ITO, Wd. -2(3), Pune, Pune V. Shri Ashok Keshvlal Oswal, Pune

ITA 357/PUN/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72209 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-09-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 22-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEB JAIN
• Keywords: Search and seizure; Document seized; Deemed to accrue or arise in india; Block assessment; Documents seized
• Section: 69; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 357/PN/2012 (ASSESSMENT YEAR 2001-02) ITO, WARD-2(3), PUNE .. APPELLANT VS. SHRI ASHOK KESHVLAL OSWAL, 303/1, NANAPETH, PUNE-411002 .. RESPONDENT PAN NO. AAAPO6196N ASSESSEE BY : SMT. DEEPA KHARE REVENUE BY : SHRI RAJEEB JAIN DATE OF HEARING : 19-09-2013 DATE OF PRONOUNCEMENT : 30-09-2013 ORDER PER R.S. PADVEKAR, JM : THIS APPEAL IS FILED BY THE REVENUE CHALLENGING TH E IMPUGNED ORDER OF THE LD.CIT(A)-II, PUNE DATED 29-11-2011 FO R THE A.Y. 2001-02. 2. THE SOLITARY ISSUE FOR CONSIDERATION BEFORE US IS WHETHER THE LD.CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.22,02,000/- MADE BY THE AO TOWARDS ALLEGED UNACCOUNTED INVESTME NT FUND. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION I N THE CASE OF SHRI SHRIRAM H. SONI, THE ASSESSEE WAS ISSUED NOTIC E U/S.148 OF THE ACT ON 18-03-2008. IN RESPONSE TO SAID NOTICE THE ASSESSEE INFORMED THAT HIS RETURN FILED FOR A.Y. 2001-02 DEC LARING TOTAL INCOME OF RS.78,530/- MAY BE TREATED AS IN RESPONSE TO NOTICE U/S.148. 2.1 AS PER THE FACTS ON RECORD, THE ASSESSEE IS AN INDIVIDUAL AND HE IS IN THE BUSINESS OF TRADING AND RUNNING A SMAL L GROCERY SHOP SINCE 1995 AT NANAPETH, PUNE. THERE WAS A SEARCH A ND SEIZURE ACTION U/S.132 OF THE ACT WHICH WAS CARRIED OUT AGA INST ONE SHRI SHRIRAM H. SONI ON 29-07-2003 AND NUMBER OF DOCUMEN TS AND 2 BOOKS OF ACCOUNTS WERE SEIZED. IT WAS REVEALED THA T SRI SHRIRAM H. SONI WAS IN THE FINANCE/BROKERAGE BUSINESS. MANY O F THE CASH TRANSACTIONS WERE REVEALED FROM THE DOCUMENT SEIZED DURING THE COURSE OF SEARCH IN THE RESIDENCE OF SHRIRAM H. SON I. THE BLANK AS WELL AS SIGNED PROMISSORY NOTES/BILLS OF EXCHANGES, BLANK UNDATED CHEQUES AND AMOUNTS OF LOAN MENTIONED, BESIDE THE E NTRIES IN THE CASH BOOK, CHECK LIST OF THE BORROWERS INDICATING T HE DUE DATE OF PAYMENT OF INTEREST AND BROKERAGE PAID TO SHRIRAM H . SONI WERE FOUND IN THE DOCUMENTS SEIZED. 2.2 IT WAS NOTICED THAT NAME OF ONE ASHOK OSWAL W AS APPEARING IN THE SEIZED DOCUMENT IN ABBREVIATED/DIS TORTED FORM AND AS PER THE DOCUMENT THERE WAS AN INDICATION THA T THE SAID PERSON HAS INVESTED NEARLY 22 LAKHS AS ON 31-03-200 0. THE AO BROUGHT TO TAX THE SAID AMOUNT WHICH WAS TOWARDS TH E PRINCIPAL AND INTEREST AMOUNT OF RS.7,721/- U/S.69 FOR THE A. Y. 2000-01 BUT SAID YEAR IS NOT BEFORE US. IN THE A.Y. 2001-02, T HE AO WORKED OUT THE PEAK OF INVESTMENT ON THE BASIS OF LOANS REFUND ED AND LOANS ADVANCED AS PER THE SEIZED DOCUMENTS AVAILABLE AND WORKED OUT THE PEAK AMOUNT OF FRESH INVESTMENT OF RS.18,14,150 /- AND MADE ADDITION OF RS.22,02,000/- U/S.69 OF THE INCOME TAX ACT. THE AO HAS DISCUSSED THE MODUS OPERANDI FOLLOWED BY SHRIRAM H. SONI WHEREIN IT HAS BEEN MENTIONED THAT LOAN IN CASH HAS TO BE ADVANCED NORMALLY FOR 90 DAYS AFTER DEDUCTING THE I NTEREST THEREON WHICH VARIES FROM 1.5% TO 2% PER ANNUM AND HE IS TO CHARGE THE BROKERAGE WHICH VARIES FROM 0.25% TO 0.5%. AS NOTE D BY THE AO THE NAME OF THE ASSESSEE WAS APPEARING IN THE SEIZE