9911796707
TMI Blog2022 (3) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2, 4 and 5 of Annexure A-1 seized on 28.03.2008 and Page No.99 to 103 of Annexure A-1 seized on 14.03.2008. In the assessment order, the Assessing Officer had concluded that as no satisfactorily reply was coming from the assessee about the meaning of the symbol '#' used in the seized material, it was presumed to mean 'cash'. Accordingly, the Assessing Officer made an addition of Rs..17,26,55,984/- after scrutinizing the seized Pg. No.99 to 103 of Annexure A-1 and Pg.No.2, 4 & 5 of Annexure A-1. 3. Aggrieved assessee preferred an appeal before the Ld.CIT(A) and filed detailed submissions which is reproduced in the first appellate order at Page No. 28 to 53, it was submitted that a family settlement had happened by way of share transactions between the Ashok Ruia Group (Assessee Group) and Bharat Ruia Group. The Assessee Group had purchased the share of M/s Phoenix Mills Limited amounting to Rs..256,82,11,894/-, M/s Galaxy Entertainment Ltd amounting to Rs..2,90,33,040/-, M/s RR Pvt. Ltd amounting to Rs..101,99,96,001/- and M/s. Senior Holding Pvt. Ltd amounting to Rs..4,000/-. The said shares were purchased by M/s Ashok Apparels Pvt. Ltd and M/s Bellona Developers Ltd. of Ashok R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which the impugned additions had been made mere 'dumb documents' and has no relevance to make an additions. * The entire addition is based on the assumption of the Ld AO that sign '#' rhyme with cash. In this regards we submitted that in the case of the block assessment where the addition has to be made on the evidence found during the course of the search and one cannot go on assumptions and presumptions. * Total consideration has not been paid by the appellant in his individual capacity but through the companies. Than can how the alleged payment has been added in the appellant's income without evidence. * The figure of Rs. 381 crores and odd mentioned in the seized papers is not only figure which is estimated by the recipient. Besides, there are two more figure i.e. 360 crores and 377 croes and odd. Hence, then can how the figure Rs. 381 crores and odd is finalized by the department. Hence, we request your honour that a mere entry on loose sheet of papers and where the appellant claims that it was just an estimation done, but not supported by the actual cash when there is no documentary evidence to support the passing of cash and further there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. 2,90,33,040 R R Pvt. Ltd 1,01,99,96,001 - Senior Holding Pvt. Ltd 4,000 Total 2,62,92,19,627 95,89,92,268 - 2,90,33,040 12.4 To sum up, the undisputed fact on record is that the Bharat Ruia Group had sold it's stake in M/s Phoenix Mills Limited, M/s Galaxy Entertainment Ltd., M/s RR Pvt. Ltd. and M/s Senior Holding Pvt. Ltd. to the Ashok Ruia Group for a total consideration of Rs. 3,61,72,44,935/-. However, it may be noted that the Appellant has not directly entered into any share transaction with the Bharat Ruia Group. It is clarified here that M/s Ashok Apparels Pvt Ltd and M/s BeIlona Developers Ltd., are concerns of Ashok Ruia Group, which had purchased the stake from the Bharat Ruia Group. Hence, at the outset, the Appellant had contended that since no transaction had been entered into by him in his individual capacity, the question of making an addition of cash in his hands doesn't arise at all. 12.5 A perusal of the seized material placed on record clearly reveals that there are three amounts mentioned at various places viz. Rs. 381,39,58,713/-, Rs. 360,69,71,895/- and Rs. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /working of the amount BRR to receive as per family settlement and sale of Phoenix Shares, R.R. Ltd. Shares etc. The # items are additional claims BRR has raised, which were agreed to be settled by taking over BRR's liabiHties to sisters (i.e. 50% of 34CR.) This is explained as below: Late RR Ruia had 6 children of which 4 are daughters and 2 are sons namely, Shri Ashok Ruia and Shri Bharat Ruia. In the family settlement implemented under a signed Memorandum Of Family Settlement the sisters have been paid Rs. 34 crores i.e. Rs. 8.50 crores each by cheque. Bharat Ruia was refusing to pay Rs. 1 7 crores which was 50% of the amount to be paid to sisters. Ashok Ruia paid the full Rs. 34 crores. Theoretically, each brother should have paid 50% of Rs. 34 crores, or 17 crores so Bharat Ruia's accountants notionally set off Rs. 17crores in their internal working. Based on this, BRR's accountant/ advisor showed receipt of Rs. 381 crores i.e. Rs. 364 crores which is paid in cheque to BharatRuia Group from time to time plus Rs. 1 7 crores which is notionally considered by the accountant/advisor as received