G.S. Expressway (P) Ltd., Allahabad V. DCIT, Central Circle, Varanasi

ITA 29/VNS/2020

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8911 (ITAT-VARANASI)
• Duration Of Justice: 2 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-11-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 30-01-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMALENDU NATH MISHRA
• Keywords: Search and seizure
• Section: 132; 139; 142(1); 153A; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH, VARANASI (THROUGH VIRTUAL HEARING) BEFORE SHRI.VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA No.29/VNS/2020 Assessment Year: 2012-13 M/s G.S. Expressway (P) Ltd, 37, Elgin Road, Civil Lines, Allahabad- 211001 PAN-AAECG0982E v. DCIT, Central Circle, Varanasi (Appellant) (Respondent) Appellant by: None Respondent by: Sh. Amalendu Nath Mishra, CIT DR Date of hearing: 02.11.2022 Date of pronouncement: 04.11.2022 O R D E R SHRI VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 03.12.2020 of CIT(A) for the assessment year 2012-13. 2. None has appeared on behalf of the assessee nor any application for adjournment was filed when this appeal was called for hearing despite the fact that on the last date of hearing, the matter was adjourned at the request of the assessee. Accordingly, we propose to hear and dispose of this appeal ex parte. The assessee has raised the following grounds in this appeal:- “1. Because the Ld. CIT (A) has erred, as per law as well as on the facts and in the circumstances of the case, in affirming the addition of Rs.15,00,000/- made by the Ld. AD as unexplained money u/s 69A of the Income Tax Act on the basis of dumb document found from the premise of third party. 2. Because the Ld. Lower Authority erred in making impugned addition u/s 694 of the Income Tax Act, without considering that it was never established that the ITA No.29/VNS/2020 M/s G.S. Expressway (P) Ltd. 2 assessee-company was found to be the owner of any such money, bullion, jewellery or other valuable articles. 3. Because the LD. Lower Authority has also erred in view of the fact that M/s Tulsiani Construction and Developers (P) Ltd. (second party) has also denied to have made any payment in cash of Rs.15 Lacs. Hence, the addition made solely on the basis of noting on seized page is not backed with corroborative evidence. 4. Because the Ld. Lower Authority has erred in making addition of the same amount of Rs.15,00,000/- in case of M/s Tulsiani Construction and Developers (P) Ltd. which is against the Principle of Law and Equity. 5. Because the Ld. Lower Authority has erred in making addition only on the basis of assumptions and presumptions without having any evidence on record. 6. Because the Ld. Lower Authority also erred in making addition without considering the submission made the appellant and case laws relied upon. 7. Because the Ld. AO has also erred in charging interest u/s 234A of IT Act while computing the demand. 8. The assessee craves leave to add/ alter any of the grounds of appeal before or at the time of hearing.” 3. The solitary issue arises for our consideration and adjudication is regarding addition of Rs. 15 Lac made by the AO on account of undisclosed cash receipt as recorded in the seized material. The assessee company is engaged in the business of Real Estate and filed return of income under section 139 on 29.9.2012 declaring total income of Rs. 9340/-. Subsequently, there was a search and seizure action under section 132 of the Income Tax Act carried out on 16.11.2016 at the business and residential premises of M/s Tulsiani Construction and Developers Pvt. Ltd. and its sister concern. The assessee was also subjected to search and seizure action on 16.11.2016. 4. During the course of search and seizure action, several documents, cash jewellery etc., were found and seized by the search party out of which the seized document containing certain entries of sales made by the assessee disclosing a cash receipt of Rs. 15 Lac is relevant for this case. The AO noted that the assessee received cash of Rs. 15 Lac. in respect of the transaction of sales of FSI in Block No. 1 at I.T. Park-2, Ansal, Lucknow to M/s Tulsiani Construction and Developers Pvt. Ltd. The said amount has not been recorded ITA No.29/VNS/2020 M/s G.S. Expressway (P) Ltd. 3 by the assessee in the books of accounts and accordingly, the AO made the addition of the same under section 69A of the Act. The assessee challenged the action of the AO before the CIT(A) but could not succeed. 5. It is gathered from the submissions of the assessee before the authorities below that the assessee took the stand that it has received a sum of Rs. 74,23,937/- from M/s Tulsiani Construction and Developers Pvt. Ltd., through cheques and the same is reflected in the bank account as well as in the books of accounts of the assessee. The assessee denied the receipt of alleged amount of Rs. 15 Lac as recorded in the seized material. The statement of facts as filed before the CIT(A) contains submissions of the assessee as under:- “1- The set, a company, derives income under head Profits and Gains from Business and Profession and is engaged in the business of real estate. The assessee had filed return u/s 139 on 29.09.2012 showing total income at Rs.9,340/-. 