D DOCUMENT IN ABBREVIATED/DISTORTED FORM AS OSWAL AHSOK OR OSW AL ASK. THE SAID DOCUMENT WAS GIVEN TO THE ASSESSEE AND SOUGHT HIS EXPLANATION. THE ASSESSEE TOTALLY DENIED HAVING AN Y CONNECTION WITH SHRIRAM SONI AND STATED THAT HE IS RUNNING A S MALL GROCERY SHOP AND IN THE YEAR 2000 HE WAS 23 YEARS OF AGE. H E ALSO CONTENDED THAT ASSESSEE HAS NO ASSETS, PROPERTY OR INVESTMENTS AND HIS FINANCIAL POSITION IS NOT SOUND. THE ASSES SEE DENIED THE DOCUMENTS ON WHICH NAME ASHOK OSWAL WAS APPEARING AS HAVING ANY NEXUS WITH HIM. THE ASSESSEE ALSO STATED THAT IN ONE OR 2 PLACES SIGNATURES ARE APPEARING ON THE DOCUMENTS AN D THOSE SIGNATURES ARE DIFFERENT THAN THE ASSESSEES SIGNAT URE. THE ASSESSEE ALSO FILED THE TELEPHONE DIRECTORY OF THE PUNE CITY TO 3 SHOW THAT THERE WERE MANY PERSONS WITH THE NAME AS HOK OSWAL. BUT THE AO WAS NOT CONVINCED AND COMPLETED THE ASSE SSMENT BY MAKING ADDITION OF RS.22,02,000/-. THE ASSESSEE CA RRIED THE ISSUE BEFORE THE CIT(A). 3. SO FAR AS THE A.Y. 2000-01 IS CONCERNED THE LD. COUNSEL AS WELL AS THE LD. DR UNABLE TO EXPLAIN WHETHER THE D EPARTMENT HAS FILED THE APPEAL OR NOT BUT AS ASSESSMENT IN BOTH T HE A.YRS. 2000- 01 AND 2001-02 ARE BASED ON THE SAME REASONING AND THE EVIDENCE, HENCE WE DECIDED TO DISPOSE OF THIS APPEA L INDEPENDENTLY. 4. IN THIS CASE, THE CIT(A) HAS CALLED FOR REMAND R EPORT OF THE AO IN RESPECT OF THE SUBMISSIONS MADE BY THE ASSESS EE IN THE A.Y. 2000-01 AND THE REMAND REPORT WAS SUBMITTED BY THE CONCERNED AO. IN THIS CASE, BEFORE THE AO THE ASSESSEE FILED AN AFFIDAVIT STATING THAT HE HAS NO BUSINESS CONNECTION OR ANY T RANSACTION WITH SHRIRAM H. SONI. HE ALSO DID NOT KNOW SHRIRAM H. SO NI. HE ALSO DENIED THAT HE HAD GIVEN ANY LOAN ON INTEREST TO SH RIRAM H. SONI AS ALLEGED IN THE YEAR 1999-2000. THE ASSESSEE ALSO F ILED BANK STATEMENT OF RATNAKAR BANK LTD., NANAPETH BRANCH, P UNE FOR THE PERIOD 27-09-1998 AND THE ASSESSING OFFICER RECORDE D THAT NO LOAN TRANSACTIONS WERE FOUND. IT APPEARS THAT IN THIS C ASE AO HAS RECORDED THE STATEMENT OF 5 TO 7 PERSONS WHOSE NAME S ARE ASHOK OSWAL AND THE STATEMENTS WERE FORWARDED TO THE LD. CIT(A). AS PER THE STATEMENTS RECORDED NAMES OF THOSE PERSONS ARE AS UNDER : 1. SHRI ASHOK HANSRAJ OSWAL 2. SHRI ASHOK KANTILAL OSWAL 3. SHRI ASHOK KUNDANMAL OSWAL 4. SHRI ASHOK HIRACHAND OSWAL 5. SHRI ASHOK KANHAIYALAL OSWAL 4.1 AS PER THE REMAND REPORT SENT BY THE AO ON VER IFICATION OF THE SEIZED MATERIAL, IT WAS NOTICED THAT NO PROMISS ORY NOTE/BLANK CHEQUES IN THE NAME OF ASHOK OSWAL WAS FOUND. TH E AO ALSO REPORTED THAT EVEN IF THE NAME OSWAL ASHOK WAS AP PEARING IN THE INVESTOR COLUMN IN THE DIARY, THERE WERE NO SIGNATU RES. THE LD.CIT(A) ACCEPTED THE PLEA OF THE ASSESSEE THAT TH E ASSESSEE IS 4 NOT THE SAME OSWAL ASHOK WHOSE NAME IS APPEARING IN THE SEIZED DOCUMENTS. THE REASONS GIVEN BY THE LD.CIT(A) ARE AS UNDER : 3.10 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLAN T, ALL THE REMAND REPORTS RECEIVED, COUNTER COMMENTS OF TH E APPELLANT AND MATERIAL AVAILABLE ON RECORD. THE APPELLANT HAS RAISED ONE GROUND OF APPEAL FOR BOTH THE YEARS I.E. A.Y. 2000- 01 AND 2001-02, WHICH PERTAINS TO ADDITION MADE BY THE A.O. OF RS.2 2,07,701/- AT RS.22,02,000/-FOR A.Y. 2000-01 AND 2001-02, RESPECT IVELY U/S 69 OF THE IT. ACT, 1961. DURING THE ASSESSMENT PROCEED INGS THE A.O. RECEIVED THE INFORMATION FROM THE ADDL CIT, CENTRAL RANGE-2, PUNE, AND THE SEIZED DOCUMENTS IN THE CASE OF SHRIR