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TMI Blog2025 (5) TMI 1635X X X X Extracts X X X X X X X X Extracts X X X X ..... e same is against the appellant, is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case. 2. Ground Regarding whether the search conducted on the appellant u/s 132 is legal and valid: The appellant denies himself liable to be assessed under section 143(3) r.w.s 153A of the Act by the impugned assessment order upheld by the learned CIT(A) on the ground that: - i. The search initiated in the case of the appellant is illegal and ultra vires the provisions of section 132[1][a], [b] and [c] of the Act; ii. That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion and therefore, the action under section 132[2] is bad in law [224 ITR 19 (SC)] and consequent assessment under section 153A is null and void-ab-initio on the parity of the ratio of the decision of the Hon'ble Apex Court in the case of Ajith Jain, reported in 260 ITR 80. iii. The authorities below have not discharged the burden of proving that there is a valid search under section 132 [1] [a], [b] and [c] of the Act, and consequently the assumption of jurisdiction to make an assessment under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing material unearthed in the course of search that provisions of section 153A of the Act can be invoked. 4. Grounds regarding: Whether the CIT(A) officer has assumed valid jurisdiction in the absence of issue of notice u/s 129 of the Act. i. The order of assessment is bad in law and void-ab-initio for want of requisite jurisdiction on the facts and circumstances of the case. ii. The learned CIT(A) was precluded from making the assessment in as much as the mandatory notice u/s 129 of the Act was not served on the appellant and consequently there is no valid assumption of jurisdiction on the facts and circumstances of the case. iii. The learned CIT(A) is not justified in shifting the onus to the assessee to raise objections to jurisdiction even in cases where no notice u/s 129 of the Act is issued and effectively holding that there is no requirement of issuance of notice u/s 129 of the Act on the facts and circumstances of the case. 5. Grounds regarding: Whether the assessment order is valid in law in the absence of valid approval u/s 153D. i. The learned assessing officer is not justified in passing the assessment orders u/s 143(3) r.w.s 153A of the Act in the absence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s undivided family which was in the custody of the appellant and was declared in the said return out of abundant caution on the facts and circumstances of the case. iv. The learned CIT(A) is not justified in disregarding the revised returns filed before the Lok Ayukta which properly depicts the jewellery actually owned by the appellant on the facts and circumstances of the case. v. The learned CIT(A) failed appreciate that the proper explanation was tendered by the appellant for the apparent differences including the reconciliation of the quantum of jewellery as actually found in the course of search and consequently no additions are warranted on the facts and circumstances of the case. vi. Without prejudice, the learned CIT(A) ought to have appreciated that the very provisions of section 69A of the Act are not applicable on the facts and circumstances of the case. 8. Ground regarding: Whether the addition made of Rs. 95,45,000/- as unexplained investment in jewellery of appellant's spouse on protective basis is in accordance with law? i. The learned CIT(A) is not justified in confirming the addition of the jewellery said to be belonging to the appellant's spouse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abilities, facts and circumstances of the Appellant's case. 2. The appellant denies himself liable to be assessed to total income of Rs. 3,29,83,76,880/- as against the returned income of Rs. 8,76,880/- on the facts and circumstances of the case. 3. Ground Regarding whether the search conducted on the appellant u/s 132 is legal and valid: The appellant denies himself liable to be assessed under section 143(3) r.w.s 153A of the Act by the impugned assessment order upheld by the learned CIT(A) on the ground that: - i. The search initiated in the case of the appellant is illegal and ultra vires the provisions of section 132[1][a], [b] and [c] of the Act; ii. That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion and therefore, the action under section 132[2] is bad in law [224 ITR 19 (SC)] and consequent assessment under section 153A is null and void-ab-initio on the parity of the ratio of the decision of the Hon'ble Apex Court in the case of Ajith Jain, reported in 260 ITR 80. iii. The authorities below have not discharged the burden of proving that there is a valid search under section 132 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of section 153A which is contrary to well settled principle of law that, it is only on the basis of incriminating material unearthed in the course of search that provisions of section 153A of the Act can be invoked. 5. Grounds regarding: Whether the CIT(A) officer has assumed valid jurisdiction in the absence of issue of notice u/s 129 of the Act. i. The order of assessment is bad in law and void-ab-initio for want of requisite jurisdiction on the facts and circumstances of the case. ii. The learned CIT(A) was precluded from making the assessment in as much as the mandatory notice u/s 129 of the Act was not served on the appellant and consequently there is no valid assumption of jurisdiction on the facts and circumstances of the case. iii. The learned CIT(A) is not justified in shifting the onus to the assessee to raise objections to jurisdiction even in cases where no notice u/s 129 of the Act is issued and effectively holding that there is no requirement of issuance of notice u/s 129 of the Act on the facts and circumstances of the case. 6. Grounds regarding: Whether the assessment order is valid in law in the absence of valid approval u/s 153D. i. The learned asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es has surfaced leading to irrefutable conclusion that there are even interpolations in the planted diary on the facts and circumstance of the case. iv. The learned CIT(A) failed to appreciate that the search official has placed identification marks and it is clear that some writing are there beneath the said identification mark and thus it is clear that there is interpolation even on this count in the planted diary on the facts and circumstance of the case. v. The learned CIT(A) failed to appreciate that the certified scanned copy of the pages which are part of the sworn statement did not contain page no 1A 3A and 4A and thus the numbering is a clear case of interpolation in the planted diary which consequently demonstrates the mind of the revenue and on this count also the assessment needs to be annulled on the facts and circumstance of the case. vi. The learned CIT(A) failed to appreciate that even in the statement recorded on 06.05.2016 (which questioning by itself is after certain interpolations) there was no question asked on an amount of 65 crores clearly fortifying that the same has been interpolated after the statement recorded on 6/5/2016 on the facts and circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d circumstances of the case. ii. The learned CIT(A) failed to appreciate that the failure by the department to hold an enquiry into the authenticity of the planted diary leads to an inference that the revenue is not interested in the Truth of the matter and consequently no addition ought to have been made on the facts and circumstance of the case. iii. The learned CIT(A) failed to appreciate that the inaction of the income-tax department in conducting a fair enquiry into the authenticity of the seized diary is fatal to the assessment proceedings on the facts and circumstance of the case. iv. The learned CIT(A) ought to have appreciated that the prevention by the department to hold an enquiry into the various allegations of the appellant should lead to an adverse inference against the revenue on the facts and circumstance of the case. v. The learned CIT(A) erred in not appreciating that the failure of the department to either submit the planted diary to forensic test or investigation as complained by the appellant or on its own is fatal to the assessment proceedings on the facts and circumstance of the case. vi. Without prejudice the authorities below ought to have at leas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . iii. The learned CIT(A) further failed to take note that the additions made in the present case are not on the basis of books of account but on some random scribblings in loose papers and the alleged diary entries which can only be treated as "dumb documents" on the facts and circumstances of the case. iv. The authorities below ought to have realised that "dumb document" cannot be not admissible evidence in law, being documents, which are neither understandable nor intelligible, nor self-evident in themselves and therefore cannot advance the case of the department and cannot be relied upon to sustain the additions on the facts and circumstances of the case. Strong reliance in this regard is placed on the judgement of the Hon'ble Apex Court in CBI vs V.C.Shukla (1998) 3 SCC 410. v. The learned CIT(A) failed to also appreciate that it is well settled law that unless the author of the document is examined who alone can explain the entries and the transactions therein, no reliance can be placed on such document, more so when the document is dumb document and is incapable of speaking for itself. Consequently, the author of the document in question itself not being known and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the AO to demonstrate that the entries in the disputed diary or seized material have resulted in materialised transactions giving rise to income of the assessee on the facts and circumstances of the case. xiii. The learned CIT(A) is not justified in confirming the addition when the inference of income on the basis of the disputed diary in itself is glaringly a figment of imagination and not forthcoming even in the said notings or something that may be inferred objectively and without aid of any imagination on the facts and circumstances of the case. xiv. The CIT(A) failed to appreciate that none of the hypotheses of the learned AO is grounded in reality or any material on record. Thus, entire addition is only based on surmise and conjecture and at the most suspicion. xv. The CIT(A) ought to have appreciated that it is well settled position of law that no amount of suspicion can take the place of evidence. The very fact that the learned AO had to strain himself so much to force-fit the numbers itself reveals that the same is not self-evident in themselves so as to treat them as income of the appellant. xvi. The CIT(A) failed to notice that the mere mention of the word ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s applicable in respect of the addition made. i. The authorities below erred in misconstruing the statutory presumption u/s 292C of the Act in making the addition in as much as though there is presumption as to belonging and correctness there is no presumption that the content therein indicates the income of the assessee. ii. The learned CIT(A) erred in law in effectively upholding use of the declaration u/s 132(4) of the Act said to be made by the appellant even though the said statement finds no mention in the panchanama drawn up in the course of search proceedings on the facts and circumstances of the case. iii. Without prejudice, the learned CIT(A) also erred in law in effectively upholding the use of the declaration u/s 132(4) of the Act