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TMI Blog2023 (3) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... calculated thereon - HELD THAT:- All the transactions found noted in the registers, BS-01 and BS-02 actually pertained to the partnership firm, M/s Motilal Gopikishan and did not relate to the assessee in his individual capacity and accordingly, we find that there was no justification for making any addition to the total income of the assessee on account of amounts found noted in the registers, BS-01 and BS-02 against the names of various parties/ projects and notional interest computed thereon by treating it as unaccounted investment of the assessee. We also find force in the alternative contention of the Ld. Counsel that daily balance in the registers found during the course of search and inventorized as BS-01 and BS-02 was either Rs. 10,00,000/- or less on each of these days and therefore, the addition in dispute before us should have at most been Rs. 10,00,000/- and not Rs. 1,53,83,960/-. We are of the considered opinion that there was no justification for making addition to the total income of the assessee on account of alleged amount of unaccounted cash investment made in the name of various parties and interest calculated thereon by treating it as unaccounted/ undiscl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act ) for Assessment Year (hereinafter referred to as A.Y. ) 2018-19 with the following grounds: 1. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in law in deleting the addition of Rs. 1,88,800/- u/s 69 of the Income Tax Act on account of unexplained Cash loans given to various persons interest earned thereon. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in law in deleting the addition of Rs. 1,53,83,960/- u/s 69B of the Income Tax Act on account of unaccounted/ undisclosed cash investment made interest thereon in names of various parties. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in law in deleting the addition of Rs. 56,05,000/- u/s 69B of the Income Tax Act on account of unaccounted/ undisclosed investment made in cash in C.K. Greens, Burhanpur. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in law in deleting the addition of Rs. 1,07,000/- u/s 69A of the Income Tax Act on account of cash receipts, which is admitted by the assessee in the statements. 2. The assessee is a partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various parties as noted in the assessment order along with the copy of capital account of the assessee in the books of M/s Motilal Gopikishan for the period from 01.04.2011 to 31.03.2018 in support of cash withdrawn from the firm, M/s Motilal Gopikishan so as to substantiate that the assessee was having sufficient balance of cash available with him to justify the source of loans advanced by him to few of the parties on temporary basis. The Ld. Counsel further submitted that interest income of Rs. 85,410/- earned from such advances was actually received on 27.04.2018 i.e. during the F.Y. 2018-19 and accordingly, the said amount of interest income was duly offered for tax in the income-tax return of the assessee for the A.Y. 2019- 20. Accordingly, the Ld. Counsel submitted that there was no justification for making addition to the total income of the assessee on account of alleged amount of cash loans given to various persons and interest calculated thereon. 6. On the other hand, the Ld. DR supported the findings of the Ld. AO. 7. We have heard the respective parties and perused the relevant material available on record. The Revenue is aggrieved with the findings of Ld. CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no justification for making addition of Rs. 1,88,800/- to the total income of the assessee on account of alleged amount of cash loans given to various persons and interest calculated thereon by treating it as undisclosed income under section 69 of the Act, which has been rightly deleted by the Ld. CIT(A). Hence, we do not find any infirmity in the findings of the Ld. CIT(A) and accordingly, the deletion of addition of Rs. 1,88,800/- made by the Ld. CIT(A) is just and proper so as to warrant no interference. Hence, Ground No. 1 of the appeal preferred by Revenue is found to be devoid of any merits and, thus, dismissed. Ground No. 2:- 10. The Revenue through this ground of appeal has challenged the deletion of addition of Rs. 1,53,83,960/- made by the Ld. AO on account of alleged amount of unaccounted cash investment made in the name of various parties and interest calculated thereon by treating it as unaccounted/ undisclosed investment under section 69B of the Act. 11. The brief fact leading to the case is this that the Ld. AO on perusal of BS- 01 and BS-02 found and seized during the course of search from the residential premises of the assessee observed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... psis filed before us. On the basis of the screenshots of relevant extract of BS-01 and BS-02, the Ld. Counsel submitted that these papers contained day-to-day jotting of amounts in the name of various