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TMI Blog2018 (4) TMI 1548X X X X Extracts X X X X X X X X Extracts X X X X ..... nveniently ignored the explanation of the assessee regarding the cash payment although the cash payments were reflected in the bank account of Senior Builder Ltd. When Senior Builders Ltd. is an assessee and the bank account is not an undisclosed one, therefore, all those cash deposits made in the bank account could not have been from the assessee. - Decided in favour of assessee - ITA No.5680/Del/2014 - - - Dated:- 3-4-2018 - SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER Department by : Smt. Paramita Tripathy, CIT(DR) Assessee by : Shri Ved Jain, Adv. Shri Ashish Goel, CA O R D E R PER R. K. PANDA, AM : This appeal filed by the Revenue is directed against the order dated 31.07.2014 of CIT(A)- XXXI, New Delhi relating to assessment year 2011-12. 2. Facts of the case, in brief, are that the assessee is an individual and is the proprietor of M/s Vijay Jeweller, Jaipur. A search and seizure action u/s 132(1) was conducted at the residential as well as business premises of the assessee and his group concerns/companies/family members on 28.03.2011. During the course of search and seizure operation, it was found that Shri R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T PAID BY ASSESSEE GROUP TO VIJAY DIXIT GROUP AS PER HARD DISC SEIZED Total payments made by assessee group to Vijay Dixit group 134,276,687.00 AS PER ASSESSEE S RECORD (ALREADY SUBMITTED) Total payments made by assessee group to Vijay Dixit group 150,402,451.00 Less : Amount not considered in the seized material (3,300,000.00) Add : Wrong Amount considered in the seized material 210,000.00 (An amount of ₹ 33,00,000/- was paid by Classique International through banking channel on behalf of Rajesh Kumar, however same has been shown as only ₹ 2,10,000/- in the seized material with remarks as out of 33 lacs ) Add : Amount mentioned in the seized material but not related to the assessee (rather it is the bank transactions between Vijay Dixit and Senior Builders Limited) and having no connection with the assessee group 1,248,356.00 Less : Intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 10,41,49,470/-) paid through cheques after 25/12/2010 appear to be included in figure of ₹ 6,12,37,817/- mentioned as cash bank paid after 25/12/2010 on page 4. After excluding this payment of ₹ 3,01,27,217/- made through cheque the balance amount comes to ₹ 3,11,10,600/- (i.e. ₹ 6,12,37,817/- (-) ₹ 3,01,27,217/-) and this balance is same as appearing on page no.5. He observed that the cash payment of ₹ 3,11,10,600/- appearing on page 5 are the same balancing figure of page 4 as worked out above. Further, it is clear that the cash payment of ₹ 3,11,10,600/- has been made by Sh. Rajesh Kanodia to Vijay Dixit Group. Further the nomenclature of headings used on page 5 and page 8 which are all cash payments either before 25/12/2010 is same or these figures are not included in page 1 which are all cheque payments. 6. The Assessing Officer, therefore, came to the conclusion that (i) The cash paid in the whole transactions is at ₹ 3,11,10,600/- + ₹ 200000/- by Kanodia Group, (ii) The total interest received by Kanodia Group (Rs.2.70 crores) for these payments as worked in page 4 is taxable and will be accordingly treated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ha Pathak ₹ 54,27,849/- will be added in Smt. Sumedha Pathak in the A.Y. 2011-12. ₹ 1,19,55,614/- Thus the assessee has made unaccounted cash payment of ₹ 31310600/- (+) ₹ 8500489/- and source of this cash has not been explained, therefore this amount will be added back to the income of the assessee u/s 69C of IT Act, 1961 considering it to be advance made from undisclosed income. Further the assessee has earned interest on these advanced amounts and has shown only part of it in the books of accounts. Hence total amount mentioned below will be added in the hands of the assessee as undisclosed interest income during the year :- i) The cash paid in the whole transactions is at ₹ 31110600/- + ₹ 200000/- by Kanodia Group Interest on ₹ 31310600/- @ 3.334% as mentioned on page no.4 Rs.31310600/- ii) Bank overdraft ₹ 8500489 plus interest thereon ₹ 851748/- @ 3.334% as mentioned on page no.4 Rs.3290456/- The total interest received by Kanodia Group on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posited in the Senior Builders ltd. Accordingly all these payments are made by Vijay Dixit. It is not a case where this amount is not explainable from Mr. Vijay Dixit. On going through the bank statement of Senior Builders Lt. it can be seen that cash has been withdrawn from time to time from this bank account. All these cash has been utilized