9911796707
TMI Blog2016 (1) TMI 1472X X X X Extracts X X X X X X X X Extracts X X X X ..... is clear that the seized paper is merely a rough noting having mentioning the year 2003-04, therefore, Assessing Officer was not justified in interpreting the seized paper to be a purchase of property by assessee and others. The seized paper is, therefore, clearly dumb document and did not lead to anywhere so as to make any addition against the assessee. We, accordingly, set aside the orders of authorities below and delete the entire additions. X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the property. It cannot be made out whether it is a transaction of purchase or sale which has been presumed as transaction of purchase by the Assessing Officer. The word 'year 3-4' has been used on the top of loose page but Assessing Officer made addition in assessment year 2005-06. The Assessing Officer merely presumed it to be investment. The interpretation of the Assessing Officer is wrong without corroborating with any transaction or property without having any document, agreement or purchase or Sale Deed in the seized record. The Assessing Officer made additions in respect of other names also without any reasons. It was, therefore, submitted that these are dumb documents. It was submitted that the seized documents should be read in totality. The assessee has already surrendered additional income of ₹ 15 lacs in assessment year under appeal out of total surrender of ₹ 4 Cr. Therefore, it would cover up all the additions, if any made by the Assessing Officer. 10. The submissions were sent to the Assessing Officer and the Assessing Officer reiterated the facts stated in the assessment order in his remand report. 11. The ld. CIT(Appeals) considered the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asked to assessee regarding the seized paper relating to assessment year under appeal i.e. 2005-06. The questions referred to some diary or Annexure A-1 and A-6 of the diary, which may be relevant for assessment year 2010-11. PB-29 is statement of assessee recorded on 21.02.2010 in which he has surrendered ₹ 4 Cr in all the assessment years. PB-2 is bifurcation of the surrendered income in several years. The ld. counsel for the assessee submitted that in the seized paper, there is no mention of any plot or purchase of any property. No evidence of investment in property was found. Addition is made merely on presumptions. The seized papers have only rough notings and as such dumb document. No corroborative evidence was found of investment in any property. The Assessing Officer has not given any benefit of the surrendered amount of ₹ 15 lacs. The rough notings contain the projects only. PB-3 is reply before Assessing Officer explaining therein that rough notings were proposals/projects only but it is a fact that neither the assessee nor his family members or associates have indulged in purchase/investment in any immovable property and no document was found during the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rival submissions. The copy of the seized paper is reproduced in the appellate order relevant on this issue. Copy of the same is also filed at page 11 of the Paper Book. The details are already noted above. The Assessing Officer, considering the seized papers, interpreted the seized document in his own way holding it to be regarding purchase of property by assessee and others. However, no such fact has been mentioned in the seized paper because the seized paper did not contain mentioning of any purchase of property by assessee and others. No evidence of actual investment in any property was found during the course of search. The so called purchase of property by assessee or others did not found exist. The seized paper contain on the top of it "year 2003-04". Therefore, seized paper could not be considered in assessment year 2005-06. No area or location of any property purchased by assessee or making any investment therein, have been found on the seized paper. Even on second issue, the word 'Chandigarh Flat' has been mentioned but without giving any detail or location of the property. Therefore, from the seized paper, it could not be ascertained whether assessee purchased any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal had rightly held that the provisions of section 69 A of the Act were not applicable. The Tribunal also held that if the assessee failed to explain the contents of the slip, it was for the Revenue to prove on the basis of material on record that they represented transactions of sales or stock-in-hand before making any addition on this score. The assessee had duly explained that these were rough calculations and the assessee's explanation had not been rebutted by any material evidence. Therefore, the order of the Tribunal could not be said to be perverse." 