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TMI Blog2013 (1) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 271D. 3. ITA Nos.62/Del/2010 & 63/Del/2010 are the appeals filed by the Revenue for AY 2004-05 & 2006-07 against the reduction in the penalty levied under Section 271E while ITA Nos.4903/Del/2009, 4905/Del/2009 & 4907/Del/2009 are the appeals by the assessee against the sustenance of penalty levied under Section 271E for AY 2004-05, 2005-06 & 2006-07 respectively. 4. Since common issues are involved in all these appeals, they are being disposed of by this single consolidated order for the sake of convenience. 5. The facts of the case are that there was search and seizure operation at the business premises of the assessee and other group concerns. Simultaneously, the search also took place at the residence of the directors/partners of the assessee and the group concerns. During the course of search at the premises of Shri Yogesh Gupta, certain documents were found and seized. His statement was also recorded on 31st May, 2006 in which he surrendered the sum of Rs.13 crores as under:- (i) In his own name Rs.2 crores (ii) Home Developers (P) Ltd. Rs.2 crores (iii) Realtech Project (P) Ltd. Realtech Construction (P) Ltd. Rs.9 crores 6. In his statement, Shri Yogesh Gup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under:- AY Penalty levied Relief by CIT(A) Penalty sustained 2004-05 1,36,69,400/- 68,19,000/- 68,50,000/- 2005-06 8,80,000/- Enhanced by 11,33,500/- 2006-07 8,46,33,100/- 8,36,33,100/- 10,00,000/- 13. The Revenue, aggrieved with the deletion of penalty, is in appeal vide ITA Nos.62/Del/2010 & 63/Del/2010 for AY 2004-05 & 2006-07 while assessee, aggrieved with penalty sustained, is in appeal before us vide ITA Nos.4903/Del/2009, 4905/Del/2009 & 4907/Del/2009 for AY 2004-05, 2005-06 & 2006-07. 14. Since in all these appeals, the issues are interrelated, they are heard together. 15. At the time of hearing before us, it is submitted by the learned counsel for the assessee that during the course of search, certain loose papers were found from the residence of Shri Yogesh Gupta and not the business premises of the assessee which is a private limited company. In pursuance to the search, the statement of Shri Yogesh Gupta was recorded on 31st May, 2006 in which he admitted that the loose papers are in his handwriting and he also explained that the loose papers contain details of various unaccounted transactions as well as certain unaccounted investments of the group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, levied the penalty under Section 271D for AY 2001-02 to 2006-07. The total penalty worked out was Rs.16,48,98,940/- which was bifurcated in six assessment years as under:- Assessment Year Amount 2001-02 Rs.5,00,000/- 2002-03 Rs.48,25,000/- 2003-04 Rs.7,00,000/- 2004-05 Rs.3,84,60,000/- 2005-06 Rs.2,25,50,000/- 2006-07 Rs.9,78,63,940/- Total : Rs.16,48,98,940/- That the appeals for AY 2001-02, 2002-03 & 2003-04 came up before the ITAT Delhi Bench vide ITA Nos.4495, 4496 & 4497/Del/2009 in which the ITAT held that from these papers, the acceptance of loan in cash by the assessee is not proved. Accordingly, the ITAT upheld the order of the CIT(A) wherein the penalty levied under Section 271D was cancelled. The Revenue filed appeal before the Hon'ble Jurisdictional High Court which also upheld the order of the ITAT and held that it is not established that the respondent assessee had taken loan/deposit in cash. He stated that the facts of the year under consideration are identical. That in those years also, same/similar papers were considered, same statement of Shri Yogesh Gupta was considered and same consolidated order passed by the Assessing Officer was considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments seized from the premises of the assessee company or of its Directors show huge receipt and payment of cash loan/deposits. These have been analyzed and it is seen that the transactions in violation to the provisions of 269SS are as per below; Default as committed u/s 269SS r.w. Sec. 271D SN Narration & Reference Amount of default 1 Cash loan/deposits of 1,48,50,000 received upto 17- 05-2004 as found referred in Annexure A-7/Page 42 relevant to AY 05-06 1,48,50,000 2 Loan/Deposit of Rs.2.40 cr. received from Paliwal in AY 04-05 shown in Ann. A-7 2,05,00,000 3 Additional loan/deposit received on 18-05-04 as referred in Annex. A-7 page 43 in AY 05-06b 10,00,000 4 Cash