9911796707
TMI Blog2022 (1) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... ect were made by the Assessing officer. On appeal by the assessee, CIT(A), while adjudicating the merits of the case and which are under challenge before us, has again recorded a similar findings, as recorded by the Coordinate Benches in SHRI JUGAL KISHORE GARG (DEREWALA) [ 2021 (5) TMI 814 - ITAT JAIPUR] , that M/s Manglam Builder Developer Ltd had owned up all the N Trading Company data found in cloud as belonging to them and basis the same, it filed settlement petition before Settlement Commission on 28.03.2018 and the On money receipts relating to various real estate projects Pertaining to JEM project has been declared by MBDL and after considering the expenditure incurred, MBDL has offered additional income of 72.32 cr before the Settlement Commission and which has been accepted by the Settlement Commission in its order dated 16.05.2019 and accordingly, where on-money received in JEM project belong to MBDL and MBDL has offered the same which has been accepted and no evidence was found in search to indicate that the appellant has received any share in on-money , the AO was directed to delete the additions in the hands of the assessee. We therefore find that the facts of the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus addition of 'on money' was on the basis of incriminating seized data. 5. Whether on the facts and in the circumstances of the case and in law, Ld. CIT(A)-4, Jaipur is justified giving relief to the assessee on the ground that the Manglam Group had owned up the entire entries in the N Trading on cloud data before the Hon'ble ITSC. The order of Hon'ble ITSC has already been challenged in writ before the Hon'ble High Court." 3. Briefly stated, the facts of the case are that the assessee has filed her original return of income u/s 139 on 05.08.2013 at a total income of ₹ 42,89,950/- which was revised u/s 139(5) on 31.05.2015 at a total income of ₹ 1,54,33,880/-. Subsequently, a search and seizure operation u/s 132(1) was carried out on 04.11.2016 at the various premises of M/s Mangalam Group, Jaipur. The residential premises of the assessee were also covered in the said search operation. Thereafter, notice u/s 153A was issued and in respect of the said notice, the assessee furnished her return of income on 31.10.2018 declaring total income of ₹ 1,54,33,880/-. Thereafter, notice u/s 143(2) as well as 142(1) was issued and specific show cause notice was issued t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer, after considering the submissions so filed by the assessee, which are contained at para 7.1 to 7.6 of the assessment order which reads as under:- "7.1 Firstly, the assessee has simply denied having any knowledge of the N. Trading Co. Cloud entries found in his name. Now the moot question arises that can denial on the part of the assessee be treated as proof of the fact that the entries found in the cloud do not pertain to him. The answer is "No." In order to discharge the burden the assessee needs bring forth something more than simple denial. The denial by the assessee holds no substance when M/s MBDL has itself owned up the entire cloud entries while filing its petition before the Hon'ble ITSC. M/s MBDL has admitted that the contents of the unaccounted tally data found on cloud are correct and has offered it for taxation. When one party of the transactions under consideration has held the contents of the cloud data are correct, then the second party to the transaction (in this case the assessee) needs to bring forth more evidence which could substantiate his stand that no such transaction had taken place. 7.2 The assessee has submitted that the data co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oud data is a speaking document of evidentiary value, as the same has been owned up in totality by M/s MBDL Pvt. Ltd. before the Hon'ble ITSC. The admission in this case has been made by M/s MBDL Pvt. Ltd. and MBDL has continuously refused to disclose the details of the persons with whom this transaction was made. In such a scenario the N Trading entry under consideration pertain to the assessee. 7.4 The assessee has alleged that the evidence of 'on money' found against him is nothing but a presumption and assumption. However such a presumption is a rebuttable one and the assessee has tried to rebut the presumption by submitting that he has never engaged in any of the "on money" transactions which are being reflected on the N. Trading Cloud and he has no knowledge of any such transaction. A rebuttable presumption is clearly a rule of evidence which has the effect of shifting the burden of proof by leading the evidence. The word "rebuttable" here means that the person against whom it lies can rebut it when called upon to prove it, which means that the party who denies and doubts the document can claim that the content of the document is not true. However, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... All these work are carried out by MBDL. She neither has any knowledge of the alleged 'on money' collected by the builder nor received any 'on money' from the builder. (ii) The documents and soft data referred by the AO were seized from the business premises of MBDL and not from the residence of the assessee. Hence these