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2023 (11) TMI 324 - AT - Income TaxAssessment u/s 153C - any seized documents belonging to the assessee found or not? - addition of cash receipts by invoking the provisions of section 68 - AO has recorded his satisfaction note that incriminating documents seized possession of Sh. Rakesh Yadav and Sh. Rajbir Goyat reveals that Sh. Jethmal Mehta had entered into various cash transactions with them - HELD THAT - It is not in dispute that the document containing certain cash entries (both receipts and payments) which are tabulated were seized from the premises of Sh. Rakesh Yadav and Sh. Rajbir Goyat belonging to Antriksh Group, during the course of their search on 05/02/2014. It is not in dispute that the said tabular form contained a surname called Mehta , which was suspected by the Department to be representing Sh. Jethmal Mehta, the assessee herein. The assessee had categorically denied in his reply that these transactions were not at all related to him and he has nothing to do with the same. This goes clearly to prove that assessee had categorically disowned seized document as not belonging to him or pertaining to him or relating to him. Admittedly these seized documents were seized from the premises of Sh. Rakesh Yadav and Sh. Rajbir Kumar Goyat during the course of their search and hence the presumption in terms of section 292C of the Act would be that the said document belongs/pertains/relates to the searched person. It is not in dispute that the seized documents were in the handwriting of searched person. However, the aforesaid presumption could be rebutted by the AO of the searched person with cogent material by recording a satisfaction note that the said material does not belong/pertain/relate to the searched person but instead belongs/pertains/relates to some other person (a 3rd party). The only material available with the Revenue is the surname Mehta used in the said seized document which is assumed by the Revenue to be Jethmal Mehta i.e., the assessee herein. He had categorically denied right from the inception that his name is not at all mentioned in the seized document. No cogent evidence has been brought on the record by the Revenue to prove that the surname mentioned in the seized document in fact refers to Jethmal Mehta i.e., the assessee herein. The entire seized documents that is the subject matter of the addition were placed on record by the Ld. AR before us. On perusal of the same, we find that nowhere the name of Jethmal Mehta is mentioned and only the surname Mehta is mentioned. We find that the Revenue was not able to collaborate the seized document with any other transactions belonging/pertaining/ relating to the assessee to give weightage to these seized documents. Hence, the said seized document becomes merely dumb documents in the hands of the assessee. In our considered opinion, the assessee cannot be held to be having control over what the third person records in his regular books of accounts or in the parallel books of account. Here the seized documents are merely loose sheets not forming part of the books of account of the assessee and that they do not constitute admissible evidence and are to be merely discarded as dumb documents as there are no other corroborative material or evidence to link those documents. The Revenue right from the inception has been assuming that the surname Mehta mentioned in the seized documents refers to Jethmal Mehta i.e., the assessee herein. We have already given our observations in this regard (supra) that assessee had categorically denied the contents of the seized materials when they were confronted to him. The assessee cannot be expected to prove the negative. Decided in favour of assessee.
Issues Involved:
1. Legality of satisfaction note recorded by the AO. 2. Validity of proceedings under Section 153C. 3. Addition of cash receipts under Section 68. 4. Addition of unexplained investment in jewellery. Summary: 1. Legality of Satisfaction Note Recorded by the AO: The assessee argued that the satisfaction note recorded by the AO was illegal and bad in law as a single satisfaction for all the years (2008-09 to 2014-15) was recorded. The Ld. CIT(A) observed that the AO failed to establish that the seized materials belonged to the assessee. The satisfaction note did not contain concrete satisfaction that the seized documents contained the name of the assessee. 2. Validity of Proceedings Under Section 153C: The Revenue contended that Section 153C, amended by the Finance Act, 2015, applies to proceedings initiated after 01.06.2015. However, the Ld. CIT(A) quashed the assessment framed under Section 153C, noting that the documents seized did not belong to the assessee but to Sh. Rakesh Yadav and Sh. Rajbir Goyat. The presumption under Section 292C was not rebutted by the AO with cogent material. The Tribunal upheld this observation, noting that the seized documents did not mention the name of the assessee and were merely dumb documents without corroborative evidence. 3. Addition of Cash Receipts Under Section 68: The AO made an addition of Rs. 6,75,17,615/- on account of alleged cash receipts. The Ld. CIT(A) found that the addition was based on documents found during the search at the premises of Sh. Rakesh Yadav and Sh. Rajbir Goyat, which did not belong to the assessee. The Tribunal upheld this finding, noting that the Revenue failed to prove that the seized documents pertained to the assessee. 4. Addition of Unexplained Investment in Jewellery: The AO made an addition of Rs. 2,82,020/- on account of unexplained investment in jewellery. The Ld. CIT(A) found that this addition was not based on any incriminating material found during the search. The Tribunal upheld this finding, noting that the addition was not supported by any evidence linking it to the assessee. Conclusion: The Tribunal upheld the Ld. CIT(A)'s decision to quash the assessments framed under Section 153C for the AYs 2012-13, 2013-14, and 2014-15, and dismissed the Revenue's appeals on the grounds of legality and validity of the proceedings. The Tribunal also dismissed the Cross Objections filed by the assessee as not pressed.
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