as corroborative evidence more so when the said declaration is validly retracted in the affidavit sworn to before a magistrate on the facts and circumstances of the case. 13. Grounds regarding: Without prejudice, whether the manner of quantifying the above addition is in accordance with law? i. The learned CIT(A) is erred in confirming the additions on the basis of the disputed diary as income of the appellant despite the fact that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd ultra vires the provisions of section 132[1][a], [b] and [c] of the Act; ii. That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion and therefore, the action under section 132[2] is bad in law [224 ITR 19 (SC)] and consequent assessment under section 153A is null and void-ab-initio on the parity of the ratio of the decision of the Hon'ble Apex Court in the case of Ajith Jain, reported in 260 ITR 80. iii. The authorities below have not discharged the burden of proving that there is a valid search under section 132 [1] [a], [b] and [c] of the Act, and consequently the assumption of jurisdiction to make an assessment under section 153A of the Act is untenable in law. iv. The learned CIT(A) ought to have appreciated that the very search proceeding is tainted by several irregularities and therefore invalid in the eye of law and consequently the assessment order passed thereunder is liable to be annulled on the facts and circumstances of the case. v. The learned CIT(A) is not justified in holding that the Explanation to section 132(1) declares that the reason to believe which forms the basis for in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce u/s 129 of the Act was not served on the appellant and consequently there is no valid assumption of jurisdiction on the facts and circumstances of the case. iii. The learned CIT(A) is not justified in shifting the onus to the assessee to raise objections to jurisdiction even in cases where no notice u/s 129 of the Act is issued and effectively holding that there is no requirement of issuance of notice u/s 129 of the Act on the facts and circumstances of the case. 6. Grounds regarding: Whether the assessment order is valid in law in the absence of valid approval u/s 153D. i. The learned assessing officer is not justified in passing the assessment orders u/s 143(3) r.w.s 153A of the Act in the absence of valid and lawful approval of the Joint Commissioner u/s 153D of the Act on the facts and circumstances of the case. ii. The copies of the approvals, if any, obtained from the Joint Commissioner u/s 153D of the Act have not been provided to the appellant in the course of appellate or remand proceedings on the facts and circumstances. iii. The learned lower authorities may be put to strict proof of obtaining valid and lawful approval of the Joint Commissioner u/s 153D of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, the action under section 132[2] is bad in law [224 ITR 19 (SC)] and consequent assessment under section 153A is null and void-ab-inito on the parity of the ratio of the decision of the Hon'ble Apex Court in the case of Ajith Jain, reported in 260 ITR 80. iii. The authorities below have not discharged the burden of proving that there is a valid search under section 132 [1] [a], [b] and [c] of the Act, and consequently the assumption of jurisdiction to make an assessment under section 153A of the Act is untenable in law. iv. The learned CIT(A) ought to have appreciated that the very search proceeding is tainted by several irregularities and therefore invalid in the eye of law and consequently the assessment order passed thereunder is liable to be annulled on the facts and circumstances of the case. v. The learned CIT(A) is not justified in holding that the Explanation to section 132(1) declares that the reason to believe which forms the basis for initiating the search u/s 131(1) shall not be disclosed to any person or any authority or the Appellate Tribunal and therefore, the validity of the search cannot be adjudicated by him, without appreciating that there are var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. ii The learned CIT(A) failed to appreciate that there are several interpolations in the planted diary and consequently the assessment passed on such basis is bad in law. iii. The learned CIT(A) failed to appreciate that in the Panchanama the number of pages is stated to be 5 while three new pages has surfaced leading to irrefutable conclusion that there are even interpolations in the planted diary on the facts and circumstance of the case. iv. The learned CIT(A) failed to appreciate that the search official has placed identification marks and it is clear that some writing are there beneath the said identification mark and thus it is clear that there is interpolation even on this count in the planted diary on the facts and circumstance of the case. v. The learned CIT(A) failed to appreciate that the certified scanned copy of the pages which are part of the sworn statement did not contain page no 1A 3A and 4A and thus the numbering is a clear case of interpolation in the planted diary which consequently demonstrates the mind of the revenue and on this count also the assessment needs to be annulled on the facts and circumstance of the case. vi. The learned CIT(A) faile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstrated as to how the entries in the alleged diary evolved over a period even when in the custody of the income-tax department in the course of investigation proceedings and therefore, a fair investigation into the origin, veracity and reliability of the same ought to have been undertaken on the facts and circumstances of the case. ix. The learned CIT(A) failed to appreciate that the failure by the department to hold an enquiry into the authenticity of the planted diary leads to an inference that the revenue is not interested in the Truth of the matter and consequently no addition ought to have been made on the facts and circumstance of the case. x. The learned CIT(A) failed to appreciate that the inaction of the income-tax department in conducting a fair enquiry into the authenticity of the seized diary is fatal to the assessment proceedings on the facts and circumstance of the case. xi. The learned CIT(A) ought to have appreciated that the prevention by the department to hold an enquiry into the various allegations of the appellant should lead to an adverse inference against the revenue on the facts and circumstance of the case. xii. The learned CIT(A) erred in not appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case. ii. The learned CIT(A) erred in not considering that the above addition of undisclosed income is based on material which is unconnected with the appellant and the origin of it is itself doubted and questioned by the appellant on the facts and circumstances of the case. iii. The learned CIT(A) further failed to take note that the additions made in the present case are not on the basis of books of account but on some random scribblings in loose papers and the alleged diary entries which can only be treated as "dumb documents" on the facts and circumstances of the case. iv. The authorities below ought to have realised that "dumb document" cannot be not admissible evidence in law, being documents, which are neither understandable nor intelligible, nor self-evident in themselves and therefore cannot advance the case of the department and cannot be relied upon to sustain the additions on the facts and circumstances of the case. Strong reliance in this regard is placed on the judgement of the Hon'ble Apex Court in CBI vs V.C.Shukla (1998) 3 SCC 410. v. The learned CIT(A) failed to also appreciate that it is well settled law that unless the author of the docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y corroborative material, that is to say some other material or evidence on record in conjunction with which it may be treated as speaking, has to be disregarded in framing of the assessment orders. xii. The learned CIT(A) erred in not taking note that the onus was on the department and the AO to demonstrate that the entries in the disputed diary or seized material have resulted in materialised transactions giving rise to income of the assessee on the facts and circumstances of the case. xiii. The learned CIT(A) is not justified in confirming the addition when the inference of income on the basis of the disputed diary in itself is glaringly a figment of imagination and not forthcoming even in the said notings or something that may be inferred objectively and without aid of any imagination on the facts and circumstances of the case. xiv. The CIT(A) failed to appreciate that none of the hypotheses of the learned AO is grounded in reality or any material on record. Thus, entire addition is only based on surmise and conjecture and at the most suspicion. xv. The CIT(A) ought to have appreciated that it is well settled position of law that no amount of suspicion can take the plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts to the truth that there are no such incomes in the first place. Thus, there is no corroboration of any undisclosed income even by way of any assets in the hands of the appellant on the facts and circumstances of the case. xxiii. The CIT(A) erred in placing reliance on the decision of this Hon'ble Tribunal in ITA Nos.1362, 1363 and 1367/Bang/2013 in the case of M/s. Trishul Buildtech Infrasq (P) Ltd v. JCIT in as much as the factual matrix in that case is entirely different from the one in the present case of the appellant. That was a case where the entries in the seized diaries were clearly admitted by the assessee and further in respect of some of the entries therein, declared undisclosed income for various assessment years and therefore, it was held that he cannot disown the entries in the diary. 10. Grounds Regarding whether the Presumption u/s 292C of the Act is applicable in respect of the addition made. i. The learned CIT(A) erred in misconstruing the statutory presumption u/s 292C of the Act in making the addition in as much as though there is presumption as to belonging and correctness there is no presumption that the content therein indicates the income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO that the difference in the jewellery value as per the returns filed before the Lok Ayukta for the FY 2015-16 and the actual quantum of jewellery found in the course of search is unexplained investment on the facts and circumstances of the case. iv. The learned assessing officer is not justified in disregarding the revised returns filed before the Lok Ayukta which properly depicts the jewellery actually owned by the appellant on the facts and circumstances of the case. v. The learned assessing officer failed appreciate that the proper explanation was tendered by the appellant for the apparent differences including the reconciliation of the quantum of jewellery as actually found in the course of search on the facts and circumstances of the case. vi. Without prejudice, the learned assessing officer ought to have appreciated that the very provisions of section 69A of the Act is not applicable on the facts and circumstances of the case. 13. Ground regarding: Whether the addition made of Rs. 86,95,409/- as unexplained investment in jewellery of appellant's spouse on protective basis is in accordance with law. i. The learned CIT(A) is not justified in confirming the addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case 16. The appellant craves for leave of this Hon'ble Tribunal, to add, alter, delete, amend or substitute any or all of the above grounds of appeal as may be necessary at the time of hearing. 