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TMI Blog2018 (10) TMI 1499X X X X Extracts X X X X X X X X Extracts X X X X ..... ning had been claiming that the said amount was paid for purchase of diamonds - Held that:- We though are in agreement with the A.O that the “receipts” under consideration viz. Annexure A-11 – Page 30-31 did not make any mention that the amounts were paid by the assessee for purchase of diamonds, but then, we cannot also remain oblivious of the fact that the said” receipts” also did not make any such mention from which it could be safely concluded that the amount was paid by the assessee for purchase of property. We may further observe, that the” Affidavit” and the confirmation filed by Sh. Vikram Singh Shekhawat also substantiates the fact that the amount was paid by the assessee for purchase of diamonds. We thus, not being able to persuade ourselves to subscribe to the view arrived at by the A.O on the basis of the seized documents viz. Annexure A-11 – Page 30-31,thus uphold the order of the CIT(A) and confirm the deletion of the addition of ₹ 42,21,000/- made by the A.O. - Decided against revenue. - ITA No.5917/Mum/2011, ITA No. 5717/Mum/2011 - - - Dated:- 10-10-2018 - Shri R. C. Sharma, AM And Shri Ravish Sood, JM For the Assessee : Shri S.C. Tiwari Ms. Rutuja P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ram Singh Shekhawat. Rs.42,21,000/- 2. Income from undisclosed sources as regards the cash loan advanced by the assessee to M/s Vijay Gruh Nirman Pvt. Ltd. Rs.30,00,000/- 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) after deliberating on the contentions advanced by the assessee deleted the addition of ₹ 42,21,000/- that was made by the A.O, on the ground that the assessee had from his undisclosed sources made a cash payment of the said amount to Shri Vikram Singh Shekhawat. However, the CIT(A) not being persuaded to subscribe to the claim of the assessee that the cash loan advanced by him to Vijay Gruh Nirman Pvt. Ltd. was received back and utilised by him for purchase of diamonds, thus upheld the addition of ₹ 30,00,000/- made by the A.O. 5. The assessee assailing the addition of ₹ 30,00,000/- that was sustained by the CIT(A), has carried the matter in appeal before us. The facts pertaining to the issue under consideration lies in a narrow compass. During the course of the assessment proceedings, it was submitted by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot offered by him for tax, it was submitted by the assessee as under: During the course of assessment proceedings, your honour has raised query regarding the declaration of income u/s. 132(4) of the I.T. Act and its break up, in this regard, we have to state that during the course of search proceedings, our above client has given the confirmation regarding the declaration, a letter was furnished to your honour that the undisclosed income represents jewellery, diamonds, amount receivable, etc. This declaration was on the basis of the sale value arrived at by the diamond trader to who same were given on Janghad, but on sale our client realized only ₹ 73,79,868/- the copies of the bills were filed along with the break up of the disclosure amount. Due to the market difference there is a difference of ₹ 1,20,132/-. The source of the acquisition of these diamonds- (a) As per the seized pages No. 33 to 36 of Annexure-A 11, it indicate payment made to Vi jay Gruh Nirman amounting to ₹ 6,00,000/- in multiple of 5, this ₹ 30,00,000/- and said money received back as it is mentioned on the reverse side of these receipts. Hence ₹ 30,00,000/- is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e thousand only by cash. ₹ 21,21,000/- Dt. 7.7.2006. I say received, Sd/ (Vikram Singh) (v) As per page No. 40, the said Shri Vikram Singh Shekhawat has issued another receipts stating that he has received a sum of ₹ 20,00,000/- by DD No. 57838, 57839, 57 (Totalling to ₹ 40,00,000/- vide DD Nos. 57837, 57838, 57839, 578340 (each five lakhs) dated 27/6/2005 being part payment against sale of plot No.1,2 3 in Indra Gruh Nirman Sahakari Samiti Ltd, Jaipur at Shri Kushal Nagar, Sanganer, Jaipur, all the vouchers issued before by against this payment is cancelled and new receipt is now given to you. (vi) As per page No. 41, the said Shri Vikram Singh Shekhawat has issued another receipt stating that received with thanks from M/s. Euro Developers Ltd., a sum of ₹ 20,00,000/- (Rupees Twenty lacs only ) by cheque No. 033165, 033166 ( each ten lacs) dated 25/4/2006 as part payment against sale of plot No.01 to 06 ( one to six ) in Indra Gruh Nirman Sahakari Samiti Ltd., Jaipur at Shri Kusal Nagar, Sanganer, Jaipur, all the vouchers issued before by against this payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 6/7/2006 what prevented the assessee to explain the same in the statement u/s. 132(4) of the I.T. Act recorded on 3/8/2006 is best known to the assessee. Thus assessee's claim that the amount received from Vijay Gruh Nirman Pvt. Ltd. has been utilised for purchasing the diamonds cannot be accepted. Therefore, the cash loan advanced by the assessee amounting to ₹ 30,00,000/- by way of promissory notes are treated as assessee's income from undisclosed sources and added to the total income of the assessee. 