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TMI Blog2018 (6) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... is submitted that Ld. AO has made such addition on the basis of loose paper marked as Annexure A-l page no. 127 found in premises of Mr. Chand Mishra. It is submitted that no such rent receipts have been received in cash by the appellant. It is further submitted that neither evidences whatsoever have been found by the Income Tax Search team nor any loose papers have been found during search proceedings which indicates that your appellant has received such Rs. 4,80,000/- out of books and therefore assumption and presumptions of receipt of alleged undisclosed Income of Rs. 4,80,000/- is unreasonable and unlawful. Without prejudice, we would like to state that appellant follows Cash system of accounting and therefore, such receipts can be taxed only on the basis of evidence of receipt of such cash. It is further submitted that no evidence regarding receipt of cash has been found by search party as well as by the Ld. AO hence, adding of same on assumptions and presumptions is against basic of principles of law and against Natural justice. In view of the above facts, such addition should be deleted. 2. On the facts and circumstances of the case and in law, Hon'ble Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT had adjudged that fair return of about 7% on the investment in properties can be taken into account for determining Annual ratable value. It is further submitted that consequential to the above act of determining the notional rent, Hon'ble Commissioner of Income Tax (Appeal) erred in confirming the action Ld. AO who erred in making disallowance of depreciation of Rs. 18,43,347/- as claimed by your appellant in respect of said office on the pretext that the same was not used for the office purpose for the year under consideration. It is to state that such assumptions and presumptions were made by the learned assessing officer without verifying the facts. It is therefore prayed to your honour to delete such addition made on arbitrary basis and allow the depreciation claim in respect of such office. It is therefore prayed to give necessary direction in this regard. 3. The grounds of appeal raised in Revenues appeal read as under: (i) Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) is justified in deleting the addition of Rs. 3,35,00,000/- being cash component of the payment for purchase of commercial property from MIs.Arjun Realto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... handled and managed her entire business I endorsement and which is corroborated by other evidences seized during the course of search?" Assessee's appeal: 4. Apropos ground no.1 - addition of Rs. 4,80,000/- being undisclosed income in respect of rent received in cash from Shivani Oil and Gas Exploration: 4.1 On this issue the assessing officer made the addition by observing as under: On verification of the Annexure A-l page no, 127 of the loose papers seized from Navkaran Office on 21-03-2011, it is seen that the assessee was charging an amount of Rs. 55,000/- as gross rental per month from M/s.Sivani Oil & Gas Exploration Services in respect of Sky Garden, Oberoi property and as per the scribbling on the back side, it is evident that along with Rs. 55,000/- in cheque on which TDS was being deducted by the payee, the assessee was also receiving Rs. 60,000/- per month in cash. Thus the total monthly rent comes to Rs. 1,15,000/- per month, while the assessee is offering only Rs. 55,000/- per month in the books. Thus from combined reading of all these papers, it is very evident that assessee from June, 2009 onwards has been charging Rs. 60,000/- in cash from M/s.Shivani Oil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income Tax (Appeals) confirmed the addition. 6. Against this order assessee, the assessee is in appeal before us. 7. We have heard both the counsel and perused the records. We find that the assessee's submissions on this issue are same as considered by us in assessee's own case for assessment year 2010-2011 vide order dated 16.01.2018. In the said order, the issue has been dealt with as under: 10. In this regard, we note that the assessee has submitted as under: It is submitted that Ld. A.O. has made such addition on the basis of loose paper marked as Annexure A-1 page no. 127 found in premises of Mr. Chand Mishra. It is submitted that no such rent receipts have been received in cash by the appellant. It is further submitted that neither evidences whatsoever have been found by the Income Tax Search team nor any loose papers have been found during search proceedings which indicates that you appellant has received such Rs. 6,00,000/- out of books and therefore assumption and presumptions of receipt of alleged undisclosed income of Rs. 6,00,000/- is unreasonable and unlawful. Without prejudice, we would like to state that appellant follows Cash system of accounting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as office rather than 901. In this regard, statement on oath of one of the assessee's employee Ms.Deepika Prakash was recorded u/s.!32(4) of the I T Act on 24-01-2011, wherein she stated in reply to Q.5 that; "As per my knowledge the flat was purchased by Ms. Priyanka Chopra in 2008. The flat was since then never utilized for business or