by Mr. Vijay Dixit. The AO has totally ignored the explanation and arbitrarily made the addition in the hands of the assessee. The AO never made any effort to even enquire from Mr. Vijay Dixit. He did not make any effort to co-relate these transactions with the business associates or the activities of Mr. Vijay Dixit. All these transactions are linked to Mr. Vijay Dixit and assess has nothing to do with these transactions. The source of these cash also has been got explained from the bank statement of Senior Builders Ltd. and the bank account of Mr. Vijay Dixit. The inference drawn by the AO accordingly on this account is absolutely incorrect and against the facts on record. Accordingly the AO was not justified to make these additions. The AO has further added ₹ 85,00,489/- on account of overdraft of Senior Builders Ltd. It is surpri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition which is not correct. It was submitted that the Assessing Officer neither called Shri Vijay Dixit for his examination nor asked for the accounts of Senior Builder Ltd. which is a company. Further, the Assessing Officer has also did not enquire from the respective bank accounts to make further enquiries. It was submitted that as per the provisions of section 132(4A) of the I.T. Act, there lies a presumption against the assessee, in case certain documents are found during the course of search. However, such presumption is a rebuttable presumption and as such the additions on the basis of such documents are not to be made mechanically without giving any finding against the same. Various decisions were also brought to the notice of the ld. CIT(A). Without prejudice to the above, it was submitted that the Assessing Officer has erred in not allowing the benefit of telescoping to the assessee. The bank account of Senior Builder was also filed before the ld. CIT(A) showing huge cash withdrawals made from the said account. It was submitted that Mr. Vijay Dixit has been making heavy withdrawals from the firms for meeting of its obligation. The amount of ₹ 99,00,000/- issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he grand total of ₹ 13,42,76,687/-. The AO has admitted that the transactions contained in page No. 1 are duly accounted for by the assessee and his group. He also accepted that page no. 2 and 3 are repetitions of the amounts written on page no.1. The AO has concluded that the amounts mentioned on page no. 5 relate to the amounts paid in cash by the assessee to Vijay Dixit group which has not been accounted for by the appellant. Thus he has brought to tax ₹ 3,11,10,600/- mentioned in the said page No.5. On the basis of entries on page 4 the AO has also concluded that the appellant has received interest at the rate of 3.3334 % per month on the total advances made by the appellant group. He has adopted the interest figure as given on page 4 in respect of ₹ 10,43,49,470/- and on the remaining amounts added by him he has computed interest at the rate 3.3334% for the relevant period. The AO has also held the bank overdraft of ₹ 84,00,489/- appearing on page 4 as unaccounted investment of the assessee and added the same along with interest computed at the rate of 3.3334%. 5.3.4 The main reason for holding ₹ 3,11,10,600/- as unaccounted cash payment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers in whose bank account these amounts have been found deposited. 5.3.9 The said page-S, also has payment of salary of ₹ 15000/- to Vinod Accountant who apparently is an employee of Vijay Dixit group. Next entry shows the payments to Solanki, Driver and the assessee has clearly stated before the AO that Solanki was not his employee. Item No. 11, refers to payments made to Policeman Tomar P. expenses. Similarly, there are narrations which show that Vijay Dixit has spent money/ paid amounts to certain persons like to NP Singh for Khemka case , to Khan for MG Road Mall etc. The assessee has submitted before the AO that all the. parties/ persons whose names appear on page-5 are connected/related to Sh. Vijay Dixit not to the appellant or his group. AO has not disputed these facts but simply ignored all these averments without making any comments. 5.3.10 The AR has also submitted that the Mr. Vijay Dixit had sizeable cash withdrawals from his bank accounts. Further, the AR has also drawn attention to the fact that Vijay Dixit group had withdrawn cash immediately after receiving cheques from the assessee's group. If the appellant were to advance money in cash, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded at page 17 are that of the Vijay Dixit and not of the assessee. 4.17 The above explanation clarifies the allegation of ₹ 3,11,10,600/- out of ₹ 3,98,11,089/-. 