17. For these and other grounds that may be urged at the time of hearing of appeal, the appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity. 3. Grounds of appeal by the Revenue : For Assessment Year 2014-15 (I) Based on the facts and circumstances of the case, whether the Id. CIT(A) was correct in allowing telescoping of amount of Rs. 64.5 Crores as payments without proper justification. (II) Whether on the facts and circumstances of the case, the Id. CIT(A) was right in allowing telescoping of payment made during the year amounting to Rs. 64.5 Crores without any satisfactory explanation from the assessee to prove the legitimacy of these claimed payments. (III) Any other grounds which may be urged at the time of hearing. For Assessment Year 2015-16 (I) Based on the facts and circumstances of the case, whether the ld. CIT(A) was correct in deleting the protective assessment of Rs. 329,75,00,000/- made in A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the years and difference in the reconciliation of jewellery related documents and affidavit are filed with the Returning Officer/Lokayukta. For the sake of convenience, we are deciding first the assessee's appeals filed for the Assessment Year 2013-14 and Assessment Years 2014 -15 to 2016-17 respectively. 5. Assessment Year 2013-14 Brief facts of the case are that the assessee is a Member of Legislative Council and Parliamentary Secretary to the Chief Minister of Karnataka, besides being office bearer of sports federations. He filed his return of income on 25.03.2014 declaring total income of Rs. 6,03,150/- being Income from Salary, Income from House property and Income from Other Sources. He also admitted agricultural income of Rs. 91,000/-. The return of income was processed under section 143(1) of the Act returning a Nil demand. 6. A search under section 132 of the Act was conducted on 15.03.2016 at Room No. 306 Hotel CIDADE-DE- GOA and at his residence at Door No.206, 2nd Main, Domlur, 2nd Stage, Bengaluru, on 15.03.2016 to 17.03.2016 upto 3.15 a.m. and last Panchanama was drawn on 14.05.2016 and search was concluded. The relevant documents are placed at page No. 17 & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as protectively added under section 69A of the Act in the hands of the assessee. Accordingly, he completed the assessment under section 143(3) r.w.s. 153A of the Act on 29.12.2017 with the approval of JCIT, Central Range - 2, Bengaluru, in F.No. 51(3)/CIT/CR-2/2017-18 dated 29.12.2017 as per section 153D of the Act. 9. Aggrieved from the above Order, assessee filed appeal before the ld. CIT(A) raising the legal issue as well as on merits of the case. The assessee also filed written submissions on 28.01.2022 in detail which has been incorporated by the CIT(A) in his Order at Para No.6 from page No. 6 to 48. After going through the written submissions and documents available, the CIT(A) dismissed all legal issues and confirmed the additions. 10. Aggrieved from the above Order, assessee filed appeal before the Tribunal raising similar legal grounds raised before the ld. CIT(A) as well as on merits of the case. The learned AR of the assessee, has filed a written synopsis on the arguments advanced by him during the course of hearing which is as under: 1. The assessee was searched u/s 132 of the IT Act on 15/03/2016 and in the search an affidavit, filed by the assessee before the Ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not incriminating in nature. (c) The Learned DR has urged that this document filed before the Returning Officer is an incriminating seized material found in the search. This contention is incorrect in law in as much as even though the said document is seized, it does not by itself reveal any incriminating information to the effect that the assessee has undisclosed income by way of jewelry. (d) Had the document, filed before the Lokayuktha, which is a declaration of jewelry held by the assessee as on 31/03/2013, also been found and seized in a search, then the same would constitute document found and seized in the search and a comparison of both these documents could lead an inference of unexplained jewelry. (e) In support of the submission that the second document namely, the Lokayuktha return filed for 31/03/2013 was not even available in the course of the search proceedings, it is amply clear by going through the statements recorded in the course of search that nowhere in these statements, the investigating authorities had posed any query putting forth the said Lokayuktha return before the appellant. The query was asked for the very first time by the AO in the statement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the search under section 132 or requisition u/s 132A of the Act, 1961. However, the completed/unabated assessments can be reopened by the AO in exercise of powers u/s 147/148 of the Act, subject to fulfilment of conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved." (h) It is clear from the above judgment that when applied to the facts of this assessee's case, material found in the search i.e. declaration before the Returning Officer as on 01/06/2012 is not incriminating in nature. The AO cannot reopen proceedings for the A.Y. 2013-14 u/s 153A by means of the declaration dated 01/06/2012. (i) The declaration of assets filed before the Lokayuktha as on 31/03/2014, was not found in the search and hence constitutes other information in the possession of the AO. The AO would have been well within his rights to reopen the assessment of A.Y. 2013-14 by resorting to Section 147/148, based on information obtained from Lokayuktha during the assessment proceedings, subject to fulfilment of the conditions prescribed in sections 147/148 of the Act. B. The protective assessment in the hands of the appellant cannot also be sustained whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore the addition is to be deleted for advancement of substantial cause of justice. D. The Fourth issue is that the AO was wrong in adopting the CBDT Values in making additions to income by way of unexplained jewelry u/s 69A of the Act. The Appellant places reliance on the binding decision of the Jurisdictional Karnataka High Court in the case of V.Selvaraj vs DCIT in ITA No. 92/2018, by order dated 19th August 2021, wherein the Hon'ble High Court held that the Assessing Officer can only act upon a valuation report furnished by a Valuation Officer appointed under Section 12A of the Wealth Tax Act and any valuation adopted for the purposes of assessment has to be solely based on such a report and additions which are made not based on a valid report is liable to be deleted. In the case of this appellant the addition made by the AO is not based on a valuation report furnished by a Valuation Officer appointed u/s 12A of the Wealth Tax Act and hence the entire addition needs to be deleted. In conclusion the Appellant submits that his appeal be allowed for the advancement of the substantial cause of justice. 11. The learned AR had also argued orally the contents of the wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be questioned before appellate authority. The burden to prove so is also on the assessee. This option has not been exercised by the assessee till date even after several years of search. The Hon'ble High Court of Orissa in 393 ITR 121 observed as under: "These statutory provisions have been taken note by the Hon'ble Supreme Court as well as by various High Courts dealing with the power of search and seizure. The Hon'ble Apex Court while discussing the issue in the case of Pooran Mal v. Director of Inspector, [1974] 93 ITR 505 SC has been pleased to hold the constitutional validity of section 132 of the IT Act, 1961 and it has been laid down that the necessity of recording of reasons in support of the reasonable belief contemplated by section 132 of the IT Act, 1961, however, the principle has been laid down that the reason which led the authorities to conduct search and seizure need not to be disclosed or communicated to the person against whom the warrant of authorization has been issued." Assessee in this instant case merely contended that the search conducted was based on no valid information. The assessee has not proceeded with its assumption with any suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Ground 5 and AY 2016-17 - Ground 4: In this ground, the appellant has raised the issue about the assessing officer assuming valid Jurisdiction in the absence of notice under section 129 of the act. Comments: For ready reference section 129 of the act is reproduced here as under: "129. Change of incumbent of an office. - Whenever in respect of any proceeding under this Act an income-tax authority ceases to exercise jurisdiction and is succeeded by another who has and exercises jurisdiction, the income- tax authority so succeeding may continue the proceeding from the stage at which the proceeding was left by his predecessor: Provided that the assessee concerned may demand that before the proceeding is so continued the previous proceeding or any part thereof be reopened or that before any order of assessment is passed against him, he be reheard." The above provision of the section clearly says it is up to the assessee to demand for rehearing before the continuation of previous proceedings. With respect to the objection with regard to jurisdiction, the decision of the Hon'ble Supreme Court in the case of GKN Driveshaft Ltd in 259 ITR 19, the decision of the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the assessee contends that the action of the Assessing Officer is without authority of law and, therefore, wholly without jurisdiction." Hence, the assessee cannot objection to the jurisdiction assumed by the assessing officer under the provisions of section 129 of the IT Act, 1961. Learned CIT(A) also in page 52 under para 11 (AY 2014-15) has dismissed the ground stating as below: "10. The third issue is the challenge to jurisdiction of the AO stating that there was no notice issued under section 129 of the Act. The AO. has in the remand report dated 15.05.2018 submitted to this office that the provisions of section 129 of the Act does not call upon the AO to inform the assessee and seek objections in the event of change in incumbent. The AO has also submitted that the new incumbent continues with the proceeding, and it is for the assessee to seek to be reheard on the proceedings concluded, if any. Having perused the same, I am of the considered opinion that the assessee has not exercised any such option and after conclusion of the proceedings the same cannot be permitted to be raised. Hence the ground no. 5 is dismissed." From the above legal position and on the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in the assessment proceedings. It is also imperative to place the fact on record that inferences have to be drawn considering that the proceedings have to be concluded in the light of the time limitation factor. The assessee submitted that the number of notices calling for information alone cannot be the yardstick of affording opportunities of being heard unless the appellant is made known as to what is the real case that he is called upon to defend. However, the assessee did not expand on what the yardstick of affording opportunities actually is. This apart from the contention that the seized materials were not shown to him is factually incorrect as the materials had been handed to him for examination during the statements recorded by this office. It is also significant to mention that while Shri Santharam CA was sought to be passed on as an Authorised Representative who even wished to peruse the seized material, no power of attorney has been filed by him before this office till date. Letters filed in the inward requested that the copies of the seized material be handed over to AR Shri