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TMI Blog2022 (4) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... s found it will be returned back to him. It is for this reason that in search cancellation receipt was not found from the assessee as it was given to Vikas Sharma but the cheques and receipts which were misplaced could be located by the search party in course of search. As in search of assessee no other material was found to indicate that he or any of his family members has given any cash advance to Vikas Sharma except that his son Manaswi Gautam has made investment of ₹ 1.21 cr. by cheque in M/s Royal Terrace Hotel Private Limited. Thus, when no transaction took place against the above undated cheques and receipts it cannot be presumed that the assessee has provided cash loan to Shri Vikas Sharma - Thus we direct to delete the addition made and sustained qua this issue - Decided in favour of assessee. - ITA No. 67/JP/2021 - - - Dated:- 31-3-2022 - Shri Sandeep Gosain, JM And Shri Rathod Kamlesh Jayantbhai, AM For the Assessee : Shri P.C. Parwal (CA) For the Revenue : Shri Sanjay Dhariwal (CIT-DR) ORDER PER: SANDEEP GOSAIN, J.M. This is an appeal filed by the assessee against the order of ld. CIT(A)- 4, Jaipur dated 28/05/2021 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he A.O. with regard to making addition of ₹ 50,00,000/-. Against the said order of the ld. CIT(A), the assessee is in further appeal before the ITAT on the grounds mentioned above. 5. All the grounds raised by the assessee are interrelated and interconnected and basically relates to challenging the order of the ld. CIT(A) in confirming the addition of ₹ 50.00 lacs. In this regard, the ld. AR appearing on behalf of the assessee has reiterated the same arguments as were raised before the ld. CIT(A) and also relied on the written submissions filed before the Bench and the contents of the same are reproduced as under: 1. It is submitted that Shri Vikas Sharma is the Managing Director of M/s Royal Terrace Hotels Pvt. Ltd. Sh. Manaswi Gautam, son of the assessee has made investment of ₹ 1.21 crore in the share capital of the company. As Vikas Sharma was in need of funds for construction of hotel, he approached Manaswi Gautam, son of the assessee to provide funds and for such arrangement he was required to give blank receipts and unnamed undated cheques. However, the funds could not be arranged. The cheques and the receipts were to be returned back to Shri Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t later on he could not provide the same. Therefore, when the statement is read in whole there is no such contradiction as assumed by the Ld. CIT(A). (e) So far as the statement of Sh. Vikas Sharma as to the signing of receipt for the funds to be arranged by Manaswi Gautam and the cancellation receipt having been made with the assessee is concerned, it may be noted that since Manaswi Gautam has misplaced the cheque and receipt which could not be traced out even reminding him 4-5 times, Sh. Vikas Sharma obtained the cancellation receipt from the assessee who is father of Manaswi Gautam and a person of repute in the society so that such receipt is not misutilised. This fact all the more establishes the genuineness of the cancellation receipt which has been presumed by the lower authorities as fake document. (f) The lower authorities without any basis only on assumption and presumption stated that the cancellation receipt is a fake document. No material is brought on record in support of his allegation to prove that the cancellation receipt is a fake document. They have ignored that stamp paper on which cancellation receipt is given is duly notarised. The veracity of sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t hand side, ₹ 63,00,000/- given is noted in the bracket as ( 63L given ). On the right hand side, the date of 01-08-08 is noted. On the bottom portion of this page it is noted that ₹ 30,00,000/- received back upto 19-12-2011.It is also noted that ₹ 33,00,000/- is due and the interest from 19-12-2011 is outstanding. The assessee explained that he has advanced ₹ 63,00,000/- to RGS between 01.05.2008 to 31.05.2008 out of which ₹ 30,00,000/- was received back upto 19.12.2011. Thus, it is the realisation of advance given in 2008 and therefore, the same is not a receipt of loan rather it is repayment of advance earlier given to RGS. The Ld. CIT(A) has also accepted this contention of assessee. Thus, as per this paper assessee has availability of funds of ₹ 30,00,000/- prior to 19.12.2011. Therefore, if any addition on the basis of blank receipts is sustained, the set off of ₹ 30 lacs available with the assessee be allowed. This was also submitted to the AO vide letter dt. 26.12.2018 (PB 73-75) but the same was not considered. Therefore, even if an adverse inference is drawn on the basis of these documents, the addition at the most can be of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. ADIT