the statements under Section 132(4) and/or under Section 131 of the Act have been explained in the affidavit filed on 20.05.2013. The very fact that the search continued for as long as 36 hours indicates that coercion and undue influence were exercised by the authorities of the appellant department for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income Tax Vs. RatanCorpn., (2005) 197 CTR 536 (Gujarat); The Assistant Commissioner of Income Tax, Central Circle, Ajmer Vs. Shri Devendra Kumar Choudhary, 2-S-10 to 2-S-18, Basant Vihar, Bhilwara, ITA No. 828/JP/16; Commissioner of Income Tax Vs. Ashok Kumar Soni, (2007) 291, ITR, 172 (Raj.); Kailashben Manharlal Chokshi Vs. Commissioner of Income Tax, (2008) 174 Taxman 466 (Gujarat); Commissioner of Income Tax, Central-II, Mumbai Vs. Omprakash K. Jain, (2009) 178 Taxman 179 (Bombay); Mehta Parikh & Co. Vs. Commissioner of Income Tax, (1956) 30 ITR 181 (SC); Shree Ganesh Trading Co. Vs. Commissioner of Income Tax, Dhanbad, (2013) 257 CTR 159 (Jharkhand); Commissioner of Income Tax, Karnataka Vs. Shri Ramdas Motor Transport Ltd. (2015) 230 Taxman 187 (Andhra Pradesh); Chetnaben J. Shah Vs. Income Tax Officer, Ward 10(3), (2016) 288 CIR 579 (Gujarat)." (Emphasis Supplied) The Hon'ble Rajasthan High Court in this case further held as under:- "In view of the law discussed above, it must be held that statement recorded under Section 132(4) of the Act and later confirmed in statement recorded under Section 131 of the Act, cannot be discarded simply by observing that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with section 69, of the Income-tax Act, 1961- Search and seizure. Block periods 1-4-1985 to 31-3-1995 and 1-4-1995 to 12-12-1995 Whether section 132(4) enables an authorized officer to examine a person on oath and such a sworn statement made under section 132(4), thus can be used as an evidence under Act. Held, yes - A search operation was carried out at premises of assessee whereby cash, jewellery, books of account and certain documents were found and seized - Assessee on same day had given a statement under section 132(4) where under admissions with regard to unaccounted income of Rs. 6.20 lakhs were made - Said unaccounted income consisted of marriage expenditure, unexplained household expenditure, etc. - Assessing Officer, made additions in respect of unaccounted income of Rs. 6.20 lakhs admitted under section 132(4) However, after lapse of about nine months from date of admission, assessee through an affidavit sought to retract from statement made under section 132(4) on ground that (a) when there was no evidence or incriminating material discovered at time of search no addition could have been made merely on basis of statement under section 132(4) and (b) that impugned disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- The appellant has challenged that id. AO made an addition of Rs. 50,000/- on account of alleged loan advanced to Shri Ram Chandra Saini. He made contention that the appellant was only a middleman/conduit and he was arranging money from the prospective lenders and advancing the same to the prospective borrowers. During the course of search & seizure action at the premises of the appellant situated at 35, Chitragupt Nagar-1st Imliwala Phataka diary and some loose papers containing cash/cheque loan receipts & payments were found which were seized and inventorized as Annexure AS, Exhibit -2 &3. On perusal of the seized annexure it was found that transactions of cash/cheque loan in the name of various persons were noted along with details of interest. Therefore, vide notice dated 16.09.2019 he was asked by the Id. AO to explain the nature of transactions recorded on these pages, assessee was also asked to produce/provide whereabouts of the persons whose name was found recorded in seized annexure. 6.3 The appellant in inter-alia submitted an affidavit sworn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble i then why such details could not be subraitted by the appellant with respect to transactions in table 2. With respect to parties and transactions in table 2 the appellant could not show the name address identity and source etc. and thus the same remains unexplained. The implication of the same is that if any transaction or party gets shifted in its nature of transaction from table 1 to table 2 i.e. where the identity etc. of the third party w.r.t. the transactions stand rejected, the same shall be taxed in the hands of the appellant accordingly as if it formed part of transactions in table 2. 6.7 Appellant is having unaccounted money with him and such unaccounted money has not been recorded in the books and thus covered by section 69A of the Act. With respect to the source of the funds the appellant is required to satisfy the identity genuineness and creditworthiness of the parties from whom the funds are received, however that is not the claim of the appellant. Further when such amount is lent by the party in an unaccounted manner the loan asset in the hands of the lender needs to be explained by him with respect to the source of such investment/asset. In view of the discus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n confirming addition of Rs. 40,00,000/- made by the ld. AO the income of the appellant on account of alleged on-money paid by him from undisclosed sources for purchase of flat at Chitragupt Nagar, Jaipur on the basis of agreement for purchases of said flat. 2. That on the facts and in the circumstances of the case the ld CIT(A) is wrong, unjust and has erred in law in confirming addition of Rs. 50,000/- made by the AO to the income of the appellant on the basis of exhibit 2 and 3 of seized Ann. AS allegedly on the ground that identity, genuineness and creditworthiness of the concerned person is not proved. 3. That the ld CIT(A) is also wrong and has erred in law in upholding applicability of provisions of sec. 115BBE of the IT Act, 1961 to the addition confirmed by him vide ground No. (1) & (2) above. 