parties in respect of transactions of the firm, M/s Motilal Gopikishan for the purpose of maintaining control and also for remembrance as well as details with respect to stock of Toor dal, Moong Mogar, Urad Mogar, Rice and various other products related to the day-to-day business carried on by the firm, M/s Motilal Gopikishan. Hence, the Ld. Counsel vehemently argued that the Ld. AO adopted the approach of pick and choose and picked only few of the transactions from these papers which contained the names of the parties and corresponding amounts and ignored the remaining transactions which contained details with respect to stock of Toor dal, Moong Mogar, Urad Mogar, Rice and various other products related to the day-to-day business carried on by the firm, M/s Motilal Gopikishan which proved that these papers and transactions contained therein actually pertained to the firm, M/s Motilal Gopikishan. The Ld. Counsel further submitted that nothing was found during the course of search to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order picked certain entries as found recorded in BS-01 and BS-02 and added the same to the total income of the appellant by treating the same as advanced by the appellant. The appellant before the assessing officer clearly stated that these entries relate to his firm M/s Motilal Gopikishan and not relates to the appellant in his Individual capacity. The assessing officer brushed aside the explanation of the appellant and treated the same as related to the appellant without assigning any reason which was not the correct approach of the assessing officer. The addition made by the assessing officer in the hand of the appellant when transactions recorded in the BS-01 and BS-02 relates to the firm M/s Motilal Gopikishan is therefore not justified more so when the nature of transactions were duly explained and also found recorded in the books of account of the firm. 4.4.5. The difference of the opening and closing balance of particular day is less than Rs 10,00,000/- and cash balance as per book of the firm M/s Motilal Gopikishan and in the book of the appellant was higher than the difference as calculated. Hence, on this count also the assessing officer was not justifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him to look into the same whenever the need arises to do so for his future purpose. Admittedly the said diaries were not being maintained on day-to-day basis in the course of business. There is no mention of the dates on which the alleged payments were made. In fact the entries there in are on monthly basis. Even the names of the persons whom the alleged payments were made do not find a mention in full. They have been shown in abbreviated form. Only certain 'letters' have been written against their names which are within the knowledge of only the scribe of the said diaries as to what they stand for and whom they refer to. 19. With respect to evidentiary value of regular account book, this Court has laid down in V.C. Shukla, thus; 37. In Beni v. BisanDayal it was observed that entries in books of account are not by themselves sufficient to charge any person with liability, the reason being that a man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of the parties. There must be independent evidence of the transaction to which the entries relate and in absence of such evidence no relief can be given to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the Assessing Officer finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year. In the present case, nothing valuable was found in possession of the appellant. The diary as referred by the assessing officer is a dumb document and therefore the assessing officer was not justified in making any addition to the total income of the appellant under section 69B of the Act. The appellant also succeeds in this ground also. The addition as made by the assessing officer amounting to Rs: 1,53,83,960/- under section 69B of the Act is not justified and hereby Deleted. Therefore, the appeal on this ground is Allowed. Since the additions as made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove, we are of the considered opinion that all the transactions found noted in the registers, BS-01 and BS-02 actually pertained to the partnership firm, M/s Motilal Gopikishan and did not relate to the assessee in his individual capacity and accordingly, we find that there was no justification for making any addition to the total income of the assessee on account of amounts found noted in the registers, BS-01 and BS-02 against the names of various parties/ projects and notional interest computed thereon by treating it as unaccounted investment of the assessee. 20. We also find force in the alternative contention of the Ld. Counsel that daily balance in the registers found during the course of search and inventorized as BS-01 and BS-02 was either Rs. 10,00,000/- or less on each of these days and therefore, the addition in dispute before us should have at most been Rs. 10,00,000/- and not Rs. 1,53,83,960/-. We have also gone through the summary chart containing the day-wise balances found noted in BS-01 and BS-02 along with the day-wise availability of cash in the books of M/s Motilal Gopikishan and in the books of the assessee on these days which was placed on Page No. 225-232 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal, the addition was deleted by the Ld. CIT(A). Hence, the instant appeal has been filed before us by the Revenue. 