Prakash Asphaltingh & Toll of Highways (India) Ltd, Mhow V. The ACIT ,Central-1, Indore

CO 45/Ind/2021

AI Insights

The case involves multiple appeals and cross-objections filed by the revenue and the assessee, Prakash Asphaltings & Toll Highways (India) Ltd., against the orders of the Commissioner of Income-Tax (Appeals) and the Assessing Officer. The appeals pertain to the assessment years 2009-10 to 2011-12 and involve issues such as disallowances under section 14A of the Income-tax Act, unaccounted interest payments on cash loans, and unaccounted investments. The Tribunal examined the legal and factual basis of each issue, considering previous judgments and the specific circumstances of the case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127182 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 4 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-10-2022
• Assessment Year: 2010-2011
• Appeal Filed On: 05-12-2021
• Other Referred Cases: ITA No. 589/Ind/2015, ITA No. 227 & 228/Ind/2017, ITA No. 301/2012, ITA No. 5585/Del- Trib/2015, ITA No. 565/Ind/2019, ITA No. 589/Ind/2015, ITA No. 227 & 228/Ind/2017, ITA No. 301/2012, ITA No. 5585/Del- Trib/2015, ITA No. 565/Ind/2019
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Revision of order; Business expenditure; Loose papers; Document seized; Earning of tax free income; Question of law; Corroborative evidences; Onus to prove; Retraction; Reason to believe; Documents seized; Rule 8D; Set aside
• Section: 263; 132; 154; 69C; 143(3); 153A; 14A; 260A; 205; 250; 64; 43; 48; 73; 13; 153; 119; 22; 153C

Judgement Text

आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER (Conducted through Virtual Court) IT(SS)A No.32 to 34/Ind/2021 Assessment Year: 2009-10 to 2011-12 ACIT (Central)-1 Indore बनाम/ Vs. Prakash Asphaltings & Toll Highways (India) Ltd., Mhow (Appellant / Revenue) (Respondent / Assessee) PAN: AABCP 0398 N CO No.44 to 46/Ind/2021 (Arising out of IT(SS)A No.32 to 34/Ind/2021) Assessment Year: 2009-10 to 2011-12 Prakash Asphaltings & Toll Highways (India) Ltd., Mhow बनाम/ Vs. ACIT(Central)-1 Indore (Appellant / Assessee) (Respondent / Revenue) PAN: AABCP 0398 N Assessee by Shri Madhur Agrawal, AR Revenue by Shri P.K. Mitra, CIT-DR Date of Hearing 19.10.2022 Date of Pronouncement 10.01.2023 आदेश / O R D E R Per Bench: Feeling aggrieved by the appeal-orders passed by Ld. CIT(A), detailed hereafter, the revenue/assessee has filed these appeals/cross-objections for different assessment-years [“AY”]. Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 2 of 46 IT(SS)As No. 32/Ind/2021, 33/Ind/2021 and 34/Ind/2021 are the appeals filed by revenue respectively against the appeal-order dated 07.07.2020, 06.07.2020 and 06.07.2020 for AY 2009-10, 2010-11 and 2011-12, passed by learned Commissioner of Income-Tax (Appeals)-3, Bhopal [“Ld. CIT(A)”], which in turn arise out of respective assessment- order/rectification-order/consequential assessment-order passed by learned ACIT/DCIT, Central-1, Indore [“Ld. AO”] under the provisions of Income-tax Act, 1961 [“the act”]. Cross-Objection No. 44/Ind/2021, 45/Ind/2021 and 46/Ind/2021 are filed by assessee respectively out of those IT(SS)As. 2. At the time of hearing, the Ld. AR appearing on behalf of assessee had chosen not to press all three Cross-Objections, namely C.O. No. 44/Ind/2021, 45/Ind/2021 and 46/Ind/2021, filed by assessee. Hence the same are treated as dismissed at the request of Ld. AR. We would take up Revenue’s appeals for adjudication. 3. The grounds raised by revenue are as under: IT(SS)A No. 32/Ind/2021 – Revenue’s appeal for AY 2009-10: “(1) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition of Rs. 1,80,71,675/-made by the Assessing Officer u/s 14A of the Income-tax Act, 1961 and has overlooked the findings of the Assessing Officer mentioned in the assessment-order. (2) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition of Rs. 82,03,684/- made by the Assessing Officer on account of unaccounted interest payment on cash loan and has overlooked the findings of the Assessing Officer mentioned in the assessment-order. (3) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition of Rs. 14,83,394/- made on account of unaccounted interest payment on cash loan and has overlooked the findings of the Assessing Officer mentioned in the assessment-order. (4) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition of Rs. 5,52,49,940/- made on account of unaccounted investment and has overlooked the findings of the Assessing Officer mentioned in the assessment-order. Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 3 of 46 (5) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in treating the documentary evidences as dumb documents in the wake of the fact that part details of such documents were matched with the books of account of assessee.” IT(SS)A No. 33/Ind/2021 – Revenue’s appeal for AY 2010-11: “(1) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition of Rs. 1,07,12,272/- made by the Assessing Officer u/s 14A of the Income-tax Act, 1961 and has overlooked the findings of the Assessing Officer mentioned in the assessment-order. (2) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition of Rs. 58,55,122/- made by the Assessing Officer on account of unaccounted interest payment on cash loan and has overlooked the findings of the Assessing Officer mentioned in the assessment-order. (3) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition of Rs. 5,37,00,603/- made on account of unaccounted investment and has overlooked the findings of the Assessing Officer mentioned in the assessment-order. (4) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in treating the documentary evidences as dumb documents in the wake of the fact that part details of such documents were matched with the books of account of assessee.” IT(SS)A No. 34/Ind/2021 – Revenue’s appeal for AY 2011-12: “(1) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition of Rs. 1,29,09,512/- made by the Assessing Officer on account of bogus payment to petrol pumps and has overlooked the findings of the Assessing Officer mentioned in the assessment-order. (2) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition of Rs. 1,00,97,137/- made by the Assessing Officer u/s 14A of the Income-tax Act, 1961 and has overlooked the findings of the Assessing Officer mentioned in the assessment-order. (3) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition of Rs. 35,67,34,692/- made on account of unaccounted investment and has overlooked the findings of the Assessing Officer mentioned in the assessment-order. (4) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law by holding only 8% of bogus transaction with paper entity Geet Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 4 of 46 Exim Pvt. Ltd. as taxable while the assessee had claimed expenses of Rs. 38,77,55,100/- as sub-contract expenses and that actual work carried by Geet Exim Pvt. Ltd. remain unproved.” 4. Heard the learned Representatives of both sides at length and case- records perused. 5. Briefly stated the facts are such that the assessee is company engaged in the business of developing, operation and maintenance of infrastructure projects of roads and bridges, toll collection contracts, etc. A search u/s 132 was conducted on assessee on 27.08.2014 and the cases of assessee were assessed for AY 2009-10 to 2014-15 u/s 153A/143(3) and for AY 2015-16 u/s 143(3) vide a consolidated assessment-order dated 30.12.2016, wherein additions were made on different counts. Subsequently, the Ld. AO also passed a rectification-order dated 30.07.2019 u/s 154 for AY 2009-10 and 2010-11. Furthermore, the Ld. AO also passed a newer assessment-order dated 11.12.2019 u/s 153A/143(3) read with section 263 for AY 2011-12. Being aggrieved, the assessee went in first-appeals to Ld. CIT(A). The Ld. CIT(A) decided appeals vide separate appellate-order assessment-year wise for AY 2009-10, 2010-11 and 2011-12 giving substantial relief to assessee. Still being aggrieved, now the revenue/assessee have filed these appeals/cross-objections assailing the orders of Ld. CIT(A). 6. We would proceed year-wise and if common grounds are raised for multiple years, same will be dealt together. Ground No. 1 of Revenue’s appeal for AY 2009-10 (Rs. 1,80,71,675), Ground No. 1 of Revenue’s appeal for AY 2010-11 (Rs. 1,07,12,272), Ground No. 2 of Revenue’s appeal for AY 2011-12 (Rs. 1,00,97,137): 7. These grounds relate to the disallowance u/s 14A read with Rule 8D. 8. Ld. AO made this disallowance for the reason that the assessee has made investments yielding exempt income and hence section 14A read with Rule 8D requires disallowance. Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 5 of 46 9. During first-appeal, the Ld. CIT(A) made a detailed analysis of the factual aspects of the issue in the light of section 14A, Rule 8D and decided judicial rulings in Para No. 4.1 of his order as well as case-history of assessee qua these additions, which are not re-producing for the sake of brevity, and deleted the disallowance. 10. Before us, with the consent of Ld. DR, the Ld. AR took lead for this ground and straightaway submitted that while completing first round of assessments of AY 2009-10, 2010-11 and 2011-12 (before conduct of search), the Assessing Officer made the same additions, viz. Rs. 1,80,71,675/-; 1,07,12,272/- and Rs. 1,00,97,137/- respectively. Thereafter, the assessee contested those additions and matters travelled upto ITAT, Indore in ITA No. 589/Ind/2015 for AY 2009-10 and ITA No. 227 & 228/Ind/2017 for AY 2010-11 & 2011-12, which were decided by ITAT vide orders dated 20.09.2016 and 25.04.2018 respectively. While deciding appeal of AY 2009-10, though ITAT agreed in principle for deletion of disallowance but, however, remanded the matter back to AO for a fresh decision after certain verification. Further, while deciding appeal of AY 2010- 11 and 2011-12, the ITAT deleted the disallowance. Ld. AR submitted that in the present appeals, the same additions have again been made by Ld. AO. Hence, the issue being already settled in first-round of litigation, no disallowance ought to have been made. Ld. AR submitted that the Ld. CIT(A) has made an elaborate discussion not only on factual and legal aspects of the disallowance but also considered the aforesaid Orders already passed by ITAT and thereafter deleted the disallowance. Ld. AR submitted that there is no infirmity in the order of Ld. CIT(A), hence the deletion of disallowance must be upheld. 11. Ld. DR dutifully supported the orders of Ld. AO and argued that the disallowance must be sustained. Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 6 of 46 12. We have considered the facts, rival submissions and perused the material held on record. We observe that the Ld. CIT(A) has made a detailed discussion of the entire gamut of issue by considering factual and legal aspects and came to conclude that the disallowance u/s 14A / Rule 8D was not warranted in the present case. Further, in Para No. 4.1.12 of his order, the Ld. CIT(A) has categorically mentioned as under: “4.1.12 Furthermore, it is worth mentioned that in the case of appellant itself, the issue of disallowance u/s 14A r.w.r 8D for AYs 2009-10 to 2011-12 has already been dealt with by Hon’ble jurisdictional ITAT Indore vide appeal no ITA 589/Ind/2015 dated 20.09.2016 and 227, 228/Ind/2017 dated 25.04.2018. Hon’ble ITAT has allowed claim of the appellant by stating that the investment made in quoted/unquoted shares was made out of interest free funds. Therefore, judiciously following the order of Hon’ble ITAT Indore in the case of appellant addition made by the AO is deleted.” 13. Clearly, therefore, there is no infirmity in the findings made by Ld. CIT(A). Before us, the Revenue has not rebutted the findings by placing any contrary material on record. Therefore, we do not see any reason to interfere with the order of Ld. CIT(A). Hence we uphold the action of Ld. CIT(A) and dismiss these grounds. Ground No. 2 of Revenue’s appeal for AY 2009-10 (Rs. 82,03,684): 14. This ground relates to the addition of unaccounted interest payment on cash-loans. 