4. The appellant craves permission to add to or amend to any of grounds of appeal or to withdraw any of them. With reference to above grounds of appeal, the appellant submits as follows :- 1. Facts of the case 1(i) The appellant belongs to a very small village and is a 3rd Grade school teacher and his only source of income is salary from the Education Department, Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961 for the reason that TDS was deducted out of the salary income and the employer Government of Rajasthan has submitted the complete particulars and details of TDS made on the Income Tax Portal. Finally, the assessment has been completed after making addition of Rs. 40,00,000/- u/s 69 of the IT Act, 1961 on account of alleged cash payment made for purchase of residential flat and Rs. 50,000/- u/s 69A of the IT Act, 1961 on account of alleged loan(s) and advance(s) to Shri Ram Chandra Saini. Computing the total assessable income at Rs. 43,10,540/-. In this connection, it is worthwhile to submit here that there was no unexplained money / undisclosed income but the amount was of the loan(s) and advance(s) arranged from his fellow teachers and known persons and relations. Thus, the action of invoking the provision of 69A of the IT Act, 1961 is grossly wrong and bad in law. 2. Action of Ld. A.O. The ld. AO made the impugned addition on account of alleged unexplained investment of Rs. 40,00,000/- made in purchase of flat at Chitragupt Nagar, Jaipur, on the basis of a statement of the appellant recorded u/s 132(4) of the IT Act, 1961, with reference to an agreement to sale da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MISSION OF THE APPELLANT Ground No. 1 4(i) The first ground of appeal is challenging, the addition of Rs. 40,00,000/- made on account of alleged cash paid in purchase of residential flat at Chitragupt Nagar, Imiliwala Phatak, Jaipur. The brief undisputed facts of the above said transaction as submitted before the Hon'ble lower authority are as follows :- 4(i)(a) One Shri Satyapal Singh and the appellant Shri Jaipal Singh were tenants in the residential house situated at 35, Chitragupt Nagar-I, Imiliwala Phatak, Jaipur since the year 1990-2000. 4(i)(b) The said residential house was owned by Smt. Vidhya Mathur W/o Shri Basant Bihari Mathur 4(i)(c) In October, 2012, Smt. Vidhya Mathur sold the said house by executing a registered sale deed to Shri Chhotu Ram Kumawat. 4(i)(d) Shri Chhotu Ram Kumawat is a contractor and engaged in building construction activities i.e. constructing the Flats, Villas, etc. and selling to the prospective buyers. He purchased the said house to construct residential flats to sell thereof to the prospective buyers. 4(i)(e) Since, Shri Satyapal Singh and the appellant both were tenants and there was ongoing litigation in between the previous ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay the agreed purchase consideration of the residential flat and accordingly, the said agreement to Salecum- MoU was also used for bank loan purposes. Because as per banker(s) policy, only part of the amount is being advanced and not the full consideration. 4(i)(l) It is submitted that the statement of the appellant u/s 132(4) of the IT Act, 1961 was recorded under force and into making depositions to suit the IT department. Further as evident from the statement itself that the appellant has not stated / admitted that he paid Rs. 40,00,000/- in cash to Shri Chhotu Ram Kumawat. A copy of relevant part of the said statement is appearing at top of page No. 4 of the assessment order. However, for ready reference, the said relevant part is reproduced herein below :- "प्रश्न 15 : आपने Plot No. 35 पर निर्मित जो फ्लैट चित्रगुप्त नगर जयपुर में श्री छोटू ë ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #2327; 40 लाख प्रति फ्लैट के आस-पास बेचा है परन्तु राजिस्ट्रीयॉ सभी में DLC rate से करवाई है । मेरे मामले में भी रजिस्ट्री DLC rate से करवाई है। अतः इकरारनामे की राशि एवं रजिस्ट्री की राशि में अन्तर आ रहा है।" 4(i)(m) It is also learnt from the assessment order that a statement of Shri Chhotu Ram Kumawat was also recorded u/s 131 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21,25,000/- and out of the said amount, a sum of Rs. 17,00,000/- were paid from the bank loan and Rs. 4,25,000/- out of his accumulated past year savings from salary income. Further, now it is a settled position of law that no addition can be made on the basis of seized document indicating purchase of property by assessee because such document(s) is not conclusive proof of On Money transaction. Ref. CIT vs. Prem Prakash Nagpal, 40 taxmann.com 153 and also in case of CIT vs. Smt. P.K. Noorjahan (1999) 103 Taxman 382 (SC). The Hon'ble Supreme Court held that "The use of the word "may" indicates that the intention of the Parliament in enacting section 69 was to confer a discretion on the AO in the matter of treating the source of investment which has not been satisfactorily explained by the assessee as the income of the assessee and the AO is not obliged to treat such source of investment as income in every case where the explanation offered by the assessee is found to be not satisfactory. The question whether the source of the investment should be treated as income or not under section 69 has to be considered in the light of the facts of each case." In view of the above facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the said diary has been reconfirmed by the appellant in the said statement. As per above facts and documentary evidences, there is no ambiguity regarding the nature and transactions noted in the said seized diary and the version of the appellant that he acted only a middle man / conduit in carrying on the said transactions 5(iii) The ld. AO, during the course of assessment proceedings regarding transactions noted in diary prepared two tables marked as Table-1 "Transactions not related to assessee and Table-2 transactions related to assessee". The Table- 1 is appearing at page No. 14 and Table-2 is at page No. 15 and 16 of the assessment order. (The transactions of Table-1 are not visible and as such, a separate visible copy of the said transactions is enclosed herewith). 5(iv) As evident from the findings of the ld. AO that the transactions as per Table-1 have not been considered for making addition for the reasons that the appellant has submitted/ furnished, the PAN number affidavit / identity prove, accepted one Shri Nawal Kishore Sharma in his case the PAN Number is not mentioned. Regarding transactions as per Table No.-2, it is a finding of the ld. AO that "Assessee nei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for the reason that the assessee has not furnished the names, address and PAN of such persons tabulated in Table No. 2 at page no. 15 of 30 is also grossly wrong and bad in law. As in this case, there was no borrowing by the assessee from Shri Ram Chandra Saini but the money was advanced to Shri Ram Chandra Saini. However, ld. AO made the addition drawing an incorrect and wrong inference that money was advanced by Shri Ram Chandra Saini to the appellant. In view of the above facts and circumstances of the case, the impugned addition made by the ld. AO is unsustainable and deserves to be deleted. 