by Bharat Ruia Group as explained above setting off against the # ite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;(pronounced as hash) clearly signifies that it has been used for showing the amount received in 'cash'. This meaning is also evident from the various phrases used in this statement, such as 'received in # 'share account in #', 'monthly compensation up Sept 07 #' and'50% Saki Naka in # 4,40,00,0000'. It is also important to note that nowhere in this statement anything about share of sisters is mentioned. In light of above, it is evident that total amount received by Shri Bharat R Ruia group on account of family settlement is Rs. 381,39,58,7131- as mentioned in the said statement. Please comment on this. Ans. As already stated in my earlier reply, the statements had been prepared by the Accountant/B ha rat Ruia in connection with family settlement though you have raised the query in detail, quoting various figures given on Page 103 in nutshell, Bharat R Ruia and family was ultimately paid Rs. 364 crores out of Rs. 381 crones payable to him (including additional claim) after duly adjusted his share of Rs. 17 crores towards the amount payable to four sisters as per the family settlement agreement. As regards the word 'received' mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is customary that the two brothers would have to bear equal cost on account of payments to sister. The family settlement documents read along-with the seized material in a coherent manner reveals that the partition of the assets had been done in an extremely fair manner. The assets had been divided on a 50: 50 basis between the two brothers and each of the sister had been paid Rs. 8.5 Crore. It belies logic as to why only one brother shall bear the cost of payments to the sisters. The documents placed on records supports the argument of the Appellant that an amount of Rs. 17 crores was adjusted against the amount paid to the sisters. I have noted that the said argument of the Appellant duly corroborated by material on record has not at all been refuted or rebutted by the Assessing Officer. 12.12 I have also taken note of the fact that during the course of search and seizure proceedings, the statements of various persons have been recorded, including that of Shri Atul Ruia and none of them have stated that cash has been paid to Shri Bharat Ruia (HUF). I have also noted that no corroborating incriminating document was found during the course of the search operation in support of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the authorities at the time of search on 6-8-2003. By the time of search, it is clear that the agreement to sell was not reached to its logical conclusion and the agreement was rescinded and part of the money received from the vendee was returned and the subject property was let out to another third party and the whole transaction was aborted. When the whole chain of events are available in the course of search and all the agreements were very well before the authorities, how it is possible for the Assessing Officer to read the events in a piece-meal manner instead of reading it in a logical and a continuous manner from the beginning to the end. The Assessing Officer has stopped on 31-3-1999 to make out a case that there is a transfer of asset within the meaning of section 2(47) of the Income-tax Act, 1961 read with section 53A of the Transfer of Property Act for the impugned assessment year 1999-2000. In order to make out such a case, the Assessing Officer has refused to look into the events, which followed after 31-3-1999. If the Assessing Officer read the entire episode as a whole, the Assessing Officer would know that there was no actual transfer of any capital asset from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakhs becomes admissible to the assessee as cash expenditure in relation to cash receipts of the assessee. Thus, the excess of receipts over the expenditure can be worked out at Rs. 8.95 lakhs. The matter does not end here. It has been pointed out earlier that there are certain other figures of cash amount to be received by the assessee. The two sums of 400, being old and 179 from Dhawal, aggregating to 579, are to be received in cash. Therefore, this amount will have to be added to the undisclosed income. Thus, the undisclosed income, by reading the document as a whole is calculated at Rs. 14.74 lakhs (Rs. 8.95 lakhs + Rs. 5.79 lakhs). The argument of the learned DR in this matter may also be considered here. His case was that the expenditure has to be proved by the assessee. We are unable to agree with this submission if the impugned seized material is to be considered for the purpose of computation of the undisclosed income. The learned DR had pointed out that the Assessing Officer had verified some of the cash receipts from the customers. It appears that no opportunity of cross examination has been given by the Assessing Officer to the assessee in this behalf. Therefore, the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment was made to one Shri Chandru by cheque. It had been clarified by the Appellant that the said amount of Rs. 15,00,000/- was transacted through banking channels and pertains to reimbursements made by Phoenix Mills Ltd. to M/s. B.R. International. Thus, the theory of the AO that '#' represent cash payments is merely based on conjectures and surmises. 