9911796707
TMI Blog2025 (2) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... esident individual. For the assessment years under dispute, the assessee had filed its returns u/s. 139(1) of the Act in regular course. A survey cum search action was undertaken in case of Sunshine Group, M/s. Sabari Developers, LLP and M/s. Evergreen Enterprises and other related entities, including the main persons and their employees between the period 06.10.2017 to 11.10.2017. As a follow up of such search and seizure action, the assessee was also covered under search and seizure operation on 07.10.2017. Consequent to the search and seizure operation carried out in case of assessee, proceedings were initiated u/s. 153A of the Act. 5. In course of assessment proceedings in pursuance to notice u/s. 153A of the Act, the Assessing Officer (AO) informed the assessee that during the search and seizure operation conducted in case of Shri Nilesh 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .O. proceeded to rely upon the materials seized from the premises of Shri Nilesh Shamji Bharani and the statements recorded u/s. 132(4) of the Act and held that the entries appearing in the seized material represent cash loan transactions of the assessee. Accordingly, he not only added back the alleged cash loan as unexplained investment u/s. 69 of the Act, but also computed notional interest thereon on estimate basis by applying the rate of interest of 1.50%. Accordingly, he completed the assessments for all the assessment years under dispute. 7. Though, the assessee contested the additions by filing appeals before learned first appellate authority, however, he was unsuccessful. 8. We have heard the parties and perused the materials on record. Before us, ld. Counsel for the assessee had advanced submissions both on legal grounds as well as 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the seized/impounded material are handed over to them and they are allowed time to go through such materials. It is further relevant to observe, in course of the assessment proceedings, Shri Nilesh Shamji Bharani had filed a detailed and exhaustive Affidavit, copy of which is placed in the paper book, completely disowning the statement recorded u/s. 132(4) of the Act and explaining the compelling circumstances under which he had given the statement. In the said Affidavit, Shri Nilesh Shamji Bharani has further stated that the statements recorded u/s. 132(4) of the Act from other individuals related to M/s. Evergreen Enterprises, do not have much substance, as they were not aware of the real facts and they were merely acting on the directions of Shri Nilesh Shamji Bharani. In the said Affidavit, Shri Nilesh Shamji Bharani has explained that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to give statement? Ans. Nilesh Bharani I can read, write and understand English. I wish my statement to be recorded in English. Q. 3 Rajesh R Shah Have 1 ever dealt in cash with you? Ans. Nilesh Bharani No Q.4 Rajesh R Shah Did I give you any cash loan or have you ever served any interest to me? Ans. Nilesh Bharani No Q.5 Rajesh R Shah In answer to question no.50 of the your recorded statement on 11.10.2017, you have stated name of Mr Nishith of Asha Consultancy (the broker) used to contact me through which Jayanti Agency (the borrower) has availed loan. You are requested to explain who is Nishith and how he is related to Asha consultancy. Ans. Nilesh Bharani I do not know Nishith and I do not recollect that I have mentioned the name of Nishith during the search proceedings Q.6 Rajesh R Shah Then, who has 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri 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. In fact, it is relevant to observe, in the statement recorded u/s. 132(4) of the Act, Shri Jagdish T Ramani, who allegedly was assisting Shri Nilesh Shamji Bharani in his work, had stated that Shri Nilesh Shamji Bharani had instructed him to follow up with the lender, i.e., the assessee, to determine the modality of payment. He had stated that he instructed one of the office boys to collect money from the lender and after the money is collected, it is given to the borrower on execution of a promissory note. He had further stated that after the money is delivered 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 reco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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