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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 ..... he appellant. 3. That the Ld. CIT(A) has erred in sustaining the addition under section 69C amounting to Rs. 1,71,77,024/- on account of unexplained expenditure though it was duly shown in books of accounts and without any corroborative evidence. 4. That the Ld. AO has erred in making the addition under section 69A amounting to Rs. 9,03,100/- on account of unexplained money to the income of the Assessee on the basis of seized documents and presumption without any corroborative evidence. 5. That the Ld. AO failed to link the loose paper with the appellant. It is also held by Hon'ble Allahabad High Court in the case of CIT, Kanpur vs. Shadiram Ganga Prasad, 2010 UPTC 840 that presumption under Section 132(4A) is a rebuttable and not absolute. Therefore, once the appellant submitted a detailed plausible explanation in respect of loosed papers, then the onus shifted on the Ld. A.O. to conduct some investigation to link these papers with the appellant, which is a complete failure on the part of the Ld. A.O. in this case. 6. The Ld. AO has misinterpreted the provisions of section 132(4A), section 292C, section 153A, section 69C, section 69A and other provisions of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order. The AO alleged that such annexures represents some unaccounted payments and construction related expenses. The contents of Annexure A-2, A-7 and A-9 were reproduced in para 8 of the assessment order. The assessee filed a reply to the aforesaid show cause notice on 23.04.2021 denying the ownership of Annexure A-7 and A-9 and also denied the incurring of any construction expenses found noted in the loose papers. Another show cause notice was issued in the interregnum on 22.04.2021 seeking explanation of the assessee on loose papers/documents Annexure A-4 as inventorized and seized from the residence of the assessee. The source of expenses incurred were thus enquired. The Assessee denied ownership of such loose paper/ documents. The AO took note of the replies of the assessee on such show cause notices but however invoked the provision of section 132(4A) & 292C of the Act to draw statutory presumptions against the assessee. The AO alleged that the assessee has failed to file any documentary evidences to rebut his claim that seized documents do not belong to him or contents thereof, are not true. The AO further observed that these documents contained details of day-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out that the assessee has not carried out any construction activity at his residence as shown to be in the entries reflected in the loose papers/documents. The AO has made the additions as an ipse dixit in an arbitrary manner disregarding the overwhelming social obligations of the assessee where large number of people keep visiting him on daily basis. The loose papers/documents have been found from the residence of the assessee which is spread over 5000 sq. yard and his office is also situated therein alongwith a large courtyard. It is quite possible that loose papers/documents might have been left by some visitor which is reinforced by the fact that such loose papers/documents were not found from the bedroom or other rooms of the assessee or any kind of locked study room of the assessee or his family members. The assessee thus, essentially contended that loose papers/documents did not belong to him at all and additions are based on uncorroborated loose papers/documents containing some scribblings and non-speaking documents is not justified at all. 7. The CIT(A) however observed that the contention of the assessee that seized documents do not belong to him, is not tenable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout prejudice to the plea of the assessee that such papers could belong to any of the outside visitors who step in premises o meet him as a sitting MLA. Therefore, the presumption against the assessee is not justified particularly when such loose papers marked as various annexures are not in the handwriting of the assessee nor do it carries the name of the assessee. 9.2 The Ld. Counsel for the assessee relied upon host of the judicial pronouncements including: [a] CIT vs Shadiram Ganga Prasad, S.P.Kanodia & Smt. Premlata Kanodia 2010 SCC Online All 3548 (All.High Court); [b] P.R.Metrani vs CIT, Bangalore [2007] 1 SCC 789; [c] Pushkar Narain Sarraf vs CIT 1990 SCC Online All 825; [d] CIT, Delhi (Central)-II vs D.K.Gupta [ITA No.1126/2008] vide order dated 26.09.2008 (Delhi High Court); [e] Neeraj Goel vs ACIT 2019 SCC Online ITAT 66 vide order dated 28.02.2019; [f] CCBI vs V.C.Shukla and Ors. (1998) 3 SCC 410; and [g] Common Cause and Ors. Vs Union of India and Ors. (2017) 11 SCC 731. 