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TMI Blog2021 (5) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... he service tax ledger account shows flat wise tax paid from 2011 to 2016 even on individual payments credited. Hence, just on the basis of one loose sheet of paper with miscellaneous, unconfirmed 86 uncorroborated notings, to make an addition is not fair as this would also mean a suppressed sale of of about 25% against the shown project revenue and jack up the profit to 30% (5.43% already shows) which appears to be astronomical as well as impractical on a single project. The addition dwells more in the realm of presumption than real. It is clear that the A.O.'s examination of the Annexure AS-2 was very casual and not based either on the possible further enquiries or workings or on the appreciation of statements and change in the status of several flats owners. He has just made a one sided assessment based only on the loose sheet without bringing on record the other corroborative evidences. The addition made by the AO based on the loose paper, which is not conclusive evidence and, therefore, the same is not sufficient to make the addition. We found that the ld. CIT(A) has passed a speaking and reasoned order discussing all the details of the case of the assessee, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he hearing of the appeal and C.O. were concluded through video conference in view of the prevailing situation of Covid-19 Pandemic. 3. The brief facts of the case are that the assesse is a partnership firm and engaged in the business of building and constructions works. The assessee filed its return of income on 28/09/2015 declaring total income of ₹ 41,41,130/-. The case of the assessee was selected for limited scrutiny through CASS and notices were issued. The A.O. completed the assessment on 28/12/2017 and assessing total income of assessee at ₹ 2,26,71,560/- by making addition of ₹ 1,85,30,430/- on account of undisclosed income. 4. Being aggrieved by the order of the A.O., the assessee carried the matter before the ld. CIT(A), who after considering the submissions of both the parties as well as material placed before him, restricted the addition to the tune of ₹ 75,630/-. Against the impugned order passed by the ld. CIT(A), both i.e. the revenue is in appeal and the assessee is in cross objection before the ITAT. 5. The ld. D.R. appearing on behalf of the Revenue has relied on the order of the A.O. and also relied on the brief facts submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inging on record the other corroborative evidences to the fore for establishing his finding. The addition made by the Assessing Officer based on the loose paper, which is not conclusive evidence and, therefore, the same is not sufficient to make the addition. In my opinion, no addition can be made on the basis of dumb documents/note book/loose slips in the absence of any other material to show that the assessee has earned undisclosed income. The CIT(A) further stating that : I am not inclined to agree with the addition made by the A.0 totaling to ₹ 1,85,30,430/- restrict it to ₹ 75,630/- The decision of the CIT(A) is not acceptable as the CIT (A) has not appreciated the facts mentioned by the AO in the assessment order : During the time of assessment proceeding in compliance of show cause the assessee has stated that : we just a planning, estimate and subsequently what actually happened, has been considered in the books of accounts and no contrary material has been found that the amount of sale, mentioned in the books o accounts, is wrong. No circumstantial or other evidence has been shown to us that when books of accounts are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents: (i) K.Sakthivel Vs The ACIT TCA No. 1083 of 2005, dated 14/06/2012 (ii) CIT Vs M/s Hotel Meriya, ITA No. 551 of 2009, dated 26/05/2010 of Kerala High Court. 6. On the other hand, the ld. AR appearing on behalf of the assesse has reiterated the same arguments as were raised before the ld. CIT(A) and relied on the written submissions filed before the Bench and the same is reproduced below: 1. That Annexure AS2 which is seized. from residence of Shri BD Mundra /Anil Mundra both partners of this firm has 65 pages of which Page 9 is centre of controversy. 2. That though during statement u/s 132(4) no question in relation to AS2 were asked by search team but during post search proceedings before learned ADIT (Investigation) statement of Shri Anil Mundra Partner of the Appellant firm were taken u/s 131 wherein on 12.11.2013 and 0.11..20131 he explained every page of AS2 and each item, of Page 9 of AS2. After his statement it appears the learned AD1T (Investigation) was satisfied because he did not call for any information on these papers which is reflected from page 16 of first Appeal Order also. (Already quoted in Para VII of Facts) 3. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 4491080/- which was mentioned in Page 9 of AS2 also t ₹ 2978100/- which the Id. AO in his Assessment Order mentioned as ₹ 4491080/- thus the learned AO made addition of difference ₹ 1512980/- also. 8. We submit addition made by the Assessing Officer based on the undated and unsigned loose paper which has many noting jottings is not a conclusive evidence and, therefore, the same is not sufficient to make addition. To tax any particular receipt, primary evidence is very much necessary which is missing in this case and unless there is primary evidence, it cannot be considered as conclusive evidence against any person. Reliance in this regard is made on :- (i). CIT Vs Shivkani Co. (P) Ltd. 159 ITR 71 (SC) (1986) (ii) K P. Varghsre Vs ITO (1981) 131 ITR 597 (SC (iii) Baldeo Kishankapoor Vs ACIT 68 ITD 37 (Chd) (TM)(1999) (iv) JCIT Vs Gramophone Co. India Ltd. (2003) 87 ITD 88 (Bombay) (V) DCIT Central Vs Shri Krishna Yadav (2011) 12 Taxmann 4 (Hyd) (vi) ACIT Vs Satyapal Wassan (2007) 295 ITR 80 (MP), (vii) Devi Lal Gheri Lal Shah Vs DCIT (1995) 127 CTR 135 (Guj) (viii) CIT Vs Khazan Singh Brother ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal no. 2 to 4 pertain to addition made based on a paper (loose sheet) found in possession of Sh. B.D. Mundra, one of the partners in the assessee firm during the course of search proceedings on the Mundra Group on 13/08/2013 as intimated to the present A.O. by DCIT Central Circle, Kota. The seized document is detailed at page 2 3 of the assessment order. As per the A.O. the difference between the sale price mentioned in the page no 9 of Annexure AS-2 (of the seized documents) and that shown in the books of accounts in respect of a flats sold comes to ₹ 1,85,30,430/-. The assessee in response to show cause given by the A.O. in this regard mentioned that the paper (Annexure AS-2 having 65 pages) was a rough working and had no link with the actual sale. He gave detailed reasoning for contesting the A.O.'s contentions. He mentioned that the actual flats sold were not to the same persons in all cases and there were different prices due to buyers opting for 'skeleton' or 'completed' flats as well. The A.O. in his order has mentioned at page 7 that in response to question 57, recorded by the ADIT (Inv.) u/s 131 during the post search proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer has asked the details about difference of ₹ 82 'lakhs' noted on the page to be reconciled with the books. In response, the position has been explained by the appellant assessee's partner and no further cross questioning has been resorted to. Annexure AS-2 seized by the investigation wing had 65 pages as under;- Page 58 to 65 was agreement with Smt. Prabha Sharma for flat no. 103 for consideration of ₹ 57, 38,000/- (shown in the loose sheet as Kiran Bhai earlier Prabha Sharma later for 53, 60,500) the sale agreement registered on 23.06.2014 at the same price. Page 42 to 57 two agreements with Anil Mundra (himself the partner) for flat no. 602 601 for ₹ 55 lakhs each, mentioned in the sheet at ₹ 58,04,250/- 55,20,250/-. Page 34 to 41 shows agreement for flat no. 302 with Rajesh Maheshwari for ₹ 58 lakhs was sold as such though in the loose sheet 302 is written against Sh. Brajesh Maheshwari (brother of Rajesh whose name appears in the sheet against flat no. 202 after a cutting of Brajesh's name) the transaction for this flat is complete as the cheque is received on 10.08.2012, then why wrong names appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed that the stamp valuation authority has not recorded any adverse findings on the sale price, which should have been there if the flats were sold at much higher prices than claimed by the assessee. (2) Despite the availability of the names, other details 86 PAN etc. of the buyers, the A.O. has not cross verified the details of purchase, payments etc. to verify the version advanced by the assessee. (3) The A.O. has not been able to adduce or bring on record any corroborative evidence to show that higher consideration was actually received by the appellant outside the books of accounts to match with the figures of difference appearing in the loose sheet. In fact he did not even cross check with the partner Sh. Anil Mundra others regarding the same to establish any difference in their version given at the time of search. (4) Even in the course of the search proceedings nothing has been brought on record so as to establish any agreements to sell evidencing any cash or unaccounted consideration passing hands between the buyers the assessee appellant. It is also noteworthy, that no commitment, acceptance of undisclosed sales or disclosure regarding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) The 'Skelton' flats' rate is coming to ₹ 3200 to ₹ 3400/- per square feet itself while the 'completed' or 'fully furnished' flat is sold @ 4967/- which difference if not real, would involve an adverse finding from both the service tax department as well as the SRO for tax avoidance if some flats of same measurement are sold at different rates to 'accommodate' cash proceeds. No adverse findings have been gathered by the A.O. from these two departments in respect of the assessee's project. The service tax ledger account shows flat wise tax paid from 2011 to 2016 even on individual payments credited. Hence, just on the basis of one loose sheet of paper with miscellaneous, unconfirmed 86 uncorroborated notings, to make an addition of ₹ 1,85, 30,430/ - is not fair as this would also mean a suppressed sale of of about 25% against the shown project revenue and jack up the profit to 30% (5.43% already shows) which appears to be astronomical as well as impractical on a single project. The addition dwells more in the realm of presumption than real. ITAT, Delhi in the case of Samta Khinda vs. ACIT, Central Circle-22 passed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same issue, the Tribunal has held as under : The crux of these decisions is that a document found during the course of search must be a speaking one and without any second interpretation, must reflect all the details about the transactions of the assessee in the relevant assessment year. Any gap in the various components as mentioned in section 4 of the Income Tax Act must be filled up by the Assessing Officer through investigations and correlations with the other material