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TMI Blog2018 (4) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... me as well as furnishing inaccurate particulars of income. Thus in the instant case the penalty has not been levied on the specific charge as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. In these circumstances, we are of the view that imposition of penalty cannot be sustained. The plea of the ld. Counsel for the assessee which is based on the decisions referred to in the earlier part of this order has to be accepted. We therefore hold that imposition of penalty in the present case cannot be sustained and the same is directed to be cancelled - Decided in favour of assessee - ITA Nos.- 1439/Del/2012 & 3551/Del/2014, ITA Nos.- 1441/Del/2012 And 3553/Del/2014 - - - Dated:- 12-4-2018 - SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER For The Assessee : Sh. Salil Kapoor, Sh. Sumit Sh. Ani Jain CA/Advocates. For The Revenue : Smt. Deepali Chandra, CIT (DR) ORDER PER BENCH ITA NO. 1439/Del/2012 This is an appeal filed by the assessee. The Assessee has raised the following grounds of appeal:- 1. That on the facts and circumstances of the case and the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00000 7689000 Less Withheld Cash 7. However, the assessee during the assessment proceedings claimed to have acquired the shares of M/s ECPL at ₹ 37,11,000 only. The assessee further filed the details of the payment for his share in the company as detailed under:- Ch no. Date Amt Name of the person in whose favour cheque was issued 238972 12.08.2004 3,72,500.00 Meena Rani 238973 26.07.2004 2,98,750.00 Rajesh Singh 2 In addition payment of ₹ 25000/- was also made in cash. 8. The assessee also submitted that originally the deal for the purchase of the company was fixed at ₹ 1.15 crores but subsequently it was reduced to ₹ 37,11,000/- due to the fact that the directors of ECPL denied to sale the plant and machinery, stock, debtors and other current assets and technical know-how. Therefore, there was no quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share of the assessee at ₹ 19,01,224/- as unexplained investment and added to the total income of the assessee. 11. Aggrieved assessee preferred an appeal before the Ld. CIT(A). The assessee before the Ld. CIT(A) submitted that as per the seized documents WP-I annexure A-4 pages 4 to 8, the amount of ₹ 76,89,000/- to be paid to the director of ECPL was withheld. There was mentioned of cash payment of ₹ 1 lacs only in the seized documents. This fact was also supported by affidavit furnished by Shri Pawan Sharma and Smt. Meena Sharma, the erstwhile director of ECPL. 12. The AO also erred in relying on part of the statement given by Shri Pawan Sharma that no business activity was carried on by ECPL in the earlier years whereas in the same affidavits, it was mentioned that the deal was decided at ₹ 38,11,000/- only. Thus, the AO accepted part of the statement which is suiting to him and benefiting to the Revenue. 13. The provision of section 132 (4A) of the Act cannot over write the provision of section 69 of the Act meaning thereby that the provision of sec. 132(4)A of the Act presumes that the documents found during the course of search belongs to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of the balance consideration of ₹ 76,89,000/- has been made in cash. Rather the word withheld has been mentioned on this page which justifies the contention of the assessee that there was a change in the terms and conditions and the balance money was with held. It has thus been argued that as no corroborative evidence has been brought on record to support that the payment has actually been made therefore no presumption u/s 132(4A) can be drawn. The appellant has also submitted that the affidavits of Sh. Pawan Kumar Sharma and Smt. Meena Sharma have been disregarded by the AO and the statement on oath of Sh. Pawan Kumar Sharma has been selectively relied upon by the AO. That moreover no copy of statement of Sh. Pawan Kumar Sharma was provided to the assessee and the same was recorded at the back of the assessee. B. I have carefully considered the arguments of the appellant. However the same are basically self serving and are not supported by positive evidence. It is observed that the appellant has himself, based on the narration in page 5 of the seized document has admitted that initially the sale consideration for the transfer of entire share holding of M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her Sh. PK Sharma also stated in his said statement that the machineries were sold by him for a consideration of ₹ 40,000/- to 