Santharam who appeared to collect copies and was informed to file the power of attorney an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was called for on this ground and is reproduced here below: "The stand that assessee had been taking was that the material did not belong to him. Even in the case where he admitted that the material was in his own handwriting, he did not wish to disturb on the contents recorded by him. Subsequently, in the ground of appeals, the assessee suddenly claimed that the handwriting is not matching, which the assessee did not object till date. The statement copies have been provided to the assessee. Moreover, the assessee did not furnish any basis for calling the diary planted. Mere naming the diary as planted without any cogent basis rationale behind the same, does not prove the contention of the assessee. The claim of the assessee that in the statement recorded on 06.05.2016, there was no question asked on an amount of 65 crores clearly fortifying that the same has been interpolated after the statement recorded on 06.05.2016 is untrue, as questions with regard to the said dairy and its entries were confronted to the assessee during the statement recorded u/s 132(4) of the IT Act, 1961 dated 15.03.2016, i.e., during the search proceedings itself, which emboldens the stand of the dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er documents or assets which had been taken into custody from the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of section 132A, had been found in the possession or control of that person in the course of a search under section 132. Similar provisions are prescribed in section 132(4A) of the IT Act, 1961 thereof. Moreover, the presumption u/s 132(4A) does not absolve the assessee of the burden to prove the genuineness of the transaction. [refer judgement in the case of Man Mohan Gupta vs ACIT (2005) 274 ITR 179 (Raj)] It can be seen from the above that the law provides a presumption of not only the ownership but also the genuineness of the contents of the seized material. This apart, in the instant case the provisions of section 292C have been fully fulfilled due to the fact that the seized material is established beyond doubt to belong to the assessee despite his insistence of denial. The corroborative facts also establish the genuineness of the contents of the seized material making it irrefutable evidence." The Assessing Officer also in his comments relied on the decisions of Hon'ble High Court of Gujarat has in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /KG/9 and from pages 8 to 16 (AY 2014-15) discussed the contents of the seized material marked as A/KG/3.In pages 17,18 and 19 (AY 2014-15) he proved that the two materials are interconnected and he corroborated both. He also proved that the transactions are financial in nature and are in crores. Further he has clearly ascertained and established that the appellant has earned significant commission also for the receipt and payment transactions mentioned in the seized material. During the course of the search and assessment proceedings, the authorised officer and the assessing officer has made a summary of receipts and payments transacted by the appellant for various financial years from 2013-14 and. 2015-16. The assessing officer relied on Sections 132(4A) and 292C of the Act that the ownership of the seized materials belongs to the appellant and AO is legally justified in doing so. Learnt CIT appeal on merits has discussed two important questions based on the facts of the case. The first question he addressed is whether the two above mentioned evidence in the form of a spiral diary A/KG/3 and loose sheet marked as A/KG/9 can be relied upon for making the addition. Learn CIT(A) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer is correct and they constitute unaccounted income in a clear manner. The Assessing Officer also was called for to give his comments and his reply is given below: "The reliance of the assessee on the judgement of the Hon'ble Supreme Court in the case of CBI v. V.C. Shukla, wherein it has been ruled that loose documents have no evidentiary value unless corroborated by other independent and reliable evidence is not in consonance with the facts of the instant case as the seized material had cogent material with the relevant period, stating true state of affairs, identifying the person to whom sums have been paid, the purpose of the payment of the sums (i.e., Lok Sabha Election, 2014, BBMP Elections, 2015 and ZP- TP Elections, 2016) and even identifying the receipts during the period (for which relief is allowed by the Ld. CIT(A) to the assessee). The modus operandi of the sums payments being made, outside the spectrum of the banking medium, thereby acting in cohort to evade the taxation. Hence, there is enough corroborative evidence brought on record to establish the unexplained payments made and unexplained receipts of sum and their utilization thereof. The provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onus then shifts back to the revenue to establish the taxpayer's liability. However, in this instant case, the assessee failed to discharge its primary liability to furnish the legality and source of such income. Even if the assessee contends that it is not his income, the onus is on the assessee to prove the same. In absence of any documentary evidences, it is evident that the assessee has nothing to say on this issue. The assessee has placed undue emphasis on the contention that corresponding assets have not been found. This contention is against basic principles of income accounting. The original computation of income would be considering income net of the expenditure incurred in earning such income as admissible under the Act. However, in cases wherein the details of such income are not available and those of assets are available, the Balance Sheet method is resorted to as a measure to arrive at income assessable. The Balance Sheet method does not factor in the expenditure that assessee incurs. In case one was to find credit-card expenses evidencing purchases of jewellery and club expenses, it cannot be contended that the Assessing Officer has to only consider the unac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Tribunal. 7. Grounds on Jewellery - AY 2013-14 - Grounds 7,8,9 and AY 2016-17 - Grounds 12,13 & 14: These grounds pertains to the addition made by the AO on account of unexplained investment made on account of the jewellery. Ld CIT(A) has given a finding in para 15.3 in page 60 for AY 2016-17 as under: "15.3 Though the appellant has raised various contentions that there is no such undisclosed or unexplained investment, the appellant has not explained the apparent discrepancies in his on statements on affidavit before Lok Ayukta and the affidavits filed in the course of the assessment proceedings before the AO. Therefore, I am not inclined to interfere with the inferences drawn by the AO as to the unexplained nature of the jewellery." The same reasoning was given by him for the AY 2013-14 also in pages 50 and 51 of the order for AY 2013-14 also for confirming the addition. The assessing officer also in pages 2,3,4 &5 of the assessment order for AY 2013-14 and pages 43,44,55 and 56 of the assessment order AY 2016-17 has clearly established that the differential amount is unexplained income under section 69A of the Act. The Assessing Officer was called for to gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase law submitted by the assessee is not in consonance with the facts of the instant case, wherein the issue was with regard to the valuation of excess stock, which was done by the AO and the point of contention was that the valuation arrived was high. The addition in this instant case was made by adopting the CBDT rate for jewellery with due deductions. Hence, the objections of the assessee holds no water." Hence based on the above factual findings, the above grounds raised on jewellery also may kindly be dismissed. 8. Grounds on irregularities in Panchnama (new pages of diary) and identification marks (Ground 6 (iii) that the number of pages of the diary is mentioned as five while three new pages surfaced later, Ground 6(iv) that the search official has placed identification marks on writings of the diary leading to interpolation, Ground 6(v) that the certified scanned copy of the pages which are part of the sworn statement did not contain page no. 1A, 3A and 4A and the numbering is clear case of interpolation in the diary and Ground 6(ix) that no investigation has been carried out in finding the authenticity of the diary.) The comments of the DDIT(Inv.) vide his letter dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Congress party and sitting Minister of Bengaluru City) and M B Prasanna (Manager/assistant of KJG) have given Rs. 24 crores. Paid AICC - This means the amount received which has been paid to AICC (All India Congress Committee) at Delhi M. Vora - 32 cr = Motilal Vohra is the treasurer of Indian National Congress, New Delhi has received Rs. 32 crores. RG Office - 6 cr = Rahul Gandhi office. An amount of Rs. 6 crore might have been paid to some person working in Rahul Gandhi office. SG Office - 8 cr = Sonia Gandhi office. An amount of Rs. 8 crore might have been paid to some person working in Sonia Gandhi office. A/KG/03 dated 15.03.2016 Page No. 1A (LS) - 2014 continuation = Lok Sabha Elections 2014 continuation of payments made to AICC. DGVS - 3 cr, 4 cr, 8 cr = Digvijay Singh is the Senior Congress Leader from Madhya Pradesh who is in-charge of Karnataka State Congress i.e he is the main representative of AICC to Karnataka who decides about the ministerial berths and other important decisions in the Karnataka State Congress Party. He has received Rs. 15 crores. H.Comm - 3.5 cr = This pertains to hawala commission paid to transporting from one point to another. In this rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A ZP-TP continuation = Zila Panchayat and Taluk Panchayat elections continuation from page no. 3 KJG - 30 cr = K J George (MLA of Congress party and sitting Minister of Bengaluru City) has paid Rs. 30 crores. DKS - 12 cr = D K Shivakumar (MLA of Congress Party and sitting Minister for Power) has paid Rs. 12 crores. A/KG/03 dated 15.03.2016 Page No. 4 Paid AICC = Amount paid to AICC, Delhi. The following persons have received the money from Karnataka State Congress Unit :- M. Vora - 15 cr - sep, 10 cr - Oct, 25 cr - Oct, 10 cr +5 - Nov+, 15 - Dec and 15 - Jan 16 = Motilal Vohra is the treasurer of Indian National Congress, New Delhi has received the following amounts starting from September 2015 to January 2016 :- September 2015 - Rs. 15 crores October 2015 - Rs. 35 crores November 2015 - Rs. 15 crores December 2015 - Rs. 15 crores January 2016 - Rs. 15 crores AP - 5cr - Oct, 3 cr - Jan = Ahmed Patel who is a very senior Congress MP and is in the core committee of the AICC has received Rs. 8 crores during October 2015 and January 2016. DGS - 6 cr - Nov, 5 cr - Jan = Digvijay Singh is the Senior Congress Leader from Madhya Pradesh who is in-charge of Karnataka State Cong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the above said inferences are of the persons who are considered and proved to be of high moral and responsible leaders of my party. Hence, I vehemently. oppose the names mentioned in the above inference at the deepest of my imagination are completely wrong and baseless. Hence, I object vehemently to the above inferences drawn by you. Q 31 I am once again giving you an opportunity to think for five minutes with respect to the response given for Q.No. 29 and 30. Further, if you would like to change your answer to the Q.No 29 and 30 you can change. I also bring to your notice that the penal provisions which have been clearly explained to you in the above statement at Q.No. 3 and 25. This would be the final opportunity to give correct response to Q.No. 29 and 30. Ans. Sir, the answers given to the Q.No. 29 and 30 of this statement are completely correct and I would not like to change any of my answers. 