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TMI Blog2021 (3) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... ng small commission for getting borrowers for intending lenders. Net worth of the payment was ₹ 28.71 Crores as on 31/03/2015 and ₹ 27.33 Crores as on 31/03/2016 and thus, the calculation of the AO that ₹ 1.56 Crores represented the net worth of ₹ 1.56 Crores on 06.07.2015 is wrong and rightly deleted by the ld. CIT(A) - AO has completely failed to bring any substantive evidence on record to prove that these entries represented the amounts in lakhs and hence , we do not find any infirmity in the order of ld. CIT(A) - The order passed by the ld. AO is based on presumption of surmises without any underlying substantive evidences and therefore, was rightly deleted by the AO. We are therefore, inclined to upheld the order of CIT(A) and appeal of the revenue is dismissed. - ITA No.3967/Mum/2019 - - - Dated:- 8-3-2021 - Shri Rajesh Kumar, AM And Shri Pavan Kumar Gadale, JM For the Assessee : Shri Madhur Agrawal For the Revenue : Shri Sajit V. Nair ORDER PER RAJESH KUMAR, ACCOUNTANT MEMBER: The aforesaid appeal has been filed by the revenue against the impugned order dated 28/03/2019, passed by the CIT(A)- 50, Mumbai, for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion from the finance activity during the year 2007 till date which has also become bad. Accordingly, AO during the course of assessment proceedings, asked the assessee to provide the nature and source of said income and explain how it has been reflected in the books of accounts with supporting bills, vouchers and evidences and also to show-cause as to why the same should not be treated as unaccounted unexplained income of the assessee. The assessee replied vide letter dated 21/11/2017 and reiterated his stand as made before the search party. The AO was not convinced with the submissions of the assessee and came to the conclusion that page No.6 shows worth at ₹ 1.56 Crores on 06/07/2015 for F.Y.2015-16 which AO concluded that C pertains to Cash , P pertains to Profit and I pertains to Interest and thus, came to the conclusion that the amount mentioned in the said sheet of ₹ 1.56 Crores is an unaccounted and unexplained income and added the same to the income of the assessee by framing assessment u/s.143(3) of the Act vide order dated 26/12/2017. 5. In the appellate proceedings, the ld. CIT(A) allowed the appeal of the assessee after taking into consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appearing in the seized page means the figures written below actually represents the amount lost by the Appellant. According to the Appellant, the entries on the said seized page represent the net worth that is lost in relation to the various parties. The Appellant had categorically stated that as such the amounts noted in the seized page had not been received by the Appellant at all and hence, represents the amount lost in the finance business, which had closed way back. 9.5 Also, at the top of the said seized page in the middle the phrase net worth is written. I have noted that on the said seized page a general amount of ₹ 1.56 crores is written. According to the Appellant, even if it is presumed that the same represented the net worth of the Appellant, then also no addition can be made, as the actual net worth of the Appellant, as reflected in the books of accounts is far greater. It is a material fact on record that the net worth of the Appellant is ₹ 28.71 crores, as on 31.03.2015 and ₹ 27.33 crores, as on 31.03.2016, which is far greater than that mentioned in the impugned seized. 9.6 I am also in agreement with the contention of the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght on record. Reliance is placed on Ashish Batham v. State of MP, AIR 2002 SC 3206. 9.10 In this context, further reference is made to judgment of Hon'ble Special Bench of Mumbai Tribunal in the case of GTC Industries Ltd. v. ACIT [164 ITD I (Mum)(SB)]t wherein the Hon'ble Tribunal observed as under:- Ultimately the entire case of revenue hinges upon the presumption that assessee is bound to have some large share in so called secret money in the form of premium and its circulation. However, this presumption or suspicion how strong it may appear to be true but needs to be corroborated by some evidence to establish a link that GTC actually had some kind of share in such secret money. It is quite trite suspicion howsoever strong may be but cannot be the basis of addition except for some material evidence on record. The theory of preponderance of probability is applied to weigh the evidence of either side and draw a conclusion in favour of party which has more favourable factors in his side. The conclusion have to be drawn on the basis of certain admitted facts and material and not on the basis of presumption of facts that might go against the assessee. Once nothing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 79 S.C. 1537. 9.14 The principles of the Indian Evidence Act are equally applicable and have been applied with full force in Income-tax proceedings. The Hon'ble Supreme Court in Chuharmal v. CIT [1988] 1 72-ITR-250 stated:- was meant by saying that the Evidence Act did not apply to proceedings under the Income-tax Act, 1961, was that the rigour of the rules of evidence contained in the evidence Act was not applicable; but that did not mean that when the taxing authorities were desirous of invoking the principles of the Evidence Act in proceedings before them, they were prevented from doing so. 9.15 It is settled law that suspicion, howsoever, strong cannot take the place of legal proof, as has been held by the Hon'ble Supreme Court in the case of Umacharan Shaw and Bros. v. CIT (1959) 37-ITR-271. Further reliance is placed Upon: Krishnand v. State of Madhya Pradesh: AIR 1977 SC 796 Jayadayal Poddar v. Mst. Bibi Hazra: AIR 1974 SC 171 CIT v. K Mahim Udmaf20001158 CTR (Ker.) 100:12000] 242 ITR133(Ker.) Dhakeshwari Cotton Mitts Ltd. v. CIT(1954 26ITR 775 (SC) Omar Salay Mohamed Sait v. CIT(1959)37 ITR 151 (SC) Asstt. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.19 In this regard, it is important to refer to the judgment of Hon'ble Delhi High Court in the case of CIT vs. Antt Bhalla (2010) 38 DTK 0113: (2010) 322 ITR 0191, wherein the Hon'ble Delhi High Court has upheld, the following observations of the CIT(A):- 4.2 I have considered in detail the material on record. From the notings on p. 47 of Annex. A2, it cannot be said that any actual expenditure is represented by such notings which is not recorded in the books of account. To support the addition on account of unexplained expenditure on the basis of jottings on a loose sheet of paper, it is necessary to establish that the notings represent unaccounted transaction, with the help of independent corroborative evidence. In this case apart from the notings on the said paper, no other independent material or evidence has been brought on record. Moreover, the explanation submitted by the appellant is supported by relevant entries in the books of account of VTPL. Accordingly, the allegation of unexplained expenditure outside the books of account has not been established in the assessment order. The addition of ₹ 35 lacs is, therefore, deleted. 9.20 I have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eized record represents his undisclosed income for the year under consideration and such burden has not been discharged by the AO. In order to bring certain sum to tax, the onus is on the Revenue to prove that the said sum has the character of income chargeable to tax in India. Reliance placed on Janki Ram Bahadur Ram Vs. CIT, (1965) 57 ITR 21 (SC) 9.24 I have noted that no enquiry had been done by the AO in relation to the plethora of seized material found during the course of the search operation, regarding the closed down finance business of the Appellant. It had been held by the Hon'ble Delhi High Court in the case of CIT vs. Gangeshwari Metal Pvt. Ltd. (201^ G^)TR (Del) 299 that in case of lack of enquiry on the part of the tere assessee has furnished all the details, no addition can be made. 9.25 In view of the above detailed factual and legal matrix, the addition made by the AO amounting to ₹ 1.56 Crores on the basis of i-phone messages is hereby deleted and accordingly, the Ground Nos. 1 2 of the present appeal are allowed. 6. We have heard the rival submissions and perused the material on record. The undisputed facts are that during the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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