AM H. SONI, A FINANCE BROKER AND NOTICE U/S 148 WAS ISSUED TO THE APPELLANT. THESE SEIZED DOCUMENTS PERTAINED TO SEARCH AND SEIZ URE ACTION U/S 132 CARRIED OUT IN THE CASE OF SHRIRAM H. SONI, A F INANCE BROKER ON 29.07.2003. A LARGE NUMBER OF SEIZED DOCUMENTS, BOO KS OF ACCOUNT HAD BEEN SEIZED RELATING TO THE FINANCE BRO KERAGE BUSINESS OF SHRIRAM H. SONI APART FROM REGULAR BUSINESS TRAN SACTIONS RELATING TO THE FINANCE BROKERAGE BUSINESS. THE INC RIMINATING DOCUMENTS RELATING TO THE ADVANCE OF CASH LOANS RUN NING INTO SEVERAL CRORES WERE FOUND AND SEIZED ALONG WITH THE RELATED DOCUMENTS IN THE FORM OF BLANK PROMISSORY NOTES DUL Y SIGNED BY THE BORROWERS, BLANK UNDATED CHEQUES DULY SIGNED AN D WITH LOAN AMOUNT MENTIONED BESIDES THE CHECKLIST OF BORROWERS INDICATING THE DUE DATES OF PAYMENT OF INTEREST AND BROKERAGE. THE A.O. DURING THE ASSESSMENT PROCEEDINGS FOUND THAT THE NA ME OF ONE ASOK OSWAL WAS APPEARING IN THE SEIZED DOCUMENT IN ABBREVIATED AND DISTORTED FORM AS OSWAL ASHOK OR OSWAL ASK. DURING THE COURSE OF SCRUTINY OF THE SEIZED DOCUMENTS OF SHRI S.H. SONI, THE A.O. LISTED ALL THE TRANSACTIONS APPEARING ON PAGE NOS. 85, 86, 87, 88, 89, ON WHICH THE NAME OF THE APPELLANT APPEARED . THE A.O. HAS ALSO DISCUSSED THE MODUS OPERANDI OF SHRI S.H. SONI WITH RESPECT TO HIS MONEY LENDING BUSINESS IN THE ASSESSMENT ORD ER FOR BOTH THE ASSESSMENT YEARS. 3.11 THE A.O. THEN HANDED OVER THE COPY OF THE SEIZED DOCUMENTS TO THE APPELLANT AND SOUGHT THE EXPLANATI ON WITH RESPECT TO THE ENTRIES CONTAINED THEREIN ON THE DOC UMENTS. THE APPELLANT DENIED TO HAVE ANY CONNECTION, WHATSOEVER , WITH SHRI SHRIRAM H. SONI AND SUBMITTED THAT A SMALL GROCERY SHOP WAS BEING RUN BY HIM. HOWEVER, THE A.O. DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND HELD THAT THE CASH LOANS APPEARING ON THE SEIZED DOCUMENTS WERE THE INVESTMENT OF THE APPELLANT ALONG WITH THE DETAILS OF INTEREST THEREON WAS THE DEEMED INCOME U/S 69 OF THE ACT, AS THE SAME WAS NOT RECORDED IN THE BOOKS OF ACCOUNT AND THE SAID AMOUNTS WERE TAXED AS INCOME F OR ASSESSMENT YEARS 2000-01 AND 2001-02. 3.12 DURING THE APPELLATE PROCEEDINGS THE LD. COUNSEL OF THE APPELLANT SUBMITTED THAT THE APPELLANT HAD NO CONNE CTION WITH SHRI SHRIRAM H. SONI AS THE APPELLANT IS A PERSON HAVING A SMALL GROCERY BUSINESS AND THAT HE HAS NO ASSETS, PROPERT Y OR ANY INVESTMENT, AND THAT THE FINANCIAL POSITION OF THE APPELLANT IS NOT VERY GOOD AND, THEREFORE, HE WAS NOT CAPABLE OF ADV ANCING SUCH 5 HUGE AMOUNTS TO ANYBODY. IT WAS ALSO EXPLAINED THAT THE APPELLANT WAS GIVEN A COPY OF THE SEIZED MATERIAL ON THE BASI S OF WHICH ADDITIONS WERE SOUGHT TO BE MADE AND ON REFERENCE T O THE SAID MATERIAL, IT CAN BE SEEN THAT WHEREVER THE NAME 'AS HOK OSWAL' APPEARS, THERE IS NO MENTION OF MIDDLE NAME. THERE IS NO SIGNATURE OF THE APPELLANT EXCEPT ON PAGE 3 OF BUND LE NO. 7 OF PANCHANAMA DATED 02.08.2003 WHERE THERE ARE SIGNATU RES OF THE RESPECTIVE PERSONS NAMED THEREIN AND THE SIGNATURE AGAINST THE NAME 'ASHOK OSWAL' IS DIFFERENT THAN THE SIGNATURE OF THE PRESENT APPELLANT. IT WAS, THEREFORE, EMPHASIZED THAT, THE FACT THAT THE SIGNATURE OF THE PERSON ON THE SAID PAGE DOES NOT M ATCH WITH THE PRESENT APPELLANT SHOWS THAT THE PERSON WHOSE NAME APPEARS AS 'ASHOK OSWAL' ON THE SEIZED MATERIAL IS NOT THE PRE SENT APPELLANT AND, THEREFORE, MORE MATERIAL IS REQUIRED FOR A CON CLUSION TO BE ARRIVED AT THAT THE PERSON CONCERNED IS THE PRESENT