14. It may be stated here that in assessment year 2005-06, assessee was a partner in the firm and has no other independent source of income. Later on, he has become Director in the company. Therefore, there is no question of making any undisclosed investment in any alleged property. Further, the Assessing Officer has not mentioned in the assessment order under which Section the additions have been made on these grounds. We have also gone through the initial statement of the assessee recorded on the date of the search in which no specific questions have been asked to the assessee to explain the seized paper relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestment in property. The revenue on the same issue has raised ground No. 3 in departmental appeal challenging the restricting of the addition of ₹ 72,12,850/- to ₹ 5 lacs. 17. Briefly the facts of the case are that the assessee challenged the addition of ₹ 72,12,850/- made by Assessing Officer on the basis of the seized document at page 16, back-side of Annexure A-5. The said impugned seized documents are reproduced in the appellate order (PB-12). The Assessing Officer has made the impugned addition on the basis of following observations : 'Inderjit Brar Advance 10 lac Plots ₹ 19,42,500/- Plots ₹ 25,20,000/- Plots ₹ 21,36,000/- Shop 6,19,500/- -------------------- 72,12,850/- -------------------- 15% Advance 9,89,775/-+ 89,775/- 10% Advance 6,59,850/-+ 59,850/- 25% Advance 6,49,625/-+ 1,49,625/- 17(i) The Assessing Officer observed that investment in Bhucho Mandi shows investments in various lands. The assessee failed to give identity of so called HP and Teja Singh, therefore, investment of ₹ 72,12,850/- was added as undisclosed investment. 18. The assessee challenged the addition before ld. CIT(Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , following the decisions of the various Benches of the Tribunal and other decisions held that the document found during the course of search must be speaking one and without any second interpretation and must reflect all the details about the transaction of the assessee in relevant assessment year. The ld. CIT(Appeals), accordingly, found investment of ₹ 5 lacs against H.P. could be considered to be unaccounted investment against the assessee and rest of the addition was found to be merely on presumption of the Assessing Officer and accordingly, rest of the addition was deleted. 18(ii) The ld. counsel for the assessee referred to PB-12 which is seized document and submitted that the issue is same as have been considered above and also submitted that it is a cancelled document therefore, no addition could be made on this issue. On the other hand, ld. DR reiterated the submissions already made above and relied upon order of the Assessing Officer. 19. We have considered rival submissions. It may be noted at the out-set that seized document, as recovered is a cancelled document as a cross has been put on the same. The authorities below have not explained as to when the documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, assessee challenged the addition of ₹ 16,72,000/- on account of unexplained investment in property. The Assessing Officer made addition of ₹ 16,72,000/- on the basis of seized document at page No. 15 of Annexure A-5 (PB-13). The seized paper is reproduced in the earlier order. The Assessing Officer, on consideration of the seized paper observed, "This paper shows that Bhucho land has been sold to Shri Inderjit Singh Brar for ₹ 16,72,000/- and profit of ₹ 87,000/- has been earned. The statement of account of Shri Inderjit Brar is as under : i) Cash = ₹ 8 lacs ii) Cheque = ₹ 2 lacs iii) Cash = ₹ 4.85 lacs Bhucho = ₹ 1.87 lacs 22(i) The Assessing Officer noted that since assessee has not declared any investment regarding this sale of land at Bhucho, whole of the sale amount of ₹ 16,72,000/- is considered as income of the assessee. 22(ii) The assessee submitted before ld. CIT(Appeals) that notings in this document has been regarded as sale of the property by Assessing Officer which is merely presumption of the Assessing Officer. No details of any property which has been allegedly sold by assessee has been given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were wholly unjustified in making addition of ₹ 16,72,000/- against the assessee on the basis of the above seized paper. We, accordingly, set aside the orders of authorities below and delete the entire addition. Ground No. 5 of the appeal of the assessee is accordingly allowed. 25. On ground No. 6 of the appeal of the assessee, the assessee challenged the addition of ₹ 10,68,000/- as against addition of ₹ 21,36,000/- made by Assessing Officer on account of unexplained investment in property. The revenue on ground No. 4 challenged the restricting of the addition of ₹ 21,36,000/- on the same issue to ₹ 10,68,000/-. 