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TMI Blog2025 (4) TMI 1476X X X X Extracts X X X X X X X X Extracts X X X X ..... on 03.03 2005 at his residence resulting in assessments being framed u/s 153A of the Act making various additions to the income of the assessee, a few of which were sustained by the Ld.CIT(A).Both the appeals were therefore taken up together for hearing and are being disposed off by this common consolidated order. 3. We shall first be dealing with assessees appeal for A.Y 2005-06 in ITA No. 495/Agra/2012 ITA number 495/Agra/2012 A.Y 2005-06 4. The grounds of appeal raised by the assesseeread as under: "1. (i) That the addition of Rs. 1670000/- on account of alleged unexplained expenditure on election made on mere suspicion and without any adverse material to support even in remand proceedings as conceded by A.O. in his remand report sustained by the C.I.T. (Appeal) is arbitrary, unjust and illegal. (ii) Sustained on mere presumption on the basis of inscription made in the diary which does not bear the date, month or year of alleged transaction in arbitrary, illegal and against natural justice. (iii) That the C.I.T. (Appeal) has erred in law to not follow the ratio laid down by Apex Court that entries in books of account cannot without independent evidence of their trustwor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the dispute . The assessee had also pointed out that before the Income Tax Authorities, in his statement recorded during search, the assessee had clearly deposed that the search was organised at the instance of the family members of Har Narayan Tiwari. He had pointed out that at the time of search operation a crowd of 20 to 25 persons had come and entered his house and as such it was possible that somebody had thrown this diary with bad intention, which was subsequently seized by the department .All these facts are recorded at para 4 of the assessment order. Briefly put, the assessee had repeatedly denied having anything to do with the diary seized and pointing out that the name on the diary was that of Alok Kumar Tiwari, necessary enquiries be conducted with him. The name, address and all details of the concerned person was given to the AO. The assessment order also records the fact that on inquiry conducted by the Department with Shri Alok Tiwari, he denied to have maintained this diary. 7. Before the Ld.CIT(A) also the assessee reiterated that he had nothing to do with the diary and that necessary inquiry be conducted with Alok Tiwari. The Ld. CIT(A), we have noted, dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information from the District Election Office to show that these expenditures were not incurred by the assessee or his brother, Suresh Kumar Pandey and in view of the fact that the assessee has denied in his statement recorded during search operation about any relationship with this diary, no addition can be made in the hand of the assessee (appellant) on the basis of entries in the diary but he has not given any comment on the argument of the AO that such addition can be made as per the provisions of section 132(4A) looking to the fact that this diary was found from the possession of the assessee (appellant) and he has not given any satisfactory reply about the entries made in this diary and despite denying his relationship with this diary, he could not give any cogent reason as to how this diary came in his possession, in support of his argument, the Ld. AR has referred to three judicial pronouncement as given below :- "The Hon'ble Allahabad High Court in the case of CIT Vs. Chaman Lal Dhingra (1994) 121 Taxation 272, 273 has held that the seized document cannot taken place of proof rather they merely create suspicion. The Hon'ble Supreme Court in the case of Dhakeshwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d expenditure u/s 69C in the income of the assessce (appollant) and accordingly, Ground No. 4 is dismissed." 9. It is evident from the above that the entire basis for making the addition in the hands of the assessee and confirming the same,is the presumption provided under section 292C of the Act and section 132( 4A) of the Act, which provides that any books of accounts/documents found during search are to be presumed to belong to the searched person and the contents thereof to true unless rebutted with cogent evidence. But we have noted that both the authorities below have applied the provisions to suit their own purposes of making and confirming the addition in the hands of the assessee.It is settled law that a document has to be read in its entirety and not in parts. The fact of the case is that the diary carried the name of Alok Tiwari. The diary, as a matter of fact, was not in the name of the assessee. Therefore reading the document as a whole, the diary could not be set to belong /relate to the assessee nor its contents said to relate to the assessee, more particularly in the light of the fact that the assessee had in the first instance itself, in his statement recorded dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and we do not find any merit in the addition made by the revenue authorities on account of the cash found deposited in the bank account of the assessee remaining unexplained .It is a fact on record that the assessee had maintained Balance Sheet for the impugned year. The