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TMI Blog2022 (4) TMI 1181X X X X Extracts X X X X X X X X Extracts X X X X ..... have corroborated the said transactions with the books of accounts of the assessee. But no such evidences were collected by the Assessing Officer to corroborate the seized material before completing the assessment of the assessee. Coming to the nature of seized material found during search, we observe that the seized data was maintained by Shri Joydeep Basu but he is stated to be only recording the entries. He is stated to be doing as per the inputs provided by Shri Neel Kamal Berry. Shri Neel Kamal Berry is stated to be receiving instructions from Sanjay Mitra and Puneet Dalmia. It is evident from the above that, even as per Department, the person carrying out the transactions, person recording the transactions and person giving instructions are different. This is to be seen in the light of the fact that Dalmia Group have disown the seized data while filing the application before Settlement Commission. We observe that the amount of addition admitted before the Settlement Commission by the Dalmias is way too small than the addition made in the case of the assessee. Although the Department has strongly objected this before the Settlement Commission the application has been acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... criminating documents were found. It is the case of the Department that the incriminating document found from the premises of Dalmia Group reveals unaccounted cash transactions between Dalmia Group and Jain Group of which assessee is a main person. The necessary information was passed on from the DDIT (Inv), New Delhi to the Assessing Officer at Mumbai. Consequently, a notice u/s.148 of the Act was issued by the Assessing Officer on 22.11.2013. During the course of the assessment proceedings, it was pointed out to the assessee that various documents found from the premises of the Dalmia Group reveal the cash transactions between Dalmia Group and the assessee. The assessee was asked to show cause as to why the addition should not be made in respect of such cash transactions. In response, the assessee flatly denied having entered into any cash transactions with Dalmia Group. The Assessing Officer rejected the explanation of the assessee and proceeded to determine the undisclosed income arising out of the cash transactions recorded in the seized documents. The Assessing Officer thereafter made a detailed discussion about the contents of the seized documents. The Assessing Officer has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (Finance) of Dalmia Bharat Enterprises Ltd and Shri Sanjay Mitra, acting as the head of the team for handling cash transactions, revealed that the instructions start from the Dalmias and flow through Shri Sanjay Mitra, Shri Neel Kamal Berry and Shri Joydeep Basu, in that order, for executing discreet unaccounted cash transactions/receipts and payments. Relevant evidences have been supplied to the assessee. 13.5 It is to be noted that Shri Joydeep Basu, regularly and systematically, maintained the details of unaccounted cash transactions on a pen drive. Some of the details, as contained in the pen drive, match with the contents of the documents, seized from the residence of the Dalmias. In the pen drive, one folder named SJ Files is stored The folder Si Files contain three folders namely Meeting on 9.78.2011 , reciprocal and strd files . 13.6 The details in structured Accounts and reciprocal , stored on the pend drive of Shri Joydeep Basu, have been discussed at length in the questionnaire issued. The transactions of shares appearing in strd filed of SJ Files reflect cash paid on the given dates to Shri Anand Jain. The details of shares, share holding, capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The condition for giving them this option to buy or to enable selling to a person of their comfort was that Dalmias will ensure that there is no loss on these shares including reimbursement of an interest of 12% per annum. Therefore, they provided an lCD of ₹ 40 crores, ₹ 10 crores as debenture application money and ₹ 34 crores as cash to ShriAnand lain. 13.10 In paras 11.15 to 11.17, of the questionnaire issued, the details of transactions and issues relating to funds provided, debenture application money and payments made, are discussed. The details of interest accrued and reimbursement of capital are discussed in paras 11.20 and 11.21 of the questionnaire. 13.11 The issues relating to transactions in shares appearing in the file 'reciprocal' of SI files are discussed at length in para 12 of the questionnaire. 