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TMI Blog2019 (2) TMI 979X X X X Extracts X X X X X X X X Extracts X X X X ..... the him is not valid; and b) It is based on factually erroneous premises and built upon surmises and conjectures. 3.That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Ld. AO in making an addition of Rs.l,40,00,0001- under section 69A of the Act. 3.1 The Ld. AO and the Ld. CIT(A) erred in ignoring the fact that the aforesaid amount was received by the Appellant as advance against his property and in holding that the aforesaid amount belongs to the appellant. 3.2 The Ld. AO as well as the Ld. CIT(A) erred in ignoring the fact that there was voluntary admission and written statement given under section 131 of the Act by two independent person who jointly had given the said sum of Rs. 1,40,00,000/- as advance against the property of the appellant. 4.That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Ld. AO in making an addition of Rs. 13,42,000/- out of Rs. 68,42,0001- which was found in the lockers of the Appellant under section 69A of the Act. 4.1 That the Ld. AO and the Ld. CIT(A) failed to appreciate that the entire amount of Rs. 68, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in loans and advances, payment of Rs. 30 lakhs and Rs. 70 lakhs respectively was shown in the name of Shri K.K. Agarwal. Payment vouchers were also produced and return of income of those companies was also produced before the Ld. AO. 2.1 Summons u/s 131 of the Act was issued to Shri K.K. Agarwal, who explained sources of fund in his statement. Regarding balance Rs. 40 lakhs, Sri KK Agrawal explained that he has withdrawn the said sum from his bank account. To substantiate the same, he submitted that he is having profits of approximately 6 lakhs and an approximate turnover is of Rs. 13 crore. He submitted details of balance sheet, wherefrom he has withdrawn Rs. 40 lakhs and given to assessee. 2.2 Shri Vipin Gupta was also examined under section 131 of the Income Tax Act, who confirmed the funds having advanced to Shri K.K. Agarwal. 2.3 Ld. AO rejected contention of assesse. The main reason for rejection of argument advanced by assessee is that, according to Ld. AO, market value of property was Rs. 80,26,425/- and further the amount of cash found against the above property is Rs. 1.40 lakhs. For this, assessee explained that total sale consideration agreed for purpose of sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n nature and therefore do not require adjudication. 6. Ground No. 2 is in respect of challenge raised by assessee against initiation of proceedings under section 147 of the Act as void ab initio. Ld. Counsel submitted that Ld. A.O. assumed wrong jurisdiction under section 148, and entire proceedings are bad in law. In support of his argument, he submitted that information based upon which reopening has been initiated by Ld. AO is CBI Report. Referring to CBI Report placed at page 145-194 of paper book Ld. Counsel submitted that reason to believe of income having escaped assessment, does not emanate from the reasons recorded. He submitted as under: Sl. No. Information received from CBI by the Ld.AO Addition made by the Ld.AO I. Cash seized of INR 1.40 crores from the residence of the appellant. Advance of INR 1.40 crores was received from Mr. KK Agarwal against the agreement to sale of property at Kavi Nagar Ghaziabad. Addition of INR 1.40 crores was made u/s 69A as unexplained money. II. INR 68.42 lakhs received from various lockers of assessee. The Ld.AO accepted the contention that the appellant under the will has received the amount, however, held that Sh.Roshan Lal J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by assessee and then concluded that there is escapement of income. Amount of Rs. 2.10 crore was found to have been not disclosed in original return filed by assessee, that was seized by CBI and, therefore, there is a live link between material and escapement of income. 8.1 Ld. Sr. DR submitted it was not the intention of Ld. AO to make further investigation, or rowing enquiries, but to make specific investigation and enquiries, with respect to amount of Rs. 2.10 crore found during course of search by CBI. He thus, submitted that reopening is valid. It was also argued by Ld. Sr. DR that when such huge amount of cash is seized from a salaried person, which do not form part of orginal return of income, Assessing Officer is only required to arrive at a prima facie reasonable belief of income having escaped assessment. He is not supposed to reach at a conclusion at the time of recording of reasons. He submitted, that when there is cash available, which is not disclosed in books of accounts which are not at all maintained by assessee and which are not attached with return of income it cannot be said that Ld. AO did not have any reason to believe regarding escapement of income. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om 293, wherein, it has been stated that, under guise of reopening of assessment, Assessing Officer cannot make rowing enquiry. We have carefully perused above decision and found that in that particular case Assessing officer did not have any tangible material to form an opinion of income chargeable to tax having escaped assessment. However, in present facts of case before us, huge cash was found from assessee who is deriving Income under the head "Salary". In view of this, above decision does not fit into the facts of the present case. 9.4 Next decision relied upon by Ld. Counsel is with respect decision by Hon'ble Delhi High Court in case of CIT vs Minakshi overseas Pvt. Ltd. 82 taxmann.com 300 (Delhi), wherein it has been held that, where there was no independent application of mind by Assessing Officer to tangible material and that conclusion of Assessing Officer was mere reproduction of conclusion in investigation report, reasons failed to demonstrate link between tangible material and formation of reason to believe that income escaped assessment, and consequently reassessment was not justified. 