5(vii) The appellant with reference to his claim that no addition can be made in the hands of the middle man / broker on account of loan transactions carried out by him in his said capacity submit that at the most, the income for providing the said services can be a brokerage income and not loan(s) amount reliance is placed. (1) Shiv Prakash Bajaj vs. DCIT In ITA No. 368/JP/2018 (Jaipur Tribunal) Held - ...Therefore, the assessee being a broker cannot be held liable to pay tax on an income which does not arise or belong to the assessee. At the most, the income for providing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of alleged unexplained investment made in purchase of residential flat at Chitragupt Nagar, Jaipur 1(ii) The addition is based on the statement recorded u/s 132(4) with reference to an agreement to sale executed between Shri Chhotu Ram Kumawat, Shri Satpal Singh and Shri Jaipal Singh. 1(iii) The said agreement was solely a notional / symbolic agreement only and was executed to honour the terms of mutual settlement in between Shri Chhotu Ram Kumawat, Shri Satpal Singh and Shri Jaipal Singh to vacate the tenanted property and also to withdraw a civil suit pending before the Hon'ble Court regarding vacation of the property. 1(iv) Copy of the following documents have been filed in paper book:- (a) Affidavit of Shri Satpal Singh, Page No. 76 (b) Copy of application filed before the Addl. District and Session Judge - 7, Jaipur Mahanagar, Jaipur page No. 74 & 75. 1(v) Addition of Rs. 50,000/- on account of advance made to Shri Ram Chandra Saini. 2(i) The ld. AO made addition for the reason that "Assessee neither furnished their names, address and PAN Number of such persons nor did assessee produce such person". The ld. AO further given a finding that "it is apparent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash flow chart highlighting the relevant entry. 1-7 2 Copy of agreement to purchase of residential flat at Ground Floor, Plot No. 35, Chitragupta Nagar-1, Imliwala Phatak, Jaipur seized during the course of search vide page No. 43-46 of Exhibit No. 1 of Exhibit-1, Annexure-AS. 8-10 3 Copy of registered sale deed(s) (Chain documents) of property situated at Plot No. 25, Chitragupta Nagar-1, Imliwala Phatak, Jaipur 11-73 4 Copy of application dated 11.10.2013 filed before the court to withdraw the civil suit. 74-76 5 Copy of application filed for supply of photo copy of statement of Shri Chotu Ram Kumawat and Radheyshyam Choudhary 77 15. Ld. AR of the assessee in support of the contention raised also relied upon the following case laws for all the years : S. No. Name of Cases/Statement Name of Court Date of order Page No. 1 Commissioner of Income-tax vs. Jeet Construction Company Supreme Court of India 20.11.2020 1-4 2 Glass Lines Equipments Co. Ltd. vs. Commissioner of Income-tax High Court of Gujarat 12.07.2001 5-8 3 Smt. Suraj Kanwar Devra vs. Income Tax Officer, Ward-2(2), Udaipur ITAT Jodhpur Bench 23.11.2021 9-33 15.1 The ld. AR of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Rs. 5,00,000/- interest due from 7.8.2013). Sh. Krishan Kant Sanadhya 5,00,000 No advance but return of Rs. 5,00,000/- by Sh. K.K. out of Rs. 10,00,000/- advance to him. Shl Nawal ji 2,00,000 Advance, out of repayment of loan by Sh. Deepu vide entry No. 2 at page No. 35, seized diary paper book page No. 10. Total 29,50,000 (ii) Interest rs. 76,000/- 2015-16 (i) An Addition is made of Rs. 21,11,000/- on a/c of alleged unexplained investment for purchase of agricultural land at village Swaroop Garh, Tehsil Hindoli, Distt. Bundi An agreement to sale was seized. (ii) An addition of Rs. 7,18,000/- is made on a/c of advances to following persons :- Name Amount Explanation of the appellant Sh. Chinu 20,000 Out of cash in hand as per cash flow statement. Sh. Ghanshyam 50,000 Out of cash in hand as per cash flow statement. Sh. Rajendra Deshnok 1,50,000 The loan advanced out of Rs. 6,00,000/- received on 05.07.2014 from Shri Mool Singh - vide page No. 30 of the seized diary and cash flow statement. The transactions with Shri Mool Singh have been considered by the Ld. AO as not pertaining to Appellant Sr. No. 19 of Table-1. Sh. Ashok 8,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,00,000/- received from Shri Bhanu Pratap, narration given at Page No. 36 of seized diary, whose transactions have been considered, as not pertaining to the appellant, Table-1, Sr. No. 5. Sh. Ratan Singh 2,00,000 No advance was made to Shri Ratan Singh. But, he repaid the said amount on 21.03.2016, advanced to him on 23.01.2016, facts are verifiable from narration in front of the entry at Page No. 54 "Received". Total 10,21,000 (ii Addition is made of Rs. 1,87,000/- on account of Interest The appellant was a middle man and the interest received from the lonee was paid to loners. It is also evident from the seized record that the loners have filed affidavits that no interest was received by them and because of defaulter of the payment of the lonees, the principal amount is jeopardy. 2017-18 (i) An addition of Rs. 14,81,000/- is made on a/c of advances to following persons :- Name Amount Explanation of the appellant Sh. Nawal Kishore Sharma 10,00,000 At the outset, it is submitted that Shri Nawal Kishore Sharma filed an affidavit, confirming the fact that the transaction with appellant pertains / belongs to him but the ld. AO made the addition for the reason t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh in hand as per cash flow statement. Sh. Pappu Bhaisaab 1,00,000 Rs. 1,00,000/- were advanced out of the cash in hand as per cash flow statement. Sh. Ram Chandra Saini 50,000 The transaction of Shri Ram Chandra Saini dated 05.11.2012 at Page No. 61 pertains to the assessment year 2013-14 and an addition has already Sh. Ram Chandra Saini 50,000 The transaction of Shri Ram Chandra Saini dated 05.11.2012 at Page No. 61 pertains to the assessment year 2013-14 and an addition has already been made in the said assessment year. Fact is verifiable from the narration against the entry. It is verifiable from the narration that the amount was advanced, out of the amount received from Mosi Sa whose transactions have been considered by the ld. AO as no pertaining to the appellant vide Sr. No. 16 of Table-1. Sh. Nawal Kishore Sharma 3,00,000 The addition has already been made by the ld. AO in assessment year 2017-18 taking the transaction date as 10.07.2016. Although, the said act was also wrong because the date of transaction is 02.09.2013. The facts are verifiable from the Table-2, Page No. 14 of the assessment order. Thus, the said addition is a duplicate and deserves to be dele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the second issue of loan addition. 