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TMI Blog2015 (8) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... rt this allegation that the assessee actually paid alleged amount either by cheque or in cash towards sinking fund and maintenance security to M/s Suncity Projects Pvt. Ltd. or any other entity or concern. The AO had also not brought out any fact on assessment records that the maintenance agreement was executed between the assessee and the developer i.e. M/s Suncity Projects during the FY 2009-10 pertaining to AY 2010-11 under consideration and the assessee made said payments towards sinking fund and maintenance charges during relevant financial period either by cheque or in cash over and above the expenses booked and reflected in her books of accounts and this payment was actually made by the assessee from income earned from unaccounted sources.It is also pertinent to note that the AO has not brought out any evidence or incriminating material to show that the assessee has actually made payment of sinking fund and maintenance security over and above the expenses reflected and recorded in her books of accounts and the assessee has made said payments from her unaccounted sources.- Decided against revenue. Disallowance of commission - CIT(A) deleted the addition - Held that:- The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly assumed jurisdiction u/s 153A of the Act. Hence, initiation of proceedings u/s 153C of the Act and all subsequent proceedings deserve to be quashed - Decided in favour of assessee. Addition on the issue of pending rent - CIT(A) has enhanced the assessment on this issue by the said amounts in respective AY 2010-11 and also in earlier AY 2009-10 but AO had not made any addition - Held that:- as per general human probability and mental level of a man of ordinary prudence, it cannot be accepted that while a property is being sold at approximately 25% higher rate as compared to circle rate and registered sale deed is executed for the consideration of ₹ 16,42,68,832 then how come said seller may be agreed to transfer an amount of pending rent of ₹ 8,91,15,757 to the purchaser under an undisclosed arrangement. That too for the period prior to actual and legal transfer of property. In this situation and under aforesaid discussion, we are of the considered opinion that in absence of any other incriminating material, evidence or document, the enhancement of income by the CIT(A) on stand alone basis of contents of document in question Annexure A-1 cannot be held to be susta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery - Held that:- AO made addition on the basis of surmises and conjectures by adopting a hyper technical approach and ignoring the huge amount of surrender of ₹ 62 crore and the letter of the assessee dated 10.8.2009 explaining the statement made during the course of search wherein the factum regarding jewellery was duly elaborated by the assessee. On this issue, we are unable to see any mistake or any other valid reason to interfere with the impugned order on the issue of capital gain on sale of salary and we hold that the AO made addition without any basis on the imaginary facts ignoring the sustainable explanation of the assessee and the CIT(A) rightly deleted the same. - Decided against revenue. Disallowance u/s 14A - Held that:- DR has not disputed this fact that there was no exempt income for the assessee during the financial year under consideration i.e. AY 2009-10 relevant to AY 2010-11 and in the light of ratio of the judgment of Jurisdictional High Court of Delhi in the case of CIT vs Holcim India P. Ltd. (2014 (9) TMI 434 - DELHI HIGH COURT ), no disallowance u/s 14A of the Act can be invoked for making disallowance. The issue is squarely covered in favour of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out that the CIT(A) had no justified reason to delete this addition, therefore, the impugned order may be set aside by restoring that of the AO. Ld. AR supporting the impugned order submitted that the property continues to be leasehold and therefore there was no occasion for the assessee to make payment of ₹ 1,24,90,084 as this payment was contingent upon the happening of the specific event on converting the property from leasehold to freehold. Ld. AR submitted that the AO has not brought out any evidence or incriminating material to show that the assessee made payment towards freehold charges, therefore, the CIT(A) was right in deleting the same. 4. On careful consideration of above submissions, we note that the AO picked up and presumed payment of freehold charges on the basis of Annexure A1 page 5 available at page 16 of assessee s paper book. Ld. AR took us through copy of the sale deed available at page 96 to 117 of the Paper Book and submitted that the property was purchased as leasehold and only in the event of conversion from leasehold to freehold, payment of freehold charges was to be made by the purchaser assessee and since the property continues to be l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid impugned amount towards sinking fund and maintenance security, therefore, the AO rightly made addition on this account as the assessee has made said payments from the income earned by the assessee from her unaccounted sources. 7. Replying to the above, ld. AR vehemently contended that the payments towards sinking fund and maintenance security were to be fastened upon the assessee on execution of maintenance agreement and since maintenance agreement was not executed during the period under consideration, therefore, there was no occasion to make such payments during the relevant financial year under consideration. Ld. AR vehemently contended that the AO made addition on the basis of surmises and conjectures without bringing any adverse material on record which was rightly deleted by the CIT(A) after considering the fact that the maintenance agreement was not executed during the relevant financial year and therefore, there was no occasion to make any payment in this regard for the assessee. On careful consideration of above, at the outset, from the impugned order, we note that the CIT(A) granted relief for the assessee with following conclusion and observations:- 12.2.2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee from income earned from unaccounted sources. 9. It is also pertinent to note that the AO has not brought out any evidence or incriminating material to show that the assessee has actually made payment of sinking fund and maintenance security over and above the expenses reflected and recorded in her books of accounts and the assessee has made said payments from her unaccounted sources. The AO has also not brought out any fact to support his contention that the assessee entered into any maintenance agreement with Sun City Projects (P) Ltd. or any other entity during the relevant financial period pertaining to assessment year under consideration. On the basis of foregoing discussion, we reach to a fortified conclusion that the AO made disallowance without any reasonable and justified basis which was rightly deleted by the CIT(A) by rightly appreciating the totality of facts and circumstances of the case. Hence, we are unable to see any perversity or any other valid reason to interfere with the conclusion of the CIT(A) and we uphold the same. Accordingly, ground no. 2 and 3 of the revenue being devoid of merits are dismissed. Ground No. 4 10. Apropos ground no. 4, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tablish this fact that the assessee actually made payment of commission to Shri Lalit Modi in cash over and above the amount recorded in her books of accounts as the AO has not let out any incriminating material or evidence to support this fact that the assessee made payment to Shri Lalit Modi by cheque or in cash or by way of any other mode from the income earned from unaccounted sources. 