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TMI Blog2017 (4) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 5936/Del/2016 - - - Dated:- 28-3-2017 - SHRI H.S. SIDHU, JUDICIAL MEMBER For The Assessee : SH. V.K.SABHARWAL, ADV. and SH. SUDHIR MATHUR, ADV. For The Department : MS. BEDOBINA CHAUDHURI, SR. DR ORDER The Assessee has filed the Appeal against the impugned Order dated 27.9.2016 of Ld. CIT(A)-23, New Delhi pertaining to assessment year 2008-09. The assessee has raised as many as 24 grounds, but the only effective and pressed the ground which is relating to addition of ₹ 13,63,080/- on account of undisclosed income. 2. The brief facts of the case are that the assessee filed his return of income at a total income of ₹ 1,57,962/- on 31.07.2008, the same was processed u/s.143(1) of the I.T. Act, 1961 on the income declared by the assessee. A search and seizure operation was carried out in the case of M/s Bright Group of Cases on 25.11.2010. During the course of examination of seized material contained in Annexure A-29 A-30, AO noted that huge payments have been made to various persons in cash. Most of the individuals are Faculty Members who took teaching assignments for students enrolled by M/sBright Professional Pvt. Ltd.. Sh. Vikas Kapoor, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed for the assessment year 2007-08 on 2.6.2014 wherein the impugned additions were made of ₹ 4,44,000/- on the basis of seized material contained in Annexure A-29 relating to M/s Bright Professional Pvt. Ltd; copy of written submissions filed before the CIT(A) in respect of the additions made of ₹ 4,44,000/- in the declared income of the appellant for the assessment year 2007-08; copy of appellate order passed for the assessment year 2007-08 by the CIT(A)-23, New Delhi wherein the additions made were deleted and appeal of the appellant was allowed on the identical facts; copy of reasons recorded relating to the assessment year 2008-09 on the identical facts as recorded in the assessment year 2007-08 prior to invoke the provision contained u/s.147 of the I.T. Act; copy of objections filed with regard to the initiation of proceedings vide letter dated 20.7.2015 before the AO relating to AY 2008-09; Adjudication of objection filed by the AO vide letter dated 6.8.2015; copy of remand report sent by the AO to the Ld. CIT(A)-23,New Delhi for the assessment year 2008-09; copy of letter dated 1.9.2016 sent to the appellant by the CIT(A)-23, New Delhi seeking certain clarifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges against the professional assignment given to him and besides this, no any other amount he has received from them, as alleged. That it was also apprised to the concerned Assessing Officer, that likewise to this year, there was also an information available with him relating to the Financial Year 2006-07, that the appellant has received over and above from his professional charges of ₹ 4,44,000/- from M/s Bright Professionals Pvt. Ltd., which he has failed to disclosed in his books of accounts for the said year, as such on the basis of identical reasons recorded in the preceding year i.e. A.Y. 2007-08, the additions were made in the hands of the appellant of ₹ 4,44,000/- in the declared income, against which the appellant preferred an appeal before the CIT(A)-23, New Delhi, and the same has been allowed by the CIT(A)-23, thereby deleting the additions made of ₹ 4,44,000/- in the income declared, but the Assessing Officer disposed off the objection filed out-rightly without taking into consideration the aforementioned facts. That during the course of assessment proceedings, the concerned Assessing Officer was further apprised the following informa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r admitted: c. That they have made cash payment to the appellant of ₹ 13,63,080/- during the AY, 2008-09 and not ₹ 20,70,0001- which were taken to be the concealed income by the Assessing Officer at the time of recording the reasons. b. He has further admitted that the said payments claimed to be made of ₹ 13,63,080/- appears in their rough day-book maintained by us. He further admitted that we are not having any records about the fee receipts from students and consequently professional charges paid to our faculty members. The same facts were confirmed by the other director Sh. Sanjeev Kumar Gupta of MIs Bright Professionals Pvt. Ltd. in his statement recorded on 08.01.2016 uls 131 of the Act c. That in their cross-examination on 08.01.2016, both the directors have admitted that there is no any agreement entered and executed between any of the faculty member and the management of their Institute. All the fee receipts and payments are verbal and there is no record either maintained or available with us for the sharing of fee between the faculty members. They all are being paid in cash for which we are not maintaining any proper records with us. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the A.Y. 2008-09. 4. Whether the Assessing Officer was correct under the law to make additions of ₹ 13,63,080/- in the hands of the appellant without appreciating that the provisions of law has been invoked u/s 147 of the Income Tax Act 1961, only on the basis of borrowed information from the Investigation Wing of the Deptt. without having his own satisfaction thereof, prior to record reasons and consequently issuing notice u/s 148 of the Income Tax Act 1961, to the appellant. 5. Whether the Assessing Officer was correct under the law to make additions of ₹ 13,63,080/- in the hands of the appellant because of not taken into consideration / adjudicating the Affidavit filed by the appellant, that apart from the receipt of ₹ 91,000/- he has not received further any amount in cash of ₹ 13,63,080/-. 6. Whether the Assessing Officer was correct under the law to make additions of ₹ 13,63,080/- in the hands of the appellant, as he has failed to appreciate that the appellant is maintaining his proper books of accounts and same have also been accepted as true and correct, while finalizing the assessment proceedings and no adverse finding if any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Ltd. Vs. ACIT (Supra) 19. Jai Bharat Maruti Ltd. Vs. CTT(Supra) 20. Ambika Steels Ltd. (supra), 21. AGR Investment Ltd. (supra), the Hon 'ble Jurisdictional High Court of Delhi 22. Raymond Woollen Mills (supra), Hon 'ble Apex Court 23. Rajesh Zhaveri (supra), Hon'ble Apex court 24. CIT vs Insecticides (India) Ltd., 25. Signature Hotel (P) Ltd. (supra) 26. CIT vS. SFIL Stock Broking Ltd. (supra) 27. ITO vs. On Exim (P) Ltd. (supra), ITAT Delhi 28. UNITED ELECTRICAL COMPANY (P) LTD. Vs. CIT ORS. REPORTED AS (2002) 258ITR 317 (DEL), wherein it was held: 29. CIT Vs. SFIL STOCK BROKING LTD. REPORTED AS (2011) 325 ITR 285 30. CIT vs. ATUL JAIN, REPORTED AS (2007) 163 TAXMANN 325 (DEL) 31. P. Munirathnam Chetty and P. Satyanarayana Chetty v. Income-tax Officer, (1975) 101 ITR 385 (AP), 32. Ganga Saran and Sons Pvt. Ltd. v. Income-tax Officer and Others, (1981) 130ITR 1 (SC), 33. SARTHAK SECURITIES Co. (P) LTD. vs. ITO: REPORTED AS (2010) 329ITR 110 (DEL) 34.ITO, Ward-31(2) Vs. Amar Khosla, New Delhi in ITA No. 1891/Del/2010 for the A.Y 2001-02 35. Central India electric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranking officer. For these reasons, the Court is satisfied that the findings by the ITAT cannot be disturbed. That in the case of ITO, Ward-31 (2) Vs. Amar Khosla New Delhi in ITA No. 1891/Del12010 for the A.Y 2001-02 by the ITAT, 'H' Bench, New Delhi vide order dated 26.12.2013, the similar observation was drawn by the Court. Other Cases decided / relied upon on the identical issue: 1. Central India electric Supply Co. Ltd. Vs.ITO, 333ITR 237 (Del). 2. United Electric Co. Pvt. Ltd. Vs. CIT and others, 258ITR 317 3. CIT Vs. SPL's Sidhartha Ltd. 345ITR 223 (Del) 4. CIT Vs. Naveen Khanna (dated 18.11.2009 in ITA No. 21/2009 (DHC). 5. State of Bihar Vs. JA.C Saldanna Ors. AIR (1980) SC 326. 6. State ofGujarat Vs. Shantilal Mangaldas, AIR (1969) SCN 634. 7. Anirudh Sinhji Karan Sinhji Jadeja Vs. State ofGujarat, (1995) 5 SCC 302 8. Central India Electrical Supply Co. Ltd. Vs. ITO Anr., Reported as (2011) 333 ITR 237 (del) 9. Calcutta Discount Co. Ltd. v. Income Tax Officer, Companies District 1, Calcutta Anr., (1961) 41 ITR 191 (SC) . 10. CIT v. Shri Tirath Ram Ahuja (HUF), (2008) 306 ITR 173 (D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Supra) in ITA No. 5630/2011 has upheld the order of the Tribunal. 7. CBIvs. VC Shukla (1998) 3 SCC 410) 8. CIT vs. PV Kalyansundaram (294 ITR 49) 9. CIT vs. Girish Chaudhary (2008) 296 ITR 619 (Delhi) - Delhi High Court. 10. ACITvs. Sharad Chaudhary (2014) 165 TTJ0145) (Delhi) 11. Sunita Dhadda vs. DCIT (2012) 71 DTR 0033 Jaipur. 