Ld. CIT(A), we have noted, has picked up the figures of the cash and bank balance available as at the beginning of the year and as at the end of the year from this balance sheet to workout the availability of cash with the assessee. We have gone through the contents of the Balance Sheet, which was placed before us in a paper book at page number 21-24. The said Balance Sheet, we have noted, records the opening and closing balances of both the bank accounts in which the Revenue authorities have noted cash to be deposited by the assessee. Considering the fact that both the bank accounts are recorded in the balance sheet of the assessee, there can be no case with the Revenue of the cash found deposited therein being from unexplained sources .As long as the cash and bank balances are recorded in the Balance Sheet of the assessee, it is simple accounting, that all the transactions recorded therein are duly accounted for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the loans of Rs. 1,20.000/- shown by the assessee (appellant) because all the persons in whose names, these affidavits were filed could not be produced to confirm that they have issued these affidavits and therefore, these affidavits remained unsubstantiated. In view of these affidavits being in form of additional evidence and remained unsubstantiated during the inquiry made at remand stage by the AO and also it has not been explained as what was sufficient cause for not producing these affidavits before the AO during the assessment proceeding, these affidavits cannot be admitted as additional evidence in appeal proceeding as the condition stipulated u/r 46A of the Income-tax Rule, 1962 has not been satisfied as well as these affidavits were not got verified by producing the persons in whose names they are made and hence, I find that the assessee (appellant) failed to establish the identity as well as creditworthiness of all the lenders in whose name these loans were shown and hence, genuineness of these loans could also not be established. Therefore, I confirm the amount of Rs. 1,20,000/- for the loans found to be taken by the assessee (appellant) during the year under cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts of the issue and his findings on the same are contained in para 13.1 to13.5 as under 13.1 In Ground nos. 9 & 10, addition of Rs. 20,23,567/- on account of expenses and investments recorded in seized documents BK-2 considering them unexplained has been disputed. With regard to this addition, the AO has discussed as under "The assessee was required to explain the source of investment / payment / expenses made with regard to different purposes mentioned in papers enclosed vide notice dated 03.11.2006. In the enclosed papers a BK-2 Annexure in which investment and expenses amounting to Rs. 20,23,567/- reflected was enclosed. In compliance to this query the assessee filed submission dated 29.11.2006 stating therein that he has to say nothing more except what he has already stated in the statement on oath. A perusal of the statement recorded shows that the assessee was questioned a few entries out of this Annexure and the assessee could not explain even any of them. In view of the above facts and discussion it is concluded that the assessee has no explanation about the source of investment / payment and expenses totaling to Rs. 20,23,567/- which is added to the disclosed income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has to say nothing more except what he has already stated in his statement on oath." In the assessment order a page 04 (para No. 3), the Ld. AO has mentioned that "the assessee was required to explain the source of investment / payment / expenses made with regard to different purposes mentioned in the papers enclosed vide notice dated 03.11.2006. In the enclosed papers a BK-2 annexure in which investment and expenses amounting to Rs. 20,23,567/- reflected was enclosed. In compliance to this query the assessee filed submissions dated 29.11.2006 stating therein that he has to say nothing more except what he has already stated on statement on oath ................." The observations of the Ld. AO is apparently incorrect and without any basis. Your kind good self will kindly see that the appellant vide his written reply dt. 29.11.2006 explained in detail about the BK-2 which fact has altogether been ignored by the Ld. AO and he has only picked up last sentence of the reply which says that "In all these entries your good self has recorded statement on oath of the assessee Shreedhar Pandey and the assessee has nothing to say more except what he has already stated in his statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh available with the appellant. On all these points statement on oath of the assessee was recorde by the Ld. AO and as such while submitting the explanation on BK-2 vide written reply dated 29.11.2006 in the last lines, it was made clear that only on these three points the appellant had to say nothing except what he has stated in his statement on oath recorded by the AO. It is worth mentioning that in the questionnaire notice u/d 142(1) dated 03.11.2006 for this Assessment Year, the Ld. AO raised a separate query and desired the appellant to explain the amount of Rs. 6,26,250/- given to Ashish Shukla which point was replied vide para No. 18 of the reply dated 29.11.2006, in