17. On the other hand, ld. DR relied upon the finding recorded in the orders of the lower authority. As regards the addition of Rs. 40 lac the same has been made based on the document found during the search and therefore, the contention that the assessee has not paid consideration cannot be believed. As regards the loan addition lower authority already deleted the addition where all the details were submitted and sustained only those addition where the assessee has not submitted the details. 18. We have heard the rival contentions and perused the material placed on record. In this appeal vide ground no.1 the assessee challenges the finding of the ld. CIT(A) while sustaining the addition of Rs. 40,00,000/- made by the ld AO to the income of the assessee- appellant on account of alleged on-money paid by him from undisclosed sources for purchase of flat at Chitragupt Nagar, Jaipur based on agreement for purchases of said flat. The fact related to the dispute are that a sale agreement dated 03-11-2012 found and seized as page numbers 43 to 46 of Exhibit-1 of Annexure "AS". The aforesaid seized agreement has been executed between Shri Chhotu Ram Kum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found tenable for the reason that the argument of the assessee that the agreement was executed to obtained bank loan is totally misplaced as bank advance loan to any person based on his credit score. In the instant case the assessee is the Government employee, and bank can determined his credit score from his salary slip/form-16. The assessee has not furnished any documentary evidence as such which can substantiate that no cash amount was paid whereas in the seized sale agreement it has been categorically mentioned that the seller has received Rs. 40,00,000/- from the assessee in cash. Further, the statement of Shri Chhotu Ram Kumawat recorded u/s 131 of the Act dated 11-12-2017 wherein at question no. 12 he acknowledges the sale agreement under consideration which clearly established the sanctity of the seized sale agreement and the cash payment of Rs. 40,00,000/- is also found to be true. Based on that the assessee has purchased a flat under consideration and made cash payment of Rs. 40,00,000/- vide an agreement which has not been reported in the subsequent sale deed. The cash payment of Rs. 40,00,000/- is 'on-money' paid by the assessee to purchase the aforesaid flat. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion raised submitted that the assessee-appellant and his brother Shri Satpal were tenant for more than 25 years and the purchase agreement of the flat was made as security of withdrawal of the civil suit, pending before the Hon'ble Civil Court for vacation of the house by land lord. Complete supporting documentary evidence has been submitted in a paper book and thereby contended that; 4(i) The first ground of appeal is challenging, the addition of Rs. 40,00,000/- made on account of alleged cash paid in purchase of residential flat at Chitragupt Nagar, Imiliwala Phatak, Jaipur. The brief undisputed facts of the above said transaction as submitted before the Hon'ble lower authority are as follows :- 4(i)(a) One Shri Satyapal Singh and the appellant Shri Jaipal Singh were tenants in the residential house situated at 35, Chitragupt Nagar-I, Imiliwala Phatak, Jaipur since the year 1990-2000. 4(i)(b) The said residential house was owned by Smt. Vidhya Mathur W/o Shri Basant Bihari Mathur 4(i)(c) In October, 2012, Smt. Vidhya Mathur sold the said house by executing a registered sale deed to Shri Chhotu Ram Kumawat. 4(i)(d) Shri Chhotu Ram Kumawat is a contractor and engaged in b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to protect the interest of the tenants, the said symbolical / notional agreement to sale was executed. A copy of application submitted before the Hon'ble Civil Court to withdraw the civil suit is enclosed. 4(i)(k) It is also a fact that the appellant and Shri Satyapal Singh, co-tenant both are petty means persons and were absolutely unable to pay the agreed purchase consideration of the residential flat and accordingly, the said agreement to Salecum- MoU was also used for bank loan purposes. Because as per banker(s) policy, only part of the amount is being advanced and not the full consideration. 4(i)(l) It is submitted that the statement of the appellant u/s 132(4) of the IT Act, 1961 was recorded under force and into making depositions to suit the IT department. Further as evident from the statement itself that the appellant has not stated / admitted that he paid Rs. 40,00,000/- in cash to Shri Chhotu Ram Kumawat. A copy of relevant part of the said statement is appearing at top of page No. 4 of the assessment order. However, for ready reference, the said relevant part is reproduced herein below :- "प्रश्न 15 : आपन ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;प्त नगर, जयपुर में कुल 6 फ्लैट बनाएं है तथा सभी फ्लैटों को लगभग 40 लाख प्रति फ्लैट के आस-पास बेचा है परन्तु राजिस्ट्रीयॉ सभी में DLC rate से करवाई है । मेरे मामले में भी रजिस्ट्री DLC rate से करवाई है। अतः इकरारनामे की राशि एवं ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e place. In support of this fact the appellant also places on record that he got noted the entire transaction in his above referred seized diary and in the said diary there is no noting about the above said alleged cash payment for purchase of the residential flat. It is further submitted that the appellant purchased the residential flat for Rs. 21,25,000/- and out of the said amount, a sum of Rs. 17,00,000/- were paid from the bank loan and Rs. 4,25,000/- out of his accumulated past year savings from salary income. Further, now it is a settled position of law that no addition can be made on the basis of seized document indicating purchase of property by assessee because such document(s) is not conclusive proof of On Money transaction. Ref. CIT vs. Prem Prakash Nagpal, 40 taxmann.com 153 and also in case of CIT vs. Smt. P.K. Noorjahan (1999) 103 Taxman 382 (SC). The Hon'ble Supreme Court held that "The use of the word "may" indicates that the intention of the Parliament in enacting section 69 was to confer a discretion on the AO in the matter of treating the source of investment which has not been satisfactorily explained by the assessee as the income of the assessee and the AO is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to the money has been given by the legal heirs of Shri Basant Biharilal Mathur to Shri Chhotu Ram Kumawat or by the assessee. f) The agreement is not registered. g) Ld. AO has not examined the legal heirs of the late Shri Basant Biharilal Mathur as to the payment of money in consideration of the vacation of land in favour of Shri Chhotu Ram Kumavat 20. Based on the above facts it is not clearly established that the assessee while vacating the possession of the property occupied gives the money for purchase of flat is against the common sense and therefore, the ld. AO has made the addition without bringing correct facts on record and therefore, we do not see any merit to sustain the addition and therefore, we direct the ld. AO to delete that addition. Based on these observations ground no. 1 raised by the assessee is allowed. 