APPELLANT. THE TELEPHONE DIRECTORY ON BEING REFERRED INDICATES SEV ERAL PERSONS RESIDING IN PUNE WHERE THE NAME 'ASHOK OSWAL' APPEA RS AND, THEREFORE, UNLESS THE IDENTITY OF THE SPECIFIC PERS ON IS PROVED, THE ADDITION CANNOT BE MADE PURELY ON PRESUMPTION. THE A.O. HAS NOT ACCEPTED THE EXPLANATION FURNISHED AND, THEREFORE, IT WAS CONTENDED THAT THE BASIS ON WHICH NOTICE U/S 148 HA S BEEN ISSUED SHOULD BE BROUGHT ON RECORD AS THE APPELLANT IS UNABLE TO UNDERSTAND THE REASON WHY THE SAID NOTICE U/S 148 H AS BEEN ISSUED TO HIM. IT WAS ALSO STATED THAT THERE HAS TO BE SOME MATERIAL APART FROM THE SIMILARITY OF THE NAME TO S HOW THAT THE APPELLANT IS THE ONLY PERSON WHO HAS MADE TRANSACTI ONS WITH SHRI SONI. IT WAS ALSO CONTENDED BY THE APPELLANT THAT A PART FROM THE SIMILARITY IN NAME OF THE APPELLANT, THERE IS NO OT HER CORROBORATIVE MATERIAL TO SUGGEST ANY NEXUS OF THE APPELLANT WITH SHRI SONI OR THE TRANSACTIONS REFLECTED IN THE SEIZED MATERIAL A S THERE ARE NO PROMISSORY NOTES OR BLANK CHEQUES FOUND. 3.13 ON THE BASIS OF THE ABOVE SUBMISSION MADE BY THE APPELLANT REMAND REPORT HAD BEEN CALLED FOR FROM TH E A.O. FROM TIME TO TIME. THE REPORTS SUBMITTED BY THE A.O. ON THE BASIS OF ENQUIRIES CONDUCTED INDICATED THAT AT LEAST 10 PERS ONS BY THE NAME OF ASHOK OSWAL WERE FOUND, HOWEVER, ALL OF THEM HAD DENIED HAVING ANY CONNECTION WITH SHRI SONI. IN THIS REGAR D, A LETTER DATED 22.07.2009 WAS ALSO SENT BY THE ADDL. CIT, RANGE-2, PUNE TO THE ADDL. CIT, CENTRAL RANGE-2, PUNE, IN WHICH A REQUES T WAS MADE FOR SUPPLYING INFORMATION PERTAINING TO SHRI 'ASHOK K. OSWAL' ESPECIALLY WITH RESPECT TO THE DETERMINATION OF PAN AND ADDRES S OF SHRI OSWAL AS THE PROCEEDINGS WERE STARTED ON THE BASIS OF INF ORMATION PASSED ON BY THE CENTRAL RANGE. IT WAS ALSO MENTIONED IN T HE SAID LETTER THAT ON A SEARCH OF THE BSNL DIRECTORY NAMES OF MOR E THAN 10 PERSONS BY THE NAME ASHOK OSWAL WERE FOUND IN PUNE AND, THEREFORE, TO BACK THE ASSESSMENT ORDER BEFORE TH E CIT (APPEALS) THE IDENTITY OF THE ASSESSEE NEEDS TO BE ESTABLISHE D. HOWEVER, NO SUCH REPLY WAS RECEIVED BACK FROM THE CENTRAL RANGE -2, PUNE, BY THE ADDL. CIT RANGE-2, PUNE. THE A.O. WAS, THEREAFT ER, AGAIN ASKED VIDE THE LETTER DATED 18.07.2011 TO LOCA TE ANY CORROBORATIVE EVIDENCE IN THE FORM OF SIGNED BLANK CHEQUES, PROMISSORY NOTES ETC. TO ESTABLISH THE CONNECTION O F THE APPELLANT WITH SHRI S.H. SONI AS FOUND IN OTHER RELATED CASES DURING THE 6 SEARCH ACTION U/S 132. IN THE SAID REMAND RE PORT DATED 01.08.2011 IT WAS STATED BY THE A.O. THAT ON VERIFI CATION OF THE SEIZED MATERIAL CONTAINED IN BUNDLE NO. 98, NO PROM ISSORY NOTES OR BLANK CHEQUES IN THE NAME OF 'ASHOK OSWAL' WERE FOU ND AND THAT ONLY IN THE COPY OF THE CHECKLIST THE NAME OF 'OSWA L ASHOK' APPEARED IN THE 'INVESTOR' COLUMN OF THE PAGE, HOWE VER, NO SIGNATURES AGAINST THE ABOVE ENTRIES OF 'OSWAL ASHO K' WERE FOUND IN THE SEIZED DOCUMENTS. THE APPELLANT HAD ALSO SUB MITTED AFFIDAVIT ON 01.11.2010 STATING THAT THERE WAS NO B USINESS CONNECTION OR ANY TRANSACTION WITH SHRI S.H. SONI. 3.14 THE COPIES OF ALL THE REMAND REPORTS RECEIVED W ERE GIVEN TO TIE APPELLANT FOR COMMENTS AND VIDE LETTER DATED 02.09.2011 IT WAS SUBMITTED THAT THE REMAND REPORTS WERE CALLED FOR TO ESTABLISH THE IDENTITY OF THE APPELLANT W.TH REFERENCE TO THE SEIZED MATERIAL APART FROM THE NAME AS APPEARING IN THE SEIZED DOCUMENTS. IT WAS STATED THAT IN THE FIRST REMAND R EPORT DATED 21.12.2009, THE