6. On the contrary, Ld. DR relied upon the orders of the authorities below and stated that Ld. CIT(A) has passed a well reasoned order which does not need any interference, hence, he requested that the appeal filed by the Assessee may be dismissed. 7. We have heard both the parties and perused the records, especially the impugned order passed by the Ld. CIT(A), Paper Book and the Brief Synopsis. We find that the assessee filed his return of income at a total income of ₹ 1,57,962/- on 31.07.2008, the same was processed u/s.143(1) of the I.T. Act, 1961 on the income declared by the assessee. A search and seizure operation was carried out in the case of M/s Bright Group of Cases on 25.11.2010. During the course of examination of seized material contained in Annexure A-29 A-30, AO noted that huge payments have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords. ii. That since the addition made in the preceding year have already been considered and deleted as such by the Ld. CIT(A), therefore, no further additions if any be required to be made in the hands of the assessee in the A.Y. 2008-09 in terms of Rule of Consistency required to be followed on the identical issue, as has been held by the various Courts even by the Apex Court. iii. That the Assessing Officer was further apprised about the Statement of Sh. Rashid Masood, one of the Director of M/s Bright Professionals Pvt. Ltd. recorded on 25.11.2010 u/s 132(4) of the Income Tax Act 1961. Wherein he explained the names of their faculty members in which the name of the appellant is not appearing. It further appears in the said Statement in response to the Questions No. 14,15,16,17,19,20,21,22,23,24 25, put to him, that against the receipts of fees from students and payment to any of their faculty members, they are not issuing/ getting any receipts and the same were also not being recorded in their regular books of accounts. This apart, the Director failed to explain the cash in hand available with them of ₹ 1.49 Crore in his Statement recorded on 25.11.2010. He has f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13,63,080/- in the hands of the assessee while finalizing the assessment proceedings, without appreciating the facts, that on the basis of dump, uncorroborated and unsigned documents, without having any nexus to the payment of ₹ 13,63,080/- alleged to be paid to the assessee, the addition made only on the basis of presumption and guesswork of the Assessing Officer was not tenable, even the Directors of the company could also further not been able to prove the authenticity and validity of the document wherein reflecting the amount if any be paid to the appellant of ₹ 13,63,080/- during the Financial Year 2007-08 in their Statements recorded u/s 132 and 131 of the Income Tax Act 1961 and in their cross-examination also, therefore, the additions made are not liable to the sustained. My view is fully supported by the decision of the ITAT, Delhi in the case of Samta Khinda vs. ACIT, Central Circle-22 passed in ITA Nos. 336/Del/2012 5515/Del/2013 (AY 2009-10 dated 2911.2016, wherein it has been held that without any corroborating evidence /material, any of the figures mentioned /appearing on the unsigned loose papers seized / collected by the Department during the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Whether on the facts a d circumstances of the case, the Income Tax Appellate Tribunal was correct in Law in deleting the addition of ₹ 25,40,36,454 out of the total addition of ₹ 31,01,09,834 made by the AO on account of undisclosed receipt (from sale of space flats in Vatika Triangle? 2. Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was correct in law in deleting of ₹ 11.49,55,096 (i.e. ₹ 11,34,05,096 plus ₹ 15.50,000) out of the total addition of ₹ 13,84,20.000 made by the AD on account of undisclosed income not declared by the Assessee in its books of account? 3. Whether on the (acts and circumstances of the case, the Income Tax Appellate Tribunal was correct in law in deleting the addition of ₹ 1,04,39,000 made by the AO on account of accommodation entries taken by the Assessee? 4. Whether on the facts and circumstances of the case, the order of the ITAT is not perverse as it has failed to consider that in this case, the AO made the addition on the basis of the relevant searched material gathered from the Assessee during the course of the search proceedings? 29. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 45. As pointed out in Commissioner o{Income Tax v. S.M Aggarwal (supra) the said document can at best be termed as a 'dumb' document which in the absence o{independent corroboration could not possibly have been relied upon as a substantive piece of evidence to determine the actual rates at which the flats were sold. Further as pointed out in Commissioner of Income Tax v. D.K. Gupta (supra) merely because there are notings of figures on slips of paper, it did not mean that those transactions actually took place. Likewise in Commissioner of Income Girish Chaudhary (supra), the Court termed a loose sheet containing some notings of figures as a 'dumb document' since there was no material to show as to on what basis the AO had reached a conclusion that the figure '48' occurring in one of them was to be read as ₹ 48 lakhs. 46. In the present case, there was again no material on the basis of which the AO could have applied a standard rate of ₹ 4,800 per sq ft for all the floors of VT. It was also not open to the AO to draw an inference on the basis of the projection in the document, particularly when the Assessee offered a plausible explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the seized documents indicate exchange of on money between the parties. Admittedly, in the assessee's case there was no search. The seized document found during the course of search in the premises of M/s. M.V.V. Builders, is a loose sheet wherein certain financial transactions were recorded in the name of the assessee. Though, Sri M.V.V. Satyanarayana stated that he had paid a sum ofRs.50 lakhs and ₹ 25 lakhs in the financial year relevant to assessment year 2007-08 2008-09, to Sri P. Koteswara Rao towards land dispute settlement, nowhere it is stated that he had paid on money to the assessee towards purchase of site. The assessee right from the beginning stated that he had not received any on money from M/s. M.V.V. Builders towards sale of site. Besides, loose sheets found in the premises of M/s. M.V.V. Builders, the A.O. does not have any other document to show that the assessee has received on money from the purchaser. The A.O. has not made out any attempt to find out some reliable cogent material evidence on record to support his findings or to corroborate the statement of the purchaser. The assessee denied having received any on money over and above what was state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that on money is exchanged between the parties. 13 .. merely harping upon loose sheet and third party statement, which cannot be considered as conclusive evidence against the assessee to bring on money to tax as undisclosed income. The A.O. is required to bring further evidence on record to show that actual money is exchanged between the parties, but literally failed to do so. The AO did not conduct any independent enquiry relating to value of the property, instead merely relied upon statement given by the purchase of the property which is not covered. Further, there is no evidence with the A.O. that money has been exchanged between purchaser and seller. Therefore, we are of the view that the A. 0. is not correct in making additions towards on money without there being any evidence to show that the assessee has received anv money over and above what was stated in the sale deed. 17. Considering the facts and circumstances of this case and also applying the ratios of the judgements cited above, we are of the view that the A.O. is not correct in coming to the conclusion that on money exchanged between the parties based on a loose sheet found in the premis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, who is a third party, The evidence brought on record by the Department is not enough to fasten additional tax liability on the assessee. As seen from the above document this is just a handwritten loose document and the handwriting is also not of the assessee and the loose document was found at the premises of a third party. The burden on the Department to prove conclusively that the loose document belongs to the assessee. There is no presumption in law that the assessee has actually paid ₹ 1651akhs towards purchase of the property. The undisclosed income in this case is to be