15. On the other hand, the learned DR relied on the Order of the lower authorities and submitted that the documents found during the course of search and seizure in the premises of the assessee which was marked as A/KG/10 is corroborated with the information received under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for such financial year.]" 17. On going through the common Paper Book filed by the assessee for the Assessment Years 2013-14 to 2016-17, assessee has filed reconciliation statement and affidavit regarding the difference in the jewellery reported with the Lokayukt. Assessee has also written letter to the DCIT (Inv.), Circle - 2(3), 3rd Floor, CR Building, Bengaluru, in which he has stated that his mother passed away in the year 1986 and thereafter, the assessee got 1/5th share as per their family arrangements among two brothers and two sisters and has submitted that while filing annual statement of assets, the jewellery belonged to his mother and family was included. In the month of January, 2016, his brothers and sisters mutually agreed and received jewellery of 1228.84 gms. Further, on going through the statement recorded under section 131 of the Act dated 18.12.2017 as per question-and-answer Nos.41 and 42, it was stated that reconciliation statement shall be filed and later the assessee has filed reconciliation statement. During the course of search and seizure action under section 132 of the Act, we noted that there was no jewellery seized. Only the AO has made addition on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessments can be re-opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved." 19. The question now that arises for consideration is whether the copy of the affidavit dated 01.06.2012 filed by the assessee before the Returning Officer for the purpose of contesting in election which was found and seized during the search under section 132 of the Act can be treated as incriminating document found and seized during the search. The affidavit admittedly showed that as on 01.06.2012, the assessee did not own any jewellery and that his wife owned about 350 grms of jewellery. The information contained in the document by itself cannot be considered as incriminating. It will assume the character of being incriminating in nature only when it is compared to any other material found and seized during the search and which prima facie disproved the content of this affidavit filed before the Returning Officer. The AO has compared the contents of these affidavits failed before the Returning Officer with a declaration of assets as on 31.03.2013 as declared b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , these are kept open. 22. In the result, appeal filed by the assessee is allowed as per above terms. 23. ITA Nos.1022 to 1024/Bang/2024 (assessee's appeals) ITA Nos.1290 to 1292/Bang/2024 (Revenue's appeals) These three appeals in ITA Nos.1022 to 1024/Bang/2024 has been filed against the order passed by the learned CIT(A) confirming the addition made in the Assessment Order passed under section 153A r.w.s. 143(3) of the Act and the Revenue has filed appeal in ITA Nos.1290 to 1292/Bang/2024 on the relief given by the learned CIT(A) on the above Order passed under section 153A r.w.s. 143(3) of the Act. 24. Briefly stated, the facts of the case are that the assessee filled return of income under section 139(1) for the following three Assessment Years as under: Sl. No. Assessment Years Date of filing of return under section 139(1) of the Act Income declared (in Rs.) 1. 2014-15 06.02.2015 8,00,900/- 2. 2015-16 11.02.2016 10,30,780/- 3. 2016-17 04.08.2016 20,96,630/- 25. There was search conducted in the case of the assessee from 15.03.2016 to 17.03.2016 at his residence and on 15.03.2016 at Room No. 306, Hotel CIDADE-DE- GOA. During the course of search several in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded under section 131 and 131(1A) of the Act. The assessee continuously denied the figures noted in the diary and loose sheets and the answers were given in the same fashion on the statements recorded on oath on different dates. The AO observed from the contents of the diary as under: Received Steel Bridge 65 cr MBP 15 cr HCM 13 cr KJG 30 cr DKS 12 cr 135 cr 30. The above total was not drawn in the material found. On aggregating the sum, the same totals to Rs.135 Crores. Thus, the AO observed that:- (a) the two seized materials are interconnected (b) transactions are financial in nature (c) the amounts are in crores and further made comparison of page 9 of A/KG/9 with page 3 and 3A of A/KG/3 and drew a table as under: A/KG/3 A/KG/3 A/KG/9 A/KG/9 Steel Bridge 65 65.5 MBP 15 37 HCM 13 10 KJG 30 10 MBP DKS 12 12.5 135 135 31. The AO also comes to a conclusion that on comparison of the figures placed at the first and the last are tallied except for a difference of 0.50 in cash. Thus, it became clear that A/KG/9 had an estimate of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's wife Smt. Hamsaraj can be seen from the scanned copy placed hereinabove at para 7.1 and onwards of the Assessment Order. It cannot be the case that mere denial of knowledge of the contents of the evidence would suffice especially in the light of the fact that some of the entries match with the entries contained in the other material marked as A/KG/9 as brought out hereinabove. This being the case, the onus lies with the assessee to establish as to whom it belongs to if not to him and how is it that these entries match with the entries made by him in A/KG/9. The consistent mode of denial is merely an act of non-cooperation which can only lead to adverse inference being drawn. 33. The AO after examining the entire documents marked as A/KG/3 and A/KG/9 where receipts and payments are listed, the receipts have not been evidently explained relating to any source nor it has been incontrovertibly being established as belonging to another person making the applicability of provisions of section 132(4A) and section 292C of the Act inevitable and it was put to the assessee on 30.01.2017. Question No.34 was relied on by the AO on 25.05.2016. Further a proposal placed before the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed representative has filed any power of attorney even though notice under section 143(2) of the Act and other notices were issued. The assessee appeared and he contested the admission of Rs.15 Crores on the ground that (a) no undisclosed assets / investments have been found (b) the statement given was under coercion and it was filed on 22.08.2017 in writing. 38. The various statements recorded on these materials from 15.03.2016 are listed hereunder: a) Statement recorded u/s 132(4) on 15-3-2016 b) Statement recorded u/s 132(4) on 16-3-2016 c) Statement recorded u/s 132(4) on 17-3-2016 d) Statement recorded u/s 131(1A) on 18-04-2016 e) Statement recorded u/s 131[1A) on 25-04-2016 f) Statement recorded u/s 131(1A) on 26-04-2016 g) Statement recorded u/s 132(4) on 14-05-2016 h) Statement recorded u/s 131(1A) on 25-05-2016 i) Statement recorded u/s 131 on 30-01-2017 j) Statement recorded u/s 131 on 11-02-2017 k) Statement recorded u/s 131 on 10-11-2017 l) Statement recorded u/s 131 on 08-12-2017 m) Statement recorded u/s 131 on 18-12-2017 39. Thus, after giving various opportunities listed above, the assessee failed to utilize and was also put on notice of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver were found and inventorized. In the course of proceedings, the assessee's wife filed letter dated 27.09.2017 accompanied by affidavit of the assessee, Shri. Ashwin Raj, Smt. Hamsaraj and Smt. Chitra, sister-in-law of assessee. As per these affidavits, the jewellery found during the course of search belonging to each of the persons is tabulated as follows: Assessee Gold Jewellery in gms Silverware in Kgs Shri K Govindaraj 632.250 Nil Smt Hamsaraj 845.90 2.50 Smt Chitra 70.94 Nil 47. The AO observed from the statement before the Lokayukta that the position as on 31.03.2016 was as under: Assessee Gold Jewellery Silver Shri K Govindaraj 1500 5 Kg Smt Hamsaraj 4500 10.73 Kg 48. From the affidavit filed and other documents available, the AO calculated the value in the hands of the assessee and treated as unexplained investments under section 69A of the Act as under: 14.7 The difference in the hands of Shri K Govindaraj works out to 867.50 gms i.e 1500 gms reported to LokAyukta minus 632.50 gms as on date of search and in affidavit. Adopting the CBDT rate for jewellery with due deductions the rate of Rs. 22,700/- is adopted to arrive at a value of Rs. 1,96,92, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be a diary which does not belong to him and it is an admitted by the Revenue that the entries therein are not written by the appellant. 1. The AO has made an addition of Rs. 329,75,00,000/- based on the entries found in this diary, substantively in the A.Y. 2014-15 and protectively in the A.Y. 2015-16, based on the very same entries as the AO is not sure about the Assessment Year, to which these entries relate to. 2. Apart from the above addition of Rs. 329,75,000/- the AO has made an addition of Rs. 408,50,00,000/- in the A.Y 2016-17. 3. The AO has also made an addition of Rs. 1,08,49,584/- by way of unexplained jewellery, u/s 69A of the Act for the A.Y. 2016-17. 4. The submissions of the Appellant on the issue of additions made on the basis of entries in a Diary found during the search are as under: (a) The AO has made additions to income based on the entries found in the Diary marked as A/KG/3, purely based on his assumptions, presumptions, conjectures, imagination, suspicion and surmise which is not backed by any cogent material or evidence on record. (b) The additions made in the present case are not on the basis of books of account but on some scribblin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es though relevant were only corroborative evidence and it is to be shown further by some independent evidence that the entries represent honest and real transactions and that monies were paid in accordance with those entries." In Para 39, in Page 44 of the compilation, the Hon'ble Supreme Court observes as under: "A conspectus of the above decisions make it evident that even correct and authentic entries in books of accounts, cannot without independent evidence of their trustworthiness, fix a liability upon a person." When applied to the fact of the case of the present appellant it is clear that the Diary, even if considered as being part of books of account maintained by the appellant, the entries therein cannot be relied upon to fasten a liability, in the absence of independent corroborative evidence which will validate these entries. This decision is squarely applicable to the facts of the appellant's case. (ii) Common Cause v. UOI [2017] 394 ITR 220 (SC) [page nos. 51-59 of Case Laws Compilation] Para 20 in Page 57 of the compilation "It is apparent from the aforesaid discussion that loose sheets of papers are wholly irrelevant as evidence being not admiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed material / 'Excel' sheet (not mentioning the assessees' names) forms a dumb document or not. We make it clear that the department has failed to corroborate the impugned seized document indicating assessee's alleged on money payment over and above the sale price itself. All it has done is to rely on their father's name only. It is nowhere clear as to whether