which it was made clear that this amount was given by Smt. Pushpalata Pandey wife of the appellant from her account no. 3786 maintained in Etawah Distt. Co-operative Bank, Etawah on 02.02.2005 and this explanation of the appellant was accepted by the Ld. AO. Thus, the AO was satisfied about this transaction. Thus, the action of the Ld. AO in making the above addition of Rs. 20,23,567/- was without appreciating the facts of the case and without considering the written replies and the factual position was unjus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee with A. Dubey for purchase of some jewellery and again an entry of Rs. 1,10,000/- which includes return amount of Rs. 1,00,000/- from A. Dubey and then last sentence on which the AO has relied to make the addition is written that in all these entries, your good self has recorded the statement on oath of the assessee Shreedhar Pandey and the assessee has to say nothing more except what he has already stated in his statement on oath. In view of incomplete details available on record with regard to the seized document BK-2, the AO has been asked to provide the complete details of page-wise entries in this seized document. In compliance to my direction, the AO provided the desired details in the remand report dated 02.03.2012 as under :- S. No. Date Details of Entry Receipt Expenditure / Payment Deposit 2. 20.01.05 Advocate 0 50991 3. 21.01.05 0 5000 For Deposit 54050 4. 22.01.05 Challan 0 20000 Donation saifai Mahotsav 11000 5. 24.01.05 0 5000 Challan 20000 Donation 110 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sted out by the AO in view of the fact that in written submission filed in the appeal proceeding, only three entries were explained and for other entries, it was stated that they were explained in a letter 23.08.2006 submitted to the AO but this letter was neither found in the assessment record, nor found enclosed with the written submission as contended in the written submission filed before me. Therefore, I find that the Ld. AR has been able to explain only three entries before me and they are as under: 1. Rs. 6,26,250/- given to Shri Ashish Shukla by the wife of the appellant who is her bhanja for doing some business through account payee cheque draft. 2. Rs. 1,00,000/- deposited by the appellant with Mr. A.Dubey. 3. Rs. 1,10,000/- return of money from A. Dubey including Rs. 10,000/- cash available with the appellant. The above explanation of the appellant has not been controverted by the AO and I have also found that Rs. 6,26,250 and Rs. 1,00,000/- has been found to be reflected as money withdrawn from the bank account on 02.02.2005 from A/c no. 3786 and A/c No. 3783 respectively and hence, these payments can be considered to have been paid from the accounted fund of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e added as unexplained receipt and Rs. 10,54,467/- as unexplained expenditure in the hand of the assessee(appellant) totaling to Rs. 12,75,317/ -. Therefore, I confirm the addition of Rs. 12,75,317/- out of the addition of Rs. 20,23,567/- made by the AO on account of seized document BK-2 and the assessee (appellant) gets a relief of Rs. 7,48,250/ -. Accordingly, Ground nos. 9 & 10 are partly allowed. 22. As per the above the addition of Rs. 12,75,317/- pertains to entries of expenses and investments found recorded in seized document BK 2,treating them to be unexplained. The findings of the Ld. CIT (A), contained at para 13.5 of his order,we have noted,is a detailed finding who has considered all the contentions of the assessee and after dealing with all of them has given part relief to the assessee.The original edition made by the AO was to the tune of Rs.20,23,567 /-which the Ld. CIT(A), after considering each and every argument and contention made before him and corraborating it with the documents on record,has confirmed to the extent of Rs.12,75,317/- which he noted to have remained unexplained. In the absence of any assistance on behalf of the assessee on this factual issue w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt of Rs. 60,000/- on 09.02.2005. The Ld. AO . asked the nature of payment of this sum which was clarified and duly explained in the reply dated 29.11.2006 as under :- "As regards payment of cash of Rs. 60,000/- to Rajan Dubey (page-62 of BK-3), it is submitted that Rajan Dubey is former employee of our Group and a sum of Rs. 60,000/- was paid in cash by the assessee Shreedhar Pandey to him for the purchase of fertilizers for their own agriculture land. It has already been stated at so many times that this group owns huge agricultural land for which substantial quantity of fertilizer is required. It is submitted that expenditure relating to agricultural land are always incurred in cash. It is also clarified that as per the query given in the questionnaire your good self has treated this amount as receipt, while if you will go through this point you will find that this is a payment not the receipt which is the revenue expenditure and has to be allowed. The Ld. AO in his assessment order has discussed the above explanation of the appellant, but has rejected the same that no explanation with regard to the source of payment of Rs. 60,000/- in cash to the above named person wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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