12. Ld. AR has further drawn our attention towards page no. 124 and 125 of the assessee s paper book that Shri Lalit Modi has submitted this clarification before the revenue authorities that the document Annexure A-1 seized from his residence does not represent any transaction of property or otherwise by the assessee Mrs. Vinita Chaurasia and with any other party including Suncity Project Pvt. Ltd. Ld. AR has also contended that as per certificate submitted by the assessee before the revenue authorities available at page 125 of assessee s paper book, it is further clear that the deal of purchase of property from M/s Suncity Project Ltd. was made by the assessee directly through her husband and no commission was paid to any broker since it was a direct deal. The AR also has drawn our attention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 to support the impugned addition on account of alleged commission payment to Shri Lalit Modi by the assessee. The AO has not brought out any other incriminating material or evidence or details fact to support this contention that the assessee had actually made payment of commission to Shri Lalit Modi over and above the amount recorded in her books of accounts pertaining to impugned property purchase out of income from her unaccounted sources. It is also pertinent to note that Annexure A-1 which is available at page 16 of assessee s paper book reveals that the payment of commission by the assessee to Shri Lalit Modi has not been mentioned but contents of right side down below corner manifest that if contents therein are presumed to be gospel truth, then also there was no mention of payment of commission. Per contra, the words to pay on the right side or commission amount ex facie show that the commission was due to pay. For making addition in regard to expenses on investment out of income from unaccounted sources, the onus is on the AO to establish this fact that the assessee actually made payment towards commission expenses over and above the entries made in the books of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Lalit Modi and Suncity Projects (P.) Ltd., the said annexure is not admissible and could not be attributed to the appellant. (vi) That the learned CIT CA) has misinterpreted the provisions of Section 292C of the Act. 3(i) That CITCA) has erred in making enhancement to the extent of ₹ 5,50,72,700/- in terms of provisions of section 251 (2) of the Income Tax Act, 1961. (ii) That enhancement and consequential addition of ₹ 5,50,72,700/- is without proper appreciation of facts, application of mind and opportunity to the assessee. (iii) That presumption of any undisclosed payment or investment and consequential enhancement is highly arbitrary and uncalled for. (iv) That in the absence of any evidence in respect of any such payment, having been made by the appellant there could be no ground or basis for any such addition and same is required to be deleted. (v) That CITCA) has misconstrued and misapplied decision of Delhi High Court in the case of CIT vs. Sonal Construction 28 Taxman.com 127 and same has no relevance or bearing to the facts of the case. 4 (i) That observation of CIT(A) regarding addition of ₹ 4 crore in AY 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther submitted that satisfaction note in the case of Shri Lalit Modi (person searched) was recorded by ACIT, Central Circle-21, New Delhi on 30.6.2011 who is also the assessee of the present appellant assessee but it is a settled legal principle that even when the AO of the searched person and the other person is the same, then also the recording of satisfaction in the case of searched person as well as in the case of other person is mandatory for validity assuming jurisdiction u/s 153C of the Act. To support this proposition, ld. AR has placed reliance on the following decisions of Hon ble Allahabad High Court, Andhra Pradesh High Court and orders of the Tribunal:- i) DCIT vs M/s G.S. Finance and Investment P. Ltd. (Delhi ITAT) (25.02.2015) i) Tanvir Collections Pvt. Ltd. vs ACIT (ITAT Delhi) (ITA No. 2421/D/2014 (Dated 16.01.2015) ii) CIT vs M/s Gopi Apartment (All High Court) dated 1.5.2014 iii) CIT vs Shettys Pharmaceuticals Biologicals Ltd. (AP High Court) I.I.T.A. No.662 of 2014 and batch dated 26.11.2014 iv) DCIT vs Aakash Arogya Mindir P. Ltd. (ITAT Delhi) (December 1st, 2014) v) ACIT vs Inlay Marketing Pvt. Ltd. (ITAT Delhi) (14.11.2014) 19. Ld. AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt stipulation of the same seized documents cannot be considered for the confirming of the addition in respect of alleged over and above payment of consideration in respect of purchase of property transaction and in respect of alleged receipt of cash of ₹ 59,56,943 and for making enhancement of income of amount of pending rent amounting to ₹ 4,91,15,757 even though there was no such inquiry or investigation carried out neither by the AO nor by the CIT(A) in respect of such cash payments and sinking funds, maintenance security, freehold charges and commission and by the CIT(A) in respect of alleged refund of cash to the assessee and alleged receipt of pending rent by the assessee. 21. Ld. AR has further drawn our attention towards assessment order at page 5 para 4.4.3 and submitted that the impugned document has to be considered in entirety and not in bits or piecemeal. It is not open for the revenue authorities to treat one part of document as correct and other part of same document as wrong. Ld. AR further pointed out that since major part of additions on account of sinking fund, maintenance security, freehold charges and commission payment has already been deleted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d therein is of no consequence considering the nature of document. Ld. AR strenuously pointed out that presumption u/s 132(4A) and 292C of the Act is applicable only in the case of person from whose possession the document is seized and not in the case of third party or other person and therefore, the same has no relevance and in the case of present assessee who is undisputedly a person other than person searched and the document Annexure A-1 does not belong to the present appellant assessee viz. Vinita Chaurasia. Ld. AR has further drawn our attention towards paper book page 96-117 and submitted that rough noting or proposal cannot replace or dilute the evidentiary value of the registered sale deed and there is no document on record to show that anything over and above the amount mentioned in sale deed was paid by the assessee and the whole basis of the addition is based on surmises and conjectures which cannot be held as sustainable. Ld. AR vehemently contended that the sale consideration paid by the assessee for the property in question is well above tmore than 25% of the prevailing circle rate for the period under consideration, as such, there could be no presumption about any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee to the seller M/s Suncity Project Pvt. Ltd. by way of PDC i.e. post dated cheques and in addition to that and there was an excess payment of ₹ 59,56,943 by the assessee to the seller which was refunded to the assessee and therefore, addition of this amount was rightly made by the CIT(A) enhancing the assessment. 