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TMI Blog2024 (12) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. Therefore, we do not see any infirmity into the finding on fact recorded by the CIT(Appeals). The same is hereby upheld. The grievance raised by the Revenue lacks merit, hence dismissed. - Shri Kul Bharat, Judicial Member And Shri Avdhesh Kumar Mishra, Accountant Member For the Appellant : Shri Sanket Milind Joshi, CA For the Respondent : Ms. Jaya Choudhary, CIT-DR ORDER PER KUL BHARAT, JM: This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-29, New Delhi, dated 02.11.2018, pertaining to the assessment year 2008-09. The assessee has raised following grounds of appeal: 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 2,45,00,000/- u/s 69 of the IT Act. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has failed to appreciate the facts that:- (i) During the course of search proceedings three PDCs (post dated cheques) bearing cheque No. 033623 dated 04.12.2015, 056675 dated 25.08.2015 and 056673 dated 25.08.2015 amounting to Rs. 2,00,00,000/-, Rs. 50,00,000/- and Rs. 5,00,000/- respectively in favour of the assessee issued by M/s Am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that during the course of search proceedings certain post dated cheques were recovered from the possession of the assessee. 4. On the other hand, learned counsel for the assessee opposed the submissions and supported the order of learned CIT(Appeals). He further placed reliance on the judgment of Hon ble Delhi High Court rendered in the case of CIT v. Girish Chaudhary (2008) 296 ITR 619 (Del.) to buttress the contention that the post dated cheque being dumb document cannot be relied upon. He submitted that the impugned addition made by the Assessing Officer on the basis of presumption is not justified in law. He further submitted that Assessing Officer has not brought any corroborative evidence whatsoever to support the presumption drawn by him. He further submitted that post dated cheque of Rs. 2,00,00,000/- was issued by Amrapali Group as security to the assessee group against the amount of Rs. 2 crores advanced by PSK to the Amrapali Group vide cheque dated 01.07.2014. 5. Heard the rival submissions and perused the material available on record. We find that learned CIT(Appeals) has given a detailed finding on the issue in question by observing as under: 8.4 I have considered th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nducted by the Dept. on all the various premises of the assessee and her family members. However, the A.O. has not brought an iota of corroborative evidence on record to support the presumption drawn by her and therefore the appellant has contended that the addition made by the A.O. on the basis of presumption and surmises is not justified in law. The appellant has also stated that the minor discrepancies pointed out by the A.O. for rejecting the explanation furnished by the appellant are not justified on facts of the case. The appellant has relied upon various judicial decisions in support of her case. Accordingly, it has been contended that the addition of Rs. 2.45 crores made by the A.O. purely on the basis of presumption and surmises without bringing any corroborative evidence on record and rejecting the explanation furnished by the appellant which is supported by documentary evidences in not justified in law and on facts of the case. 8.5 It is a fact on record that the appellant has discharged the initial onus cast upon her to furnish explanation as to how the seized PDCs do not represent any unaccounted transactions entered into by her. The appellant has also substantiated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced funds of Rs. 2 Crs. to UHCPL by way of four cheque nos.010315, 010316, 010317 010318, all dated 03.07.2014 of Rs. 50 lacs each. The appellant has explained that the seized PDC of Rs. 2 Crores at page no. 100 was issued by the Amrapali Group as a security to the assessee group against the amount of Rs. 2 Crs. advanced by PSK to the Amrapali Group/ UHCPL vide cheques dated 01.07.2014. The appellant has stated that the said amount was advanced by PSK to the Amrapali Group/ UHCPL in terms of the MOU dated 08/07/2014 and in this very MOU, it was specifically stated that as against the amount advanced by PSK/ assessee group, the Amrapali Group shall issue Post Dated Cheques as a security to the extent of the amount advanced by PSK/ assessee group. Thus, the appellant has explained that the fact that the above PDC of Rs. 2 Crores was issued as a security against the amount of Rs. 2 Crores advanced by PSK to Amrapali Group was evident from the documentary evidence in the form of seized MOU and payment of Rs. 2 Crores made by PSK to the Amrapali Group through banking channel. 8.6.1 With regards to the objection raised by the A.O. that the PDC has been issued by ASDPL, even though the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Dated Cheques to PSK Group to the extent of amount advanced by PSK. The appellant has claimed that the seized PDC of Rs. 2 Crores dated 04/12/2015 issued by ASDPL in the name of the appellant is the PDC issued by Amrapali Group as a security against amount advanced by PSK to UHCPL in terms of the above seized MOU. The A.R. for the appellant has contended that for the time being, even if go by the presumption of the A.O. that this seized PDC is not the PDC issued by Amrapali Group as a security against the amount advanced by PSK, then as per the undisputed facts stated in the MOU, a different PDC amounting to Rs. 2 Crs. issued by UHCPL to PSK would certainly have been found in the course of extensive search proceedings conducted by the Dept. on the various commercial as well as residential premises of the appellant group at New Delhi and Bengaluru. However, no such PDC issued by UHCPL in the name of PSK has been found by the Dept. from any of the searched premises. Accordingly, the appellant has contended that the presumption drawn by the A.O. fails to hold ground on the facts of the case and hence, the same is not justified. I find considerable force in the above argument advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Group by getting FSI etc. in consideration of the amount paid to them, however, in view of the above facts, the recovery of the impugned amount looks very uncertain and even locating the Directors of the Amrapali Group has become very difficult. Further, it is noticed that the notice u/s 133(6) and 131 have been served on UHCPL and ASDPL, however, the said companies have not responded to the Income Tax Dept. Nevertheless, I am of the considered view that mere non furnishing of confirmation from the Amrapali Group under the peculiar circumstances, cannot be a ground to reject the explanation furnished by the appellant since the same is supported by other documentary evidences. 