12.21 Mere suspicion, however strong or probable it maybe, is no effective substitute for the legal proof required to substantiate a charge, which the learned AO has failed to furnish. There is a long mental distance between 'may be true' and 'must be true' and this basic and golden rule helps to maintain the vital distance between conjectures and sure conclusions to be arrived at, on the touchstone of a dispassionate judicial enquiry based upon a complete and comprehensive appreciation of all features of the case, as well as the quality and credibility of evidence brought on record. Reliance is placed on Ashish Bathani V. State of MP, AIR 2002 SC 3206. 12.22 It is a trite law that the suspicion howsoever strong cannot partake the character of legal evidence. Reference in this regard is made to the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions of Pooja Bhatt 66 TTJ (Mum) 817& D. M. Kamani (HUF) 65 TTJ (Pat) 504. It is well settled by the Hon'ble Supreme Court in more than one decision that courts have to be watchful and avoid the danger of suspicion to take place of legal proof for sometime, unconsciously it may happen to be a short step between moral certainty and legal proof. In this regard, reference may be made to the judgment in the case of Narendra Singh v. State of MP, 2004 SCC 1893. 12.26 It is well settled proposition of law that the court should safeguard itself against the danger of basing its conclusions on suspicions, howsoever strong they may be. It is equally well settled that the Courts decision must rest not upon suspicion but upon legal grounds established by legal testimony. Mere suspicion, however strong, cannot take the place of proof. Reliance is placed upon State v. Guizari Lal Tandon AIR 1979 S.C. 1382 and J.A. Naidu v. State of Maharashtra AIR, 1979 S.C. 1537. 12.27 The above stated 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] 172-ITR-250 sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age 182 observed: There was no material before the Assessing Officer, which could have led to a conclusion that the transaction was, simpliciter a device to camouflage activities, to defraud the Revenue. No such presumption could be drawn by the Assessing Officer, merely on surmises and conjectures". 12.31 The Hon'ble Supreme Court in Parimisetti Seetharamamma v. CIT [1965] 57-ITR-532 at 536-537 observed:- 'By sections 3 and 4, the Indian Income-tax Act, 1922, imposes a general liability to tax upon all income. But the Act does not provide that whatever is received by a person must be regarded as income liable to tax In all cases, in which a receipt is sought to be taxed as income, the burden lies upon the department to prove that it is within the taxing provision. Where however a receipt is of the nature of income, the burden of proving that it is not taxable, because it falls within an exemption provided by the Act, lies upon the assessee'. 12.32 In such a situation, the seized documents can only be held as rough dumb documents, as these documents do not provide any conclusive evidence. I have noted that the complete details of the transaction, the parties invol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, inter-alia, on the basis of loose papers found during search by making certain presumptions which are found to be inconsistent or contrary to other evidence on record cannot be upheld, especially when no significant asset outside the books or no evidence of ostensible expenditure outside the books is found. Nirnial Fashions (P) Ltd. V. Dy.CIT [2009] 23 DTR 386 (Kol.)(Trib.). * Assessee's undisclosed income could not be taken as Rs. 48 lakhs on the basis of seizure of a dumb document which showed certain unexplained entries totally '48' in the absence of any material on record to come to the conclusion that the figure '48' is to be read as Rs. 48 lacs. The Tribunal having rightly deleted the addition of Rs. 48 lakhs, the order of the Tribunal does not give rise to a question of law, much less a substantial question of law. CIT v. Girish Choudhary [2008] 6 ITR 619 ('Del.). * Loose papers found at assessee's premises indicating money lending transactions without mentioning assessee's name have no evidentiary value and cannot by itself form the basis of addition. Chander Mohan Mehta V. Asstt. CIT [1999] 71 ITD 245 (Pune). 