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TMI Blog2017 (8) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... ina, A.R. For The Respondent : Shri Durga Dutt, D.R. ORDER PER RAVISH SOOD, JUDICIAL MEMBER The present appeal is directed against the order passed by the CIT(A)-35, Mumbai, dated 14.12.2012, which in itself arises from the assessment framed by the A.O u/s 143(3) r.w.s. 254 of the Income Tax Act, 1961 (in short 'the Act'), dated 29/12/2008. The assessee assailing the order of the CIT(A) had raised before us the following grounds of appeal:- 1. Addition on account of alleged unexplained investment Rs. 5,08,870/- (a) The Id. CIT(A) erred in confirming alleged addition out of loose paper being seized material without appreciating that when the observation of Assessing Officer in Remand Report states that the said amount of the parties could not be correlated with the other seized material to ascertain whether it is a case of loan given or taken, the confirmation of addition is not justified when the Appellant has disowned the seized paper. (b) Without prejudice to the above, the finding in the original assessment proceeding as good as an ex-parte basis looses it colour on the face of Remand Report having passed with duly accorded opportunity. Therefore, the Order of the Id. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come of the assessee was assessed at ₹ 33,34,380/-. The assessee assailed the said assessment order before the CIT(A). The CIT(A) directed the A.O to recompute the income of the assessee in respect of certain issues, which inter alia included the addition of ₹ 5,64,562/- made in the hands of the assessee on account of loan and interest. The revenue being aggrieved with the restoring of the assessment by the CIT(A) to the file of the A.O, therein filed an appeal with the Tribunal on 25.05.1999. The A.O in the mean time gave effect to the 'directions' of the Tribunal, vide his order passed u/s. 143(3) r.w.s. 254, dated 30.03.2001. The A.O in his aforesaid order referred to the seized annexure, viz. a 'loose sheet', marked as Annexure A/12 - Page No. 128, and being of the view that the amount of ₹ 4,60,000/- (as was gathered by the A.O on decoding the contents thereof) pertained to the loans advanced by the assessee to various parties, while for the amount of ₹ 48,868/- mentioned in the said document was the interest received by the assessee on the said loans. The A.O thus in the course of such 'fresh assessment' made an addition of ₹ 5,08,868/- [i.e S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' proceedings and issued a Notice u/s. 143(2) on 04.06.2008. The assessee submitted before the A.O that as he had filed a 'Miscellaneous application' before the Tribunal in respect of the latters order dated 06.02.2008, therefore, the assessment proceedings may be kept in abeyance till the disposal of the said application. The A.O however not finding favour with the said request of the assessee proceeded with the assessment proceedings. The A.O while framing the 'fresh assessment' observed that as the advance/loans were not found reflected on the 'assets' side of the 'balance sheet' of earlier years, therefore, the amount of loan of ₹ 4,60,000/- alongwith the interest of ₹ 48,868/- could safely be related to the year under consideration, viz. A.Y. 1995-96, in the hands of the assessee. Thus, the A.O while framing the aforesaid assessment endorsed the observations of his predecessor and retained the addition of ₹ 5,08,868/-(supra) in the hands of the assessee, vide his order passed u/s 143(3) r.w.s 254, dated. 29.12.2008. The assessee assailed the assessment framed by the A.O before the CIT(A). The CIT(A) in the course of the appellate proceedings observed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other 'seized material', therefore, it could not be ascertained as to whether the same represented 'loan taken' or 'loan given'. The A.O in the backdrop of the aforesaid facts stated that the assessee had failed to provide any explanation as regards the amount of ₹ 5,08,868/- (supra) during the course of the assessment proceedings. The CIT(A) after deliberating on the 'remand report' of the A.O observed that as the 'document' was seized from the assessee and the same referred to 'A/C KMT', therefore, the assessee could not be allowed to distance himself from the aforesaid document. Though the CIT(A) observed that the A.O had accepted that the amount of ₹ 4,60,000/-(supra) could not be correlated with the 'seized records', nor it could be verified that whether the same represented 'loan given' or 'loan taken', but as the assessee had failed to provide any explanation in respect of the amount of ₹ 5,08,868/- (supra), therefore, the addition made by the A.O was justified. 5. The assessee being aggrieved with the aforesaid order of the CIT(A) had carried the matter in appeal before us. That it was submitted by the ld. Authorized Representative (for short 'A.R') for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... z. Page 128 could be correlated with the other 'seized material', failing which it could not be ascertained as to whether the amounts mentioned therein were loans given or taken. That in the backdrop of the aforesaid facts it was vehemently averred by the ld. A.R that the assessee had suffered an addition of ₹ 5,08,868/-(supra) despite absence of any evidence which could go to justify drawing of such adverse inferences in his hands. The ld. A.R. relying on a judgment of the Hon'ble Supreme Court in the case of Common Cause (Registered Society) and Others Vs. Union of India and Others (CWP No. 505 of 2015), dated 11.01.2017, submitted that the Hon'ble Apex Court in the aforesaid judgment had clearly held that random sheets and loose papers in the absence of any corroborative material would have no evidentiary value. It was submitted by the ld. A.R that the Hon'ble Supreme Court relying on its earlier judgment in the case of CBI Vs. V.C. Shukla (1998) (3) SCC 410, had held that as the entries in the 'books of accounts' are merely corroborative evidence, thus independent evidence is necessary so that the trustworthiness of the entries contained therein could be verified. Thus in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department till date by placing on record any 'material' to the contrary, therefore, the same holds the ground as on date and cannot be summarily brushed aside. We find that the Tribunal while restoring the matter to the file of the A.O had gone by the observations of the A.O that the income may relate to A.Y. 1994-95 and A.Y: 1995-96, and considering the same had specifically directed that if the investments were found to be made in A.Y. 1994-95, then no addition was liable to be made in the hands of the assessee during the year under consideration, i.e. A.Y. 1995-96. We find that as stands gathered from the records, it remains as a matter of fact that since inception, viz. order passed by the A.O u/s 143(3) on 27.03.1998, the revenue had remained confused as to whether the amount of ₹ 4,60,000/- (supra) (as is stated to have been decoded by the revenue) gathered from the 'seized document', viz. Page 128, represented a 'loan given' or a 'loan taken'. That a perusal of the records reveals that the A.O while framing the assessment under consideration, had vide his letter dated 08.01.2001 proposed that the amount of ₹ 4,60,000/-(supra) be treated as loans taken by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents of the 'seized document', viz. Page 128 represented loans taken by the assessee, would therein be justified in holding to the contrary that the same represented loans advanced by the assessee to various parties, only for the reason that the assessee had distanced himself from the said impugned document and the contents thereof. We are further absolutely not at all impressed by the claim of the lower authorities that as the term 'A/C KMT' appeared on the impugned document, therefore, it could safely be held that the same referred to the name of the assessee, viz. Shri Kauntey M. Tanna. We thus in light of our aforesaid observations, being of the considered view that there is no 'material' before us which could go to persuade us to uphold the addition of ₹ 5,08,868/- (supra) in the hands of the assessee, thus, in the backdrop of the facts of the case, therein holding a strong conviction that there is no reason for us to sustain the additions made by the A.O in the hands of the assessee, which thereafter had been upheld by the CIT(A), thus delete the same. The order passed by the CIT(A) is set aside. 4. The appeal of the assessee is allowed. Order pronounced in the open c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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