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TMI Blog2016 (10) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... losed income. There being no contrary material on record, we confirm the findings reached by the ld. CIT(A) on this issue. Accordingly, ground No. 1 of the appeal of the Revenue is dismissed. Unaccounted cash payment to other family group - notings on different pages of memorandum of family settlement, sized from the residence of Sh.Vinit Beriwala, has made aforesaid addition - Held that:- No statement has been recorded of the person (s) from whose possession these documents were found. The ld. CIT(A) has categorically mentioned that there has been no addition to income in hands of either Sh. Vineet Beriwala or Sh. SS Beriwala for A.Y.2006-07 based on the narration found made on the seized papers or that they have anywhere declared the receipt of payments from the assessee. There is nothing on record to contradict the findings of the ld. CIT(A) that no cash for ₹ 7,33,50,000/- or a lesser amount found at any of the premises of Sh. Vineet Beriwala or Sh. SS Beriwala , nor any details of any investment/ expenditure having been made out of this supposed amount of ₹ 7,33,50,000/- were found in search on Sh. Vineet Beriwala or Sh. SS Beriwala. Thus there being no corrobor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sahu, Accountant Member: This is an appeal by the Revenue against the order of ld.CIT(A)-III, New Delhi dated 12.12.2011 for the assessment year 2006-07 on the following grounds : 1. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of ₹ 5,00,000/- made by the Assessing Officer u/s 69B of the Income Tax Act, 1961 on account of unexplained investment. 2. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of ₹ 7,33,50,000/- made by the Assessing Officer on account of undisclosed income. 3. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of ₹ 1,17,428/- made by the Assessing Officer on account of low household withdrawal. 4. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 2. The brief facts of the case are that search and seizure operation u/s. 132 of the Act was carried out in Vipul Group of cases on 01.06.2006 covering the flagship company of the group M/s. Vipul Ltd. and their director s. This also include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of the assessee by the AO. As against this in his submission dated 09.05.11 the appellant has inter alia upon giving a bifurcation of the total surrendered undisclosed income for ₹ 1,01,05,976/- submitted that this entire surrender comprises of six different types of application of the undisclosed income of ₹ 1,01,05,976/-. That in the statement of affairs prepared on the basis of loose papers, as on 31.03.06( page 74 of the paper book) , the appellant has made the following addition to the capital account:- Add: Income disclosed in Search on 1.06.06 Survey Proceedings on 19.09.08 Income on the basis of Annexure A-1/3 5 ₹ 66,44,976/- Cash paid to father for personal expenses (on the basis of Pg 7, Annexure A-l) ₹ 9,90,000/- Income on the basis of Annexure A-l/10 ₹ 8,75,000/- Income on the basis of Annexure A-l/11 ₹ 6,75,000/- Expenses for conversion p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed expenses (which have already been treated as income) has also been mentioned in the capital account and that under this head expense for conversion and purchase of jewellery for Sunita Beriwala at ₹ 5 lacs has separately been mentioned. While giving no finding on the correctness and truthfulness of the statement on ₹ 5 lakh spent on conversion of jewellery, the fact remains that from the above noted details it is observed that the disclosure of income for ₹ 1,01,05,976/- made by the appellant at the time of search has been adhered to and the investment in Rolex Watch for ₹ 4 lacs and for Mont Blanc pen for ₹ 1 lac (total ₹ 5 lacs) has been shown as part of the undisclosed income and therefore the addition made on this account is directed to be deleted. B. As regards the addition of undisclosed income of ₹ 7,33,50,000/- is concerned , upon a careful reading of the AO's findings and the appellant submission thereon and the perusal of the copy of the seized documents the following notable points emerge:- i. It is a matter of record, as noted by the AO himself, that Annexure A-l pages 1 to 109, which mostly relate to narration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the AO is satisfied 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 s. 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the AO having jurisdiction over such other person and that AO shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of s. 153A. 12. On a plain reading of the aforesaid provisions it is apparent that ss. 153A, 153B and 153C lay down a scheme for assessment in case of search and requisition. Sec. 153A deals with procedure for issuance of notice and assessment or reassessment in case of the person where a search is initiated under s. 132 or books of account, other documents or assets are requisitioned under s. I32A after the 31st day of May, 2003. Sec. 153B lays down the time-limit for completion of assessment under s. 153A. Sec. 153C which is similarly worded to s. 158BD of the Act, provides that where the AO is satisfied that any money, bullion, j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at if any documents found though pertaining to the assessee, if not belonging to such assessee, the action under s. 153C r/w.s. 153A cannot be invoked. The Tribunal in this case held as under:- 7. We have heard both the parties. It is an undisputed fact that books of account or documents do not belong the assessee, as these were seized from the premises of Shri Reddy. It is nowhere stated that these books of account or documents showed that all the transactions were belonging to the assessee. Such books of account or documents contained the transactions relating to the group concerns of Shri Reddy. No valuable belonging to the assessee has been seized during the course of search. The term belonging implied something more than the idea of casual association. It involves the action of continuity and indicates one more or less intimate connection with the person over a period of time. The books of account or documents seized during the course of search have a close association with the group concern