15. The facts qua this addition are such that during the course of search, the authorities seized a laptop from the premise of assessee wherein a company named “XYZ 08092” was found in tally-data and also seized loose papers marked as “LPS-1 to 8” from the premises of Shri G.C. Patidar, an employee of assessee. The authorities also recorded statement of Shri G.C. Patidar. The authorities also seized a diary marked as “BS-4” from the premise of assessee which contained details of a party organized by assessee, which was attended by certain persons known to assessee. Based thereon, the Ld. AO framed a view that the assessee has taken cash-loans from known persons; paid interest thereon from unaccounted sources; and Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 7 of 46 also given cash-loans to its directors/their relatives. When the Ld. AO confronted the assessee in the matter, the assessee submitted that the laptop seized from its office was not in a working condition. It was further submitted that the laptop was being used by one of its employee, Shri Nilesh Tawrech who had already expired in the year 2009. The assessee further submitted that Shri Nilesh Tawrech was taking tally-accounting training under Shri G.C. Patidar, who used to provide hypothetical entries for training purpose and that is why a company named “XYZ 08092” was opened in the tally-system. It was further submitted that Shri G.C. Patidar worked as an accountant in the office of assessee and also worked for others. It was further submitted that Shri G.C. Patidar had informed the assessee that most of the entries were hypothetical and a few entries were copied from actual transactions of assessee for imparting training to Mr. Nilesh Tawrech. The assessee also submitted an affidavit dated 28.12.2016 of Shri G.C. Patidar in this regard. The assessee also submitted that “XYZ 08092” company is a dummy company opened by Shri G.C. Patidar / Shri Nilesh Tawrech and the assessee had neither awareness nor any connection with such company. In the affidavit dated 28.12.2016, Shri G.C. Patidar also retracted his statements recorded during search. This way, the assessee disowned the “XVZ 08092” company as well as the cash-transactions alleged by authorities. However, Ld. AO did not accept the submissions of assessee mainly for the reasons that (i) the laptop having been found from possession of assessee, the same is presumed to belong to assessee by virtue of section 292C of the act; (ii) the tally-data found in the laptop under “XYZ 08092” company contained both accounted transactions and unaccounted transactions of assessee, hence the entire tally-data has to be treated as belonging to assessee and the data cannot be said to be “dumb documents”. Finally, the Ld. AO worked out the effect of financial transactions recorded in “XYZ 08092” company and arrived at a conclusion that the assessee had taken cash-loans and paid interest thereon from unaccounted sources. With Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 8 of 46 such understanding, the Ld. AO made an addition of Rs. 82,03,684/- in AY 2009-10 vide Para No. 13 to 13.2.12 of the assessment-order. 16. During first-appeal, the assessee made a detailed submission to Ld. CIT(A). After considering submission of assessee, the Ld. CIT(A) deleted this addition. The relevant paragraphs of the CIT(A)’s observation are extracted below: “4.2 Ground No. 4, 5, 9 to 12:- Through these grounds of appeal, the appellant has challenged the addition of Rs. 14,83,394/-, Rs. 82,03,684/- & Rs. 5,52,49,940/- on account of cash loans to directors and interest payment on cash loan. During the course of search a Lenovo laptop was found from office premises of the appellant. The AO during the course of assessment proceedings found that one tally data in the name of ‘XYZ 0809 2’ contain details of payment of statutory dues. The AO further observed that appellant has borrowed heavily from market and has repaid interest. Further, some documents were found and seized from Shri GC Patidar one of the employee of the appellant. The relevant extract of said loose paper is scanned on page no 81 of the assessment order. The details of loan received/paid as mentioned on the impugned tally data is provided by the AO on page no 86 in the body of the assessment order. Taking into entire evidence under consideration, the assessee was required to explain each and every transaction of the tally data and reconcile the same with regular books of accounts. The AO after considering reply of the assessee did not find the same acceptable for the reasons mentioned in para 13.2.2 to 13.2.9 of the assessment order. 4.2.1 The Appellant has submitted a detail reply dated 26/12/2016 in response to show cause notice issued by AO dated 19/12/2016, a copy hereof is submitted during hearing, in relation to apprehension with regards to entries in XYZ tally data and paper seized from premises of AIDPL. The same is reproduced as under: XXX (not being reproduced for brevity) 4.2.2 I have considered the facts of the case, plea raised by the appellant and findings of the AO. Admittedly, the sole basis of such huge addition is one the tally data recovered from laptop of old employee and loose papers sheets seized vide LPS-1 to 8 from premises of Shri G C Patidar. During the course of search, statement of Shri GC Patidar was recorded on oath which has been retracted vide affidavit dated 28.12.2016. Since, the statement given during search has been retracted, therefore, the same cannot be relied upon. As a matter of fact the appellant before, AO as well as before me has stated that the entries in respect of laptop data which has been seized from the office of the company was used by one of its employee Mr. Nilesh Tawrech who was taking tally accounting training under Shri G.C. Patidar, who used to provide him hypothetical entries for learning purpose for that reason and for learning purpose name of the company was taken as ‘XYZ’. The appellant has claimed Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 9 of 46 not having any knowledge of company ‘XYZ’ which has also been stated by appellant during the course of assessment proceedings. The appellant after the search proceedings enquired from his staff member regarding the impugned printouts. Mr G.C. Patidar, who worked as an accountant usually comes to office and worked for others and uses the printer installed at the premises of the appellant, informed that he has opened this account on tally to train his junior Mr. Nilesh Tawrech and most of the figures are imaginary and few of the figures were copied from the data of appellant. The appellant in support has filed affidavit of Shri G.C. Patidar regarding the same. 4.2.3 After considering the entire factual matrix and evidence/material on record inter alia written submissions filed, I reach to conclusion that impugned additions have been made on the basis of assumption and presumption which neither sustainable on facts nor in law. The AO has reached to conclusion that few of the entries in printouts and books of appellant are matching, therefore, the same represents correct picture of books of accounts of the appellant and subsequent addition was made to the income of the appellant. On perusal of copy of affidavit filed by Shri G.C. Patidar, it is observed that the said tally dummy company has been created on his instruction in order to train his junior Mr. Nilesh Tawrech. He further submitted that no firm in the name of XYZ exists and neither PATH company i.e. Appellant Company has taken or repaid any loan in cash nor any loan was provided to the directors of the appellant company. The seized data is haphazard and un-systematic. The Data shows that the appellant company has borrowed the money in cash and paid to the Directors Shri Punit Agrawal and Shri Nitin Agrawal. No company takes the cash borrowing from the market and transfer it to the directors when Directors are having very good goodwill in the market to borrow directly in their own name. Therefore, the loose paper sheets and laptop entries cannot be considered as a relevant evidence for making such huge additions. Also, the AO ought to have considered this very simple fact the learning tally accounts does not reflect true & real business transactions. These documents have been scanned on page 81 to 86 of the assessment order. On a plain and cursory look would make it amply clear that this paper is relating to “some tally account in the name of XYZ 0809 2 from 01.04.2008 to 31.03.2009 & 01.04.2009 to 31.03.2010”. Appellant has strongly contended that the said printouts were taken by Shri G.C. Patidar and does not belong to him. The owner and creator of the documents have admitted that the said impunged printouts have been made by his ex- employee who is no more and had also explained the reason for preparing such documents. Shri G.C. Patidar has clearly stated that the tally accounts have been prepared for training purpose only and the data are picked from different sources which also includes random data of appellant. The AO failed to consider that neither the appellant nor his accountant has stated that any such firm actually exists and the transactions as mentioned in the seized printouts have been executed. The additions have been imposed on sheer presumption and assumption basis. Further, the AO did not even bother to carry out independent enquiries from the person whose names are mentioned on LPS-1 & LPS 8 which was seized from the premises of G C Patidar. The trainee junior Nilesh Tawarech has untimely passed away. Therefore, it is impossible for the appellant to bring Shri Nilesh Tawarech in person for Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 10 of 46 examination on oath. It is pertinent to mention that no incriminating material was found during search having sole direct nexus with any of the impuged cash loan transaction. Furthermore, neither the AO call any of the person whose names were mentioned on loose paper for examination nor any person whose name were mentioned on loose paper turned out to AO and has admitted that any such transaction has taken place. Therefore, in absence of any cogent evidence having direct nexus with the impugned transactions, the said impugned papers and tally data account cannot be used against the appellant. The AO has also alleged that some of the data is accounted and some of the data is unaccounted in books of accounts, however, has failed to explain that the unaccounted data. Also, the data found from the premises of Shri G.C. Patidar was not matching with the data found from the office premises of the appellant in the seized impunged tally data. The AO has also compared data found from premises of Shri GC Patidar and impunged tally account of DM Poddar. On bare reading one could easily establish that the entries mentioned in the ledger account of D.M Poddar does not matches with the jottings of the loose paper seized from premises of Shri GC Patidar. Similarly the ledger account of R.P. Poddar is also not matching with the other account as mentioned in the loose paper sheets. The AO has also reproduced the accounts of various persons as “In Recovered Data” and “In Regular Books of” and has tried to establish a nexus between seized tally data and books of account of the appellant. While analysing the comparative chart, the data as mentioned “In Recovered Data” and “In Regular Books of” are not matching. Here is important to keep in mind that Shri GC Patidar has admitted that the trainee was provided with mixed random data of various concerns. Therefore, there may be some instance where the said amount gets tallied with the training tally data. However, for the other unmatched data the onus lies on AO to prove that the said transaction was fully materialised with each and every detail of the transaction with supportive evidences. No positive independent evidences has been brought on record by the AO. Therefore, it is proved beyond doubt that the seized tally accounts do not form part of regular books of account. Most importantly, the AO himself has admitted that the data is getting partially corroborated. 