12.33 In Bansal Strips ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... independent evidences exist, the addition on the basis of notings and jottings cannot be upheld. The relevant extracts of this decision are reproduced hereunder:- "The third dispute in the present appeal is with regard to the addition of Rs. 35 lakhs made by the Assessing Officer as unexplained expenditure of the appellant under section 69C of the Income-tax Act, 1961. The Commissioner of Income-tax (Appeals) in this behalf observed that no independent material or evidence had been brought on record by the Assessing Officer to establish that the notings/jottings recorded on the loose sheet of paper represented an unaccounted transaction. The Commissioner of Income-tax (Appeals) accepted the explanation of the appellant that the sum of Rs. 35 lakhs represented requirement of funds for different purposes and did not represent any receipt or outgoing for any such purpose. The Commissioner of Income-tax (Appeals) considered the material on record at length and came to the following conclusion: "4.2 I have considered in detail the material on record. From the notings on page 47 of annexure A-2, it cannot be said that any actual expenditure is represented by such notings which is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Rs. 35 lacs is, therefore, deleted." 12.38 The Hon'ble High Court of Delhi in the case of CIT Central II Vs S.M. Aggarwal [2007] 62 TAXMAN 3 (DELHI)hzd held that the dumb document could not be considered as a documents representing undisclosed income of the assessee. The relevant extract of the same are reproduced as below:- "12. It is well-settled that the only person competent to give evidence on the At tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Rs..3,32,415 is not reflected in any books of accounts. Accordingly, he made addition as undisclosed cash found and seized in the hands of Mr. Ashok Ruia in terms of provisions u/s. 69A of the Act. 7. Aggrieved assessee preferred an appeal before CIT(A) and filed detailed submissions before him. The same are reproduced below: - "15.0 During the course of appellate proceedings, the AR of the appellant had submitted written submissions on this issue which are reproduced, as under:- "In the above ground, the appellant has challenged the addition of Rs. 3,32,415/- to the appellant's income as income from other sources under section 69A of the Income Tax Act, 1961. The A.O. has discussed the above addition in para 13 onwards in the assessment order. The contentions of the AO in respect of the entire addition is based upon the fact that since the appellant had not produced any evidence for substantiated cash found during the course of the search proceeding and the same were not reflected in his books of account as cash in hand. Accordingly, before discussing the various contentions in respect of the addition, we would like to present to your honour the facts of said addition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share trading and investment. Further, he also manages his own HUF. Accordingly, appellant is earning his income by way of salary, business income, capital gains and income from other sources. Further, he has also received dividend income from the investments. Further, we would like to submit that Mrs. Amla Ruia, the wife of the appellant is earning her income by way of salary, business income, capital Moreover, as mentioned earlier that appellant is the Karta's of HUF. The said HUF earns income by way of Income from House Propriety, Business, Capital Gain and other source. Hence, from the above it is clear that in appellant family, there are three persons who have its individual source of income and each person regularly filed its return of income. Before going further it is very essential to discuss the additions made by the department in the earlier assessment years as well as captioned assessment year. In respect to the same we would like to submit the assessed income of the appellant in the earlier year as under: COMPUTATION OF TAXABLE INCOME Rs. Rs. INCOME FROM SALARY 6,93,380/- INCOME FROM HOUSE PROPERTY 1, 05,95,668/- PROFITS FROM BUSIN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dividend income of Rs. 1,03,73,985 during the A.Y. 2007-08. In relation to the A.Y. 2008-09 we would like to submit that the appellant had earned the income of Rs. 10,28,98,430 (16,17,82,192 - 5,88,83,762 set off previous year loss). Further, the appellant has earned the exempt dividend income of Rs. 1,10,46,113 during the year 2008-09. It is further submitted that in respect to the AY 2006-07 and A.Y. 2007-08, the addition was