of Shri Reddy. It records the transaction carried out by that group. It does not record the transaction carried out by the assessee. Under the WT Act, assets belonging to assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to initiate action under s. 153C of the Act so as to frame assessment under s. 153 A of the Act. We, therefore, set aside the assessments. The word belonging to has also been seen in Concise Law Dictionary published by LexisNexis Butterworths ,Wadhwa ,Nagpur. From the third edition of this book it is seen that the word belonging to refers to ownership. Though capable of denoting an absolute title it can also signify even possession of an interest less than full ownership. It signifies something more than the idea of casual association and indicates a more or less intimate connection. I have given considerable thought to the facts of the case and the arguments made by the appellant . Now the requirement under the law is regarding the ownership of the document itself and the fact of the matter is that the there is no absolute or limited ownership of the assessee over the seized documents. As there is no intimate connection between the contents of the seized document and the appellant and neither there is any other corroborative evidence to the effect that the appellant had parted with the cash portion recorded in the seized document therefore the requirement under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no presumption about earning of income and the AO cannot make addition based on incomplete entries and notings made on unsigned, rough paper which does not clearly reveal that the assessee has earned income. That accordingly no reliance can be placed on such dumb document. Reliance has been placed on the decision of Delhi High Court in case of C1T vs. Kulwant Rai 2911TR 36 and it has been submitted that the addition made by the AO without any corroboration of the seized rough papers based on any direct/circumstantial evidence is not in accordance with law and therefore may be deleted. The contents of the documents have been gone through which are cryptic in nature . Even the deciphering of the figure of 1.25 and 6.0850 into ₹ 1.25 Crores and ₹ 6.0850 Crores is based on assumption. Moreover no dates are recorded against these narrative and that on the top of page 107 (which in my view should be correctly read as pending portion 12.04.2006) refers to arising from family settlement of 12.04.06 . It is also a matter of record that the impugned documents have not been seized from the possession or control of the appellant but rather have been seized from residential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to ₹ 9,12,878/- . That apart from the above the assessee has also shown drawings for undisclosed expenses, which has been treated as income for the year amounting to ₹ 34,61,000/- and therefore there is no case for making an addition of ₹ 1,17,428/- as unexplained expenditure on house hold expenses. The other argument of the appellant is that no addition u/s 153A can be made unless there are certain documents or material found in the search. Reliance in this regard has been placed on the decision in Anil Kumar Bhatia 1 ITR (Trib.) 484 other cases. On a consideration of the submission of the appellant it is noted that while it is apparent that as such the withdrawals for household expenses are quite low considering the status of the appellant and his family ( as the withdrawal and LIC premium and school fees are distinct from normal expenses incurred on electricity, vehicle, fooding, and the expensive life style) but then it is also a matter of record that there has been an substantial drawing for undisclosed investment for ₹ 34,61,000/- during the year which has been treated as income as per the disclosure made by the appellant. This includes miscella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the search party and surrender of additional income was made only to these items. On this Annexure, there is no mention of any purchase or conversion of jewellery. The ld. CIT(A) has also found that in the statement of affairs, drawings for undisclosed expenses already treated as income, have also been mentioned in the capital account and that under this head expense for conversion and purchase of jewellery for Sunita Beriwala at ₹ 5 lacs has separately been mentioned. We, therefore, find that the disclosure of income for ₹ 1,01,05,976/- made by the assessee at the time of search has been adhered to and the investment in Rolex Watch for ₹ 4 lacs and for Mont Blanc pen for ₹ 1 lac (total ₹ 5 lacs) has been shown as part of the undisclosed income. There being no contrary material on record, we confirm the findings reached by the ld. CIT(A) on this issue. Accordingly, ground No. 1 of the appeal of the Revenue is dismissed. 7. Regarding deletion of addition of ₹ 7,33,50,000/-, it was submitted by the ld. DR that the Assessing Officer on the basis of notings on different pages of memorandum of family settlement, sized from the residence of Sh. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the assessee. There is nothing on record to contradict the findings of the ld. CIT(A) that no cash for ₹ 7,33,50,000/- or a lesser amount found at any of the premises of Sh. Vineet Beriwala or Sh. SS Beriwala , nor any details of any investment/ expenditure having been made out of this supposed amount of ₹ 7,33,50,000/- were found in search on Sh. Vineet Beriwala or Sh. SS Beriwala. Thus there being no corroborative evidence found in search or post search investigation to substantiate the fact that the appellant has made unaccounted cash payment for ₹ 7,33,50,000/- to Sh. Vineet Beriwala or Sh. SS Beriwala during the year, the assumption of payment of cash derived from alleged paper seized cannot be supported. Therefore, ld. CIT(A) has rightly deleted the addition. The ld. CIT(A) has also recorded the findings on legal aspect of the case also, inasmuch as the alleged paper was not found from the possession of assessee and there was no corroborating evidence to show that the said papers seized from third party belong to the assessee. He has also relied on several decisions of Hon ble Higher courts. The Revenue has not brought any material on record contrary to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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