on 23.11.2016. In his statement which are at page No. 67-68 of the paper book, Shri Vikas Sharma in reply to Q.No.5 6 accepted that receipts at Pg1-5 and 146-150 of Annexure AS-3 is signed by him. He was in need of funds for construction of hotel for which he approached Sh. Manaswi Gautam for loan. Sh. Manaswi Gautam asked him to give the signed cheques and receipts and he will provide the funds but later on could not provide the same. Therefore, against the receipts and cheques given to Sh. Manaswi Gautam, a cancellation agreement dated 21.03.2012 which are at page No. 71-72 of the paper book was executed as the original receipts and cheques were misplaced by him. 9. We further observed that the AO during course of assessment proceedings on the basis of above papers presumed that assessee has advanced cash loan of ₹ 50,00,000/- to Shri Vikas Sharma and accordingly issued show cause notice dated 24.12.2018 requiring assessee to furnish the source of such advance. The assessee vide letter dated 26.12.2018 which are at page No. 73-75 of the paper book as reproduced at page 3 4 of assessment order explained that Shri Vikas Sharma, Managing Director of M/s R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 of Exhibit 3 and that these are receipt of money taken from Dr.Manaswi Gautam and that these documents relate to him. However, he stated that he did not receive the money for which he obtained cancellation from Dr.Manaswi Gautam. Therefore, statement of Sh. Vikas Sharma is itself contradictory. (d) On one hand Sh. Vikas Sharma has stated that the cancellation agreement was made between him and Dr.Manaswi Gautam whereas on the other hand it is observed that cancellation agreement produced by the assessee is between Dr. Shiv Gautam and Sh. Vikas Sharma. The so called cancellation agreement was not found at the residential premises of the assessee during search proceedings. The search was conducted on the Gautam Group on 21.07.2016 whereas the fact of cancellation agreement emerged in the statement of Sh. Vikas Sharma u/s 131 on 23.11.2016. Therefore, cancellation agreement appears to be an afterthought and it is nothing but a fake document and cannot be relied upon. 10. Having considered the rival contentions and carefully perused the material placed on record and we found that Shri Vikas Sharma is the Managing Director of M/s Royal Terrace Hotels Pvt. Ltd. Sh. Manaswi Ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observation of Ld. CIT(A) that statement of Sh. Vikas Sharma is contradictory is incorrect in as much as on Pg 7 8 of Ld. CIT(A) order where his statement is reproduced, it can be noted that he has stated that these receipts which are in relation to the amount received from Manaswi Gautam are signed by him, the same were signed and given by him on the assurance of Manaswi Gautam that he would provide the funds but later on he could not provide the same. Therefore, when the statement is read in whole there is no such contradiction as assumed by the Ld. CIT(A). (e) So far as the statement of Sh. Vikas Sharma as to the signing of receipt for the funds to be arranged by Manaswi Gautam and the cancellation receipt having been made with the assessee is concerned, it may be noted that since Manaswi Gautam has misplaced the cheque and receipt which could not be traced out even reminding him 4-5 times, Sh. Vikas Sharma obtained the cancellation receipt from the assessee who is father of Manaswi Gautam and a person of repute in the society so that such receipt is not misutilised. This fact all the more establishes the genuineness of the cancellation receipt which has been presumed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings at Page 34 of the order:- In the case in hand, when the documents seized during the course of search in case of Shri DP Sehgal do not establish conclusively the fact of alleged loan of ₹ 15 crores, then the said material can be a relevant evidence but in the absence of any other corroborative material to show the actual transaction and movement of money, it is not established that the transaction of loan of ₹ 15 crores in cash has actually taken place between the assessee and Shri DP Sehgal. We have already discussed the contents of the acknowledgment and arrived at the conclusion that these documents itself do not establish the transaction of loan but these are only submitted in advance for proposal of loan which was not materialized and this fact is also corroborated by the subsequent sanction of loan by AU Finance Ltd. Accordingly, in the facts and circumstances of the case as discussed above, we hold that the revenue has failed to establish conclusively and beyond doubt that the actual transaction of ₹ 15 crores has taken place between the assessee and Shri DP Sehgal, hence the penalty levied under section 271D is not sustainable and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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