26. The Assessing Officer made addition of ₹ 21,36,000/- on the basis of seized document at page No. 15 of Annexure A-5 (PB-13). The said seized paper is also cancelled document. The Assessing Officer observed from the seized paper that there is a mention on the same page regarding sale of plots to Bittu and Krishan Bhandari for ₹ 10,68,000/- each i.e. total Rs. 21,36,000/-. ₹ 2 lacs received cash from Bittal on 03.02.2005. The Assessing Officer considered unexplained investment in property and added the same. 27. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion sustained by the ld. CIT(Appeals). Therefore, there was no justification for ld. CIT(Appeals) to have partly confirmed the addition. The ld. CIT(Appeals) relied upon decision in the case of Sonal Construction (supra) with regard to raising presumption against the assessee and not requiring any corroborative evidence but in this case, Hon'ble High Court observed that the seized paper did in fact contain figures relating to the four projects which were admittedly undertaken by the assessee. Therefore, view of the Tribunal was not found justified. However, in the present case, the seized document is crossed and cancelled document and did not reveal any specifically if assessee has sold any specific property to any purchaser. Therefore, considering the above discussion, we do not find any justification for ld. CIT(Appeals) to have partly sustained the addition on this issue. We, accordingly, set aside the orders of authorities below and delete the entire addition. Ground No. 6 of appeal of the assessee is allowed and ground No. 4 of departmental appeal is dismissed. 29. On ground No. 7 in the appeal of the assessee, assessee challenged order of ld. CIT(Appeals) in not giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.2005 for paying ₹ 2,52,700/- which would not fall in assessment year 2005-06. It is, therefore, a dumb document and would not lead to any inference. The Assessing Officer has made this addition merely on presumption, therefore, ld. CIT(Appeals), on proper appreciation of the seized paper, correctly deleted the addition. This ground of appeal of revenue is accordingly dismissed. 35. In the result, appeal of the assessee is allowed and departmental appeal is dismissed. ITA 457/2014 (Departmentl Appeal : A.Y. 2010-11) 36. This appeal by revenue is directed against the order of ld. CIT(Appeals)-I Ludhiana dated 11.02.2014 for assessment year 2010-11. 37. On ground No. 1, revenue challenged the deletion of addition of ₹ 2,33,35,000/- on account of unexplained amount. The Assessing Officer made this addition on the basis of seized document at page 40 backside of Annexure A-2, seized from the residence of the assessee which is reproduced in the appellate order and copy of the same is also filed at page 12 of the Paper Book. The assessee, on being confronted with the same, submitted that these payments are replica of page No. 38 of Annexure A-2. Reply of the assessee to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was submitted that even if this figure is taken for addition, it will be covered by surrender made during the course of search of ₹ 4 Cr. The Assessing Officer mis-construed the explanation of the assessee and made the addition without evidence merely noting the date of 27.03.2010. The Assessing Officer has taken the total of notings on this page as 2,33,00,000/- despite the fact that figure of 177.35 is total of 51.40 + 66.40 + 39.70 + 19.85. Thus, Assessing Officer was wrong in taking the figure of ₹ 233 lacs being 233 has been taken by making calculation on the basis of presumptions. The Assessing Officer failed to interpret the documents, in totality which are estimated notings. The submissions of the assessee were forwarded to the Assessing Officer for his comments in which he has reiterated the same facts. 39. The ld. CIT(Appeals), considering the explanation of the assessee in the light of material on record and considering the notings in the seized paper in consultation with the Assessing Officer, deleted the entire addition. His findings in para 11 of the appellate order are reproduced as under : "11. I have considered the facts of the case, the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ands recorded in the document at page 40 backside of Annexure A2 which the Assessing Officer has considered in assessment year 2010-11. It is therefore absolutely self contradictory to consider the same tenders in two assessment years especially when there is clear evidence recorded on the seized document that the payments emanating out of the same has been made in financial year 2010-11. It is-on this basis that I am of the view that the addition made by the Assessing Officer to the tune of ₹ 2,33,35,000/- is not sustainable as the same has been recorded and taken into account in assessment year 201112, The fact that how the figure of ₹ 2,33,35,000/- has been arrived at is besides the point." 