Appeal Details
Counselvise Citation
[2024] 130 COUNSELVISE.COM (IT) 0968 (ITAT-JODHPUR)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
5 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
04-03-2024
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
23-01-2024
Assessment Year
2014-2015
Appeal Filed On
02-10-2023
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE: DR. S. SEETHALAKSHMI, JJUDICIAL MEMBER & SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 Sh. Jagdish Soni B-13, Mandore Mandi Jodhpur [PAN: AXZPS 6834 J] (Appellant) Vs. DCIT, Central Circle-01, Jodhpur (Respondent) Appellant by Sh. Rajendra Jain, Adv. & Smt. Raksha Birla, CA Respondent by Sh. Shailendra Sharma, CIT DR Date of Hearing 24.01.2024 Date of Pronouncement 05.03.2024 ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM These three appeals filed by assessee is arising out of the order of the Commissioner of Income Tax, Jaipur-5 dated 15/09/2023 [here in after ld. CIT ] for assessment year 2013-14 to 2015-16 which in turn arise from the order dated 09.08.2021 passed under section 153A of the Income Tax Act, by ACIT, Central Circle-01, Jodhpur. I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 2 2. Since the issues involved in these appeals are almost identical on facts and are almost having similar grounds, except the difference in amount added and disputed, therefore, these appeals were heard together with the agreement of both the parties and are being disposed off by this consolidated order. 3. At the outset, the ld. AR has submitted that the matter in ITA No. 362/Jodh/2023 may be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are identical except the difference in the amount of levy of penalty in other cases. The ld. DR did not raise any specific objection against taking that case as a lead case. Therefore, for the purpose of the present discussions, the case of ITA No. 362/Jodh/2023 is taken as a lead case. Based on the above arguments we have also seen that for these appeals grounds are similar, facts are similar, and arguments were similar and therefore, were heard together and are disposed by taking lead case facts, grounds, and arguments from the folder in ITA No. 362/Jodh/2023. I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 3 4. Before moving towards the facts of the case we would like to mention that the assessee has assailed the appeal in ITA No. 362/Jodh/2023 on the following grounds; 1. That on the facts and in the circumstances of the case, the order passed by ld CIT(A) in a most perverse manner also has reduced the procedure to an empty formality, which has to be deprecated. Therefore the order passed by Ld CIT (A) liable to be quashed. 2. That on the facts and in the circumstances of the case, the finding recorded by the ld CIT(A) manifest that there is no application of mind and the averments as recorded in the order are very vague and general and rather inconsistent with the facts available on record. Therefore, it crystal clear that ld CIT(A) flagrant disregarded of law and rules of procedure or in violation of principle of natural justice. 3. That on the facts and in the circumstances of the case, the ld CIT(A) deliberately and intentionally disregarding to the authoritative pronouncement of Hon’ble Courts has grave consequences on the rule of law in the country and it is nothing short of exceeding his jurisdiction and a contemptuous act on his part. 4. That on the facts and in the circumstances of the case, the ld CIT(A) erred in upholding the validity of order passed by Ld AO without taken to consideration the submission and evidences in right perspective and judicious manner. 5. That on the facts and in the circumstances of the case, the ld CIT(A) erred in upholding evidentiary value of loose paper found as a result of search in the absence of any cogent evidence or corroboration in support of the entries in loose paper merely on the basis of guess and pure suspicion. 6. That on the facts and in the circumstances of the case, the ld CIT(A) erred in not appreciating the submission, and legal pronouncement in right perspective and judicious manner and also in the absence of any clinching adverse evidence on record while confirming addition made by ld AO. 7. That on the facts and in the circumstances of the case, the ld CIT(A) erred in upholding the addition on account of unaccounted interest income on the basis of assumption & presumption particularly when the loose papers are not capable of describing transactions as the way of ld AO & CIT(A) had deciphered them. I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 4 8. That on the facts and in the circumstances of the case, the ld CIT(A) erred in sustaining addition of Rs 88,20,000/- in respect of unaccounted interest income on the basis of loose papers. 9. That on the facts and in the circumstances of the case the ld CIT(A) grossly erred in represented irrelevant, arbitrary and contrary facts and law while upholding the validity of addition made by ld AO. 10 That on the facts and in the circumstances of the case, the Ld CIT(A) erred in relying on inadmissible evidences or material while upholding the addition made by the Ld AO. 11 That on the facts and in the circumstances of the case, the CIT(A) grossly erred in violating the principal for justice of honest taxpayers and the functioning of processing’s in honesty and judicially manner and to avoid litigation as created unnecessary by AO. 12. That on the facts and in the circumstances of the case, the CIT(A) grossly erred in violating the principal for justice of honest taxpayers and the functioning of processing’s in honesty and judicially manner and to avoid litigation as created unnecessary by AO. 13. That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in sustaining addition in returned income without having any credible evidence or only on the basis of assumption and presumption. 14. That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in charging interest u/s 234B & 234C of the Act. 15. That the petitioner may kindly be permitted to raise any additional or alternative grounds at or before the time of hearing. 16. The petitioner prays for justice & relief.” 5. Succinctly, the fact as culled out from the records is that in this case, original return of income was filed on 29/09/2013 for the A.Y 2013- 14 declaring total income of Rs. 46,83,400/-. A search and seizure action u/s 132 of the Income Tax Act, 1961 was carried out at business/residential premises of Soni Group of Jodhpur on 09.04.2018 to which the assessee Shri Jagdish Soni belongs wherein several I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 5 incriminating documents along with cash, jewellery and other valuables were found/seized from the various premises of the group searched. The Soni group is primarily engaged in the business of trading in Agro Commodities on NCDEX platform and also carry out transactions of Future & Options. In addition, the group is also engaged in the finance business by extending cash loans on interest. 5.1 Because of the search conducted Notices u/s 153A dated 18/11/2019 for the A.Ys. 2013-14 to 2018-19 were issued, which were served digitally requiring the assessee to file the return of income within 30 days of receipt of notice. In compliance to the same, assessee has filed its ITR u/s 153A for A.Y. 2013-14 declaring total income at Rs. 46,83,400/- on 30/12/2019. Notice u/s 143(2) was subsequently issued on 07/01/2020 and a detailed common questionnaire for A.Y. 2013-14 to 2019-20 was issued on 12/02/2020 along with notice u/s 142(1) of the Income Tax Act, 1961. 5.2 The assessee is a proprietor of Soni Agro Industries, Jodhpur, which is engaged in trading of agriculture commodities and during this year on the turnover of Rs 8,14,000/- earned a Gross Profit of Rs. 92,200/-. On the other hand, in the personal capacity assessee has also I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 6 carried out trading of agricultural commodities declaring turnover of Rs. 2,37,25,600/- and declaring Gross Profit of Rs. 56,00,000/- He has got rental income from House Property and Income from Other Sources also, which includes interest on FDRs etc. 5.3 During the course of search at the residential premises on 09/04/2018 at Plot No. 163. Riddhi Siddhi, Polo 2 nd Paota, Jodhpur certain loose papers were seized as per Annexure AS Exhibit 1 containing 9 pages. In one of the seized documents of this Exhibit bearing No. 2, some jottings of cash loan advanced by the assessee to some borrower during the F.Y. 2010-11 and 2011-12 were found and this loan account was settled on 15/04/2014. The ld. AO made an exercise to make out what this document says and in doing so the the ld. AO noted that Shri Jagdish Soni had advanced a cash sum of Rs. 1,40,00,000/- on 01/02/2011 and charge interest @ 1% per month thereupon and the same is worked out by him up till 15/04/2014 for a period of 38 month and 15 days (38.5%) and thus the interest chargeable calculated by him is Rs. 53,90,000/- (Rs. 1,40,00,000/- x 38.5%). Subsequently, the same party borrowed a sum of Rs. 1,65,00,000/- on 09/12/2011 and at the interest rate of 1% per month and the interest was worked out by Shri Jagdish Soni till 15/04/2014 for I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 7 a period of 28 months and 6 Days (28.2%) and thus the interest chargeable calculated by him is Rs. 46,53,000/- (Rs. 1,65,00,000/- x 28.2%). In the meantime, the borrower also deposited certain amount with Shri Jagdish Soni and his deposition also earned the same interest rate of 1% per month and the working is done by him accordingly On 10/10/2013, the borrower deposited a sum of Rs. 50,00,000/- with Shri Soni and interest is worked out by him for a period of 6 Months 5 Days (Rs 50,00,000/- x 6 1667%) upto 15/04/2014 the dale of account settlement and thus the interest was payable to the borrower amounted to the Rs. 308,333/-. Again, the borrower deposited a sum of Rs 50,00,000/- with Shri Soni on 16/10/2013 and his deposition also carried the same interest rate of 1% per month and the working is done by him accordingly which is for a period of a day less than complete 6 Month (5.966%) upto 15/04/2014 and interest is thus worked out at Rs 2.98 333/- (Rs 50,00,000/- x 5.966%). The borrower again deposited a sum of Rs. 1,00,00,000/- with Shri Soni on 13/01/2014 and in the same way his deposition carried the same interest rate of 1% per month and the working is done by him accordingly, which is for a period of 3 Months 2 Days (3.066%) upto 15/04/2014 and the interest is worked out at Rs. 3.06 667/ (Rs 1,00,00,000/-x 3.066%). So, to summarise the above transaction entries, it is seen that the assessee Shn Jagdish Soni has I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 8 advanced a cash loan of Rs. 3,05,00,000/- (Rs. 1,40,00,000/- Rs. 1,65, 00 000/-) and earned interest over his credit balance with the borrower of Rs. 1.00.43,000/- (Rs. 53,90,000/- Rs. 46,53,000/-). On the other hand, the borrower who repaid and deposited surms of Rs. 2,00,00,000/- (on 10/10/2013 Rs 50,00,000/- on 16/10/2013 Rs 50,00,000/- & on 13/01/2014 Rs. 1,00,00,000/-) and Rs. 1,00,00,000/- (on 15/04/2014) on various dates also earned interest upon his deposits with Shri Soni, which aggregated to Rs. 9, 13,333/- (Rs. 3,08,333/- Rs 2.98 333/- Rs 3,06,667/-) and in the working Shri Soni has after giving credit of this interest amount of Rs. 9, 13,333/- settled the account with interest chargeable from the borrower of Rs. 91,29,667/- The ultimate position of this entire transaction is that on 15/04/2014, credit balance of Shri Soni with the borrower was of Rs 5,00,000/- (loan amount) and interest amount of Rs. 91,29,667/-, aggregating to Rs 96,29,667/-. Therefore, obvious that assessee entered into cash loan transactions and advanced a cash loan of Rs 1,40,00,000/- & Rs. 1,65,00,000/- during A.Y. 2011-12 & 2012-13 respectively, from the source not explained and also did not disclose the interest earned in A. Y. 2015- 16 of Rs 91.29 667/-. I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 9 5.4 On the second set of loan and interest transaction mentioned on the lower part of the seized Document No. 2 of Exhibit AS-1 the ld. AO noted that hri Jagdish Soni had advanced a cash sum of Rs. 2,80,00,000/- on 09/12/2011 and charge interest @ 1% per month thereupon and the same is worked out by him up till 13/01/2014 for a period of 25 Month and 04 Days (25 1333%) and thus the interest chargeable calculated by him is Rs. 70,37.333/- (Rs. 2.80.00.000/- x 25. 