2019 (11) TMI 274 - AT - Income Tax

Cash found during the course of search by the CBI at residence - search and seizure operation under section 132 - original of cash receipt not produced - HELD THAT - Assessing Officer has reproduced certain material based on charge sheet filed by the CBI against the assessee and others, in which the CBI has clearly mentioned that there was a criminal conspiracy between assessee, Dr. Sukhvinder Singh and others to get a favour from Shri Ketan Desai for approval of MBBS Course. There was specific information received by CBI and conversation of all the persons have been recorded by the CBI. Nothing have been explained in this regard with regard to allegations made against the assessee and others in the charge-sheet submitted by the CBI and reproduced by the Assessing Officer in the assessment order. Considering the totality of the facts and circumstances of the case and that there was substantial gap between withdrawal of cash by Shri Rahul Ahuja and alleged payment to the assessee. Therefore, assessee has failed to explain source of the cash of ₹ 2 crores found from his possession during the course of search by the CBI. The entire case set-up by the assessee is clearly an afterthought. The MOU and receipt are sham documents and fabricated by the assessee and others later on which fact is further strengthened by the fact that no original of MOU and receipt have been produced before the authorities below. Otherwise, the same could have been subjected to verification by CFSL. Copy of the MOU was produced, but, it was not having the back side which could have throw light on the fact as to when the said stamp paper were purchased and whether stamp papers were genuine or not. Hon ble Supreme Court in the case of Durga Prasad More 1971 (8) TMI 17 - SUPREME COURT and in the case of Sumati Dayal 1995 (3) TMI 3 - SUPREME COURT has held that the Courts and Tribunals have to judge the evidence before them by applying the test of human probability . If the said test is applied in this matter, it is clearly established that the assessee has failed to prove source of ₹ 2 crores found during the course of search by the CBI at his residence.- Decided against assessee

Summary

Issues Involved:
1. Legitimacy of ?2 Crores recovered by CBI.
2. Addition of ?15,74,000/- and ?5 Lakhs as unexplained cash.

Issue-wise Detailed Analysis:

1. Legitimacy of ?2 Crores Recovered by CBI:
A search conducted by CBI on 22.04.2010 led to the seizure of ?2 Crores from the assessee's premises. The assessee claimed this amount was an advance for the sale of agricultural land. However, discrepancies arose in the statements of the assessee, Shri Sanjeev Kumar Sharma, and Shri Rahul Ahuja regarding the size of the land, the sale price, and the details of the transaction. The assessee stated no agreement was signed, while Shri Rahul Ahuja presented a copy of an MOU dated 12.04.2010. The original MOU and receipt were not produced, raising doubts about the transaction's authenticity. The CBI's investigation revealed that the amount was part of an illegal gratification scheme involving the assessee and Dr. Ketan Desai for obtaining recognition for Gian Sagar Medical College. The Tribunal concluded that the transaction was a sham, designed to explain the cash found during the CBI search. The addition of ?2 Crores as unexplained money was upheld.

2. Addition of ?15,74,000/- and ?5 Lakhs as Unexplained Cash:
During the search, ?15,74,000/- was found at the assessee's premises. The assessee initially claimed this amount belonged to companies and included personal cash. However, during assessment proceedings, the assessee stated the entire amount belonged to him but failed to provide satisfactory evidence for the source of ?5 Lakhs. The Tribunal noted that household withdrawals were insufficient considering the assessee's lifestyle and expenses. The addition of ?5 Lakhs as unexplained cash was confirmed. The remaining amount of ?15,74,000/- was considered on a protective basis to safeguard the revenue's interest.

Conclusion:
The Tribunal dismissed the appeal, confirming the additions of ?2 Crores and ?5 Lakhs as unexplained money and cash, respectively, based on the inconsistencies in the statements, lack of original documents, and the findings of the CBI investigation.