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TMI Blog2022 (1) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... e Rajasthan High Court against the decision of the Coordinate Benches in case of Shri Jugal Kishore Garg [ 2021 (5) TMI 814 - ITAT JAIPUR] cannot be the basis for not following the decision so passed by the Coordinate Benches in aforesaid case as nothing has been brought on record in terms of the specific grounds basis which the findings in aforesaid orders have been challenged by way of writ petition and secondly, whether the order of the Settlement Commission and that of the Coordinate Benches have been stayed by the Hon ble Rajasthan High Court or not. Where the decision of the Coordinate Bench is not acceptable to the Revenue, the Revenue is well within its right to pursue the matter before the Courts and however, till such time, the order of the Coordinate Bench is not stayed or overruled by the Courts, the assessee is well within his rights to draw support from the said decision. Where the matter is adjudicated by the Hon ble Rajasthan High Court in favour of the Revenue, the Revenue is not without recourse and is free to take action as per law. Therefore, following the principle of consistency, where the Coordinate Jaipur Benches have taken a view in the matter under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he circumstances of the case and in law ld. CIT(A)-4, Jaipur is justified in 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 the facts of the case are that the assessee filed his original return of income on 27-3-2015 declaring total income of ₹ 46,75,520/- which was selected for scrutiny assessment and thereafter, the assessment was completed U/s 143(3) of the Act vide order dated 04.11.2016 accepting the returned income filed by the assessee. Thereafter, a search operation U/s 132 of the Act was carried out on various business premises of Manglam Group, Jaipur on 04.11.2016. Consequent to the said search action, the notice U/s 153C of the Act was issued to the assessee on 26.10.2018. In response to the said notice, the assessee furnished his return of income on 26.11.2018 declaring total income of ₹ 46,75,520/- as originally declared and assessed. Thereafter, notice U/s 143(2) of the Act was issued on 28.11.2018 followed by notice U/s 142(1) on the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,750/- 5. The assessee was accordingly asked by the Assessing officer to show-cause and explain as to why these credit entries should not be treated as his undisclosed income and added to his total income and brought to tax. 6. In response to the show-cause, the assessee submitted that these transactions/entries/document/papers of N Trading Co. are not related with him. It was submitted that Mr. Nand kishor Gupta S/o Shri Rood Mai Gupta of Manglam Build-Developers Ltd. has given an affidavit stating that they have already considered these papers/ transactions related to N Trading Company in their application filed before the Settlement Commission. The records were found with Shri Nand Kishor Gupta and they had included these papers in their Settlement Commission petition, there is thus no justification to add this amount again in the case of the assessee. It was submitted that the original affidavit of Shri Nand Kishor Gupta was enclosed with reply filed by the assessee for A.Y 2014-15. Further, an affidavit of Shri Ram Gopal Sarraf, assessee was also enclosed declaring that transactions were not related to him and original affidavit was enclosed with repl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in absence of any evidence presumption holds true and has not been rebutted successfully. 8.4. In this case the assessee has simply tried to shift the onus on the department by resorting to denial. Denial does not have any evidentiary value, on the other hand the incriminating cloud 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. To elucidate this point further the statement of Sh. N. K. Gupta, Managing Director of M/s MBDL which was recorded during the course of search needs to be considered. When Shri N.K. Gupta was specifically asked to explain the nature of such transactions, he refused to disclose the name and complete address of these persons from whom such huge cash transactions were made. In the statement given by Shri N.K. Gupta he has submitted it clearly that in order to avoid litigation he will not disclose the names of the parties with whom these unaccounted transactions, were made. Every transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53C of the Act by way of additional grounds of appeal contending that the cloud data was seized from the business premises of Manglam Group and key person of the Manglam Group owned up all of them as pertaining to their own affairs and thus the same pertains to and information contained therein relates to them and not to the assessee and secondly, the said cloud data cannot be termed as incriminating material found as pertaining to the assessee and therefore, no action can be taken u/s 153C of the Act. Besides that, on merits of the case, the consequent order passed by the Assessing Officer U/s 143(3) r.w.s. 153C of the Act was also challenged. 9. The ld. CIT(A) admitted the additional grounds of appeal wherein the assessee has challenged the initiation of the proceedings U/s 153C holding that the same is purely legal in nature and involves question of law and does not require any investigation or examination of fresh facts and can be decided on facts and material available on record. The ld. CIT(A) however negated the plea of the assessee that no incriminating material were seized from the premises of Manglam Group and held that seized material is apparently incriminating mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led settlement petition before settlement commission on 28.03.2018. As per the petition filed by MBDL before the Hon ble Settlement Commission the peak deposit of unaccounted capital introduced, loans and advances and interest paid and received was considered for computing the income. Accordingly income of ₹ 15.10 cr. was offered on the basis of cloud data of N. Trading Company. The same is accepted by the Settlement Commission at page 151 of the order dated 16.05.2019. 8.2 In respect of surplus it may point out that as per the petition filed by MBDL before the Hon ble Settlement Commission, the on money (of) received by the group on its various projects was considered for computing the income. In its admissions made before the Hon ble Settlement Commission, MBDL has explained the nature of such surplus which was credi ted to the partner s accounts. In fact the same represent on money . Accordingly income of ₹ 80.07 Cr. ( ₹ 72.33 cr. + ₹ 7.75 cr.) was offered on the basis of cloud data of N Trading Company. The same is accepted by the Settlement Commission at page 57 of the order dated 16.05.2019. 