1333%). Subsequently, the same party borrowed a sum of Rs. 15,00,000/- on 14/01/2014 and Shri Soni didn't charge any interest for a single day as the working of interest is done by him upto 13/01/2014 Shri Soni also paid a sum of Rs 15.00.000/- to the borrower on 14/01/2014. In the meantime, the borrower also deposited certain amount with Shri Jagdish Soni and his deposition also carried the same interest rate of 1% per month and the working is done by him accordingly. On 10/10/2013, the borrower deposited a sum of Rs. 1,50,00,000/- with Shri Soni and interest is worked out by him for a period of 3 Months 3 Days (Rs 1,50,00,000/- x 3.10%) upto 13/01/2014 the date of account settlement and thus the interest was payable to the borrower amounted to the Rs 4,65,000/-. Again, the borrower deposited a sum of Rs. 50,00,000/- with Shri Soni on 16/10/2013 and his deposition also carried the same interest rate of 1% per month and the working is done by him I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 10 accordingly which is for a period of three days less than complete 3 Months (29%) upto 13/01/2014 and interest is thus worked out at Rs. 1,45,000/- (Rs. 50,00,000/- x 2.9%). The borrower again deposited a sum of Rs. 1,00,00,000/- with Shri Soni on 13/01/2014 but the settlement of account date is the same, no interest was calculated for this in his working which is seized and forming part of the assessment order. So, to summarise the above transaction entries, it is seen that the assessee Shri Jagdish Soni has advanced a cash loan of Rs. 2,80,00,000/- and earned interest over his credit balance with the borrower of Rs 70,37,333/- On the other hand, the borrower who repaid and deposited sums of Rs 2,00,00,000/- (on 10/10/2013 Rs 1,50,00,000/-, on 16/10/2013 Rs. 50,00,000/-) and Rs. 1,00,00,000/- (on 13/01/2014) on various dates also earned interest upon his deposits with Shri Soni, which aggregated to Rs. 6.10,000/- (Rs 4,65,000/- + Rs. 1,45,000/-) and in the working Shri Soni has after giving credit of this interest amount of Rs 6, 10,000/- settled the account with interest chargeable from the borrower of Rs. 70,37,333/-. The ultimate position of this entire transaction is that on 13/01/2014, credit balance of Shri Soni with the borrower after adjustment of interest amounts and surplus fund of the borrower lying with Shri Soni was worked out at Rs. 59,27,333/- (Rs. 70,37,333 – Rs. 6,10,000 – Rs. 5,00,000 (Rs. I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 11 20,00,000 – Rs. 15,00,000/-). From above working, it is therefore that the assessee entered into cash loan transactions and advanced him a cash loan of Rs. 2,80,00,000/- and 15, 00,000/- during A.Y 2012-13 & 2014-15 respectively, from the source not explained and also did not disclose the interest earned in A.Y 2014-15 of Rs. 64,27,333/-. 5.5 In view of above discussion, the assessee has entered into cash loan transaction as per the jottings made in the seized documents and the interest component involved pertaining to A.Y 2014-15 from the upper and lower part of the said document is calculated as under- 1. Upper Part of the Document No. 2 (a) Interest @ 12% per annum on the amount of Rs. 1,40,00,000/- received during the F.Y 01/04/2013 to 31/03/2014 (12%) Rs. 16,80,000/- (b) Interest @ 12% per annum on the amount of Rs. 1,65,00,000/- received during the F.Y 01/04/2013 to 31/03/2014 (12%) Rs. 19,80,000/- (c) Interest @ 12% per annum accrued to the borrower on his deposit to the lender of Rs. 50,00,000/- for the period between 10/10/2013 to 31/03/2014 (5.7%) Rs. 2,85,000/- (d) Interest @ 12% per annum accrued to the borrower on his deposit to the lender of Rs. 50,00,000/- for the period between 16/10/2013 to 31/03/2014 (5.5%) Rs. 2,75,000/- (e) Interest @ 12% per annum accrued to the borrower on his deposit to the lender of Rs. 1,00,00,000/- for the period between 13/01/2014 to 31/03/2014 (2.6%) Rs. 2,60,000/- Net interest received by the assessee (a+b-c-d-e) Rs. 28,40,000/- II. Lower Part of the Document No. 2 (a) Interest @ 12% per annum on the amount of Rs. 2,80,00,000/- received during the F.Y 01/04/2013 to 31/03/2014 (date of settlement) (9.43%) Rs. 26,40,400/- I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 12 (b) Interest @ 12% per annum accrued to the borrower on his deposit to the lender of Rs. 1,50,00,000/- for the period between 10/10/2013 to 13/01/2014 (date of settlement) (3.13%) Rs. 4,69,500/- (c) Interest @ 12% per annum accrued to the borrower on his deposit to the lender of Rs. 50,00,000/- for the period between 16/10/2013 to 13/01/2014 ( date of settlement) (2.93%) Rs. 1,46,500/- Net interest received by the assessee (a+b-c-d-e) Rs. 20,24,400/- So to summarise the above working of interest earning by the assessee, Shri Jagdish Soni, he has enjoyed net interest on the transactions recorded in the upper part of this document during the F.Y. 2013-14 of Rs. 28,40,000/- on the cash loan advanced by him and on the basis of lower part of the document the working of net interest earning by the assessee comes at Rs. 20,24,400/- on the cash loan advanced by him. Thus, in aggregate the interest income to the tune of Rs. 48,64,400/- (Rs. 28,40,000/- + Rs. 20,24,400/-) has not been disclosed in his ITR because the original advancement of cash loan was also not disclosed by him in his ITR for A.Y. 2011-12, so no question of disclosure of interest earned thereupon does arise for the A.Y. under consideration and accordingly it is found that since the assessee has not disclosed this interest income an addition of Rs. 48,64,400/- is being made as undisclosed interest income u/s 68 of the Income Tax Act, 1961. I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 13 6. Aggrieved from the order of the above order of the assessing officer the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised by the assessee, the relevant findings of the ld. CIT(A) is reiterated herein below: “5. Ground No. 1 to 4:- These grounds are related to validity of assessment order. Decision 5.2 I have considered the facts of the case and written submission of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. These grounds of appeal are related to validity of assessment order. These grounds of appellant have no merits. The AO has passed the order as per the provisions of section 153A of the IT. Act, 1961 after considering all the facts of the case and the submissions made by the appellant. Thus ground no. 1 to 4 are hereby dismissed. 6. Ground No. 5 to 16:- These grounds are related to addition of Rs. 48,64,400/- in respect of unaccounted transactions on the basis of loose papers bearing Page No. 2 of Exhibit AS-1 seized during the course of search & seizure proceedings u/s 132 of the IT. Act, 1961. “Decision 6.2 I have considered the facts of the case and written submission of the appellant as against the observations/ findings of the AO in the assessment order for the year under consideration. 6.2.1 A search and seizure action u/s 132 of the Income Tax Act, 1961 was carried out at business/residential premises of Soni Group of Jodhpur on 09/04/2018. The assessee Shri Jagdish Soni is associated with the above group. During the search proceedings at the residential premises of the assessee at Plot No. 163, Riddhi Siddhi, Polo 2nd Paota, Jodhpur, several incriminating documents were found and seized. In one of the seized documents of Annexure-AS Exhibit-1 page No. 2, the details of cash loans by the assessee were found. On the basis of the details found in this page, the AO has made an addition of Rs. 48,64,400/- as undisclosed interest income. 6.2.2 For ready reference the same is scanned here as under: X X X X X I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 14 6.2.3 The AO had described this page very meticulously. The details mentioned on page No. 2 of Exhibit-1 of Annexure-AS are fully described on the basis of interest amount mentioned on this page and period of loan as calculated in the paper. 15/04/2014 50,00,000 10.10.2013 6 Months & 5 days or 6.16666 months 3,08,333 1,40,00,000 01.02.2011 38 Months &15 days or 38.5 months 53,90,000 50,00,000 16.10.2013 5 Months & 29 days or 5.96666 months 2,98,333 1,65,00,000 09.12,2011 28 Months &6 days or 28.2 months 46,53,000 1,00,00,000 13.01.2014 NI , 3 Month's & 2 days or 3.06666 months 3,06,6 1,00,00,000 15.04.2014 Closed - 9,13,333 1,00,43,000 91,29,667 (ii) Upper Part of Document/Page No. 2 I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 15 6.2.4 Facts mentioned in the Assessment order 1. First set of loan and interest transaction mentioned on the upper part of the seized Document No. 2 of Exhibit AS-1. (a) Shri Jagdish Soni had advanced a cash sum of Rs. 1,40,00,000/- on 01/02/2011 and charge interest @ 1% per month thereupon and the same is worked out by him up till 15/04/2014 for a period of 38 Month and 15 Days (38.5%) and thus the interest chargeable calculated by him is Rs. 53,90,000/- (Rs. 1,40,00,000/- x 38.5%). (b) Subsequently, the same party borrowed a sum of Rs. 1,65,00,000/- on 09/12/2011 and at the interest rate of 1% per month and the interest was worked out by Shri Jagdish Soni till 15/04/2014 for a period of 28 Months and 6 Days (28.2%) and thus the interest chargeable calculated by him is Rs. 46,53,000/- (Rs. 1,65,00,000/- x 28.2%). (c) In the meantime, the borrower also deposited certain amount with Shr Jagdish Soni and his deposition also carried the same interest rate of 1% per month and the working is done by him accordingly. On 10/10/2013, the borrower deposited a sum of Rs. 50,00,000/- with Shri Soni and interest is worked out by him for a period of 6 Months 5 Days (Rs. 50,00,000/- x I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 16 6.1667%) upto 15/04/2014 the date of account settlement and thus the interest was payable to the borrower amounted to the Rs. 3,08,333/-. (d) Again, the borrower deposited a sum of Rs. 50,00,000/- with Shri Soni on 16/10/2013 and his deposition also carried the same interest rate of 1% per month and the working is done by him accordingly which is for a period of a day less than complete 6 Month (5.966%) upto 15/04/2014 and interest is thus worked out at Rs. 2,98,333/- (Rs. 50,00,000/- x 5.966%). (e) The borrower again deposited a sum of Rs. 1,00,00,000/- with Shri Soni on 13/01/2014 and in the same way his deposition carried the same interest rate of 1% per month and the working is done by him accordingly, which is for a period of 3 Months 2 Days (3.066%) upto 15/04/2014 and the interest is worked out at Rs. 3,06,667/- (Rs. 1,00,00,000/-x 3.066%). So, to summarise the above transaction entries, it is seen that the assessee Shri Jagdish Soni has advanced a cash loan of Rs. 