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TMI Blog2016 (6) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act, 1961 (in short 'the Act') Act was conducted on 16.10.2007. Notice u/s 153A of the was issued to the assessee on 6.6.2008. Subsequentl y, statutory notices were also issued to the assessee which were served upon the assessee. During the course of search at the residential premises of the directors of the assessee company, documents numbering 96 & 97 of Annexure A-1 dated 18.11.2005 containing details of purchases of jewellery set of Rs. 1,34,000/- (weight 158.880 gms) were siezed. The bill No. 3311 dated 18.11.2005 was issued by the Talwar Sons, jeweller SCT 14-015, Sector 22-D, Chandigarh in the name of M/s N.K. Enterprises (P) Ltd Village Lohgarh, Zirakpur. Similarly documents No. 95 of Annexure A-1 dated 18.11.2005 containing details for purchases of five diamond rings of Rs. 1700/- was seized. The Bill No. 823 dated 18.11.2005 was issued by M/s Talwer Sons, jeweller in the name of M/s N.K. Sharma Enterprises (P) Ltd. During the course of search, at the residential premises of the directors, yet another document No. 99 of Annexure A-1 dated 19.11.2005 containing details of purchases of jewellery set of Rs. 48,000/- (weight 56.80 gms) was seized. The bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be rejected on the ground that the same was an afterthought or created afresh. The said cash flow statement is reflective of the events which are cross verifiable in terms of bank withdrawals/deposits an purchases/sales of immovable properties in the form of register deeds, The stance of the Assessing Officer that the same is not verifiable at this stage is hollow and devoid of any logic. , The purchase of jewellery which obviously should normally be in the hands of individual stands recorded in the personal cash book of Sh. N.K. Sharma and therefore no separate addition in the hands of company which has similar name could be made. The addition made is therefore directed to be deleted." 5. We have heard the rival submissions. From the above findings of the CIT(A), it is clear that jewellery in dispute was found recorded in the perosnal cash book of Shri N.K. Sharma and therefore, the Ld. C IT(A) has categorically held that no separate addition in the hands of the assessee company can be made. The Ld. C IT(A) observed that in the case of the individual in this group of cases, he had accepted cash flow statement prepared by the assessee was based upon the bank account deposits and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lenged the action of the CIT(A) in deleting the addition by admitting additional evidence at the appellate stage. We will dispose off both the grounds of appeal, together in succeeding paragraphs. 8. The facts relating to this issue are that the Assessing officer made the addition of Rs. 1 crore on account of alleged payment to one Shri Jagdeep Singh by Shri Yadwinder Sharma on behalf of the assessee company. The Assessing officer relied on the affidavit of Shri Yadwinder Sharma filed on 27.3.2009 in the Court of Additional Civil Judge (Senior Division) Dera Bassi in the case of Sh Jagdeep Singh S/o Sh. Narindaer Singh Vs. Sh. Jagdish Arora and others. The affidavit submitted by Shri Yadwinder Sharma reads as under:- "I, Yadwinder Sharma, aged about 35 years s/o Sh. Vishwanath Sharma R/o village Lohgarh, N.A.C. Zirakpur, Tehsil Dera Bassi, Distt. S.A.S. Nagar (Mohali) do hereby solemnly affirm and declare as under :- 1. That I am permanent resident of village Lohgarh, N.A.C Zirakpur, tehsil Dera Bassi, Distt. .A.S, Nagar (MohaJi) and I am engaged in the business of real estate in the area of Zirakpur and its adjoining areas. 2. That I am full time director of M/s N.K Sharm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 is the entry of cash book for the month of April 2005 which is also correct as per the original. On the basis of above affidavit of Shri Yadwinder Sharma, the Assessing officer took the view that no transaction by cheque was made between Sh. Jagdeep Singh and Yadwinder Sharma. He further observed that from paras 6 & 7 of the affidavit, it is clear that Rs. 1 crore was paid to Shri Jagdeep Singh in cash in the last week of April 2005 and returned in cash in first week of May 2005. The Assessing officer further noted that Shri Yadwinder Sharma also enclosed with the affidavit a copy of cash book for 9.4.2005 showing cash in hand of Rs. 92,95,344/- to prove the availability of cash. According to the Assessing officer, if Shri Yadwinder Sharma had given money through cheque then he would have enclosed copy of the bank account showing bank balance and withdrawals during that period and, therefore, the Assessing officer rejected the contention of the assessee regarding transaction by cheque. Consequentl y, the Assessing officer held that Shri Yadwindear Sharma paid Rs. 1 crore on behalf of the company in cash to Shri Jagdeep Singh from undisclosed sources, therefore, the Assessing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purchase of land when into civil dispute before the court. The specific question and answer on the issue as recorded by the Assessing Officer u/s 131 is reproduced as under:- Q.6. A complaint has been received against you from Sh. Jagdish Arora in which he has stated that you have received a sum of Rs. 1 crore cash in month of April, 2005 from Sh. Yadwinder Sharma, which was returned by you in the month of May, 2005, what do you want to say in this regard? Ans. Yes I had received a cheque of Rs. 1 crore from Mr. Yadwinder Sharma bearing cheque No. 133950 drawn on HDFC Bank, Zirakpur dated 25/4/2005 from M/s N.K. Sharma Enterprises (P) Ltd. Actually Sh. N.K. Sharma is my very close friend and we have the family relations with each other. The cheque as received by me was returned within 10 days to Sh. Yadwinder Sharma due to some dispute, registration of plot could not executed. The perusal of proceedings conducted by the Assessing Officer in terms of enquiries done from Sh. Jagdish Singh make it clear that no consequential action was taken in the case of Sh. Jagdeep Singh as the alleged receipt and repayment of loan of Rs. 1 crore had not actually taken place. This fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was paid on behalf of the company to Shri Jagdeep Singh has to be considered in the context of the pending civil litigation between Shri Jagdeep Singh and Shri Jagdish Arora. It is apparent from the records that Shri Jagadish Arora had filed a suit before the Additional Civil Judge, Derabassi to seek forfeiture of the amount which he had received from Shri Jagdeep Singh to the tune of Rs. 50 lakhs in respect of a deal they had entered into for purchase of land worth Rs. 3.75 crores. The contention of the assessee was that Shri Jagdeep Singh in his attempt to satisfy the Court regarding his capability of having sufficient resources to honour his part of the commitment in the deal to purchase the property sought the help of his family friend Shri Yadwinder Sharma, one of the directors of the assessee company, who agreed and submitted an affidavit, wherein the availability of an amount of Rs. 1 crore was shown for his friend Shri Jagdeep Singh. It is clear from the above narrated facts that Shri Yadwinder Sharma filed the affidavit before the Civil Court, Derabassi to support the case of Shri Jagdeep Singh. We fully agree with this observation of the CIT(A) that in fact no actual p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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