made on the tune of disallowance u/s 14A r.w.r 3D. In this regards, it is submitted that the disallowance u/s 14A r.w.r 8D is nothing but the disallowance on the basis of change of opinion. At this juncture we would like to submit that from the observation of the Assessment Orders, it can be concluded that the appellant does not have any other undisclosed income/undisclosed investments. From the above narrated facts, it can be safely depicted that the appellant has not been taxed for any income from any undisclosed sources in any of the preceding years and in view of the same it can be inferred that the cash found during the year is not from any undisclosed sources but from regularly filed returns of the appellant and his wife. Hence, we request to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of undisclosed source. In respect to the same, we would like to submit that from very beginning the appellant had contended that the cash found during search is out of personal saving of the appellant and his wife from the various years. Therefore, the said cash nowhere belonged to his business operation. It is further submitted that cash reflected in the balance sheet consist only business related cash. Hence, the Ld. AO has erred in comparing the balance of cash as stood in balance sheet and the cash found at the residence of the appellant. At this juncture, we would like to draw your honour's kind attention to the normal journal accounting practice followed by the each and every appellant of India in the case of drawing. In India double accounting entry system has been followed. Thus, in the case when the appellant withdraw the amount from its business then as per the method of double accounting entries system, capital as well as cash both should be reduce from the books of account. Therefore, the view of the AO that the cash in hand is Rs NIL is incomprehensible to the appellant. Therefore, we request to your Honour to consider the above factual position and request ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d cast u/s 69A of the Act." 10. At the time of hearing, Ld. DR submitted a detailed submissions and filed a written copy by email. It is reproduced below: - "During the course of search on 20/02/2008 in the Phoenix Group, managed and controlled by the Ruia Family, certain loose papers were seized from the corporate office of Phoenix Mill Ltd. on 14/03/2008 and 28/03/2008, which were numbered as page numbers 99-103 of Annexure 1 and page numbers. 2,4,5 of A-1, respectively. These pages are reproduced on page number 10-17 of the assessment order. A brief narration of the contents of these papers is also available on page 18 of the assessment order. To put it briefly, the details and noting made on these papers are pertaining to the consideration received / receivable towards family settlement between the two groups of the Ruia family, one of them led by Shri Ashok R Ruia and the other led by his brother Shri Bharat R Ruia. As emanating from the facts on record, the assessee and his brother has entered into a family settlement whereby the assessee had purchased the share of Shri Bharat R Ruia in Phoenix Mill Ltd and other entities as well. Perusal of the seized documents show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order on page 34 , wherein the assessee states that the learned AO briefly states that "the seized documents reflect the actual transactions", but fails to support the said statement with any further evidences. No demonstrative and actual link between the seized papers and the actual transactions has been stated by the learned AO in the assessment order and accordingly it is very unclear as to how he proceeds to declare that the seized documents reflect the actual transactions " In this regard , attention is drawn to the number of shares purchased by the ARR group of Galaxy Entertainment Ltd. and Phoenix Mills Ltd., which as per the details of shares purchased provided on page 18 of the paper book are 275488 shares of Galaxy transferred in April 2007;and 601580 shares of Phoenix Mill Ltd transferred in April 2007. Same figures are reflected on page 99(10 of AO), 101(12),103(14),2(15),&4(17)( (Galaxy); page 100(11) ( PML) The documents also mention certain amounts against the narration 50% Sakinaka in by inflation in price 8,15,50,000: reference may be made to pages:4(17),2(15),102(13),101(12) and 99(10). 