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TMI Blog2023 (9) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... e entries relating to the payments received by PWD for civil construction and maintenance work done for Medical College as deposit. But the assessee failed to adduce in support of the same either from Medical College or from the office of the PWD. Similarly the purchase of a Scorpio Vehicle, the assessee failed to prove that it belonged to the senior officer of the department, when various payments break-up are entered into the loose paper seized. Regarding Rs. 7,50,000/- treated as illegal gratification on the basis of loose paper seized, the assessee failed to substantiate the above payments were made to Shri Vinod Gupta, Anil Songra for the work done by them by PWD Department with necessary evidences. Thus the assessee failed to discharge the initial onus cast upon him/her. Unexplained expenditure - AO was not satisfied with the reply given by the assessee as the assessee has not given any details regarding the person mentioned as Sahab in the Loose Paper Seized nor has any proof of the claim of the payment of the amount mentioned in the Loose Paper seized by the so called Sahab has been furnished. The assessee has also not discharged its onus of submitting any documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Addition on account of cash found during the course of search - The Insurance Policy that too of higher denomination of Rs. 50,000/- and above cannot be paid by cash. Those transactions is to be routed through only cheques or DDs in favour of the Insurance Company. Further past savings of Rs. 86,000/- why it was seized from the briefcase of the assessee is not properly explained. In the absence proper explanation by the assessee with necessary evidences, the additions made by the Assessing Officer does not require any interference. Thus the ground raised by the assessee is hereby rejected. Addition towards Registry expenses for purchase of plot at Kerwa Dam - A.O. has rejected the explanation of the assessee that the payment is from the past savings of the assessee - Since the cash flow chart/statement of affairs of Smt. Bharti Bhasne submitted during the course of assessment proceedings already stand rejected and it was held that she was not having any regular source of income before commencing her work as an Insurance agent. The Ld. CIT(A) also confirmed that Smt. Bharti Bhasne did not have regular source of income before starting her profession as an agent of ICICI Prud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come 2005-06 - - 30.08.2010 1,56,460 9,77,460 2006-07 - - 30.08.2010 1,14,457 29,72,695 2007-08 - - 30-08-2010 1,25,890 32,83,890 2008-09 31.07.2009 1,43,110 30.08.2010 1,43,110 72,82,620 2009-10 31.07.2009 2,83,100 - - 1,03,25,004 Smt. Bharti Bhasne Asst. Years Original Return Return u/s. 153A Dated Income Dated Income Assessed Income 2005-06 NA NA NA NA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m tuition and no return prior to A.Y 2006-07 or after that had been filed by her. She had filed her returns of income only after search seizure operations. Her claim of earning from tuition was also not supported by any document. Thus, the appellant and his wife failed to prove that Smt. Bharti Bhasne had ever earned any income from tuition or beauty parlour etc. Considering the facts of the case, the AO was justified in rejecting the cash flow submitted by the appellant. Since Smt. Bharti Bhasne had no source of income, the AO was justified in holding that the source of investment in plots at Goragoan and payment for registry of plot at Kerwa Dam at Bhopal remained unexplained and assessing the same as unexplained investment of the appellant from undisclosed sources. Accordingly. the addition of Rs. 4,12,000/- in A.Y. 2006-07, of Rs. 2,65,000/- in A.Y. 2007-08 and of Rs. 30,000/- in A.Y. 2009-10 made on substantive basis in the hands of the appellant are confirmed. (B) Additions of Rs. 19,90,000/- in A.Y. 2007-08, of Rs. 50,09,528/- in A.Y. 2008-09 and of Rs. 67,64,000/- in A.Y. 2009-10 on account of unexplained investment in ICICI Prudential Insurance policy in the name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in the purchase of ICICI Prudential Insurance policies from the commission income earned from ICICI Prudential Insurance. The commission income was deposited in bank account which was utilized to purchase FD etc., whereas the investment in ICICI Prudential Insurance Policies was made by Demand Drafts of amounts less than Rs. 50,000/- purchased in cash. Smt. Bharti Bhasne had tried to explain the above investment mainly from following sources: (i) Amount of Rs. 51,00,000/- claimed to be received from Roshan Co-operative Housing Society after surrender of her rights in the property; and (ii) On account of cessation of customers liability of Rs. 5,03,531/- in A.Y. 2007-08, of Rs. 47,57,258/- in A.Y. 