9911796707
TMI Blog2025 (2) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. After examination of the information and details placed on record and discussion with the A/R of the assessee, the total income of the assessee is computed as under:- Return income Rs. 7,47,670/- Add:- Disallowance of interest payment as discussed in para No. 5 Rs. 29,690/- Add:- Part disallowances of expenses having personal elements as discussed in para No. 6 6,626/- Add:- Disallowance as interest on TDS as discussed in para no. 7 Rs. 73 Add:- Addition as discussed in para no. 8 Rs. 1,18,83,333 Assessed total income Rs. 1,26,67,392 R/o Rs. 1,26,67,390/- On challenge to the said assessment order by the assessee, byway of appeal, Learned CIT(A) upheld the assessment made by the Assessing Officer. 2. ITA No. 572/JPR/2024 has been filed, while challenging order dated 29.02.2024 passed by the Learned CIT(A), Jaipur, whereby penalty order u/s 271AAB of the Act, has been upheld. Vide penalty order, pertaining to the aforesaid assessment year i.e. AY 2013-14, the Assessing Officer levied penalty of Rs. 35,65,000/- ( i.e. @ of 30% of the above mentioned undisclosed income of Rs. 1,18,83,333/-). 3. The above mentioned assessment order and the penalty order - relating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 1000 Ka 1 maha 11500 1000 Ka 26 Din 9966 5 sunilji 5 Dinshji 25 Sheela Devi 10 Arpitji 10 Ajayji 25 Sanjayji 1/3 25 Satyanarainji 15/3 35 Sureshji 26/3 3,22,000 3,83,333 On perusal of fist half of above table, it seems that these transactions are related to money lending. For example in the first column, principle amount is written with omitting three zeros, in second column period for which amount was given on interest and in third column indicate interest amount interest amount has been calculated @ 1.15% per month For example:- 5,00,000 x 1.15% =5750 (interest of 30 days) (5750/30) x 7 1341.66 r.o. 1342 (interest of 7 days) In the second half of the above entries, it appears that the digits against the names represent amount of loan given by the assessee and are written in doder form. For example figure of 5 represents amount of Rs. 5 lacs and figure of 24 represents amount of Rs. 25 lacs. The total of these figures comes to Rs. 1.40 crore which is the total loan given by the assessee to the parties mentioned therein. The amount of Rs. 3,22,000 represents the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is is added to his total income in AY 2013-14 and AY 2014-15 as p the dates mentioned in these papers. Total loan is of Rs. 1,40,00,000/- as per the discussion above and interest is of Rs. 3,83,333. The detail is as under:- 5,00,000 Sunilji 7/3/13 5,00,000 Dineshji 2/3/13 25,00,000 Sheela Devi 1/4/13 10,00,000 Arpitji 16/3/13 10,00,000 Ajayji 20/3/13 25,00,000 Sanjayji 1/3 25,00,000 Satyanarainji 15/3 35,00,000 Sureshji 26/3 1,40,00,000 The amount of Rs. 25,00,000/- advanced to Sheela Devi pertains to AY 2014-15 and the balance amount of Rs. 1,15,00,000/- pertains to AY 2013-14. The interest amount of Rs. 3,83,333/- also pertains to AY 2013-14. Therefore addition of Rs. 1,18,83,333/- is hereby made in the total income of AY 2013-14 and addition of Rs. 25,00,000/- is hereby made in AY 2014-15. Therefore, penalty proceedings u/s 271AAB of the Act are being Initiated separately. Addition of Rs. 1,18,83,333" 7. Vide abovesaid assessment order, the Assessing Officer disallowed a sum of Rs. 73, claimed as interest on TDS, by observing in the assessment order that the same was not permissible as per provisions of Section 40A(ii) of the Act. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the assessment order u/s 143(3) r.w.s. 153C(1)(b) of the Act, relating to AY 2014-15. 12. It may be mentioned here that, as regards the assessment year 2014-15, the assessee furnished return of income on 28.10.2015 i.e. after the search and seizure operation, declaring therein total income at Rs. 30,92,250/-. 13. As regards the year under consideration, as noticed above, search and seizure operation had led to the discovery and seizure of the above mentioned two documents i.e. page No. 38 and 39 of the seized papers- the incriminating documents, marked as Annexure-A, Exhibit-1. Having regard to said incriminating material, and after providing opportunity of being heard to the assessee, the Assessing Officer made an addition of Rs. 25 lacs by observing in the manner as under:- "7.5 It is an undisputed fact that these papers (Annexure-A, Exhibit-1 page no. 38 an 39) have been recovered from the premises of the assessee himself and therefore it was his primary duty as per section 292C of the Act to explain the same but he has altoge the failed to do so. Therefore, it is presumed u/s 292C of the Act that these papers are relate to him and he is wilfully omitting to explain t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are repetition of entries mentioned at page no. 38. 