3,05,00,000/- (Rs. 1,40,00,000/- Rs. 1,65,00,000/-) and earned interest over his credit balance with the borrower of Rs. 1,00,43,000/- (Rs. 53,90,000/- + Rs. 46,53,000/-). On the other hand, the borrower who repaid and deposited sums of Rs.2,00,00,000/- (on 10/10/2013 Rs. 50,00,000/-, on 16/10/2013 Rs. 50,00,000/- & on 13/01/2014 Rs. 1,00,00,000/-) and Rs. 1,00,00,000/- (on 15/04/2014) on various dates also earned interest upon his deposits with Shri Soni, which aggregated to Rs. 9,13,333/- (Rs. 3,08,333/- + Rs. 2,98,333/- Rs. 3,06,667/-) and in the working Shri Soni has after giving credit of this interest amount of Rs. 9,13,333/- settled the account with interest chargeable from the borrower of Rs. 91,29,667/-. The ultimate position of this entire transaction is that on 15/04/2014, credit balance of Shri Soni with the borrower was of Rs. 5,00,000/- (loan amount) and interest amount of Rs. 91,29,667/-, aggregating to Rs. 96,29,667/-. From above working, it is therefore obvious that you had entered into cash loan transactions with your debtor and advanced him a cash loan of Rs. 1,40,00,000/- & Rs. 1,65,00,000/- during A.Y. 2011-12 & 2012-13 respectively, from the source not explained and also did not disclose the interest earned in A.Y. 2015-16 of Rs. 91,29,667/- In your reply given on the query raised about all the seized documents and seeking explanation in the format provided in the questionnaire, while submitting reply in this regard, your AR did not discuss anything over the said seized Annexure by Party No. 2 from your residence at 163, Polo 2nd, Paota, Jodhpur. As such, now you are required to furnish your explanation on the entries of transactions of cash loan given by you and furnish reasons for not disclosing neither the advancement of such cash loan, repayment received in part and parcel from I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 17 the borrower and interest eventually earned by you on the said advancement of loan in your ITR for A.Y. 2015-16 or earlier years for that matter. II. Second set of loan and interest transaction mentioned. Document No. 2 2 of Exhibit AS-1. (a) Shri Jagdish Soni had advanced a cash sum of Rs. 2,80,00,000/- on 09/12/2011 and charge cash sum.of interest @ 1% per month thereupon and the same is worked out by him up till 13/01/2014 for a period of 25 Month and 04 Days (25.1333%) and thus the interest chargeable calculated by him is Rs. 70,37,333/- (Rs. 2,80,00,000/- x 25.1333%). (b) Subsequently, the same party borrowed a sum of Rs. 15,00,000/- on 14/01/2014 and Shri Soni didn't charge any interest for a single day as the working of interest is done by him upto 13/01/2014. Shri Soni also paid a sum of Rs. 15,00,000/- to the borrower on 14/01/2014. (c) In the meantime, the borrower also deposited certain amount with Shri Jagdish Soni and his deposition also carried the same interest rate of 1% per month and the working is done by him accordingly. On 10/10/2013, the borrower deposited a sum of Rs. 1,50,00,000/- with Shri Soni and interest is worked out by him for a period of 3 Months 3 Days (Rs. 1,50,00,000/- x 3.10%) upto 13/01/2014 the date of account settlement and thus the interest was payable to the borrower amounted to the Rs. 4,65,000/-. (d) Again, the borrower deposited a sum of Rs. 50,00,000/- with Shri Soni on 16/10/2013 and his deposition also carried the same interest rate of 1% per month and the working is done by him accordingly which is for a period of three days less than complete 3 Months (2.9%) upto 13/01/2014 and interest is thus worked out at Rs. 1,45,000/- (Rs. 50,00,000/- x 2.9%). (e) The borrower again deposited a sum of Rs. 1,00,00,000/- with Shri Soni on 13/01/2014 but the settlement of account date is the same, no interest was calculated for this in his working. So, to summarise the above transaction entries, it is seen that the assessee Shri Jagdish Soni has advanced a cash loan of Rs. 2,80,00,000/- and earned interest over his credit balance with the borrower of Rs 70,37,333/- On the other hand, the borrower who repaid and deposited sums of Rs 2,00,00,000/- (on 10/10/2013 Rs. 1,50,00,000/-, on 16/10/2013 Rs. 50,00,000/-) and Rs. 1,00,00,000/- (on 13/01/2014) on various dates also earned interest upon his deposits with Shri Soni, which aggregated to Rs. 6,10,000/- (Rs. 4,65,000/- Rs. 1,45,000/-) and in the working Shri Soni has after giving credit of this interest amount of Rs 6,10,000/- settled the account with interest chargeable from the borrower of Rs. 70,37,333/- The ultimate position of this entire transaction is that on 13/01/2014, credit balance I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 18 of Shri Soni with the borrower after adjustment of interest amounts and surplus fund of the borrower lying with Shri Soni was worked out at Rs. 59,27,333/- (Rs. 70,37,333 - Rs. 6,10,000 Rs. 5,00,000 (Rs. 20,00,000 - Rs. 15,00,000)). From above working, it is therefore obvious that you had entered into cash loan transactions with your debtor and advanced him a cash loan of Rs. 2,80,00,000/- and 15,00,000/- during A.Y. 2012-13 & 2014-15 respectively, from the source not explained and also did not disclose the interest earned in A.Y. 2014-15 of Rs. 64,27,333/-. In your reply given on the query raised about all the seized documents and seeking explanation in the format provided in the questionnaire, while submitting reply in this regard, your AR did not discuss anything over the said seized Annexure by Party No 2 from your residence at 163, Polo 2nd, Paota, Jodhpur. As such, now you are required to furnish your explanation on the entries of transactions of cash loan given by you and furnish reasons for not disclosing neither the advancement of such cash loan, repayment received in part and parcel from the borrower and interest eventually earned by you on the said advancement of loan in your ITR for A.Y. 2014-15 or earlier years for that matter. a) It is not disputed that the said seized document does not carry any name of the persons between whom the said loan transaction have been carried out but this is also an undeniable fact that the said document was found and seized from the bedroom of the assessee at 163, Polo 2nd Paota, Jodhpur and provisions of section 132(4A) lays down that it may reasonably be presumed that when the said document was found in possession and control of the assessee, the same are belonging to the assessee and the contents on this document are true and pertaining to the assessee. b) The nature of the transaction and the contents and figures mentioned therein have been decrypted by the undersigned and inference have been drawn with an accuracy of rate of interest and amount of interest accrued and the working given by the undersigned is based upon as per the notings made in the documents, which are not refutable at the end of the assessee. The disowning of the entire document in view of provisions of section 132(4A) is not acceptable because by virtue of this section onus is cast upon the assessee to explain the document and transactions mentioned therein with supporting evidences which substantiates his version that the transaction inferred from the said document is incorrect and in absence of any cogent evidence said documents did not pertain to or the transactions mentioned therein are not executed by him. I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 19 c) The assessee has not discharged the onus casted upon him by virtue of provisions of section 132(4A) as well as did not bring anything on record to controvert that the calculation of interest inference drawn by the Assessing Officer is not justified and incorrect furnished from the assessee's side in contradiction to what has been presumed u/s 132(4A), the inference drawn by the Assessing Officer is not justified and incorrect. d) In view of above discussion, it is rightly held that the assessee has entered into cash loan transaction as per the jottings made in the said seized documents and the interest component involved pertaining to A.Y 2014-15 from the upper and lower part of the said document is calculated as under:- 1 Upper Part of the Document No. 2 (a) Interest @ 12% per annum on the amount of Rs. 1,40,00,000/- received during the F.Y 01/04/2013 to 31/03/2014 (12%) Rs. 16,80,000/- (b) Interest @ 12% per annum on the amount of Rs. 1,65,00,000/- received during the F.Y 01/04/2013 to 31/03/2014 (12%) Rs. 19,80,000/- (c) Interest @ 12% per annum accrued to the borrower on his deposit to the lender of Rs. 50,00,000/- for the period between 10/10/2013 to 31/03/2014 (5.7%) Rs. 2,85,000/- (d) Interest @ 12% per annum accrued to the borrower on his deposit to the lender of Rs. 50,00,000/- for the period between 16/10/2013 to 31/03/2014 (5.5%) Rs. 2,75,000/- (e) Interest @ 12% per annum accrued to the borrower on his deposit to the lender of Rs. 1,00,00,000/- for the period between 13/01/2014 to 31/03/2014 (2.6%) Rs. 2,60,000/- Net interest received by the assessee (a+b-c-d-e) Rs. 28,40,000/- II. Lower Part of the Document No. 2 (a) Interest @ 12% per annum on the amount of Rs. 2,80,00,000/- received during the F.Y 01/04/2013 to 31/03/2014 (date of settlement) (9.43%) Rs. 26,40,400/- (b) Interest @ 12% per annum accrued to the borrower on his deposit to the lender of Rs. 1,50,00,000/- for the period between 10/10/2013 to 13/01/2014 (date of settlement) (3.13%) Rs. 4,69,500/- (c) Interest @ 12% per annum accrued to the borrower on his deposit to the lender of Rs. 50,00,000/- for the period between 16/10/2013 to 13/01/2014 ( date of settlement) (2.93%) Rs. 1,46,500/- Net interest received by the assessee (a+b-c-d-e) Rs. 20,24,400/- I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 20 So to summarise the above working of interest earning by the assessee, Shri Jagdish Soni, he has net interest on the transactions recorded in the upper part of this document during the F. Y * (0.2013 - 14) of Rs. 28,40,000/- on the cash loan advanced by him and on the basis of lower part of the document the working of net interest earning by the assessee comes at Rs. 20,24,400/- on the cash loan advanced by him. Thus, in aggregate the interest income to the tune of Rs. 48,64,400/- (Rs. 28,40,000/- + Rs. 20,24,400/-) has not been disclosed in his ITR because the original advancement of cash loan was also not disclosed by him in his ITR for A.Y. 2011-12, so no question of disclosure of interest earned thereupon does arise for the A.Y. under consideration and accordingly it is found that since the assessee has not disclosed this interest income an addition of Rs. 48,64,400/- is being made as undisclosed interest income u/s 68 of the Income Tax Act, 1961. 