residence purpose. Hence the fiat is vacant since it was purchased." On further verification it is noticed that the said penthouse is of two different units and separate agreements are made. Further, as admitted above, the penthouse was not utilized, however, the assessee is claiming depreciation on the same. In this regard, the assessee was asked to submit the details with supporting documentary evidence that the said penthouse has been used for office purpose and why annual value under the provisions of sec.23(1)(c) should not be determined treating it as income from House Property by disallowing depreciation. In reply to the same the assessee's representative orally stated that the said penthouse is used for keeping the assessee's dresses as godown, however he has not furnished any documentary evidence that it has been utilize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have heard both the counsel and perused the records. Upon careful consideration we note that this addition has been made by the assessing officer on the basis of a statement of the assessee employee that the said flat was vacant. Apart from the above, no other evidence is available with the Revenue. The assessing officer has noted that assessee was asked to submit with supporting documentary evidence that the said Penthouse has been used for office purpose. In response, the assessing officer has noted that assessee 's representative stated that the said Penthouse is used to keep the assessee's dresses as godown, however ,the assessing officer noted that no evidence has been furnished for official use. In this regard, now the learned counsel of the assessee has submitted that the said flat was used for office purpose of the assessee's business/profession, as assessee was not having any other premises inasmuch as the flats owned by the assessee and her parents were let out. In this regard, the learned counsel of the assessee submitted that the details of rent receipt for such intervening period were duly submitted to the assessing officer and the ld. Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counts of the assessee. 16. Upon the assessee's appeal, the ld. Commissioner of Income Tax (Appeals) deleted the addition holding as under: It is seen that the Assessing Officer had relied only on page no. 114 for making addition, without taking cognizance of page no, 109 to 113 of the same Annexure A-1 which also shows the details of the actual transaction. Further, the retraction statement filed by the assessee's mother states that assessee has not made such cash payment to M/s Arjun Realtors Pvt Ltd which has not been considered by Assessing Officer. It is seen that Assessing Officer has not brought anything on record to substantiate the addition of Rs. 4.65 crores. Addition cannot be made on the basis of loose papers only which are not substantiated by documentary proof. Therefore the assessee's submission is accepted in light of Hon'ble Supreme Court decision in CIT Vs. Kalyanansundaram (2007) 294 ITR 49 (SC) and Hon'ble Mumbai Tribunal decision in SP Goyal vs. DCIT (2002) 82 ITD 85 (Mum Tribunal). Therefore, in the light of the above discussion, this addition is deleted. 17. Against the above order, the Revenue is in appeal before us. 18. We have heard both the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted fact as per the assessee's statement. Further, as per the above said page Rs. 1.10 crores was paid by cheque and Rs. 66 lakhs was paid by cash as on 22.12.10. The above said transaction of Rs. 66 lakhs is supported by cash vouchers marked as page no.13 dated 18-10-2010 paid to Manual Fernandis Rs. 1,00,000/-, Page no.14 dated 30-10-2010 paid to Manual Fernandis Rs. 5 lakhs (signed), page no.16 dated 30-10-2010 paid to Selestian Almeida which was received and signed by Manual Fernandis, Page no.20 dated 15-12-2010 paid to Manual Fernandis of Rs. 3 lakhs, page no.21 dated 21-12-2010 paid to Manual Fernandis Rs. 10 lakhs, page no.24 dated 22-10-2010 paid to Manual Fernandis of Rs. 20 lakhs, page no.42 dated 30-10-2010 paid to Manual Fernandis of Rs. 5 lakhs, page no,41 paid to Manual Fernandis of Rs. 5 lakhs. The dates of these receipts also match with what is written on Page 10 of Annexure A 3. Further more it can be seen that the page 11 of the said diary shows that "balance ofRs.85 lakhs cash and payment ofRs.7 takhs Cash" and Rs. 2,71,000/- was paid as Registration & Stamp duty charges, which was also paid in cash. Further, at the top of the page it was mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... khs respectively. It is noticed that the above said two agreements were registered in the name of Smt. Madhu Chopra and the payments were made by Ms.Priyanka Chopra and Shri Ashok Chopra and after that the book entries were transferred as loans. This practice is followed for various payments in the group. Therefore, though the agreement was made in the name of Smt. Madhu Chopra, this issue of on-money payment in cash was taken in the case of the assessee, as most of the payments were gone through her account only. No payment whatsoever was paid by Smt.Madhu Chopra. Hence, this issue of Rs. 1.06 crores is taken in the case of Ms.Priyanka Chopra on substantive basis. On further verification of the details of payment made to Manual Fernandes it was mentioned as follows: 30-12-2010 Cheque No. 