Shri Jagdish Soni, Jodhpur V. DCIT, Central Circle-1, Jodhpur

ITA 365/JODH/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7930 (ITAT-JODHPUR)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-01-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 02-10-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Business income; Income from undisclosed sources; Search and seizure; Loose papers; Principle of natural justice; Corroborative evidences; Onus to prove
• Section: 69; 143(3); 142(1); 234B; 69B; 251; 143(2); 139(1); 64; 48; 13; 22

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. No. 365/Jodh/2023 Assessment Year: 2019-20 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 09.04.2024 ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal filed by assessee is arising out of the order of the Commissioner of Income Tax (Appeal), Jaipur-5 dated 20/09/2023 [here in after ‘CIT(A)’ ] for assessment year 2019-20 which in turn arise from the order dated 12.08.2021 passed under section 143(3) of the Income Tax Act, by ACIT, Central Circle-01, Jodhpur. I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 2 2. In this appeal, the assesee has raised 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), NFAC grossly erred in upholding the addition made by ld AO in respect of gold jewelary and silver ornaments without considering the legal & valid documentary evidences furnished by assessee. 6. That on the facts and in the circumstances of the case, the ld CIT(A) erred in sustaining addition of Rs 13,31,704/- made by the ld AO on the presumption that the gold jewellery found during the course of search action was unexplained u/s 69B of the Act.. 7. That on the facts and in the circumstances of the case, the ld CIT(A) erred in sustaining addition of Rs 93,220/- made by the ld AO on the presumption that the silver items found during the course of search action was unexplained u/s 69B of the Act.. 8. That on the facts and in the circumstances of the case, the ld CIT(A) erred in confirming addition made by ld AO in respect unexplained gold & silver items found as a result of search by deliberately & intentionally ignoring the affidavits, marriage photographs, statement u/s 132(4) of family members etc and other documentary evidence furnished by assessee. 9. That on the facts and in the circumstances of the case, the ld CIT(A) erred in upholding the addition on the basis of loose paper by representing I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 3 classic example of volition of principle of natural justice. 10. That on the facts and in the circumstances of the case, the ld CIT(A) erred in sustaining addition of Rs. 22,34,667/- in respect of unaccounted cash loan and interest thereon on the basis of loose paper. 11. That on the facts and in the circumstances of the case, the ld CIT(A) erred in without accepting the real truth and contents of such loose paper and upholding the addition particularly when the loose paper is not capable of describing the transaction the way the ld CIT(A) & ld AO had deciphered them. 12. That on the facts and in the circumstances of the case, the ld CIT(A) erred in confirming the addition on the basis of dumb documents without any corroborative evidence/finding that alleged document have materialized into transactions. 13. That on the facts and in the circumstances of the case, the ld CIT(A) erred in represented irrelevant, arbitrary and contrary facts and law while upholding the validity of addition made by ld AO. 14. 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. 15. That on the facts and in the circumstances of the case, the ld CIT(A) erred in charging interest u/s 234B & 234C of the Act. 16. That the petitioner may kindly be permitted to raise any additional or alternative grounds at or before the time of hearing.” 3. Succinctly, the fact as culled out from the records is that in this case, return of income was filed on 30/10/2019 for the A.Y 2019-20 declaring total income of Rs. 56,65,480/-. 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 incriminating documents along with cash, jewellery and other valuable I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 4 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. 3.1 During search at 163, 2 nd Polo, Paota, Jodhpur in the Bedroom of Shri Jagdish Soni & Smt. Parvati Soni, gold jewellery valuing at Rs. 41,58,145/- (Fine Wt. 1324.250) and silver valuing at Rs. 93,220/- were found and out of which gold jewellery valuing at Rs. 5,32,230/- (169.5 Gms) was seized as per Annexure JS-1. Further, bank locker of Shri Jagdish Soni & Smt. Parvati Soni was also searched and from Locker No. 239, ICICI Bank, Mandore Road, Jodhpur gold jewellery valuing at Rs. 11,17,242/- (Fine Wt. 355.810) was found and out of which gold jewellery valuing at Rs. 7,99,474/- (254.61 Gms) was seized as per Annexure JS-2. Shri Jagdish Soni vide question no. 47 of his statement recorded u/s 132(4) dated 09/04/2018 was asked to explain the source of jewellery found from his residence and locker No. 239, ICICI Bank, Jodhpur. Further, vide a question No. 49, the assessee was specifically asked about the excess jewellery found beyond the reasonability of gold jewellery in a Hindu family as per the CBDT Instruction No. 1916, the I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 5 assessee has replied that regarding excess jewellery he did not have any evidence. From the above reply and the gross weight of gold jewellery found from the assessee's premises, it is noticed that the assessee was found in possession excess gold jewellery beyond the permissible limit of reasonableness as per the CBDT Instruction No. 1916 by a gross weight of 380.06 Gms (1324.25 + 355.81 - 1300) and assessee has got no evidence with him to substantiate the procurement with its source of above excess gold except to the submission that marriage photographs substantiates the ownership. Thus, even if the reasonability aspect as per the CBDT Instruction No. 1916 is considered and given credence for the excessive gold jewellery worth Rs. 13,31,704/- was not found explained from the end of the assessee. Accordingly, it held that 380.06 Gms of gold jewellery was purchased by the assessee out of unexplained source of income and the same is added u/s 69B of the Income Tax Act, 1961 and therefore, an addition of Rs. 13,31,704/- is made to the total income of the assessee. 