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TMI Blog2025 (1) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... learned CIT(A). Decided in favour of assessee. - Shri V. Durga Rao, Judicial Member And Shri K.M. Roy, Accountant, Member For the Assessee : Shri Kapil Hirani For the Revenue : Shri Sandipkumar Salunke ORDER PER K.M. ROY, J.M. Captioned appeal by the assessee is against the impugned order dated 26/03/2018, passed by the learned Commissioner of Income Tax (Appeals) 3, Nagpur, [ learned CIT(A) ], for the assessment year 2015 16. 2. In its appeal, the assessee has raised following grounds: 1. That the learned CIT Appeal erred in law and on facts in confirming the addition of Rs. 2,50,00,000/- and the same is liable to be deleted. 2 That the addition maintained at Rs. 2,50,00,000/- is bad in law in as much as Assessee denied to have received any amount in Cash but however in spite of specific denial and supply of addresses and PAN number neither examined Govindraja Group Mills nor the broker Mr. Surenthirakumar. Hence this addition is bad in law. 3. That the addition maintained at Rs. 2,50,00,000/- is further vitiated in law as it is without proper opportunity and without supporting by any independant evidence in view of specific denial by Assessee. 4. That the Addition of 2,50,00,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss appeal for the impugned assessment year and the Counsel of the assessee immediately upon realizing the inadvertence, filed the copy of the appeal before the Registry on 26/02/2020, which was accordingly then registered and the consequent delay of 702 days had accordingly occurred. 4. We have considered the arguments of the learned Counsel for the assessee and also perused the contents of the application seeking condonation of delay including the affidavit filed by Shri Vijay Chandak, Advocate, stating the above facts. It is an undisputed fact that the present appeal was filed with the office of the D.R. on 07/05/2018 and that the appeal fees pertaining to the said appeal was also paid by the assessee on 04/05/2018, which is well within the time limit of 60 days from the date of the impugned order passed by the learned CIT(A). It appears that the delay in filing of the appeal was solely on the inadvertence on the part of the staff of the Counsel of the assessee in assuming that having filed the copy of the appeal with the office of the D.R., the procedure filing of the appeal stood completed and consequently the copy of the appeal remained to be filed with the Registry, as was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nciliation purposes. The learned Counsel further invited our attention to the said handwritten note where firstly there is a balance of ₹ 5,10,19,465, mentioned as on 31/05/2014, which according to the learned Counsel for the assessee is the balance receivable by the assessee on account of sales made to the entities pertaining to Govindraja Mills Group. The learned Counsel further invited attention to Pages 116-124 of a separate Paper Book containing compilation of submission made before the learned CIT(A) wherein the copies of accounts pertaining to companies of Govindraja Mills Group has been enclosed which shows the balances in the books of accounts of the assessee as under: SGML Balance as on 31.5.2014 ₹ 1,22,15,204 SGTPL balance as on 13.5.2014 ₹ 2,10,51,741 SGTPL II balance as on 13.5.2014 ₹ 1,77,52,520 Total: ₹ 5,10,19,465 9. It is the contention of the assessee that the said balance as appearing in the documents referred to and relied upon by the Assessing Officer is nothing but the balance pertaining to entities of Govindraja Mills Group and books of accounts of the assessee against sales made by the assessee the said entities. He vehemently a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, corroborative or otherwise, to prove that the assessee received the said amount of ₹ 2.5 crore except the loose paper relied upon. He further emphasized the fact that the date of receipt of cash is nowhere mentioned in the documents referred to and relied upon by the Assessing Officer. It is further his case that the said document was not prepared by the Assessee nor any of its staff members and that the writing on the said page was not matched with the assessee nor any of its staff members to prove that the document was prepared by the assessee or its staff. It is the case of the assessee that it is solely on the basis of this page that the Assessing Officer without examining the party who has allegedly paid the cash and without bringing on record any independent evidence has made the addition of ₹ 2.5 crore. The learned Counsel for the assessee further very interestingly invited our attention to the copy of the assessment order filed for the assessment year 2014-15 wherein the similar addition has been made by the Assessing Officer pertaining to the same amount of ₹ 2.5 crore and consequently the learned Counsel for the assessee argued that considering