A.O. HAS MADE ENQUIRIES WITH THE PE RSONS NAMED IN THE TELEPHONE DIRECTORY, WHICH WAS FURNISHED BY THE APPELLANT AND THE PERSONS EXAMINED BY THE A.O. HAVE DENIED TO HAVE ANY CONNECTION WITH THE ENTRIES IN THE SEIZED MATERIAL, HOWEVER, NO CORROBORATIVE MATERIAL HAS BEEN PUT FORWARD BY THE A.O. THAT COULD ESTABLISH THE IDENTITY OF THE APPELLANT AND ON THE BASIS OF WHICH THE A.O. COULD HAVE INITIATED THE ACTION U/S 148 AND TH US, IN THE FIRST REMAND REPORT THE A.O. HAS INDIRECTLY ACCEPTED THE NON-EXISTENCE OF CORROBORATIVE MATERIAL. IN THE SECOND REPORT DAT ED 14.01.2011,, THE A.O. HAS OBSERVED THAT THE APPELLANT HAS NOT GI VEN ANY LOAN TO SHRI S.H. SONI WHICH SUPPORT THE CONTENTION OF THE APPELLANT THAT THERE IS NO CONNECTION OF THE APPELLANT WITH THE SE IZED MATERIAL. IN THE 3 RD REMAND REPORT, THE A.O. AFTER VERIFICATION OF THE SEIZED MATERIAL HAS CONFIRMED THAT THERE ARE NO CHEQUES OR PROMISSORY NOTES FOUND IN THE SEIZED MATERIAL AND ALSO CONFIRM ED THAT THERE WERE NO SIGNATURES EITHER OF THE APPELLANT AGAINST THE NAME WHEREVER 'OSWAL ASHOK' APPEARS. THEREFORE, THE SAID REPORT CONCLUSIVELY PROVES THAT THE ACTION HAS BEEN TAKEN BY THE A.O. WITHOUT ANY CORROBORATIVE MATERIAL AND, THEREFORE, NO NOTICE U/S 148 OF THE A.O. COULD HAVE BEEN ISSUED IN THE CASE OF APPELLANT AND THE ADDITIONS MADE ARE, THEREFORE, NO JUSTIFIED IN LAW. 3.15 THE APPELLANT'S COUNSEL HAS ALSO CONTENDED THAT T HE IDENTITY OF THE APPELLANT HAS NOT BEEN ESTABLISHED BY THE A. O. AND THAT THERE IS NO CORROBORATIVE MATERIAL EITHER IN THE SE IZED DOCUMENT SO AS TO PROVE THE NEXUS OF THE APPELLANT TO THE TRANS ACTIONS WITH SHRI S.H. SONI. IT HAS BEEN, THEREFORE, STATED THAT IN T HE ABSENCE OF ANY CORROBORATIVE MATERIAL NO ACTION CAN BE TAKEN IN TH E CASE OF THE APPELLANT. THE APPELLANT HAS PLACED RELIANCE ON THE FOLLOWING JUDICIAL DECISIONS: 1. KIRTI OSWAL VS DCIT, PUNE ITAT, ITA NO.1700/P N/07 2. ADDL. CIT VS MS LATA MANGESHKAR, 97 ITR 696 (B OM) 3. RAMCHANDRA OIL MILLS VS COMMISSIONER OF SALES TAX, 77 CTR 317 (BOM) 4. ANAND PRAKASH GUPTA VS ACIT, 92 TTJ 766 (JODH) 5. ITO VS BALA PRASAD R. LOKMANYAWAR, 18 TTJ 167 (PUNE) 7 3.16 THE ADDITION OF THE LOANS ALONG WITH THE INTERESTS HAS BEEN DONE BY THE A.O. ON THE BASIS OF THE SEIZED DOCUMEN TS FOUND DURING SEARCH ACTION IN THE CASE OF SHRI SHRIRAM SO NI. HOWEVER, NO CORROBORATIVE EVIDENCE HAD BEEN FOUND OR HAS BEEN B ROUGHT ON RECORD BY THE A.O. DURING THE ASSESSMENT PROCEEDING S TO SUBSTANTIATE THE NOTINGS ON THE DOCUMENT FOUND DURI NG THE SEARCH ACTION IN THE CASE OF SHRIRAM SONI. THE APPELLANT H AS CATEGORICALLY DENIED TO HAVE MADE ANY TRANSACTION WITH SHRIRAM H. SONI AND HAD ALSO FILED AFFIDAVIT TO THAT EFFECT DENYING ANY SUC H TRANSACTION WITH SHRI SONI. THE APPELLANT HAS ALSO CONTENDED THAT NO INDEPENDENT EVIDENCE TO SUPPORT THE PAPER ENTRIES THAT THE APPE LLANT FIRM HAD TAKEN CASH LOANS AND INCURRED EXPENDITURE IN CASH H AVE BEEN FOUND OR BROUGHT ON RECORD BY THE A.O. IN THE REMAN D REPORT DATED 28.07.2011, THE A.O. HAS CATEGORICALLY MENTIONED TH AT AFTER VERIFICATION OF THE SEIZED MATERIAL AND AS PER RECO RD NO BLANK CHEQUES OR ANY 'PROMISORY NOTE' WERE FOUND IN THE C ASE OF THE APPELLANT. IT HAS ALSO BEEN MENTIONED THAT, WHEREVE R, THE NAME 'ASHOK OSWAL' APPEARS THERE ARE NO SIGNATURES. THES E SPECIFIC FINDINGS CLEARLY INDICATE THAT THE A.O. HAS NOT IDE NTIFIED WHETHER 'ASHOK OSWAL' MENTIONED IN THE SEIZED PAPERS IS THE SAME AS THE APPELLANT. ON