25.1 Ld. DR, supporting the enhancement of ₹ 4,91,15,757 on account of pending rent, also submitted that the property, which was purchased by the assessee, was already given on rent, by Sun City Projects P. Ltd. and the assessee Smt. Vinita Chaurasia received amount of pending rent, from the tenant which was also mentioned in the seized document Annexure A-1, therefore after adjusting the amount of ₹ 4 crores already paid in AY 2009-10, the CIT(A) rightly enhanced the income of the assessee by the said amount unpaid pending rent after affording due opportunity of hearing for the assessee. Ld. AR submitted that the AO rightly assumed jurisdiction over the assessee for reassessment u/s 153C r/w section 143(3) of the Act as there was sufficient and valid ground to assume jurisdiction on the assessee on the basis of incriminating material Ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson in respect of whom search was conducted, the question of invoking section 153C of the Act would not arise. Ld. AR has also pointed out that the AO of Shri Lalit Modi i.e. person searched recording satisfaction u/s 153C of the Act on 30.6.2011 (placed at paper book page no. 17) but there is no mentioning in the said satisfaction note that the seized document Annexure A-1 was disowned or disclaimed by the person searched viz. Lalit Modi. Furthermore, in this situation, the question of invoking section 153C of the Act would not arise and the AO of the person searched miserably failed to comply with the duty cast upon him to rebut the presumption that the document seized during the search operation upon Shri Lalit Modi does not belong to the person searched and the same actually belongs to the other person i.e. assessee of the present appeal Smt. Vinita Chaurasia. Ld. AR vehemently contended that merely because name of the present assessee has been mentioned in the impugned document Annexure A-1 does not relate the same to the present appellant and it cannot be legally held that the seized document Annexure A-1 belongs to the present assessee. 27. Ld. AR has also pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person 3a[and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A] 30. In the case of CIT vs Shettys Pharmaceuticals Biologicals Ltd. (supra), the Hon ble Andhra Pradesh High Court held as under:- This appeal is sought to be preferred and admitted against the judgment and order of the learned Tribunal dt.28.S.2014 in relation to the assessment year 2009-2010 on the following suggested question of law. In the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub- section (1) of section 153A. (emphasis supplied) It is therefore clear that firstly satisfaction has to be recorded by the Assessing Officer who conducted search, that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in Section 153A of the Act. Thereafter, the Assessing Officer having jurisdiction over third party on receipt of the seized material or books of accounts or document being handed over to him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfaction of the AO of the person searched shall record his satisfaction that the books of accounts or documents or assets etc. seized or requisitioned have a bearing on the determination of total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A of the Act. Meaning thereby, section 153C(1) of the Act mandates recording of satisfaction by the officer of the person searched as well as officer of the other person is a precondition for invoking jurisdiction under this provision. 31.1 The ratio laid down by the Hon ble Andhra Pradesh High Court in the case of CIT vs Shettys Pharmaceuticals Biologicals Ltd. (supra) further makes it clear that the recording of satisfaction postulates the application of mind consciously as the document seized must be belonging to any person other than the person searched referred to in section 153A of the Act. The Hon ble High Court has further made it clear that this requirement does not dispense with only on the reason that the AO of the person searched and the other person is the same because when a thing is to be done in way particular manner under the law, this has to be done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments and possession of photocopies of documents are two separate things. While the Jaipuria Group may be the owner of the photocopies of the documents it is quite possible that the originals may be owned by some other person. Unless it is established that the documents in question, whether they be photocopies or originals, do not belong to the searched person, the question of invoking Section 153C of the said Act does not arise. 16. Thirdly, we would also like to make it clear that the assessing officers should not confuse the expression belongs to with the expressions relates to or refers to . A registered sale deed, for example, belongs to the purchaser of the property although it obviously relates to‟ or refers to the vendor. In this example if the purchasers premises are searched and the registered sale deed is seized, it cannot be said that it belongs to the vendor just because his name is mentioned in the document. In the converse case if the vendor s premises are searched and a copy of the sale deed is seized, it cannot be said that the said copy belongs to the purchaser just because it refers to him and he (the purchaser) holds the original sale d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid that it belonged to the other person just because her name is mentioned in the document. 34.1 On the basis of foregoing discussion, we are inclined to hold that as per section 153C of the Act, the AO of the searched person must be satisfied that any document seized or requisitioned belonged to a person other than the searched person and only then the AO of searched person can hand over such document to the AO having jurisdiction over such other person. We further hold that it is only after such handing over that the AO of such other person can issue a notice to that other person and assess or reassess his taxable income in accordance with the provisions of section 153 of the Act. Hence, before a notice u/s 153C of the Act is issued, two steps have to be taken, viz. first step is that the AO of the person who is searched must arrive at a clear satisfaction that the impugned document seized from the person searched does not belong to him but to some other person and secondly after such satisfaction is arrived at by the AO of the person searched, then the document is required to be handed over the AO of the other person to whom such document belongs or belonged to . In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on note, we are unable to discern any satisfaction of the kind required under Section 153C of the said Act. 12. This being the position the very first step prior to the issuance of a notice under Section153C of the said Act has not been fulfilled. Inasmuch as this condition precedent has not been met, the notices under Section 153C are liable to be quashed. It is ordered accordingly. 