21. Ground no. 2 raised by the assessee challenges the addition of Rs. 50,000/- made by the AO as income of the assessee- appellant on the basis of exhibit 2 and 3 of seized Annexure AS allegedly on the ground that identity, genuineness and creditworthiness of the concerned person was not proved. The bench noted that in this year Rs. 50,000/- was added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udication. In terms of these observations, the appeal of the assessee in ITA no. 115/JP/2024 is allowed. 23. Now we deal with the appeal of the assessee in ITA no. 116/JP/2024 for the assessment year 2014-15. Since the facts of the case are already discussed above we directly deal with the grounds of appeal raised by the assessee. In this appeal vide ground no. 1 and 2 raised by the assessee are not pressed and therefore, the same are dismissed as not pressed. 24. Now coming to the solitary ground left in this appeal thereby challenging the finding of the ld. CIT(A) confirming addition of Rs. 29,50,000/- made by the AO the income of the appellant on the basis of exhibit 2 and 3 of seized Ann. AS allegedly on the ground that identity, genuineness and creditworthiness of the concerned person was not proved. The bench noted that the ld. CIT(A) has dismissed this ground of appeal by observing as under : "7.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on ITBA portal and such pan found active. Further to this as claimed by assessee ld. AO recorded a statement of Shri Ram Sharam son of Shri M L Sharma was recorded under section 131 on 21.11 2017 wherein he admitted that he entered into transaction with Shri Bhanupratap through assessee and assessee acted as merely middleman considering that fact he has not made any addition of those transaction reported in table one except in case of Shri Naval Kishore Sharma as the assessee has not furnished the pan number in that case. Now for the remaining transaction tabulated in Table 2 the assessee neither furnished their names address and permanent account number of such person nor did assessee produce such person. Further, when the assessee was asked about such transactions assessee admitted that such transactions were entered by him to meet his household expenditure. In that case it is responsibility of the assessee to prove the source along with the identity genuineness and credit worthiness which ld. AO notes that the assessee has not discharged. In the light of these fact the ld. AO tabulated those transaction for all the years starting from A. Y. 2013-14 to 2018-19. Accordingly for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te to reiterate herein below the finding of the ld. CIT(A) on this issue : "5.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- The appellant has challenged addition of Rs. 21,25,000/- made on account of investment in land through a sale agreement made in November 2014 which includes cash payment of Rs. 19,25,000/-, as an unexplained investment u/s 69 of the Act. In his submission appellant has made contention that He was acting as a middleman in dealing with sale transaction (total agreed sale consideration was Rs. 1,32,51,000/-) of an agricultural land situated at village Saroopgarh, Tehsil Hindoli, Bundi. The facts of the case are that one Shri Nirmal Singh Anand S/o Dileep Singh Anand owned the above said agricultural land vide Khasra No. 678 and 821/237. M/s. Shree Harisar Pvt Ltd. (whose directors are known to the appellant) were interested to buy the said land. On the request of M/s. Shree Harisar Pvt. Ltd. an agreement to purchase was made throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be paid within two months from date of sale agreement and remaining amount was to be paid within four months from date of agreement. Further, on the first page of this agreement the details of payment received from Indian Bank account, New Delhi has been found noted and the scan of the same is extracted in the assessment order. Dates of the payment are not recorded and appear to be post dated cheques. During the course of search proceedings, statement of the assessee Shri Jaipal Singh was recorded on oath U/s 132(4) of the LT Act, 1961 and vide question 11 of his statement he was asked to explain about the sale agreement executed by him with Shri Nirmal Singh Anand and the amount paid by him in pursuance of this agreement In reply, he has stated that he had given only a sum of Rs. 21,11,000/- and subsequently he sold this property to the owner of M/s Harisar Pvt Ltd., Shri Dhirendra Sharma and that the entire sale consideration was paid by them to the original land owner. During the assessment proceedings, the appellant came out with a completely new story and in reply to the aforesaid SCN the assessee filed a written reply wherein he submitted that the aforesaid sale agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d which is also seen in other cases that when the buyer like appellant purchases a property for further reselling in such a case to avoid the stamp duty and other associated expenses and to avoid investment of full value of consideration they enter into memoranda agreement and make a part payment generally in cash and final property registration deed agreement is entered into between the initial seller and final buyer. In the assessment year under appeal also the appellant has entered into similar kind of agreement where the appellant is shown as the purchaser and such fact of mentioning in the agreement has not been controverted by the appellant. The assessee could not explain why these purported prospective buyer who paid whole consideration amounting to Rs. 21,25,000/- could not execute the sale agreement whereas they agreed to be a witness of sale agreement as evident from above scan of sale agreement. The assessee