PERUSAL OF THE ASSESSMENT ORDER ALSO, IT IS APPARENT THAT NO ENQUIRY IN THIS REGARD IS SEEN TO HAVE BEEN CARRIED OUT BY THE A.O. DURING THE ASSESSMENT PROCEEDINGS, DESPITE THE FACT THAT THE APPELLANT HAD CATEGORICALLY DENIED TO HAVE HAD ANY TRANSACTIONS WITH SHRIRAM H. SONI, HOWEVER, SOME ENQUIRY WAS CARRIED OUT THOUGH WITH RESPECT TO THE NAMES OF THE INDIVIDUAL NAMED AS 'ASHOK K. OSWAL' AS ENLISTED IN THE TELEPH ONE DIRECTORY DURING THE REMAND PROCEEDINGS. HOWEVER, IN NONE OF THE CASES OF PERSONS WHOSE NAMES WERE SIMILAR TO THAT OF APPELLA NT, ANY SUCH TRANSACTION WITH SHRI SHRIRAM SONI WAS FOUND BY THE A.O.' EVEN EXAMINATION OF SHRIRAM H. SONI WAS NOT CARRIED OUT WITH RESPECT TO THE SEIZED DOCUMENTS AND WHICH PERTAINED TO THAT OF THE APPELLANT AND EVEN THE CROSS-EXAMINATION WAS ALSO NOT ALLOWED TO BE DONE DURING THE ASSESSMENT PROCEEDINGS. 3.17 THE APPELLANT HAS CITED A NUMBER OF CASE LAWS IN RESPECT OF THE CLAIM MADE. IN THE CASE OF ADDL. CIT VS LATA MA NGESHKAR (1974) 97 ITR 696 (BOM), THE HON'BLE BOMBAY HIGH CO URT HELD THAT THE DIARIES ARE NOT BOOKS OF ACCOUNT AND NO LI ABILITY CAN BE FASTENED ON THE PERSON ON THE BASIS OF AN UNILATERA L ENTRY MADE BY ANOTHER PERSON AGAINST SUCH PERSON. SIMILAR VIEW HA S BEEN TAKEN; IN THE CASE OF PRATHARNA CONSTRUCTION (P) LTD. VS. DCIT, (2001) 70 TTJ 122 (AHD) AND SMC SHARE BROKERS LTD. VS. DCIT ( 2007) 109 TTJ (DELHI) 700, THAT ADDITION CANNOT BE MADE IN TH E HANDS OF THE ASSESSEE ON THE BASIS OF ENTRY IN THE DIARY AND STA TEMENT OF THIRD PARTY AT THE BACK OF THE ASSESSEE FROM WHOM DIARY H AS BEEN FOUND BY THE REVENUE. THE BURDEN IS ON THE A.O. TO SHOW T HAT THE AMOUNT FOUND TO BE CREDITED IN THE ASSESSEE'S ACCOU NT FROM THE SEIZED DOCUMENTS OF SHRIRAM H. SONI, BELONGED TO TH E ASSESSEE, BY BRINGING PROPER EVIDENCE ON RECORD AND THE ASSESSEE COULD NOT BE EXPECTED TO EXPLAIN THE SOURCE OF INCOME TO DISCHAR GE THE BURDEN THAT LAY UPON HIM. POSSESSION OF ANOTHER CANNOT BE PRESUMED TO BE THE POSSESSION OF THE ASSESSEE. IF THE OWNERSHIP IS DISPUTED THE 8 BURDEN OF PROVING THAT THE POSSESSION WAS NOT POSSE SSION AS OWNER AND THAT OWNERSHIP WAS OF SOMEONE ELSE, IS ON THE ASSESSEE, HOWEVER, IF THE A.O. WANTS TO ASSERT THAT THE ASSESSEE IS THE OWNER OF THE AMOUNT RECEIVED FROM SOMEONE ELSE, THEN THE BURDEN LIES ON HIM TO PROVE THE OWNERSHIP OF THE AS SESSEE. 3.17.1 SIMILAR VIEW HAS BEEN TAKEN IN THE OTHER CASES CIT ED BY THE APPELLANT. IN THE CASE OF KIRTI C. OSWAL VS DCI T, PUNE ITAT, ITA NO. 1700/PN/07 DATED 03.10.2008, WHERE SEIZED P APERS AND INCRIMINATING MATERIAL IN THE FORM OF LEDGER ACCOUN T IN THE BOOKS OF RANKA JEWELLERS FOUND FROM THE PREMISES OF LA TH IRD PERSON AND ON THE PAPERS ONLY ONE NAME 'KIRTI' HAS REFLECTED. THE TRIBUNAL HELD THAT THE PAPER SHOWS ONLY ONE WORD 'KIRTI', WH ICH BY ITSELF DOES NOT LEAD TO THE INFERENCE THAT IT WAS THE ACCO UNT OF THE ACCOUNT OF THE ASSESSEE. THE ASSESSEE HAD CLEARLY D ENIED ANY RELATION IN RESPECT OF SUCH TRANSACTION. EVEN RANK A JEWELLERS HAD NOWHERE STATED THAT THIS ACCOUNT REFERRED TO THE AS SESSEE. THE ADDRESS GIVEN WAS FOUND TO BE A VAGUE STATEMENT WHI CH COULD NOT BE RELATED TO THE ASSESSEE. THE TRIBUNAL HELD THAT NO INFERENCE CAN BE DRAWN FROM, FACTS FROM RECORD THAT TRANSACTION FROM SEIZED MATERIAL RELATED TO THE ASSESSEE AND, THEREFORE, TH E ADDITION WAS NOT JUSTIFIED. IN THE OTHER CASES CITED BY THE APPE LLANT COURT/TRIBUNAL HELD THAT ADDITION CANNOT BE MADE IN CASES WHERE BOOKS OF ACCOUNT/ DOCUMENTS HAVE BEEN SEIZED FROM T HE THIRD PERSONS PREMISES AND WHERE NO CORROBORATIVE MATERIA L HAS BEEN BROUGHT ON RECORD. 