103060 HSBC, Chembur Rs. 40,00,000 15-12-2010 Cheque No. 103058 HSBC, Chembur Rs. 35,00,000 15-11-2010 RTGS Rs. 35,00,000 Total (Agreement Value) Rs.1,10,00,000 On verification of the details of payment made to Mr.Salestin Augustine Almedia it was mentioned as follows: 30-10-2010 Cheque No. 102727 AXIS Bank Rs. 5,00,000 14-12-2010 Cheque No,102740 AXIS Bank Rs.20,00,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avour of Mr. Salestin Augustine Alrneida It is submitted that the said cheques are duly recorded in the books of account and ledger account. It is submitted that page nos. 40, 41 & 42 are one and the same. Further Rs. 5 lacs was paid in cash which is fanning part of Rs. 7 lacs cash admitted by Mrs. Madhu Chopra as undisclosed income in case of transaction for acquisition of Sawant Property in the clarificatory statement filed before your honour. In respect ofRs.32 lacs it is submitted that out of total 32 lacs, Rs. 30 lacs is the amount paid to Plaza Hotels Pvt Ltd., on behalf of Manuel Fernandes. Further, Rs. 2 lacs was paid in cash which is forming pan of Rs. 7 lacs cash admitted by Mrs. Madhu Chopra as undisclosed income in the case of transaction for acquisition of Sawantwadi property. However, the assessee has not been able to explain the above said other payments on which vouchers have also been made and signed by Manual Fernandes. Further, in her above said statement, the assessee had accepted that cash component to the tune of Rs. 7 lakhs has been made in the above said transaction. Further in respect of Rs. 32 lakhs the assessee has submitted that the same was pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. (Addition of Rs. 1,06,00,000) 20. Upon the assessee's appeal, the ld. Commissioner of Income Tax (Appeals) deleted the addition. On some aspects of the addition made by the assessing officer, she referred to assessee's explanation and accepted the same. She further noted that assessing officer has made the addition without considering the page wise submission of the assessing. What are these page wise submission have not been brought on record by the learned CIT-A. She has also referred to Hon'ble Apex Court decision in the case of P. V. Kalyanasundaram (supra). However, we find that this Hon'ble Apex Court case relates to some scribbling in loose sheets found in the course of search, but in the present case it is not a case of jotting but a number of materials including proper receipts of cash payment which were found by the revenue in the course of search. One of us in this Bench was the author of the Tribunal order in this case which had travelled upto the Hon'ble Apex Court and got confirmed. Hence, the ld. Commissioner of Income Tax (Appeals)'s reliance upon this case law is not sustainable. In the light of aforesaid discussion, in our considered opinion, this is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t have allowed telescoping of the income with the declaration of undisclosed income by her mother. Here we find that the Revenue's plea is not sustainable. Throughout the search assessment it has been noted that assessee's mother has been handling all the affairs of the assessee. When the Revenue can make additions in the hands of the assessee, on the basis of that it was so stated and accepted by the assessee's mother, there is no reason why such telescoping cannot be granted. Accordingly, we do not find any infirmity in the order of the ld. Commissioner of Income Tax (Appeals) on these issues.. Hence, we affirm the same. Apropos ground no. 5: 25. Addition on this account was made by the assessing officer by holding as under: Further, in the statement recorded on 24-01-2011 of Shri Chand Mishra, the secretary he had admitted that he had arranged 4 wedding functions for the assessee, -wherein an amount of Rs. 30 lacs., was charged in cash for each function, which was not accounted for in the books of accounts. In this regard, in the retraction statement Smt. Madhu Chopra had submitted that such weddings was attended in view of and part of contract with M/s.Cineyu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax (Appeals) has correctly accepted the assessee's submission in this regard and deleted the addition. Hence, we accept the ld. Commissioner of Income Tax (Appeals)'s finding and affirm her order. 29. In the result, both the appeals are partly allowed for statistical purposes. ITA No. 4569/Mum/2015 30. This is an appeal by the Revenue against the order of the ld. Commissioner of Income Tax (Appeals) dated 11.05.2015 and pertains to the assessment year 2011-12. 31. The grounds of appeal read as under: "Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) is justified in deleting the addition of Rs. 74,80,110/-, (out of cash payment of Rs. 1,06,00,000/- out of which Rs. 31,19,890/- has been offered to tax by the assessee) made on protective basis, being unaccounted/undisclosed income towards cash payment for purchase of property at Sawantwadi at Goa without appreciating the fact that the addition has been made on the basis of assessee's confessional statement, which has been duly confirmed by her daughter Ms. Priyanka Chopra, and substantive addition in this case of Ms. Priyanka Chopra has been deleted?" 32. In this case, the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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