2008-09 and of Rs. 17,50,000/- in A.Y. 2009-10. From the facts of the case, it is evidently clear that both these sources were an afterthought made up story just to try to explain an unaccounted investment in ICICI Prudential Insurance Policies . As regards source of Rs. 51,00,000/-, it was claimed that the father of Smt. Bharti Bhasne had gifted a property to her before her marriage which was claimed to be purchased for Rs. 1,00,000/- in 1990 and she had surrendered her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h on surrendering of rights in the said property. In regard to cessation of customers' liability also, the story of the appellant is unbelievable. In the case of an LIC Agent, it is not the normal practice that investor would give amount in advance to the agent for a long time and normally the investor pays the amount through cheque or draft in the name of insurance company itself. Further, Smt. Bharti Bhasne had provided names of 18 customers from whom she had claimed to have received these amounts, which were later on claimed to be appropriated by her as cessation of liability. But when she was asked to produce these 18 persons who were claimed to be agriculturist, only 8 persons were produced and their statements were recorded. From the statements recorded it was found by the AO that there were contradictions in their statement and, therefore, could not be relied upon. The appellant also failed to explain satisfactorily the contradictions in their statements. Thus, this was also a made up story just to try to show availability of cash in the hands of Smt. Bharti Bhasne to explain unexplained investment by the appellant in the purchase of ICICI Prudential Insurance in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and had paid advance of Rs. 1,50,000/- only. This agreement was subsequently cancelled and Shri Mardan Singh had paid Rs. 25,00,000/- to Shri B.L. Bhasne (father of the appellant) who had purchased ICICI Prudential Insurance Policies in the name of the appellant. But it may be noted that the on investigation/ enquiry, Ld. AO had proved with cogent material that it was a made up story just to build up cash to show the source of purchase of ICICI Prudential Insurance Policies. It may be noted that during the course of search no such argument was taken by the appellant and rather the appellant's wife, Smt. Bharti Bhasme had surrendered the total investment in ICICI Prudential Insurance Policies including the policies purchased in the name of the appellant and agreed to pay tax thereon. The Ld. AO had successfully proved that the alleged agreement to purchase dated 13.05.2003 purported to be entered between appellant's father Shri BL. Bhane and Shri Mardan Singh was not genuine as it was shown that no such stamp paper was actually purchased from Shri Sayed Anwar Rizvi in the case of Shri Mardan Singh Vs. Shri B.L. Bhaste. The AO also found from the statement of Shri Mardan S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 292C reads as under: (ii) that the contents of such books of account and other documents are true; and As regards page no.41 of seized document LPS-11, it may be noted that in the submission before AO, the appellant admitted that the transactions recorded on this page relates to office work calculation of allotment receipts, whereas in the submission during appellate proceedings, it was contended that it was purely a dumb document and the same cannot be used as an evidence as the name, date and purpose were not mentioned on this page. This shows that the appellant is taking a different stands at different stage of proceedings, which cannot be relied upon. During assessment proceedings, it was stated that the transactions recorded on this page were related to work calculation of allotment receipts but the appellant failed to adduce any evidence from the office of P.W.D. to prove this contention. Thus, the appellant had not discharged his onus to properly explain the transactions recorded on this page. It was not a dumb document as the appellant himself admitted that on this paper transactions relating to government receipts were entered. This paper clearly mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 10.04.2006 for purchase of land . Hence, addition of Rs. 1,50,000/- on account of unexplained investment in the purchase of land for A.Y. 2007-08 is confirmed. (G) Addition of Rs. 51,579/- treating the same as illegal gratification on the basis of LPS-10 page 4 seized. 11.4 I have carefully considered the submission of the appellant and facts of the case. The appellant stated that this amount of Rs. 51,579/- was related to maintenance of government quarters. But the appellant failed to adduce any evidence whatsoever in support of his claim. In the absence of any evidence, the submission of the appellant cannot be accepted . Therefore, the addition of Rs. 51,579/- made by the AO is confirmed. (H) Additions of Rs. 4,30,000/- on the basis of transactions recorded on page 8 of LPS-10 seized from the residence of the appellant. 