50,000/- in scrap to Kabadis after 2 years 2 '/2 years from their installation. Thus in the case of the assessee it is the balance sheet of M/s Empire Castings P. Ltd. and the attending circumstances which clearly demonstrates that the value of the stock, debtors, plant machinery technical knowhow was such which if not purchased would have led to a difference of ₹ 76,89,000/-. Seen in this context Sh. Pawan Kumar Sharma s statement on oath dated 15.12.09 is merely confirmation of the figures which are apparent from the balance sheet and nothing more. While Sh. Pawan Sharma has given an affidavit dated 16.12.2009, which has been relied by the appellant and which is to the effect that initially it was decided by the members of M/s Empire Casting P. Ltd. to transfer the ownership of the company as a running unit to Sh. RP Arora and his brothers (inclusive of all movable and immovable properties but later only land and building were transferred) but then this affidavit is a self serving one and cannot be believed in view of the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll cases that conclusive evidence of payment of cash must also be found during the search. Rather this being a civil matter, the entire evidence has to be apprised on basis of preponderance of probability. While the coming to the above finding reliance is placed on the observations made by ITAT Amritsar in case of Inderpal Singh Ahuia vs. ACIT 103 ITD 271, wherein the Tribunal has in para 16.7 16.8 has made the following observations:- Moreover, when we speak about the burden to be discharged by the Revenue, it is to be seen in the light of facts and circumstances of each case. It does not mean that there should be a direct evidence about the person in whose presence such money was received. It is common knowledge that most of such transactions take place in clandestine manner and money is not being exchanged in the presence of other. The issue whether the onus is discharged or not by the Revenue has to be seen in the light of facts and circumstances of each case. In this case, we feel that such onus stands discharged. The Ld. Counsel further relied on the statements of the persons to whom the assessee had actually sold the land where they stated that the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grieved by this order, the assessee preferred an appeal before us. The Ld. AR before us filed a paper Book which is running from pages 1 to 61 as well as a Paper Book containing the case laws comprising of pages from 1 to 56. 17. The Ld. AR before us submitted that indeed as per the provision of section 132(4A) and 292C a presumption is drawn that the document found during the search proceedings belong to the assessee, but the contents of the documents found during the search proceedings should be used in total. The AO cannot use part of the documents found during the course of search as correct and ignoring the other details contained in those seized documents. There is no mention in the seized documents that any payment of cash has been paid by the assessee for the acquisition of the company i.e. ECPL except ₹ 1 lac. 18. The amount of consideration was reduced from 1.15 crores to 38,11,000/-due to the fact that the assessee has not acquired plant and machinery, other current assets. 19. The affidavit furnished by Shri Pawan Sharma and Smt. Meena Sharma cannot be just brushed aside without any reasonable cause. As per the affidavit furnish by Shri Pawan Sharma, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eque was mentioned at ₹ 37,11,000/-. Further payment of rupees one lac has also been paid in cash as per page no. 5 (enclosed as annexure II) which is reproduced as under:- TOTAL VALUE 11500000 Less Payment by Cheque 3711000 7789000 Less Cash given 100000 7689000 Less Withheld Cash On perusal of the seized documents we observe that there is mention that the value of the transaction is of ₹ 1.15 crores which has been duly accepted by the lower authorities as per the seized documents. Similarly the payment of ₹ 37.11 lacs has been paid through banking channels and the remaining amount to ₹ 1 lacs has been paid by the assessee along with his four brothers in cash. As per the seized documents, there is no mention that any payment has been made by the assessee in addition to ₹ 38.11 lacs (37.11 + 1 lacs). Rather the seized documents suggest that the assessee has withheld s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d support and guidance from the Judgment of Delhi High Court in the case of CIT vs. Anil Bhalla reported in 322 ITR 191wherein it was held as under:- Where no independent material or evidence had been brought on