4.2.4 XXX (relates to other ground) 4.2.5 Another reasoning provided by the AO in support of his allegation that one BS-4 was found during the course of search which contain names of certain persons who are invitees to the party. The AO has applied all possible guess work in support of his allegation and stated that the name of the person whose names are written on BS-04 are known to appellant and in all probability will give loan to appellant. Even if the perusal of the contents of the BS 4 is made, there is only a single name matching with the name from whom loans are allegedly borrowed in cash, which is as under:- Sl. Name of the alleged Lenders on the basis of tally data./ loose sheets Name as per BS-4 who are invitees to the party 1 Anil Poddar Name not found Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 11 of 46 2 DD Singhal Name not found 3 Dev Modi Name not found 4 DM Poddar Name not found 5 Dr. Modi Name not found 6 G.L. Modi Name not found 7 Kailash Agrawal Name not found 8 Kavita Nagliya Name not found 9 Manju Anil Modi Name not found Mishraji Name not found 11 Narendra Kala Name not found 12 Neeaj Modi Name not found 13 Nitin Goyal Name not found 14 R.P. Poddar Name not found 15 R.S. Modi Name not found 16 Santosh vrindavanagrawal Name not found 17 Satish Mewada Name Found 18 Savitri Poddar Name not found Sunil Modi Name not found The data in the form of loose sheet gathered from the premises of GC Patidar which is a print out of excel sheet cannot be relied upon in the absence of any corresponding entry being made of the loan given by the counter party in his books. It is the stand of the AO that some of the Modi family member has given loan to PATH by cheque, therefore the entries in the loose sheet / tally data can be assumed to be true. The proof of actual transaction taken place cannot be substituted from the presumption howsoever strong it may be it cannot take the place of an evidence. It is onus on the AO to prove that actual transaction of cash i.e. movement of cash actually taken place with the help of documentary evidence. The assessment order does not discuss any such attempt by the department to conclusively establish that the transaction whereby debtor creditor relationship has been created between the two parties. None of the parties Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 12 of 46 from whom the loans are allegedly taken by Assessee Company in cash were examined for the truth of the happening of such transactions. If the alleged cash loans are taken by the assessee company is taken to be true on the fact of it, then there arises a corresponding liability of income tax on such undisclosed income in the hands of giver of the cash loan. In none of the cases, the reciprocity which is a fundamental necessity of existence of transaction was ever proved or attempted by the department. In two cases reopened by the Department of Mr. Anil Poddar and Mr. Raghunath Poddar of which the Assessee Company has been informed, the reason to believe that cash loans were advanced by those person to assessee company was found unsupported and therefore such doubt has no legs to stand upon. Thus, in entirety the seized loose paper and tally data is dumb document/data and does not reflect any exchange of money by/to appellant. 4.2.6 This is settled legal position that any ‘dumb document’ cannot be used as an evidence to draw an adverse inference against the assessee. Case laws supporting this proposition are as under:- ACIT Vs. Satyapal Wassan (2007) 295 ITR (AT) 352 (Jabalpur) Held that “the crux of these decisions is that a document found during the course of search must be a speaking one and without any second interpretation, must reflect all the details about the transactions of the assessee in the relevant assessment year. Any gap in the various components as mentioned in section 4 of the Income Tax Act must be filled up by the Assessing Officer through investigations and correlations with the other material found either during the course of the search or on the investigation. As a result, we hold that document No.7 is a non-speaking document.” Most important ratio laid down in the said judgment is that “impugned document” must be speaking one and without any second interpretation and must reflect all the details about transactions of the assessee. In the instant case, the dummy tally account was created for training purposes by Shri G.C. Patidar but taking data from different sources including that of appellant. It would not be out of world to point out that the AO has never asked/enquired from the persons whose names are mentioned on the loose papers. The AO also did not enquired from Shri G.C. Patidar who has admitted to have been owner and creator of the tally account and subsequently retracted by filing affidavit dated 28.12.2016. Absence of these vital details is making the loose paper under consideration as “deaf & dumb document”. The onus was solely on the AO to fill such vital gaps by bringing positive evidence on record and prove the allegation about alleged cash loans by the assessee, which he utterly failed to do so. CBI vs VC Shukla 3 SCC 410 The Hon’ble Supreme Court has held that loose sheets of paper cannot be termed as 'book’ within the meaning of s. 34 of Evidence Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 13 of 46 Act. It has also been held therein by the Hon’ble Supreme Court that even correct and authentic entries in books of account cannot, without independent evidence of their trustworthiness, fix a liability upon a person. The Hon’ble Supreme Court also observed that even assuming that the entries in loose sheets are admissible under s. 9 of the Evidence Act to support an inference about correctness of the entries still those entries would not be sufficient without supportive independent evidence. Rakesh Goyal Vs. ACIT (2004) 87 TTJ (Del) 151 – The findings of Hon’ble Tribunal was as under:- “20.1 After perusing the findings of the CIT(A) and the submissions of both the parties, we do not find any infirmity in these findings. Firstly the finding of the CIT(A) has not been controverted by the learned Departmental Representative by filing any positive evidence. The copies of the pages found from the possession of the assessee are placed in the paper book and after going through these papers, we find that these are simply deaf and dumb documents and they cannot be considered for making any addition. This is a settled principle of law that any document or entry recorded in those documents should be corroborated with positive evidence. Here in the present case nothing has been corroborated or proved that assessee was dealing in money lending business.” Mohan Foods Ltd Vs. DCIT (2010) 123 ITD 590 (Del) – Held that -- although the contents of the relevant seized documents show that the amounts mentioned therein relate to some expenditure, in the absence of any other evidence found during the course of search or brought on record by the AO to show that the said expenditure was actually incurred by the assessee, the same cannot be added to the undisclosed income of the assessee by invoking the provisions of s. 69C—Assessee explained that the said entries represented estimates made by its employees in respect of proposed expenditure—There is no evidence on record to rebut/controvert the said explanation- Additions not sustainable CIT Vs. S M Agarwal (2007) 293 ITR 43 (Del) – Held that – “In this case the department seized documents "Annexure A-28 p. 15, - gives the details of certain handwritten monetary transactions which shows that the assessee had given a loan of Rs. 22.5 lacs Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 14 of 46 on interest and earned interest income of Rs. 3.55 lacs on it. The Tribunal hold this document as dumb document. The relevant findings of the Tribunal as mentioned in the above order is as under:- “We have ourselves examined the contents of the document and are unable to draw any clear and positive conclusion on the basis of figures noted on it. The letters ‘H.S.’, ‘T.2’ and ‘D-Shop’ cannot be explained and no material has been collected to explain the same. Likewise, the figures too are totally unexplained and on the basis of notings and jottings, it cannot be said that these are the transactions carried out by the assessee for advancing money or for taking money. Thus, in our opinion, this is a dumb document." Hon’ble High Court confirmed the findings of the Tribunal and relevant findings was as under:- “12. It is well settled that the only person competent to give evidence on the truthfulness of the contents of the document is the writer thereof. So, unless and until the contents of the document are proved against a person, the possession of the document or handwriting of that person, on such document by itself cannot prove the contents of the document. These are the findings of fact recorded by both the authorities i.e. CIT(A) and the Tribunal.” “15. Similarly, in the present case, as already held above, the documents recovered during the course of search from the assessee are dumb documents and there are concurrent findings of CIT(A) and the Tribunal to this effect. Since the conclusions are essentially factual, no substantial question of law arises for consideration”. Jayantilal Patel Vs. ACIT & Ors (1998) 233 ITR 588 (Raj) – Held that - “During search at the residence of Dr. Tomar, the Department official found a slip containing some figures. This piece of paper claimed to have been recovered at the time of search contains figures under two columns. In one column, the total of these figures comes to Rs. 17,25,000 from 31st May, 1989, to 8th Dec., 1989, and in the other column, the total of these figures comes to Rs. 22,12,500. An addition of Rs. 22,12,500 on the basis of figures on a small piece of paper in respect of purchase of Plot No. B-4, Govind Marg, Jaipur was made by the AO. This plot B-4, Govind Marg, Jaipur, has been purchased jointly by Dr. Tomar, Dr. Mrs. Tomar and B.S. Tomar, HUF. Held that no addition on account of entries on a piece of paper which is claimed to have been found at the time of search, can be made, treating the figures as investment for purchase of plot No. B- Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 15 of 46 4, Govind Marg, Jaipur in the hands of Dr. Tomar, Dr. Mrs. Tomar and B.S. Tomar HUF.” N K Malhan Vs. DCIT (2004) 91 TTJ (Del) 938 - Held that – “We have perused the aforesaid explanation and the seized document placed at assessee’s paper book-I pp. 48 and 50. The document does not state of any date or the year against the entries written therein. It does not show whether the assessee has made or received any payment. It also cannot be deciphered from the said documents that the entries therein pertain to the block period. The AO also did not bring on record any material to show that any investment has been made by the assessee in any chit fund company or otherwise. The document found and seized might raise strong suspicion, but it could not be held as conclusive evidence without bringing some corroborative material on record. The document contained only the rough calculations and was silent about any investment. On the basis of such a dumb document, it cannot be said that there were investments made in fact by the assessee. Heavy onus lay upon the Revenue to prove that the document gives rise to undisclosed investment by the assessee. This onus has not been discharged. Accordingly no addition of undisclosed income could be made on the basis of such a document. Such a view has also been entertained by the Hon’ble Allahabad High Court in CIT vs. Dayachand Jain Vaidya (1975) 98 ITR 280 (All). The addition so made, therefore, is directed to be deleted.” Stanamsingh Chhabra vs. Dy. CIT (2002) 74 TTJ (Lucknow) 976: None of the loose papers seized are in the hand writing of the assessee. There is some jotting by pencil in some coded form on the loose papers made by the surveyed person or some other person. Moreover, no entries are supported by any corroborative evidence; such loose papers can not be called even the documents as they are simply the rough papers to be thrown in the waste paper basket. In this connection, the assessee relies upon the court decisions. CIT Vs. Chandra Chemouse P. Ltd. (2008) 298 ITR 98 (Raj.): It is held that – (i) Additions can be made only when evidence is available as a result of search or a requisition of books of accounts or documents and other material. However additions cannot be made on the basis of inferences. Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 16 of 46 (ii) No facts were available to AO after search and inference of AO did not fall within the scope of Section 158BB. (iii)Deletion of additions made by Tribunal of assumed undeclared payments made for purchase of property was on basis of facts. Ashwani Kumar V. ITO (1991) 39 ITD 183 (Del) and Daya Chand V. CIT (2001) 250 ITR 327 (Del) and S.P. Goel V. DCIT (2002) 82 ITD 85 (Mum.): Nine out of 19 slips found were without any name or amount and therefore were dumb documents and no adverse inference could be drawn. Common Cause (A Registered Society) Vs. Union of India – 30 ITJ 197 (SC). In this case, the Hon’ble Court held that without any independent evidence or corroborative material, no addition is permissible on the basis of loose paper jottings & notings. The relevant paras of the order are as under :- 16. With respect to the kind of materials which have been placed on record, this Court in V.C. Shukla’s case (supra) has dealt with the matter though at the stage of discharge when investigation had been completed but same is relevant for the purpose of decision of this case also. This Court has considered the entries in Jain Hawala diaries, note books and file containing loose sheets of papers not in the form of “Books of Accounts” and has held that such entries in loose papers/sheets are irrelevant and not admissible under Section 34 of the Evidence Act, and that only where the entries are in the books of accounts regularly kept, depending on the nature of occupation, that those are admissible 17. It has further been laid down in V.C. Shukla (Supra) as to the value of entries in the books of account, that such statement shall not alone be sufficient evidence to charge any person with liability, even if they are relevant and admissible, and that they are only corroborative evidence. It has been held even then independent evidence is necessary as to trustworthiness of those entries which is a requirement to fasten the liability. 18. This Court has further laid down in V.C. Shukla (Supra) that meaning of account book would be spiral note book/pad but not loose sheets. The following extract being relevant is quoted hereinbelow :- “14. In setting aside the order of the trial court, the High Court accepted the contention of the respondents that the documents were Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 17 of 46 not admissible in evidence under Section 34 with the following words: "An account presupposes the existence of two persons such as a seller and a purchaser, creditor and debtor. Admittedly, the alleged diaries in the present case are not records of the entries arising out of a contract. They do not contain the debits and credits. They can at the most be described as a memorandum kept by a person for his own benefit which will enable him to look into the same whenever the need arises to do so for his future purpose. Admittedly the said diaries were not being maintained on day-to-day basis in the course of business. There is no mention of the dates on which the alleged payments were made. In fact the entries there in are on monthly basis. Even the names of the persons whom the alleged payments were made do not find a mention in full. They have been shown in abbreviated form. Only certain 'letters' have been written against their names which are within the knowledge of only the scribe of the said diaries as to what they stand for and whom they refer to." 19. With respect to evidentiary value of regular account book, this Court has laid down in V.C. Shukla, thus; “37. In Beni v. Bisan Dayal it was observed that entries in books of account are not by themselves sufficient to charge any person with liability, the reason being that a man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of the parties. There must be independent evidence of the transaction to which the entries relate and in absence of such evidence no relief can be given to the party who relies upon such entries to support his claim against another. In Hira Lal v. Ram Rakha the High Court, while negativing a contention that it having been proved that the books of account were regularly kept in the ordinary course of business and that, therefore, all entries therein should be considered to be relevant and to have been proved, said that the rule as laid down in Section 34 of the Act that entries in the books of account regularly kept in the course of business are relevant whenever they refer to a matter in which the Court has to enquire was subject to the salient proviso that such entries shall not alone be sufficient evidence to charge any person with liability. It is not, therefore, enough merely to prove that the books have been regularly kept in the course of business and the entries therein are correct. It is further incumbent upon the person relying upon those entries to prove that they were in accordance with facts.” 20. It is apparent from the aforesaid discussion that loose sheets of papers are wholly irrelevant as evidence being not admissible under Section 34 so as to constitute evidence with respect to the transactions mentioned therein being of no evidentiary value. The entire prosecution based upon such entries which led to the investigation was quashed by this Court. Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 18 of 46 4.2.7 Further, in numerous other case laws courts have consistently upheld the view that no addition and penalty could be imposed in the hands of the assessee on the basis of the dumb loose papers seized during search, in absence of any corroborative material to show undisclosed cash loan given/taken by the appellant. Some of the case laws are as under:- (i) M M Financiers (P) Ltd Vs. DCIT (2007) 107 TTJ (Chennai) Held that “no addition could be made in the hands of assessee on the basis of the dumb loose slips seized from his residence, in the absence of any corroborative material to show payment of any undisclosed consideration by the assessee towards purchase of land”. (ii) Monga Metals (P) Ltd Vs. ACIT 67 TTJ 247 (All. Trib): Holding that Revenue has to discharge its burden of proof that the figures appearing in the loose papers found from assessee’s possession constitute undisclosed income. [In the present case, loose papers were not even seized from assessee’s possession]. (iii) Pooja Bhatt Vs. ACIT (2000) 73 ITD 205 (Mum. Trib) Held that where document seized during search was merely a rough noting and not any evidence found that actual expenditures were not recorded in books of account, additions not justified. [In the instant case, similarly no other corroborative evidence was found in search to prove that details/figures mentioned in notings on page 117 to 119 of A/1 represent ‘on money’ payments by the assessee]. (iv) Atual Kumar Jain Vs. DCIT (2000) 64 TTJ (Del.Trib) 786 – Held that additions based on chit of paper, surmises, conjectures etc could not be sustained in the absence of any corroborative evidence supporting it. [Similarly in present case, neither either parties have admitted payment/receipt of ‘on money’ nor any corroborative evidence was seized to support the findings of the AO]. (v) S K Gupta Vs. DCIT (1999) 63 TTJ (Del.Trib) 532 Held that “that additions made on the basis of torn papers and loose sheets cannot be sustained as same do not indicate that any transaction ever took place and does not contain any information in relation to the nature and party to the transaction in question.” Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 19 of 46 (vi) Jagdamba Rice Mills Vs. ACIT (2000) 67 TTJ (Chd) 838 Held that “No addition can be made on dump documents”. (vii) In the latest decision of the Hon’ble M.P. High Court, Indore Bench in the case of the PCIT-1 v/s Shri Pukhraj Soni (2019) 34 ITJ 489 (MP) has held as under; “On the basis of search re-assessment additions were made – Appeal allowed by CIT(A), which was confirmed by ITAT – ITAT held that CIT(A) was justified in allowing the appeal as AO has done the addition on the basis of notings found in the books of third person – Revenue filed appeal against the order of ITAT – HELD – In the case of Common Cause (A Registered Society) v. Union of India, (2017) 30 ITJ 197 (SC), the Supreme Court held that incriminating materials in form of random sheets, loose papers, computer prints, hard disk and pen drive etc. and has held that that are inadmissible in evidence, as they are in the form of loose papers – In the present case also entries found during search and seizure which are on loose papers are being made the basis to add income of respondent-appellant – In the light of the Supreme Court judgments, no case for interference is made out with the order passed by ITAT – Moreover no substantial question of law arise in the present appeal – Appeal is dismissed” It is settled legal position that onus of proof is on the person who makes any allegation and not on the person who has to defend. As per legal maxim “affairmanti non neganti incumbit probation” means burden of proof lies upon him who affirms and not upon him who denies. Similarly as per doctrine of common law “incumbit probation qui digit non qui negat” i.e. burden lies upon one who alleges and not upon one who deny the existence of the fact. The AO has failed to discharge his onus of proof especially when penalty has been imposed under “deeming fiction”. In view of this lacune on the part of AO, the penalty imposed is legally not sustainable. As held in the case of CIT v/s KP Varghese 131 ITR 574 (SC) by Hon’ble Apex Court in absence of evidence that actually assessee paid more amount than declared in registered deed, no addition can be made. In the case of Bansal Strips (P) Ltd & Ors Vs. ACIT (2006) 99 ITD 177 (Del) it has been held that :- “If an income not admitted by assessee is to be assessed in the hands of the assessee, the burden to establish the such income is chargeable to tax is on the AO. In the absence of adequate material as to nature and ownership of the transactions, undisclosed income cannot be assessed in the hands of the assessee merely by arithmetically totally various figures jotted down on loosed document”. Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 20 of 46 4.2.8 It is settled law that AO cannot make any addition merely on basis of suspicion, however strong it may be. The AO is not justified in presuming certain facts without having anything to corroborate. Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v/s CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, still assessment cannot be made on the basis of imagination and guess work. It has been held in the case of Umacharan Saha & Bros co. v/s CIT 37 ITR 21 (SC) that suspicion, however strong cannot take place of evidence. Similar views have been expressed by Apex court in the case of Dhiraj Lal Girdharilal v/s CIT (1954) 26 ITR 736 (SC). 