6.2.4 The AO has mentioned that the assessee has not discussed anything over the said annexure while submitting the reply on the query raised about all the seized documents and seeking explanation in the format provided in the questionnaire. Further during the course of assessment proceedings, the assessee submitted his reply on 05.06.2021 and submitted that: "alleged lose paper found as a result of search is unnamed, unverified, unauthenticated, unstamped and unsigned and also no writer of alleged loose paper by assessee or his family members. Further also there is no reference in respect of nature and character of transactions on alleged loose paper. There is also no reference of "Cash" on such loose paper as alleged by your goodself, than how the same can be treated as belonging to assessee only" 6.2.5 Further during the course of appeal proceedings the appellant has submitted his reply on 28.07.2023. In his reply, the appellant has submitted that: "Perusal of seized loose papers it is reveals that there was rough noting which is silent as to the payer and payee of the amount in question and does not describe or express the substance that the payment was made by cheque or cash nor it is proved that the documents is in the hand writing of assessee or at least bears his signatures and as such on the basis of nonspeaking document. The assessee himself had explained before authorized officer as well as before Ld. AO, that neither he is author of said loose paper nor possess any knowledge about alleged unnamed, unverified, unauthenticated, unstamped and unsigned transactions. Further also the hand writing on such loose paper was neither by assessee nor his family members. Therefore, without analyzing or considering the impact of dumb/bald loose paper in the right & judicial perspective made the allegation against the appellant is I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 21 contrary to law settled by Hon'ble courts and also against the principal of natural justice." 6.2.6 The appellant had also relied on the judgments of Hon'ble Delhi High Court in the case of CIT Vs. D.K. Gupta (308 ITR 230) Hon'ble ITAT, Jabalpur Bench in the case of ACIT Vs. Satya Pal Wasan (295 ITR 352)(AT)(JAB) Hon'ble ITAT "B" Bench, Mumbai in the case Raj Homes SV Group Vs. DCIT, Circle order dated 07.03.2019 Hon'ble Apex Court in the case of CIT Vs. P.V.Kalayanasundaram 2007 (294) ITR 49 SC Hon'ble Supreme Court in the case of Ramji Dayawala & Sons 9P0 Ltd. Vs. Invert Import AIR 1981 SC 2085 6.2.7 The facts of the above referred cases are different from the present case. In the case of CIT Vs D.K. Gupta (308 ITR 230), the assessee had offered the explanation along with the documents and evidence. In the case of ACIT Vs. Satya Pal Wasan (295 ITR 352)(AT)(JAB), the date of transaction and type of transaction in the seized material were unexplained. 6.2.8 It is a fact, that every paper has its own nature and significance. It is a very simple fact, that if anybody is asked about the papers/documents found in his possession, it may be any bill, it may be any receipt of payment It can be a boarding pass, it can be electricity bill, it can be a hand written list of grocery items, it can be a list of expenses incurred or a list for any meeting agenda but on perusal of any paper, the saying that the paper is dumb document is not the justification of the paper. In the instant case, during the course of search the above document was found and seized from the bedroom of the assessee, at 163, Polo 2nd Paota, Jodhpur. As per the provisions of section 132 (4A) of the Income Tax Act, 1961, it is very clear that: Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed- (1) that such bocks of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person, (il) that the contents of such books of account and other documents are true 6.2.9 The appellant was aware about the transactions mentioned in the above document. The document was seized from the bedroom of the appellant, it shows the importance of the paper and how it was directly related to the appellant. If the appellant is claiming that he was not the author of the said document. Then, it was the duty of the appellant to disclose the name of the author and purpose of the said document in his possession. Further, appellant has submitted that document was unnamed It shows that assessee was I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 22 aware that with whom these transactions had taken place. When any transaction take places between two known persons, then names are not mentioned as both knows that what kind of dealing had taken place 6.2.10 in the instant case, assessee has not co-operated in the proceedings of department neither during the course of search proceedings or during the assessment proceedings. The appellant continuously objecting the details mention on the above seized document by saying that the noting of the seized paper is apparently in the nature of dumb document as there is no description/address of the transactions to which the noting refer neither any details relating to any payment made either in cheque or in cash to any person has been mentioned on this seized paper. 6.2.11 It is very clear that the above document/page contains the final statement of loan given by the appellant, re-payment of loan by borrower, calculation of interest and status of completion of the loan with period. Further, it was the onus of the appellant to prove the description of the document. The appellant had not made any efforts to disclose the details of the transactions and related persons mentioned on the above seized document/paper and repeatedly made efforts to object the details of the paper by saying a dumb document in absence of any detail. 6.2.12 In view of the above discussion, I hold the addition made by the AO as appellant failed to prove the onus of the document, failed to prove that the paper does not pertain to him, failed to establish that when paper was not related to him that how it was found in his possession, which was found and seized from his bedroom during the search and seizure proceedings u/s 132 of the Income Tax Act, 1961. Further, the AD has established the nature of transaction, Incone yielding nature of transactions and taxability on such income as per income-tax law. Thus, the addition made by the AO of Rs 48,64,400/- is hereby upheld Grounds of appeal on these issues are hereby dismissed. 7. The 17th ground of appeal is that on the facts and in the circumstances of the case, the Id AO grossly erred in charging interest u/s 234B and 234C of the Act. This issue is consequential in nature so no needing any specific adjudication and are accordingly treated as dispose off. 8. The last Ground of Appeal is that the appellant craves leave to add, alter, amend or withdraw any of the grounds of appeal during the course of appellate proceedings. The appellant has not added or altered, amend or withdraw any of the above mentioned grounds of appeal. Accordingly. such I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 23 mention by the appellant in its ground is treated as general in nature, no needing any specific adjudication and is accordingly treated as dispose off. 9. In the result, the appeal is treated as dismissed.” 7. Since the assessee did not find any favour from the order of the ld. CIT(A) the assessee has preferred present appeal on the grounds as stated hereinabove. To support, contention in support of the various grounds so raised the ld. AR of the assessee relied upon the written submission which is reproduced herein below :- FACTS OF THE CASE 1] That the assessee is an individual and derives business income from trading of commodities in the name of Prop. concern M/s Soni Agro Industries and also in his individual capacity, rent income from house property and income from other source. 2] That the assessee has maintained computerized books, which consists of Journal, Ledgers, Cash Book, and Bank Book. The books of accounts so maintained are subject to Audit u/s 44AB of the Act. 3] That on 29/09/2013 the assessee had filed the return of income u/s 139 of the Act by declaring the total income of Rs. 46,83,400/- and accordingly paid the taxes. The return filed by the assessee was accepted u/s 143(1) of the Act. 4] That case of assessee was selected for security and accordingly the ld AO had issued notice u/s 143(2), 142(1) along with query letter to assessee. The assessee had furnished complete details for his assessment as required by ld AO during the assessment proceeding. 5] That on 08/01/2016, the ld AO passed the assessment order u/s 143(3) and assessed the income as declared by the assessee. 6] That on 09/04/2018 a search u/s 132A was carried out in the residence premises as well as in the business premises of the assessee and accordingly the Ld AO had issued notice u/s 153A of the Act. I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 24 7] That in response to notice u/s 153A the assessee had filed the return of income declaring total income of Rs. 46,83,400/- on 30/12/2019. 8] That during the assessment proceedings u/s 153A the appellant had explained each & every query raised by the Ld AO and also submitted explanation with documentary evidences. 9] That the appellant had further submitted that the loose papers bearing Page No. 2 Exhibit 1 was found & seized is rough noting and are not belonging to appellant and in this regard detailed submission filed by the assessee. 10] That on 09/08/2021 the Ld AO passed the assessment order without taken to consider the explanation furnished by assessee and assessed the total income of Rs. 1,35,03,400/- by making addition of Rs. 88,20,000/- in respect of cash loan and interest thereon u/s 68 of the Act. Having discussed the facts of the case, I would like to submit on each ground of appeal raised in the memo of appeal: - 1] As regards ground of appeal No. 1 to 4 relating to validity of assessment order. From the assessment order it is crystal clear that the Ld AO had treated such proceeding is just formalities and game of hide & seek. The explanation and documentary evidences furnished by the assessee had never been disproved or brought on record any adverse material against the same and made the addition on hypothetical way which resultant unnecessary harassment to the assessee. 2] As regards ground of appeal No. 5 to 16 relating to addition of Rs. 88,20,000/- in respect of unaccounted transactions on the basis of loose papers bearing Page No. 2 of Exhibit AS-1. a] That during the course of search the authorized officer had found and seized loose papers bearing Page No. 2 of Exhibit A-1. Such loose papers are apparently dumb documents. The appellant had also submitted detailed submission before the Ld AO during the assessment proceeding which was reproduced by the Ld AO at Para 5.1 Page 6 to 8 of assessment order. b] That the Ld AO without considering the explanation and judicial decisions relied by the appellant in right perspective and judicious manner merely on the basis of hypothetical way made irrelevant observation which is not only contrary to principle of natural justice but also highly disregarded the judicial discipline. c] The observation/ finding recorded by Ld AO at Para 5.2, Page 8 & 9 of the assessment order. The foundation of addition made by the Ld AO is the documents was found in the possession & control of the assessee and the assessee had not been discharged the onus casted upon him by virtue of provisions of section 132(4A) of the Act. d] Perusal of seized loose papers it is reveals that there was rough noting which is silent as to the payer and payee of the amount in question and does not I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 25 describe or express the substance that the payment was made by cheque or cash nor it is proved that the document is in the handwriting of assessee or at least bears his signatures and as such on the basis of non speaking document. The assessee himself had explained before authorized officer as well as before Ld AO, that neither he is author of said loose paper nor possess any knowledge about alleged unnamed, unverified, unauthenticated, unstamped and unsigned transactions. Further also the hand writing on such loose paper was neither by assessee nor his family members. Therefore, without analyzing or considering the impact of dumb/bald loose paper in the right & judicial perspective made the allegation against the appellant is contrary to law settled by Hon’ble Courts and also against the principal of natural justice. The Hon’ble Delhi High Court in the case of CIT vs. D.K. Gupta (308 ITR 230) held that in absence of corroborative or direct evidence to presume that the notings or jottings had materialised into transactions giving rise to income not disclosed in the regular books of accounts, no addition can be made. e] ITAT, Jabalpur Bench in the case of ACIT vs.Satya Pal Wasan (295 ITR 352 (AT)(JAB) submitted that presumption raised on the basis of a dumb document are unsustainable and cannot give rise to an addition. f] The ld AO made such addition without appreciating that the writing on the loose papers, nature of transactions, found and seized during the course of search action as invalid and cannot be treated as document under Evidence Act, relevant and admissible in evidence as held in Raj Homes SV Group Vs. DCIT circle ITAT "B' Bench Mumbai, dt.7.3.2019, holding that the additions based upon selective scribbling in rough note is de-hors any corroborative finding is not justified. Moreover, in this scribbling in the note is examined on the touch tone on the common law maxim of approbate and reprobate, the addition is further not justified. Relying on the decision of the Hon'ble Apex Court in the case of CIT Vs. P.V.Kalayanasundaram 2007 (294) ITR 49 SC. The Hon'ble Supreme Court has held in Ramji Dayawala & Sons (P) Ltd. Vs. Invert Import AIR 1981 SC 2085: It was held by Supreme Court rat the "mere proof of handwriting of a document not tantamount to a proof of all the contents or the facts stated in the documents, if the truth of the stated in a document is in issue, mere proof of the handwriting and execution of the document would not furnish evidence of the truth of the fact or contents of the document. The truth or otherwise of the fact or contents so stated would have to be proved by admissible evidence i.e., by the evidence of those persons who can vouchsafe for the truth of the fact in issue." g] Further also during the assessment proceedings the appellant had submitted before the Ld AO vide letter dated 05/06/2021 which was reproduced by Ld AO in the assessment order. The relevant Para of such letter reads as under: - "I shall be greatful if your good self providing the information or evidences on the basis of which alleged allegation had been made in notice u/s 142(1) of the Act:- a] On what basis your good self alleging “it is seen that the assessee Shri Jagdish Soni has advanced a cash loan of Rs. 3,05,00,000/- (Rs. 1,40,00,000/- + I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 26 Rs. 1,65,00,000/-) and earned interest over his credit balance with the borrower of Rs. 1,00,43,000/- (Rs. 53,90,000/- + Rs. 46,53,000/-).” Particularly when it is admitted facts that the alleged seized loose papers contained statement in figures of certain unnamed transactions which was neither written by assessee nor his family members. Further also when no names of assessee or his signature etc are mentioned on alleged loose paper. b] Any incrementing material found as a result of search or collected by your good self in any mode in support of allegation made by your good self that the assessee had advance cash loan to borrower may kindly be provided. c] That alleged loose paper found as a result of search is unnamed, unverified, unauthenticated, unstamped and unsigned and also no writer of alleged loose paper as identified i.e either assessee or his family members. Further also there is no reference in respect of nature & character of transactions on alleged loose paper. There is no reference of “Cash” on this paper as alleged by your good self, thereafter on what basis your good self alleging that such transactions belonging to assessee and in support of such allegation any credible material available with your good self may kindly be provided. d] That the noting of the seized paper is apparently in the nature of dumb document as there is no description/ address of the transactions to which the noting refer neither any detail relating to any payment made either in cheque or in cash to any person has been mentioned on this seized paper than on what basis your good self holding the alleged transactions is belonging to assessee. e] Since the seized papers were did not bear the signature of the assessee or any other party, it was in the nature of dumb documents having no evidentiary value in eye of law and as such sole basis for determination of undisclosed income of the assessee on the alleged loose paper is not only against the principal of natural justice but also contrary to settled principal of law decided by Hon’ble Supreme Court, Hon’ble jurisdictional High Court etc. On what basis your good self had made allegation that contained statement in figures of certain unnamed transactions made by some unidentified person on a loose paper belonging to assessee without given any reasoning or finding or had not mentioned any evidence or material as to how or on what basis the above figures were considered as the assessee’s income. However What is relevant is the nature of evidence/material discovered during the search proceedings whereas according to provision of law such alleged loose paper are independently not capable to proved that alleged transaction mentioned are belonging to assessee or written by assessee. Your good self made hypothetical allegation against the assessee for proposing addition is not only against the provision of law but also against the principal of natural justice." h] The Ld AO without taken to consider the explanation of the assessee and fasten the liability on arbitrarily manner against the appellant which is against the principle of natural justice. It is mandatory duty of the Ld AO to disprove the facts, I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 27 explanation and legal position submitted by assessee with corroborative evidences. Merely the loose papers contained statement, the figures of which appeared to be certain unnamed transaction but there was nothing either in law or in logic to warrant the conclusion that the figures noted therein pertain to assessee and also it does not mean that Ld AO can arrive at any figure without any basis by adopting an arbitrary method of calculation which resultant to “harassment". It shall not be out to place to mention that the Hon’ble Supreme Court in the case of K.P. Varghese v. ITO [1981] 24 CTR (SC) 358/[1981] 131 ITR 597 (SC) held that the fictional receipt cannot be deemed to be a receipt in the absence of any cogent material to support the factum of actual receipt. i] A document may be speaking or dumb. It all depends whether all the ingredients/components for levying taxation are clearly decipherable from the document either on standalone basis or in association with other documents or investigation. The components which enter into the concept of taxation are, first, the transaction/event which attracts the levy, second, the person on whom the levy is imposed and who is obliged to pay the tax, third, the assessment year in which charge of income-tax is levied, fourth, whether any taxable income arises from the transaction recorded in the document and fifth, the rate or rates at which tax is to be imposed. The rates are prescribed in the annual Finance Act and therefore, this component has no value in determining the total income arising from a seized document. Thus, other four elements are relevant. [refer- ACIT Vs. Satyapal Wassan (2007) 295 ITR (A.T.) 352 (Jbl)] j] A charge can be levied on the basis of document only when the document is a speaking one. The document should speak either out of itself or in the company of other material found on investigation and/or in the search. The document should be clear and unambiguous in respect of all the four components of the charge of tax. If it is not so, the document is only a dumb document. No charge can be levied on the basis of a dumb document. k] Thus, a document will be dumb document where any of the four ingredients are missing and AO fails to supplement the missing ingredient with the help of other documents or from post search investigation/inquiries. Examples of how a document is held as dumb can be seen in following cases- ACIT v. Dr. Kamla Prasad Singh [2010] 3 ITR(TRIB.) 533 (PAT.); CIT v. Girish Chaudhary [2007] 163 TAXMAN 608 (DELHI); CIT v. S.M. Aggarwal [2007] 162 TAXMAN 3 (DELHI); PANKAJ DAHYABHAI PATEL (HUF) v. ACIT [1999] 63 TTJ 790 (AHD.); Ashwani Kumar v. ITO [1991] 39 ITD 183 (DELHI); PCIT v. Ajanta Footcare (India) (P.) Ltd. [2017] 84 taxmann.com 109 (Calcutta); DCIT v. C. Krishna Yadav [2011] 12 taxmann.com 4 (Hyderabad); Harish Textile Engineers Ltd. v. DCIT (2015)379 ITR 160 / 128 DTR 145 / (2016) 236 Taxman 420(Bom.)(HC); CIT v. Jaipal Aggarwal [2013] 212 Taxman 1 (Delhi) l] The Hon’ble ITAT Pune Bench in the case of Manoj Madanlal Chhajed Vs ACIT (ITAT Pune) IT(SS)A/ 91-98/ PUN/2022 dated : 28/06/2023 “D. We have carefully gone through the notings found in the seized material i.e. Diary of 2009. These notings are found in the Diary, 2009, which is found and seized during the course of search and seizure operations, wherein certain I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 28 payments as well as receipts were recorded without recording the dates and full details. It is not even a record of daily transactions. Certainly it does not form part of books of account regularly maintained by it in the course of business. It is not clearly dicipherable from the said entries on standalone basis that a transaction had taken place, which gives rise to any taxable event for the reason that there is no indication from the entries found therein that a transaction was undertaken during the previous year relevant to the assessment year under consideration giving rise to the taxable event. More particularly, these entries do not indicate that the loans received from the sundry creditors are fictitious or mere accommodation entries. Thus, the entries are non-speaking, it cannot be concluded that it represents the undisclosed income of the assessee for the reason that the entries does not disclose four components required to be satisfied to constitute a taxable event. The first is the taxable event which attracts the levy, the second is the person on whom the levy is imposed and who is obliged to pay the tax. The third is the assessment year in which charge of income-tax is levied. The fourth is the total income of the previous year and the fifth is the rate or rates at which tax is to be imposed. The rates are prescribed in the annual Finance Act. Therefore, these entries have no value in determining total income on the basis of seized diary. Our view in this regard is supported by the decision of Hon’ble Supreme Court in Govind Saran Ganga Saran v. CST, 155 ITR 144 (SC), wherein, it was held that for the purpose of charging to tax, there should be four components to be satisfied. For the sake of convenience, we refer to the relevant head notes from that decision: “The component which enter into the concept of a tax are well known. The first is the character of the imposition known by its nature which prescribes the taxable event attracting the levy, the second is a clear indication of the person on whom the levy is imposed and who is obliged to pay the tax, the third is the rate at which the tax is imposed and he fourth is the measure or value to which the rate will be applied for computing the tax liability. If those components are not clearly and definitely ascertainable, it is difficult to say that the levy exists in point of law. Any uncertainty or vagueness in the legislation scheme defining any of those components of the levy will be fatal to its validity.” E. Reliance can be