record by Assessing Officer to establish that notings/jottings recorded on loose sheet of paper seized during search represented an unaccounted transaction and Tribunal held that entries in question belonged to some company, inasmuch as assessee could explain from books of such company that these projects were undertaken by it, and Tribunal held that loose sheet did not represent any expenditure incurred by assessee, deletion of addition based on loose sheet, treating it as unexplained expenditure in assessee's hands was justified [In favour of assessee] 28. In view of above, we hold that the seized document should be read and applied in totality. As there was no mention of any cash payment to Shri Pawan Kumar Sharma and Smt. Meena Sharma in seized documents, accordingly, we hold that the AO has made the addition on his presumption and conjecture. As we have decided the issue in favor of assessee on technical count, we are not inclined to adjudicate other a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amend, append, delete any or all grounds of appeal. 31.1 The issues raised by the assessee are exactly identical to the issue raised in ITA No. 1439/Del/2012, both the Ld. AR and D/R before us agreed whatever view will be taken in ITA No. 1439/Del/2012 would be applied in the instant case. As we have already decided the issue in favour of the assessee in ITA No. 1439/Del/2012. Therefore, respectfully following the same, we decide the issue raised by the assessee in his favour. 31.2 Thus, the appeal filed by the assessee is allowed. ITA No. 3553/Del/2014 32. This appeal is filed by the assessee in ITA No. 3553/Del/2014 pertaining to AY 2005-06. The assessee has raised the following grounds of appeal:- 1. That on the facts and circumstances of the case and the provision of law the Ld. CIT(A) has failed to appreciate that the initiation of proceedings u/s 271(1)(c) is illegal and bad in law. 2. That on the facts and circumstances of the case and the provision of law the Ld. CIT(A) has failed to appreciate that the impugned penalty order passed by Ld. AO u/s 271(1)(c) is illegal, bad in law, time barred, without jurisdiction and wrong on facts. 3. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to appreciate that the assessment order passed by the Ld. AO u/s 143(3)/153A is illegal, bad in law and wrong on facts. 2. That the Ld. CIT(A) has failed to appreciate that impugned assessment order passed by the Ld. Assessing Officer is against that principles of natural justice and has been passed without affording reasonable opportunity of being heard. 3. That on the facts and on the circumstances of the case and the provision of law the Ld. CIT(A) has erred in sustaining an addition of ₹ 1879981/- as unexplained investment for acquisition of shares of Empire Casting Pvt. Ltd. 4. That the Appellant craves the right to amend, append, delete any or all grounds of appeal. 34.1 The issues raised by the assessee are exactly identical to the issue raised in ITA No. 1439/Del/2012, both the Ld. AR and D/R before us agreed whatever view would be taken in ITA No. 1439/Del/2012 would be applied in the instant case. As we have already decided the issue in favour of the assessee in ITA No. 1439/Del/2012. Therefore, respectfully following the same, we decide the issue raised by the assessee in his favour. 34.2 Thus, the appeal of the assessee is allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,602/- u/s 271(1)(c) of the Act. 5. That the Appellant craves the right to amend, append, delete any or all grounds of appeal. 36.1 In the present case the penalty was imposed on account of the following additions made in the assessment : i. Undisclosed investment ₹ 18,79,981.00 ii. Surrender of income ₹ 30,00,000.00 At the outset, we observed that we have already decided the quantum appeal of the assessee in his favour in respect of undisclosed investment of ₹ 18,79,981.00 only. Therefore, the penalty imposed by the AO stands deleted on account of impugned addition. Now coming to the income surrendered by the assessee during the assessment proceedings for ₹ 30 lacs only. In this regard the learned Counsel for the assessee before us submitted that the penalty was initiated in the assessment order on account of concealment of particulars of income whereas the penalty was levied in the order on account of filing inaccurate particulars of income as well as concealment of income. Thus the penalty order does not contain the specific charge against the assessee namely as to whether the assessee was guilty of having concealed parti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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