4.2.9 Despite the request of the Appellant, during the course of Assessment proceeding and also during the course of Penalty proceedings, the department despite having several weapons in its armory, like giving of summon, survey, search and seizure, re-assessment, revision etc could not establish as to whether the alleged person from whom it is alleged that the appellant has taken huge loan in cash are really existing person or imaginary person. Nothing has been brought on record to suggest any enquiry has been conducted about the alleged lenders. No statement were recorded of the so called lenders by issuing summon, if there be any belief or doubt as to taking of loan in cash, if harbored by the department. Even if some statements were recorded they are not shared nor there was opportunity given to cross examine the person from whom it is alleged that Appellant has taken loan in cash. Further , the theory of huge cash loan being taken by Appellant, which has been built upon the loose sheet and laptop, a presumption u/s. 132 (4A) was available in the statute book but it has been duly rebutted by the Appellant with cogent and germane explanations, which cannot be disbelieved. Hon. ITAT Indore Bench in the case of Dr. Yogiraj Sharma Vs. asstt CIT (2015) 25 ITJ 105 (Indore Tribunal); [2016] 69 taxmann.com 366 (Indore - Trib.)/[2015] 169 TTJ 547 (Indore - Trib.) categorically held that department has to bring cogent evidence to prove that transaction has actually taken place and inference cannot take the place of actuality . The relevant para is reproduced as under, “In this case also we noted that the revenue authorities tried to co- relate these figures with the various supplies made to M.P Health Dept. but AO did not call any of the parties or if called for has not brought statement of any of the parties, if recorded, on record to prove whether these parties have paid any commission to the Assessee. Even no information was supplied or given to us or brought on records what happened in the case of these parties. Inference was simply drawn on the basis of the interpretation given to the various figures appearing in the loose papers. Inference, as we have already held, whatsoever strong, cannot take the place of actuality. We have gone through the various decisions as has been relied.” Hon. Supreme Court in the context of sec. 69C in the case of Pr. CIT Central III Vs. Lavnya Land Pvt Ltd [ 2019] 103 Taxmann.com 9 (SC) / [2019] 261 Taxmann 454 (SC) dismissed the SLP arising out of the Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 21 of 46 Judgment CIT Vs. Lavnya Land Pvt Ltd [2017] 83 Taxmann.com 161 (Bom). The issue decided in favor of assessee as under, “Whether since seized document did not belong to Assessee but seized from residential premises of one DD who had later retracted his statement, no action Under section 153C could have been undertaken in respect of Assessee, Held - Yes. Whether further since entire decision was based on seized document and there was no material to conclusively show that huge amount revealed from seized document were actually transferred from one side to another, addition under section 69C were not sustainable. Hon’ble Supreme Court in the case of Pr. CIT Vs. Vinita Chaurasia [2018] 98 Taxman.com 468 (SC) arising out of Order of HC in CIT Vs. Vinita Chaurasia [2017] 82 Taxmann.com 153 dismissed the departmental SLP and affirm the very principle again that when an addition was made to the assessee income by invoking 153C on the basis of document seized in the course of search carried out in the case of L and later L retracted his statement that said document belong to Assessee and moreover there were various internal inconsistencies and contradictions in document in question , impugned addition was to be set aside. In the case of CIT Vs. World wide Township Project Ltd (2014) 106 DTR Del 139 it was held that “A plain reading of the aforesaid Section indicates that (the import of the above provision is limited) it applies to a transaction where a deposit or a loan is accepted by an assessee, otherwise than by an account payee cheque or an account payee draft. The ambit of the Section is clearly restricted to transaction involving acceptance of money and not intended to affect cases where a debt or a liability arises on account of book entries. The object of the Section is to prevent transactions in currency. This is also clearly explicit from clause (iii) of the explanation to Section 269SS of the Act which defines loan or deposit to mean "loan or deposit of money". The liability recorded in the books of accounts by way of journal entries, i.e. crediting the account of a party to whom monies are payable or debiting the account of a party from whom monies are receivable in the books of accounts, is clearly outside the ambit of the provision of Section 269SS of the Act, because passing such entries does not involve acceptance of any loan or deposit of money. In the present case, admittedly no money was transacted other than through banking channels. M/s PACL India Ltd. made certain payments through banking channels to land owners. This payment made on behalf of the assessee was recorded by the assessee in its books by crediting the account of M/s PACL India Ltd. In view of this admitted position, no infringement of Section 269SS of the Act is made out.” In the present case, the entries during the course of training in a dummy Company XYZ found in one Laptop and some loose sheets found at the premises of G.C. Patidar are the sole basis. Neither there is any payment Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 22 of 46 or receipt of money nor these entries have established any Debtor Creditor relationship. The taking or accepting a loan is a bilateral action but there is nothing on record to suggest such essential bilateral character which is vital to constitute a transaction of loan or deposit. Any person of ordinary prudence, giving loan in cash would ask for security such as post dated cheque, collateral guarantee etc or at least a promissory note to secure his lending. Nothing has been found during the course of search to justify the huge alleged cash borrowings. Further, as per the own averment of the Learned AO, subsequent to the Financial Year 2008-09 and 2009-10, such entries were not found carried out in the subsequent years. If these entries represent actual state of financial affairs i.e. loan taken or given in cash, they are invariably required to be carried forward to next year as is the practice strictly followed in book keeping and accounts. 4.2.10 Even if the legislative presumption under section 132(4A) is available in the statute of income tax, yet the ingredient of default has to be established by the Department. In the case of Ushakant N Patel vs CIT (2006) 6 ITJ 312 (Gujrat HC) it has been held that un-disclosed investment under Sec.69, the question was whether even if presumption under 132(4A) is established, yet prerequisite of sec. 69 has to be complied with. It was held that even if the presumption available u/s. 132(4A) can be raised against assessee, the ingredient by way of prerequisite condition of 69 of the Act has to be satisfied and cannot be presumed to have been established on the basis of 132(4A) of the Act. Section 69 opens with the word “where any financial year immediately preceding the Assessment year, the Assessee has made investment ...” Therefore it was incumbent upon the authority to establish that such investment had been made in a financial year immediately preceding the assessment year in question. In the case in hand, despite presumption, the ingredient of default i.e. actually taking or repaying loan or interest payment or giving loan to directors in cash is to be established by the Authority, with necessary enquires conducted in the case of alleged lenders by summoning them, recording their evidence, giving cross examination to Appellant, exercising recourse to 153C or 147 to bring undisclosed income in the form of cash loan, which in our considered opinion, the authority failed to do. Therefore, Loan or Deposit of Money actually taken by appellant is to be established by independent and direct evidence and not with the help of Laptop data or jottings. The Burden is heavy on the person who allege, once the initial presumption is rebutted with sound explanations. In the case of DCIT Vs. Home Developers Pvt Ltd, Hon Delhi High Court on 23rd May, 2012 in ITA No. 301/2012/ 304/2012 and 305/2012 held that:- The Revenue filed appeal against the order of the ITAT before Hon'ble Jurisdictional High Court. The Hon'ble Jurisdictional High Court, vide order dated 23rd May, 2012 in ITA Nos.301/2012, 304/2012 & 305/2012, dismissed the Revenue's appeals with the following finding:- Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 23 of 46 “5. Learned counsel for the Revenue has relied on the statement of Yogesh Gupta recorded on 31st May, 2006. in the said statement Yogesh Gupta had disclosed and surrendered an amount of Rs.13.05 crores as additional income in the financial year 2005-06. This included Rs.2 crores in his own hand and Rs.9.05 crores as income of Real Tech Projects Pvt.Ltd. Rs.2 crores was disclosed as undeclared income of Home Developers Pvt.Ltd. In the said statement in question Nos.11 and 12 Yogesh Gupta 16 others was asked to explain document A-12. Yogesh Gupta had stated that these were unaccounted transactions in cash. No question was put to state or furnish the details of the writer or recipient i.e. the details of the companies, which had received the said amounts. He was also not asked to specify or state whether the amount received was on account of advances for flats or loan. Revenue was fully satisfied by the surrender made and closed their investigation. Thus, in the present case, there is doubt, but it is not established that the respondent-assessee had taken loan/deposit in cash. There is suspicion but this alone without further verification and investigation cannot justify the finding that the respondent-assessee had taken loan/deposit in cash. The findings recorded by the tribunal are not perverse. 6. In view of the aforesaid factual position, we do not think that the order passed by the tribunal requires any interference in exercise of power under Section 260A of the Act. Accordingly, the appeal is dismissed. 4.2.11 XXX (relates to other ground) 4.2.12 In view of the above discussion, material evidences on record and case laws cited, firstly, the AO ought to have examined Shri G.C. Patidar after filing the retraction affidavit who was the owner of the impugned printouts. Secondly, the loose paper or rather say it as dumb document should be a speaking one having direct nexus with the assessee with supportive independent/corroborative evidences. Thirdly, the AO ought to have examined the lenders whose names are mentioned on the loose papers. My findings on the issue under consideration are based on the various conclusions drawn by me which have been discussed in the above paras. From the above it is clear that no such transaction occurred on the ground. The AO failed to establish the nexus on receipt and repayment of impugned loans/interest. It is settled legal pronouncement, that presumption how strong cannot take place of evidence. Further, neither the lender nor the re-payer of the loan has admitted that any such transaction took placed. The tally data during training was dormant and futile and cannot be trusted for making any addition to the income of the appellant. During the simultaneous search of the premises of the directors of the company, to whom the payment running into crores have been allegedly made no corresponding cash or utilization of such payment advance to director have been found, which shows that the transactions are not real. The loose sheet which has been obtained from office of Agroh (Third person) also cannot Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 24 of 46 be relied upon as true state of cash loan and nor the interest attributable thereon can be said to be a real transaction (relates to other ground, hence stricken through). Thus from the above discussion it is very clear that none of the such transaction, i.e. firstly cash loan taken by appellant, secondly repayment of loan in cash by the appellant, thirdly, loan given by appellant to its directors and fourthly, interest payment on loan taken by appellant materialized. Thus, the AO was not justified in making additions on the basis of dumb documents which were found during the course of search. Therefore, additions made by the AO amounting to Rs. 14,83,394/- on account of unaccounted interest paid to AIDPL (Para 13.4.10 of assessement order) (relates to other ground, hence stricken through)., Rs.82,03,684/- on account of interest payment made in cash (Para 13.2.12 of assessment order ) & Rs. 5,52,49,940/- on account of cash loan advanced by PATH to its directors as per XYZ tally data are Deleted. Therefore appeal on these grounds is Allowed.” 