it is an alleged document forming part of the books of account maintained in the regular course of business either by the vendor or vendee side. All it contains therefore is rough notings and jottings only. This tribunal co-ordinate bench's decision Nishan Constructions Vs. ACIT ITA No.1502/Ahd/2015; after considering the hon'ble apex court's landmark decision in Common Cause, Vs. Union of India (2017) 77 taxmann.com 245 (SC) and CBI Vs. V.C.Shukla (1998) 3 SCC 410 (SC) holds that such loose sheets deserves to be treated as a dumb documents only since not revealing full details about the dates containing lack of further particulars and therefore, ought not to be made basis of an addition. Similar other judicial precedents ACIT Vs. Layer Exports P Ltd., (2017) [184 TTJ 469] (Mumbai) and ITO Vs. Kranti Impex Pvt Ltd., ITA N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-speaking document in as much as it does not contain any intelligible narration in support of the inference drawn by the Assessing Officer that it reflected unaccounted transactions carried out by the assessee outside the regular books of account. When a dumb document, is to be made the basis to fasten tax liability on the assessee, the burden is on the AO to establish with corroborative evidence that the nature of entries contained therein reflect income and also that such income was in the control of the assessee. Thus, AO has to establish, with necessary corroborative evidence, that various entries contained in the seized document reflect unaccounted transactions effected by the assessee. Considering the entirety of circumstances, in the absence of any material to support the nature and ownership of the entries found in the seized document, no addition is permissible in the hands of the assessee as undisclosed income by merely arithmetically totalling various figures jotted down on such document." Para 13.45 in Page 175 of the compilation "Thus, it is settled position of law that onus lies upon the Department to collect cogent evidence to corroborate the notings on the lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uspicion, conjectures and surmises. Suspicion, however strong, cannot take place the material in place of evidence of the AO. The AO should act in a judicial manner, proceed in a judicial spirit and come to the judicial conclusions. The AO is required to act fairly as a reasonable person, not arbitrarily and capriciously. The AO without examining the students / parents who have paid the capitation fees cannot come to the conclusion that the assessee has received unaccounted capitation fees. The basis for donation is notebook / loose sheet. This notebook or loose sheets found during the course of search is only circumstantial evidence and not full proof evidence to sustain the addition. No addition can be made in the absence of any corroborative material. If it is circumstantial evidence in the form of loose sheets and notebook, it is not sufficient to come to the conclusion that there is conclusive evidence to hold that assessee has collected unaccounted capitation fees. The notes in the diary/loose sheets are required to be supported by corroborative material. Since there was no examination or cross-examination of persons concerned, the entire addition in the hands of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me are unaccounted transactions actually carried out by the assessee. In the absence of these necessary ingredients, the additions were deleted. It is seen from the facts of this appellant's case, the AO has not established the veracity of the diary entries with necessary corroborative evidence. He has also not recorded statements from the persons who are alleged to have paid monies to the appellant, confirming the said payments and also purpose of these payments. In these circumstances, the additions made by relying on diary entries need to be deleted. (d) In the opinion of the AO, the material in A/KG/9 which is in the handwriting of the appellant is effectively the corroborating material for the alleged diary entries in A/KG/3. It is respectfully submitted that such a view and argument is plainly fallacious. The material in A/KG/9 itself is a dumb document and is unintelligible. It is neither speaking for itself nor is it self-evident as to the contents of the same. Therefore, it cannot be anyone's case that one dumb document can be said to be corroborating another dumb document. The AO is clearly wrong in relying upon the material A/KG/9 to prove the veracity of the mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y shall presume certain facts. So far as the subject-document is concerned, both the Statutory Appellate Authorities found insufficient evidence to link the document with the assessee in the first place. Thus, primary fact was not established from which presumption could be drawn. In Para 10 at Page 206 of the compilation "In the subject proceeding, two Statutory Appellate Authorities have exercised their discretion against the Revenue and in favour of the assessee. The reason for exercising such discretion is that no stock discrepancy could be demonstrated and there was no corroboration of the figures forming the basis of addition to the income of the assessee as was directed by the Assessing Officer. No question about the said document was put to the Director of the assessee in course of search. This factor was also taken into consideration by the aforesaid Appellate bodies. The two Statutory Appellate Authorities doubted the inherent probative value or quality of the above-referred document upon applying their mind on it. In substance, the said authorities found no reason to draw presumption against the assessee on the basis of scribbled figures appearing on the document i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the figures in the Diary to be representing the undisclosed income of the Appellant. Furthermore, if these amounts were really the income of the appellant, there must have been assets to represent these corresponding incomes which ought to have been unearthed in the course of search proceedings. The very fact that there is no such unearthed assets only points to the truth that there are no such incomes in the first place. Thus, there is no corroboration of any undisclosed income even by way of any unexplained asset in the hands of the appellant. (g) The Revenue has also relied on the decision of this Hon'ble Tribunal in Trishul Buildtech Infrastructure (P) Ltd v. JCIT in ITA Nos. 1362, 1363 and 1367/Bang/2013 dated 20.02.2015, which is also cited by the LD. CIT(A) in his appellate order to support the additions made based on entries in the diary (A/KG/3). This reliance of the Revenue is entirely misplaced. It is respectfully submitted that the additions on the basis of diary entries were confirmed in the said case for the reason as stated in para 30 therein as follows: "As we have already seen, in a statement KP. Shetty recorded in the post search proceedings, K.P. She ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o belong to the spouse of the appellant which is added protectively. Further, the addition on account of silver jewellery said to belong to the appellant is of Rs. 1,84,950/- and of the spouse of the appellant of Rs. 4,00,602/-. (These figures as rectified by the rectification order u/s 154 of the Act dated 20.02.2018.). The details are as under: Gold Particulars Found in course of search Statement of assets filed before Lok Ayukta (gms) Difference (gms) CBDT rate per gm (after adjustments) Difference in Rs. Appellant 632.50 1,500 867.50 22,70 19,69,225 Spouse of appellant 845.90 4,500 3,654.10 22,70 82,94,807 Silver Particulars Found in course of search Statement of assets filed before Lok Ayukta (kgs) Difference (gms) CBDT rate per gm (after adjustments) Difference in Rs. Appellant - 5.00 5.00 36,990 1,84,950 Spouse of appellant 2.50 13.33 10.83 36,990 4,00,602 1,08,49,584 (a) It is important to notice the fact that the Jewellery found in the search is much less than the jewellery shown in the statement filed before Lokayuktha. In other words no unexplained jewellery was physically found in the search u/s 132. The statement file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch came into the custody of the appellant on his mother's death. Out of abundant caution, the appellant was advised to declare this also in the return filed before the Lokayuktha. However, mere declaration that the appellant 'has' the jewellery in the Lokayuktha return cannot in any manner be construed as 'owned' by or 'belonging' to the appellant. (i) However, in the declarations made in the Lokayuktha returns, there appears to have been genuine error in as much as the partition of the undivided family had occurred in the interim and the appellant had retained only his 1/5 share of the ancestral property and handed over the rest to other members. (j) The appellant also realized the apparent difference in the income-tax records and the Lokayuktha return and in good faith and as a law-abiding citizen filed revised return before the Lokayuktha to put the records straight. Copy of the revised returns filed before the Lokayuktha are placed in the Common Paper Book at page nos. 151 to 162. The assessing officer has disregarded this completely and brushed aside the revised return as afterthought. The appellant has only done which is in compliance of law and without finding any defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there can be no protective assessment." In view of the above judicial precedents, the entire protective addition of Rs. 86,95,409/- made in the hands of the assessee, in the absence of a substantive addition in the hands of his wife, is also bad in law and needs to be deleted. In any case the addition made u/s 69A have no legs to stand and the protective addition made, in the absence of a substantive addition in the hands of his wife, are both bad in law and the entire addition u/s 69A, both protective and substantive, in the hands of the appellant needs to be deleted for the advancement of substantial cause of justice. The next issue is that the AO was wrong in adopting the CBDT Values in making additions to income by way of unexplained jewelry u/s 69A of the Act. The assessee places reliance on the binding decision of the Jurisdictional Karnataka High Court in the case of V.Selvaraj vs DCIT in ITA No. 92/2018, by order dated 19th August 2021, wherein the Hon'ble High Court held that the Assessing Officer can only act upon a valuation report furnished by a Valuation Officer appointed under Section 12A of the Wealth Tax Act and any valuation adopted for the purposes of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned AO, then the payments in subsequent years are naturally out of the receipts in preceding year. Therefore, to tax the receipt and the payment is to tax the same item twice and is not tenable. The benefit of telescoping the income of subsequent year ought to have been extended to the appellant. This is what the learned CIT(Appeals) has done in the appellate order. In conclusion the Appellant submits that his appeal be allowed for the advancement of the substantial cause of justice." 