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TMI Blog2012 (11) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Shri Rajanbhai Patel was recorded on 10-10-2008. 5. On going through Annexure A-17, impounded during the course of survey, the A.O. noticed that there were certain notings about certain payments (the details listed on page 3 to 6 of the Assessment order) which aggregated to Rs. 1,32,57,366/-.The A.O. was of the view that it represented the cash payments with date of payment to the partners of the firm towards the expenses. The assessee in reply to the query of the A.O. submitted that the entry did not belong to the firm or the partners & the paper is unsigned. The explanation of the assessee was not found acceptable for the reason that against all the transactions/figures noted in loose papers, the partner's name was mentioned, the papers were impounded from the premises of the firm and the assessee could not substantiate by furnishing necessary details of the persons to whom, it belonged. The A.O. thus treated Rs. 1,32,57,366/- as unexplained expenditure u/s. 69C and added it to the assessee's income. Aggrieved by the action of A.O., the assessee carried the matter before CIT (A). CIT (A) upheld the addition by holding as under: "5. During the course of appellate proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. A.R. further submitted that the loose papers contains 5 columns. 1st column indicate the date, 2nd column indicate expenses, 3rd column indicates unchinna + payment for expenses, 4th column indicates net expenses and 5th column indicates the figures in bracket and name. The A.O. has drawn the conclusion from these loose papers that it gives datewise figure of total expenses, money borrowed, payment thereof and net expenses of family whereas the last column is cash borrowed, cash repaid and cash paid towards expenses. He placed on record at pages 32A to 35 copies of the loose sheets impounded. He submitted that the A.O. has treated the gross amount of Rs. 1,32,57,366/- as expenditure and added to the income of the assessee. He submitted that at the most the total of paid for expenses aggregating to Rs. 14,69,500/- should have been added to the income instead of Rs. 1,32,57,366/-. Without prejudice, the Ld. A.R. submitted that the A.O. has erred in not giving telescopic effect for the purpose of calculating the alleged income. 8. The Ld. D.R. on the other hand submitted that the explanation that the 4thcolumn indicates net expenses (I, e. difference of total expense minus paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to financial transactions for the reason that it was punctuated by commas and there was date against each entry. He therefore aggregated the figures and after excluding the first entry of Rs. 3 lac and Rs. 12 lacs, since it did not pertain to the financial year under consideration, considered the balance sum of Rs. 34,20,000/- as unexplained credit in the hands of the assessee and added it u/s. 68 of the Act. Aggrieved by the addition made by the A.O. the assessee carried the matter before CIT (A). 12. The submissions made by the assessee before CIT (A) were not accepted by CIT (A) as according to him the submissions made by the Accountant before A.O. that the page was only an estimate drawn by him and did not relate to the assessee was considered to be an afterthought. But since there was totaling mistake (the correct figure was Rs. 25,20,000/- instead of Rs. 34,20,000/-) he upheld the addition of Rs. 25,20,000/- but telescoped it against the addition of Rs. 1,32,57,366/- u/s. 69C. Aggrieved by the action of the CIT (A), the assessee is now in appeal before us. 13. Before us, the Ld. A.R. submitted that the paper on which certain figures were jotted down does not belong to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e nor does it have signature of any person. The Revenue has not brought any material on record to prove that the notings on the loose sheet represents the amount received/spent by the assessee. There is no evidence found by the Revenue in the form of extra cash, jewellery or investment outside the books. In such a case the explanation offered by the assessee cannot be rejected. 16. In the case of S. P. Goyal (supra) the co-ordinate Bench of the Tribunal has held that the loose paper in itself has got no intrinsic value. When it is a mere entry on a loose sheet of paper and if the assessee claims that it was only a planning, not supported by actual cash, then there has to be circumstantial evidence to support that this entry really represent cash. 17. In the case of ACIT vs. Satyapal Wassan (supra) the co-ordinate Bench has held that a charge on the basis of document can be levied only when the document is a speaking one. The document should speak either out of itself or in the company of other material found on investigation and/or in the search. The speaking from the document should be loud, clear and unambiguous. If it is not so, then document is only a dumb document. No charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of the lenders, copy of their pass book, copy of acknowledgement of Income tax returns in case of Income tax payers, copy of 7/12 utara, copy of PAN card etc., before the A.O. He placed on record the copy of the covering letter addressed to A.O. evidencing the submission of aforesaid documents at page No.18 to 20 of the paper book. Thus it was submitted that the assessee has proved the identity, creditworthiness and genuineness of the transactions. The assessee relied on the decision in the case of Rohini Builders 256 ITR 360 (Guj.), 220 CTR 622 (Raj.), 217 CTR 354 (Raj.) and The Ld. D.R. on the other hand relied on the order of A.O. 24. We have heard the rival submissions and perused the material on record. The factual matrix of the case is that the assessee has obtained aggregate loan of Rs. 5,70,000/- from six parties. The assessee had submitted the copies of confirmation of account of the lenders, copy of their pass book, copy of acknowledgement of Income tax returns in case of Income tax payers, copy of 7/12 utara, copy of PAN card etc. before the A.O. and has thus discharged the initial onus cast u/s. 68. The Revenue has not placed on record any material to controvert t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rters, the Ld. A.R. submitted that no disallowance was called for. On the other hand, the Ld. D.R. relied on the order of the A.O. 30. We have heard the rival submissions and perused the material on record. From the details of payment listed by the A.O. in the assessment order, it is seen that the A.O. furnished a chart showing interalia, the names of party, amount paid and date of payment/credit. Since the information with respect to date of payment and credit is clubbed together, it is not known whether the amount represents the amount paid or amount credited. Further, if the amount is credited, then what is the amount outstanding as on the balance sheet date. We therefore, feel that this aspect needs verification and accordingly remit the matter to the file of A.O. for verification and with a direction to verify the payments and allow the deduction considering the decision of Spl. Bench in the case of Merilyn Shipping & Transporters wherein it has been held as under:- "The provisions of section 40(a)(ia) of the Act are applicable only to the amounts of expenditure which are payable as on the date 31st March of every year and it cannot be invoked to disallow which had been ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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