50% Sakinaka in # 4,40,00,000, ref: pages 2(15), 4(17),103(14), 102(13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cash component works to around Rs. 8 .20 crore approximately and the share of the BRR group being half of the same would be around 4 crore. This figure coincides with the amount of Rs. 4.40 crore mentioned as 50% Sakinaka in # 44,000,000.00. Thus, it can be concluded that # is cash. The above findings also counters the assessee's contention that no undisclosed source was found by the department to substantiate the generation of the alleged cash. As regards the assessee's assertion that no undisclosed assets were found by the department in the case of recipient to substantiate the utilization of alleged cash, it may be mentioned that in the case of Bharat R Ruia HUF, the recipient, additions were made on account of unexplained cash deposits and unexplained jewellery for AY 2008-09 and earlier years. Moreover, Bharat R Ruia Karta of the BRR (HUF) admitted undisclosed income on account of interest received on loans provided by the proprietary concern of BRR (HUF) , which was to the tune of Rs. 5.70 crore for AY 2008-09. It may be further noted that as per information obtained from the AO, BRR(HUF) has opted for VsV scheme for AY 2008-09. Further, the assessee's contention t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived is shown as Rs. 37,74,66,021.01.it however seems that the assessee has inadvertently read the balance receivable amount of Rs. 37.746 crore as 377.46 crore. 2. Rs. 360,69,71,895/- as per page 101(12) 3. Rs. 381,39,58,713/- as per page 103(14). Though no date is mentioned on this page, it may be noted that the figure is similar to that reflected on page 5&4 which are dated 21/06/2007. Hence it reflects the total stake consideration including the additional deal. Firstly, it needs to be appreciated that not all the documents are dated. Secondly the share price changes over a period of time. The documents seem to be prepared during April to June 2007. Hence, the difference in the figures in the absence of any date being specified is not a very relevant argument so as to negate the inferences drawn by the AO on the basis of these documents. It need not be ignored that the assessee has not placed any document on record to explain the exact terms and conditions attached to the buy out of the stake of the BRR group by the ARR Group. As per the notings of the order sheet dated 10/12/2010, reproduced on page 23 of the assessment order, the assessee denied entering into any wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant clauses of the Family Settlement Deed in support of his contention. Attention of the Bench is drawn to clause 13&15 of the Family Settlement Deal, available on page 14 of the paper book. The assessee has also put forward an argument that since the acquisition of the shares held by Bharat Ruia and the signing of the Family Settlement Deed was contemporaneous, it can be fairly inferred that the Rs. 17 crore was considered as notional payment out of the total deal value of Rs. 381 crore. One however fails to understand that when the family members had the wisdom of having a written deed for the division of assets of their deceased parents and for settling the claim of their sisters for eternity, what prevented them from reducing the terms of the share stake deal worth 381 crore in black and white. Reference is also made to szd. Page no. 5 (16), wherein there is working of fund flow- dated21/06/2007- the amount received is shown as 381 crore. The paper also has details of the investments. Why would investments be planned after considering rupees 381crore, if the difference as per the assessee was a notional difference of Rs. 17 crore, factored in by the BRR Group. As regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shares were decided to be purchased by Ashok Apparels Pvt. Ltd. & M/s Bellona Developers Ltd. the family settlement deed, also mentions about settlement between group of individuals, one headed by a ARR and the other by BRR. So it's very logical to conclude that the cash payments were made by Shri Ashok R Ruia. 12.5 56 3 different figures reflected in the seized documents itself conclusively proves that the entries recorded are rough in nature the difference between 321 crore and 381 crore is on account of additional deal, apparent from noting on szd. paper 103(14) 12.6 the AO has picked up the highest figure of Rs.381.39 crore and has added the difference between it and the actual settlement value of 364 crore the inference drawn by the CIT(A) is completely incorrect as the quantum of addition of Rs. 17.26 crore is not the difference between the 2 figures of 381 crore and 364 crore, but the sum of the three entries marked with the # sign. Moreover, the figure of 364 crore is also one suggested by the assessee. Reference be made to reply of Atul Ruia to question number 22 reproduced on page 57 of the CIT(A)'s order wherein he attempts to provide an explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, hence the conclusion drawn by the AO is not on mere suspicion. 