7.7. However, in his statement, the assessee disowned the transactions mentioned in these pages and stated that these were not related to his business. This claim of the assessee cannot be accepted. It can be seen that this paper has been recovered from the premises of Shri Rajendra Agarwal. The entries in this page are very clear and their nature gets clarified by the calculations of interest made on page no. 38 which have been discussed above. Partially, the dates are also mentioned which show that these are related to the month of March. The search was conducted on 03.04.13 and hence these entries appear to be related to March/April, 2013. The dates are further confirmed by the clear dates which have been mentioned on page no. 39 discussed above wherein some of these entries are appearing with the same amounts. The names of the parties are given and amounts are mentioned against them. The assessee is not prepared to give any explanation about these entries. However a wholistic construction of the entries on page no. 38 and 39 suggests that these entries are related to the money which has been advanced by Shri Rajendra Agarwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trol & conveyance Exp. Rs. 10,200/- Repaid & Maintenance Rs. 5,084/- Total Rs. 90,075/- Query letter dated 26.11.2015 was issued to the assessee, whereupon he submitted his reply thereto. The Assessing Officer did not find any merit in the said response by the assessee and accordingly, disallowed in lump sum a sum of Rs. 9,007/- i.e. 10% of the expenses claimed by the assessee, and which related to telephone and vehicle. In this regard, the Assessing Officer made following observations:- "6.4 The reply of the assessee has been duly considered but the same has not been found tenable. The assessee has not maintained any detail or log book of running of vehicle and use of telephone. The assessee has not furnished any copy of log book for the same. Thus, the assessee could not adduce any evidence to prove that the expenditure incurred for telephone and vehicle were incurred wholly and exclusively for business purposes. No log book has been maintained by the assessee in respect of use of telephone and vehicle, hence, the fact that the personal use of telephone and vehicle or uses for purposes other than the business cannot be ruled out. Therefore, a lump-sum disallowance of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosed income of Rs. 1,18,83,333/- (as regards the Assessment Year 2013-14) and income of Rs. 25,00,000/- as regards the Assessment Year 2014-15. 19. It may be mentioned here that in the written submissions, ld. Counsel for the appellant submitted that ground No. 1 challenged the dismissal of the appeal in limine by ld. CIT(A). However, in the course of arguments before us, ld. Counsel for the appellant has not pressed said ground of appeal, in respect of the appeals filed here, and withdrawn the said ground of appeal, the reason being that subsequent to the passing of the impugned orders. Ld. CIT(A), vide order u/s 154 of the Act rectified typographical error regarding inadvertent incorporation of para 2.1 in the impugned orders. Accordingly, the appeals filed by the assessee challenging the impugned orders on the grounds of dismissal of his appeal in limine, are dismissed as not pressed, as regards the said ground. 20. Ld. Counsel for the appellant has submitted that the authorities below should not have placed reliance on the two incriminating documents mentioned above, the reason being that these are two loose papers not indicating as to whether the same pertained to any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income for the said two assessment years. Statements of the assessee were recorded u/s 132(4) i.e. during search & seizure, and 131 of the Act i.e. post search. 23. Even though, it has been submitted by ld. Counsel for the appellant, in the course of arguments that the assessee had retracted the statements said to have been recorded during the search proceedings, no material has been placed on record to discard the said statements i.e. one made at the time of search and seizure, and the other made u/s 131 of the Act. 24. On going through Question No. 15, 18 and 19, with responses thereto by the assessee, it transpires, and as rightly submitted on behalf of the Revenue, attention of the assessee was specifically drawn to the two documents i.e. page No. 38 & 39, while putting it to him that on 3.4.2013, said documents were recovered at the time of search of his residential premises and that transactions recorded therein revealed that same pertained to lending of money, on interest, to the persons named therein. The assessee in response to the said question admitted seizure of the said documents from his residential premises at the time of search on 03.04.2013. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such exercise has been done. Further the presumption in law cannot be rebutted by just making simple plea denying the same in the self-serving manner. In view of the facts and circumstances the rebuttal of the appellant is found to be devoid of any basis in any merits and is hereby rejected and it is hereby held that the documents seized belong to the appellant. Further regarding the evidentiary value, there is no requirement in the law that the documents seized during the course of search and seizure action must be in the handwriting of the assessee or the same should be having the signatures of the assessee or the same should have clear titles on the headings etcetera. It is a matter of common knowledge that the loose papers found and seized during the course of search and seizure action pertaining to unaccounted transactions are never written in a very formal and very clear manner except in very rare circumstances. The very reason that the transactions are unaccounted leads to the logical inference and conclusion that there cannot be any prescribed format for the same. Further it is the settled law as per judgements of honourable Supreme Court that unaccounted transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,22,000 3,83,333 On perusal of first half of above table, it seems that these transactions are related to money lending. For example in the first column, principle amount is written with omitting three zeros, in second column period for which amount was given on interest and in third column indicate interest amount. Interest amount has been calculated @ 1.15% per month. 5,00,000 x 1.15% = 5750 (interest of 30 days) (5750/30) x 7 =1341.66 r.o. 1342 (interest of 7 days) In the second half of the above entries, it appears that the digits against the names represent amount of loan given by the assessee and are written in codec form. For example figure of 5 represents amount of Rs. 5 lacs and figure of 2t represents amount of Rs. 25 lacs. The total of these figures comes to Rs. 1.40 crore which is the total loan given by the assessee to the parties mentioned therein. The amount of Rs. 3,22,000 represents the amount of interest @ 1.15% for two months charged on the total loan of Rs. 1.40 crores. And the figure of Rs. 3,83,333 is the total of Rs. 3,22,000 + 61,333 received as interest by the assessee. Page No. 39:- This paper contains details of amounts gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The detail is as under:- 5,00,000 Sunilji 7/3/13 5,00,000 Dineshji 2/3/13 25,00,000 Sheela Devi 1/4/13 10,00,000 Arpitji 16/3/13 10,00,000 Ajayji 20/3/13 25,00,000 Sanjayji 1/3 25,00,000 Satyanarainji 15/3 35,00,000 Sureshji 26/3 1,40,00,000/- The amount of Rs. 25,00,000/- advanced to Sheela Devi pertains to AY 2014-15 and the balance amount of Rs. 1,15,00,000/- pertains to AY 2013-14. The interest amount of Rs. 3,83,333/- also pertains to AY 2013-14. Therefore addition of Rs. 1,18,83,333/- is hereby made in the total income of AY 2013-14 and addition of Rs. 25,00,000/- is hereby made in AY 2014-15/- Therefore, penalty proceedings u/s 271AAB of the Act are being initiated separately. Addition of Rs. 1,18,83,333/-" 28. In Ajay Gupta's case, Tribunal was found to have reversed finding of the ld. CIT(A) only on the basis of presumption u/s 132(4)A, without recording any finding as to how the loose sheets recovered on search, were linked with the assessee. Hon'ble High Court was of view that in absence of corroborative evidence, Tribunal was not justified in reversing the finding recorded by ld. CIT(A). 29. In view of the contents of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, we do not find any merit in the submission that the appellant was under the impression that NBFCs are not Banks or that the addition be deleted. As a result, the impugned orders upholding the additions for the two Assessment Years under consideration are upheld. Lumpsum disallowances 35. Learned counsel for the appellant has contended that the Assessing Officer has made lump sum disallowances, as regards certain expenses observing that same contained personal elements, but the Assessing Officer having not identified any particular instance of personal use, the disallowances deserve to be deleted. 36. As is available from the impugned orders, the Assessing Officer called upon the assessee to produce record to explain as to whether the subject expenses were incurred for business purposes, but the assessee was found to have not been maintaining any details or log book of the running vehicle and about use of telephone. Assessing Officer specifically observed that the assessee did not produce any evidence in support of the reply to the query raised i.e. to establish that the expenditures were incurred for business purposes. In absence of any such evidence, it can safely be s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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