37. Turning to the facts of the present case, we note that the AO of the person searched Shri Lalit Modi recorded satisfaction on 30.6.2011. For the sake of clarity in our observations and findings, the same is reproduced below:- 30-06-2011 Satisfaction Note for issue of notice u/s 153 C of the LT. Act Name of the assessee : Smt. Vinita Chaurasia PAN : AAFPC4589D Search and seizure action U/S 132 of the I.T. Act was carried out on 19-06-2009 at the residential as well as business premises of Shri Lalit Modi at L-48, Lajpat Nagar-Il, New Delhi, During the course of pendency of assessment proceedings in the case of Shri Lalit Modi for AY 2004-05 to 2010-11 (u/s 153 A/ 143 (3), the material seized from the premises of the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umed jurisdiction u/s 153A of the Act. At the cost of repetition, we also hold that the satisfaction recorded by the AO of the person searched does not meet the legal requirement of first step of section 153C of the Act. To support these conclusions, we respectfully follow the decision of Hon ble Jurisdictional High Court of Delhi in the case of Pepsico India Holdings Pvt. Ltd. vs ACIT (supra), Pepsi Foods P. Ltd. vs ACIT (supra), CIT vs Shettys Pharmaceuticals Biologicals Ltd. (supra) and order of ITAT Delhi in the case of Tanvir Collections Pvt. Ltd. vs ACIT (supra). Hence, initiation of proceedings u/s 153C of the Act and all subsequent proceedings deserve to be quashed, thus, we order accordingly. Resultantly, legal ground no. 1(i) to (iii) of the assessee are allowed. Ground No. 2 (i) to (iii), 3(i) to 3(iii) 4(i) to (iii) of assessee in ITA No. 3343/D/2013 ground no. 4 of the revenue in ITA No. 3551/Del/2013 38. Apropos these grounds, ld. AR submitted that without prejudice to the legal objections of the assessee, even on merits, the additions made by the assessee, even on merits, the additions made by the assessee on account of disallowance of freehold charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n deleted by the CIT(A). Thus, when the receipt of commission on brokerage has not been found to be sustainable in the hands of payee Shri Lalit Modi by the first appellate authority, then the payment of commission on brokerage by the present assessee payer cannot be held as established and sustainable in facts and in law. 39. Ld. AR reiterating his earlier arguments further pointed out that as per the AO, the assessee had accounted an amount of ₹ 16.42 crore in the books of accounts which was paid by way of cheque and similar amount of payment was made over and above, what is accounted in her books of accounts, out of income from unaccounted sources. Ld. AR has further drawn our attention towards middle of Annexure A-1 and submitted that there is a mention of cheque value ₹ 16,42,68,832 which was undisputedly recorded in the sale deed as well as in the books of accounts of the assessee but down below, there is mention of PDC value ₹ 16,42,68,522 and thereafter on the right side received amount has been mentioned as ₹ 17,02,25,465 which also shows surplus payment of ₹ 59,56,943 which gave rise of enhancement of assessment by this amount by the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as per Annexure A-1, the assessee actually paid ₹ 17,02,25,465 over and above the amount which was recorded in her books of account and the AO added only ₹ 16,42,68,522 as the cash component over and above the books of accounts of the sale transaction which resulted in excess payment of ₹ 59,56,943 which was reflected in Annexure A-1 as to refund . Ld. DR further pointed out that the income of ₹ 8,91,15,757 accrued to the assessee as a result of an undisclosed arrangement between her and M/s Suncity Project Pvt. Ltd. because the seized document Annexure A-1 clearly denotes ₹ 4 crore as paid to the assessee in financial year 2008-09 pertaining to FY 2009- 10 and the CIT(A) was quite justified in directing the AO to make addition in this regard in the relevant assessment year. Ld. DR further pointed out that the balance amount of ₹ 4,91,15,757 has been revealed as an obligation of Suncity Project Pvt. Ltd. as to pay to the assessee, therefore, the same was added to the income of present assessment year under consideration in this appeal. 42.1 Supporting the order of enhancement, the ld. DR strenuously pointed out that as per Annexure A-1, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... careful consideration of above submissions and contentions of both the sides, at the very outset, we note that admittedly, the sole impugned document Annexure A-1(which we are enclosing here with this order as Annexure A-1) for the sake of clarity in our findings was seized during search and seizure operation held on 19.06.2009 at the premises of Shri Lalit Modi. We further note that the AO picked up document Annexure A-1 and held that the assessee Smt. Vinita Chaurasia has made payment in regard to purchase of property at Vasant Square Mall for a total consideration of ₹ 32,85,37,354 out of which payment was made by cheque of ₹ 16,42,68,832 which admittedly stands recorded in the books of accounts of the assessee. We further note that the main allegation of the AO is that the assessee had also made payment of ₹ 16,42,68,522 towards over and above sale consideration and also made payment of sinking fund, maintenance security, freehold charges and commission over and above her books of accounts from the income earned from unaccounted sources. 44.1 At this stage, it is pertinent to mention that the additions made by the AO in regard to sinking fund, maintenance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eflect any payment by PDC and the revenue authorities have not brought out any fact to support this contention that the assessee made over and above payment of ₹ 17.02 crore out of income earned from unaccounted sources. Ld. AR also added that during the search and seizure operation in the case of Shri Lalit Modi and during reassessment proceedings u/s 153C of the Act and also during first appellate proceeding before the CIT(A), the revenue authorities have not found any other incriminating document, material or evidence which could support the fact that the assessee made over and above payment of ₹ 17.02 crore to the seller and made payment of ₹ 65,70,747 as brokerage and commission to Shri Lalit Modi over and above the books of accounts out of the income earned from her unaccounted sources, either by cheque or in cash. Admittedly, the additions made by the AO and enhancement made by the CIT(A) had been made only on the basis of stand alone seized document Annexure A-1, which was seized from Shri Lalit Modi during search and seizure operation held on 19.6.2009. At this stage, before drawing a final conclusion, it is relevant and necessary to consider the ratio of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given unnecessary weightage to the copy of MoU. The factum of transfer of a capital asset by Mrs Jind Singh in favour of the assessee was not established. The case of the assessee is that he has not purchased any land. The alleged MoU is a document exhibiting the negotiation of the purchase of land, but it never materialized. The Assessing Officer has erroneously observed that it is for the assessee to establish that land was not purchased. In our opinion, for charging the assessee with tax on account of unexplained investment, it is the Assessing Officer who ought to have established that land was purchased by the assessee and he failed to disclose the source of such purchase. Instead of discharging this onus, learned Assessing Officer treated a document as gospel truth and tried to put an onus upon the assessee to prove a negative fact which is not permissible in law. Learned First Appellate Authority has rightly considered this aspect and deleted the addition. 