12.32- 12.38 68- 74 The seized papers are Dumb documents Sufficiently demonstrated that the documents are not dumb but contain relevant noting which become all the more important in the absence of any written terms and conditions in respect of the mode and quantum of settlement between the two groups. 12.39 74 where assessee has furnished all the details no addition can be made No details except the details of share purchase and the family settlement deed are provided by the assessee. 12.40 74 no documentary evidence to support the passing of cash. Both the recipient and the payer are indulged in generation and application of cash out of book is already established before the Hon'ble Bench. To conclude, the findings of the search and the narrations on the 8 seized documents under reference, substantiate the existence of cash transaction between ARR and BRR. On the contrary, the assessee has failed to substantiate his contention with any sort of documents. Further, the CIT(A) miserably failed to appreciate the documents and facts available before him and has directed to delete the addition mere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Department at any stage and no addition has been made in this regard. Before the Tribunal, it has been stated for the first time that Rs. 8 crore would be in cash. There is absolutely no material or base to say this except imagination. 6. The assessee has not given break up of Rs. 364 crores. The amount of Rs. 364 crores was given by the assessee at the time of search as a rough figure of valuation of shares at the time when seized page no. 2 (page 15 of assessment order) was prepared. This figure was taken as base by wing as well as A.O. For the first time before Tribunal Department is questioning this figure. For issuing Show Cause Notice, A.O. has relied upon this figure (para ix on page 22 of A.O.). This was figure of valuation based on market rates at particular point of time and since A.O. has acted upon the same, it can not be disputed now. 12. Considered the rival submissions and material placed on record. We also considered the submissions of both counsels and their counter submissions on the issues raised in the grounds of appeal. We observe that there was a family settlement between the Ashok Ruia Group and Bharat Ruia Group and it is fact on record that both par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessment order are actual figures and transactions marked as # is in cash and therefore, the AO added a sum of Rs. 17.26 crores, summary of which is reproduced on page no 38 of the Assessment order. d) We observe that on account of shares amounting to Rs. 361 crores (share value on the dates of transactions) and there are no separate payments in respect of different figures comprised in Rs. 381 crores. Balance amount of Rs. 17 crores is an adjustment of the claim of payment made to sisters. There is possibility of above adjustment particularly when there is no investigation or findings of the revenue authorities either in search proceedings or in assessment proceedings. e) We also observe that the said fact was also stated by the parties during the course of search itself. f) The seized document page no. 102 (page 12 of A.O.) which indicates that the payment of Rs. 360.69 crores is 'amount payable excluding sisters'. 13. We also observe that the figures mentioned in the seized papers are inconsistent and hence not reliable based on our below observations: - a) The figures written on various pages keep on changing and there is no consistency and hence figures cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the payment of Rs. 17.39 crores (i.e. Rs. 381.39 crores ~ Rs. 364 crores) as payment made in cash. However, actual addition was made of Rs. 17.26 crores which is aggregation of 3 transactions with # on page no. 15 of assessment order. (vii). The allegation of the A.O. is not supported with any undisclosed money or source of income found during the course of search. (viii). The shares have been purchased by Ashok Apparels Pvt Ltd and Bellona Finevest Ltd and not a single share has been purchased by the assessee. In our view, no addition can be made in the case of the assessee and even Ld CIT(A) has given the said finding in his order in para 12.3 and 12.4 on page 54, 55. (ix). It appears that the fund flow statement on pg 16 of the Assessment order has been made by the accountant of Shri Bharat Ruia based on his understanding. It is quite likely that like the notional receipt of Rs. 17 crores included in the receipt side, there could be notional payment included in the payment side (refer see expenditure item of Rs. 51.04 crores). 15. We observe that Ld.CIT(A) has elaborately discussed the various issues in his order and in summary, he came to conclusion that no def ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