computed by the AO on the basis of the available material on record. It should not be based on conjectures and surmises. As of now, the material considered by the AO for making the addition of ₹ 1 crore is seized material marked a 'A/CRK104' and the statement of 5. This loose sheet found at the premises of CRK is not enough material to sustain this addition. The seized material found during the course of search and the statement recorded are some piece of evidence to make the addition. The AD has to establish the link between the seized material and other books of account to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mined or the .basis of the material and evidence detected in the course of the search action. The circumstances surrounding the case are not strong enough to justify the addition made by the Department. The burden of proving the actual consideration in the purchase of property is on the Revenue. Considering the entire facts of the case, the Revenue has failed to discharge its duty, instead made up a case on surmises and conjectures which cannot be allowed. Under these circumstances, there is no reason to confirm the addition of ₹ 100 lakhs towards on-money payment. Accordingly, the addition of ₹ 100 lakhs is deleted. CIT vs. P. V. Kalyanasundaram (2006) 203 CTR (Mad) 449: (2006) 282ITR 259 (Mad) relied on . 8.4.1 The Hon ble A.P. High Court in the case of K Lakshmi Savitri Devi (Supra) in ITA No. 563 of 2011 has upheld the order of the Tribunal. We are of the view that the Tribunal has rightly held that the registered document dt. 21.8.2006 under which the respondent purchased the above property showed that only ₹ 65. 00 lakhs was paid to the vendor by the respondent: that there was no evidence to show that the respondent had paid Rs.l. 00 crore in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 153A of the Act. AO should also have recorded his satisfaction in this case u/s. 153A of the Act. Even otherwise, the document shown before us does not have the date of transaction where amount of ₹ 96 lakhs is alleged to have been transferred by appellant to other person. Further the AO has also stated that the transaction is also corroborated by the date of cheque transaction. We do not found any cheque transaction where assessee is involved in the present transaction which is allegedly taxed in the hands of the assessee. Much to say that there was no date of cash transaction as alleged then it is surprised how AO has correlated the date with other transaction. Even otherwise when the assessee had denied the transactions, AO should have examined the recipient of search stated in that document and then confronted the assessee with the same. All these exercise have not at all been carried out by the AO. Furthermore, the presumption stated u/s. 292C of the I.T. Act is a rebuttal presumption. Therefore, when the assessee herself denied any such transaction, it cannot be stated that the actual transaction has taken place between the assessee and the person concerned whose name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compliance. It is further clarified that even if the AO of the searched person and the other person is one and the same, then also he is required to record his satisfaction as has been held by the Courts. 5. In view of the above, filing of appeals on the issue of recording of satisfaction note should also be decided in the light of the above judgment. Accordingly, the Board hereby directs that pending litigation with regard to recording of satisfaction note under section 158BD/153C should be withdrawn/not pressed if it does not meet the guidelines laid down by the Apex Court. 9.1 The above Circular states that even if the AO of the search person is one and the same then he should also record the satisfaction. Leaving aside the matter on satisfaction in this case the assessment has also been made disregarding the provisions of the search as provided under Chapter XIV-B of the Act. Once again at the cost of repetition the date of search is 6.11.2008 and the assessment year involves before us is assessment year 2009-10 and further addition has been made on the basis of the document impounded during the course of search at the residence of the assessee. The AO has procee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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