13.12 The seized documents and data contain unaccounted cash transactions, which are not part of the books maintained by the Dalmias and their related business entities. Some of the seized documents are in the handwriting of Shri Yadu Hari Dalmia. Some of the details in the seized documents match with the details stored on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on such shares transferred such profit to the other party in the form of cash or profits. In his settlement, total amount ₹ 84.16 crores has been received by Shri Anand Jain. Out of this ₹ 84.16 crores, ₹ 54.50 crores have been paid in the form of profits and ₹ 29.66 crores have been paid in the form of cash. Out of the profits of ₹ 54.50, ₹ 47 crores (₹ 27 crores + ₹ 20 crores) are received in the A 2007-08 and ₹ 75 crores appear to be received by Shri Jain in FY 2008-09. (Refer Path: H./SJ Files/Reciprocal/SJ reciprocal MIS July 5 2011/Sheet 3). Cash of ₹ 29.66 crores is received by Shri Jain in the FY 2009-10. Accordingly, the amounts of ₹ 47 crores in the A Y 2008-09, ₹ 75 crores in the A V 2009-10 and ₹ 29.66 crores in the A Y.2010-11, in the hands of Shri Anand jain, become relevant. The assessee was required to furnish explanation. 6. The above referred cash payment has been alleged to be made by Dalmia Group to the assessee during the year under consideration. The case of the A.O., based on his interpretation of the seized material, is that the assessee is holding certain shares of the liste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case and in law, the Ld. C.I.T.(A) has erred in deleting the addition in respect to the addition made by the A.O. for ₹ 47.00 Crores holding that documents seized from the premises of Dalmias of Delhi is not conclusive evidence. 2. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of AO be restored. 3. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. 10. At the time of hearing, Ld. DR submitted that the seized documents are meticulously maintained and the transactions with the assessee have been clearly reflected in the said seized documents. The attention was invited to various seized pages which are at page No. 1 to 16 of the assessee's paper book. The Ld. DR has drawn attention to various seized documents and pointed out that the amount of ₹.47 crores have been mentioned on seized page No. 21 (PBP 14) wherein it has been clearly mentioned that the profit of ₹.20 crores have been paid up to 31.12.2007 and ₹.27 crores has been paid during January to March 31, 2008. It was also pointed out that the heading of the seized page details of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8] 404 ITR 433 (Madras) b. Smt Dayawanti v. CIT [2017] 390 ITR 496 (Del.) c. Smt. Vasantibai N. Shah v. CIT [1995] 213 ITR 805 (Bombay). d. Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC) e. S. P. Jaiswal v. CIT [1973] 224 ITR 619 (SC) 14. On the other hand, Ld. AR submitted that the real issue to be decided in the present case is not as to whether the seized documents are meticulous or complete. The real issue to be decided is as to whether the documents found from the premises of third party can be relied upon for making the addition in the hands of the assessee. Thus, the principal argument of the assessee is that the addition on the basis of seized material found during the course of search from third party cannot be sustained. This is more particularly so when the assessee has consistently and categorically denied any cash transactions. Further, not only there is no corroboration of the seized documents but the details of the shareholding, allegedly held by the assessee, has not been shown to be existing at all. Thus, the seized documents are uncorroborated. He submitted that this proposition is supported by the series of judicial pronouncements, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of payment by the assessee was found during the course of the search. Merely recording made by a third party or statement of a third party could not be treated as so sacrosanct so as to read as a positive material against the assessee. Therefore, addition in the hands of the assessee on account of 'on-money' was notjustified iv) ACIT v. Prabhat Oil Mills [52 TTJ 533 (Ahd)] - Pg. nos. 38-43 In this case, the department relied upon certain notings in the seized diary found from the premises of third party and contended that the assessee had made sales outside the books of accounts. However, the assessee denied of having made any sales outside the books of accounts. The Hon'ble Tribunal held that once the assessee denies the transaction, the onus was on the Assessing Officer to prove with corroborative evidence that the entries in the seized diary represented sales outside books of accounts. The Hon'ble Tribunal further held that mere entries in the accounts of third party was not sufficient to prove that assessee had indulged in transaction outside books of accounts. Further, in para 9 of the order, the Hon'ble Tribunal also rejected the argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered the rival submissions and material placed on