9.5 In the present case before us, CBI Report already exonerated assessee with r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whom cash was found and seized which, was not disclosed in return of income filed by assessee, we do not find any infirmity in action of Ld. AO in initiating reassessment proceedings under section 147 of the Act. The CIT(A) rightly upheld reassessment proceedings. Accordingly, Ground number 2 raised by assessee stands dismissed. 10 Ground No. 3 is in respect of addition made by Ld.AO of Rs. 1,40,00,000/-, under section 69A of the Act. During course of assessment proceedings, assessee explained the source of Rs. 2.10 crores. Assessee submitted that Rs. 1.40 crores is received against proposed sale of property. With respect to the advance received against sale of property, assessee submitted that Rs. 1 crore has been received by purchaser Shri K.K. Agarwal from two companies assessee submitted their balance sheets, where the sums were disclosed as advance paid to Kishan Kishore Agarwal. Ld. AO made addition, which was confirmed by Ld. CIT(A). 11 Ld. Counsel submitted that sum of Rs. 1.40 crores seized during course of search, conducted by CBI from assessee's premises, was received as advance from Mr K.K Aggarwal, against agreement of sale of property at Kavi Nagar, Ghaziabad. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... picion regarding genuineness of transaction. Placing reliance upon orders of authorities below Ld. Sr. DR submitted that, creditworthiness and genuineness of Sh. Vipin Gupta is questionable and has not been proved. Hence, amount of Rs. 1.40 crores has been rightly added under section 69A as unexplained money. We have perused submissions advanced by both the sides in the light of the records placed before us. 13 During course of search, Agreement for sale dated 19 December 2010 between assessee and Shri Krishen Kishore Agrawal for sale of property at KA - 49, Kavi Nagar and measuring 297.275 mK situated at Ghaziabad, for total sale consideration of Rs. 2.90 crores was found from premises of assessee. The above property was subject to mortgage with State Bank of India for loan taken by assessee. As per clause number 2 and 3 of Agreement, assessee was paid a sum of Rs. 1.40 crores by Sh. K.K. Agarwal. Assessee stated that cash found of Rs. 2.10 crores is consisting of Rs. 1.40 crores being cash given by buyer to assessee. Assessee submitted that Shri KK Aggarwal paid this sum of Rs. 1.40 crores to assessee. During the course of search before by CBI, Shri KK Agarwal was examined, who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , where he is Director. Balance sheets placed in paper book relating to companies from where monies have been advanced, which is relied upon by Ld. Counsel, substantiates the same. Further, assessee produced Shri KK Aggarwal and Sri Vipin Gupta, before AO who provided funds to shri K K Agarwal, who in turn advanced money to assessee for purchase of property. Both parties confirmed the transactions, showing source and trail of cash paid by Mr Vipin Gupta to Mr KK Agaral who in turn paid it to assessee. Ld. AO was also shown that all the parties involved in transactions from where cash was paid to Shri K.K. Agarwal, who in turn paid to assessee, are assessed to income tax. Assessee submitted their balance sheets and respective vouchers before assessing officer. Assessee also shown respective entries in balance sheet of those parties in the name of Shri KK other while under the head advances paid for properties. Assessee has also shown that Shri Vipin Gupta is carrying on business and has turnover of 13 crores by submitting the balance sheet and profit and loss account along with return of that person. Assessee also supported the payment from Shri Vipin Gupta to Shri K K Agarwal by pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, seems to be genuine. Ld. AO further on examination of 'Will' noted that Rs. 55 lakhs has been bequethed to assessee. Therefore, out of 68.42 lakhs Ld. AO allowed Rs. 55 lakhs as explained and made addition of balance of Rs. 13.42 lakhs as undisclosed income under section 69A of the Act. The Ld. CIT(A) confirmed the addition. 15 Ld. Counsel submitted that a sum of Rs. 68.42 lakhs was seized from various lockers by CBI. He submitted that Ld.A.O. added sum of Rs. 13.42 lakhs and accepted balance Rs. 55 lakhs. Ld. Counsel submitted that entire money has been received by assessee under 'Will' of Late Roshan Lal Jain, being father of assessee. He further submitted that Ld.A.O made addition only on the ground that, money was not found in locker. He submitted that entire money was received by assessee under 'Will' and Ld. A.O partly admitted receipt of money under 'Will', balance cannot be denied without there being contrary materials on record. He submitted that there has been no evidence on record to establish anything contrary. 16 Ld. Sr. DR though supported orders of authorities below, submitted that Will has not been probated by assessee and therefore its authenticity cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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