40. We have considered rival submissions. The ld. DR relied upon order of the Assessing Officer and submitted that assessee made disclosure, therefore, all papers belong to the assessee. No evidence was filed to explain the seized paper, therefore, addition was wrongly deleted by ld. CIT(Appeals). The ld. DR also filed gist of his arguments. On the other hand, ld. counsel for the assessee reiterated the submissions made before authorities below and submitted that copy of the sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naccounted expenditure/payments made by the assessee. However, Assessing Officer has failed to explain the same through any evidence or material on record. The decision in the case of Ravi Kumar (supra) squarely apply in favour of the assessee. 41(i) The Hon'ble Delhi High Court in the case of CIT V Girish Chaudhry 163 Taxman 608 held that "In the instant case, there were no material on record to show that as to what on basis, the Assessing Officer reached the conclusion that the figure of "48" was to be read as ₹ 48 lacs". The document recovered during the course of search in the instant case was a dumb document. Thus, the Tribunal rightly deleted the addition made by Assessing Officer on account of undisclosed income on the basis of the seized material." In this case, Assessing Officer has also not brought any evidence to prove the loose paper. Therefore, no corroborative evidence is available on record. Since at the appellate stage, Assessing Officer failed to explain as to how he has made this huge addition shall clearly support findings of ld. CIT(Appeals) that addition was wholly unjustified. The ld. CIT(Appeals) also, on appreciation of other documents on record r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire addition. His findings in para 17 of the appellate order are reproduced as under : 17. I have considered the facts of the case, the basis of addition made by the Assessing Officer, the arguments of the AR on the issue and also closely examined the seized record on which the impugned addition had been based. It is quite apparent from the perusal of the impugned seized document that it records either the estimated or actual transactions pertaining to a project/tender namely Bathinda-Talwandi and same stands recorded on the top of the paper, I have examined the list of various projects executed by M/s Singla Engineers & Contractors Pvt. Ltd. Bathinda and it is seen that this particular project had been allotted to the appellant company on 05.09.2008 and was completed to the extent of 52.95% in financial year 2008-09 and other details pertaining to this project are as under :- SINGLA ENGINEERS & CONTRACTORS PVT. LTD. Particulars Name of deptt. Value of contract Date of allotment Date of completion Year 08-09 Year 09-10 Year 10-11 %age 08-09 %age 09-10 %age 10-11 Wdg/Stg, of Bathinda-Talwandi Sabo- Sardulgarh Road (Four Lanning km 9.20 to 15.00) nl Om mtr wide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT(Appeals) examined the list of various projects executed by the company of the assessee M/s Singla Engineers & Directors P.Ltd., Bathinda and it was found that this particular project has been allotted to the company on 05.09.2008 and was completed to the extent of 52.95% in financial year 2008-09. The company has made FDR in favour of Executive Engineer, Construction Division, PWD to the tune of ₹ 40,24,000/- on 07.08.2008 and for the purpose, guaranty of ₹ 1,59,00,050/- has also been given on 06.09.2008 for which margin money refund would be ₹ 25 lacs. These vital facts were considered in the background of the seized document and therefore, ld. CIT(Appeals) found that these may pertain to the year 2008-09 itself. The ld. CIT(Appeals), accordingly, deleted the addition. The finding of fact recorded by ld. CIT(Appeals) have not been rebutted through any evidence or material on record. Further, no denomination have been given on the seized paper therefore, the judgement of the Delhi High Court in the case of Girish Chaudhry (supra) clearly apply in the case of assessee. When the tenders have been floated by the company of the assessee, there is no reason to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng confronted with the same submitted that same was part of surrender of ₹ 4 Cr made by assessee. The Assessing Officer, however, made addition of ₹ 1.06 Cr. 49(i) The assessee challenged the addition before ld. CIT(Appeals) and it was submitted that Assessing Officer has interpreted the word 805 as amount of the bill in lacs and 0.5% as bribe paid and 40 lacs as amount of bribe without any such noting on this document. Even there is no whisper from where Assessing Officer could infer that bribe was paid on some percentage basis. These figures are without any denomination and cannot be extrapolated by presuming that these are in lacs and most of which covered by surrender of ₹ 4 Cr. The Assessing Officer has failed to co-relate this document to another document found during the course of search to prove that assessee has made any payment of bribe. 