record. We observe from the record submitted before us that there was a search at the premises of Dalmia Group and certain incriminating documents were found, it revealed alleged unaccounted cash transactions between Dalmia Group and Jain Group. The revenue considered the fact that the assessee is the main person in Jain Group, the DDIT (Inv), New Delhi referred the issues to the assessing officer, accordingly reassessment proceedings were initiated in the case of the assessee. When the above findings were confronted with the assessee during the assessment proceedings, we observe from the record that the assessee has consistently denied having any transactions with the Dalmias. From the record submitted before us, such stand of the assessee was communicated to the Assessing Officer vide letter dated 04.03.2014 (Para no. 3.1 of assessment order). Further communication to this effect was made vide letter dated 20.03.2014 addressed to the Assessing Officer (Para no. 3.2 of assessment order). Further, we observe that the Assessee's statement was recorded u/s.131(1) of the Act on 11.05.2012 by ADIT (Inv), New Delhi, who had carrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cants by the department ........ 19. Further we observe that in reply to Rule 9 report reproduced on Page no 18 of the order, Dalmias have stated that 'the employees who were recording/executing the transactions were not actually aware of the whole/correct import of the transaction. They have further observed at page 21 of the order that none of the Dalmia family member was present at the time when the pen drive was seized or cloned. It is their claim that 'hence, the ownership and authenticity of the contents of the pen drive per se is not clear'. We observe that the amount of addition admitted before the Settlement Commission by the Dalmias is way too small than the addition made in the case of the assessee. Although the Department has strongly objected this before the Settlement Commission (Pg no 13 of ITSC order), the application has been accepted and nothing has been brought on record to show that the order of the Settlement Commission has been reversed or even challenged. In any case, even if the person from whom the documents have been found out have accepted the Correctness of transaction before the Settlement Commission, in our considered view, the same i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has given a firm and categorical statement on the first day itself. 22. In our view, the AO has not conducted any independent enquiry or made any efforts to corroborate the seized pages or link it to assessee. The entire assessment has been made without bringing on record any evidence but merely relying on statements made by persons from Dalmia Group and AO s perceptions/presumptions. 23. Further, as regards the argument of the Ld. DR that the cheque transactions with two companies are corroboration of seized material it is observed that the cheque transactions are not of the assessee. Transactions other than cheque transactions do not get established automatically. Ld DR argued by relying on the Hon ble Jurisdictional High Court decision in the case of Smt. Vasantibai N Shah (supra) that there was nothing improper on the part of the AO in relying on circumstantial evidence in such a case for the purpose of arriving at the above finding in as much as no direct evidence in a transaction like the one in question was even possible. Circumstantial evidence in such cases was not impermissible because in such cases it was only the circumstantial evidence which would be available an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proper, more particularly so when Dalmia Group have disputed the contents of the pen-drive. Further reliance is placed upon the decision of Mumbai Bench of the Tribunal in the case of Simtools P. Ltd. v. DOT in ITA No. 1574/Mum/2020 dated 09.02.2022 wherein following the above referred decision of the Supreme Court, it was held that the electronic data cannot be relied upon in the absence of requisite certificate. 25. After considering the above discussion, in our considered view, the findings of Ld CIT(A) is proper and he has addressed the issue in right perspective. We do not see any reason to interfere with the findings of the Ld CIT(A). Accordingly, the grounds raised by the revenue is dismissed. 26. The identical issue has been involved in A.Y. 2009-10, 2010-11 and 2011-12 findings given in the para no 26 is applicable mutatis mutandis, accordingly the appeal filed by the revenue is AY 2009-10, 2010-11 and 2011-12 are also dismissed. 27. Additionally, in A.Y. 2011-12 the Department has raised a ground in respect of annual letting value of certain flats owned by the assessee. The said ground of appeal is reproduced as under: - 2. Whether on the facts and circumsta ..... 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