12.4 I have carefully considered the submission of the appellant and facts of the case! The contention of the appellant that this is a dumb document is not tenable because the appellant himself had admitted that the transactions recorded on this page pertained to purchase of a Scorpio Vehicle of Rs. 4,30,000/-. However, the appellant contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted income . Hence, addition of Rs. 53,828/- is confirmed. The appellant admitted that the entries written on this page as 40+ 40+ 20 below the names of 'Pathak', 'Raju' and 'More' are related to contractors. The appellant contended that these amounts pertained to the payments to be made to these contractors for the work done by them but the appellant had not adduced any evidence whatsoever in support of his contention that these were not payments received by him . Therefore, the AO was justified in making addition of Rs. 1,00,000/- as amounts received by the appellant from these contractors, who were undertaking contract work for roads under his jurisdiction. Hence, the addition of Rs. 1,00,000/- for A.Y. 2009-10 is confirmed. The appellant admitted that the entries written on this page as 100 = 35+20+ below the names of 'Abi' and 'Pandit' are related to contractors. The appellant contended that these amounts pertained to the allotment balances in regard to construction of roads in Raisen Division. But the appellant had not adduced any evidence whatsoever in support of his contention that these were not payments received by him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 82,000/- is confirmed. It may be noted that the appellant had reiterated the same submission as was made before the AO. The appellant failed to substantiate his claim with any evidence that these amounts relate to the payments made to the contractor by PWD Department and not commission/ illegal gratification received by the appellant . Therefore, the addition of Rs. 11,50,000/- is confirmed. The appellant reiterated the same submission as was made before the Ld. AO. The appellant had not mentioned the name of the person referred to as Sahab in the document. Had it been expenditure incurred for any official vehicle, the appellant could have furnished the relevant documents / confirmation from the office to explain the transaction. Since, the appellant had not discharged his onus to explain the source of expenditure of Rs. 63,576/- incurred for repairing of a vehicle, the AO was justified in treating the same as unexplained expenditure incurred by the appellant. Hence, addition of Rs. 63,576/- made by the AO in A.Y. 2009-10 on account of unexplained expenditure incurred by the appellant out of his undisclosed income is confirmed. The contention of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of statement of Shri R.K. Garg as well as the document impounded from his business premises containing an entry of payment of Rs.3,00,000/- to Bhasne ji, the appellant. But the appellant failed to rebut the fact that the name of the appellant was appearing in the incriminating documents found and impounded from the premises of Shri R.K. Garg. contractor. During assessment proceedings, the appellant had also not asked for cross examination of Shri R.K. Garg. Thus, the entries recorded in the incriminating document found from the premises of Shri R.K. Garg, which were corroborated by the statement of Shri R.K. Garg, contractor, proved clearly that amount of Rs. 3,00,000/- was paid to the appellant as illegal gratification . Therefore, the AO was justified in making addition of Rs. 3,00,000/- in the hands of the appellant for A.Y. 2009-10. Hence, the addition of Rs. 3,00,000/- is confirmed. 4. Aggrieved against the Appellate Orders, the assessees are in appeals before us raising various Grounds and the same are tabulated as follows: Consolidated Grounds of Appeal- late Jitendra Bhasne Smt. Bharti Bhasne Assessment Years Issues involved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - - - - - - 3 Rs. 3,86,000 Loose Papers found at premises of R.K. Garg - - - - - - - - 7 Rs. 3,00,000 Registry Expenses for Kerwa Dam Plot - - - - - - - - 8 3-4 Rs. 30,000 Bharti (Protective) 5. Ld. Counsel Shri Ashish Goyal appearing for the assessee argued in detail by filing a Paper Book running to 170 pages containing Statement of Affairs from the Financial Year 1994-95 to 2005-06, Certificate of Experience as Teacher, Certificate of Beautician, Certificate from Insurance Regulatory and Development Authority, Statement recorded during search, Returns filed by the assessee, Affidavits and Agreements entered between the parties, copy of the loose paper seized, etc. 5.1. Regarding the first ground of Loose Papers add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allotment receipts, whereas during the appellate proceedings before Ld. CIT(A), it was contended by the assessee that it was purely a dumb document and the same cannot be used as an evidence, as there is no name, date and purpose were not mentioned. Thus the assessee is taking a different stands at different stage of proceedings. Therefore the claim of the assessee is rightly rejected by the Ld. CIT(A) which does not require any interference. Further the assessee could not dispute the above position with relevant documents. 