9911796707
TMI Blog2025 (2) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. Pertinently, though, during the time search and seizure operation was carried out in case of M/s. Evergreen Enterprises and Shri Nilesh Shamji Bharani, a search and seizure operation was also carried out in case of the assessee, however, not a single piece of incriminating material was recovered from the assessee indicating involvement of assessee in the alleged cash loan transaction or any other illegal activity. It is quite surprising that considering the magnitude of the alleged cash loan transaction appearing in the seized document, not a single piece of incriminating material relating a cash loan transaction was recovered from the assessee during the search and seizure operation conducted on assessee. If the version of Mr. Jagdish T Ramani that the promissory note given by the borrower is delivered to the lender is to be taken on face value, then at least if not all few such promissory notes would have been recovered in course of search and seizure operation carried out in case of the assessee. It is quite improbable that such huge amount of cash loan transaction would not leave any trace of incriminating material /evidence with the assessee. Thus, on cumulative analysi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh Shamji Bharani and M/s. Evergreen Enterprises on 06.10.2017, incriminating materials relating to undisclosed money lending activity carried out by Shri Nilesh Shamji Bharani were found and sized vide Annexure A-1 to A-117. The A.O. further informed the assessee that Shri Nilesh Shamji Bharani, being the partner of M/s. Evergreen Enterprises, gave a statement u/s. 132(4) of the Act on 11.10.2017, admitting that he is engaged in the business of finance, cash lending and borrowing activity and earns income in cash through brokerage. The A.O. informed that in the said statement Shri Nilesh Shamji Bharani has admitted of having received cash loan from the assessee and, in turn, advancing such loan to other persons/entities. The A.O. further brought to the notice of the assessee that when Shri Nilesh Shamji Bharani was questioned on the incriminating material being Annexure A-1 to A-117, he stated that the code name of the lender, "A/76/R", represents Asha Consultancy, the proprietary concern of the assessee. The other figures in code words represents the amount of cash loan advanced. The A.O. further referred to the statements recorded u/s. 132(4) of the Act from other employees of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on merits. Whereas, the learned Departmental Representative ('ld. DR' for short) has submitted his counter arguments. 9. Having considered rival submissions, we deem it appropriate to deal with the grounds raised on merits of the additions made, at the outset. As discussed earlier, basically, the A.O. has made two additions. Firstly, addition on account of unexplained investment, being the alleged cash loan advanced by the assessee and, secondly, notional interest computed on estimate basis on such cash loan. A careful reading of the assessment order reveals that these additions are entirely based on the document seized during the search conducted in the premises of Shri Nilesh Shamji Bharani annexed as Annexure A-1 to A-117 and statements recorded u/s. 132(4) of the Act, in course of search and seizure operation conducted in case of Shri Nilesh Shamji Bharani and M/s. Evergreen Enterprises. It is a fact on record that the statements u/s. 132(4) of the Act and relied upon by the A.O. were recorded from persons closely related to M/s. Evergreen Enterprises. While Shri Nilesh Shamji Bharani is a partner of M/s. Evergreen Enterprises, the other individuals are employees of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the entries appearing in the seized material actually represent cash given to him by his late father. In the said Affidavit, Shri Nilesh Shamji Bharani has further explained, had the cash transaction mentioned in the seized documents actually taken place then certainly some amount of cash would have been found in course of search and seizure operation. 11. It is further relevant to observe, when the assessee was confronted with the seized material and the statements recorded from Shri Nilesh Shamji Bharani and other individuals, he emphatically denied of having knowledge of any such transaction or having advanced any cash loan at any point of time to Shri Nilesh Shamji Bharani or M/s. Evergreen Enterprises. To bring out the true facts, the assessee demanded cross examination of Shri Nilesh Shamji Bharani. It is a fact on record that A.O. permitted such cross examination in course of the assessment proceedings. The details of which are as under: Statement on oath of Shri Rajesh Shah, aged 53 years, 8/0. Shri Rameshchandra Shah, resides at 604, Nilgiri, Nilkanth Vihar, S B K. Ram Marg, Mumbai 400 077 recorded u/s. 131 of the Incometax Act, 1961 on 25/11/2019 at 04.30 PM. and cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as prepared these questions and answers(stated in the statement dated 11/10/2017)? Ans. Nilesh Bharani The questions were prepared by Income-tax officers and I have answered without understanding the content of the statement as statement was recorded early in the morning at 4. AM. Q.7 Rajesh R Shah When you have replied that I have not dealt in cash with you, then, why name is appearing as alleging page no.68 & 69. Ans. Nilesh Bharani When I replied to the department officer that I have no cash dealing with Rajesh Shah, they repeatedly asked me this question. At last, after several denial, I said that I dealing with Rajesh Shah to end the process. Q.8 Rajesh R Shah How we know each other? Ans. Nilesh Bharani I know you as a Bank loan arranger of Sunshine Group. 12. As could be seen from the above extract, in the cross examination taken on oath, on a specific question asked by the assessee, Shri Nilesh Shamji Bharani denied of having entered into any cash loan transaction with the assessee. Thus, the facts on record reveal that except the so called incriminating material seized from the premises of Shri Nilesh Shamji Bharani and some statements recorded u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered to the borrower and promissory note is obtained, he had instructed the office boy to deliver the promissory note to the lender. It is quite surprising that considering the magnitude of the alleged cash loan transaction appearing in the seized document, not a single piece of incriminating material relating a cash loan transaction was recovered from the assessee during the search and seizure operation conducted on assessee. If the version of Mr. Jagdish T Ramani that the promissory note given by the borrower is delivered to the lender is to be taken on face value, then at least if not all few such promissory notes would have been recovered in course of search and seizure operation carried out in case of the assessee. It is quite improbable that such huge amount of cash loan transaction would not leave any trace of incriminating material /evidence with the assessee. Thus, on cumulative analysis of facts and materials available on record, we are of the opinion that is no conclusive evidence was available with the A.O. to establish on record that the entries appearing in the seized material actually represent cash loan transaction of the assessee. 14. In view of the aforesaid, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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