53. The ld. DR relied on the order of the AO and CIT(A) for confirming the addition made by AO. The learned DR has filed common written synopsis for his arguments from Assessment Years 2013-14 to 2016-17 which has been reproduced hereinabove at para No. 11 and the same is considered for the arguments of the learned DR for the Assessment Years 2014-15 to 2016-17. Hence, it does not require reproduction here. In addition to the above written synopsis, the learned DR had also submitted that the AO was correct in presuming & expanding the abbreviations found in the seized material A/KG/3 & A/KG/9 to represent the names of persons as brought out in the assessment order as all of them were from the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that the net sum of Rs. 262,25,00,000/- is to be brought to tax, thus giving a relief of Rs. 64,50,00,000/-, has confirmed the substantive addition of Rs. 262,25,00,000/- for the Assessment Year 2014-15, holding that entries made in A/KG/9 supports the explanation given by the AO for the entries in A/KG/3 and is also the evidence for the transactions which are denoted by the entries made in A/KG/3. The learned CIT(A), in view of his confirming the substantive addition in Assessment Year 2014-15, deleted the protective addition in the Assessment Year 2015-16. 57. As regards the Assessment Year 2016-17, the learned CIT(A) has given telescoping to the extent of Rs. 135,50,00,000/- on account of entries which are presumed to be receipts and thus set off against the total payment of Rs. 408,50,00,000/- brought to tax by the AO and after this set off of Rs. 135,50,00,000/- the learned CIT(A) has held that the net sum of Rs. 273,00,00,000/- is to be brought to tax, thus giving a relief of Rs. 135,50,00,000/-. The assessee has challenged these additions on the ground that the diary entries are dumb documents, which are not corroborated by any evidence and the Revenue has challenged the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, has not made any addition based on the entries in seized material A/KG/9. He has only relied upon this seized material to make additions based on entries found in the Diary A/KG/3. 61. The Law is now settled that entries in loose sheets or diaries cannot be relied upon to make additions in the absence of corroborative evidence. From the above discussion, we find that presumption under section 132(4A) is rebuttable presumption. Statement under section 132(4) is no doubt an important evidence while making presumption under section 132(4A). Addition under section 69 of the Act can be made if the explanation offered by the assessee is not found satisfactory. In a search case where some material or loose paper is found, the Department is to follow certain procedure viz., the assessee is to be confronted on the material found at the time of search. Examination of all concerned parties should also take place. For this purpose, the Income-tax Act provides power to Revenue authorities under section 132(4) and under section 131 of the Income-tax Act that income cannot be treated as undisclosed income merely because some loose paper is found during the course of search. The reasons are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guments extensively. On hearing the learned counsel for both the parties, this Court finds it relevant to examine the following questions that arises for consideration in these writ appeals, which are as under: (1) Whether 'Loose Sheets' and 'Diary' have any evidentiary value? (2) Whether Centralization is in violation of Section 127 of the Income-tax Act, 1961, is valid? (3) Whether the Notice under section 153C of the Income-tax Act, 1961 is valid herein? As regards Question No. 1: Upon reading the material provided and the order of the learned Single Judge delivered on 12-8-2022, it is evident that the income that has escaped assessment and notices under section 153C of the Income-tax Act, 1961, were solely issued based on loose sheets and documents which are termed as 'diaries' found during the search. The applicability of section 69A of the Act arises only when the principles laid down under section 68 of the Act are satisfied. section 68 states that there must be books of accounts or any books with credit entry. The said Act reads thus: "Section 68: Where any sum is found credited in the books of an assessee maintained for any prev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Act relating to the relevancy of facts; and those provisions are to be found in Section 6 to 55 appearing in Chapter II. Section 5, with which Chapter II opens, expressly provides that evidence may be given in any suit or proceeding of the existence or non-existence of every fact in issue and the facts declared relevant in the aforesaid section, and of no others. Section 34 of the Act reads as under:- "34. Entries in books of account when relevant - Entries in book of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the court has to inquire but such statements shall not alone be sufficient evidence to charge any person with liability." 17. From a plain reading of the Section it is manifest that to make an entry relevant thereunder it must be shown that it has been made in a book, that book is a book of account and that book of account has been regularly kept in the course of business. From the above Section it is also manifest that even if the above requirements are fulfilled and the entry becomes admissible as relevant evidence, still, the statement made therein shall not alone be sufficient evidence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e two files (MR 72/91 and MR 73/91)." 25. The Hon'ble Supreme Court in the case of Common Cause (supra) at paragraphs 278 to 282 of the judgment, has observed thus: "278. With respect to the kind of materials which have been placed on record, this Court in V.C. Shukla case has dealt with the matter though at the stage of discharge when investigation had been completed by same is relevant for the purpose of decision of this case also. This court has considered the entries in Jain Hawala Diaries, note books and file containing loose sheets of papers not in the form of "books of accounts" and has held that such entries in loose papers/sheets are irrelevant and not admissible under section 34 of the Evidence Act, and that only where the entries are made in the books of accounts regularly kept, depending on the nature of occupation, that those are admissible. 279. It has further been laid down in V.C. Shukla case as to value of entries in the books of account, that such statements shall not alone be sufficient evidence to charge any person with liability, even if they are relevant and admissible, and that they are only corroborative evidence. It has been held that even then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt thereof to another set of persons it could not be said, by any stretch of imagination that they were books of account, argued Mr. Sibal. He next contended that even if it was assumed for argument's sake that the above books were books of account relating to a business still they would not be admissible under section 34 as they were not regularly kept. It was urged by him that the words 'regularly kept' mean that the entries in the books were contemporaneously made at the time the transactions took place but a cursory glance of the books would show that the entries were made therein long after the purported transactions took place. In support of his contentions he also relied upon the dictionary meanings of the words 'account' and 'regularly kept'. 281. With respect to evidentiary value of regular account book, this Court has laid down in V.C. Shukla, thus: (SCC p.433, para 37) "37. In Beni v. Bisan Dayal [AIR 1925 Nagpur 445] it was observed tat entries in book s of account are not by themselves sufficient to charge any person with liability, the reason being that a man cannot be allowed to make evidence for himself by what he chooses to write in h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing upon the decisions of the hon'ble Apex Court in the VC Shukla Case and the Common Cause case, held in para No. 48 that in the absence of any corroborative evidence, loose sheet can at the most be termed as "dumb document" which did not contain full details about the dates, and its contents were not corroborated by any material and could not be relied upon and made the basis of addition and further held that the Revenue cannot even assume jurisdiction and issue a notice to assess a person under section 153C of the Act on the basis of entries in a diary, as diary entries are not considered as themselves, which are not supported by any corroborative evidence. 66. If one were to apply the ratio of this decision to the facts of the assessee's case, the AO does not even have jurisdiction to issue a notice under section 153A of the Act for Assessment Year 2014-15, which does not abate as on the date of search, by merely relying upon entries in a diary found during search and which are not corroborated by any independent evidence which validates these entries. The AO has relied only on the Question & Answer No. 104 from the statements recorded under section 132(4) of the Act regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... control of the assessee. Thus, AO has to establish, with necessary corroborative evidence, that various entries contained in the seized document reflect unaccounted transactions effected by the assessee. Considering the entirety of circumstances, in the absence of any material to support the nature and ownership of the entries found in the seized document, no addition is permissible in the hands of the assessee as undisclosed income by merely arithmetically totalling various figures jotted down on such document." 68. The Bench concluded in para No. 13.45 and 13.46 as under:-: 13.45. "Thus, it is settled position of law that onus lies upon the Department to collect cogent evidence to corroborate the notings on the loose sheets. The additions cannot be made merely on the basis of notings on the loose sheet papers which are in the nature of "dumb documents" having no evidentiary value. The onus lies on the Department to collect the evidence to corroborate the notings on the loose sheets. In the present case, it is undisputed position that as a result of search and seizure action in the case of respondent- assessee and its group companies, no material whatsoever was seized and found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case, we have already held that there are various loose sheets, scribblings, jottings and Excel sheets taken from the computer having no signature or authorization from the assessee's side. These are unsubstantiated documents and there is nothing to suggest any undisclosed assets of assessee found during the course of search. More so, it does not show any recovery of the undisclosed assets in the form of landed property, building, investments, money, bullion, jewellery or any kind of movable or immovable assets. In such circumstances, we are of the opinion that the decisions relied on by the ld. DR cannot be applied to the facts of the assessee's case." Para 247 "Being so, in our opinion the seized material relied by the assessing officer for sustaining addition is not speaking one in itself and also not speaking in conjunction with some other evidence with authorities found during the course of search or post search investigation. Thus, the well settled legal position is that a non-speaking document without any corroborative material, evidence on record and finding that such document has not materialised into transactions giving rise to income of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents, unexplained money, unexplained expenditure etc., for these are but representations of the underlying income which the assessee can be reasonably presumed to have earned. Any income which can be fictionally deemed to have been earned need to be traced to any of these specific provisions in the Act. 72. The existence of any unexplained money, Investment or expenditure etc., would indicate the existence of the underlying income which is statutorily recognized. It is only these legal presumptions or deeming provisions that are available in the law for the Revenue to press in to service, if at all. In other words, to bring to tax any undisclosed income, the Revenue has to either demonstrate the actual earning of the income as a fact i.e., not merely on presumptions, conjecture and surmise or the statutory presumptions as stated above have to be invoked. AO is not correct in taking this view as no presumption can be drawn in the absence of corroborative evidence. The provisions of section 292C of the Act relied upon by the AO merely enables the AO to consider the notings as true and correct and it does not enable the AO to make further presumptions that the notings represents any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt dealt with such kind of document as involved in this case in the case of CBI v. V.C. Shukla 1998 taxmann.com 2155 known as Jain Hawala Case and laid down the ratio. Let us to reproduce the same. 