2014 (11) TMI 691 - AT - Income Tax

Assessment u/S 153A pursuant to search and seizure u/s 132 - Presumption u/s 292C - Deletion of peak amount of unexplained cash Held that - The contentions of the revenue has no merit - The specific questions put to Sh. S.K. Gupta during the cross-examination cannot be termed to be vague where full facts have not come out - consistently Sh.S.K.Gupta states that no money has been received or paid by him relatable to the annexures - the arguments of the assessee that these are the extracts of the statement of Sh. S.K. Gupta recorded at the time of the search are correct and the revenue is mistaken in her arguments to contend that the questions No-14 & 15 are vague questions put forth during the cross examination - the assessee in both the years has filed a Paper Books and none of the parties have considered it necessary or expedient to refer to any document or fact. No evidence has been placed before us nor any cogent argument has been raised so as to show that on facts the view taken by the CIT(A) was not correct - In the absence of any specific infirmity in the order or reliance placed upon any evidence upsetting the view taken, revenue has failed to offer any meaningful argument in support of its claim - No reasons which can be legally accepted so as to remand the matter have also been placed relying upon ACIT vs Lata Mangeshkar 1973 (6) TMI 13 - BOMBAY High Court - in the facts of that case reliance placed by the Revenue on the statement of two witnesses was considered to be not relevant for making an addition in the hands of the assessee - whereas one of the witnesses was considered to be a person who could not have any knowledge the other witness who though was a partner in the concerned firm had given a statement that he had made payments to the singer in black - the statement at best could arouse suspicion but suspicion could not take place of proof and in the absence of proof, the statement was discarded there was no merit in appeal Decided against revenue.

Summary

Issues Involved:
1. Deletion of addition made on account of peak amount of unexplained cash for the assessment years 2006-07 and 2007-08.

Detailed Analysis:
Issue 1: Deletion of Addition on Account of Peak Amount of Unexplained Cash

Background:
The Revenue filed appeals against the order of CIT(A) which deleted the additions made by the Assessing Officer (AO) on account of peak amounts of unexplained cash for the assessment years 2006-07 and 2007-08. The AO had made additions based on documents seized during a search and seizure operation at the premises of Shri S.K. Gupta, who was alleged to be an entry provider. The AO confronted the assessee with these documents, leading to additions of Rs. 27,00,000/- for 2006-07 and Rs. 1,14,80,000/- for 2007-08.

Arguments by Revenue:
The Revenue argued that the CIT(A) erred in deleting the additions. The AO had relied on the seized documents which allegedly showed that the assessee had made cash payments to S.K. Gupta's group companies to receive accommodation entries. The Revenue emphasized that S.K. Gupta admitted to being an entry provider, and the AO had correctly made the additions based on the seized documents and the statements recorded during the search.

Arguments by Assessee:
The assessee contended that the additions were based on mere suspicion and conjecture without any corroborative evidence. The assessee argued that the seized documents did not belong to him and that no corroborative evidence was found during the simultaneous search at his premises. The assessee also highlighted that S.K. Gupta, during cross-examination, denied any cash transactions with the assessee or his family members.

CIT(A)'s Findings:
The CIT(A) found that the AO's additions were based on presumptions and conjectures. The CIT(A) noted that the seized documents were found at S.K. Gupta's premises and not from the assessee. Furthermore, S.K. Gupta, during cross-examination, denied having any cash transactions with the assessee. The CIT(A) concluded that in the absence of any corroborative evidence found at the assessee's premises, the presumption under section 132(4A)/292C could not be applied to the assessee. The CIT(A) relied on various judicial precedents to support this conclusion.

Tribunal's Decision:
The Tribunal upheld the CIT(A)'s order, dismissing the Revenue's appeals. The Tribunal noted that the Revenue failed to provide any cogent argument or evidence to counter the CIT(A)'s findings. The Tribunal emphasized that the presumption under section 132(4A)/292C is rebuttable and applies only to the person from whose possession the documents were seized. The Tribunal also referred to judicial precedents, including the Bombay High Court's decision in ACIT vs. Lata Mangeshkar and the Delhi Bench's decision in DCIT vs. Yashpal Narender Kumar, which supported the assessee's case. The Tribunal concluded that the additions made by the AO were not justified and dismissed the Revenue's appeals for both assessment years.

Conclusion:
The Tribunal dismissed the Revenue's appeals, upholding the CIT(A)'s deletion of additions on account of peak amounts of unexplained cash for the assessment years 2006-07 and 2007-08. The Tribunal found that the additions were based on presumptions and conjectures without any corroborative evidence, and the presumption under section 132(4A)/292C could not be applied to the assessee.