50. The impugned seized document was examined in the presence of Assessing Officer and it was found that calculation thereon did not add up arithmetically as 0.5% of 805 was written as 400 but arithmetically it should be 04 only. The Assessing Officer was, therefore, directed to bring on record as to how and on what ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closed income could be made out from various incriminating documents and other unaccounted assets found during the course of search operation which has to be reduced by the amount of disclosure made under section 132(4) to come to the net figure of taxable assessed income. The Assessing Officer is therefore directed to give credit of 10.6 lacs on this ground." 51(i) The ld. DR relied upon order of the Assessing Officer. On the other hand, ld. counsel for the assessee reiterated the submissions made before authorities below and submitted that ld. CIT(Appeals) has given set off of the disclosure of ₹ 8 lacs in assessment year 2010-11 and same was not challenged in that assessment year therefore, it is a contradictory stand of the revenue. 52. We have considered rival submissions and do no find any merit in this ground of appeal of the revenue. The ld. CIT(Appeals), on reading the seized document found that project of ₹ 805 lacs which is part of the financial record of the company, 0.5% has been paid which does not stand accounted for. The figure of 805 and 05% were clearly recorded in the seized document therefore, the resultant figure would not come to ₹ 40 lacs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has interpreted the impugned seized document in the following manner as contained in para 2.3 of the assessment order : 2.3 As per document Annexure Al page no.44&45 seized from the residence of assessee there are various payments made by the assessee the details of which are as under: Name of Project Amount of bills clear (in lacs) Amount paid (in lacs Giana 800 8 NH 64 Dabawali 690 7 Bhuchho BT! 800 8 NH-95 573 6 Total 29 Less already given (-)10 Balance 19 Malot Fazilka +23 Total 42 54(i) Further, the back-side of this page No. 44 finds mention that following amounts are due to Mr. Shekhon OGBL 27 lacs CRF 23 lacs 54(ii) The assessee explained that this is covered by part of surrender of ₹ 2.10 Cr. Reply of the assessee was not accepted and addition was made. 55. The assessee submitted before ld. CIT(Appeals) that notings on this page have been wrongly interpreted because there is no figure of 1.02 Cr mentioned on this page and the Assessing Officer has simply totaled 19+23 = 42 written on page No. 45 and totaled the same by taking figure of 27 and 23 on page 44 backside which even if taken as correct, comes to 92 only. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to one Mr. Shekhon on the given date could be 79 lacs and not 102 lacs. It has been clearly proved that figures are generally in lacs and written in abbreviated manner. For instance, ₹ 8,05,00,000/- has been written as 805. The assessee in his reply has also claimed that the additions so made have been considered in the disclosure of ₹ 3.61 crores. The assessee submitted before the Assessing Officer that the figure of ₹ 3.61 crores should be treated as part of the disclosure made under section 132(4) during the course of search operation but the Assessing Officer decline to give the credit merely on the ground that disclosure was made on the basis of other documents. It is matter of record that no such other documents have been ^highlighted by the Assessing Officer which meant that no credit for disclosure whatsoever has been given. The Assessing Officer has only proceeded to work out whatever undisclosed income could be made out from various incriminating documents and other unaccounted assets found during the course of search operation which has to be reduced by the amount of disclosure made under section 132(4) to come to the net figure of taxable assessed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner as 6.67, 12.49, 10 etc. as amounts in lacs against the remarks 'BG', adjustment of Patiala account, payments made from Bathinda through Ajitpal Singh, payment made from Chandigarh