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TMI Blog2016 (3) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... e in his capacity as Managing Director had received the moneys set out in the form of notings in the seized papers. He has pointed out that when similar situation prevailed in respect of moneys received by the assessee on behalf of Brijlal Todi Charitable Trust, the AO drew an inference that the assessee being in complete control of the activities of the trust ought to have received on money from the transferees. According to him such an inference had to be drawn even the seized document is attributable to M/s. BCL because the assessee was the Managing Director in complete control of BCL. Again reference was made to provision to section 292C of the Act. The learned counsel for the assessee relied on the order of CIT(A). We have given a careful consideration to the rival submissions, The first aspect as we have already noticed, is that the AO was convinced that seized documents NT/1 34 to 38 belong to BCL and that appropriate proceedings will be initiated against BCL in respect of transactions. Having come to such a conclusion the AO could not have attributed the entries in the seized documents to the assessee. As far as page 34 of the seized document is concerned we find that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cument NT/1 (page 20 21) by holding that this amount represented advance for contemplated sales and as the properties were not sold there can be no generation of income without considering that the said advance were never repaid by the assessee and the finding of the CIT(A) is contrary to his own findings whereby he has confirmed addition of ₹ 10 lakhs based on the same documents. C.O.No.4/Kol/2011 1. a) FOR that the Ld. CIT(Appeals) erred in law as well as on facts in retaining the addition to the extent of ₹ 10 lacs on the basis of the seized papers marked NT/1, Pages-20 21 on irrelevant considerations. The Ld. CIT(Appeals) erred in not appreciating the fact that the seized documents marked NT/1, Pages-20 21 did not relate to the appellant and no addition could be made on the basis of the said seized papers as income of the appellant. b) FOR that in any case, the addition of a sum of ₹ 1 0 lacs or any amount whatsoever as income of the appellant on the basis of the said seized papers is wrong, unjustified and bad-in-law. 2. FOR that the appeal filed by the Revenue objecting to the reliefs allowed by the Ld. CIT(Appeals) is frivolous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons recorded in the seized documents as follows :- The ground floor of premises no.32, Ezra Street, Kolkata and Premises No.159/A, Rashbehari Avenue, Kolkata belong to a trust by name Brijlal Todi Charitable Trust. The assessee explained that it was a family trust of the assessee and that the assessee was not the owner of the aforesaid properties. The assessee therefore disowned receipt of any moneys as stated in the seized documents. The AO however held that the assessee failed to produce books of account of the trust for verification and therefore the claim of the assesee could not be believed. AO observed that receipt of sum of ₹ 2,50,000/- by cheque is reflected in the regular books of accounts. The order is silent as to in whose books of accounts the said sum was reflected. In respect of the remaining ₹ 12.30 lakhs recorded as received by cash in the seized documents, the AO held that the same is undisclosed income of the assessee for the block period 01.04.1990 to 12.02.2001. The said sum was added in the various assessment years as per the details given in the seized documents which are as follows :- Date of Receipt Asst.Year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Room Nos. 9 10 Gopal Das Mimani 1,00,000/- 03.07.2000 -do- Room No.19 Gopal Das Mimani 50,000/- 03.07.2000 -do- Shyamsunder The assessee produced copies of the registered Conveyance deed in the name of Rakesh Kr.Garg. The assessee therefore submitted that it had not received cash as referred in the seized documents. 8. With regard to the premises at 159A, Rash Behari Avenue, Kolkata the assessee pointed out that the assessee trust continued to be the owner of the premises and the rooms continued to be in the occupation of tenants of the aforesaid premises. The assessee pointed out that there is no transaction executed by the trust in favour of the tenants. It was not probable that the assessee would have received moneys from the tenants. The assessee thus submitted that on the basis of notings in the loose papers which do not belong to the assessee, in respect of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... di Charitable Trust, earlier known as Bharat Trust was a family trust of Todi family and appellant was part of the Todi family. In my opinion, appellant was capable of being control of Brij lal Todi Charitabl Trust. A trust is a taxable person under Income tax Act. However, it is a non living artificial entity. As an artificial entity it can receive only that amount of sale consideration which is credited in its bank book or cash book or such books of account. Appellant has never taken a ground that the cash of ₹ 12.30 lakh has been entered in the books of Brij lal Todi Charitable Trust as further sale or advance consideration over and above the cheque consideration on account of sale of the rooms in 32, Ezra Street and 159/ A, Rashbehari Avenue. Therefore the evidences and circumstances and the fact that the paper was seized from the possession of appellant, show that there is a high probability that appellant received ₹ 12.30 lakh in cash as controller of Brijlal Todi Charitable Trust on sale or contemplated sale of rooms in 32, Ezra Street and 159/ A, Rashbehari Avenue. The seized papers show that wherever Brij lal Todi Charitable Trust had transferred the ownershi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be in occupation of tenants on the date of the search. These facts have not been contradicted by the Assessing Officer and therefore it cannot be said that the advance. of ₹ 2.3 lakh for contemplated sale represents sale. receipt unless the sale of rooms is actually affected. Facts of the case show that these rooms were not sold by Brijlal Todi Charitable Trust subsequently, therefore, the question of any income, from such non existing sale Would not arise. When the event for generation of income is non existent the question of any undisclosed income from such event cannot arise. The evidences therefore show that the contemplated sale of one room of 32, Ezra Street and three rooms of 159/ A, Rash Behari Avenue for the advance of ₹ 2.3 lakh could not be converted into sale and therefore no undisclosed income of the appellant can be determined on the basis of such contemplated sale which did not realize. 