found either during the course of the search or on investigation. As a result, we hold that document No. 7 is a non-speaking document. In the case of Anuj Chawla Vs Commissioner of Income Tax (Delhi High Court) in Appeal Number: ITA No. 478/2007, C.M. APPL. 6708/2007 has opined that- This court has considered the submissions and the relevant materials. The document seized and relevant for this purpose is a loose sheet of paper, containing figures. Against E-6 , the figure '22 is shown. Next to it 'N-8 against which the figure 5 has been scribbled. Three other figures too have been shown. Ipso facto these mean nothing. The AO deduced that these reflected the true valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there is on-money exchanged between the parties. In the absence of proper inquiry and sufficient evidences, we find no reason to confirm addition made by the assessing officer towards on money. Therefore, we direct the assessing officer to delete addition of ₹ 3,05,00,000 made towards on money. Thus, it is clear that the A.O.'s examination of the Annexure AS-2 was very casual and not based either on the possible further enquiries or workings or on the appreciation of statements and change in the status of several flats owners. He has just made a one sided assessment based only on the loose sheet without bringing on record the other corroborative evidences to the fore for establishing his finding. The addition made by the Assessing Officer based on the loose paper, which is not conclusive evidence and, therefore, the same is not sufficient to make the addition. In my opinion, no addition can be made on the basis of dumb documents/note book/loose slips in the absence of any other material to show that the assessee has earned undisclosed income. Noting on the note book/diar3r/loose sheets are required to be supported/corroborated by other evidence and should als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement copy of the partner recorded at the time of the post-search proceedings u/s 131 on various dates viz. 17.10.2013, 18.10.2013, 22.10,2013, 24.10.2013, 8.11.2013, 09.11.2013, 11 12.11.2013 and on the relevant annexure AS-2 mostly on 13.11.2013, it is noted that Sh. Anil Mundra, Partner, has in response to the questions related to annexure AS-2 pages 4 to 65 mentioned and elaborated the details of each page which includes the booking forms, agreement, floor plans, area details and said that page no. '9' was a 'dummy sheet' whereby some name of actual buyers and some dummy partners' names are written. He has also mentioned that some buyers initially opted for fully furnished flats later opted for skeleton flats so the difference in price was there but the agreements were finally registered on actual prices. For some flats, part amounts were received till then some of the partners namely Sh. Ashok Maheshwari, Rajendra Jain, Anil Mundra himself Bhuvanesh Lahoty's names were on the sheet so as to show to prospective buyers that only a few flats were available for sale. The ld. CIT(A) has further held that the A.O. has not been able to adduce or bring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... single project. The addition dwells more in the realm of presumption than real. Thus, it is clear that the A.O.'s examination of the Annexure AS-2 was very casual and not based either on the possible further enquiries or workings or on the appreciation of statements and change in the status of several flats owners. He has just made a one sided assessment based only on the loose sheet without bringing on record the other corroborative evidences. The addition made by the Assessing Officer based on the loose paper, which is not conclusive evidence and, therefore, the same is not sufficient to make the addition. Considering the totality of facts and circumstances, we found that the ld. CIT(A) has passed a speaking and reasoned order discussing all the details of the case of the assesse, therefore, we do not find any reason to interfere into or deviate from the findings so recorded by the ld. CIT(A) and we uphold the same. This ground of the Revenue s appeal is dismissed. 9. Now we take the assessee s cross objection wherein the assessee has challenged the order of the ld. CIT(A) in confirming the addition of ₹ 75,630/-. 10. From perusal of the record, we not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the litigant or an attempt to save limitation in the underhand way. If the party who is seeking condonation of delay has not acted in malafide manner and reasons explained are factually correct then the Court should be liberal in construing the sufficient cause and lean in favour of such party. A justice-oriented approach has to be taken while deciding the matter for condonation of delay. However, this does not mean that a litigant gets free right to approach the court at its will. 13. If we apply the settled principles as laid down by the Hon ble Supreme Court as well as other courts on the facts of the present case, we find that the assessee has explained cause of delay, therefore, in the facts and circumstances of the case, we condone the delay of 06 days in filing the present C.O. and admit the same for hearing and adjudication. 14. We have considered the rival contentions and carefully perused the material placed on record as well as the order of the ld. CIT(A). As we have discussed in detail in earlier paras of this order that ld. CIT(A) has passed a speaking and reasoned order discussing all the details of the case of the assesse and had given proper relie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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