17. Before us, the Ld. DR relied upon the assessment-order and Ld. AR relied upon the order of first-appeal. 18. We have considered rival submissions of both sides and perused the material held on record carefully. After a careful consideration, we observe and find as under: (i) The laptop is seized from the office of assessee. Hence by virtue of section 292C, the laptop is presumed to be owned by assessee. Although the assessee claimed that the laptop belonged to Shri Nilesh Tawtech who had expired on 21.12.2010, it was for the assessee to bring some evidence to rebut the presumption of section 292C which had not been done. If the laptop belonged to Shri Nilesh Tawtech, how could it be retained by assessee till the date of search on 27.08.2014 and not handed over to the heirs of Shri Nilesh Tawtech? (ii) Laptop was containing Tally-data in the name of “XYZ 0809 2” company. On verification of tally-data, the authorities have found that it contained accounted-transactions of assessee besides unaccounted- transactions. Ld. AO is, therefore, correct in concluding that the tally- data, which contained the accounted-data of assessee as well, certainly belonged to the assessee. Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 25 of 46 (iii) Ld. AO has analysed the nature of transactions found in tally-data; corroborated the same with the loose-papers found at the premise of Shri G.C. Patidar, another employee of assessee. To illustrate, the Ld. AO has mentioned working of interest-calculations in Point No. 6/Page No. 80 of the assessment-order. The loose-papers seized from Shri G.C. Patidar are also natural documents, for example the excel-sheet on Page No. 81 of the assessment-order clearly reveals, the original cash-transactions done by assessee, subsequent modifications done therein, the names of parties, dates, amounts; captions such as “paid” “PAID” “to be returned” etc. which are not fictional entries. On Page No. 84 of the assessment-order, the Ld. AO has also made a corroboration of the data recorded in tally-system with the papers seized from Shri G.C. Patidar. (iv) Ld. AO has stated that the BS-4 seized by authorities contained a diary which shows a social relationship of assessee with the lenders. But, however, Ld. CIT(A) has rejected the AO’s finding by saying that the names of those persons do not match with the names of lenders. The observation, whether the names of persons matched or not and hence the assessee had social relationship with those persons or not, is at the best an ancillary point only and cannot be taken as a tool to dislodge the cash-loans taken by assessee, which are very much recorded in the tally-data / loose-papers seized. (v) Statements of Shri G.C. Patidar were also recorded by authorities on 27.08.2014 u/s 132(4) of the Act. The statements as re-produced by Ld. AO in Para No. 13.3 of assessment-order, are scanned below: Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 26 of 46 Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 27 of 46 Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 28 of 46 On going through these statements, we observe that Shri G.C. Patidar has not only admitted the cash-loans taken by assessee but also explained the modus operandi adopted in that regard. These statements, which are recorded during the proceeding of section 132(4) have an evidentiary value and cannot be taken lightly. (vi) In Para No. 4.2.2., the Ld. CIT(A) has taken into account “During the course of search, statement of Shri GC Patidar was recorded on oath which has been retracted vide affidavit dated 28.12.2016. Since, the statement given during search has been retracted, therefore, the same cannot be relied upon.” On perusal of records, we observe that the affidavit dated 28.12.2016, though made in the name of Assessing Officer, yet there is no wishper by Ld. AO in the assessment-order on affidavit having been filed or the contents of affidavit. It is also noteworthy that the assessment-order depicts that the assessee filed last-reply to Ld. AO on 26.12.2016 and the affidavit is dated 28.12.2016. Be that as it may be, assuming that the said affidavit was submitted to Ld. AO, there are several infirmities. Firstly, the affidavit which is claimed to contain the retraction is filed not before 28.12.20216, which is after about a period more than 2 years from the date of search as well as at the feg-end of assessment-order. Further, to appreciate the contents of affidavit, we reproduce a scanned copy of the same: Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 29 of 46 Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 30 of 46 Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 31 of 46 Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 32 of 46 It is noteworthy that in Para No. 8 of the affidavit, Shri G.C. Patidar has clearly admitted that he had made jottings on various loose- papers and diaries under the instruction of Shri Puneet Agarwal. Thereafter in Para No. 10 of the affidavit, he has further admitted that he used to provide those loose-papers and diaries to Mr. Nilesh Tavrech based upon which Mr. Nilesh Tavrech used to make entries in his own laptop. Thus, there is a clear admission by Shri G.C. Patidar of three vital points, viz (i) he made loose papers; (ii) the loose papers were under the instructions of Shri Puneet Agarwal (Shri Puneet Agarwal was director of assessee-company); and (iii) those loose papers were entered by Shri Nilesh Tavrech in the tally-data in laptop. While submitting so, Shri G.C. Patidar has given additional averments by saying (i) loose-papers were made because some family members of assessee-company wanted to demonstrate other family members that the assessee-company was in huge loses and market debts, and (ii) those loose-papers were given to Shri Nilesh Tavrech (a deceased employee who was not available for verification by revenue-authorities) for learning tally-accounting. We are not impressed by these additional averments, which are in the first blush, do not appear credible to anyone. Thus, we do not find the affidavit of Shri G.C. Patidar as a retraction, rather it is acceptance of the loose-papers, laptop, entries in tally-data and the actual occurrence of the financial transactions found by revenue-authorities. 19. In view of above discussion and for the reasons stated therein, we are of the view that the Ld. AO has rightly concluded that the assessee has taken cash-loans from various lenders and paid interest thereon from undisclosed sources. Being so, we reverse the action of Ld. CIT(A) and uphold the addition of Rs. 82,03,684/- made by Ld. AO. Hence, this ground is allowed. Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 33 of 46 Ground No. 3 of Revenue’s appeal for AY 2009-10 (Rs. 14,83,394): 20. This ground relates to the addition of unaccounted interest payment on cash-loans. 21. The facts qua this addition are such that during the course of search conducted on one M/s Agroh Infrastructure Developers Pvt. Ltd (AIDPL), the authorities seized a loose paper marked as “LPS-1-Page No. 21 / 23”, which contained details of certain financial transactions. The document contained two tables, the upper-table contained the name of assessee and the transactions which were corroborated by the books of assessee. But the lower-table neither contained the name of assesssee nor the transactions mentioned therein were corroborated by assessee’s books. However, the Ld. AO attributed the transactions mentioned in the lower-table to the assessee for the reason that the transactions mentioned in the upper-table were corroborated to assessee and hence the document has to be considered in entirety. Based thereon, the Ld. AO framed a view that the assessee has taken a cash loan of Rs. 1,15,00,000/- during 27/03/2008 to 31/03/2008 relevant to AY 2008-09. Further, the Ld. AO also found a transaction captioned as “buy-back of shares” of Rs. 3,66,25,000/- made during the previous year 2008-09 relevant to AY 2009-10 but concluded the same to be a transaction of cash-loan taken by assessee from AIDPL. The Ld. AO also observed that the assessee must have paid an interest of Rs. 14,83,394/- on the aforesaid transactions to AIDPL out of undisclosed sources. When the Ld. AO confronted the assessee in the matter, the assessee submitted that the impugned loose paper was seized from AIDPL in an independent search proceeding conducted upon AIDPL and not from assessee. Hence any presumption u/s 292C should be taken against AIDPL, not against assessee. However, the Ld. AO did not accept the submissions of assessee and made an addition of Rs. 14,83,394/- on account of cash-payment of interest from undisclosed sources in AY 2009-10 vide Para No. 13.4 to 13.4.10 of the assessment-order. Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 34 of 46 22. During first-appeal, the assessee made a detailed submission to Ld. CIT(A). After considering submission of assessee, the Ld. CIT(A) deleted this addition. The relevant paragraphs of the CIT(A)’s observation are extracted below: “4.2.4 Further, the AO on the basis of one loose sheet which is page No. 21 of LPS -1 and reproduced at page 100 of the Order and on the basis of page No. 23 of LPS -1 and placing reliance on second table has reached to a inference that during financial year 2008, the Appellant –PATH has received a cash loan of Rs. 115 Lakhs in cash from Agroh (in short AIDPL) and in next financial year the appellant has accepted the cash loan of Rs. 3,66,25,000/- from M/s Agroh Infrastructure Developers Pvt. Ltd (In short AIDPL) and on other hand accepts the same to be cash-buyback of shares. The AO has also held that interest amounting to Rs. 14,83,394/- was charged by AIDPL. Whereas the said document only records some purported cash received and cash paid but no where the name of PATH is reflected. Even on second table at page 99, the name of PATH is not reflected therefore to attribute these transactions to PATH is fallacious. The said loose sheet was subject to varying interpretation in the year AY 2008-09 and is a non speaking/ dumb document. The director of Agroh cannot give any satisfactory reply during the statement recorded at the time of search however during the course of their assessment admitted that they have given loan to PATH. The statement of the Director wherein they admitted giving loan to PATH has not been provided nor the opportunity to cross examination was made available. It is important to mention that the buy back of shares is duly accounted in audited books of account of appellant and the impugned loose papers were not found from premises of the appellant. Therefore, the AO is not justified in presuming buyback of shares as cash loan and interest on a loan was equally hypothetical. The statement given which has to be used against the assesse has to be confronted and opportunity to cross examine has to be provided, which squarely apply in relation to loose paper seized from the premises of Agroh where the statement was taken behind the back. 4.2.11 Last but not the least, the loose papers relating to alleged loan and interest were found and seized from premises of Agroh Group of Indore located at Aqua Point, Umaria, Mhow as page no 19-23 of LPS-1. As far as legality of the addition, it is settled position of law that no addition/ disallowance can be made to the total income of the appellant in absence of any incriminating documents in the case of non-abate assessment year. Accordingly, the scope of assessment u/s.153A would be restricted to incriminating material found during the course of search from premises of appellant. In the instant case the loose papers were found and seized from the premises of AIDPL (third party). Hon’ble Delhi Tribunal in the case of Trilok Chand Chaudhary (2019) 33 NYPTTJ 610 (Del-Trib) dt.20-8-19 has held as under:- Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 35 of 46 5.4 ...it is evident that the material relied upon for making addition was not found from the premises of the assessee. 