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TMI Blog2025 (3) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... mption available u/s 132(4A) & S. 292C of the Act being rebuttable, has to be seen in the light of direct and circumstantial evidences. Despite extreme course of search, no irregularity in the form of excess cash or other unaccounted assets has been claimed to be discovered. The circumstantial evidence thus, does not stand contrary to the assertions made by the assessee. Additions based on mere discovery of diary without anything more, in such circumstances would tantamount to assuming such entry to be conclusive for the purpose of assessment. Such view, if taken, would run contrary to the judicial dicta available in this regard. The adverse view taken by the AO as well by Ld.CIT(A) based on the entries in diary seized in the course of search appears to be of abstract nature and without corroboration. Preponderance of probabilities in the facts of the present case are in favour of the assessee and against the Revenue. It is well settled that onus lies on the person who alleges. The assessee cannot be placed with impossible burden to prove a negative point as held in the case of K.P.Varghese [1981 (9) TMI 1 - SUPREME COURT] No negative evidence to support the entries was found d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2023 [AY 2011-12] CIT(A), Noida-3 order dated 17.05.2023 -Do- -Do- The issues being common, interlinked and identical for various AYs in captioned appeals filed by the assessee and the Revenue, all these cases have been heard together and accordingly adjudicated by a common order. ITA No.1951/Del/2023 [Assessment Year : 2011-12] (Assessee's appeal) & ITA No.2566/Del/2023 [Assessment Year : 2011-12] (Revenue's appeal) 2. As per the grounds of appeal, the assessee has challenged the order of the CIT(A) and the AO broadly on three points namely, (i) the additions made in the instant case under s. 153A r.w.s. 143(3) of the Act are not permissible in the absence of any incriminating documents found in the course of search and seizure operation; (ii) the approval granted under s. 153D of the Act by the Competent Authority to the assessment order framed under s. 153A of the Act did not confirm to the requirement of law and therefore, consequential assessment order is bad in law; and (iii) the additions made by the AO based on certain loose papers/diary was wrongly confirmed by the CIT(A) [albeit partially] by applying peak theory. While the AO has made an addition of INR 3,47,09,20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be unexplained payments. 6.2. The assessee filed detailed submissions before the CIT(A) as reproduced in para 6.2 of the first appellate order to counter the additions so made. The CIT(A) however referred to the provision of s. 132(4A) and s. 292C of the Act to hold that the entries found recorded in the diary/loose papers seized from the premises of the assessee are presumed to be belonging to the assessee and therefore, the assessee cannot take a contrary stand to what was found recorded in the diary. The CIT(A) however entertained a view that having regard to several entries showing receipts as well as payments, the concept of 'Peak Credit Theory' shall come into play. The doctrine of 'Peak Credit Theory' was thus applied whereby the additions to the extent of INR 1,52,40,000/- was endorsed as against the aggregate addition of INR 3,95,13,400/- carried by the AO. 6.3. Dis-satisfied and aggrieved by the partial relief extended by the CIT(A), the assessee has preferred appeal before the Tribunal. Likewise, the Revenue has also knocked the door of the Tribunal against the part relief granted by CIT(A). 7. At the time of hearing, Ld. Counsel reiterated the submissions made bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has neither purchased any plot from one Mr. Pintu as alleged nor any document was found as shown in the entries reflected in the loose papers/diary. The AO has made additions as an ipse dixit and in arbitrary manner disregarding the absence of corroboration and also ignoring overwhelming social obligations of the assessee where large number of people keep visiting him on daily basis. The Ld. Counsel thus essentially contended that entries in loose papers/diary do not belong to him at all and mere non-speaking documents of such type would not give rise to such additions. 7.3. The Ld. Counsel submitted that the CIT(A) brushed aside such contention of the assessee that entries found in the loose paper/diary do not belong to him solely because such loose papers/diary were seized from the premises of the assessee. The CIT(A) has wrongly quantified the additions based on 'Peak Theory' rather than granting complete relief from unsupported additions made by AO. 7.4. The Ld. Counsel broadly pointed out that; (i) the entries found recorded has no relation to the assessee, name of the assessee is not mentioned against such entries, scribblings and same are not in the handwriting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r.w.s 292C of the Act dehors the peculiar circumstances, are wholly unjustified. 7.7. The Ld. Counsel also submitted that despite the allegation of cash receipts and cash payments as per the so-called entries, no unaccounted cash was found from the premises of the assessee per se. Such facts also support the non-existence of such entries on behalf of the assessee. 7.8. The Ld. Counsel next submitted that the 'Peak Theory' has been wrongly applied by the CIT(A) instead of complete relief. Such action is driven by the presumption that the entries of receipts and payment did exist but the payments have been consummated out of receipts and vica-versa calling for application of 'Peak Theory'. The Ld. Counsel submitted that both the authorities have thus mis-directed themselves in law. 8. Per contra, the Ld.CIT DR for the Revenue strongly relied upon the assessment order. The Ld.CIT DR submitted that formidable evidence in the form of diary/loose papers showing entries were found from the premises of the assessee and therefore statutory presumption under s. 132(4A) r.w.s 292C gets triggered and a simplicitor denial by the assessee that the diary/loose papers/receipts do not belong to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It may pertinent to observe that standard of proof for rebutting presumption is that of preponderance of probabilities and not beyond reasonable doubt. Whereas s. 132(4) attaches evidentiary value, in the absence of any enquiry and in the absence of any corroborative evidences, the persuasive burden lay upon the assessee is on a far lower pedestal. 9.4. In this backdrop, it is the key plank of the assessee that he has all along taken an unequivocal stand that he is not aware of nature of such entries which are not in the hand writing of the assessee. The entries contained in the loose paper/diary have neither been given effect nor any material shown found in the course of search which may be seen attributable to such entries. The assessee cannot plausibly offer an explanation on the entries not carried out or executed by him. The assessee has thus disassociated himself from the entries recorded in the diary etc. completely. In a testament to its bonafides, it is pleaded on behalf of the assessee that despite being in the cusp of a fragile situation of search, nothing incriminating in the form of unaccounted cash or jewellery or other material could be confronted to the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rus that the 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 anything different. It is asserted on behalf of the assessee that the entries in loose papers/documents do not belong to the assessee. The entries could relate to any visitor coming for consultations on their proposed transaction. 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. 133(6) or s.131, except making enquiries from the assessee at the time of assessment. No material is brought on record to justify the contents of the loose papers/diary. The presumption available u/s 132(4A) & S. 292C of the Act being rebuttable, has to be seen in the light of direct and circumstantial evidences. Despite extreme course of search, no irregularity in the form of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riminating documents found in the course of search and seizure operation; (ii) the approval granted under s. 153D of the Act by the Competent Authority to the assessment order framed under s. 153A of the Act did not confirm to the requirement of law and therefore, consequential assessment order is bad in law; and (iii) the merits of additions made by the AO amounting to INR 18,50,000/-. 18. We have heard the rival submissions from respective sides and perused the assessment order and the first appellate order. The material referred to and relied upon in the course of hearing as well as case laws cited have been carefully perused. 19. Identical issue towards alleged unexplained investment by way of purchase of plot from one Mr. Pintu arose in AY 2011-12. The allegation was labeled against the assessee based on jottings in loose papers/diary. Such additions have been deleted in AY 2011-12 having regard to complete lack of corroborative evidences and absence of enquiry in the course of s.132(4) of the Act. The social status of the assessee being 'Mukhiya' of the village was also borne in mind. The legal position was perused and in the absence of any cogent evidence against the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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