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TMI Blog2015 (12) TMI 1835X X X X Extracts X X X X X X X X Extracts X X X X ..... o such statement was recorded regarding the contents of this seized document We are of the view that page no. 7 of BRI-20 is a dumb document and particularly one of the director of the assessee company Shri Subrata Banik was deposed during the course of search on 07.11.2006 but no question about this document was asked, which implies that this page was not considered as important and even after search no questions were asked about the narrations or entries. In view of the above, we confirm the order of CIT(A) and both the issues of revenue's appeal are dismissed. - ITA No. 297/Kol/2012 - - - Dated:- 4-12-2015 - Mahavir Singh, JM And Waseem Ahmed, AM For the Appellant : Shri D Mallikarjuna, CIT-DR For the Respondents : Shri R N Bajoria, Sr. Counsel Shri S Jhajharia, Adv ORDER Per Shri Mahavir Singh, JM This appeal by revenue is arising out of order of CIT(A), Central-III, Kolkata in Appeal No.191/CC-II/CIT(A)C-III/08-09 dated 30.12.2011. Assessment was framed by ACIT, C.C-2, Kolkata u/s. 144 of the Income-tax Act, 1961 (hereinafter referred to as the Act ) for AY 2007-08 vide its order dated 31.12.2008. 2. The only issue in this appeal of reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted by the assessee and accordingly, the AO after noting the detailed facts made addition of suppressed purchases at ₹ 5,10,33,507/- by observing as under: It is seen from the above page of the seized document that the assessee had made a purchase of ₹ 7,77,35,924/55 during the year against which it made a payment of ₹ 6,43,28,726/61. Similarly, it made a sale of ₹ 3,11,85,100/90 against which the assessee company received payment of ₹ 2,63,58,743/31. On perusal of the e-return of the assessee for the Ay 2007-08, it is found that the assessee has shown a sale of ₹ 3,19,13,094/- and purchase of ₹ 2,67,02,417/-. It clearly shows that the assessee company has grossly suppressed its purchase, which comes to ₹ 7,77,35,924/55 - ₹ 2,67,02,417/- = ₹ 5,10,33,507/55. Similarly, from the same documents, he noted that there is unexplained expenditure but no explanation is coming from the assessee and she added a sum of ₹ 98,10,220/- as under: Under the circumstances, I do not find no other alternative but to treat the expenditure shown by the assessee as unexplained expenditure and add the same to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether any statement of the appellant was recorded regarding the contents of the seized documents BRI/20 Page-7 during the course of search or post search investigation. However, the AO has remained silent on this point. I found that a statement of Sri Subrata Banik, Director of the assessee company was recorded during the course of search seizure operation on 07.11.2006. In this statement although questions were asked about several seized documents including Page -9 of seized document BRI/20 , no question was asked about the seized document BRI/20 Page - 7 which implies that this page was not considered important at that point of time. From the above discussion it is clear that no cogent material was unearthed during the search or post search investigation or assessment or remand proceedings to suggest that the assessee has indulged in making huge purchases in excess of ₹ 5 Crores outside its regular books of accounts. Similarly no cogent material has been adduced at any point of time to suggest that amounts have been spent on show-room decoration outside the books of accounts. I have already given a finding that the seized document BRI/20 Page -7 is a dumb document. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was explained by Ld. Counsel Sh. Bajoria that addition has been made on the basis of pg-7 of BRI/20 which comprises of loose sheets of pages 1-89. He referred to relevant loose page-7 on the basis of which addition has been made is enclosed in assessee's paper book at page 85. From the perusal of which it will be seen that in this sheet certain figures have been jotted but it neither gives any date nor gives any year to which it is related except a short mention of 06-07 against one particular item and it does not indicate either the name of assessee or anybody else. It appears that the figures jotted there may have been for several accounting years 2004-05, 2005-06 and 2006-07 relevant to assessment year 2005-06, 2006-07 and 2007-08 respectively. If sales and purchases of all these three items are taken up together it will be seen that the purchases and sales recorded in the books of accounts were much more than the figures appearing at page-Z of seized documents. But assessee has not accepted the ownership of such paper seized. Further, in view of the facts the assessee claimed that there being no specific date or specific year no addition could be made on account of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arose between the date of survey to 31.3.2007 and your Honour will agree that this is wholly an unacceptable and unbelievable proposition and as such the A.0 has referred casually to survey only to prejudice the case of your petitioner without having any relevance to the additions made. (f) Moreover as stated above such loose sheet neither contained any date or any name or any year nor any signature except 06-07 at a particular place. Even the A. O has not proved that such seized paper was in the handwriting of any employees of your petitioner-company or any of the Director of the petitioner-company. Hence such loose sheet giving no date or year etc. cannot be a ground for making addition. (g) Moreover this is to submit that your petitioner deals in certain specified types of goods all of which contains the brand name of your petitioner-company and all such goods are purchased by outsourcing from certain specific parties for which the names and addresses of the parties from whom such purchases were being made are available. The A. a never made any attempt to verify from such persons from whom goods have been purchased by your petitioner by outsourcing as to whether there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made on the basis of pg-7 of BRI/20 which comprises of loose sheets of pages 1-89. Copy of relevant loose sheet-7 on the basis of which addition has been made is enclosed in assessee's paper book at page-85. From the perusal of which, it is seen that in this sheet certain figures have been jotted but it neither gives any date nor gives any year to which it is related except a short mention of 06-07 against one particular item and it does not indicate any name which proves ownership. As regards stock found in the survey, the entire stock was found to have been duly accounted for and AO having not specifically pointed out as to how much unaccounted/un-disclosed stock was found during survey no adverse inference could be drawn only on the basis of stock arises in course of survey. 