5.5 We also find that during relevant period, i.e., FY14-15, for using any material found from the premises of the third party during the course of the search in assessment proceeding of the assessee, the AO of the third party was required to record satisfaction as the material belong to the assessee in terms of sec153C and then was required to proceed as per the sec153C. In the instant case, it is evident that addition in dispute has been made in the assessment completed u/s153A. The assessee raised this issue before the ld CIT(A), however, the ld CIT(A) rejected the arguments of the assessee observing as under: “6.3 Another argument of the appellant, if understood correctly, is that in reference to the document u/c, the AO ought to have initiated proceedings u/s153C and that in no case this can be considered u/s153A. This argument has no legs to stand for the simple reason that it is patently absurd. Undisputedly, a search u/s132 was conducted in the appellant’s case and therefore, the assessment was to be completed u/s153A and the ld AO was under a statutory obligation to consider entire material irrespective of the place from where it was found (i.e. appellant’s own place or some other place). There cannot be 2 assessments one u/s153A and other u/s153C. In short, the argument of the appellant that document seized from the premises of Shri Ashok Chaudhary cannot be considered u/s153A is absurd and is accordingly rejected.” 5.6. In our opinion, the finding of the ld CIT(A) is not based on correct appreciation of law. The reasoning of the ld CIT(A) is that there cannot be 2 simultaneous assessment u/s153A and other u/s153C. This reasoning is faulty. The assessment u/s153C could have been made after completion of the assessment u/s153A. The Act has provided separate provisions for making assessment in case of material found in the course of the search from the premises of the assessee as well as the material found in the course of search at the premises of the third party. The AO is required to follow the procedure laid down in the Act for making the assessment and he cannot devise his own procedure for shortcut methods. In our considered opinion, when the case of the assessee is covered u/s153A and if reliance is placed on the incriminating material found during the course of search of third party, then sec153C would be applicable and have to be adhered to. Thus, in the instant case, the AO was required to first complete the proceedings u/s153A in hand, which were initiated by way of notice dt.30-6-14 and thereafter, he was at liberty to take action u/s153C for bringing the material found from the premise of Shri Ashok Choudhary to tax in the hands of the assessee. Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 36 of 46 5.7. In Shivani Mahajan (Del-Trib) dt.19-3-19 ITA No.5585/Del- Trib/2015, identical que was raised before the Tribunal as under: “9. we find that in these appeals, following 2 questions arise for our consideration: (i) Whether any material found in the search of any other person than the assessee in appeal, can be considered in the assessment u/s153A of the assessee. 5.8. The Tribunal after considering arguments of the parties held as under: “14. From a reading of the above decisions of Hon’ble jurisdictional HC, it is evident that completed assessment can be interfered with by the AO on the basis of any incriminating material unearthed during the course of search. If in relation to any AY no incriminating material is found, no addition or disallowance can be made in relation to that year in exercise of power u/s153A. Obviously, the reference to the incriminating material in the above decisions of Hon’ble Jurisdictional HC is in regard to incriminating material found as a result of search of the assessee’s premises and not of any other assessee. The legislature has provided sec153C by invoking the same the Revenue can utilise the incriminating material found in the case of search of any other person to the different assessee. Sec153C is reproduced below for ready reference:* 15. Thus, when during the course of search of an assessee any books, document or money, bullion, jewellery etc. is found which relates to a person other than the person searched, then the AO of the person searched shall hand over such books of account, documents, or valuables to the AO of such other person and thereafter, the AO of such other person can proceed against such other person. However, in the case under appeal before us, admittedly, sec153C is not invoked in the case of the assessee and the assessment is framed u/s153A. We, respectfully following the above decisions of Hon’ble jurisdictional HC, hold that during the course of assessment u/s153A, the incriminating material, if any, found during the course of search of the assessee only can be utilised and not the material found in the search of any other person.” 5.9 ...in the instant case, separate search warrant has been issued in the case of the assessee as well in the case of Shri Ashok Chowdhary and the AO has used the material found in the course of search at the premise of Shri Ashok Chowdhary, which is not permitted in view of the express provision of the law. Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 37 of 46 5.10 The addition made by the AO in violation of the procedure provided in the Act is bad in law and void ab initio and cannot be sustained. Accordingly, the addition of Rs.3.3 crores, made protectively on the basis of the documents found from the premises of the third party, by the AO and upheld by the ld CIT(A) on substantive basis, is deleted. The ground No.6.2 is accordingly allowed. Further Hon’ble Kolkata Tribunal in the case Krishna Kumar Singhania (2018) 168 ITD 271 (Kol-Trib) dt.6-12-17, where in Para 10 it was held as under: “10. We find that it is not in dispute that there were no documents that were seized from the premises of the assessee except loose sheets vide seized document reference KKS/1 comprising of 8 pages, for which satisfactory Explanation has been given by the assessee and no addition was made by the ld AO on this seized document. The seized document used by the ld AO for making the addition in sec153A assessment is CG/1 to 11 and CG/HD/1 which were seized only from the office premises of ‘Cygnus group’ of companies in which assessee is a director. In this regard, it would be pertinent to note that as per sec292C, there is a presumption that the documents, assets, books of accounts etc found at the time of search in the premises of a person is always presumed to be belonging to him/them unless proved otherwise. This goes to prove that the presumption derived is a rebuttable presumption. Then in such a scenario, the person on whom presumption is drawn, has got every right to state that the said documents does not belong to him/ them. The ld AO if he is satisfied with such Explanation, has got recourse to proceed on such other person (i.e., the person to whom the said documents actually belong to) in terms of sec153C by recording satisfaction to that effect by way of transfer of those materials to the AO assessing the such other person. This is the mandate provided in sec153C. In the instant case, if at all, the seized documents referred to in CG/1 to 11 and CG/HD/1 is stated to be belonging to assessee herein, then the only legal recourse available to the deptt is to proceed on the assessee herein in terms of sec153C. In this regard, we would like to place reliance on Pinaki Misra & Sangeeta Misra (2017) (Del HC) dt.3-3- 17, wherein it was held that, no addition could be made on the basis of evidence gathered from extraneous source and on the basis of statement or document received subsequent to search. Hence, we hold that the said materials cannot be used in sec153A against the assessee. This opinion is given without going into the merits and veracity of the said seized documents implicating the assessee herein.” In view of the above, it is clear that the impunged loose papers and documents were found from third party premises and therefore, presumption u/s 292C Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 38 of 46 will apply to AIDPL only and not to the assessee. Thus, the AO was not justified in making addition u/s 153A of the Act. 4.2.12 In view of the above discussion ... The loose sheet which has been obtained from office of Agroh (Third person) also cannot be relied upon as true state of cash loan and nor the interest attributable thereon can be said to be a real transaction............ Therefore, additions made by the AO amounting to Rs. 14,83,394/- on account of unaccounted interest paid to AIDPL (Para 13.4.10 of assessement order),.......are Deleted. Therefore appeal on these grounds is Allowed.” 23. Before us, the Ld. DR relied upon the assessment-order and Ld. AR relied upon the order of first-appeal. 24. We have considered rival submissions of both sides and perused the orders of lower authorities. On a careful consideration, we agree with the observations made by Ld. CIT(A) that the impugned seized document which is the basis of making addition in the hands of assessee, was in fact seized from the premise of AIDPL and not from assessee, hence no presumption u/s 292C can be drawn against assessee; (ii) no addition can be made on the assessee u/s 153A on the basis of document found during search conducted upon someone else, particularly because the AY 2009-10 under consideration is a non-abated assessment-year; and (iii) the Ld. AO has not provided any opportunity of cross-examination of AIDPL to the assesssee before relying upon the document found in possession of AIDPL. Thus, keeping in view these serious infirmities, the Ld. AO is not justified in using the impugned document against assessee for drawing adverse inferences and making any addition. Being so, we are in agreement with the Ld. CIT(A) that the addition of Rs. 14,83,394/- is not sustainable. We, therefore, approve the action of Ld. CIT(A). This ground is, thus, dismissed. Ground No. 4 of Revenue’s appeal for AY 2009-10 (Rs. 5,52,49,940), Ground No. 3 of Revenue’s appeal for AY 2010-11 (Rs. 5,37,00,603): 25. These grounds relate to the additions on account of cash-loan given by assessee to its directors and their relatives, which are treated as unaccounted investments. Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 39 of 46 26. Learned Representatives of both sides fairly agree that these additions do not arise from the original assessment-order dated 30.12.2016 which is subject-matter of present appeal, in fact these additions originate from the rectification-order dated 30.07.2019 passed by Ld. AO u/s 154 of Income- tax Act, 1961. Hence, the revenue cannot raise these grounds in present- appeal though a separate appeal against the order dated 30.07.2019 could have been filed by revenue. Faced with such congruence of parties, we dismiss these grounds, being non-maintainable in present appeal. The revenue is, however, at liberty to file a separate appeal against the order dated 30.07.2019 in accordance with the relevant provisions of law. Ground No. 2 of Revenue’s appeal for AY 2010-11 (Rs. 58,55,122): 27. This ground relates to the addition of unaccounted interest payment on cash-loans. 