24. The Ld. Counsel for the assessee submitted that the relevant pages of LPS- 11 referred to by the Ld. AO while making the aforesaid addition constituted dumb documents since there was no reference about any investment being made by the assessee in his name in C K Greens project in those papers. The Ld. Counsel further submitted that those papers merely contained reference of some amounts on the basis of which it was presumed by the Ld. AO that the assessee made investment in cash to retain plot in C K Greens colony. The Ld. Counsel submitted that the assessee during the course of assessment proceedings as well as first appellate proceedings categorically explained that neither he nor any of his family members made any investment towards purchase of plot in C K Greens project related to M/s Rudra Developers, Burhanpur and that the plots in C K Greens project were booked through his son, Shri Rahul Bansal but not actually by him. The Ld. Counsel also pointed out to the fact that the Ld. AO herself while passing the assessment order in the case of Shri Rahul Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... related to C K Greens, Burhanpur. Accordingly, the assessing officer issued a show cause notice dated 13-11-2019 during the course of search assessment proceedings wherein the respondent was requested to show cause as to why an amount of Rs. 56,05,000/- should not be treated as unaccounted cash credit for the Assessment Year 2018-19. Copy of show cause notice dated 13-11-2019 as issued during the course of search assessment proceedings have already been filed on page nos. 49-90 of paper book filed before the Hon ble Bench. 3.2.2] The respondent categorically stated during the course of search assessment proceedings and also during the course of appellate proceedings that neither the respondent nor any of his family members made any investment towards purchase of plot in C K Greens project related to M/s Rudra Developers, Burhanpur. It was categorically explained that plots in C K Greens project were booked through the son of the respondent, Shri Rahul Bansal but not actually by him. The screenshot of the relevant extract of the submission filed during the course of search assessment proceedings is reproduced hereunder for ready reference of the Hon ble Bench: 3.2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of which it was presumed by the assessing officer that the respondent made investment in cash to retain a plot at C K Greens. In fact, the assessing officer herself mentioned in the assessment order that it could be PRESUMED that the deal would have been completed and amount of Rs. 53.20 might have been received or paid. The screenshot of the relevant extract of the assessment order is also reproduced hereunder for ready reference of the Hon ble Bench: 3.3.3] On perusal of the screenshot as reproduced hereinabove, it would be abundantly clear that the assessing officer made the addition merely on the basis of guess work and presumption since she herself was not sure as to whether the amount of Rs. 53.20 mentioned in the loose papers comprised of the amount received or paid by the respondent. Hence, it is beyond our understanding as to how the assessing officer made addition of Rs. 53,20,000/- to the total income of the respondent merely on the basis of a dumb document which contained no information whatsoever except for an amount of Rs. 53.20 which was mentioned on such loose paper. 3.3.4] Moreover, it also seems on perusal of the assessment order that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total income of the respondent more so when cost of investment in such plot was added in the case of Shri Rahul Bansal. 3.3.8] In view of the detailed reasons as listed hereinabove, it can be satisfactorily concluded that addition of Rs. 56,05,000/- made to the total income of the respondent on account of alleged unaccounted investment made in cash in C K Greens, Burhanpur of Rs. 53,20,000/- and profit earned thereon on sale of such investment of Rs. 2,85,000/- was neither legal nor proper and Ld CIT(A) was correct in deleting the aforesaid addition as made to the total income of the respondent. 3.4.1] It is worth mentioning that C K Greens colony was developed by M/s Rudra Developers in which Smt. Richa Bansal, daughter-in-law of the respondent was one of the partners. The Plot No. 21 and Plot No. 23 in C K Greens colony were booked through the son of the respondent, Shri Rahul Bansal. It was for this reason that papers related to the said plots were found in possession of the respondent. However, as stated above, the neither the respondent nor any of his family members made any investment towards booking of plot at C K Greens, Burhanpur. 