6. After having heard the counsel for the parties on this issue of the deletion of the addition of ₹ 1 crore on account of the alleged unexplained investment, we are of the view that the Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the contents qua the assessee. Coming to the provision contained in section 69B, it is provided that where the assessee has made an investment in any financial year, which is not recorded in the books of account, if any, maintained by him, and the assessee offers no explanation about the nature and source of investment or the explanation offered by him is not satisfactory in the opinion of the assessing officer, the value of investment made may be deemed to be the income of the financial year. As already held in the case of Chiraayu Estate Development Pvt. Ltd. (supra), the burden is on the revenue to show that the assessee has made an investment. Thereafter, the investment has to be related to a financial year. The course of events show that revenue has not proved that investment in the immovable property was made by the assessee. The year in which the investment was made is also not discernible from the document. Therefore, we are of the view that this document alone cannot form basis for making any addition. Accordingly, it is held that the ld. CIT(Appeals) rightly deleted the addition. Ground nos. 1 and 2 are, thus, dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deletion of the impugned addition under s. 69C, findings arrived at by the Tribunal are pure findings of facts and the same do not warrant any interference. 2. ACIT Vs. J.P. Morgan India (P) Ltd. [2011] 46 SOT 250 (Mum.) 3. CIT Vs. Dinesh Jain HUF [2012] 211 Taxman 23 (Delhi) 4. CIT Vs. Jaipal Aggarwal [2013] 212 Taxman 1 (Delhi)- wherein it was held that Dumb documents seized, i.e. from which nothing could be clearly understood, cannot form a justified base for making additions to income of the assessee. 17.1 In view of the above discussion, we are of the view that the addition made by the Assessing Officer based on the loose paper, which is not a conclusive evidence and, therefore, the same is not sufficient to make the addition. In our opinion, no addition can be made on the basis of dumb documents/note book/loose slips in the absence of any other material to show that the assessee has made investments in land. Noting on the note book/diary/loose sheets are required to be supported/corroborated by other evidence and should also include the statement of a person who admittedly is a party to the noting and statement from all the persons whose names the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held as follows: 12. The Apex Court in Central Bureau Investigation v. V.C. Shukla and Ors. has laid down that: File containing loose sheets of papers are not 'book' and hence entries therein are not admissible under Section 34 of the Evidence Act, 1872. 13. Similarly, the document Annexure A-37 recovered during the course of search in the present case is a dumb document and lead us nowhere. Thus, the Tribunal rightly deleted the addition of ₹ 48 lacs made by the Assessing Officer on account of undisclosed income on the basis of seized material. 14. The above being the position, no fault can be found with the view taken by the Tribunal. Thus, the order of the Tribunal does not give rise to a question of law, much less a substantial question of law, to fall within the limited purview of Section 260- A of the Act, which is confined to entertaining only such appeals against the order which involves a substantial question of law. 15. Accordingly, the present appeal filed by the Revenue is, hereby, dismissed. 11. In CIT vs. S.M. Aggarwal (2007) 293 ITR 43 (Del.) cited by the assessee, the Court in a similar situation held as follows : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because in that case there was other corroborative material for the income tax authorities to link the description of the transactions found in ITA No.66-69/2014 75-77/2014 Page 10 the said innocuous document seized with respect to other material. However, such inference cannot be drawn in this case because there is no other material. On the contrary the AO's acceptance and finalization of the assessment for 2007-08 on the basis of salary income of the assessee, undermines the entire findings with respect to the inferences drawn and the additions made, indicated above. The question of law urged, therefore, is not substantial and is answered against the revenue. 14. So far as the second amount ₹41,32,800/- is concerned there cannot be any doubt that the above was sought to be made in respect of the period 1999-2000. Clearly that was beyond the block period and therefore time- barred. That apart the CIT(Appeals) noted that after the remand during the pendency of appellate proceedings, the affidavit relied upon by the assessee in Brij Bhushan Gupta was not adversely commented upon. This being a factual finding the Court finds no reason to interfere with the ITAT' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat file containing loose sheets of papers are not books and hence entries therein are not admissible u/s. 34 of the Evidence Act, 1872. 28. In the present case, the seized material (two note books) marked as KBR/A/02 and KBR/A/04 wherein certain entries are found recording various transactions pertaining to the assessee. These entries in the notebook are unsubstantiated and on that basis the AO reached to the conclusion that the figures mentioned therein are to be read by adding 3 zeros and thereby he came to conclude that there is undisclosed income in these 6 assessment years. In our opinion, the document recovered during the course of search was a dumb document and led nowhere. The CIT(A) rightly came to the conclusion that it cannot be acted upon and deleted the addition. 29. Other than the loose paper, the AO has not brought on record any corroborative material or evidence to show that the inference made by him is correct. The CIT(A) after taking the totality of the circumstances into consideration came to the conclusion that the addition made by the AO is not justified and the argument put forth by the assessee is supported by documentary evidence. This was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rched i.e. Shri Lalit Modi. On careful and vigilant perusal of the judgment of Hon ble Delhi High Court in the case of CIT vs Sonal Construction, we note that the benefit of the ratio of the decision is not available for the revenue as the facts of the present case are clearly distinguishable because the impugned document viz. Annexure A-1 has not been either written or signed by the present assessee or by the person searched from whom the same was alleged to be seized during search and seizure operation u/s 132 of the Act. 52. Ld. AR has also taken us through the ratio of the judgment of Hon ble Supreme Court in the case of CBI vs V.C. Shukla (1998) 3 SCC 410 (SC) and submitted that the document Annexure A-1 said to be recovered during the course of search and seizure operation in the case of Shri Lalit Modi is a dumb document which lead the revenue nowhere and even the file containing loose sheets of papers are not books and hence entries therein are