placed on the decision of the Hon’ble Delhi High Court in the case of CIT vs. S.M. Aggarwal, 293 ITR 43 (Delhi), in the case of CIT vs. Girish Chaudhary, 296 ITR 619 (Delhi), decision of the Hon’ble Calcutta High Court in the case of PCIT vs. Ajanta Footcare (India) (P.) Ltd. 84 taxmann.com 109 (Cal.) and the decision of the Hon’ble Bombay High Court in the case of Harish Textile Engineers Ltd. Vs. DCIT, 379 ITR 160 (Bom.) in support of the proposition that a document will be a dumb document, where any of the above four ingredients is missing and AO fails fill-up the gap with the help of other documents or from post search investigation enquiries. And no addition can be made based on such dumb documents. In other words, a dumb document does not constitute incriminating material for the purpose of assessment u/s 143(3) r.w.s. 153A of the Act. F. Since the entries do not contain any details to indicate the nature of transaction, period of transaction and persons involved, the inference drawn by the Assessing Officer that the entries represent the accommodation entries I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 29 received from so called Kolkata based shell companies is merely based on the presumptions, surmises and conjectures, therefore, cannot form the basis for the addition.” m] Since, at the time of search and subsequently during the assessment proceedings the Ld AO had not brought on record any independent and corroborative materials to prove irrefutably that the noting revealed either unaccounted income or unaccounted investment or unaccounted expenditure of the assessee. The Hon'ble Delhi High Court in the case of CIT- Central-3 Vs Shri Praveen Juneja (Delhi High Court) ITA 57/2017 Date of Judgment: 14/07/2017 held as under: - "4. The explanation offered by the Assessee was that the said paper was not related to him the assessee. He was working as a professional director in Shamken Multifab Ltd. and used to handle various projects of the said company. The CIT (A) rejected the above explanation. Since the said document had been seized from the residence of Assessee, the CIT (A) drew a presumption under Section 292 C of the Act was that it belonged to him. Further, the CIT(A) proceeded to hold that Rs. 49 lakhs constituted the unexplained income of the Assessee since the Assessee had not submitted any evidence like a confirmation letter or any other document to show that expenditure related to any project of the aforementioned company. 5. The ITAT in the impugned order noted that the said document “does not indicate if it pertains to the assessee nor the address and location of the property is mentioned therein nor such property has been located by the AO during the assessment proceedings. The AO has also not brought on record any forensic evidence to prove the handwriting of the loose paper relied upon by him to make the addition, which is exclusively made on the basis of suspicion and guesswork. Even no corroborative material has brought on record by the AO to substantiate the addition nor the CIT(A) has called for any remand report seeking corroborative evidence, if any.” 6. In the considered view of the Court, the addition of Rs. 49 lakhs to the returned income of the Assessee was based on surmises and conjectures and that too on the basis of a single document without making any further inquiry. No attempt was made by the AO to find out if in fact it constituted the construction expenses of any project of the aforementioned company of which the Assessee was a director." n] It is one of classic example of search assessment in which the ld AO consciously and deliberately had treated the inquiry in the wake of a notice under section 153A is an empty formality and are game of hide and seek. Further also the ld AO failed to discharge his obligation to conduct a any inquiry to take the matter to logical conclusion and made such blatantly frivolous & unsustainable addition in the assessment order without having any concrete material to support the tentative impression about suspect of transactions on record. The Hon’ble Supreme Court in the case of Krishnanand Agnihotri vs. The State of Madhya Pradesh [1977] 1 SCC 816 (SC). In this case the Hon’ble Apex Court held that the burden of showing that a particular transaction is benami and the appellant owner is not the real owner always rests on the person asserting it to be so and the burden has to be strictly discharged by adducing evidence of a definite I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 30 character which would directly prove the fact of benami or establish circumstances unerringly and reasonably raising inference of that fact. The Hon’ble Apex Court further held that it is not enough to show circumstances which might create suspicion because the court cannot decide on the basis of suspicion. It has to act on legal grounds established by evidence. o] The Hon’ble Supreme Court in Venkataswami Naidu & Co (G) v. CIT (1959) 35 ITR 594(SC), where it was held that the character of a transaction cannot be determined solely on the application of any abstract rule, principle or test but must depend upon all the facts and circumstances of the case p] The Hon’ble ITAT Chennai Bench in the case of Array Land Developers Pvt Ltd Vs DCIT in ITA No. 379/Chny/2022 Dated: 09/06/2023 held as under:- “It was observed by the ITAT that assessee’s representative has, all along, denied having made any such cash payment to the vendors over and above the recorded book value. The evidence being relied upon by Ld. AO was in the shape of editable excel sheets which do not convey anything to show that such payment, in fact, was made by the assessee to various vendors. The assessee also submitted that the laptop was personal laptop of major shareholder and on the basis of this sheet alone, the impugned additions could not be sustained in law. Under these circumstances, it was observed that the onus had shifted on revenue to controvert the submissions made on behalf of the assessee by bringing on record cogent evidences to controvert the submissions of the assessee. The same could be in the shape of further investigation from the vendors and confronting to them the said material found from the assessee’s premises. However, there was total lack of any further independent investigation on the part of Ld. AO despite the fact that the assessment was made after a considerable period of time and Ld. AO had ample time to carry out such an investigation. Except for passing on this information to other AO’s, no efforts have been made by Ld. AO to corroborate the stand taken by him. The impugned addition, has been made on mere presumptions and assumptions of cash payment by the assessee which is not backed up by any evidence on record. Therefore, these documents are to be discarded as such and without there being any corroborative evidence to support the same, the same could not be used against the assessee to make the impugned additions. Further, it was observed that it is trite law that in case of search proceedings, the additions are to be based solely on the basis of incriminating material found during the course of search operations. Guess work or estimation or extrapolation of income is not permissible unless there are strong evidences to suggest otherwise. The additions are to be based solely on tangible material and not on the basis of estimations or extrapolation theory. Further, it was observed that in the judgment of CBI v. V.C. Shukla (1998 3 SCC 410) wherein it was held 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. The Hon’ble Court observed that ‘Book’ ordinarily mean a I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 31 collection of sheet or papers or other material, blank or written or printed, fastened or bounded together so as to form a material as a whole. Loose sheets are scraps of papers cannot be termed as books for they can easily be detached and replaced. Therefore, these are not admissible evidences. On basis of the above, it was observed that the impugned additions were not sustainable in any of the years and appeal was allowed by deletion of additions.” q] It is submitted that on the identical facts and legal position the Hon’ble ITAT Jodhpur Bench in the case of Jodhana Homes Vs ITO, ITA No 110/Jodh/2020 dated 28.01.2021, held as under:- 10. Having considered the rival contentions and carefully perused the material available on record. From perusal of record, we found that the addition has been made on the basis of loose papers found during the course of survey proceeding. It is, however, settled proposition under the income tax law that loose papers found during the course of survey proceeding do not have evidentiary value. The Coordinate Bench of ITAT Visakhapatnam in the case of P. Koteshwara Rao order dated 12.8.2016 (ITA No. 251 & 252Vizag/2012 has held that “the A.O. was not correct in coming to the conclusion that on money exchanged between the parties based on a loose sheet found in the premises of a third party and also statement given by a third person. To sustain the addition, the A.O. should have taken an independent enquiry about the value of the property and ascertain whether any under valuation is done, if so what is the correct value of the property”. Further, the A.O. failed to bring any evidence to support his findings that there is on-money payment over and above what is stated in the sale deed. 11. We also observe that the Hon’ble Madran High Court in the case of CIT vs. PV Kalyansundaram (294 ITR 49 (Mad) it has been observed that “notings on the loose pieces of paper on the basis of which the initial suspicion with regard to the under-valuation had been raised were vague and could not be relied upon as it appeared that the total area with respect to the sale deed and that reflected in the loose sheet was discrepant.” The Hon'ble A.P. High Court in the case of K Lakshmi Savitri Devi in ITA No. 563 of 2011 has upheld the order of the Tribunal by observing as under: "We are of the view that the Tribunal has rightly held that the registered document dt. 21.8.2006 under which the respondent purchased the above property showed that only Rs. 65.00 lakhs was paid to the vendor by the respondent: that there was no evidence to show that the respondent had paid Rs. l.00 crore in cash also to the vendor; that no presumption of such payment of Rs.1.00 crore in cash can be drawn on the basis of an entry found in a diary loose sheet in the premises of C. Radha Krishna Kumar which is not in the respondents handwriting and which did not contain the name of the respondent or any date of payment or the name of the person who made the payment. It rightly held that the Revenue failed to establish the nexus of the seized material to the respondent and had drawn inferences based on suspicion, conjectures and surmises which cannot take the place of proof. We also agree with the Tribunal that the assessing officer did not conduct any independent enquiry relating to the value of the property purchased and the burden of proving the actual I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 32 consideration in the purchase of the property is on the Revenue and it had failed to discharge the said burden. The Coordinate Bench of the ITAT Delhi Bench in the case of Samta Khinda vs. ACIT, passed in ITA Nos. 336/Del/2012 & 5515/Del/2013 (AY 2009-10 dated 29. 