8.3 In view of above, it is evident that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and findings of the ld. CIT(A). It was submitted that in course of search, statement of Shri N.K. Gupta, the Director and Key person of the Manglam Group was recorded u/s 132(4) wherein he owned up all the cash loan/transactions found in cloud data and stated that name of persons/entities mentioned in the said date are imaginary/false names. He has also stated that Manglam Group has not taken any loan in cash from any person or repaid it to any person as mentioned in cloud data and these relates to their own affairs and reference was drawn to the reply submitted by Shri N.K. Gupta in response to question No. 117 and 118. It was further submitted that during the course of assessment proceedings, the assessee also submitted an affidavit of Shri N.K. Gupta wherein he again affirmed on oath that no transactions of cash loan/transaction with assessee were taken by Mangalam Group or by himself. The Assessing Officer, however rejected the said affidavit without making any enquiry from him or examining him personally. Further, the Assessing Officer did not brought on record any corroborative material to controvert the affidavit of Shri N.K. Gupta and the fact that the assessee having denie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions 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. In this connection, it was submitted that when Manglam group admitted the data in cloud as its own and names are imaginary and fictious than the said data and accounts belongs exclusively to them only and transactions shown pertains only to Manglam group, and not that Manglam group is one party and therefore there has to be other party of the transaction. The Ld. A.O. is wrong in giving such finding contrary to facts. Further, now the Hon'ble Settlement Commission has decided the settlement petition filed by Manglam group by passing settlement order u/s 245D (4) and each and every transactions given in ledger accounts by Ld. A.O. on page 9 15 of assessment order has been considered as of Manglam group and covered in determining undisclosed income of Manglam group and therefore those ledger accounts cannot be held as pertaining to or related to assessee herein. 17. It was further submitted that the Coordinate Jaipur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been verified with the records available with the department . 20. It was submitted that as per above contents of the Pr. CIT, Central, Jaipur's Rule 9 report, it is evident that all the transactions in Tally data maintained in cloud have been considered and taken into account in determination of the undisclosed income of M/s. Manglam Builders and Developers. It was accordingly submitted that there is no basis in the present appeal filed by the Revenue and the same deserve to be dismissed and the order of the ld CIT(A) be confirmed. 21. We have heard the rival contentions and perused the material available on record. In case of DCIT Central Circle 1 vs Shri Jugal Kishore Garg (supra), the Coordinate Jaipur Benches of the Tribunal has held as under: 3.8 We have heard the ld. counsel for both the parties, we have also perused the materials placed on record, deliberated upon the judgement cited by both the parties as well as the orders passed by the Revenue authorities. From the facts of the present case, we noticed that the assessee is a partner in different firms and details of which have already been submitted in preceding paragraphs of this appeal. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 transactions and paid tax and offered the transactions in settlement. 3.10 After meticulously going through the facts of the case and submissions of the parties at length, we found that the transaction recorded in the cloud data of N Trading was owned up by the main person of the company MBDL with regard to the transactions like transactions under the heading of unsecured loans (receipt and payment) and consequent interest payment thereof. We have also gone through the order of the Hon'ble Settlement Commission dated 16-05-2019 pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, 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 received on cash loans. The same being settled in cash, the same is included in the peak calculations. Thus based on the above, the peak of the cash transactions was arrived at ₹ 15,10,77,6001 and the same, being the business income of the Group was thus offered as the Additional income of the group. Para 2.5 Page No. 141 of the Hon'ble Settlement Commission order Thus, based on the above, the Applicant, in the event of loan confirmations being not readily available, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 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 has already been received/settled with customers. These advance bookings are also not revenue of the year of receipt, however, to determine overall profitability/cash profit, the said amount has been considered as 'revenue' in computation of additional income. The total of such Settled Booking received in cash as available in Tally data comes at ₹ 382.89 Crores. Thus in total there has been receipt of booking advances in cash ('on money') of ₹ 684 Crore (301. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 22. 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 of the Act based on transactions in N Trading Company found on cloud data found and seized during the course of search and the assessment was completed u/s 143(3) r/w 153C for A.Y 2014-15, 2015-16, 2016-17 and 2017-18 wherein addition on account of unaccounted/undisclosed capital employed in various projects of the Manglam Group, addition on account of surplus share in profits in various projects and addition on account of interest earned on such capital employed were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd accordingly, where the amounts have been subjected to tax in the hands of MBDL and related entities, the AO was directed to delete the additions in the hands of the assessee. 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 and the matter has already been examined by the Coordinate Jaipur Benches basis the filings and acceptance of MBDL s petition before the Settlement Commission and the addition has been deleted. The Revenue has not been able to highlight and demonstrate before us as to how the findings of the Coordinate Benches should not be followed in the instant case. 24. The fact that the order of the Settlement Commission has been challenged by the Revenue by way of writ before the Hon ble Rajasthan High Court and similarly, the fact that another set of writ petitions have been filed before the Hon ble Rajasthan High Court against the decision of the Coordinate Benches in case of Shri Jugal Kishore Garg for A.Y 2014-15 and A.Y 2015-16 cannot be the basis for not following the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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