5.3.11 Considering the above facts, I am of the view that the transactions recorded on page-5 pertain to Vijay Dixit group and not to the appellant. There are no evidences to show that all these transactions were financed by the appellant. In fact such chances appear remote as the page contains transactions involving the bank account of Senior Builders Ltd and payments to persons who are apparently employees of Sh. Vijay Dixit. 5.3.12 Further, inspite of receiving a detailed reply including reconciliation of payments by appellant group and inspite of having the copies of bank account of Senior Builders matching with the entries on page-5, the AO did not seem to have cross checked with Vijay Dixit group about these entries. He has, however, cross checked some entries of page 6 7 with the Bank of Baroda, Sansad Marg, New Delhi and has accepted that the pay orders mentioned at Page 6 7 are duly made from the account of Senior Builder Ltd. (as per 2nd para on page 7 of the assessment order). He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant to Vijay Dixit Group. 5.3.16 I have already noted that such inference is not substantiable because ₹ 3,11,10,600/- also includes deposits into the bank a/c of Senior Builders Ltd which could only be out of their own books and could not be from the appellant. The said page also includes payments to persons related to Sh. Vijay Dixit and not the appellant. They are transaction of Sh. Vijay Dixit. The AR's submission that Sh. Vijay Dixit had substantial cash withdrawals from his bank a/c cannot also ignored (they could be the source of the present payments). If the sources of the transactions entered at page-5 are not explainable, the same are liable to be taxed in hands of Sh. Vijay dixit and his group as the transaction clearly pertain to Sh. Vijay Dixit Group. In view of this, I am compelled to hold the action of the AO unsustainable. 5.3.17 Further, the AO has added interest of ₹ 1,60,97,818/- on the alleged undisclosed advances and also on the disclosed advances. I have already noted that the AO has not been able to substantiate that the appellant made undisclosed ca payment of ₹ 3,11,10,600/-, and ₹ 85,00,489/- to Vijay Dixit Group. Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while accepting the pay orders as genuine and being purchased by M/s Senior Builders and Developers Ltd. has not accepted the cash transaction as belonging to them. Nothing prevented the Assessing Officer from making enquiries from M/s Vijay Dixit or his group of companies to find out the veracity of the submissions made by the assessee. Since the ld. CIT(A) has considered the submission made by the assessee and found the same to be correct, therefore, his order deleting the addition made by the Assessing Officer is fully justified. He accordingly submitted that the order of the ld. CIT(A) be upheld and the grounds raised by the Revenue should be dismissed. 14. We have considered the rival arguments made by both the sides, perused the material available on record and the Paper Book filed on behalf of the assessee. We find during the course of search at the premises of the assessee the hard disk was seized and documents bearing page no.1 to 9 were retrieved from the said hard disk which contained certain payments made to Vijay Dixit group in the firm of cheques, pay orders and in shape of cash, the total of which comes to ₹ 23,70,10,708/-. On being questioned by the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duly transacted through banking channels by Senior Builder Ltd could be unexplained. We further find that despite receiving detailed reply including reconciliation of the payments made by the assessee group and despite having the copies of bank account of Senior Builder matching with the entries on page no.5, the Assessing Officer never cross-checked the same with Vijay Dixit group. The interest calculated by the Assessing Officer at the rate of 3.3334% per month has also no basis. The various factual findings given by the ld. CIT(A) could not be controverted by the ld. DR. We find the Assessing Officer has accepted the cheque payments and pay orders mentioned on the papers retrieved from the hard disk but has conveniently ignored the explanation of the assessee regarding the cash payment although the cash payments were reflected in the bank account of Senior Builder Ltd. When Senior Builders Ltd. is an assessee and the bank account is not an undisclosed one, therefore, all those cash deposits made in the bank account could not have been from the assessee. In this view of the matter and in view of the detailed reasoning given by the ld. CIT(A), we find no infirmity in his order. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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