9911796707
TMI Blog2014 (11) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... nds addition could have been made. However, the Assessing Officer has not examined that person. Thus we hold that no addition is called for in the instant case. - ITA No. 928 and 929/PN/2011 - - - Dated:- 28-11-2014 - R. S. Padvekar (Judicial Member) And R. K. Panda (Accountant Member) For the Assessee : Sunil Pathak, Nikhil Pathak For the Department : P. L. Pathade, B. C. Malakar ORDER R. K. Panda (Accountant Member) The above two appeals filed by the assessee are directed against the common order dated 01-11-2011 of the CIT(A)-I, Pune relating to Assessment Years 2000-01 2001-02 respectively. For the sake of convenience, these were heard together and are being disposed of by this common order. ITA No.928/PN/2011 (A.Y. 2000-01) : 2. Facts of the case, in brief, are that the assessee is a partnership firm engaged in trading in curtains and other furnishings. The original return of income in this case was filed declaring total income of ₹ 16,28,420/-. In this case, the AO received information from the Addl.CIT Circle 11(2), Pune that during the course of search and seizure action in the case of Sri Shreeram H. Soni on 29-07-2003, some docum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that Your Honour is linking the said entries to the assessee. No where the name of the assessee is noted nor any other evidence is found regarding amount advanced by the assessee. There can be some other firm named Kajals in Pune and there is no evidence that the noting pertains to the assessee firm. No where the documents indicate that the amounts have been lent by the assessee to Mr. Soni. Further, there is no evidence with the dept. that Soni Group has accepted that this assessee has advanced funds to Soni Group. The addition proposed by Your Honour is simply based on presumption and without any corroborative evidence. 2.3 Relying on various decisions it was submitted that presumptions u/s.132(4A) is not applicable against the assessee. It was submitted that the presumption is available only in respect of the person from whom the paper is seized. It cannot be applied against Third Party. It was further argued that no addition can be made on the basis of evidence found with Third Party. 3. However, the AO was not satisfied with the explanations given by the assessee. According to the AO, though the assessee is not accepting that he has advanced loan, however, it is acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome loose documents found with third party. The assessee also submitted that Shreeram H. Soni had never admitted that the assessee advanced loan to him out of his unaccounted sources. It was argued that provisions of section 80 and 114 of the Indian Evidence Act are not applicable to the facts of the present case. Similarly, the various decisions relied on by the AO are also not applicable to the facts of the present case. 5. However, the Ld.CIT(A) was not satisfied with the arguments advanced by the assessee and upheld the validity of the reassessment proceedings. So far as the merit of the case is concerned, he upheld the addition made by the AO by observing as under: 6.4. I have considered the submissions of the appellant and material available on record. So far as the grounds under consideration are concerned, it is noticed that the appellant has denied the transaction altogether stating that he did not lend any funds to Shri S.H. Soni or his concerns. It is also contended that the notings on the seized documents are under the names 'Kejals - Rashmi G.' which does not belong to the appellant. It is emphasized that the appellant's name was Kejals Furnishing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plained the nature of transactions. If the same document reveals that the appellant has made investment and has earned income on those investments, all of which have remained unaccounted, the revenue is not required to take the support available u/s 132(4A). In the present case, not only the documents seized have been found to be true and correct but the same has also been found to reveal what the Assessing Officer has relied, in the appeal decided by the Hon'ble ITAT in the case of Mr. Soni. This aspect is being discussed in the coming paragraphs. In view of the above, the argument of the appellant that he cannot be fastened from the entries available in the documents seized from Mr. Soni appears totally incorrect and unacceptable. In addition to the above, the appellant had vehemently relied upon the decision of the hon'ble Bombay High Court in the case of Addl. CIT vs. Ms. Lata Mangaeshkar (1974) 97 ITR 696 (Bom), for the proposition that the addition cannot be made in the hands of the assessee only on the basis of entries in the books of third parties. It is found, as discussed in the paragraph 6.12 that the said decision is distinguishable on the facts of the case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TAT that summons u/s 131 was issued to many such investors as well as borrowers to establish the correctness of the names appearing in these documents orders of investors/borrowers were placed before the ITAT, which was taken due cognizance of while deciding the said appeals of Mr. Soni. The ITAT in its order has specifically stated that as per these assessment orders it is established that respective investors has invested their money through Shri Shriram H. Soni who acted as a finance broker. In view of the above, the stand of Assessing Officer looks perfectly correct. 