9911796707
TMI Blog2015 (10) TMI 2575X X X X Extracts X X X X X X X X Extracts X X X X ..... need not any interference from our side. X X X X Extracts X X X X X X X X Extracts X X X X ..... material and labour. To counter this problem, an arrangement was made by the firm whereby the pay orders/cheque were issued in the name of certain suppliers of materials who were prepared to give bills to the Bank and after receiving the cheques from the Bank against the loan sanctioned. These suppliers claimed to be agreed to withdraw the loan amounts received and after retaining 1 % of the amount received towards their commission, agreed to pass on the balance amount of cash to M/s Alliance Hotel. This cash, in turn was used by the firm to engage the contractors and to get the reconstruction of the premises done by paying them in cash. 4. On 11.05.2007 and 12.05.2007 survey under section 133 A of the Act was conducted at the premises of Hotel Royale Empire (Alliance Hotel) on D N Road, Mumbai. During the course of the survey certain loose papers containing figures and letters were found and impounded along with computer sheets and CDs. Out of the papers impounded, loose papers bearing numbers 4 and 5 and cash statement dated 18.11.2006 are relevant for the A.Y. 2007-08. Similarly the computer sheets impounded contained the details of Project report obtained for reconstruction a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned D.R. submitted that CIT(A) erred in directing to delete the addition of ₹ 2,62,40,000/- made by Assessing Officer under section 69A of Income Tax Act solely relying on the submission made by assessee during the course of appellate proceedings ignoring the facts that in page No. 4 & 5 of the impugned loose sheets as per Annexure A1, at Sl. No. 4 it was mentioned as "Parvez Sir" and an amount of ₹ 2,62,40,000/- was shown against this name. Assessing Officer, in his assessment order, established that "Parvez Sir" is none other than Shri Parvez M.H. Ghaswala, who has received an amount of ₹ 2,62,40,00/-. The material evidence procured by the investigation wing during the course of survey and also the facts discussed by the Assessing Officer in the assessment order. Assessee failed to discharge the onus which lies upon him to prove source and nature of receipts. So the order of the CIT(A) on this issue be set aside and that of Assessing Officer be restored. On the other hand the learned counsel of the assessee drew our attention to question No. 10 in para 5 of the assessment order wherein the question asked was "Who is Parvez Sir? In this regard the answer of Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were recovered from the business premises of Alliance Hotel and not from assessee. These slips of paper bearing No. 4 & 5 and cash statement dated 18.11.2006 were not in his handwriting. Assessee was also not called by the survey party for recording his statement in relation to papers found during the course of survey proceedings in the premises of Alliance Hotel and to record the statement to verify whether the payments made to "Parvez Sir" in the papers found is the payment made to assessee or not. Assessee was not called for recording his statement by the Assessing Officer of Alliance Hotel during the course of assessment proceedings of the said firm. However, the Assessing Officer of the assessee in his case recorded the statement of the assessee wherein assessee had denied that he is not "Pervez Sir" as mentioned in the papers found during the course of survey action conducted at the premises of Alliance Hotel. It is undisputed that papers showing the name of "Parvez Sir" were found in the premises of Alliance Hotel during the course of search action and not from assessee. Papers found were not in his handwriting. The partner of Alliance Hotel, Shri Kasam Ghaswala in his state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance Hotel. Apart from the above, the Assessing Officer did not have any other ground for arriving at the conclusion that the entry "Parvez Sir" is referring to assessee. It is undisputed fact that Alliance Hotel had carried out reconstruction work which was subsequently turned out to be illegal and was demolished. This fact was further corroborated by the order of the Brihyan Mumbai Mahanagar Palika bearing No. ACA/180/MOHA/ di. 19.03.2009, clearing mentioned that the said firm had constructed unauthorized construction of mezzanine floor and additional room with attached toilet in Alliance Hotel, 3rd floor, Empire Building. The fact of reconstruction of Alliance Hotel was accepted by Shri Kasan Ghaswala, being Managing Partner of the firm. In view of this it is absolutely evident that the Assessing Officer has made the addition on conjuncture and surmises without concrete evidence in his possession. 7. Without prejudice to the above it was the stand of the assessee that a sum of ₹ 3,02,40,000/- has been doubly taxed, firstly in the hands of Alliance Hotel and secondly in the hands of assessee. The stand of the assessee was that the unexplained investment, if any, in the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the addition of ₹ 6,88,22,000/- made by him in the case of Alliance Hotel. 9. We find that provisions of section 69A of the Act reads as under: - "Wherein any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the assessing officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may deemed to be the income of the assessee for such financial year." It is undisputed fact that assessee was not found to be the owner of ₹ 40,00,000/- appearing in the cash statement dated 18.11.2006. Assessing Officer was, therefore, not correct in invoking provisions of section 69A of the Act in making the addition of ₹ 40,00,000/-. Assessing Officer made an addition of ₹ 40,00,000/-, over and above the addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was not able to prove that the said cash was expended for the activities of the firm, as such the assessee obviously becomes the owner of the money so received, and therefore it is correctly taxed in his hands by the A.O. (b) Based on the impounded loose papers and digitalized information in CD, indicated cash transactions of ₹ 10,69,420/- between the assessee and M/s Alliance Hotels which he asserts this facts and therefore, burden lies on him to prove the said facts in view of section 101 and 103 of Indian Evidence Act 1872. (c) The cash transactions were made with the knowledge of the assessee and therefore the burden is on the assessee to establish the said fact with the proof, which has not been discharged by him. (d) The decision of the CIT(A) in the assessee's own case for A.Y. 2007-08 has not accepted by the department. (2) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not following the decision of the Hon'ble Supreme Court in the case of Nund & Samant Co Pvt Ltd vs CIT (1970) 78 ITR 268 (SC) wherein the Court has held that it is for the tax payer to establish by evidence that the particulars expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... soft copy of impounded documents, there were notings which prima facie refer to assessee, the notings being "Pervez Sir" being name of assessee himself and being ex-partner of the partnership from where the documents were impounded. Revenue could not establish the nexus between these documents with assessee. Assessing Officer has not made any effort, whatsoever, to indicate that "Parvez Sir" or other noting in the documents are really referring to assessee. In such a situation some evidence was definitely required to establish the link between both. No effort has been made in this regard and the inference that follows is that the coincidence of name can at best be said to be suggestive and not conclusive of that the documents belong to assessee. On the date of survey assessee was no more partner in the partnership firm. That definitely removes the link between the documents and assessee. Various objections raised by the counsel also established the same thing. Moreover, the predecessor CIT(A) has deleted the addition made by Assessing Officer for A.Y. 2007-08 which has been discussed by us herein above. 14.1 In view of our discussion above we hold that CIT(A) was justified in dele ..... X X X X Extracts X X X X X X X X Extracts X X X X
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