data can't be used against the assessee. (iii) During the course of search of assessee, statement of Shri Munna Lal Goyal, family head of assessee was recorded wherein certain questions relating to Jaipur Electronics Market was put to him. In response to these questions, Sh. Munna lal Goyal categorically stated that neither he nor any of his family members are involved in booking/ sale of offices/ shops in JEM. All these activities were looked after by MBDL. His family members have only received their respective share in the sale proceeds as specified in the sale deed as per the development agreement. (iv) In search of the assessee, no document or data or any material or evidence was found to suggest that she or her family members have received any 'on money' on sale of offices/ shop situated in JEM. The cloud data or accounts of N. Trading Company found from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en held that loose papers and documents seized from premises of third parties and statement recorded at back of assessee without it being afforded opportunity to interrogate said documents and without bringing on record any supporting evidence, could not be made basis for adding undisclosed income in hands of assessee. • ACIT Vs. Miss Lata Mangeshkar (1974) ITR 696 (Mumbai) It has been held that on appreciation of evidence on record, that entries in the ledger of a firm (third party) did not represent assessee's income from undisclosed sources, was finding of the fact not giving rise to any referable question of law. 9. It was further submitted that MBDL has owned up all the data found in cloud as belonging to them. On the basis of the same, it filed settlement petition before Settlement Commission on 28.03.2018. As per the petition filed by MBDL before the Hon'ble Settlement Commission, the following 'on money' receipts were considered for computing the income:- Particulars Total Receipts of 'On money' Amount of such 'On money' receipts related to JEM as declared by MBDL Booking Receipts 6,90,12,13,000 14,09,03,400 Settled Booking Receipts 3,67,74,14,100 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;on money' is received. Simply denying the receipt cannot be accepted. (ii) MBDL has owned up the transaction while filing the petition before Settlement Commission. Thus, where one party has accepted the transaction, the same is correct for other also. (iii) As per section 292C, the presumption provides that where any books of accounts, documents etc. are found in the possession or control of any person in course of search u/s 132 then it is presumed that the same belongs to such person. 7. I have perused the written submissions submitted by the Ld. AR and the order of the AO. I have also gone through the various case laws cited by the Ld. AR. I have also gone through the common paper book filed along with the order of the settlement commission in case of MBDL. 8. After careful perusal of the Ld.AO order and submission, I am not in agreement with the conclusion drawn by the AO for the following reasons:- (i) In search of the assessee no document or material was found to indicate that the assessee has received any 'on money' on sale of the shops/office at JEM Project. (ii) The assessee is only a land owner. He is not participating in day to day activities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Settlement Commission the following 'On money' receipts were considered for computing the income:- Particulars Total Receipts of 'On money' Amount of such 'On money' receipts related to JEM as declared by MBDL Booking Receipts 6,90,12,13,000 14,09,03,400 Settled Booking Receipts 3,67,74,14,100 18,76,04,460 Total 10,57,86,27,100 32,85,07,860 From this on money after considering the expenditure incurred, MBDL has offered additional income of ₹ 72.32 cr. before the settlement commission which was accepted by it at page 53 to 58 of the order u/s 245D(4) dated 16.05.2019. 8.2 Thus considering the factual and legal position especially the settlement petition filed by MBDL and order of the settlement commission, I am of the view that the 'on money' received in the JME project belongs to MBDL only. MBDL has offered the same before the settlement commission and the same has been accepted by the Hon'ble Settlement Commission vide order dated 16-05-2019. No evidence was found in search to indicate that appellant has received any share in 'on money'. Therefore the addition made for alleged share in on money received by MBDL i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of surplus share profit in projects of Manglam Group on the basis of cloud data. (iii) Addition of ₹ 85,00,000/- on account of interest earned on the basis of cloud data. 2015-16 28.12.2018 8,78,62,760/- (i) Addition of ₹ 2,82,97,500/- on account of surplus share profit in projects of Manglam Group on the basis of cloud data. (ii) Addition of ₹ 1,00,00,000/- on account of surplus interest from Manglam Group on the basis of cloud data. 2016-17 28.12.2018 28,56,88,120/- (i) Addition of ₹ 1,50,00,000/- u/s 69 of the Act on account of alleged undisclosed capital in cash employed by the assessee in various projects of Manglam Group on the basis of cloud data. (ii) Addition of ₹ 25,89,900/- on account of surplus share profit in projects received in cash from Manglam Group on