3.2 Further, the assessee has furnished no explanation in regard to source of procuring 2300.60 Gms of silver utensils/articles of aggregated value Rs. 93,220/-. Obviously, the silver utensils/articles are not covered in the said instruction of the CBDT which could be held explained and I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 6 assessee was required to furnish a plausible explanation in regard to source of procurement of these silver valuables. Unfortunately, the assessee is silent on this aspect and it appear that he has got no explanation whatsoever with him. Accordingly, in absence of any declaration regarding source of availability of silver bullion and utensils worth Rs 93,220/- the assessee is found to have violated the provisions of section 69B of the Income Tax Act, 1961 and therefore, an addition of Rs. 93,220/- is made to his total income for A.Y. 2019-20. 3.3. During the search proceedings carried out at residence situated at 164, 2nd Polo, Paota, Jodhpur by Party 3, the seized documents Bearing No. 7 of Annexure AS Exhibit 20 revealed that it was an acknowledgment receipt given by Shri Sunil Kumar Rathi S/o Shri Shankar Lal Rathi on 08/04/2018 of having received a cash loan of Rs. 20,00,000/- from Shri Jagdish Soni at the interest rate of 1% per month and promise to repay the same as and when asked. Since, the assessee has not included the said cash loan amount of Rs. 20,00,000/- as his unaccounted income for the A.Y. 2019-20, he was specifically questioned about the same in the questionnaire issued by on 12/02/2020. In reply to the same, the AR of the assessee has submitted his reply on 19.01.2021. The submission of the AR has been examined in the context of version of the assessee given in his statement recorded I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 7 on 09/04/2018 as well as of Shri Devendra Jain, friend of Shri Jagdish Soni recorded on 09/04/2018. Though from both the statements, it cannot be denied that Shri Jagdish Soni had visited Mumbai on 07/04/2018 along with his friend Shri Devendra Jain, despite existence of certain loop holes in his statement of missing of his flight Boarding Pass from Jodhpur to Mumbai and Mumbai to Jodhpur and also missing of Mobile Phone having SIM No.8955211211 during this flight Even he has not filed any FIR for this missing android phone worth Rs. 15,000/- as well as he did not reveal anything about the missing phone to his friend Shri Devendra Jain, who had accompanied him to and fro. Jodhpur to Mumbai. The plea of the AR that this document was written by some unscrupulous person but here the big question arises, who in the house of his father Shri Bhanwar Lal Soni at 164, Polo 2 ^ (nd) Paota Jodhpur created this document and planted the same in order to cause a trouble to the assessee in this regard Further, it is very obvious that the said document was not found from the house of the assessee at H. No. 163, Polo 2nd, Paota, Jodhpur and father of the assessee Shri Bhanwar Lal Soni, who is found to have indulged in advancement of cash loans, could have easily advanced Shri Sunil Kumar Rathi a cash loan of Rs. 20,00,000/- in the name of Shri Jagdish Soni on 08/04/2018 for which physical presence of Shri Jagdish Soni was not at all required. So his I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 8 absence on the very day of advancement of this cash loan to Shri Sunil Kumar Rathi on 8/4 / 2018 was not a big issue because his father Shri Bhanwar Lal Soni, who is the key person of this group and at the helm of all the affairs of his family as well as found indulged in advancement of cash loan to various persons on interest, could have easily given this cash loan on the behalf of his son and this being an irrefutable fact which substantiates and justifies this cash transaction and the document found in this regard from the residence of his father. In view of that fact, the said loan transaction in cash was made on 08/04/2018 and which was duly acknowledged as received by Shri Sunil Kumar Rathi and the assessee has during the F.Y. 2018-19 not only advanced a cash loan of Rs. 20,00,000/- out of the unaccounted source of income but also earned an interest of Rs. 2,34,667/- (11 months and 22 days on Rs. 20,00,000/- @ 1% per month) over it. Hence, an aggregate addition of Rs. 22,34,667/- (Rs. 20,00,000/- + Rs. 2,34,667/-) u/s 69 of the Income Tax Act, 1961 is made to the total income of the assessee. 4. Aggrieved from the order of AO, the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: “'Decision I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 9 7.2 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. 7.2.1 During the search proceedings carried out at residence 164, 2ndPolo, Paota, Jodhpur, the seized document bearing page No. 7 of Exhibit- 20 of Annexure-AS,this was a receipt given by Shri Sunil Kumar Rathi S/o Shri Shankar Lal Rathi on 08.04.2018 of having received a cash loan of Rs. 20,00,000/- from.Shri Jagdish Soni at the interest rate of 1% per month and promise to repay the same as when asked to. 7.2.2 For ready reference the scan copy of said seized document is as under: Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 7.2.3 During the course of assessment proceedings, the appellant was asked for the said cash loan, in reply to same, the AR of the appellant had submitted that Sh. Jagdish Soni had visited Mumbai from 07.04.2018 to 09.04 2018 so how he had given loan to alleged party when the assessee was not at Jodhpur. After considering the facts of the case and reply submitted by the appellant, the following facts were noticed: 1. Shri Jagdish Soni was unable to produce the boarding pass or any other evidence in support of his journey to Mumbai. 