9911796707
TMI Blog2013 (1) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... lained by the assessee, and which it has chosen not to. The receipt of money by the assessee is manifest per the document, which is, rather, not denied by the assessee. The acquisition of money by the assessee as at the relevant date/s, thus, cannot be and, in any case, is not in question. The same (money, in the form of cash), which is covered by section 69A, being not recorded in the assessee's books of account, the said provision would apply to the transaction. Consider this a bank pass book of the assessee, which definitely does not form part of the assessee-bank account holder's books of account, is found during search/survey, reflecting deposit/s and/or credit/s therein. The amount/s may have been withdrawn subsequently, so that it cannot be said that a deposit/s is 'found' as on the date of search, yet it is so found on the relevant date/s (of deposit/s), so that the assessee is obliged to explain the same as to its nature and source, where not reflected in its regular books of account and the date/s fall in the year/s of assessment. Thus, find no legal hindrance or barrier to the invocation of the said sections, or s. 69A in the instant case. It is only when both the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12-2012 - B.R. MITTAL AND SANJAY ARORA, JJ. Vijay Mehta for the Appellant. Surinderjit Singh for the Respondent. ORDER Sanjay Arora, Accountant Member - This is a set of cross-appeals by the Assessee and the Revenue, arising out of Order by the Commissioner of Income Tax (Appeals)-23, Mumbai ('CIT(A)' for short) dated 31-03-2011, partly allowing the assessee's appeal contesting its assessment u/s. 143(3) of the Income Tax Act, 1961 ('the Act' hereinafter) dated 30-12-2008 for the assessment year (AY) 2006-07. 2.1 The background facts of the case are that the assessee, a partnership firm in the business of providing boarding and lodging facilities, was subject to survey action u/s. 133A of the Act on May 11 12, 2007. Incriminating documents were recovered from its premises. The assessee having filed its return for the year on 31-10-2006 at a loss of Rs. 27.22 lakhs, the same was subject to the verification procedure under the Act by the issue of notice u/s. 143(2), and the impugned assessment framed. The first appellate authority having allowed the assessee partial relief, both the assessee and the Revenue are in appeal. 2.2 The two additions for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.00 6000.00 07.12.04 6000.00 6000.00 07.12.05 52000.00 52000.00 10.12.05 6000.00 6000.00 TOTAL 1366000.00 398000.00 166000.00 115000.00 62000.00 625000.00 Page: 2 Funds received from Date Amount Funds used for Alliance Hotel Parvez sir White House Nawab Masjid Adi Enterprises 14.12.05 14000.00 14000.00 16.12.05 10000.00 10000.00 21.12.05 10000.00 10000.00 24.12.05 135000.00 135000.00 24.12.05 165000.00 165000.00 26.12.05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitle it to assess the said income in the hands of another the assessee in the instant case. Toward this, he relied on the decisions in the following cases of: (i) ITO v. Ch. Atchaiah [1996] 218 ITR 239 (SC) (ii) Pradeep Agencies v. ITO, Delhi [2007] 18 SOT 12 (Del.) (SB) Further on, the addition, in any case, could not be made for the full amount, as done by the Revenue; the document itself showing that funds only to the extent of Rs. 5.61 lakhs were advanced for use of the assessee. On being further queried that the document cannot be interpreted in terms of 'A' giving loan to 'B', as nobody would give loan to himself, while the document contains the name of 'Pervez' on both the sides, it was explained by him that that was the document projected in essence. It had admittedly been prepared by a third person 'C', who had been entrusted with the funds by 'A' (Mr. Pervez), for being utilized, for the purpose of others, including 'A' himself. 