3.17.2 IN THE CASE OF CBI VS V C SHUKLA & OTHERS, AIR 1998 SUPREME COURT 1406 HAS HELD THAT THE WORD 'BOOKS' - MEANING OF SPIRAL PADS AND SPIRAL NOTE-BOOKS ARE 'BOOKS' WITHI N THE MEANING OF SECTION 34 OF THE EVIDENCE ACT, 1872 BUT, NOT LOOSE SHEETS OF PAPER CONTAINED IN THE FILE. IT WAS ALSO HELD THAT CORREC T AND AUTHENTIC ENTRIES IN BOOKS OF ACCOUNT CANNOT FIX LIABILITY UP ON THE PERSON IN ABSENCE OF INDEPENDENT EVIDENCE AS THEIR TRUSTWORTH INESS. SINCE AN ELEMENT OF SELF INTEREST AND PARTISANSHIP OF THE EN TRANT TO MAKE A PERSON - BEHIND WHOSE BACK AND WITHOUT WHOSE KNOWLE DGE THE ENTRY IS MADE LIABLE CANNOT BE RULED OUT, THE ADD ITIONAL SAFEGUARD OF INSISTENCE UPON OTHER INDEPENDENT EVIDENCE TO FA STEN HIM WITH SUCH LIABILITY, HAS BEEN PROVIDED FOR IN SECTION 34 BY INCORPORATING THE WORDS 'SUCH STATEMENTS SHALL NOT ALONE BE SUFFI CIENT TO CHARGE ANY PERSON WITH LIABILITY. EVEN CORRECT AND AUTHENT IC ENTRIES IN BOOKS OF ACCOUNT CANNOT WITHOUT INDEPENDENT EVIDENC E OF THEIR TRUSTWORTHINESS, FIX A LIABILITY UPON A PERSON. WHERE THERE WAS NO INDEPENDENT EVIDENCE REGARDING P AYMENT OF AMOUNT IN QUESTION AS REPRESENTED BY ENTRIES TO THE ACCUSED AND THE EVIDENCE OF WITNESSES WHO HAD ADMITTED THE RECE IPTS OF PAYMENTS AS SHOWN AGAINST THEM IN THE BOOKS OF ACCO UNT IN QUESTION, COULD NOT BE HELD TO BE AN INDEPENDENT EV IDENCE AGAINST THE ACCUSED, SECTION 34 CANNOT BE PRESSED INTO SERV ICE SO AS TO HOLD THE SAID BOOKS OF ACCOUNT AS ADMISSIBLE IN SER VICE. 9 3.18 IT WOULD BE RELEVANT TO MENTION HERE TH E CASE OF CIT VS SALEKCHAND AGARWAL (20,08) 300 ITR 426 (ALL ), THE FACTS OF WHICH WERE THAT IN A SEARCH IN THE PREMISES OF A TH IRD PARTY INDICATED EVIDENCE OF LOAN FROM THE ASSESSEE, BUT T HE ASSESSEE DENIED HAVING GIVEN ANY SUCH LOAN OR ADVANCE TO THE SEARCHED PARTY AND THE A.O. MADE AN ADDITION DISBELIEVING TH E DENIAL. TIE TRIBUNAL FOUND THAT APART FROM THE MATERIAL, THERE WAS NO CORROBORATING EVIDENCE TO SUGGEST THAT THE ASSESSEE DID ADVANCE THE LOAN. THE HIGH COURT HELD THAT IN THE FACE OF A SSESSEE'S DENIAL AND IN ABSENCE OF ANY OTHER MATERIAL, THE DELETION WAS FOUND JUSTIFIED. WHERE DOCUMENTS ARE FOUND IN THE PREMISE S OF A PARTY SEARCHED, IT BECOMES THE DUTY OF THE SEARCHED PARTY TO EXPLAIN THE CONTENTS TO THE SATISFACTION OF THE; A.O. WOULD THI S CONSTITUTE EVIDENCE AGAINST THIRD PARTY AS WELL? THE LAW PRESU MES THAT IT COULD SO CONSTITUTE BY PROVIDING FOR INITIATION OF BLOCK ASSESSMENT PROCEEDINGS AGAINST SUCH THIRD PARTY U/S 158BD OR 1 53C OF THE ACT. IT WAS SUCH INITIATION WHICH WAS QUESTIONED SUCCESS FULLY IN THE CASE OF AMARJOT SINGH BAKSHI (HUF) VS ACIT (2003) 263 IT R (AT) 75 (DEL) WHERE, WHAT WAS IF FOUND AGAINST THE THIRD PA RTY WAS A MERE NOTING IN A SLIP OF PAPER. SUCH SLIP INDICATED AS P ER THE A.O., SALE CONSIDERATION RECEIVED AND AN ADDITION WAS MADE. TH E MATTER WAS REFERRED TO A THIRD MEMBER ON DIFFERENCE BETWEEN TH E MEMBERS OF THE BENCH, THE THIRD MEMBER AGREED THAT, THOUGH IND IAN EVIDENCE ACT HAS NO STRICT APPLICATION, ITS PRINCIPLES REQUI RE CONSIDERATION. IF THE NOTING WAS IN REGULAR BOOKS OF ACCOUNT, IT WOUL D HAVE SOME RELEVANCE. BUT WHAT WAS FOUND ON A; SLIP OF PAPER O R LOOSE SHEET IS NOT COVERED BY ANY RULE UNDER THE EVIDENCE ACT. IN ABSENCE OF ANYTHING MORE TO CORROBORATE THE INFERENCE DRAWN ON THE BASIS OF NOTING ON A SLIP OF PAPER, THE ADDITION COULD NOT B E SUSTAINED AND THE STATEMENTS RECORDED WERE ALSO NOT SUBJECTED TO CROSS EXAMINATION. 