not admissible u/s 34 of the Evidence Act 1872. Undisputedly, the sole document picked by the AO is a printed document which has not been written or signed either by the present assessee (other person) or Shri Lalit Modi (person s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port has also been sought from the ratio of the judgment of Hon ble Punjab Haryana High Court in the case of CIT vs Atam Valves (P) Ltd. (supra) wherein it was held that:- During the pendency of assessment proceedings, a survey was conducted by the Department under section 133A of the Act on 27.9.2005 in the premises of the assessee and certain incriminating documents were found including a Slip Pad containing payment of Wages to various persons. The slips were written by Manoj Jain, an employee of the assessee who was confronted with the slips, apart from questioning of the Director Manoj Jain as well as Director of the assessee explained the position as to how the slips had been written and the stand of the assessee was that the same did not represent payment of wages during the year in question but were for the earlier year. However, the Assessing Officer did not accept the explanation and made an addition. The CIT(A) as well as the Tribunal partly set aside the addition. It was held that even though explanation of the assessee that the loose papers did not relate to payment of wages during the year in question may not be accepted in absence of any other material, the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the same has been deleted by the CIT(A) vide order dated 28.10.2013 and the revenue has disputed the said deletion by way of file appeal no. 329/Del/2014 is also being disposed of by this order. 58.1 It is also pertinent to note that on the basis of the same seized document Annexure A-1, the AO made certain additions and during first appellate proceedings, the CIT(A) has deleted the additions made on account of freehold charges, sinking fund and maintenance security against the present assessee Smt. Vinita Chaursia for which the revenue has filed ITA No.3551/Del/2013 which is also being adjudicated by us by passing this consolidated order. In this situation, it can safely be presumed that the addition made by the AO in the case of person searched Shri Lalit Modi (the alleged broker) on account of receipt of commission from the purchase of property i.e. present assessee Smt. Vinita Chaurasia has been found to be unsustainable in facts and in law by the first appellate authority. In the same manner, the additions made by the AO of the present assessee i.e. other person, on account of payment of freehold charges, maintenance security, signature found and commission has been di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale consideration as mentioned in the sale deed was ₹ 16,42,68,832, which proves that the registered sale consideration was otherwise adequate and pretty more than the circle rate and therefore, actual and fair market value of the property at the time of purchase stood explained. Hence, it should be accepted and presumed that the assessee disclosed actual amount of consideration which was invested towards purchase of said property. To support this contention, the AR has placed reliance on various judgments and orders of Hon ble Supreme Court and various High Courts including decision of Hon ble Supreme Court in the case of Kishan Chand vs CIT 125 ITR 715 (SC) and order of Hon ble Allahabad High Court in the case of CIT vs Rajpal 149 Taxman 32 (All). Now, the onus was on the AO to bring out any fact, evidence, material or any other corroborative evidence to support this contention that the assessee actually paid over and above her books of accounts payment of ₹ 17,02,25,465 as additional consideration to the seller and in absence of any such corroborative evidence or material, the addition made by the AO on stand alone basis of Annexure A-1 cannot be held as sustainable, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch financial year. On plain reading of section 69C of the Act following key features or elements are noticeable:- i) That there is an expenditure; ii) Which is actually incurred by the assessee during the financial period under consideration; iii) The same is unaccounted; and, iv) There is no satisfactory explanation provided by the assessee for the same or the explanation offered by the assessee has not been found to be satisfactory by the AO. 63. It is also pertinent to note that all the aforesaid conditions are required to be cumulatively satisfied before fastening tax liability on the assessee. Obviously, the onus or burden to prove above condition lay on the shoulders of the AO and competent revenue authorities. Further, it is noteworthy that there is no place for any presumption in applying section 69 or 69C of the Act. In simpler words all the above conditions are required to be satisfied on factual and actual basis and even presumption u/s 132(4A) and section 292C of the Act cannot be imported to section 69 or section 69C of the Act for making valid and legally sustainable additions. 64. On logical analysis of facts and circumstances of the present case, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lalit Modi (person searched) replying to question no. 3 explained the circumstances in which Annexure A-1 (page 5) reached his possession wherein he has categorically stated that no transaction took place on the basis of Annexure A-1 page 5 and he would have earned brokerage income if said proposal got materialised. The relevant question answer verbatim reads as under:- Q3. During the course of search proceedings at your residence at L-48, Lajpat Nagar -11, New Delhi, loose papers were found and seized vide annexure A-l. I am showing you page No. 5 of the said Annexure A-1. Kindly explain the transactions mentioned in it. Ans. The Chaurasia family is known to me. At the time of execution of sale deed in favour of Mrs. Vinita Chaurasia by M/s Suncity Projects Ltd. in respect of commercial space purchased in Vasant Square Mall, I was present as a witness and signed on the documents Conveying titles as a witness before sub registrar. It happened somewhere in May 2009. Since I am in real estate business, incidentally after coming back from execution of the said sale deed, I was approached by a broker at my residence making enquiry about availability of commercial space in Va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion on brokerage and the same was not found to be sustainable and in accordance with law. Under above noted facts and circumstances, we are unable to see any corroborative material, evidence, details or any other supportive allegation which could lead us to presume that the assessee made payment of commission to Shri Lalit Modi as mentioned in document in question Annexure A-1 down below right hand side. Per contra, as we have already noticed that even if for the sake of argument, the contents of document on the issue of payment of commission is accepted as gospel truth even then mentioning of words on the extremely right side down below in Annexure A-1 to pay denotes that the commission was not actually paid by the purchaser assessee of the present case to the alleged broker Shri Lalit Modi the person searched till date of preparation of document in question Annexure A-1. We are also inclined to accepted contentions of the ld. AR that the person searched i.e. Shri Lalit Modi never disowned or declined the said Annexure A-1 and never stated at any point of time that the said document belongs to the present assessee. 