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TMI Blog2015 (7) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, this ground of appeal is dismissed.- Decided against assessee. - I.T.A. No. 1392/HYD/2010 - - - Dated:- 17-6-2015 - Smt. Asha Vijayaraghavan And Shri Inturi Rama Rao, JJ. For the Petitioner : Shri P. Murali Mohan Rao, AR For the Respondent : Shri D. Sudhakar Rao, CIT-DR ORDER PER INTURI RAMA RAO, A.M. : This is an appeal filed by the assessee against the order of the CIT(Appeals)-IV, Hyderabad, dated 30-09-2010 for the AY 2008-09 raising the following grounds of appeal: 1) The Honourable CIT Appeals - IV, Hyderabad erred while confirming the order passed by Assessing officer by making addition of following amounts to the returned income relating to the blank cheques found during the search operations as no loan was advanced by the assessee. And during the course of assessment proceedings all the above mentioned persons also admitted that they did not receive any amount towards the loan. SI No Name Of The PersonIssued Cheque Amount 1 Sri Ram Pratap Agarwal 7,00,000 2 Sri Raja Rajeswari Ste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e set aside and sent back to Assessing officer for redoing the same. 9) We would like to submit that the Assessee has not concealed any income or not furnished inaccurate particulars to the A.O. Hence, the penalty proceedings u/s. 271(1)(C) may not be initiated. 10) The Assessee may add, alter or substitute any other points to the grounds of appeal before or at the time of hearing of the case / appeal . Precise and additional grounds of appeal : 1. The learned CIT (A) erred in sustaining the additions made by the assessing officer for the assessment year under consideration. 2. The learned CIT (A) erred in upholding the additions made to the income of the assessee based on the loose sheets and dumb materials which has no evidential value. 3. The learned CIT (A) ought to have applied the principle of Telescoping of the income determined in the earlier years against the expenditure of subsequent years. 4. The learned CIT (A) ought to have applied the principle of Telescoping of unexplained expenditure against the income of the appellant. 5. The CIT (A) erred in sustaining the addition of ₹ 1,12,57,000/- made towards unaccounted loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agarwal 4,00,000 Total: 1,12,57,000 The addition is made based on the blank cheques and promissory notices obtained from the above persons seized vide Annexure A/LNA/RES/01. The AO had concluded that the appellant is engaged in money lending business and advanced a sum of ₹ 1,12,57,000/- and made addition of amount as unexplained investment. 3. On appeal before the CIT(A), it was submitted before the CIT(A) that those blank cheques were obtained from the persons, who intended to borrow from him. However, the appellant stated that he never advanced any money to the said person therefore, no addition was called for. The Ld.CIT(A) after examining the explanation had disbelieved the explanation offered by the appellant and finally held that the appellant was using his own unaccounted money in providing unaccounted loans against security of promissory notice and cheques and therefore, upheld the addition. 4. It was contended before us that the documents seized are only dumb documents and therefore, no addition can be made. On the other hand, Ld.CIT(A) had placed reliance on the lower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es that the appellant is engaged in money lending. Based on presumptions, no decisions can be made. Therefore, we delete this addition of ₹ 11,00,000/-. ii. Sri Ram Pratap Agarwal (RPA): Cheque bearing No. 194404 dt. NIL for ₹ 7 Lakhs was found during the course of search and seizure proceedings. It is clear from the cheque that the details of payee and date were not mentioned. Apart from the cheque, a promissory note for equivalent amount of ₹ 7 Lakhs dt. 11th July, 2007 was found executed by Sri Ram Pratap Agarwal. He stated that he issued the said cheques and executed the promissory notes with an intention to obtain a loan. However, the loan was never granted by the appellant and he denied having received any loan from the assessee. However, the AO had not believed the statement by holding that the statement was given by Sri Ram Pratap Agarwal with an intention of helping the appellant. The CIT(A) also confirmed the addition. We notice that the cheque found did not contain the details of payee and date. It was further observed by the AO that the signature on the promissory note and on the cheque does not tally. In our considered opinion, the material on reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ohan appeared and stated that where abouts of Mr. G. Rajeswara Rao were not known as he ran away from Hyderabad due to pressures from the debtors and he stated confirmed that the signatures that were found on cheques seized were that of Mr. Rajeswara Rao. In our considered opinion, the material on record does not conclusively prove that the appellant had advanced ₹ 54 Lakhs to M/s. Raja Rajeswari Steel Traders especially the statement of the proprietor of the M/s. Raja Rajeswari Steel Traders could not be obtained. Therefore, the material on record does not indicate that the appellant had advanced ₹ 54 Lakhs to M/s. Raja Rajeswari Steel Traders. Hence, the addition is hereby deleted. v. M/s. Krishna Metals: The department has seized Cheque No. 171531 dt. NIL drawn in favour of the appellant for a sum of ₹ 4 Lakhs vide page No. 3 of Annexure A/LNA/Res/01. During the course of assessment proceedings, the AO examined Mr. Rajesh Gupta, Proprietor, M/s. Krishna Metal who had confirmed having issued the blank promissory note for ₹ 4 Lakhs along with the above cheque and he further stated that these two instruments were handed over as a security for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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