6.7. The ITAT relied on various other decisions of Tribunal benches before taking a decision regarding this issue. Relying on the decision of Mumbai ITAT in the case of Biren Savla 8677/M/2004 dated 23.09.2005, it was concluded that if on a document the name of the borrower and amount was acknowledged and accepted by the department, then the department had no legal right to ignore or disbelieve the name of the investor written on that very seized material. There cannot be one presumption to be adopted in respect of outgoings and the other for incomings, and the documents had to be read as a whole. For this p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 100 which is admittedly written by Shri Sunil Ratnakar, accountant of Shri S.H. Soni. Therefore, the Tribunal has accepted the authenticity of the entries in the seized documents arid has not accepted the contention that any of these documents were dumb documents. The authenticity of these entries in the case of Shri S.H. Soni have, therefore, been upheld by the ITAT in the order dated 17.06.2010 and there cannot be any doubt about the same. Based on these findings, the ITAT has arrived at the conclusion that provisions of section 68 cannot be applied in the case of Shri S.H. Soni for the amounts received by him from various persons and shown in the seized documents under the head investors', while categorically holding that these particular seized documents from bundle nos. 98 to 100 have to be treated as part of books of account. The Tribunal was not in agreement with the CIT (Appeals)'s conclusion that because of the fact that concrete identity of these persons and the name of the investors was not furnished by the appellant in that case, therefore, the amount should be liable to be added as undisclosed income of Shri S.H. Soni u/s 68 of the IT. Act. For this purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the Tribunal's order elaborately, which leaves one no doubt about the nature of these unaccounted transactions. 6.11. In this connection the A.O. has correctly relied on two landmark judgements of the hon'ble apex court in the case of Sumati Dayal vs. CIT (1995) 214 ITR 801; (SC) and CIT vs. Durga Prasad More (1971) 82 ITR 540 (SC), pages 545 and 545, 547. In the case of Sumati Dayal vs. CIT the Apex court had stressed the importance of circumstantial evidence and preponderance of probability. It was also held that the tax authorities were entitled to look into the surrounding circumstances to find out the reality, and the matter has to be considered by applying the test of human probabilities. In this decision, the Hon'ble Apex Court : relied upon the ratio of the earlier judgement in the case of Durga Prasad More, 82 ITR 540 (S.C). In the appellant's case, the above facts and evidences lead to the existence of compelling circumstantial evidence, and applying the test of human probabilities, it is the natural conclusion that appellant was the investor to the tune of ₹ 34 lacs of unaccounted money; as is revealed from the recordings in the seized d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance placed by the Assessing Officer on sec. 80 and 114 of the Indian Evidence Act also cannot be held to be irrelevant. The appellant has also not brought on record to show the same. 6.14. In accordance with the discussion made above including the analysis of the transactions as per the documents seized, and the reliance placed on the relevant portion of the ITAT order dated 17.06.2010 in the case of Shri S.H. Soni, the appellant's explanation is not found to be tenable in law. Accordingly, the addition made by the A.O. of an amount of ₹ 33,18,000/- for A.Y. 2001-02 and ₹ 1,04,500/- for A.Y. 2000-01 u/s.69 of the I.T. Act are hereby upheld. Grounds No. 1 to 7 of appeal are dismissed . 6. Aggrieved with such order of the CIT(A) the assessee is in appeal before us with the following grounds: The following grounds are taken without prejudice to each other. On facts and in law, 1. The learned CIT(A) erred in holding that the reopening u/s 148 was valid without appreciating that the reasons recorded were purely on presumptions and surmises and hence, the reopening was bad in law and accordingly, the reassessment u/s 147 should have been declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 1,04,500/- made by the AO u/s.69 of the I.T. Act and upheld by the CIT(A). 