9.3 Based on the elucidation of Legal position by the judicial dicta, the Ld. Counsel for the assessee contended that the statutory presumption contemplated u/s 132(4A) r.w.s. 292C of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4A) r.w.s 292C of the Act, gets triggered and a simplicitor denial by the assessee that such documents do not belong to the assessee, is not sufficient per se to shift the onus on the revenue. It would be unrealistic and illogical to assume that the documents found from the premises of the assessee do not belong to him. The CIT-DR thus contends that the onus squarely lies on the assessee to rebut the presumptions available to Revenue where he has miserably failed. 10.1 The CIT-DR pointed out that besides loose papers, Page No.11 of Annexure A-4 found from the premises of the assessee shows that one R.K.Bros (Contractor) has issued some bills/estimate in the name of "M/s. Balyan House". As per the estimate/invoice, the expenses such as Italian Floor, Skirting, Granite, Patti etc. are reflected. Therefore, it does not lie in the mouth of the assessee that no construction work has been carried out as emanating from loose papers or the loose papers do not belong to him. 10.2 The CIT-DR contended that the AO is entitled in law to make additions towards undisclosed income on the basis of loose sheets found in the course of search unless the assessee has successfully disproved the entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution and circumspection. 11.3 The assessee states to have denied the impugned loose papers/ documents to be relatable to the assessee at the first available opportunity. It was pointed out that neither the entries were made in the hand writing of any member of the family nor it was found from the residential portion of the premises. 11.4 In a customary query put in the course of hearing by the bench, the Ld. CIT-DR fairly agreed that no queries were raised in the course of statement recorded under s. 132(4) of the Act by the authorised officer to elicit information in a quest to unearth truth on loose papers/ documents. Such approach is quite intriguing to say the least. The loose papers/ documents marked as annexures are the sole basis for making additions in the search assessment. Clearly, the revenue has squandered the opportunity by their insipid action. Furthermore, a perusal of the assessment order would show that post search inquiries were raised by way of initiation of show cause notice only at the stage of assessment proceedings. The assessee has made out a case that he has responded to all the notices issued and promptly replied at all instances. 12. It may pertinent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the assessee solely on the basis of some loose papers found in the course of search, without making any iota of enquiry at the time of search either with the assessee or with the other family members do not appear sound. 15. Section 132(4A) creates a presumption with respect to the truthfulness or genuineness of the contents of the books of account, its parts, signature and handwriting, etc., found during a search. However, while the operation of section 132(4A) is not extended to the regular assessment in view of judgment in the case of Metrani (HUF) vs. CIT (2006) 287 ITR 209(SC), the operation of s. 292C seeks to extend the presumption even to assessment proceedings. The presumption under s. 132(4A) and s. 292C are however rebuttable. S. 132(4A) and s. 292C are replica of each other and expression used in such provisions are 'may presume' which is also the expression used in s. 114 of the Evidence Act and it was not a mandate that whenever the books of account were seized, the Court shall necessarily draw the presumption, irrespective of any other factors which may dissuade the Court from doing so as held in ITO vs. T. Abdul Majeed (1987) 169 ITR 440 (ker). 15.1 It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presumption available u/s 132(4A) r.w.s 292C of the Act are rebuttable presumptions. The judgments cited on behalf of the revenue do not say any thing different. It is asserted on behalf of the assessee that the loose papers/documents neither belong to the assessee nor the assessee excises any control over such documents. The documents could have come to the premises of the assessee from anywhere including visitors coming on daily basis. The loose papers/documents which is the sole basis for making additions in the instant case, has not been confronted to the assessee in the course of search at all. At the first available opportunity, the assessee has denied the contents of loose papers. In the absence of any corroborative material or any admission on the part of the assessee, the primary onus which lay upon the assessee stood discharged. it is difficult to conceive as to how the assessee would be able to disprove the contents of the loose papers/documents. The Revenue on its part has not made any worthwhile inquiry independently using tools available under s. 132(4), s. 133(6) or s.131, except issuing show cause notice to the assessee at the time of assessment. No material is bro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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