claimed that the agreement could not be executed in his name but subsequently other person based on Delhi purchased the land. However, the assessee failed to furnish any agreement or a document reveling that the agreement was subsequently cancelled and amount rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the respondent as well as the employees in exercise of the powers vested by him under section 131 of the Income-tax Act. The documents were also seized in exercise of such powers. In the above circumstance, the statement of the partner and the employees recorded by the Assessing Officer as well as the documents seized would come within the purview of the evidence under section 158BB of the Income-tax Act read with section 3 of the Evidence Act and section 131 of Income-tax Act. Therefore, such evidence would be admissible for the purpose of block assessment" ............. .............. "9. It appears that the Tribunal had arrived at a conclusion that the statements recorded by the Assessing Officer under section 132(4) of the Income-tax Act has only very limited application without applying the mind. Explanation to section 132(4) of Income-tax Act would make it very clear that the evidence so collected would be relevant for all purposes of any investigation connected with any proceeding under the Income-tax Act. We find that a reading of section 132(4) with Explanation would be relevant. Hence we quote the same for easy reference: "Section 132(4): The authorised officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce para 15 of the said judgment, which reads "15. In our view, the statements recorded under section 132(4) have great evidentiary value and it cannot be discarded as in the instant case ITA No. 720/JP/2017 M/s Bannalal Jat Construction Pvt. Ltd., Bhilwara v. ACIT, Central Circle-Ajmer by the Tribunal in a summary or in a cryptic manner. Statement recorded under section 132(4) cannot be discarded by simply observing that the assessee retracted the statements. One has to come to a definite finding as to the manner in which retraction takes place. On perusal of the facts noticed hereinbefore, we have noticed that while the statements were recorded at the time of search on 9-11-1995 and omwards but retraction. is almost after an year and that too when the assessment proceedings were being taken up in November 1996. We may observe that retraction should be made as soon as possible and immediately after such a statement has been recorded, either by filing a complaint to the higher officials or otherwise brought to the notice of the higher officials, either by way of a duly sworn affidavit or statements supported by convincing evidence through which an assessee could demonstrate that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esh, Shri Ashok Jat and Shri Padam Kumar Jain were also filed, in which they have stated on oath that they did not own any land and therefore there did not arise any question of their accepting any advance from the assessee. Learned counsel referred to Instruction No. 286/2003-IT(Inv.) dated 10.03.2003 issued by the Central Board of Direct Taxes which acknowledges the fact that in certain cases, assessees are forced to disclosed the income during the course of search, seizure and survey operations. It was advised therein that there should be focus and concentration on collection of evidence of income which lead to information of what has not been disclosed or is not likely to be disclosed before the Income Tax Department, and no attempt should be made to obtain confession as to any disclosed income. Circumstances in which the assessee had to give the statements under Section 132(4) and/or under Section 131 of the Act have been explained in the affidavit filed on 20.05.2013, The very fact that the search continued for as long as 36 hours indicates that coercion and undue influence were exercised by the authorities of the appellant department for making surrender. The affidavit filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 (Gujarat), The Assistant Commissioner of Income Tax, Central Circle, Ajmer Vs. Shri Devendra Kumar Choudhary, 2-S-10 to 2-5-18, Basant Vihar, Bhilwara, ITA No. 828/JP/16; Commissioner of Income Tax Vs. Ashok Kumar Soni, (2007) 291, ITR, 172 (Raj.); Kailashben Manharlal Chokshi Vs. Commissioner of Income Tax, (2008) 174 Taxman 466 (Gujarat), Commissioner of Income Tax, Central-II, Mumbai Vs. Omprakash K. Jain, (2009) 178 Taxman 179 (Bombay); Mehta Parikh & Co. Vs. Commissioner of Income Tax, (1956) 30 ITR 181 (SC); Shree Ganesh Trading Co. Vs. Commissioner of Income Tax, Dhanbad, (2013) 257 CTR 159 (Jharkhand), Commissioner of Income Tax, Karnataka Vs. Shri Ramdas Motor Transport Ltd. (2015) 230 Taxman 187 (Andhra Pradesh); Chetnaben J. Shah Vs. Income Tax Officer, Ward10(3), (2016) 288 CTR 579 (Gujarat)." (Emphasis Supplied) The Hon'ble Rajasthan High Court in this case further held as under:- "In view of the law discussed above, it must be held that statement recorded under Section 132(4) of the Act and later confirmed in statement recorded under Section 131 of the Act, cannot be discarded simply by observing that the assessee has retracted the same because such retraction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessed and that there was no material to support that there was such income, this contention in our view is not correct. As held by the Supreme Court in Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18 an admission is an extremely important piece of evidence though it is not conclusive. Therefore, a statement made voluntarily by the assessee could form the basis of assessment. The mere fact that the assessee retracted the statement could not make the statement unacceptable. The burden lay on the assessee to establish that the admission made in the statement at the time of survey was wrong and, in fact, there was no additional income. This burden does not even seem to have been attempted to be discharged. Similarly, case P.K. Palwankar v. CGT [1979] 117 ITR 768 (MP) and CIT v. Mrs. Doris S. Luiz [1974] 96 ITR 646 (Ker.) on which also the learned counsel for the assessee placed reliance, are of no help to the assessee. The Tribunal's order is concluded by findings of fact and in our view, no question of law arises. The applications are, accordingly, rejected." (Emphasis supplied) (In the above case the statement was recorded during survey. The above j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the respondent had in unambiguous terms stated that 20 per cent of the sales outturn is suppressed and only 80 