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TMI Blog2017 (12) TMI 1705X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. Relief may please be granted by deleting the said addition of Rs. 6,12,500/- 3. In the facts and circumstances of the case and in law the ld. CIT(A) has erred in confirming undisclosed income from other sources amounting to Rs. 34,500/- 4. The ld. CIT(A) has erred in upholding the addition of Rs. 1,38,00,000/-u/s 68 of the I.T. Act, 1961.'' 2.1 During the course of hearing, the ld.AR of the assessee has not pressed the Ground No. 1.Hence, the same is dismissed being not pressed. 3.1 Apropos Ground No. 2 and 3 of the assessee, the facts as emerges from the order of the ld. CIT(A) is as under:- ''3.3.2 I have duly considered the assessee's submission and also carefully gone through the assessment order.I have taken a note of the factual matrix of the case as well as case laws relied upon. In this case AO has made the addition on account of undisclosed investment amounting to Rs. 13 lacs made through the finance broker Sh Manish Tambi and interest thereof of Rs. 34,500/-. AO has made a detailed discussion in this regard in para 43 to 53 pg 13 to 15 of the assessment order and also relied on decision of Hon'ble Court in case of Sumati Dayal & Dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Ld. AO u/s 153A/143(3) is void ab-initio deserves to be quashed. 3. Under the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the addition of Rs. 3,21,31,893/- as income on the basis of peak creditors calculated by them ignoring the submissions of the assessee and without considering the contention of the assessee against declared peak of Rs. 52,40,137/- which was calculated on more scientific basis. 4. Under the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the addition of Rs. 32,42,597/- as own unexplained cash/capital employed in debtors after addition of Rs. 3,21,31,893/- which amount to double addition and without considering the surrender of Rs. 52,40,137/- by the assessee. 5. Under the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the addition of Rs. 1,24,77,126/- on account of interest income which is not the real income of the assessee and was calculated. 6. The assessee prays your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing. 5.1 During the course of hearing, the Ld. AR has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .10% on a total of the credits of Rs. 91,67,81,272/-. The addition u/s 68 of the Act can be made only if any sum is found credited in the books of the assessee. A book means a collection of sheets of papers bound together with the intention that such binding shall be permanent and papers used are kept collectively in one volume. A book which contains successive entries of items maybe a good memorandum book but until those entries are totaled or balanced or both as the case may be, there is no reckoning and no accounts. A book which merely contains entries of items of which no account is made at any time, is not a "book of account" in a commercial sense. Thus the addition made u/s 68 is not justified. It is noticed that over and above the peak credit, the AO has further made an addition of Rs. 52,40,137/- on account of debtors exceeding the creditors. We have found that the peak determined by the AO is not correct, otherwise also, when once peak amount has been added then no separate addition is required. It seems that the AO has not properly prepared the list of debtors and creditors based on any logic. The Ld. CIT(A) has confirmed the addition of Rs. 52,40,137/- under the Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O had added over and above peak credit. Accordingly, the case of Manish Tambi will be actually in favour of the assessee. It is also a fact that assessee has not controverted AO's findings given in the assessment order. In view of facts and circumstances of the case and duly considering the Principle of Human Probability as explained by Hon'ble Apex Court in case of Sumati Dayal & Durga Prasad More(Supra), and also duly considering circumstantial evidences of the case, both the additions made on a/c of undisclosed investment of Rs. 13,00,000/= and interest earned thereof of Rs. 34,500/= for the intervening period are hereby confirmed. Assessee's appeal in Grs no 3 & 5 fail.'' 3.2 During the course of hearing, the ld.AR of the assessee prayed for deletion of addition confirmed by the ld. CIT(A) for which following written submission has been filed. ''3. SUBMISSIONS 3.1 The entire addition by the ld. AO and its confirmation by the ld. CIT(A) is based on a presumption that whatever was written the name of Smt. Aruna Sankhla in the documents seized from Shri Manish Tambi, was of the present appellant Smt. Aruna Sankhla. However, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order of Hon'ble ITAT, was not pressed as appearing at para 5.1 at page 7 of the order of Hon'ble ITAT. Thus, the issue of document being deaf & dumb was not adjudicated and ld. CIT(A) is wrong in drawing any inference in this regard. Moreover, Hon'ble ITAT deleted the additions in the hands of Shri Manish Tambi for the technical reasons (page 16 of the order of Hon'ble ITAT) that loose papers cannot be termed as Books, therefore, no addition with reference to loose papers can be made u/s 68 of the Income Tax Act, 1961. 