10. Similarly, the addition of ₹ 98,10,220/- has been made on the basis of same seized paper comprising of ₹ 684768/- + ₹ 270677/- + ₹ 182851/- + ₹ 3696085/- + ₹ 700000/- + ₹ 150000/-+ ₹ 130694/- + ₹ 295145/- + Rs/3700000/-. In this connection, it was argued that the said seized paper indicated the amounts but not any year or any date to which if r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent order. In this connection you are requested to clarify after examining the seized documents whether any stock discrepancy was detected during the course of survey. You are also requested to state whether any statement of the appellant regarding stock found during the course of survey was recorded. Further, you are requested to state whether any statement of the appellant has been recorded regarding the contents of the seized documents BRI/20 Page-7 during the course of search or during post search investigation. Copies of relevant statements and stock inventory may please be enclosed. The A.O. vide his letter dated 2l.12.2011 responded to this letter by more or less reiterating the facts stated in the earlier remand report dated 29.3.201l. However, he remained silent about my query as to whether any statement of the assessee has been recorded regarding the contents of the seized documents BRI/20 Page-7 during the course of search or during the course of post search investigation which leads me to presume that no such statement was recorded regarding the contents of this seized document. In view of the above facts and circumstances of the case, now we will go through the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the note book/diary/loose sheets are required to be supported/corroborated by other evidence and also include the statement of a person who admittedly is a party to the noting and statement from all the persons whose names are there on the note book/loose slips and their statements to be recorded and then such statement undoubtedly should be confronted to the assessee and he has to be allowed to cross-examine the parties. In the present case, undoubtedly no statement from the parties whose names were found in the note book/loose slips has been recorded and as such there is no question of cross-examination of them and entire addition in the hands of the assessee on the basis of uncorroborated writings in the loose papers found during the course of search is not possible. The evidence on record is not sufficient to support the Revenue's case that huge money lending business has been carried on by the assessee outside the business of the assessee. This is the block assessment and we are concerned only with the undisclosed income and we have to consider only material and evidence detected as a result of search. It means that if an examination of the material already on record be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of CIT Vs. S. M. Agarwal (2007) 162 taxman 3 (Del) wherein certain documents found during the course of search was treated by Hon'ble High court as dumb document by observing in para 11 to 15 as under: 11. In the present case the Assessing Officer has placed reliance on the statement of Smt. Sarla Aggarwal, daughter of the assessee while arriving at the conclusion, that the entries belong to the transactions of the assessee. This statement made by Smt. Sarla Gupta cannot be said to be relevant or admissible evidence against the assessee, since the assessee was not given any opportunity to cross-examine her and even from the statement, no conclusion can be drawn that the entries made on the relevant page belongs to the assessee and represents his undisclosed income. It is also an admitted fact that the statement of the assessee was not recorded at any stage during the assessment proceedings. The only conclusion which can be drawn about the nature and contents of the document is that it is a dumb document and on the basis of the entry of notings or figure etc. in this document, it cannot be concluded that this represents the undisclosed income of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the figures did not co-relate with any date or details nor was the document signed. It also referred to the details of the fixed deposit receipts given in page 10 of Annexure A4, which was the seized document, and noted that except for mentioning the figure of ₹ 27,50,000/-, no details for the said figure were given. However, in respect of the fixed deposits with Karnataka Bank, the seized paper showed that the source for the same was the maturity proceeds of earlier fixed deposits. The Tribunal ultimately cancelled the addition by observing as under: 65. On going through page 463 of the paperbook, which is copy of page 10 of annexure A- 4, it is found that on these documents, some figure has been noted. From the noting on this paper, the details of FDRs cannot be detected. The assessee has denied this to be in his handwriting. The entries do not correlate any date or the signatures. The Assessing Officer did not collect any other evidence from banks or post office to correlate investment of the assessee in any other FDRs except the FDRs of ₹ 12,25,000/-, the source of which has been duly disclosed by the assessee. 66. Keeping in view of the above fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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