'That entries in the Jain Hawala Diaries, note books and file containing loose sheets paper not in the form of "Books of Accounts" and has held that such entries in loose papers/sheets are not relevant and not admissible u/s 34 of the Evidence Act, and that only where the entries in the books of accounts regularly kept, depending on the nature of occupation, that those are admissible. Further as to value of the entries in the books of account, that such statement shall not alone be sufficient evidence to charge any person with liability, even if they are relevant and admissible and that they are only corroborative evidence. It has been held even then independent evidence is necessary as to trustworthiness of those entries which is a requirement to fasten the liability. Further the Apex Court laid down that "Meaning of account book would be spiral note book/pad but not loose sheets. The following extract being relevant is quoted herein below." "14. In setting aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, still, the statement made therein shall not alone be sufficient evidence to charge any person with liability. It is thus seen that while the first part of the section speaks of the relevancy of the entry as evidence, the second part speaks, in a negative way, of its evidentiary value for charging a person with a liability. It will, therefore, be necessary for us to first ascertain whether the entries in the documents, with which are concerned, fulfill the requirements of the above section so as to be admissible in evidence and if this question is answered in the affirmative then only its probative value need be assessed. 18. "Book" ordinarily means a collection of sheets of paper or other material, blank, written, or printed, fastened or bound together so as to form a material whole. Loose sheets or scraps of paper cannot be termed as "book" for they can be easily detached and replaced in dealing with the word "book" appearing in Section 34 in Mukundram v. Dayaram a decision on which both sides have placed reliance, the Court observed:- "In its ordinary sense it signifies collection of sheets of paper bound together in a manner; which cannot be disturbed or altered excep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence to prove that entries in these loose papers and electronic data were kept regularly during the course of business of the concerned business house and the fact that these entries were fabricated, nongenuine was proved. It held as well that the PCIT/DR have not been able to show and substantiate, the nature and source of receipts as well as nature and reason of payments and have failed to prove evidentiary value of loose papers and electronic documents within the legal parameters. The Commission has also observed that Department has not been able to make out a clear case of taxing such income in the hands of the applicant firm on the basis of these documents. It is apparent that the Commission has recorded a finding that transactions noted in the documents were not genuine and thus has not attached any evidentiary value to the pen drive, hard disk, computer loose papers, computer printouts. Since it is not disputed that for entries relied on in these loose papers and electronic data were not regularly kept during course of business, such entries were discussed in the order dated 11-11-2016 passed in Sahara's case by the Settlement Commission and the documents have not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per stamp registration authorities of the impugned property is more than what has been disclosed. There is no case that any part of the jottings in the diary has been corroborated from any other findings. Hence, in the background, we find that presumption u/s. 132(4A)/292C of the Act cannot be taken against the assessee. Thus, from the facts and circumstances of the case, we find that addition of on money transaction in this case is not sustainable. 18. In this regard we place reliance of the Hon'ble Apex Court decision in the case of K.P. Vargheser v. ITO [1981] 131 ITR 587, wherein it has been held that the burden of proving is that of Revenue when there is allegation of understatement on concealment in the consideration shown. Here we find that revenue has failed to discharge the burden cast on it. 19. We also place reliance from the Hon'ble Apex Court decision in the case of CIT v. Kalyansundaram [2007] 294 ITR 49 (SC) in which allegations of on money transaction on the basis of non-convincing loose sheets found during the course of search and conflicting statement of the seller, was deleted by the Tribunal and the same was affirmed by the Hon'ble High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;s husband, whereas in the registered sale deed, total consideration had been shown to the tune of Rs. 29,50,000/- . On show caused, it was explained and replied by the assessee that the diary does not belong to the assessee and noting therein are also not in the handwriting of the assessee. However, the said reply and explanation was not found acceptable by the Assessing Officer on the reasons that in the assessee's own case for AY 2008-09, it was submitted by the assessee that the diary was maintained by her husband Sh. Mohinder Singh, being head of the family who was controlling all the financial matter of the family. Further it was observed by the AO that assessee's husband was the owner of the ½ share of the property under consideration and therefore the contention of the assessee that she has nothing to do with the contents of the diary, was unacceptable. The Assessing Officer while making the addition also relied upon section 292C of the Act on the reasons that in terms of section 292C of the Income-tax Act, 1961 the documents found in the possession of persons during the course of search are to be taken as belonging to them and contents of such documents are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truth. Even there is no circumstance and material on record to suggest as authenticated or substantive and corroborative material against the assessee on the basis of which the addition can be made. Even the diary admittedly does not belong to the assessee and noting of the same are also not in the handwriting of the assessee. Further, no description either address or location of the property has been mentioned in the diary and therefore on the basis of peculiar facts and circumstances, we are of considered view that no presumption u/s. 292C of the Act can be made against the assessee. 12. The Apex Court in the cases of V.C. Shukla (supra) and Common Cause (A registered Society) (supra) analyzed the position of law with regard to the loose sheets/diary in which some noting has been made by the person other than the persons searched and clearly held that the said document do not have any value in the eyes of law. Further entries in the Diaries, note books and file containing loose sheets paper not in the form of "Books of Accounts" and has held that such entries in loose papers/sheets are not relevant and not admissible u/s 34 of the Evidence Act. Further as to value of the entri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, 1363 and 1367/Bang/2013 dated 20.02.2015, which is also cited by the learned CIT(A) in his appellate order to support the additions made based on entries in the diary (A/KG/3). It is on record that the decision of the Tribunal was set aside by the Hon'ble High Court of Karnataka and matter was set aside to the Tribunal to decide the appeal de novo and the appeal of the assessee was allowed on a legal ground by an Order dated 26.10.2023 78. After careful consideration of the all the above referred decisions and the relevant facts therein, there is no doubt that the decisions relied upon by the assessee are squarely applicable to the facts and circumstances of the assessee's case. We find that the Hon'ble Punjab and Haryana High Court in the case of CIT Vs. M/s. Khosla Ice and General Mills 2013 (1) TMI 451, has captured the essence of this proposition and explained the same in a lucid manner, which we reproduce here below : "that when a dumb document, is to be made the basis for an addition to fasten tax liability on the assessee, the burden is on the AO to establish with corroborative evidence that the nature of entries contained therein reflect income and also that such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same, we delete the substantive addition of Rs. 329,75,00,000/- made for the Assessment Year 204-15; the protective addition of Rs. 329,75,00,000/- made for the Assessment Years 2015-16 and the substantive addition of Rs. 408,50,00,000/- for the Assessment Year 2016-17, by the AO, which are all based on entries found in the seized material A/KG/3. 82. Additions on account of unexplained Investment in Jewellery under section 69A of the Act, for the Assessment Year 2016-17: The AO has made a substantive addition of Rs. 21,54,175/- and a protective addition of Rs. 86,95,409/- as unexplained investment in jewellery for Assessment Year 2016-17. The substantive addition of Rs. 21,54,175/- represents addition on account of unexplained jewelry of the assesse and the protective addition of Rs. 86,95,409/- represents addition on account of unexplained jewelry of the wife of the assessee. The learned CIT(A) confirmed the protective addition in the hands of the assessee as substantive as no substantive addition was made in the hands of the spouse of the assessee. The learned CIT(A), however, held that since the same was added substantively for the Assessment Year 2013-14 and confirmed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case. 86. Considering the facts of the case, the learned AR submitted that the provisions of section 69A of the Act would apply only where an assessee is found to be the owner of jewellery which is not recorded in the books of accounts, if any, maintained by him and the assessee offers no satisfactory explanation about the nature and source of acquisition of the same. If one were to take a view that the quantum of jewelry as declared statement filed before the Lokayuktha reflects the correct state of affairs of the assessee and his wife, then one cannot ignore the fact the same quantum has been declared in the statements filed before the Lokayuktha for the earlier years also. An addition can be made to the income of the of the assessee for the Assessment Year 2016-17 only in respect of the jewellery found to be acquired in the Assessment Year 2016-17, for which the assessee is unable to offer a satisfactory explanation about the nature and source of acquisition. In the present case, if one were to go by the statement filed before Lokayuktha and relied upon by the AO, the neither the assessee nor his wife have acquired any jewellery during the Financial Year end ..... X X X X Extracts X X X X X X X X Extracts X X X X
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