8.6.4 In view of the above discussion, I am of the considered opinion that the explanation offered by the appellant in respect of the seized Post Dated Cheque of Rs. 2 Crores marked at S.No.100 of Annex. A-3 is reasonable and substantiated by documentary evidences. I find that the said explanation has not been found to be false by the A.O. by bringing any contrary corroborative evidences on record and hence, in my considered view, the said explanation merits to be accepted. 8.6.5 In the above paragraph, Ihav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition can be made in the hands of the assessee merely on the basis of the notings made on a loose paper seized during search action in the absence of any corroborative evidence brought on record to prove that the notings thereon represent undisclosed income of the assessee. In that case, it has been categorically held that a seized loose paper cannot by itself lead to addition in the hands of the assessee and it is for the A.O. to put life into the seized loose paper by collecting other relevant and connected material to prove that the notings on the loose paper actually represent undisclosed income earned by the assessee. In my considered view, the ratio laid down by Hon'ble Delhi High Court in the above case clearly supports the case of the appellant in the present case. 8.6.7 In view of the above discussion, I am of the considered opinion that no addition could have been made in the hands of the appellant on the basis of the Post Dated Cheque of Rs. 2,00,00,000/- dated 04/12/2015 seized from the residential premises of the appellant at C-69, Sector 30, Noida marked as Sr. No. 100 of Annex. A-3, therefore, the A.O. is directed to delete the said addition. 9. With regards to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by UHCPL to PSK was never entered between the two parties since PSK could not arrange for the balance funds of Rs. 18 Crores as agreed in the preliminary MOU dated 08/07/2014. The appellant has further explained that the service charge never became due to the appellant group/ PSK and the same was also never received since PSK could not arrange for the balance funds of Rs. 18 Crores. The A.O. has rejected the explanation furnished by the appellant and on the basis of the above seized PDCs, the A.O. has drawn a presumption that the appellant must have made unaccounted investment of Rs. 55 lakhs with UHCPL. Here again, the first issue that arises for consideration is whether the A.O. was justified in rejecting the explanation furnished by the appellant and the second issue that needs to be decided is that if the explanation offered by the appellant is not found to be acceptable, whether the presumption drawn by the A.O. solely on the basis of the seized PDCs without bringing any corroborative evidence on record is sustainable in law. 9.2 I find that the explanation furnished by the appellant regarding proposed payment of service charge is not supported by any documentary evidence. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Rs. 55 lakhs with UHCPL against which UHCPL would have given the above PDCs totalling to Rs. 55 lakhs. It is noticed that the A.O. has not brought any corroborative evidence on record to demonstrate that the appellant has made any unaccounted payments to UHCPL. I find force in the contention of the appellant that if the appellant would have made such substantial unaccounted investment of Rs. 55 lakhs with UHCPL, then at least some evidence in the form of notings, jottings etc. would have been found in the course of extensive search proceedings conducted by the Dept. which covered the various residential as well as commercial premises of the appellant group in New Delhi as well as Bengaluru. However, it is noticed that not an iota of evidence has been found in the course of search to indicate that the appellant has made any unaccounted payments to UHCPL. It is also noticed that the appellant has been declaring nominal income on account of tuition fees for all the earlier six years and the A.O. has also not brought any evidence on record to show as to how the appellant could earn such substantial unaccounted income of Rs. 55 lakhs and therefore, the presumption drawn by the A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant on the basis of the Post Dated Cheques of Rs. 50,00,000/- and Rs. 5,00,000/-seized from the residential premises of the appellant at C-69, Sector 30, Noida marked as Sr. No. 101 102 of Annex. A-3, therefore, the A.O. is directed to delete the said addition. Further, in preceding paragraphs, I have already held that no addition can be made on the basis of seized Post Dated Cheque dated 04/12/2015 of Rs. 2,00,00,000/- marked as Sr.No.100 of Annex. A-3. Thus, the entire addition of Rs. 2,45,00,000/- made by the A.O. on account of unexplained investment is directed to be deleted. Therefore, Grounds Nos. 3 4 raised by the appellant are allowed. 6. The above finding on fact, as recorded by the learned CIT(Appeals), is not rebutted by the Revenue by bringing any contrary material on record. The law is well settled that the addition made on the basis of conjectures cannot be sustained in the eye of law. The learned CIT(Appeals) has rightly followed the decision of the co-ordinate Bench [ITA nos. 374-375/Ahmd/2002] that no addition can be made purely on the basis of post-dated cheques. In the case in hand impugned addition has been made on the basis of the post dated cheques recove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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