3.19 IN THE PRESENT CASE, HOWEVER, THERE WAS NOT EVEN THE EXISTENCE OF ANY PROMISSORY NOTE OR BLANK CHEQUE SI GNED BY ANY OF THE PARTNERS OF THE APPELLANT FIRM. THIS IS ALSO RE VEALED FROM THE REMAND REPORTS OF THE A.O. WHICH WAS OBTAINED DURIN G THE APPELLATE PROCEEDINGS AND DISCUSSED IN THE EARLIER PARAS. FOREMOST, THE IDENTITY OF THE APPELLANT HAS NOT BEEN ESTABLIS HED BY THE A.O. LAND THAT THERE IS NO CORROBORATIVE MATERIAL EITHER IN THE SEIZED DOCUMENTS OR OTHERWISE SO AS TO PROVE THE NEXUS OF THE APPELLANT TO THE TRANSACTION WITH SHRI SHRIRAM H. SONI. IN V IEW OF THE ABOVE STATED FACTS, AND THE RATIO OF THE JUDICIAL CITATIO NS AND ALSO IN THE ABSENCE OF ANY CORROBORATIVE MATERIAL, THE LOANS AD VANCED ALONG WITH INTEREST CANNOT BE TREATED AS INCOME U/S.69 OF THE ACT. THEREFORE, THE ADDITIONS MADE BY THE A.O. OF RS.22, 07,721/- AND RS.22,02,000/- FOR A.Y. 2000-01 AND A.Y. 2001-02, R ESPECTIVELY ARE LIABLE TO BE DELETED AND THE GROUND OF APPEAL N O.1 RAISED BY THE APPELLANT FOR BOTH THE ASSESSMENT YEARS ARE ALL OWED. NOW THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE RECORD. THE FIRST ISSUE WE HAVE TO DEC IDE IS WHETHER 10 THE IDENTITY OF THE ASSESSEE IS PROVED THAT HE IS T HE SAME OSWAL ASHOK OR OSWAL ASK. AS PER THE REMAND REPORT GI VEN BY THE ASSESSING OFFICER, NO PROMISSORY NOTE OR BLANK CHEQ UES ON THE NAMES OF THE ASSESSEE WERE FOUND. ON PERUSAL OF TH E REMAND REPORT, WE FIND THAT ASSESSING OFFICER HIMSELF HAS EXAMINED MANY PERSONS ON SUSPICION, WHOSE NAMES WERE ASHOK OSWAL AND THE MIDDLE NAME WAS DIFFERENT. ADMITTEDLY, IN THE SEIZ ED DOCUMENT, THERE IS NO MIDDLE NAME. THE ASSESSEE FILED THE SP ECIFIC AFFIDAVIT DENYING HAVING ANY RELATION WITH SHRIRAM H. SONI. IN THE REMAND PROCEEDINGS, THE AO EXAMINED BANK ACCOUNT AND HAS R EPORTED THAT NO TRANSACTION WAS FOUND BETWEEN SHRIRAM H. SONI AN D THE ASSESSEE. IT IS VERY MUCH INTERESTING THAT WHEN THE AO HIMSELF IS NOT SURE ABOUT THE IDENTITY OF OSWAL ASHOK, THE NAME WHICH IS FOUND IN THE SEIZED DOCUMENT, HOW THE ASSESSEE CAN BE FASTENED WITH THE LIABILITY OF UNACCOUNTED TRANSACTIONS. WE FIND THAT THE AO HIMSELF ADMITS THAT THE ASSESSEE HAS SPECIFICALLY D ENIED. LAW IS WELL SETTLED THAT BURDEN IS ON THE REVENUE TO ESTAB LISH THE IDENTITY IF ANY PERSON IS TO BE CHARGED UNDER THE ACT. THE ACTION OF THE AO EXAMINING THE DIFFERENT PERSONS HAVING THE SAME NAM E PRIMA-FACIE ESTABLISHES THAT ASSESSING OFFICER HIMSELF IS NOT S URE THAT THE ASSESSEE IS THE SAME PERSON WHOSE NAME WAS FOUND NO TED IN THE SEIZED DOCUMENT. MOREOVER, NOTHING IS ON RECORD TO SHOW THAT SHRIRAM H. SONI HAS STATED ABOUT THE ASSESSEE THAT WHATEVER THE NOTINGS FOUND WERE IN RESPECT OF THE ASSESSEE. NO CORROBORATIVE MATERIAL IS FOUND. IN OUR OPINION, THE LD.CIT(A) H AS RIGHTLY DELETED THE ENTIRE ADDITION AS THERE IS NO EVIDENCE AGAINST THE ASSESSEE. WE FIND NO MERIT IN THE APPEAL FILED BY THE REVENUE . ACCORDINGLY, THE SAME IS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 30 TH DAY OF SEPTEMBER 2013. SD/- SD/- (G.S.PANNU) (R.S.P ADVEKAR) ACCOUNTANT MEMBER JUDI CIAL MEMBER PUNE DATED: 30 TH SEPTEMBER 2013 SATISH 11 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-II, PUNE 4 CIT-II, PUNE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUN E BENCHES, PUNE