11.2016, has held that “without any corroborating evidence /material, any of the figures mentioned /appearing on the unsigned loose papers seized / collected by the Department during the course of search /survey, having no evidentially value under the provisions of law even u/s. 292C of the I.T. Act, 1961. In the case of CIT vs. Girish Chaudhary (2008) 296 ITR 619 (DelhiHC) the Delhi High Court has held that “the revenue has to prove the undisclosed income beyond doubt. Further it was held that the document should be a speaking one and it should contain narration in respect of various figures noted therein. Otherwise, the same should be considered as dumb document on which reliance could not placed upon." In this case the Court termed a loose sheet containing some notings of figures as a 'dumb document' since there was no material to show as to on what basis the AO had reached a conclusion that the figure '48' occurring in one of them was to be read as Rs. 48 lakhs”. In the case of Commissioner of Income Tax v. S.M Aggarwal, the Hon`ble Delhi High Court has held that “the said loose papers can at best be termed as a 'dumb' document which in the absence of independent corroboration could not possibly have been relied upon as a substantive piece of evidence to determine the actual rates at which the flats were sold.” A division bench of the Delhi High Court in the case of CIT v. Praveen Juneja (Del-HC) ITA No. 56/2017, decided on 14-07- 2017, has deleted addition made by the Income Tax department on ground that the same was made solely on the basis of a hand written loose paper without any supporting evidence. An addition cannot be made on the basis of a handwritten loose paper which does not indicate if it pertains to the assessee and if AO has not brought on record any forensic evidence to prove the handwriting of the assessee. An addition cannot be made on the basis of suspicion and guesswork and without bringing corroborative material on record. In the case of CBI vs. VC Shukla (1998) 3 SCC 410 it has been held that the loose sheets of paper cannot be considered to be books. 12. We have considered the rival contentions of both the parties. We find that the addition has been made on the basis of loose papers impounded during the course of survey proceedings. It is, however, settled proposition under the law that without any corroborating evidence or material, any of the figures mentioned on the unsigned loose papers impounded by the Department during the course of search /survey proceeding, have no evidentiary value under the provisions of the Act. The said loose papers can at best be termed as a 'dumb' document which in the absence of independent corroboration could not possibly have been relied upon as a substantive piece of evidence to determine the actual rates at which the flats were sold. We observe that no presumption of such payment received in cash can be drawn on the basis of an entry found in a loose sheet which did not contain the name of the assessee or any date of payment or the name of the person who made the payment. The addition has been made by the AO only on I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 33 the basis of his estimate and surmises. Consequently, such addition made is directed to be deleted. r] It is further submitted that said loose paper contains jottings of certain figures by the same dose not describe or express the substance of any transaction and even if the said paper has been seized from the possession of the assesse the contents thereof are not capable of describing the transactions the way AO has deciphered them without support of corroborative evidence of the parties attributed to alleged transaction. The said paper, therefore does not come within the compass of definition of "Document", to be used as an evidence. The papers seized have no evidently value and as such on the basis of such “dumb document” the liabilities fasten on appellant against the principle of law. i. CIT v. Maulikkumar K. Shah [2008] 307 ITR 137 (Guj.): The decision of Commissioner of Income-tax (Appeals) and the Tribunal were upheld holding that no addition was justified on the basis of these loose papers. In this case, nothings in the seized diary found from the premises were the only material on the basis of which the A.O. had made the impugned additions. The A.O. had not brought any corroborative material on record to prove that such sales were made and ‘on- money’ was received by the assessee outside the books of account. The A.O. had not examined any purchaser to whom the sales of shops were effected. Onus heavily lay on the revenue to prove with corroborative evidence that the entries in the seized diary actually represented the sales made by the assessee. Such onus had not been discharged by the revenue. Mere entries in the seized material were not sufficient to prove that the assessee had indulged in such a transaction. ii. The Hon'ble Bench of ITAT, Ahmedabad in case of Nishant Construction Pvt. Ltd. VACIT in ITA No.1502/AHD/2015, held that in the absence of any corroborative evidence, "loose sheet" can at the most be termed as "dumb document" which did not contain full details about the dates, and its contents were not corroborated by any material and could not relied upon and made the basis of addition. iii. DCIT Vs. Rajendra Kumar Sancheti (ITAT Jaipur) 42 Taxworld 152 “Addition cannot be made on the basis of seized paper which is not prepared by the assessee and which appears to be a deaf and dumb document” iv. Mahaan Foods Ltd. Vs. DCIT (ITAT Delhi) (2009) 27 DTR 185 “In the absence of any other evidence found during the course of search or brought on record by the Assessing Officer to show that the expenditure found noted on seized documents was actually incurred by the assessee, the same cannot be added to the undisclosed income of the assessee. No inference could be drawn against the assessee much less any inference of unexplained expenses on the basis of a dumb document found at the residence of its director as there is no proof to show that the amount mentioned in the said document was paid by the company. I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 34 v. ACIT Vs. Satya Pal Wassan (2007) 295 ITR 9 AT 352 (Jabalpur) A document found during the course of a search must be a speaking one and without any second interpretation, must reflect all the details about the transaction of the assessee in the relevant Assessment Year. Any gap in the various components for the charge of tax must be filled up by the Assessing Officer through investigation and correlation with the other material found either during the course of the search or on investigation. Without this no addition can be made on the basis of a loose sheet. vi. Asstt. CIT v. Ravi Agricultural Industries [2009] 117 ITD 338 (Agra) (TM):“In a survey u/s. 133A the revenue authorities found certain loose papers on which some numerical entries were recorded. The assessee explained that noting on the piece of paper has nothing to do with the unexplained investment made by the assessee. The A.O. made addition to the assessee’s income on the basis of loose papers without any other supportive evidence. The Commissioner (Appeals) deleted the addition. . The Hon’ble Tribunal, both the Third Member agreeing with Judicial Member, held in para 11 “........Now looking at the paper, it has some numerical figures but does not, in any way, show that it has some relationship with some business transactions of the assessee. The paper that was taken as a material for making the addition does not conclusively establish that it pertains to the business transaction of the firm. Now, the department is making the addition as a part of unexplained investment. What sort of investment the department has found is also not clear from the assessment order. The addition, in sum and substance, made by the department is clearly not supported by any material, which can point out to unexplained investment outside the books of the assessee. ...” s] It is further submitted that there is no material evidence on record from which it can be inferred or proved that such transaction actually had been metalized at all. The AO has not brought any evidence with regards to and in support of his presumptions and has not proved whether such transactions were ever executed by the appellant. Therefore the presumption made by the AO appears to be without any proper base or evidence. Further the Ld AO has neither brought on record nor proved with the help of any evidence on record that the assessee has actually received such amount nor given the reasoning how the assessee has derived income from such noting. No addition can be made only on the basis of assumptions, presumptions or guess work. It is settled principle of law that an allegation remains a mere allegation unless proved. Suspicion cannot take the place of reality. In this respect he relied on the following judicial pronouncements: (1) Dhakeshwari Cotton Mills 26 ITR 775 (SC) (2) R.B.N.J. Naidu v/s CIT 29 ITR 194 (Nag), (3) Kanpur Steel Co. Ltd. v/s CIT 32 ITR 56 (All). (4) CIT v/s Kulwant Rai 291 ITR 36( Del). (5) CIT v/s Shalimar Buildwell Pvt Ltd 86 CCH 250(All). t] The AO has abruptly concluded in his own understanding of the transactions of loose paper, further also on a closure reading of the assessment order it is found that the assessing officer has acted in a most perverse manner. It is settled principle of law that the alleged loose paper cannot be considered as a I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 35 conclusive evidence to draw an adverse inference against the assessee, unless those transactions as alleged on loose paper are supported by corroborative evidences to indicate that those transactions and contents represents undisclosed income of the assessee. u] Even if the said paper has been seized from the possession of the assessee the contents thereof are not capable of describing the transactions the way AO has deciphered them without support of corroborative evidence of the parties attributed to alleged transaction. The said paper, therefore does not come within the compass of definition of "Document", to be used as an evidence. The papers seized have no evidently value and hence same cannot be a basis to tax undisclosed income." v] The Law is well settled, a non-speaking document referred to as a "Dumb Document" without any corroborative material evidence on record, and finding that, such document has materialized into transactions giving rise to income of the assessee which had not been disposed in regular books of accounts by such assessee has to disregarded for the purpose of the assessment to be framed u/s.!53(A) and 153(c) of the Act as held in CBI Vs. V.C.Shukia SC (FB) - 2.3.1998 (Popularly known as Jain Hawala case), clearly held that any presumption of transaction on some vague tenuous and dubious entries in a sheet of paper is not rational and hence legal, unless there is corroboration by corresponding entry in regular accounts of both the parties to the transaction. Loose sheets of papers are "not book' and hence entries therein not admissible u/s.34 of Evidence Act. I. ITO v. Smt. Pratibha Goyal [2011] 14 taxmann.com 50/132 ITD 517 (ITAT Jaipur Bench): wherein reference was made to Mumbai Bench of the Tribunal in the case of Universal Impex v. ITO [IT Appeal No. 444 (Mum.) of 2007, dated 7-5- 2009] held that addition made on the basis of statement of one of the partners and entries recorded in the diary cannot be upheld solely on the strength of the statement without any supporting material. The onus was on the AO to collect supporting material and since the AO has not discharged his onus, therefore, the addition was deleted. II. Nagarjuna Construction Co. Ltd., Vs. Dy. CIT 2012 (23) Taxmann.com 239. The basis for addition is only loose slips. These note books, loose slips are unsigned documents not established nexus between the loose slips with actual receipt of interest. The loose slips seized during the course of search is a dump document having no evidentiary value, no addition can be made as material. In the light of above I humbly request kindly delete the addition and allow the appeal and oblige. 