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TMI Blog2014 (4) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee - It belonged to the assessee’s brother - He has not at all been confronted with the contents of the diary - Assessee cannot be called upon to explain the contents of diary which belonged to the assessee’s brother and was found from the brother. There is no mention of the assessee’s name in the particulars of diary - Though there is mention of the farm house belonging to the assessee, there is no mention of the total price paid etc. - the seller has denied having taken any money over and above the disclosed sale consideration - Even the total price paid for the property is not mentioned in the seized material - The jottings in the diary by no stretch of imagination can be treated as conclusive proof of on money transactions by the assessee - It is not the case that the circle rate or the value as per stamp registration authorities of the impugned property is more than what has been disclosed - Relying upon CIT vs. Kalyansundaram [2007 (9) TMI 25 - SUPREME COURT OF INDIA] - there is no case that any part of the jottings in the diary has been corroborated from any other findings - presumption u/s 132(4A)/292C of the Act cannot be taken against the assessee – the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's elder brother at B-67, Sarita Vihar, New Delhi. This, diary contains date wise entries a out the business activities of Sh. Dinesh Pandey. From the perusal of this diary it was inferred that cash has been paid by the assessee group to one Sh. S.C. Jain from whom a farmhouse situated at Bhatti Village, Chattarpur, Delhi has been purchased in the name of the assessee. Pages 53, 54, 71 and 75 of the above diary inter-alia reflect the following entries: B-1/A-13/53 dated 16-07-2005 "Arrange cash for S.C.Jain/farmhouse" B-1/A-13/54 dated 18-07-2005 "Agreement with S. G.Jain on Chhatarpur area" B-1/ A-13/71 dated 16-08-2005 Deliver cash to Jain/Bhatti (20L)" B-1/A-13/75 dated 20-08-2005 Give 15L all cleared for Bhatti + 5L Cheque" 3.1 In view of the above, the assessee, vide order sheet entry dated 15-12-2010, was asked to explain the above contents of the seized document. In response to the same, the assessee has furnished his reply on 27-12-2010. The same is reproduced as under: During the course of hearing, in addition to the explanation sought for of items seized vide Annexure B-1, you had also called our explanation in connectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of Rs. 3.5 crores. Another broker stated the value of the farm house at the time of deal at Rs. 5-6 crores. These statements as well as the entries made on the above seized documents were also confronted to the vendor of the farm house. But the seller denied having received any payments other than those reflected in his bank account. Despite the above denial of the vendor, Assessing Officer observed from the above details, it can be safely inferred that the assessee has paid an amount of Rs. 35,00,000/- in cash over and above the sale consideration disclosed by him from undisclosed sources of his income. Accordingly, an addition of Rs. 35 lacs was made. 4. Against the above addition Assessee appealed before the Ld. CIT(A). The first objection of the assessee before the ld. CIT(A) was that jurisdiction assumed by the Assessing Officer in this case u/s. 153A is not valid. It was submitted that proceeding u/s. 153A is to be taken on seized material only. No incriminating material was found in the case of the assessee. Hence, assessment or reassessment was not possible for the instant assessment year 2006-07 u/s. 153A of the I.T. Act. However, the Ld. CIT(A) was not convinced. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from the valuation report, much more information, evidences, materials will have to be available with the Assessing officer to make an addition u/s. 69 of the Act. It can not be solely on the basis of valuation report of the DVO. However, ld. CIT(A) held that these case laws were not applicable. As in the instant case incriminating material was found which was not the case in the case laws referred above. Ld. CIT(A) further referred to the provision of section 292C and 132(4A). The observed that any person subjected the search cannot get away by merely pleading that it is not for him, but it is department to establish the veracity of the materials found and seized during the search. Ld. CIT(A) rejected all the contention of the assessee and concluded as under:- In the instant case, when asked to explain the incriminating notings in the seized diary B-1/A-13, the appellant simply stated the farm house was purchased for the disclosed amount only and the price paid was lower than the price quoted by the brokers contacted by the Department due to the fact that the impugned land was comprising of small disjointed pieces of land having litigation and title problems. No evidence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e hands of the assessee is not at all sustainable. 10. Ld. Departmental Representative on the other hand, relied upon the orders of the authorities below. 11. We have carefully considered the submissions and perused the records. In this case a search and seizure operation was conducted against the Saamang Group to which the assessee is said to be also belonging. Various persons and premises were covered during the search by the Investigation Wing of the Department including the farm house at Village Bhatti and at B-67, Sarita Vihar, New Delhi which house is registered office of the various companies of the Saamang Group in which the assessee is also the Director alongwith his brother Dinesh Panday. During the course of search at B-67, Sarita Vihar a diary was found and seized from the office of Sh. Dinesh Panday, the elder brother of the assessee. From the seized documents it was inferred that cash amounting to Rs. 35 lacs has been paid to Shri SC jain from whom farm house situated at Bhatti Village, Chattar Pur, New Delhi has been purchased in the name of the assessee. On the basis of the seized material, proceedings were initiated u/s. 153A of the I.T. Act. Some brokers were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee stands dismissed. 15. Now we adjudicate upon the merits of the case. In this case addition of Rs. 35 lacs has been made on the basis of seized material found in the shape of diary which contains the following entries:- B-1/A-13/53 dated 16-07-2005 "Arrange cash for S.C.Jain/farmhouse" B-1/A-13/54 dated 18-07-2005 "Agreement with S. G.Jain on Chhatarpur area" B-1/ A-13/71 dated 16-08-2005 Deliver cash to Jain/Bhatti (20L)" B-1/A-13/75 dated 20-08-2005 Give 15L all cleared for Bhatti + 5L Cheque" 16. We note that the said seized material in the shape of diary did not belong to the assessee. It belonged to the assessee s brother. He has not at all been confronted with the contents of the said diary. Assessee cannot be called upon to explain the contents of diary which belonged to the assessee s brother and was found from the brother. 17. We also note that there is no mention of the assessee s name in the particulars of diary as contained hereinabove. Though there is mention of the farm house belonging to the assessee, there is no mention of the total price paid etc. From the jottings as above, Assessing Officer has infer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f appeal before the Hon ble Jurisdictional High Court in the case of ITA No. 603/2011 in the case of CIT vs. Indication Instruments Ltd. The decisions were also referred by the Hon ble High Court in ITA No. 570/2012 in the case of CIT vs. Prem Prakash Nagpal vide order dated 8.10.2012 and the Hon ble High Court has dismissed the Revenue appeals. In the case of Prem Prakash Nagpal (Supra) the concluding remarks of the Hon ble High Court is as under:- The above decision, made in M/s Indication Instruments Ltd. (Supra) was affirmed by a Division Bench of this Court in ITA No. 603/2011, CIT vs. Indication Instruments Ltd. (decided on 10.5.2012). In view of the above and having regard to the fact that the Tribunal took into the account and applied the ratio in KP Varghese vs. ITO, Ernakulam, (1981) 131 ITR 597 (SC) as well as the subsequent ruling in CIT vs. PV Kalyansundaram, (2007) 294 ITR 49(SC), this Court is of the opinion that no substantial question of law arises for consideration. 21. In the background of the aforesaid discussion and respectfully following the precedents as above, we set aside the orders of the authorities below and decide the issue in favour of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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