3.3 Ld. AO at para 47 pg 14 of his order has mentioned that some persons whose names were appearing in the documents have owned the said money. However, ld. AO has not mentioned the names of the persons appearing in the documents but who did not own up the money. Merely owning by some persons cannot make the entire contents of the diary to be correct. Reliance is placed on the judicial pronouncement of the Hon'ble Supreme Court in the case of C.B.I v. V.C. Shukla 1998 (3) SCC 410, wherein it has been held that meaning of accounts book would not be diary. The extract has been set out for the sake of your convenience. "In setting aside the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... printed, fastened or bound together so as to form a material whole. Loose sheets or scraps of paper cannot be termed as 'book' for they can be easily detached and replaced. In dealing with the work 'book' appearing in Section 34 in Mukundram vs. Dayaram [AIR 1914 Nagpur 44], a decision on which both sides have placed reliance, the Court observed:- " In its ordinary sense it signifies a collection of sheets of paper bound together in a manner which cannot be disturbed or altered except by tearing apart. The binding is of a kind which is not intended to the moveable in the sense of being undone and put together again. A collection of papers in a portfolio, or clip, or strung together on a piece of twine which is intended to be untied at will, would not, in ordinary English, be called a book............................... ................................I think the term "book" in S. 34aforesaid may properly' be taken to signify, ordinarily, a collection of sheets of paper bound together with the intention that such binding shall be permanent and the papers used collectively in one volume. It is easier however to say what is not a book for the purposes of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith liability, the reason being that a man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of the parties. There must be independent evidence of the transaction to which the entries relate an din absence of such evidence no relief can be given to the party who relies upon such entries to support his claim against another. In Hira Lal Vs. Ram Rakha [ A. I. R. 1953 Pepsu 113] the High Court, while negativing a contention that it having been proved that the books of account were regularly kept in the ordinary course of business and that, therefore, all entries therein should be considered to be relevant and to have been prove, said that the rule as laid down in Section 34 of the Act that entries in the books of account regularly kept in the course of business re relevant whenever they refer to a matter in which the court has to enquire was subject to the salient proviso that such entries shall not alone be sufficient evidence to charge any person with liability. It is not, therefore, enough merely to prove that the books have been regularly kept in the course of business and the entries therein are correct. It is further incu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investments and interest thereon of Rs. 34,500, may please be deleted.'' 3.3 On the other hand, the ld. DR supported the order of the ld. CIT(A) on the issue in question. 3.4 We have heard the rival contentions and perused the materials available on record. It is pertinent to mention that similar issue in the case of M/s. Kamakshi International vs DCIT (ITA No.327/JP/2017) has been decided against the assessee by observing as under:- ''2.4 We have heard the rival contentions and perused the materials available on record. Brief facts of the case are that a Search u/s 132 of the Act was conducted at business cum residential premises, C-33, Sikar House, Outside Chandpole Gate, Jaipur of Shri Manish Tambi and his family members on 23-7-2009. Shri Manish Tambi and his family members are engaged in the field of finance as broker. During the course of search proceedings, books of accounts of Shri Manish Tambi were found and seized wherein cash transactions were reflecting. In this case, it is noted that the AO made the addition of Rs. 5,79,335/- u/s 69C of the Act in the hands of the assessee firm on the basis of a ledger, seized from the possession of Shri Manish Tambi. In first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be determined in this case and nothing more. Accordingly, we reverse the findings of the ld CIT(A) and order to delete the entire addition so made. Thus Ground Nos. 3 and 4 of the assessee are allowed.'' In view of the above facts, circumstances of the case and also the order of the Hon'ble ITAT Jaipur Bench (supra), we find no reason to interfere with the order of the ld. CIT(A) on the issue in question. Thus the solitary ground of the assessee is dismissed.'' Taking into consideration the decision in the case of M/s. Kamakshi International vs DCIT (supra), we find no reason to interfere with the order of the ld. CIT(A). Thus Ground No. 2 and 3 of the assessee are dismissed. 