68.1 At this stage of adjudication, we find it necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portunity for cross examination of Shri Lalit Modi and the director or other competent authority of M/s Suncity Projects Pvt. Ltd, the said document in question is not admissible and attributed to the assessee for making presumption u/s 292C of the Act. 68.3 On careful consideration of above, we note that the person searched has never stated that the document in question belongs to the present assessee. Admittedly, the document in question Annexure A-1 was seized from the possession of person searched i.e. Shri Lalit Modi but from his statement recorded during search and seizure operation on 19.6.2009 u/s 132(4) of the Act or his subsequent statement recorded u/s 131 of the Act on 15.3.2013 during assessment proceeding of M/s Suncity Projects Pvt. Ltd., he never stated that the document in question Annexure A-1 belongs to the present assessee Smt. Vinita Chaurasia. The presumption u/s 132(4A) of the Act and 292C of the Act can be made against the person searched and if the same is rebutted by satisfactory valid reason, then only presumption otherwise may be drawn. In the extant case, the presumption against the present assessee cannot be taken u/s 132(4A) of the Act and section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sustainable. Therefore, observations, directions and conclusion of the CIT(A) in para 12.4 of the impugned order are demolished. 69. Furthermore, the CIT(A) has enhanced the assessment by an amount of ₹ 4,91,15,757 for AY 2010-11 and by ₹ 4 crore for AY 2009-10 on the basis of contents of third portion of the document in question Annexure A-1 wherein details of alleged pending rent from 1.10.2006 to 30.4.2009 for 31months have been mentioned. It is pertinent to keep in mind that the AO had not made any addition on the issue of pending rent but the CIT(A) has enhanced the assessment on this issue by the said amounts in respective AY 2010-11 and also in earlier AY 2009-10. The facts of this issue have been dealt in detail in the earlier part of this order and on chronological analysis of the same, we note that the sale deed for the property purchased by the present assessee was executed and registered on 13.5.2009 during AY 2010-11 and this fact has not been controverted or dislodged either by the AO or by the CIT(A). The CIT(A) in para 12.3 at page 11 of the impugned order held that the income of ₹ 8,91,15,757/- was accrued to the assessee as a result of undis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remaining amount of ₹ 4,91,15,757 in AY 2010-11. However, it is relevant to mention that as per general human probability and mental level of a man of ordinary prudence, it cannot be accepted that while a property is being sold at approximately 25% higher rate as compared to circle rate and registered sale deed is executed for the consideration of ₹ 16,42,68,832 then how come said seller may be agreed to transfer an amount of pending rent of ₹ 8,91,15,757 to the purchaser under an undisclosed arrangement. That too for the period prior to actual and legal transfer of property. In this situation and under aforesaid discussion, we are of the considered opinion that in absence of any other incriminating material, evidence or document, the enhancement of income by the CIT(A) on stand alone basis of contents of document in question Annexure A-1 cannot be held to be sustainable. The CIT(A) has not made any required and appropriate inquiry in this regard and in absence of the same the enhancement of income for the year under consideration and also in the previous AY 2009-10 cannot be held as valid, sustainable and in accordance with law. 73. The next issue for our con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tively before making any addition either u/s 69 or u/s 69C of the Act and before fastening tax liability on the assessee. In our humble understanding, if the AO or the competent revenue authority discharged required onus as stated above, then only onus shifts on the shoulder of the assessee to demolish the allegations of the AO and to show that the assessee has not made any investment or expenditure during the financial period under consideration which was unaccounted in the books of accounts of the assessee out of income or receipts from unaccounted and undisclosed sources. 76. In the present case, the AO and the CIT(A) has solely relied on the document in question i.e. Annexure A-1 for making addition of ₹ 16,42,68,522 perhaps u/s 69 of the Act and the CIT(A) also enhanced the assessment by ₹ 59,56,943 perhaps u/s 69C of the Act only on the basis of contents of Annexure A-1 which cannot be said to be gospel truth. We are unable to seek any further verification, examination or any effort to bring out any other incriminating material, evidence or details or any other supporting evidence to establish the fact that the assessee actually made over and over payment of R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d evidence on record and they are legally empowered to take action on the material which may not be accepted as an evidence under Evidence Act 1872, nevertheless, such discretion does not provide them to act as a monarchy and does not entitle them to make a pure guesswork and support an addition or disallowance entirely upon discretion on the basis of a dumb documents on stand alone basis without any other corroborative or supportive material and without making any further investigation or enquiry from available reasonable sources. 80. On careful consideration of the ratio of the order of ITAT Hyderabad B Bench in the case of DCIT vs M.Aja Babu (supra), we observe that in the similar set of facts and circumstances, the Tribunal held that no addition can be made on the basis of dumb document/note/book/loose slips in absence of any other corroborative or supportive material to show that the assessee had made investment. It was also held that noting on the notebook etc. are required to be supported/corroborated by the other evidence and should also include the statement of a person who admittedly is the party to the noting and statement of all the related persons, then such state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust be filled up by the AO through investigation and correlation with the other material found either during the course of search or during inquiry or on investigation. In the present case, as we have already noted that except issue of over and above payment of ₹ 17,02,25,465, the additions made in the hands of present assessee Smt. Vinita Chaursia on account of over and above payment of sinking fund, maintenance charges, freehold charges have not been found to be sustainable by the CIT(A). In the case of alleged broker Shri Lalit Modi, the CIT(A) of searched person has also held that the addition made by the AO of the person searched on account of receipt of commission from the present assessee has not been found to be sustainable. The remaining contents of the document in question pertaining to over and above payment of sale consideration and surplus payment to the seller and the refund of surplus payment cannot be held as acceptable and sustainable in absence of any other material found either during the course of search or on investigation or inquiry. In the present case, the AO of the person searched and the AO of the other person have not pointed out any other supportiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anybody else by the assessee. Hence, ground no. 4 of the revenue in ITA No. 3551/Del/2013 being devoid of merits is dismissed. ITA NO. 329/DEL/2014 86. This appeal by the revenue has been directed against the order of the CIT(A)-XII, New Delhi dated 28.10.2013 in Appeal No.431/13-14 for AY 2010-11. Ground no. 4 of the revenue is general in nature which requires no adjudication. Remaining effective grounds of the revenue read as under:- 1. The Commissioner of Income Tax (Appeals) has erred in law and on facts in deleting an addition of ₹ 65,70,747/- on account of brokerage. 