9911796707
TMI Blog2023 (9) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) has erred in treating the MOU in question as dumb document and deleting the addition made of Rs. 2,25,00,000/- on account of unexplained investment. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in treating the incriminating documents seized during the search action u/s. 132 of the Act in the case of Param Properties and deleting the addition made of Rs. 20,00,000/- on account of unexplained cash payments treating the documents seized as dumb document. 3. It is, therefore, prayed that the order the Ld. CIT(A)-4, Surat may be set aside and that of the AO may be restored to the above extent. 4. The appellant craves leave to add, alter, amend and/or withdraw any ground(s) of appeal either before or during the course of hearing of the appeal." 2. Brief facts of the case are that the assessee is individual, engaged in the business of diamond trading, filed his return of income for A.Y. 2015-16 on 28/09/2015 declaring income of Rs. 18,70,610/-. A search action under Section 132 of the Income Tax Act, 1961 (in short, the Act) was carried out on 04/09/2015 in case of Param Properties of Surat. During the course of search action, cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d has no evidentiary value. The reply of assessee was not accepted by Assessing Officer. The Assessing Officer held that the MOU in question is correctly and accurately contained the details of property. The land in question is actually registered in the name of one of the partner whose name appears in the MOU and thirdly as per MOU, the partners of property shall carry out development work in the land and if in future, in case the property is sold, they will divide the sale consideration after deducting the expenses. In the statement recorded in search action, partner of Param Properties stated that the assessee was having share of 36%. MOU was seized from the premises of Param Properties. Their partner admitted about the deed for purchase of land and disclosed unaccounted cash investment of Rs. 50.00 lacs, though, he stated that he received back cash in May, 2015. The said amount was surrendered as his disclosure as income for A.Y. 2016-17. On the basis of such observation, the Assessing Officer made addition of Rs. 2.25 crores under Section 69 of the Act. 4. The Assessing Officer further noted that in the search action on Param Properties, certain other loose papers were found, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties cannot be brushed aside. The Assessing Officer on the basis of his aforesaid observation, made addition of Rs. 20.00 lacs in the hands of Param Properties on protective basis and in the hands of assessee on substantive basis. 6. Aggrieved by the additions in the assessment order, the assessee filed appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee filed his detailed written submissions on all the additions. On the addition, on the basis of MOU of Rs. 2.25 crores, the assessee stated that the documents of MOU is seized from the third party, is unsigned MOU/partnership deed. The same is on plain paper. It does not contain any consideration whatsoever to have been passed/invested by assessee. There is no statement of the said parties that the assessee has executed the said deed or made any investment in the partnership. Further the partnership deed is allegedly for development of farm house on the land owned by one Asheshbhai N. Doshi by contributing the development expenses in equal proportion and the profit on sale thereof, would be distributed amongst the partners as per their profit share in ratio. There is no evidence whatsoever suggesting any investment by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has entered into any such transaction with Param Properties. The assessee also stated that the addition was made on the basis of documents seized from third party without providing opportunity of cross examination of said third party which is absolutely illegal, bad in law and required outright annulment. To support all his submission, the assessee relied upon the decision of Hon'ble Apex Court in Andaman Timber Industries V CCE (2015) 281 CTR 0241 (SC), Hon'ble Gujarat High Court in DCIT Vs Mahendra Ambalal Patel (2010) 40 DTR 0243 (Guj), CBI Vs V.C. Shukla AIT 1998 SC 1406, Common Cause & Others Vs UOI & Ors. (2017) 98 CCH 0028 (SC), Hon'ble Bombay High Court in CIT Vs Lavanya Land Pvt. Ltd. (2017) 397 ITR 0246 (Bom). 8. The ld. CIT(A) after considering the submissions of assessee and the contents of assessment order deleted all the additions made by Assessing officer. On the addition of Rs. 2.25 crores, the ld. CIT(A) held that MOU was found at the premises of third party. Such MOU was not signed by the parties. Development work mentioned in the MOU was never undertaken. The property is still in the name of Asheshbhai Bhai Nanalal Doshi. The additions of figure ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s paper, the partner of Param Properties while replying to question No. 5 stated that abbreviation "M.C." refers to a broker Manojbhai and not the assessee. Further Shri Agam v. Vadecha while filing written submission dated 08/12/2015 before the Investigation Wing reported that M.C. is a broker whose name is Manojbhai with whom they carried out resale deal transaction. On the aforesaid basis, the ld. CIT(A) concluded that the documents are neither in the handwriting of assessee nor signed by assessee were found from the third party. The third party identified 'M.C.' as some other person Manojbhai and not the assessee. The complete name of assessee is not written on such papers. Such fact clearly shows that the documents are dump document as far as assessee is concerned and making addition on relying on such document is not justified. The ld. CIT(A) also held that case is also covered by the binding decision of Hon'ble Apex Court in CBI Vs V.C. Shukla and Common Cause and Ors Vs Union of India (supra). On the observation of Assessing Officer about the backup of i-phone of Agam v. Vadecha, the ld. CIT(A) held that storing of assessee's telephone number in others phone cannot be the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities carefully. The Assessing Officer made addition by taking a view that as per MOU, the assessee was having 24% share in the land and Param Properties was having 4% share. The partner of param Properties has stated that they made part payment of Rs. 25.00 lacs in cash for 4% of their share. The Assessing officer took his view that 4% share of property is valued at a minimum of Rs. 25.00 lacs then the total actual value of entire property would be of Rs. 6.25 crores. The Assessing Officer noted that the assessee questioned the sanctity of MOU on the ground that it is not signed and has no evidentiary value. The Assessing Officer held that the MOU in question correctly and accurately described the property, the land in question is actually registered in the name of one of the partner. In the statement, partner of Param Properties stated that the firm was 4% share. As purchase deed of property was seized from the premises of Param Properties which was registered on 31/3/2014 and the details of property is identical as mentioned in the MOU. The Assessing Officer on the basis of his aforesaid observation drawn his conclusion that the assessee made payment of Rs. 1.50 crore for purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of search which may contain details of payment of Rs. 1.50 crore paid by assessee for purchase of land. On the basis of the said observation, the ld. CIT(A) deleted the entire addition. We find that the Ld. CIT(A) on proper appreciation of fact correctly held that the additions made by the assessing officer is not based on evidence on record. No contrary facts or law is brought to our notice to take other view, hence, we affirm the order of Ld. CIT(A). in the result, the grounds of appeal raised by the revenue are dismissed." 13. Considering the aforesaid categorical decision of this Bench on the basis of same set of fact with respect to same document, seized from the premises of Param Property, wherein similar addition was deleted by ld CIT(A), which we affirm in our order, therefore following the principle of consistency, we affirm the order of ld CIT(A). We again find that similar addition was made against Asheshbhai Nanalal Doshi in the assessment completed under section 153C, on appeal the ld CIT(A) deleted the said addition, and the order of ld CIT(A) was affirmed by this Tribunal in IT(SS)A No.07/Srt/2021 dated 2108.2023. 14. The Hon'ble Delhi High Court in CIT Vs Gain Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws as relied against ground No. 1 of the appeal as well as the following case laws: * K.P. Varshese Vs ITO 7 Taxman 13 (SC) * Common Cause (A Registered Society) Vs UOI (2017) 394 ITR 220 (SC) * CIT Vs P.V. Kalyanasundaram (2007) 294 ITR 49 (SC) * Umacharan Shaw & Bros Vs CIT (1973) 37 ITR 271 (SC) * Lalchand Bhagat Ambica Ram Vs CIT (1959) 37 ITR 288 (SC) * Dhakeshwari Cotton Mills Ltd. Vs CIT (1954) 26 ITR 775 (SC) * CIT Vs Maulikumar K. Shah 307 ITR 137 (Guj) * Govindbhai N. Patel Vs DCIT 41 taxmann.com 147 (Guj) * CIT Vs Lavanya Land (P) Ltd. (2017) 83 taxmann.com 161 (Bom) * ACIT Vs Miss Lata Mangeshkar (1974) 97 ITR 696 (Bom) * CIT Vs Anil Khandelwal (2015) 93 CCH 0042 (Del) * CIT Vs S.M. Aggarwal 162 Taxman 3 (Del) * CIT Vs Praveen Juneja ITA No. 56/2017 (Delhi HC) * CIT Vs Vineeta Gupta 46 taxmann.com 439 (Del) 17. We have considered the submissions of both the parties and perused the record carefully. We have also deliberated on the case laws relied by the lower authorities as well as by the ld. AR of the assessee. We find that the Assessing Officer made addition of Rs. 20.00 lacs under Section 69C of the Act on account of unexplained cash paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Complete name of assessee is not mentioned on these papers. Other names are also written on these papers. The ld. CIT(A) treated such paper as dump document and by referring the decision of Hon'ble Supreme Court in CBI Vs V.S. Shukla and Common Cause & Others Vs UOI & Ors. (supra) wherein it was held that when documents were found from third party and entries were not confirmed that those entries belong to assessee, there was no question of any assumption or believe that such entry belongs to assessee and no addition can be made. On the observation of Assessing Officer with regard to back up of I-Phone of Shri Agam V. Vadecha, the ld. CIT(A) held that storing the assessee's phone number and other persons' mobile number cannot be the basis for making addition, particularly even after taking backup of I-Phone, no communication was found which remotely indicate that the assessee has undertaken such transaction recorded in the seized material. The Assessing Officer's finding in treating the abbreviation 'M.C.' pertaining to the assessee is not justified and deleted the entire addition. We also find that the Assessing Office has not made any independent investigation nor brought any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. There is no such reference in the assessment order. The assessee or his relative have not made any booking or shown purchases through Param Properties in Star Galaxy, Florence or SNS Interio as featured in the seized document from Param Properties. Thus, addition of unaccounted payment of Rs. 1.47 crore was deleted. So far as deleting the addition of Rs. 5.21 crores on accounted receipt, the ld. CIT(A) held that the Assessing Officer has considered duplicate entry to the extent of Rs. 1.52 crore, hence, such total addition needs to be deleted. Further none of the flat, shop as mentioned in the seized document, was purchased or booked by assessee. The ld. CIT(A) by reiterating his conclusion that he has already held that entries do not pertain to 'M.C.', therefore, such specific ground has become infructuous and not required any adjudication. 23. Before us, both the parties reiterated their submission as made for addition of Rs. 2.00 lacs in A.Y. 2015-16. We find that there is no independent investigation or corroborative material to make huge addition on the basis of mere assumption by drawing conclusion that 'M.C.' means Mahendra Champaklal Mehta (assessee) particularl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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