28. The impugned addition emanates from the same factual background as in “Ground No. 2 of Revenue’s appeal for AY 2009-10 (Rs. 82,03,684)” already discussed in an earlier paragraph. Hence the findings as discussed therein shall apply mutadis mutandis to this ground as well. Accordingly, this ground is allowed. Ground No. 1 of Revenue’s appeal for AY 2011-12 (Rs. 1,29,09,512): 29. This ground relates to the addition of bogus payment to petrol pumps. 30. Facts qua this addition are such that during the course of search, the authorities seized certain excel sheets from Shri Ajay Chauhan, DGM of assessee, which contained details of unaccounted cash-receipts by the assessee from certain petrol pumps. During post-search enquiry, Ld. AO recorded statements of Shri Ajay Chauhan to establish the modus operandi of cash-receipts. Based thereon, the Ld. AO framed a view that the assessee has booked bogus petrol/diesel expenses in the books of account and Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 40 of 46 received back cash-refunds from petrol pumps named “Hari Service Station” and “Maliram Filing Station”. 31. When the Ld. AO confronted the assessee in the matter, the assessee filed reply wherein the assessee accepted the observation of Ld. AO, but however the assessee also explained that it has utilized the cash-funds to meet other business expenses which were allowable as deduction; and that it has also surrendered an aggregate sum of Rs. 1,86,21,229/- in various assessment-years to cover up this issue. But, however, the Ld. AO rejected submission of assessee and made an addition of Rs. 1,29,09,512/- in AY 2011-12 under consideration, by observing and holding as under: “10.2.4 From the submission of assessee it can be seen that there is no second doubt about the fact that huge amount of cash is generated by the assessee through bogus payment. The assessee is stating partial truth and is trying to suppressed the tax liability. In the seized excel most important sheet is sheet “Main Req.” appearing in File “Required” at the location ‘Working Copy – Data – Ajaychouhansystems – Attachments - Excel Files’ From this sheet the unaccounted generation of cash through two petrol pumps namely Hari Service Station and Maliram Filing Station. The main sheet is filtered and the transactions related to said petrol pumps also confronted to the assessee vide note sheet dated 27.12.2016. In response assessee mentioned that “this office has verified the sheet”. The assessee has again stated partial truth the complete sheet is a big sheet in which numerous transactions are mentioned whereas the sheet which is as under is filtered sheet of transactions pertaining to those petrol pumps about which even assessee has accepted that it has made non-genuine payments and generated the cash. The modified sheet of the main sheet reflecting transactions is as under: Date Requirement details Debit Credit Remarks 18-Dec-2010 Hari Service Station- Diesel Bill Dt.13/12/10 2139927 500000 Party RTGS dt.20.12.10 20-Dec-2010 Hari Service Station- Diesel Bill Dt.15/12/10 569585 409512 Party RTGS dt.24.12.10 03-Jan-2011 Hari Service Station- Diesel Bill 5742562 2500000 15-Jan-2011 Hari Service Station 1497232 17-Jan-2011 Hari Service Station 2000000 Party RTGS 28-Jan-2011 Hari Service Station dt.31.01.11 2451420 09-Feb-2011 Hari Service Station dt.06.02.11 5361647 Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 41 of 46 14-Feb-2011 Hari Service Station 1000000 Party RTGS 16-Feb-2011 Hari Service Station 1000000 Party RTGS 18-Feb-2011 Hari Service Station 2500000 Party RTGS 24-Feb-2011 Hari Service Station 3000000 Party RTGS 09.06.2011 Cash recd (Maliram) 500000 12.06.2011 Cash recd (Maliram) 500000 28.06.2011 Cash recd (Maliram) 500000 30.06.2011 Cash recd (Maliram) 500000 07.07.2011 Cash recd (Maliram) 500000 13.07.2011 Cash recd (Maliram) 500000 17.07.2011 Cash recd (Maliram) 500000 10.08.2011 Cash recd (Maliram) 500000 02.09.2011 Cash recd (Maliram) 500000 06.09.2011 Cash recd (Maliram) 500000 14.09.2011 Cash recd (Maliram) 500000 19.09.2011 Cash recd (Maliram) 500000 21.09.2011 Hari service station Diesel bill 215550 215550 RTGS by HO 28.09.2011 Cash recd (Maliram) 400000 29.09.2011 Cash recd (Maliram) 100000 29.09.2011 Hari service station Diesel bill 172440 01.10.2011 Cash recd (Maliram) 300000 04.10.2011 Cash recd (Maliram) 200000 17.10.2011 Hari service station Diesel bill 6126793 3000000 RTGS by HO 21.10.2011 Cash recd (Maliram) 500000 11.11.2011 Hari service station Diesel bill 1799233 RTGS from 16.11.2011 Cash recd (Maliram) 500000 07.12.2011 Cash recd (Maliram) 500000 07.12.2011 Hari service station Diesel bill 1783030 15.12.2011 Hari service station Diesel bill 6182836 5000000 RTGS from 19.12.2011 Hari service station Diesel bill 2468478 2000000 RTGS from 31.12.2011 Hari service station Diesel bill 568976 10.01.2012 Hari service station Diesel bill 419332 33493271 Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 42 of 46 10.2.5 On the basis of the discussion above, it is clear that total amount of bogus payment made to Maliram Filing Station and Hari Service Station is Rs. 3,34,93,271/-. 10.2.6 Considering all the fact mentioned above the submission of the assessee and incriminating nature of payment made as above to petrol pumps namely Maliram Filing and Hari Service Station, Following Additions are made as per the filtered sheet above. Addition as per the facts above. A.Y. Bogus payment made to Petrol pumps Amount (in Rs.) 2011-12 1,29,09,512/- 2012-13 2,05,83,759/- 32. During first-appeal, the assessee made a detailed submission to Ld. CIT(A). After considering submission of assessee, the Ld. CIT(A) agreed that the assessee has booked bogus expenditure and made unaccounted cash- receipts from petrol pumps. But, however, he analysed the excel-sheet cited by Ld. AO in assessment-order (already reproduced in preceding paragraph) and observed that the Ld. AO has made addition of full amount of Rs. 1,29,09,512/- instead of making addition to the extent of cash-refund. Ld. CIT(A) further observed that the full amount of Rs. 1,29,09,512/- is on account of total purchases of petrol/diesel during the year and not the amount of cash-receipt. Finally, Ld. CIT(A) concluded that the Ld. AO should have made addition to the extent of cash-receipt from petrol pumps only and since the excess-sheet does not show any cash-receipt during the previous relevant to AY 2011-12, no addition could have been made in AY 2011-12. 33. Ld. DR emphasized the assessment-order. Per contra, Ld. AR placed heavy reliance upon the order of Ld. CIT(A). 34. We have considered the rival contentions of both sides and also perused the orders of lower authorities. We observe that the Ld. CIT(A) has rightly observed that the addition was warranted to the extent of unaccounted cash-receipt only. We further observe that the excel-sheet reproduced by Ld. AO in assessment-order demonstrates that there was no cash-receipt at least during the previous year 2010-11 relevant to AY 2011- Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 43 of 46 12 under consideration. Being so, the Ld. CIT(A) is very much correct in concluding that no addition was warranted in AY 2011-12. We countenance the conclusion taken by Ld. CIT(A) whereby he has deleted the addition of Rs. 1,29,09,512/-. Thus, this ground is dismissed. Ground No. 3 of Revenue’s appeal for AY 2011-12 (Rs. 35,67,34,692), Ground No. 4 of Revenue’s appeal for AY 2011-12 (Rs. 38,77,55,100): 35. These grounds relate to the disallowance of sub-contract expenses paid by assessee to M/s Geet Exim Pvt. Ltd. (GEPL). 36. The crystallized facts qua this addition are such that during the course of search, the authorities found that the assessee had booked bogus expenditure of Rs. 38,77,55,100/- on account of sub-contract payment to GEPL. However, while completing assessment u/s 153A vide assessment- order dated 30.12.2016, the Ld. AO did not make any addition. Subsequently, the Ld. PCIT took revisionary-action u/s 263 vide revision- order dated 14.03.2019 and directed the Ld. AO to re-frame assessment. In pursuance thereof, the Ld. AO passed a newer assessment-order dated 11.12.2019 after making disallowance of Rs. 38,77,55,100/-. The assessee filed a separate appeal against the newer assessment-order dated 11.12.2019 to Ld. CIT(A) assailing the impugned addition. The Ld. CIT(A) decided assessee’s appeal in a consolidated appeal-order dated 06.07.2020, whereby he allowed relief of Rs. 35,67,34,692/-. The concluding para of the order of Ld. CIT(A) is reproduced below: “4.3.14 Therefore, in view of the above judicial pronouncement and by Hon’ble jurisdictional High Court in the case of Manmohan Sadani (Supra) & CIT Vs. Balchand Ajit Kumar (Supra), the income which ought to have been taxed comes at Rs. 3,10,20,408/- (Rs. 38,77,55,100/- x 8.00%) which is Confirmed and appellant gets relief of Rs. 35,67,34,692/-. Therefore, appeal on these grounds is partly allowed.” 37. In this backdrop, the Ld. AR representing the assessee claims that addition of 38,77,55,100/- [or the relief of Rs. 35,67,34,692/- granted by Ld. CIT(A) out of that] emanate from the newer assessment-order dated Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 44 of 46 11.12.2019 which in itself was passed in pursuance of the revisionary-order dated 14.03.2019 by Ld. PCIT. Hence, the Ld. AR vehemently contends the revenue ought to have filed a separate appeal in the matter of addition of Rs. 38,77,55,100/- [or the relief of Rs. 35,67,34,692/- granted by Ld. CIT(A) out of that] and could not raise these issues in the present-appeal. In fact, Ld. AR further went on arguing further that even the revisionary-order dated 14.03.2019 passed by Ld. PCIT has also been quashed by Indore Bench of ITAT in ITA No. 565/Ind/2019 order dated 31.01.2022. As a result thereof, the newer assessment-order dated 11.12.2019 has also become non-est. Being so, the Ld. AR claims, the department cannot agitate the addition of Rs. 38,77,55,100/- [or the relief of Rs. 35,67,34,692/- granted by Ld. CIT(A) out of that] as of now. Hence taking into this status, these grounds of revenue are not maintainable at all, Ld. AR prays to dismiss the same. 38. We confronted the Ld. DR on these pleadings made by Ld. AR. The Ld. fairly agreed to the submissions of Ld. AR. Hence, keeping in view the congruence of both sides, we dismiss these grounds. Ground No. 5 of Revenue’s appeal for AY 2009-10, Ground No. 4 of Revenue’s appeal for AY 2010-11: 39. In these grounds, the revenue has claimed that the Ld. CIT(A) erred in law in treating the documentary evidences as dumb documents in the wake of the fact that part details of such documents were matched with the books of account of assessee. 40. These grounds are covered by other grounds already adjudicated in preceding paras. Hence these grounds do not require any kind of separate adjudication by us. Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 45 of 46 41. Resultantly, this appeal of revenue is partly allowed and all the three cross objections filed by assessee are dismissed. Order pronounced as per Rule 34 of I.T.A.T. Rules, 1963 on 10/01/2023. Order pronounced in the open court on ....../....../2022. Sd/- Sd/- (SUCHITRA KAMBLE) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore दनांक /Dated : 10.01.2023 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore Prakash Asphalting & Toll Highways India Ltd. IT(SS)A No.32 to 34/Ind/2021 and Co No. 44 to 46/Ind/2021 Assessment years 2009-10 to 2011-12 Page 46 of 46 1. Date of taking dictation 5.1.23 2. Date of typing & draft order placed before the Dictating Member 5.1.23 3. Date on which the approved draft comes to the Sr. P.S./P.S. 5.1.23 4. Date on which the approved draft is placed before other Member 5. Date on which the fair order is placed before the Dictating Member for pronouncement 6. Date on which the file goes to the Bench Clerk 7. Date on which the file goes to the Head Clerk 8. Date on which the file goes to the Assistant Registrar for signature on the order 9. Date of dispatch of the Order