loan/deposits received upto 31-03-2004 as referred in Annexure A-7 page 43 in AY 04-05 25,00,000 5 Cash loan/deposit on which interest of 4.68 lacs paid from 01-1-04 to 31-03-04 as referred in A-7 page 43 in AY 04-05 93,60,000 6 Cash loan/deposits (minus cheque amts) received mentioned in A-12 Page 17 falling in AY 01-02; 02- 03; 03-04 & 06-07 [AY 03-04=7 lacs; AY 02-03-48.25 & AY 01-02=5 lacs] 60,25,000 7 Cash loan/deposits from Sameer Johrii (AY 06-07) as referred in Ann.A-10 page 11 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to as depositor), any loan or deposit otherwise than by an account payee cheque or account payee bank draft, if the said amount in any case exceed Rs.20,000 or more. The first condition to be fulfilled is that the acceptance by the person upon whom the penalty sought to be levied of loan or advance from any other person. The document itself does not indicate that the assessee itself has accepted from any other person any loan or deposit otherwise than by an account payee cheque. The name of the assessee is completely absent from the said document. It is not the case of the revenue that the said document was further corroborated with some material to indicate that the said amounts were paid to the assessee company in the form of loan or deposit. In the absence of any such material being brought on record simply on the basis of aforementioned document, it cannot be said that the assessee company has contravened the provisions of Section 269-SS so as to make it liable for penalty u/s 271D. Considering the entirety of the facts and circumstances of the case, we are of the opinion that there is no infirmity in the order of the CIT(A) vide which he has deleted the penalty on merits. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are not expressing any opinion on the appeal of other years which are pending before the Tribunal and the same will depend on the facts of each case. 22. Now, the question arises whether the facts in the appeals before us are different or similar. 23. It has been admitted by the parties before us that the facts of all the three years under appeal before us are similar. Therefore, for the sake of brevity, we shall discuss here the facts of AY 2004-05. The Assessing Officer, in the assessment order dated 31st December, 2007, recorded the following finding relating to loose papers:- "Analysis of the seized material in regard to loan transactions & repayment Annexure A-7 1. One Annexure A-7 was seized from the residence of Shri Yogesh Gupta. This Register contains interalia details of various transactions in properties. About this Register, the assessee in his explanation has submitted that the same are rough workings and do not have any financial implications. Apart from the property transactions, this also contains loans/deposit transactions also. To refer, on page No.42 and 43 of it details of various loans/deposits received from one M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Yogesh Gupta and as per the Assessing Officer, these papers recorded the transactions of loan received by the assessee. Here, it would be relevant to consider the statement of Shri Yogesh Gupta from whom the papers were seized. The relevant portion of his statement reads as under:- "Q.4 During the search & seizure operations carried out at your residence on 28/03/2006, you had made a voluntary disclosure of an additional income of Rs.13 Crores. Do you confirm the same? Ans. - Yes, I confirm the above disclosure of Rs.13 Crores of additional income. Q.5 Please give the assessee wise break up of the above mentioned disclosure. Ans. I have made a disclosure of Rs.13 Crores the break up of which is as under: 1. In my own hands Rs.2 Crores (Two Crores) 2. M/s Home Developers Pvt.Ltd. Rs.2 Crores (Two Crores) 3. M/s Real Tech Projects & Construction Pvt.Ltd. Rs.9 Crores (Nine Crores) Q.6 Please also give the details regarding the sources of this unaccounted income of Rs.13 Crores and its utilisation. Ans. The money have been generated by the group over a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.37,80,000/- which is being offered for taxation as an additional income. Q. Please tell the source of this cash investment of Rs.37.80 lakhs. Ans. The source of this investments is Cash receipts by M/s Home Developers Pvt.Ltd. through the business of sale/purchase of properties and are not accounted for in the regular books of accounts. Q.8 I am showing the Annexures A-8 & A-9 seized