10. Aggrieved by the relief granted by CIT(A) the revenue has raised ground no.1 before the Tribunal in this appeal. Aggrieved by the order of CIT(A) sustaining the addition of ₹ 10 lakhs the assessee has preferred Cross Objection before the Tribunal. 11. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a given case may by itself would be sufficient to rebut the presumption u/s 292C of the Act. The Presumption u/s 292C of the Act cannot be equated to a conclusive proof. As we have already seen that both the properties in question do not belong to the assessee and belong to Brijlal Todi Charitable Trust. From the conveyance deed executed in favour of the tenant by the trust it is clear that the assessee was not in control or management of the trust and it was one Shri Anil Kumar Todi, who had executed the deed of conveyance. In fact it was not the case of the AO also that the assessee was managing all the affairs of the trust and was in a position to dominate the affairs of the trust. In these circumstances we are of the view that no credence can be placed on the seized documents to make the impugned addition in the hands of the assessee. 13. Another reason given by CIT(A) was that it was highly probable that when a deed of conveyance was executed in favour of the tenant by the trust, consideration paid otherwise than in cash would have been pocketed by the assessee. The CIT(A) in coming to the above conclusion has proceeded on the presumptions without sufficient evidence to j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in receipt of a sum of ₹ 2 lakhs repaid by Mr.Jalan by cheque on 19.04.2000 to M/.s. BCL Financial Services Ltd., against the amount due. The cheque was dishonoured and BCL has filed suit against Mr. Jalan for recovery of ₹ 2 lakhs. The AO refused to believe the claim of the assessee by observing that no corroborating evidence was filed by the assessee in this regard. 15.2. On appeal by the assessee the CIT(A) deleted the addition made by the AO for the following reasons :- 4.4. The page no.34 of NT/1 is a computer Print Out of the Ledger account Advance to Others Pramod Jalan , from the books of BCL Financial Services Ltd. (BCL) . There is one cheque payment entry and two contra entries related to cheque receipt and cheque dishonor and all such entries are ₹ 2 lakhs. Appellant has explained all the entries on behalf of BCL with evidence which the Assessing officer has rejected without any reason even after stating in page no.4 of the assessment order that page no 22 to 42 (which includes page no.34) of the seized document NT/1 belong to BCL Financial Services ltd. . I therefore delete the undisclosed income of ₹ 2 lakhs determined by Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all these entries with evidence to Assessing Officer as amount realizable from the debtors of BCL except the entry of ₹ 2 lakh from Vikram Singh which the appellant was not aware of. The onus is on Assessing Officer to rebut the claim of appellant which the Assessing Officer could have easily done if it was possible because Assessing Officer is the Assessing Officer of BCL also. Further, to hold such entries as undisclosed income of appellant, onus is on Assessing Officer to produce supporting evidence to substantiate the nature and amount of such transactions. Assessing Officer failed on both the fronts and therefore such entries cannot be held to be representing the undisclosed income of ₹ 12.5 lakh of the appellant. I therefore delete the undisclosed income of ₹ 50.851akh + ₹ 12.5 lakh determined by Assessing Officer in respect of page no 3.5.of NT/I. 17. Pages 36 to 38 of NT/1 : As far as the aforesaid pages of the seized documents are concerned, on the basis of page 36, according to the assessee no inference can be drawn from the notings in the seized paper, as it does not spelt out transactions that had actually taken place. AO, however ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table Trust, the AO drew an inference that the assessee being in complete control of the activities of the trust ought to have received on money from the transferees. According to him such an inference had to be drawn even the seized document is attributable to M/s. BCL because the assessee was the Managing Director in complete control of BCL. Again reference was made to provision to section 292C of the Act. The learned counsel for the assessee relied on the order of CIT(A). 20. We have given a careful consideration to the rival submissions, The first aspect as we have already noticed, is that the AO was convinced that seized documents NT/1 34 to 38 belong to BCL and that appropriate proceedings will be initiated against BCL in respect of transactions. Having come to such a conclusion the AO could not have attributed the entries in the seized documents to the assessee. As far as page 34 of the seized document is concerned we find that this contains more of a memorandum of things to be done which is in the form of computer print out. There is nothing brought on record as to who is the author of the documents. Besides the above no adverse inference can be been drawn from the seize ..... X X X X Extracts X X X X X X X X Extracts X X X X
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