through Mandeep, payment given by Bindu from Bathinda etc. and made total of ₹ 56.16 lacs. The assessee submitted that these payments are replica of page No. 99 of Annexure A-5. However, it is seen that those payments were made during financial year 2010-11 relating to the assessment year under appeal. The assessee challenged the said addition before ld. CIT(Appeals) and it was explained that the interpretation of the document made by the Assessing Officer is without basis and without any denomination whether these are any payments, receipts or investments. The word 'tender purpose' has been written on the top of this page which shows it was rough estimate only. The notings of 12.11.2010 i.e. BG Refund has been ignored because 'BG' in the tender means 'Bank Guaranty'. The figures of 1000, 200, 500 have been taken as 10 lacs, 2 lacs and 5 lacs without any basis. The figure of 3.67 + 3 has been taken as ₹ 6.7 lacs and accordingly made the addition which is merely on presumption. It was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to make addition of Rs.l0 lacs. The rest of the description on the document is also not sufficiently speaking to warrant any addition and I am of the view that no corroboration which is essentially required to make this document worthy of an addition has been done. The Assessing Officer has not brought on record anything even in the remand report to suggest this document having direct bearing on the working of income by the appellant. The additions made under this head, are therefore highly on presumption basis and therefore are directed to be deleted. 61. After considering rival submissions, we do not find any merit in the departmental appeal. The ld. CIT(Appeals), after appreciation of the seized paper, correctly deleted the addition. The figure of 6.67 has been taken from BG refund without bringing any evidence on record that it was unaccounted payment. The description of BG would normally mean 'Bank Guaranty' refunded and cannot be taken to be unaccounted income or expenditure of assessee. The description in this paper is not self speaking and would not lead to any purpose. There are cuttings and over writings in seized paper. Further, in the seized paper, it is mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has been made merely on presumption. The Assessing Officer reiterated the facts stated in the assessment order. 64. The ld. CIT(Appeals), considering the seized paper and material on record restricted the addition to ₹ 29 lacs. Findings of ld. CIT(Appeals) in para 23 of the appellate order are reproduced as under : "23. I have considered the facts of the case, the basis of addition made by the Assessing Officer, the arguments of the AR on the issue and also closely examined the seized record on which the impugned addition had been based. The perusal of the above detail entries shows that there is a specific date and amount and also a description which conveys the simple meaning that payments have been made by either Mandeep or Ajitpal Singh on the given date. The assessee is therefore expected to relate it to the books of accounts and show as to how these payments are accounted for therein. The entries are also in the financial year in which search had taken place and therefore could not be said to be old entries for which failing memory could be taken as an excuse. The document therefore cannot be termed as dumb as sufficient description has been recorded thereon so as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has no financial implication in the taxability. The assessee further submitted before ld. CIT(Appeals) that since no financial deal is involved, therefore, addition is unjustified and at the most, it is covered by surrender of ₹ 4 Cr. The Assessing Officer justified the addition on the basis of findings given in the assessment order. The ld. CIT(Appeals) gave benefit of ₹ 10 lacs to the assessee on this issue as the amount of ₹ 10 lacs was treated as unaccounted income of the assessee in assessment year 2010-11 on this issue and accordingly, restricted the addition to ₹ 44 lacs. His findings in para 28 of the appellate order are reproduced as under : "28. I have considered the facts of the case, the basis of addition made by the Assessing Officer, the arguments of the AR on the issue and also closely examined the seized record on which the impugned addition had been based. It is clear from the perusal of the impugned seized document that the appellant has received an amount of ₹ 54,00,000/- from one Bindu and the assessee has claimed that same cannot be taxable income as it is only an amount received and not paid. The onus on the assessee in this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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