that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n an electronic form, regularly kept in the course of business are relevant wherever they refer to a matter into which the court has to inquire, but such statements shall not alone be sufficient evidence to change any person with liability . This is now contained in section 28 of The BSA 2023 , with the caption Entries in books of account when relevant . The books of account regularly kept in the course of busi- ness means, only such books as are entered from day, as the transactions take place within the meaning of section 28 of The BSA 2023 , sub-section (12A) of section 2 of Income-tax Act, defines books of account. Books or books of account includes ledgers, day- books, cash books, account-books and other books whether kept in the written form or in electronic form or in digital form or as print-outs of data stored in such electronic form or in digital form or in a floppy, disc, tape or any other form of electro-magnetic data storage device. As per the stated provision of the section 28 of The BSA 2023 , in the assessment Proceedings, when notice is given to the assessee to produce the books of account, in support of the return submitted the books of account maintained in the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ually received any amount in cash much less cash of ₹ 2,50,00,000, as alleged by the Assessing Officer. 15. It is further an undisputed fact that despite the assessee seeking that the genuineness and veracity of the said cash payment of ₹ 2,50,00,000 be cross verified from the parties from whom it is alleged to have been received, no enquiry of whatsoever nature was made by the Assessing Officer from the broker who allegedly prepared the impugned document or from Govindraja Mills Group and have allegedly made the payment of the said sum. The whole basis of the Assessing Officer to have made the addition is simply the noting in the document and which further was explained by the assessee as being nothing but Letter of Credits received by the assessee from the said Govindraja Mills Group against the sales made to the said party. The assessee has all along including in his statement recorded pursuant to the search have denied having received any amount in cash whatsoever much less the amount of ₹ 2,50,00,000, as alleged by the Assessing Officer. 16. It is further undisputed that the balance of ₹ 5,10,19,465, appearing in the said document is the sum total of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by assessee were not correct and the entries are susceptible of resulting in income, that has not been dis- closed in the regular books of account. In such circumstances, if there was not direct or corroborative evidence to presume that the notings or jottings had materialised into transaction giving rise to income not dis- closed in the regular books of account, such jottings and notings are of no evidentiary value, and will not enable the Assessing Officer to determine any income based on such jottings and notings. The liability to tax any income shall arise only when such jottings or notings proved to be forming part of income not disclosed by assessee, for the purposes of assessment. Refer, CBI v. V.C. Shukla [1998] 3 SCC 410/[1998] 1998 taxmann.com 155 (SC), Common Cause (A Registered Soci- ety) v. UOI [2017] 77 taxmann.com 245/[2017] 245 Taxman 214 (SC). 17. It is trite law that presumption however strong cannot substitute for evidence. The Hon'ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v. CIT [1954] 26 ITR 775 (SC) and Chuharmal V. CIT (1998) 172 ITR 250 (SC) the Court held that although strict rules of the Evidence Act do not apply to income tax proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee to the companies of Govindraja Mills Group. The entire sales having already been recorded in the books of accounts and no sales having been found to have been made out of the books of accounts there is absolutely no occasion for the assessee to have received the said amount of ₹ 2.5 crore in cash as alleged and more particularly when there is absolutely no evidence whatsoever from the person who allegedly has made the payment in cash and forming that the said amount was actually paid by him. The learned Departmental Representative cannot change the colour and complexion of the case by posing facts aline in assessment. A passing references also been made to certain SMS which, however, as mentioned by the learned CIT(A) himself that the date of the said SMS not mentioned, hence, the same cannot be relied upon reaching any conclusions. The said document in absence of any corroborative evidence justifying the authenticity and veracity of the same cannot solely be the basis for making any addition much less the addition of ₹ 2,50,00,000, as has been made by the Assessing Officer in the present case and more particularly when it has not been established that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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