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TMI Blog2024 (12) TMI 1386X X X X Extracts X X X X X X X X Extracts X X X X ..... of loose papers/documents without anything more, in such circumstances would tantamount to holding the conclusiveness of such loose papers for the purpose of assessment. Such view if taken, would run contrary to the judicial dicta available in this regard. The adverse view taken by the AO as well by Ld.CIT(A) based on the loose papers/documents seized in the course of search appears to be of abstract nature and without corroboration. Preponderance of probabilities in the facts of the present case is in favour of the assessee and against the Revenue. The least which the Revenue could have done was to pose a pointed question to the assessee u/s 132(4) at the time of search itself. The Revenue failed to do so. It is well settled that onus lies on the persons who alleges. The assessee cannot be placed within impossible burden to prove a negative point in the case of K.P.varghese [ 1981 (9) TMI 1 - SUPREME COURT] . The assessee having denied its privy to the information found as per loose sheet, the onus was somewhat shifted to the Revenue. No negative evidence to support the entries was found despite a drastic step of search. Absence of material and denial by the assessee coupled with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. 3. Briefly stated, the assessee is a sitting Member of Legislative Assembly [MLA] of Delhi. The assessee is stated to have derived income from rent, interest and agricultural activities etc. The assessee denies to carry out any business activity or involved in any commercial activity per se. The assessee filed Return of Income(ROI) for AY 2017-18 under consideration on 28.03.2018, declaring total income at Rs. 3,43,030/-. The ROI was processed u/s 143(1) of the Act on 11.06.2018. In a subsequent event, the warrant of Authorization was issued by the Director of Income Tax, (Investigation), New Delhi and a search and seizure operation u/s 132 of the Act was carried out at the premises of XOXO Group of cases on 08.03.2019. The above mentioned assessee was also covered under a search proceedings u/s 132 of the Act on the same day in pursuance of the aforesaid search. In the course of search proceedings at the premises of assessee, some loose papers/documents were stated to be found and seized. Consequently, notice u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... related expenses incurred in cash. The total expenditure and receipts as found recorded in Annexure A-2, A-4, A-7 and A-9 was accordingly, summarized in para 13 of the assessment order. The AO thus, alleged that unexplained expenditure as recorded in these documents, seized from the residence of the assessee, aggregating to Rs. 2,30,67,904/- is susceptible to tax under s. 69C r.w.s 115BE of the Act. The AO further observed that the aggregate unaccounted receipt of Rs. 9,03,100/- found recorded in these loose papers as per various annexures are also susceptible to tax u/s 69A r.w.s 115BE of the Act. The AO accordingly, made additions to returned income with the aid of section 69A 69C of the Act and assessed the taxable income at Rs. 2,43,14,030/- and framed the assessment accordingly. 5. Aggrieved, the assessee preferred an appeal before CIT(A). 6. The assessee asserted before the CIT(A) that additions towards alleged unexplained expenditure quantified at Rs. 2,30,67,904/- has been made on the basis of loose papers premised on presumptions conjectures without any iota of corroborative evidences. Likewise additions on account of alleged unexplained money quantified at Rs. 9,03,100/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized from the premises of the assessee. The CIT(A) however, found merit in the plea of the assessee towards duplication of certain entries and transaction not relatable to Assessment Year 2017-18 in question. The CIT(A) further agreed with the contention raised on behalf of the assessee for credit of unaccounted receipt out of alleged unaccounted expenses. The amount quantified by the assessee towards alleged receipt amounts was thus reduced from the alleged unexplained expenditure giving rise to some partial reliefs. Thus, the CIT(A) revised the additions towards alleged unaccounted expenditure at Rs. 1,71,77,024/- as against Rs. 2,30,67,904/- made by the AO and simultaneously confirmed the additions towards unaccounted receipts amounting to Rs. 9,03,100/-. 8. Dissatisfied and aggrieved with some nominal relief extended by the CIT(A), the assessee preferred appeal before the Tribunal. 9. When the matter was called for hearing, the Ld. Counsel for the assessee reiterated the submissions made before the lower authorities and strongly contended that while the documents/loose papers might have been found and seized from the premises of the assessee, such documents/loose papers do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to the Revenue authorities in the peculiar facts of the present case. The Ld. Counsel for the assessee also contended that statutory presumptions are limited in its scope besides being rebuttable. He further submitted that the assessee has denied the loose papers pertaining to or belonging to him and in the absence of any corroborative material found in the course of search and in the absence of any question having been put to the assessee while recording the statement u/s 132(4) of the Act on 09.03.2019 on the impugned loose papers, the onus was on the Revenue to ascribe such entries in the loose papers/documents to the assessee. The appropriate query