2. The Commissioner of Income Tax (Appeals) has erred in law and on facts in deleting an addition on account of undisclosed income on sale of jewellery of ₹ 40,00,000/-. 3. The Commissioner of Income Tax (Appeals) has erred in law and on facts in deleting an addition of ₹ 6,81,298/- on account of disallowance u/s 14A of the I.T. Act. 87. Briefly stated the facts giving rise to this appeal are that the assessee filed a return on 20.11.2010 u/s 139(1) of the Income Tax Act, 19061 (for short the Act) declaring an income of ₹ 62,08,62,826/- under the head inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion as the amount of alleged commission was never received by the assessee because the deal was never materialised through the assessee. Ld. AR reiterating its arguments before the CIT(A) further contended that the assessee filed a confirmation of Smt. Vinita Chaurasia having denied paying any commission to the assessee as the property deal did not materialise through the assessee. 90. Ld. AR vehemently contended that the AO was not justified to make addition on account of alleged commission, on the basis of document of proposal which never specified that the deal in question of Smt. Vinita Chaurasia, was materialised through the assessee and no other document, evidence or material was found and seized to suggest or to support the receipt of commission by the assessee from Smt. Vinita Chaurasia. Ld. AR further pointed out that Smt. Vinita Chaurasia, the purchaser, in its confirmation clearly supported this fact that the deal of property was directly made by her through her husband and the deal of purchase of property was not done through the assessee i.e. Mr. Lalit Modi and no commission was paid to any broker as it was a direct deal of property. Ld. AR also pointed out that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition of ₹ 65,70,747/- is directed to be deleted. Ground raised in appeal is allowed. 92. In view of observations and conclusion of the revenue authorities below, we note that the AO proceeded to make addition on the basis of presumption u/s 132(4A) of the Act by holding that the burden to prove that the contents of the seized documents are not true is on the assessee. We also observe that the AO also held that the property transaction had actually taken place between Mrs. Vineeta Chaurasia and the Suncity, therefore, he has no hesitation in holding that the assessee had earned commission income of ₹ 65,70,747/- on the said property deal. The CIT(A) took a well-founded legal approach that the presumption u/s 132(4A) of the Act, on the other hand, is a rebuttable presumption and since the assessee had rebutted the same by way of filing of confirmation (available at page 125 of assessee s paper book) from Mrs. Vineeta Chaurasia in this regard, then there is no justification to make addition in the hands of assessee as alleged commission received in the deal. It is also relevant to note that the alleged broker Shri Lalit Modi (person searched) had also given a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of jewellery of ₹ 3.51 crores and the assessee admitted that he sold jewellery in cash and at that moment, he was not able to produce the evidence. 95. Ld. DR also contended that the jewellery belonged to the assessee Shri Lalit Modi and his wife Smt. Rajul Modi and there was no surrender by Smt. Rajul Modi and in the case of assessee nothing had been brought on record as to how the capital gain arising out of sale of jewellery gets accounted for. Therefore, the AO rightly made addition in this regard. Ld. DR supporting the conclusion of the AO submitted that in view of said facts, the AO rightly rejected the contention of the assessee that the income arising from sale of salary gets subsumed in the surrendered amount of ₹ 62 crore made by the AO in AY 2010-11 because there was no bifurcation of surrendered income. Ld. DR finally contended that the AO rightly estimated the capital gains of ₹ 40 lakh in the hands of assessee which was deleted by the CIT(A) without any justified reason and basis. Ld. DR lastly prayed that impugned order may be set aside by restoring that of the AO. 96. Ld. AR vehemently contended that the assessee had surrendered huge am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted the declaration of said jewellery in the wealth tax return filed by the assessee and his wife, then no addition towards alleged capital gain on sale of jewellery can be made or sustained. For the sake of clarity in our observations, the conclusion of the CIT(A) at page 16 is being reproduced as under:- It is seen that there is no basis for estimation of capital gains amounting to ₹ 50 lacs worked out by the Assessing Officer out of which ₹ 40 lacs was added in the hands of the assessee, Shri Lalit Modi and ₹ 10 lacs added in the hands of his wife Smt.Rajul Modi. It is a fact that except for the statement of the assessee, there is no evidence found during the course of search to suggest and prove that the assessee had in fact sold any part of jewellery. Also the statement made during the course of search, was duly clarified by the assessee to the office of DDI (Inv.) vide letter dated 10.08.2009 and even the declaration of the income has been accepted by the department on the basis of the said letter in which the position of jewellery was duly explained. There is no basis or evidence regarding working of the said capital gain on sale of said jeweller ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, no disallowance u/s 14A of the Act r/w Rule 8D of the Income Tax Rules 1962 can be made. Placing reliance on the decision of Jurisdictional High Court of Delhi in the case of CIT vs Holcim India Pvt. Ltd. in ITA No. 486/2014 submitted that where no exempt income is earned, there could not be any disallowance u/s 14A of the Act r/w Rule 8D of the Income Tax Rules, 1962. 101. On careful consideration of above submissions, we respectfully reproduce the conclusion of Hon ble Jurisdictional High Court of Delhi on this issue in the case of CIT vs Holcim India Pvt. Ltd. (supra) wherein para 14 and 15 read as follows:- 14. On the issue whether the respondent-assessee could have earned dividend income and even if no dividend income was earned, yet Section 14A can be invoked and disallowance of expenditure can be made, there are three decisions of the different High Courts directly on the issue and against the appellant-Revenue. No contrary decision of a High Court has been shown to us. The Punjab and Haryana High Court in Commissioner of Income Tax, Faridabad Vs. M/s. Lakhani Marketing Incl., ITA No. 970/2008, decided on 02.04.2014, made reference to two earlier decisions of the ..... 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