from your residence during the search & seizure operations carried u/s 132 on 28/03/2006. Please explain the contents of the same. Ans. These annexures contain various day to day miscellaneous notings regarding pending works etc. and have no financial implications. Q.9 I am showing the Annexures A-10 & A-11 seized from your residence during the search & seizure operations carried u/s 132 on 28/03/2006. Please explain the contents of the same. Ans. These annexures contain details of various accounted as well as unaccounted transactions which represent receipts in Cash from various persons and expenditure incurred in cash. However the same have been duly considered in making the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Page no.1 & 2 are receipts issued by Joyce Titus in respect of payments made by me for purchase of property no.F/5/2, Vasant Vihar, New Delhi. Out of this Rs.25 lakhs was paid in cash and the same is being surrendered i.e. offered for taxation. Pages no.45 to 52 are agreement to sell regarding purchase of property no.E-6/13, Vasant Vihar, New Delhi by M/s Kirti Realtors Pvt.Ltd. A cash payment of Rs.31 lakhs was made by the company to the vendors. I would also like to state that although the agreement to sell is for Rs.3.61 crores, the sale deed of this property was executed for Rs.2 crores i.e. in the sale deed the property was undervalued by Rs.1.61 crores. Therefore an amount of Rs.1.61 crores is being offered for taxation as an additional income in my own hands, since I had made the cash payments of Rs.1.61 crores out of my personal income. The pages no.77 to 84 of this annexure are receipts of payments made by M/s Home Developers Pvt.Ltd. to various vendors against purchase of property no.A-9/33, Vasant Vihar, New Delhi. As per these pages, cash payments of Rs.54 lakhs were made to the vendors. Therefore, an additional income of Rs.54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted by the Revenue. Photocopy of the loose papers have also been produced by the assessee in his paper book. For the sake of brevity, we shall mention herein below only one loose paper i.e. page No.43 in which, according to the Revenue, there is an evidence of loan of Rs.2,40,00,000/- taken by the assessee. We find that the Assessing Officer has considered the entries at the left hand side of the paper which is totaled to Rs.2,40,000/-. On this loose paper, only one name Paliwal is written and there are dates and amounts without any narration. The total of amounts is Rs.2,40,000/-. It is the inference of the Assessing Officer that the assessee is making the entries ignoring '00'/'000' (2/3 zeros). It seems that in Rs.2,40,000/-, he increased '00' (2 zeros) and made it Rs.2,40,00,000/-. As per the Assessing Officer, the entry is for receipt of loan, though in the loose paper there is no such narration except date and amount. The Assessing Officer further presumes that the assessee has repaid the loan alongwith the interest and he presumed the rate of interest to be 20%. He made the addition in respect of such alleged repayment of loan with interest. The learned CIT(A) has delete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the assessee is completely absent from the said document. Identical is the situation in the years under appeal before us. None of the documents indicate that the assessee i.e. M/s Home Developers (P) Ltd. has taken any loan or deposit from any other person. The above finding of the ITAT has been upheld by the Hon'ble Jurisdictional High Court. The Hon'ble Jurisdictional High Court held that though there is a doubt but it is not established that the respondent assessee had taken loan/deposit in cash. Their Lordships further observed that there is suspicion but this alone without any further verification and investigation cannot justify the finding that the respondent-assessee had taken loan/deposit in cash. With these observations, their Lordships upheld the finding of the ITAT. In our opinion, the above observation of their Lordships of the Jurisdictional High Court in assessee's own case for AY 2000-01 to 2003-04 would be squarely applicable in the years under appeal also. In these years also, at the most, it can be the doubt of the Assessing Officer that unaccounted transactions are in the nature of the loan taken. However, the doubt or suspicion of the Assessing Officer is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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