2- Search was conducted in the business premises of the assesse group on 16.11.2016. The case of the assessee company was centralized. Notices we 153A of the Act of issued and the assesse filed return in response to the same at the total income of Rs.9,340/- Notices u/s 142(2) and 142(1) was issued thereafter by the Ld. AQ and the same were duly complied by the assessee. 3- The Ld. Assessing Officer has completed assessment at an income of Rs.15,09,340/- by making addition of Rs.15,00,000 us 69A of the Income Tax Act, 1961. 4- The addition as made by Ld. Assessing Officer amounting to Rs.15,00,000/- is solely based on one Print-out taken from the Laptop of Ms. Anne (an employee of the company named Tulsiani Construction & Developers Pvt. Ltd.). On the basis of said page, the Ld. Assessing Officer has drawn inference that the assessee company has received Rs.15,00,000/- M/s Tulsiani Construction & Developers Pvt. Ltd. in cash against the Property at Block-1 at IT Park-2 for Hotel, which has not been shown in regular books of accounts. 5- The assessee explained during assessment proceedings that no such cash of Rs.15,00,000/- has been received by the assessed during the year under consideration from M/s Tulsiani Construction & Developers Pvt. Ltd. The assessee submitted before the Ld. AO that as per the tentative plan of payment, Rs.15 lacs was to be paid by M/s Tulsiani Construction & Developers Pvt. Ltd. in cash to the assessee. But, no such payment was made by M/s Tulsiani Construction & Developers Pvt. Ltd. in cash. The Ld. A.O. has not brought any corroborative material on record to prove that any unaccounted receipt has been made by the assessee-company from Tulsiani & Developers Pvt. Ltd. ITA No.29/VNS/2020 M/s G.S. Expressway (P) Ltd. 4 6- It is also pertinent to mention here that the second party, Le. M/s Tulsiani Constructions & Developers Pvt. Ltd. have also denied making any such payment to the assessee-company. 7- Besides, no agreement have been executed till date between the assessee- company and M/s Tulsiani Construction & Developers Pvt. Ltd., in fact the advance amount received by the assessee company has to be refunded back to the said company, The said facts were duly explained to the Ld. Assessing Officer during the assessment proceedings, however, the same has summarily been brushed aside by the Ld. Assessing Officer while passing the assessment order. 8- It is also apposite to note here that Ld. Assessing Officer has also made addition in the hands of M/s Tulsiani Construction & Developers Pvt. Ltd. of Rs. 15,00,000/- u/s 69A of the Income Tax Act. 1961 ignoring the fact that no two persons can be the owner of the same money of Rs.15,00,000/-. Besides, the addition has also resulted in double addition on the same amount which against the Principle of Law and Equity. For the said impugned addition, the other company, namely, M/s Tulsiani Construction & Developers Pvt. Ltd. has also filed appeal before your honour. 9- The Ld. Assessing Officer while making the addition has ignored the settled position of law that no addition can be made on the basis of dumb/bald documents/note book/loose slips found during search in the absence of any other material. 10- It is also a settled law that any presumption of transaction on some vague, tenuous and dubious entries in a sheet of paper is not rational, unless there is corroboration by corresponding entry in regular accounts of both the parties to the transaction. 11. The inference of the A.O. that the assessee has received unaccounted payment of Rs.15 lakhs is merely based on suspicion and surmises and there was no material whatsoever to support the conclusion of the A.0. 12. Apart from the above, the case laws as cited by the La Assessing Officer while passing the order are also distinguishable from the case of the assessee. 13- Further, no valuable article or thing was have been found from the possession of the assessee, only a computer print-out that too was found and seized from the laptop of an employee of other company and not the assessee. Neither the possession nor the ownership of any cash mentioned in the slips has been proved by the department. Therefore, application of the provisions of section 69A for making addition of Rs.15,00,000 is totally incorrect. 14- Aggrieved by the assessment order, appeal is being preferred as per separate grounds of appeal.” 6. On the other hand, learned DR has submitted that the seized material contains various entries as it is evident from the copy reproduced by the AO at page no. 2 of the assessment order. The assessee has accepted all other entries ITA No.29/VNS/2020 M/s G.S. Expressway (P) Ltd. 5 which are the receipt through cheques but denied only one entry which is in cash. Therefore, the seized material itself is not disputed by the assessee so far as the other entries are concerned except the cash receipt. The learned DR has relied upon the orders of the authorities below and submitted that the addition is made by the AO on the basis of the seized material. The assessee has accepted all the other entries of the seized material / document and denied only one out of several entries which is not acceptable. The seized document is an admissible evidence and therefore, there is no merit or substance in the present appeal of the assessee. 