8. In the addition to the written submission so filed the ld. AR of the assessee vehemently argued that the assessee is highest tax payer and I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 36 regular in making compliance under the law. The addition in the year under consideration has been made on account of alleged rough working not in the hand writing in the assessee. The ld. AR of the assessee to support this bench that the first upper part of the seized material wherein date are mentioned and are same with compared 2 nd part of the same seized material. Therefore, even on merits the working of interest on both upper lower part is apparent document itself document is dumped document and mere rough work of making a decision of the investments by the assessee and that rough working cannot be considered as income of the assessee. The ld. AR of the assessee submitted that it is the working of comparison of obtaining the overdraft facility to be taken on the fix deposit receipt of the family members. Therefore, the same is mere rough working without prejudice. The ld. AR of the assessee submitted that a without hen cannot be an egg so as without adding principle amount interest thereon cannot be added and therefore, since the revenue has not found any details of the alleged own money or unaccounted loan to any party mere the rough working made cannot be used against the assessee and that to the interest which is also of the same period calculated twice cannot be considered as income to support his view. He has relied upon the finding of Co-ordinate Bench decision in the case of Solitare World Pvt. Ltd. Vs. ACIT in ITA No. 2638/Del/2018 I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 37 dated 31.05.2022 and Shri Manoj Mandanlal Chhajed vs. ACIT in ITA Nos. 91 to 96/Pun/2022 dated 28.06.2023. 9. To support this contention reliance was placed on the following evidences: S. No. Particulars Page No. 1 Copy of written submission filed before ld. CIT(A) 1-16 2 Copy of loose paper found and seized during the search 17 10. Per contra, the ld. DR representing the revenue vehemently argued that the seized paper has been found the bed room of the assessee and it is the duty of the assessee to explain each and every entry recorded in the said seized material. The ld. AO and the ld. CIT(A) has decipher. The bench related the file in question seized these details are meticulously mentioned and meticulously calculated and assessee is escaping his liability to pay the tax which is duly recorded in the said seized material and based on the detail finding of the ld. AO and ld. CIT(A). The ld. DR prayed to sustain the addition. The ld. DR based on the copy of seized page was reproduced in the assessment order at page No. 03 from the seized material stated that the nature of transaction and the content figure mentioned therein have been decrypted by the ld. AO and inference have been drawn with rate of interest and amount of interest accrued and the working given in the seized material are not refutable by the assessee. The AO noted that the assessee has not discharged the onus casted upon him as well as the assessee did not bring I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 38 anything on record to controvert that the calculation of interest transaction infer from the said document is incorrect and in the absence of cogent evidence furnished from the assessee side in contradiction to what has been presumed u/s 132(4A) of the Act, the inference drawn by the ld. AO to be deleted along with seized material the copy of material relied upon is annexed as under:- I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 39 The ld. AO based on the above seized document calculated the interest component involved pertaining to the year under consideration and the same is calculated as under:- Based on the above arguments the ld. DR supported the findings recorded in the orders of the lower authority. I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 40 11. We have heard the rival contentions and perused the material placed on record and have gone through the various decision relied upon both the parties to drive home to their respective contentions. The bench noted that dispute in this case is the addition of alleged interest calculated on the alleged advances recorded in the loose paper found at the time of search. During the course of search the authorised officer found and seized the loose paper bearing page no. 2 of Exhibit A-1. The assessee contended that this is dump document, as the same is unnamed, unverified, unauthorised, unstamped and unsinged and the same is not in the handwriting of the assessee. The assessee further contended that there is no reference of cash on such loose paper. The assessee further submitted that the ld. AO has only considered the alleged interest as undisclosed income without there being reference to the principal amount as the income or asset of the assessee. There is no corroborative evidence material or evidence or any information which would suggest that the transaction recorded in the questioner loose paper is in fact materialised and where the assessee has any direct or indirect relation to that. The noting made in the upper part and lower part of the said loose paper is having the same figure and date even though the ld. AO considered it two separate transaction and added interest on two separate figure even though apparently it seems only one I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 41 transaction. This simple observation is not considered by the ld. AO while framing the assessment. There is no corroborative evidence found in support of the contentions recorded while deciphering that seized loose paper. The ld. AO contended that the alleged loose paper contains the amount advanced by the assessee and the interest on such advances mentioned is not offered by the assessee and thereby he has added a sum of Rs. 36,60,000/- on the upper part and Rs. 51,60,000/- on the lower part of the seized loose paper totalling to Rs. 88,20,000/- as undisclosed interest income of the assessee. We have gone through the order of the assessing officer as well as of the ld. CIT(A) both have not disclosed as to where is the principal amount whether the same is considered as income of the assessee or undisclosed assets of the assessee or not without that how the interest addition is sustainable. If there is no Hen how the egg will come. The bench noted that the addition is made solely based on the loose paper which no head or tail, not only that the figures noted in the upper part is repeated in the lower having the date and amount same though the amount is considered as twice and without discussing about the undisclosed income / assets based upon it the interest is added is purely a guess work and without bringing corroborative assets having any existed assets on which the assessee alleged to have earned the interest. The assessing officer has not made I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 42 any further enquiry, so to corroborate the noting recorded in the seized loose paper. The assessing officer has not attempted to verify that whether the interest which he intends is the assets recorded in the books of accounts or not or whether corresponding any income is offered by the assessee or not. Mere loose paper having rough noting or working cannot be considered as books of accounts maintained by the assessee and thereby the amount can be considered as unexplained credits in hands of the assessee as per provision of section 68 of the Act. There are number of judicial precedence wherein it has been held that the additions cannot be made merely on the basis of noting recorded in the loose paper which are in the nature of dump documents. The Hon’ble Apex court in the case of CIT vs. Kalyansundaram (P.V) 294 ITR 49(SC) endorsed the decision of the Hon’ble Madras High Court confirming the findings of the tribunal that no on money payment was made through the other party to the transaction accepted the receipts of on-money consideration in the absence of any prima facie a case made by the Department. Upon careful perusal of the loose paper we note that it is a mere rough working, which is silent as to payer and payee, the source being cash or cheque is also not referred or discussed. We also note that the upper part entries are repeated in the lower part working which suggest that it is mere some working, or projections has nothing to I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 43 without earning of the interest and that too without assets earing of interest is also not possible. Thus, in the absence of finding so recorded in the order of the lower authority about the undisclosed income / assets corresponding to the interest and since there is no corroborative evidence brought on record that these are the transaction has any financial implication as income or assets of the assessee and therefore, we do not find any merit to sustain the addition. Considering the overall facts stated herein above we direct the ld. AO to delete the addition of Rs. 88,20,000/- made in the hands of the assessee. Based on these observations ground no 5 to 13 are allowed. Ground no. 1 to 4 are technical grounds, since we have allowed the appeal of the assessee on merits the technical grounds become infructuous and are not required to be decided. Ground no. 14 is consequential in nature and ground no. 15 & 6 are general in nature. In terms of these observations, the appeal of the assessee in ITA no. 362/Jodh/2023 is allowed. 12. The fact of the case in ITA No. 363 & 364-Jodh-2023 is similar to the case in ITA No. 362-Jodh-2023 and we have heard both the parties and persuaded the materials available on record. The bench noted that I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 44 the issues raised by the assessee in this appeal No. 363 & 364/Jodh/2023 is equally similar on set of facts and grounds with that of issue in ITA no. 362/Jodh/2023. Therefore, it is not imperative to repeat the facts and various grounds raised by both the parties and bench feels that the decision taken by us in ITA No. 362/Jodh/2023 for the Assessment Year 2013-14 shall apply mutatis mutandis in the case of Shri Jagdish Soni in ITA No. 363 & 364-Jodh-2023 for the Assessment Year 2014-15 & 2015-16. In the result, three appeals of the assessee are allowed. Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the notice board. Sd/- Sd/- (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) Judicial Member Accountant Member Ganesh Kumar, PS (On Tour) Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order I.T.A. Nos. 362 to 364/Jodh/2023 Assessment Year: 2013-14 to 2015-16 45 Date Initial 1. Draft dictated on Sr.PS/PS 2. Draft placed before author Sr.PS/PS 3. Draft proposed & placed before the Second Member JM/AM 4. Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr. P.S./P.S. Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8. Date on which file goes to the Head Clerk 9. Date on which file goes to the AR 10. Date of dispatch of Order
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Minimum Alternate Tax (MAT): Comprehensive Overview and Key Changes under Finance Bill, 2026
Team Counselvise - February 06, 2026