8.3. In view of the above, the cash paid to Shri Vikram Singh Shekhawat of ₹ 42,21,000/- and the cash loans advanced to Vijay Grih Nirman Pvt. Ltd of ₹ 30,00,000/- are added to the total income of the assessee as undisclosed income of the assessee. The total addition on account of these works out to ₹ 72,21,000/-. We find, that as observed by us hereinabove, the CIT(A) though accepted the explanation of the assessee as regards the cash payment of ₹ 42,21,000/- made to Shri Vikram Singh Shekhawat and deleted the same, but not being inclined to accept his claim that the cash loan of ₹ 30,00,000/- advanced to M/s Vijay Gruh Nirma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee would have received the amount of ₹ 30,00,000/- from the aforementioned concern viz. M/s Vijay Gruh Nirman Pvt. Ltd, then he would not had been in possession of the promissory notes. 8. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. We find, that it was the claim of the assessee that the amount of ₹ 30,00,000/-which was advanced by him to M/s Vijay Gruh Nirman Pvt. Ltd., was returned by the said concern and utilized by him for making investment in purchase of diamonds. Further, it is the contention of the ld. A.R that Vijay Gruh Nirman Pvt. Ltd. on receipt of cash loan of ₹ 30,00,000/- on 02.07.2006 had issued 5 promissory notes (in multiple of ₹ 6,00,000/- each), dated 02.07.2006. The assessee had submitted before the lower authorities that the amount which was given to M/s Vijay Gruh Nirman Pvt. Ltd. was received back by him on 06.07.2006. In order to buttress his aforesaid claim, the assessee had taken support of the notings on the reverse side of the aforesaid promissory notes. It is observed by the lower authorities, that a perusal of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanation which could persuade us to subscribe to his aforesaid claim. Rather, we find that the A.O had during the course of the assessment proceedings on 24.12.2009 recorded the statement of Mr. Vrajlal T. Gala, director of M/s Vijay Grah Nirman Pvt. Ltd under Sec. 131 of the Act. On a perusal of the statement of Mr. Vrajlal T. Gala, it emerges that he had clearly stated that the amount of cash loan of ₹ 30,00,000/- which was received by M/s Vijay Gruh Nirman Pvt. Ltd. on 03.07.2006, was not returned by him till date viz. 24.12.2009 (i.e the date of recording of the statement). The relevant extracts of his statement is as under:- Q-6. When were the above cash loan repaid ? Ans. The above cash loan have not been repaid by me till date. We thus, are of a strong conviction that the assessee had merely in the guise of the disclosure made as regards the unaccounted sale value of the diamonds tried to wriggle out of the incriminating notings appearing on the seized document viz. Annexure A-11 - Page 33 to 36. We are of the considered view that in the backdrop of the aforesaid facts, it can safely be concluded that the cash loan of ₹ 30,00,000/- advanced by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment made by the assessee for the purchase of said diamonds could be drawn. However, the A.O observing that the assessee as a director of M/s Euro Developers Ltd. had also made certain other payments to Shri Vikram Singh Shekhawat for purchase of plot Nos. 1 to 6 in Indra Gruh Nirman Shahkari Samiti Ltd., Jaipur, thus related the said notings to the on money that would have been paid by the assessee for purchase of the aforesaid property. On the basis of his aforesaid deliberations, the A.O added the amount of ₹ 42,21,000/- as the payment made by the assessee from his undisclosed sources. 14. We find, that on appeal the CIT(A) being persuaded to subscribe to the claim of the assessee in context of the issue under consideration deleted the addition of ₹ 42,21,000/-, observing as under: 20.1 As far as the cash of 42,20,000/- paid to Mr. Vikram Singh is concerned, the appellant from the beginning has contended that it is paid for purchase of diamonds. The contention was raised before the DDIT and this fact is reflected in page 37 of the appraisal report. The explanations offered by the appellant as mentioned in page 37 of the appraisal report is extracted below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee by way of consideration for purchase of diamonds. Per contra, the ld. D.R relied on the orders of the lower authorities. 16. We have deliberated at length on the issue under consideration, and find ourselves to be in agreement with the view taken by the CIT(A). We are of the considered view, that not only the revenue has failed to place on record any documentary evidence which could irrefutably prove to the hilt that the amount of ₹ 42,21,000/- was paid by the assessee to Shri. Vikram Singh Shekhawat by way of on money for purchase of property, but rather, we find that the assessee as observed by the CIT(A), from the very beginning had been claiming that the said amount was paid for purchase of diamonds. We are of the considered view, that the A.O had erred by whimsically assuming san any material/evidence that the receipts viz. Annexure-11 Page 30-31 was the on money paid by the assessee for purchase of property. Rather, the fact that the receipts clearly made a mention that the amount was received from the assessee, unlike the receipts which were issued by Shri. Vikram Singh Shekhawat in respect of the amounts received from the assessee in his capac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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