9. The Ld. Counsel for the assessee referring to pages 33 and 34 of the paper book drew the attention of the Bench to the seized documents which shows Kajal s Rashmi G. in English. Referring to page 58 of the paper book he drew the attention of the Bench to the notings on the seized documents which shows Rashmi Gandhiji Kejals in Hindi. Referring to page 62 of the paper book he drew the attention of the Bench to the notings on the seized documents which mentions Kejals Ushicover . It may be pertinent to note that the name Kejals is in English and Ushicover is in Hindi. He submitted that Rashmi Gandhi is the partner of the assessee firm. The business of the assessee is that of Sofa covers and curtain cloths and the assessee does not deal with Ushicover which means Pillow Cover . He submitted that there is another firm namely Kejals Linen which is also doing similar business and it is at different location. He submitted that the copy of the statement of Shreeram H. Soni was never given to the assessee. Shreeram H. Soni never stated anywhere that he has received any money from the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r concerns whose name may be Kejal's or Rashmi G. Even assuming without admitting that the notings pertain to the assessee group, there are two concerns namely, Kejal's Furnishings and Kejal's Linen and then there is Shri Rashmikant Gandhi Partner in only one firm viz. Kejals furnishings, Thus, in reality, whether notings indicate one of the two firms or the partner or some one else is also not clear from the documents. It is a settled law that the burden is on the dept. to prove the meaning it attaches to the notings on the loose papers. Reliance is placed on the decision of ITAT in the case of Monga Metals [67 TTJ 247]. There is no doubt that u/s 132(4), the loose papers found during the search are true and genuine but such presumption is against the person from whom these papers are found and not against the third parties and secondly, despite this presumption, the burden is on the revenue to prove the meaning of the notings on the loose papers. Now, in this case, as we have shown, no where in the notings, the assessee s name figures clearly and if that be so, the question of holding a view that these notings pertain to the transactions of the assessee does not crop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, we find at one place it is written Kajal s Rashmi G (pages 33 34 of paper book). Similarly, at another place, it is written Rashmi Gandhi G.Kejals (page 58 of the paper book) in Hindi. Similarly, in another place, it is written Kejals Ushicover partly in English and partly in Hindi at page 62. From the above, it is seen that the seized document clearly show different names. The submission of the Ld. Counsel for the assessee that the assessee does not deal with Pillow covers (i.e. Ushicover in Hindi) could not be controverted by the Ld. Departmental Representative. The Assessing Officer has also not summoned Mr. Rashmikant Gandhi to find out the veracity of the submission of the assessee firm that it has not lent any money to Mr. Sony. The notings in our opinion, do not clearly indicate that the firm has advanced any money. It may at best be that of one individual Mr. Rashmi Gandhi in whose hands addition could have been made. However, the Assessing Officer has not examined that person. 11.1 We find an identical issue had come up before the Tribunal in the case of Jagannath Eknath Lahoti (HUF) (Supra). We find under identical facts and circumstances the Tribunal has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch of the Tribunal in the case of Ashok Keshvlal Oswal (Supra) has dismissed the appeal filed by the Revenue wherein the CIT(A) has deleted the addition of ₹ 22,02,2000/- made by the Assessing Officer on account of additions made on the basis of documents found from the residence of Shriram Soni during the course of search and seizure operation. The relevant observation of the Tribunal reads as under : 5. We have heard the rival submissions of the parties and perused the record. The first issue we have to decide is whether the identity of the assessee is proved that he is the same Oswal Ashok or Oswal ASK . As per the remand report given by the Assessing Officer, no promissory note or blank cheques on the names of the assessee were found. On perusal of the remand report, we find that Assessing Officer himself has examined many persons on suspicion, whose names were Ashok Oswal and the middle name was different. Admittedly, in the seized document, there is no middle name. The assessee filed the specific affidavit denying having any relation with Shriram H. Soni. In the remand proceedings, the AO examined bank account and has reported that no transaction was found ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