4.1 The Ground No. Ground No. 4 of the assessee is regarding upholding the addition of Rs. 1.38 crores u/s 68 of the Act by the ld. CIT(A). The facts as emerges from the order of the ld. CIT(A) are as under:- ''3.2.2 I have duly considered the assessee's submission and also carefully gone through the assessment order. I have taken a note of factual matrix of the case as well as applicable case laws relied upon. Assessee has s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. of the notary is appearing on the agreement which raises serious doubt about genuineness and authenticity of this legal document. Assessee during the appellate proceeding has not controverted AO's aforementioned findings. In view of these facts and circumstances of the case as discussed above, addition made by the AO of Rs. 1,38,00,000 on account of unexplained cash is hereby sustained. Assessee's appeal in Gr No. 2 fails.'' 4.2 During the course of hearing, the ld.AR of the assessee prayed for deletion of addition sustained by the ld. CIT(A) amounting to Rs. 1.38 crores u/s 68 of the Act for which the ld.AR of the assessee filed the following written submission. ''3. SUBMISSIONS 3.1 Our submissions before ld. CIT(A), reproduced by him at pages 18 to 27 of his order, may please be considered in correct perspective. 3.2 The findings of ld. CIT(A) are contrary to law and facts as submitted below:- (a) "The transactions were made in cash. The reason for making such a huge transactions was not very convincing." There is no prohibition under the law to receive cash as advance towards agreement to sell. The said cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, these persons were, otherwise, directors of these companies have not been disputed or doubted by the lower authorities. (e) "On the date of agreement Sh. Nayan Arvind Shah was Director of M/s. Murti Real Estate Pvt. Ltd. Who has confirmed that no such transactions were performed by the assessee. Similarly, Sh. Ravi Kewlani who was the director of M/s Ravik Finance & Investment Pvt. Ltd. Has also denied to have such agreement with the assesee." The allegation of denial is not substantiated by the department by bringing appropriate material on record. Neither copies of statements recorded were provided nor opportunities for cross examinations were given. (f) "On the date of agreement both the concerns namely, M/s Murti Real Estate Pvt Ltd Navi Mumbai and M/s Ravik Finance & Investment Pvt. Ltd, Mumbai were not having sufficient cash balance so as to advance Rs. 73 lakhs & 65 lakhs respectively to the assessee." The allegation again is unsubstantiated. Once the agreement is signed & cash having given is confirmed, non-availability of cash (unsubstantiated allegation) has no relevance for the assessment of the appellant. (g) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved. In first appeal, the ld. CIT(A) has sustained the addition made by the AO. It is noted from the available records that during the search operation incriminating documents showing cash receipts amounting to Rs. 1.38 crores lacs on account of advance for sale of Khatwara Agriculture Land. The above cash payment had been made by M/s. Ravik Finance & Investment Pvt. Ltd, C-33/1-2 Nivara Co-operative Housing Society, Sector-3, Sanpada, Navi Mumbai of Rs. 65.00 lacs and from Miss. Murti Real Estate Pvt. Ltd L-33/1-2, Nivara Co-operative Housing Society, Sector-3, Sanpada, Navi Mumbai of Rs. 73.00 lacs totallling to Rs. 1.38 crores during the year under consideration. . In order to verify the genuineness of the above concern, a survey operation was conducted on 28-07-2009 at the addresses of the above mentioned concern alongwith three other concerns from whom other family members were said to have received cash payment against sale of certain properties. The Revenue's claim is that during the course of survey these concerns were found to be non-existent. However, the assessee claims that the above concerns were having PAN and the new address could ..... X X X X Extracts X X X X X X X X Extracts X X X X
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