3.4.2] Detail of Plot N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) while allowing the appeal preferred by the assessee observed as follows: 4.5.2. On perusal of the assessment order and submission as filed by the appellant, it is clearly evident that the documents as referred by the assessing officer was not a regular book of account and merely a slip which does not bear even the name of the person who has invested and Plot No was also missing. The said documents clearly fall under the definition of dumb documents, it has no evidentiary value and the same cannot be admissible as evidence under section 34 of the Evidence Act. Further, the assessing officer also added investment of Plot in C K Greens Burhanpur in the hands of Shri Rahul Bansal, in that case, how sale can be added in the hand of the appellant. The assessing officer herself was not clear in which file she wants to add, the investment on the basis of loose paper was added in the case of Shri Rahul Bansal and also added in the case of the appellant. The said approach of the assessing officer was not correct. It is the duty of the assessing officer to collect information from the owner M/s Rudra Developers about the investment by the appellant or any other members of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chaser of these plots which puts to rest the unsubstantiated theory of the Ld. AO that the assessee made investment in C K Greens, Burhanpur in cash to retain a plot which was sold and profit was earned thereon. Further, we observe that the Ld. AO failed to collect information directly from M/s Rudra Developers, developer of C K Greens colony, regarding any investment made by the assessee in the said colony. We also find strong force in the contentions of the Ld. Counsel that the Ld. AO herself while passing the assessment order in the case of Shri Rahul Bansal made addition on account of alleged unaccounted cash investment made towards booking of plot situated at C K Greens, Burhanpur in the Assessment Year 2015-16 and accordingly, we are of the opinion that there was no rationale for taxing the amount of sale proceeds in the hands of the assessee since cost of investment made in such plot had been taxed in the hands of Shri Rahul Bansal and as a corollary, the assessee could not have sold the plot which was never purchased by him. Looking to the totality of the facts involved in the present case, we are in agreement with the contentions of the Ld. Counsel that the assessee did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of transaction contained therein. The Ld. Counsel further submitted that the amount of Rs. 1,07,000/- was received by the assessee against sale of plot executed through him in Phase II of Pranam City and that the amount received was handed over to the owner of Pranam City and no commission was received by the assessee in the said deal. Alternatively, the Ld. Counsel also submitted that even if the assessee received advance of Rs. 1,07,000/- in cash from Shri Ashwini Gupta in respect of sale of plot; then too, the amount of advance received by the assessee could not have been taxed as his income only when the sale deed would have been subsequently executed. Accordingly, the Ld. Counsel submitted that there was no justification for making addition to the total income of the assessee on account of alleged amount of cash receipt. 33. The Ld. DR supported the findings of the Ld. AO. 34. We have heard the respective parties and perused the relevant material available on record. The Revenue is aggrieved with the findings of Ld. CIT(A) in deleting the addition of Rs. 1,07,000/- made on account of alleged amount of cash receipt. We find that the Ld. CIT(A) while allowing the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een deleted on merit. Therefore, the charging of tax liability as per amended provisions of section 115BBE on these grounds is academic in nature and having no impact on the fate of these grounds. 35. The above findings of the Ld. CIT(A) have not been controverted by the Ld. DR. The facts discussed above squarely reveal that the assessee received advance amount of Rs. 1,07,000/- against sale of plot executed through him in Phase II of Pranam City and such amount was stated by the assessee to have been handed over to the owner of Pranam City. We further observe that even if the amount of advance received by the assessee ought to have been taxed in his hands, such amount of advance could have been taxed only in the year in which sale registry was executed. However, the Ld. AO has failed to bring on record any material to show that actual sale of plot was made by the assessee and that too during the year under consideration. In absence of such findings, we are unable to the accept the contentions of the Ld. AO and accordingly, we are in agreement with the findings of the Ld. CIT(A) having no rationale for making addition to the total income of the assessee on account of alleged ..... X X X X Extracts X X X X X X X X Extracts X X X X
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