per cent is recorded in the account books and it was the practice from the very beginning. So, it is just and appropriate to presume that there was uniform concealment of income in all assessment years during the block period. There is no material on record to show that the concealment of the sales out turn during any of the assessment year in the block period is lesser than the concealment detected under section 132 of the Income-tax Act. There is no whisper in the statement given by the partner of the respondent or any of the employees that there was any change of the rate of concealment in any year during the block period. No good reason was given to reject the above mentioned statement of the partner and employees recorded during search. Oral evidence was corroborated by the documentary evidence. So, it is just and appropriate to conclude that the concealment was same in all the years during the block period. Adding to that we find that when it is revealed in a search under section 132 of Income-tax Act that the assessee was following a particular method to conceal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om M/s P.M.S. Enterprises, Phagwara which was not disclosed in the return filed by him. The relevant portion of the statement reads as follows: "I am selling agent of M/s P.M.S. Enterprises, Railway Road, Phagwara and get commission @ 2 per cent on the sales effected through me. I have no other source of income except interest from firm on deposit with the firm. My wife is a housewife and does tailoring work on a very small scale" 16. Further, during search, certain sale documents were seized which bore the signatures of the assessee as well. The said documents depicted total sales of Rs. 4,92,03,005/- as noticed earlier. 17. Thus, in view of sub-ss. (4) and (4A) of s. 132 of the Act, the AO was justified in drawing presumption against the assessee and had made addition of Rs. 9,00,000/- in his income under s. 68 of the Act. The onus was upon the assessee to have produced cogent material to rebut the aforesaid presumption which he had failed to displace. The assessee retracted from the said statement vide letters dt. 24th Nov, 1998 and 11th March, 1999 during the course of assessment proceedings. However, no value could be attached thereto in the present case. In case the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent recorded earlier was incorrect; an allegation of compulsion or coercion must not be accepted merely on a statement if remained unsubstantiated Held, yes Whether, therefore, addition made on basis of statement recorded under section 132(4) was to be upheld Held, yes 5.7 Appellate has not produced any complaint lodged with higher officials supported by affidavit swearing that the contents of statement are incorrect and it was obtained under force, coercion. The statements in the retraction has to be duly supported with evidences. Similarly the allegations of coercion etc., if any, in the retraction has to be supported with evidences. The appellant has not furnished evidences to prove the earlier evidence (statement u/s 132(4)) as incorrect as the statement u/s 132(4) itself is evidence (as per judgement in Kantilal C. Shah (supra)). 5.8 In view of the above discussion the claim of the appellant that he was acting merely a simply broker is not acceptable and the same is not as per records and is near an afterthought and the same is hereby rejected. The appellant was acting in his own capacity as is seen in earlier years also and as is also clarified by the appellant himself in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble High Court. The matter was decided as per Preponderance of Probability. Extract from headnotes Section 69A, read with sections 144A and 153A, of the Income-tax Act, 1961 Unexplained moneys (Cash) Assessment year 2019-20 Pursuant to cash seized at premises of employee of a trust where assessee was a trustee, a show cause notice was issued to assessee for addition of seized cash to assessee's total income as undisclosed income Cash had been recovered on packet with markings of municipal ward from where assessee was contesting elections Assessee filed an application seeking that directions be issued for completion of assessment under section 153A considering that cash recovered did not belong to assessee and a party worker 'S' had given a voluntary statement that cash belonged to him and had filed an application before ITSC for settlement and addition would result in double taxation in hands of assessee and person who claimed ownership of seized cash However, said application was rejected and order under section 153A was passed making addition to assessee's total income under section 69A- It was found that one 'S' had given statement that cash bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 144A of the IT Act itself appears to be an afterthought. Instead of giving attention to the show cause notice and participating in the adjudication, the petitioner appears to have been ill-advised to venture out in filing the above application. 53. Further, the cash was not found under the control and the possession of the said Mr. S.Srinivasan. It was found in the residence of Mr. Damodaran and Mrs. Vimala Damodaran with packet markings as Alangayam, Pallikonda etc. with the marking of the Municipal Wards, falling under the Vellore Parliamentary Constituency from where the petitioner was contesting. The presumption under sections 132(4A) and 292C of the IT Act though a rebuttable presumption, is to be presumed against the petitioner. 54. Mere voluntary sworn statement on the same day by Mr. S.Srinivasan claiming that the seized cash were his, is not sufficient. Mr. S.Srinivasan has not shown himself to be a man of substantial means. On the other hand, the fact that the documents pertaining to the College/Trust of the Petitioner were found along with the seized cash as indicated above show that cash belonged to the petitioner which was not disclosed by the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ler and Delhi based purchaser before the Id. AO but the same dose not rebut the fact that cash amount was paid by the appellant. In view of the above discussion the claims of the appellant are dismissed. In the statement the appellant has stated to have paid a cash amount of Rs. 21,11,000/- and the learned assessing officer has done an addition of Rs. 21,25,000/- in this regard. It has been upheld in the above paragraphs that the cash payment was done by the appellant. Further that if the property was registered in some other name and even if the said