and a candid statement of the assessee thereon under s. 132(4) on such documents found in the course of search is sine qua non of due process of taking and collecting evidence in the course search. The impugned annexures / loose papers are unworthy of any reliance on the face of denial of ownership since inception coupled with complete absence of any worthwhile enquiry having been put on such so called annexures. While the assessee has rebutted the statutory presumptions by denial as well as in the absence of any corroborative m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to the following judgments; (a) CIT vs Naresh Kumar Aggarwala [2011] 331 ITR 510 (Delhi); (b) CIT vs Ambika Appalam Depot [2012] 340 ITR 497 (Madras); and (c) Mahabir Prasad Rungta vs CIT(Appeals), Ranchi [2014] 43 taxmann.com 328 (Jharkhand) 10.3 The Ld.CIT DR submitted that the presumptions raised under s. 132(4A) of the Act on seizure of such loose sheets is automatic and the onus squarely lies on the assessee to rebut that presumption by offering plausible explanation, if any. A mere denial of entries in the loose paper is not sufficient per se to discharge such onus. The stand taken by the assessee that such loose papers found at the premises of the assessee might have been left by someone and did not belong to the assessee per se needs to be vindicated by the assessee and nobody else. 10.4 The Ld.CIT DR for the Revenue thereafter, pointed out that Ld.CIT(A) has liberally granted all possible reliefs as may be plausible after nuanced appraisal of factual matrix. On objective considerations of facts, the relief towards duplicate entries, entries relating to other years have been duly provided by Ld.CIT(A) and thus, the Revenue has acted in a non-partisan manner. Hence, no i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of probabilities and not beyond reasonable doubt. While section 132(4) imposes an evidentiary burden, in the absence of any enquiry under s. 132(4), the assessee is saddled with only persuasive burden on such annexures. The degree of onus is thus on a far low pedestal. 13. In this backdrop, it is the key plank of the assessee that he has all along taken an unequivocal stand that he is not aware of existence of such loose papers/documents etc. and such loose papers are not in the handwriting of the assessee or his family members. The entries contained in the loose papers have neither been given effect nor any material was shown to be found in the course of search which may be seen attributable to such entries. The assessee cannot plausibly offer an explanation on the entries not carried out or executed by him. The name of the assessee is not shown to have been appearing in the loose papers/documents which are the basis of the impugned additions. The assessee has thus disassociated himself from the loose papers/documents completely. In a testament to its bonafides, it is pleaded on behalf of the assessee that despite being in the cusp of a fragile situation of search, nothing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from the premises of the assessee at the time of search, this might itself would not give rise to a conclusive presumption of any contrived and unreported transactions against the assessee per se. The assessee was not enquired on such loose papers at the time of search. At the first available opportunity when confronted, the assessee has explicitly repudiated the loose paper denied having carried out any entries appearing the loose papers/documents. In the absence of any substantive corroborative material found coupled with plain denial at the first instance, the initial onus on the assessee was discharged and the onus was shifted to the Revenue to prove otherwise. As noted earlier, no worthwhile inquiries have been carried out whatsoever by the Revenue and the additions have been made in the hands of the assessee by simply invoking the statutory presumption u/s 132(4A) of the Act based on such loose papers/documents without anything more. In the process, the law that the presumptions available are rebuttable have been totally ignored. It is trite that statutory presumption that documents/loose papers found in the course of search belongs to searched persons, is not absolute but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 132(4A) S. 292C of the Act being rebuttable, has to be seen in the light of direct and circumstantial evidences. The loose papers/documents found in the course of search and referred to in the course of hearing on behalf of the Revenue shows some kind of estimates issued by one, R.B.Bros. (Contractor) towards in the name of Balyan House . No inquiry has been made from the contractor despite the particulars allegedly available. It is not known whether such estimate is attributable to assessee or other tax-payers living jointly in the same house. It was for the Revenue to probe in to the matter. Despite extreme course of search, no irregularity in the form of excess cash or other unaccounted assets has been claimed to be discovered. The circumstantial evidence thus, do not stand to the contrary to the assertions made by the assessee. The additions based on mere discovery of loose papers/documents without anything more, in such circumstances would tantamount to holding the conclusiveness of such loose papers for the purpose of assessment. Such view if taken, would run contrary to the judicial dicta available in this regard. The adverse view taken by the AO as well by Ld.CIT(A) bas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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