3.2 The ld. Departmental Representative (DR) would, on the other hand, submit that the presumption of section 292C (and which was earlier sought to be pressed into service by resorting to section 132 (4A)), would not operate to di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or recovered from the assessee during a search or survey for the purpose of any proceedings under the Act. The presumption, though, is rebuttable, and the onus for the same is on one who contends otherwise, i.e., who challenges the said presumption, which is only toward considering the apparent as real. 4.2 Coming to the facts of the case, the contents of the document set out at para 3.1 above have necessarily to be regarded as true, i.e., unless proven otherwise. Further, the document has to be read as a whole and in consistence with what it would ordinarily be read and understood as, by an uninterested person of normal prudence. From this stand point, we find that it clearly states of money having been received from Parvez (P), a partner in the assessee-firm, for the use of, among others, the assessee, specifying the amounts and the corresponding dates on which the monies were provided. In this view of the matter, the assessee's first argument is that the source of the moneys/funds being 'P', the same cannot be considered as unexplained, irrespective of whether 'P' admits to having paid the same or not. In our view, section 292C imparts a statutory presumption as to the docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' for their use by, among others, the assessee. That is, it shows an effective or constructive receipt of money by or on assessee's behalf. Where it was used can only be explained by the assessee, and which it has chosen not to. Though the ld. DR would point out that an extensive renovation of the assessee's hotel premises was on at the relevant time, suggesting of the monies being used therefor, that, to our mind, would be secondary to the transaction/s. No doubt supportive, the implication/s of the user of the monies, which is implicit, and may be relevant, would come into play only once assessee explains its avenue, i.e., as to where and for what purpose the same was used, the onus for which is on it. In other words, the receipt of money by the assessee is manifest per the document, which is, rather, not denied by the assessee. The acquisition of money by the assessee as at the relevant date/s, thus, cannot be and, in any case, is not in question. The same (money, in the form of cash), which is covered by section 69A, being not recorded in the assessee's books of account, the said provision would apply to the transaction. Consider this: a bank pass book of the assessee, which de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before the authorities below is of it being the assessee's own money, given to 'P' for being utilized as and when required for its purposes. As such, all these questions, and perhaps more, which are only toward the truth of the transaction/s, arise or are imminent from the assessees explanation of 'P' being the source of money, i.e., as the document clearly indicates, and to rebut which no evidence has been lead by the assessee. It is only when both the nature and source of the money has been satisfactorily explained, that the assessee's obligation under the deeming provision stands discharged. And which, thus, cannot be said to be in the facts and circumstances of the present case. The 'satisfaction' u/s. 69A, or any other deeming provision of Chapter VI, is essentially a question of fact, to be judicially determined. When the basic facts have been with-held by the assessee, how, we wonder, could the Revenue be faulted with in being not satisfied with the assessee's explanation, which, as afore-stated, is conspiciously silent as to the nature, and which would include purpose, of the acquisition. The deeming of section 69A would, thus, be clearly applicable, and stand validly app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to Rs. 23 Lakhs 23,00,000 ( e ) In the sheet 'received Ac' lines 2 to 39 contain various cash entries NIL The same relates to AY 2007-08 ( f ) In the Sheet 'Party Ac' lines 201 to 276 contains several cash entries. In particular, line 201 has cash entry of Rs. 25 Lakhs, line 211, 212 contain cash entry of Rs. 8 Lakhs, line 256 contains cash entry of Rs. 45 Lakhs and line 275, 276 contains cash entry of Rs. 20 Lakhs. 25,00,000 8,00,000 45,00,000 20,00,000 Total 36810000 The Revenue's ground is in respect of deletion of addition of Rs. 368.10 lakhs u/s. 69 C of the Act, effected on the basis of print-outs of computer back up file 'reliable expenses'. The same reflects payments made in respect of two entities, i.e., 'Maria Developers' and 'Reliable Investment Developers' toward two properties, being Upadastra Propery and Stamp House (Botawala). The document further states to have been prepared on the basis of information given by 'Javed Sir'; Mr. Javed Ghaswala ('J') and his family members being associated with the said firms. The assessee's case is that its' name being reflected neither in the payments nor toward ..... X X X X Extracts X X X X X X X X Extracts X X X X
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