cash payment was received back by the appellant which however is not the claim of the appellant however the same is also irrelevant as the addition is on account of availability of the unaccounted/unexplained cash with the appellant and the investment of the same by the appellant in the rights and interests in the property and thus the undisclosed investment of the appellant for which the source of cash payment is unexplained. Accordingly the addition is restricted to Rs. 21,11,000/- which is the cash component as is also linked with replies of the appellant and which is also the amount mentioned by the appellant in the statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25;्त संपत्ति के इकरारनामे तक मैने सिर्फ रू.21,11,000/-दिये थे बाद में मैंने यह सम्पत्ति हरिसर प्राइवेट लिमिटेड के मालिक श्री धीरेन्द्र शर्मा को बेच दी तथा जमीन के मालिकों का पूरी राशि उन्ही से दिलाई है। इस सम्बन्ध मे ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -क्रेता, जिसे इस इकरारनामे में आगे " द्वितीयपक्ष क्रेता" से सम्बोधित किया गया है" 4(iii) The total agreed sale consideration was Rs. 1,32,51,000/- and out of the said sale consideration at the time of execution of agreement to sale, a sum of Rs. 2,00,000/- was to be paid by cheque and balance Rs. 19,11,000/- in cash. Further, vide 1st and 2nd para at page 3 of the said Agreement it is also mentioned that part of the material agricultural land was let out and a further sum of Rs. 50,00,000/- was payable after de-possession of land by the tenant within 2 months time. But the agricultural land owner Shri Nirmal Singh Anand could not fulfill the said terms of the agreement and ultimately the prospective buyer M/s. Shree Harisar Pvt. Ltd. refused to purchase the said land. The submissions of the appellant are that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and copy of the registered Agreement to sale dated 19.11.2014 filed by appellant. From the above said legal documentary evidences, it is evident and verifiable that the appellant was only a middleman (conduit) in the said transaction and the entire payment of Rs. 21,11,000/- was made by the above said persons. The observations and finding of the ld. AO confirmed by the ld. CIT(A) for making the addition are not in accordance with the requirement of law, as the requirement of notarization of affidavit has been dispensed by the legislature. Thus, at the material time there was no requirement for notarization of an affidavit. Further, the second observation of the ld. AO that why the witnesses themselves have not made the Agreement to Purchase in place of the appellant is also irrelevant for the reason that to negotiate and for some other valid reasons a middleman is appointed to finalize the land transaction. Further, as submitted above that one of the witnesses is a buyer of the land. Regarding third observation of the ld. AO of no cancellation of earlier agreement to sale and non refund of advance amount Rs. 21,11,000/-, the appellant submitted that one of the witnesses of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on merits so that nobody's rights could be scuttled down without providing opportunity of being heard to the assessee. Considering that peculiar aspect of the matter we deem it fit to remand the matter to the file of the ld. AO who will consider the factual aspect of the matter as raised by the assessee after due verification of the facts and charge the correct income in the hands of the assessee after affording due opportunity to the assessee. However, the assessee will not seek any adjournment on frivolous ground and remain cooperative during proceedings before the ld. AO. Based on this observation ground no. 1 raised by the assessee is allowed for statistical purposes. 32. Ground no. 2 raised by the assessee is exactly similar to the ground no. 3 raised by the assessee in ITA no. 116/JP/2024. On this matter the finding of the ld. CIT(A) is as under: "6.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- I have decided the similar issue in the case of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he name of Shri Ashok dated 10.07.2014 there is no advance but in fact a contrary entry of the amount returned to Mosa sa ( Mool Singh Ji) through Ashok Singh verifiable from cash flow statement and therefore, no addition is required. Next entry dated 15.08.2014 in the name of Shri Roop Singh Jhoohinda at page 36 of the diary, the submission of the assessee reveals that the said amount is duly covered as explained from the cash flow statement submitted by the assessee vide their paper book filed on 22.07.2024 that statement was available with the ld. AO and has not been disputed by the ld. AO through the ld. DR when the matter finally argued by the ld. DR and therefore, we do not find any reason to sustain that amount as income of the assessee. Entry recorded at page 36 is repayment of the same person and therefore, we see no reason to tax that repayment as income of the assessee. For the remaining the three entry two is dated 01.11.2014 for Rs. 25,000/- and Rs. 50,000/-. Where in the assessee in the submission sated that Rs. 25,000/- paid out of the cash flow statement submitted by the assessee vide their paper book filed on 22.07.2024 that statement was available with the ld. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly." This issue is also consequential to the issue as discussed in pre paragraphs on the issue of addition of the amounts mentioned in table 2 to the income of the appellant. Thus corresponding interest income is taxable in the hands of the appellant. Accordingly, this Ground of Appeal is dismissed." 35. In support of this ground ld. AR of the assessee filed the written submission contending that the ld. AO has estimated the income as undisclosed interest income for an amount of Rs. 62,000/- without any basis and cogent supporting material available on record and seized and therefore, in the search assessment without placing anything on record from the seized material that the assessee has earned any interest the same cannot be added. Considering that aspect of the matte we direct the ld. AO to delete that addition. Based on these observation ground no 3 raised by the assessee is allowed. 36. Ground no. 4 raised by the assessee charge of tax as per section 115BBE of the Act which is consequential in nature and ground no 5 being general does not require our adjudication. Based on this observation the appeal of the assessee in ITA no. 117/JP/2024 stands allowed. 37. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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