the basis of cloud data. (iii) Addition of ₹ 14,24,800/-on account of surplus interest from Manglam Group on the basis of cloud data. 2017-18 28.12.2018 4,04,51,940/- Addition of ₹ 70,94,000/- on account of onmoney received against booking of flats on the basis of cloud data of the person who owned that these transactions are only his transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nerated from booking of flats/units/plots, the said loans were periodically repaid. Interest on the loans all in cash, were also paid.In the search conducted, in the seized data, all such complete recordings of loan received, repaid and interest paid was all found. However, during the course of the search itself, since these entries could not be explained by filing confirmation of parties, these cash loans were accepted to be the undisclosed income of the Applicant group in order to buy peace.Thus based on the above, therefore, to determine the net funds generated in business, peak of the loan accounts (including the capital cash entries) was worked out. It was the contention of the Applicant that the loan introductions/repayment and the capital introduction/withdrawals all represented inflow/ outflow of funds in the business and thus in the spirit of settlement, the peak of the same was offered as the undisclosed income of the Applicant group.In the working of such peak, the following cash entries relating to loans were considered: (the peak working is enclosed at pages 422-439 of the P/B). - Receipt of unsecured loans. - Repayment of unsecured loans. - Interest paid or rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Commission at page 57 of the order dated 16.05.2019. The relevant extract of the final order wherein this issue is discussed is reproduced as under:- Para 21.2 of Page. 11 of the Hon'ble Settlement Commission order 21.2 Amount of Settled Booking Advances in Tally Data The Applicant Group received booking advances from its various customers in various projects in cash, which got "settled" when the entire 'on-money' due from the customer was received. In the tally data, such receipts have been distributed in capital account directly with account description 'surplus'. The nature of these booking advances was identical to unsettled booking advances as explained above, however, in such cases, no money remained further due from customers as far as 'cash component' was concerned, though, projects remains yet to be delivered to the customer. In the Tally Data, the said information is available with account head 'Surplus' for various schemes like "Surplus Ananda", 'Surplus Ajmer Road, 'SurplusVaishali Estate'. All such bookings are termed as Settled bookings for ready reference since in such cases, cash component h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the respective assessment years are given in the following table.'' In view of above, the ld. CIT(A) observed that it is evident that the surplus being referred to by the Ld. AO is not profit from the projects but the receipts of 'on money' credited to the capital accounts of the partners which has been considered in the additional income offered by MBDL and accepted by the Hon'ble Settlement Commission. 3.12 Thus on merits also since the amounts had already been added by the AO and the same had already been subjected to tax in the hands of MBDL and related entities, therefore, the ld. CIT(A) after considering all those facts had correctly deleted the addition made in various assessment years. The Bench also noted that no new facts have been brought by the Revenue in controverting the order of the ld. CIT(A) to the issue in question. In this view, of the matter, we find no reason to interfere with the order of the ld. CIT(A). Thus the appeal of the Revenue for the assessment year 2014-15 is dismissed." 14. In the aforesaid decision, it is noted that pursuant to search action in case of M/s Manglam Group, the action was taken in the hands of the assessee u/s 153C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Builder & Developer Ltd had owned up all the "N Trading Company" data found in cloud as belonging to them and basis the same, it filed settlement petition before Settlement Commission on 28.03.2018 and the "On money" receipts relating to various real estate projects totaling to ₹ 1057.86 cr including 32.85 cr pertaining to JEM project has been declared by MBDL and after considering the expenditure incurred, MBDL has offered additional income of ₹ 72.32 cr before the Settlement Commission and which has been accepted by the Settlement Commission in its order dated 16.05.2019 and accordingly, where "on-money" received in JEM project belong to MBDL and MBDL has offered the same which has been accepted and no evidence was found in search to indicate that the appellant has received any share in "on-money", the AO was directed to delete the additions in the hands of the assessee. 16. We therefore find that the facts of the aforesaid case are pari-materia arising out of same search action on M/s Manglam Group and same set of data in form of "N trading Company" found in cloud data which has formed the basis of addition in the aforesaid case and the matter has already been exam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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