7. We have considered the rival submissions as well as the relevant material on record. The assessee throughout the proceedings before the AO as well as CIT(A) has raised the contention that it has received a total amount of Rs. 74,23,937/- from M/s Tulsiani Construction and Developers Pvt. Ltd. against the sale of property at Block No. 1 at I.T. Park-2 for hotel and the same has been recorded in the books of accounts of the assessee. The assessee has denied the receipt of any cash payment of Rs. 15 Lac recorded in the seized material. We find that as per the ledger account produced by the assessee all other entries of sale consideration received from M/s Tulsiani Construction and Developers Pvt. Ltd. are matching with the entries recorded in the seized material except one entry of Rs. 15 Lac cash. The AO has reproduced the seized material in para 5.1 as under:- “5.1 On perusal of seized material, it was noted that, one of the pages contained entries related to transaction of sale of properties. It was observed that following payments were mentioned against the name of seller i.e. the assessee for property, namely, Block-1 of IT Park-02. “1100000(VIA CHEQUE) 1500000(IN CASH) 1500000(VIA CHEQUE) 4823937/-“ ITA No.29/VNS/2020 M/s G.S. Expressway (P) Ltd. 6 (Image-1) Details of Property in Lucknow S. No. Details of Property Name of Seller Broker Contact No. Value of Property Amount Balance 1 Block-1 At IT Park-2 for Hotel G.S. Express way limited Director: Sandeep Anand Piyush Bansal 19295750/ - “1100000(VI A CHEQUE) 1500000(IN CASH) 1500000(VIA CHEQUE) 4823937/-“ 10,371,813.00 8923937.00 The assessee was provided a material in question and categorically asked regarding the transactions made vide order sheet entry dated 06.12.018 and was asked to show cause as to why the sums mentioned above be not treated as undisclosed income of the assessee which is unexplained and unaccounted income.” 8. Therefore, the seized document cannot either be accepted or rejected in part when the assessee has accepted the other entries. Once, the assessee has not disputed the other entries recorded in the seized material then a single entry of Rs. 15 Lac received in cash cannot be denied. The CIT(A) has considered this issue in para 9 to 15 as under:- “9. During the appellate proceedings the appellant submitted that it was a DUMB document and once again submitted that no cash payment was received by transaction. 10. A perusal of assessment order and submission made by the appellant shows that the appellant has not denied the fact that advance was received by it from M/s Tulsiani construction & Developers Pvt. Ltd, and has accepted the payment reflected in the seized document information. The details regarding the payments made through cheques as disclosed in the seized material have been accepted as correct by the. appellant however it has denied the cash payment part of it. 11. It is strange that the appellant has on one hand called the seized material a DUMB document and on the other hand has partly accepted the information disclosed in it. Information disclosed in a document can either be true or false but it is improbable that partly true/false information may be recorded. 12. Further it is pertinent to note here that the information was retrieved from the laptop of Ms Anne, who was PS to Shri Anil Tulslani. Shri Tulsiani is ITA No.29/VNS/2020 M/s G.S. Expressway (P) Ltd. 7 director in M/s Tulsiani Construction & Developers Pvt. Ltd, with whom the said transaction was completed by the appellant. Thus it can be safely assumed that the information retrieved from the laptop of Ms Anne is AUTHENTIC and correct. 13. The appellant has claimed that no formal agreement has been signed between the appellant and M/s Tulsiani construction & Developers Pvt. Ltd., however in view of the fact that the appellant has itself admitted that the transaction did took place and Advance was paid, the claim made by the appellant is of no consequence. 14. The appellant has contended that the AO has made similar addition in the hands of M/s Tulsiani construction & Developers Pvt. Ltd. and it is incorrect. In view of the reason that same amount cannot be owned by two persons. The contention of the appellant is incorrect as in this case one party l.e. M/s Tulsiani construction & Developers Pvt. Ltd. has paid the amount and the other party i.e. the appellant has received the amount and both have denied the payment and receipt of the amount. The payment has been made in cash and hence the addition has been made in the hands of both the parties. 15. In view of the above find that the appellant has failed to correctly justify the information disclosed in the seized material accordingly the addition of Rs. 15,00,000/ made by the AO is justified and is hereby upheld.” 9. Thus, the CIT(A) has rightly observed that the assessee cannot claim the seized material as dumb document when all other entries are recorded in the seized material are accepted by the assessee. In view of the above facts and circumstances of the case, we do not find any error or illegality in the impugned order of the CIT(A), the same is upheld. 10. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court through virtual proceedings on 04.11.2022 at Allahabad, U.P. }}}sd/- sd/- [RAMIT KOCHAR] [VIJAY PAL RAO] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 04/11/2022 Allahabad/Varanasi Sh ITA No.29/VNS/2020 M/s G.S. Expressway (P) Ltd. 8 Copy forwarded to: 1. Appellant- M/s G.S. Expressway (P) Ltd 2. Respondent- DCIT, C.C. Varanasi 3. CIT(A) 4. CIT 5. DR By order Sr. P.S.