7. We have given our thoughtful consideration and perused the materials available on record including the Paper Book filed by the assessee. In these additions made by the A.O. on loose papers, the assessee has not justified the initial burden cast upon him/her by producing cogent evidences and materials. The assessee claimed that the transactions are relating to the office work calculation of allotment receipts, but the assessee failed to adduce any evidence from the office of PWD to prove his contention. 7.1. Regarding Rs. 1,50,000/- entry with loose paper seized, the assessee initially stated that these entries relating to the payments received by PWD f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the claim of the payment of the amount mentioned in the Loose Paper seized by the so called Sahab has been furnished. The assessee has also not discharged its onus of submitting any documentary evidence in respect of the claim that the transaction could be in the official record of the department. Had it been expenditure incurred for any official vehicle, the assessee could have furnished the relevant documents/confirmation from the office of PWD to explain the above transaction. However the assessee has not produced the Registration Certificate of the so called scorpio vehicle before any of the lower authorities to sustain his stand that it belongs to the higher officer or to the PWD Office. In the absence of any proof to that extent, the explanation offered by the assessee cannot be accepted. Thus the Assessing Officer was justified in treating Rs. 63,576/- as unexplained expenditure incurred by the assessee out of this undisclosed income. Therefore the same addition is hereby confirmed. 7.4. Regarding addition of Rs. 3,82,500/- on account of unexplained expenditure made by the assessee on the basis of seized loose papers LPS-9 Pages 1 11 seized during the course of sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive additions made in the hands of Smt. Bharti Bhasne are here deleted. 7.5. Similarly addition of Rs. 3,00,000/- recorded in loose papers from the premises of contractor, Shri R.K. Garg wherein the assessee s claim appeared in the loose seized along with other person names, the assessee has not asked for cross-examination of Shri R.K. Garg during the assessment proceedings, whereas R.K. Garg has confirmed in his statement that a sum of Rs. 3,00,000/- was paid to the assessee as illegal gratification. Thus the addition made by the A.O. does not require any interference and assessee ground fail on this count. 8. Next issue namely purchase of Plot at Gora Bishan Khedi, the assessee claimed this plot was purchased for Rs. 4,12,000/- and Rs. 2,65,000/- on 24/10/2005 in the name of Smt. Bharti Bhasne out of the investment from the past savings, and the cash flow statement is enclosed at Page No. 39 of the Paper Book. Thus the Ld. A.O. is not correct in making addition in the hands of the husband. 8.1. We have considered the above submissions of the Ld. A.R., but the assessee and his wife had never earned any income from conducting tuition or running Beautician for the earlier y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found during the course of search. It is an admitted fact that a cash of Rs. 3,93,800/- was found from the briefcase of the assessee. The assessee explained the source of cash is the amount received from customers by his wife for purchase of ICICI Prudential Insurance Policy for which she was a registered agent. The A.O. disbelieved the explanation on the ground that the cash was found in the briefcase of the assessee and not in any other almirah, purse or drawer of Smt. Bharti Bhasne. Thus the A.O. made the addition of Rs. 3,86,000/- was undisclosed income of the assessee for the Assessment Year 2009-10. The Ld. Counsel submitted before us that out of Rs. 3,83,800/-, Rs. 1,00,000/- towards the Insurance Policy of Dandana Jain wife of S.K. Jain which was paid by cash on 23.03.2009 and a sworn notarized affidavit (available at page 160 of the Paper Book) dated 02.07.2010 was filed before us that the cash of Rs. 1,00,000/- is paid towards ICICI Prudential Insurance Policy. Similarly, a sum of Rs. 2,00,000/- was received from Mr. Vinod Gupta towards ICICI Prudential Insurance Policy. In fact blank Insurance Form duly signed by Mr. Vinod Gupta was found during the course of search and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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