2. Shri Jagdish Soni in his statements taken during the search on 09.4.2018 submitted that he had gone from the airport along with his friend Sh. Devendra Jain to residence of Shri Devendra Jain in a car and taken Devendra Jain's Activa and reached his house. Shri Jagdish Soni was unable to tell that who was the owner of car and who was driving. It is also very suspicious that the assessee had not arrived his house directly from the airport. 3. Shri Jagdish Soni had submitted that he had lost his mobile having No. 8955211211 but for the same he had not filed any FIR 4. The above receipt was seized from the residence of Sh. Bhanwar Lal Soni F/o Shri Jagdish Soni, hence it is very clear that the cash loan can easily be given. to Shri Sunil Kumar Rathi without physical presence of Shri Jagdish Soni. 7.2.4. The plea of the appellant that this document was written by some unscrupulous person, cannot be relied upon as the above document was seized from 164, 2ndPolo, Paota, Jodhpur the residence of Shri Bhanwar Lal Soni, who had found to have indulged in advancement of cash loans, this is only a afterthought statement to discharge own responsibility by the appellant. 7.2.5 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 I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 10 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 this paper, the saying that the paper is dumb document is not the justification of the paper. On this paper date is mentioned, amount of cash loan along with interest is mentioned; the name party to whom loan was given is mentioned. On perusal of this paper, it can be easily said that this is an acknowledgement of cash loan received by one person named Shri Sunil Rathi. The transaction mentioned on this paper is very much related to the business of the appellant. Thus such document cannot be treated as dumb document. 7.2.6 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- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person, (ii) that the contents of such books of account and other documents are true 7.2.7 The appellant was aware about the transactions mentioned in the above document. The document was seized from the residence of the appellant, it shows the importance of the paper and how it was directly related to the appellant. The appellant has submitted 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. It is very clear that the above document/page contains the acknowledgement of loan given by the appellant. 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. 7.2.8 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 residence during the search and seizure proceedings u/s 132 of the Income Tax Act, 1961. Thus, the addition made by the AO of Rs 22,34,667 (20 lakh + interest 2,34,667) is hereby upheld. Grounds of appeal on these issues are hereby dismissed. 8. The 22 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. I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 11 9. 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 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. 10. In the result, the appeal is treated as dismissed.” 5. Since the ld. CIT(A) has dismissed, the appeal of the assessee, the assessee has preferred the present appeal on the ground as stated hereinabove. Apropos to the grounds so raised, the ld. AR of the assessee has relied upon the submission made before the ld. CIT(A) and the same is reproduced herein below:- “The appellant has presented this appeal against order passed by DCIT, Central Circle-1, Jodhpur. Before I deal with each ground of appeal I would like to narrate the facts of the case in brief: FACTS OF THE CASE 1] That the assessee is an individual and derives business income from trading of commodities on commission basis and trading of commodity on NCDEX/MCX. The assessee has also derives profit from Partnership firm M/s Jagdish Agro industries and Soni International. In addition to this the assessee has also derives rental income from house property and income from other source. 2] That the appellant had maintained computerized books of accounts, which consists of Journal, Ledgers, Cash Book, and Bank Book. Each & every transaction are duly recorded and supported from the documentary evidences. The books of accounts so maintained are subject to Audit u/s 44AB of the Act. 3] That on 30/10/2019 the assessee had filed the return of income u/s 139(1) of the Act by declaring the total income of Rs. 56,65,480/- and accordingly paid the taxes. 4] That a search u/s 132 was carried out at business/ residential premises of the appellant on 09/04/2018. At the time of search neither any incriminating material nor any evidence, information had been found which shows any investment or income earned by the appellant outside the books of accounts. I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 12 5] That the case of appellant was selected for scrutiny and accordingly the notice u/s 143(2) and 142(1) along with query letter issued by the Ld AO to appellant. In response to same the appellant had filed the explanation, information, documentary evidences etc as required by the Ld AO. 6] That during the assessment proceedings the appellant had explained the source & acquisition of gold jewelry found as a result of search with documentary evidences. Further also the appellant had made denial of the transactions recorded in seized papers which was found in the residence premises of father Shri Bhanwar Lal Soni search proceeding. 7] That on 12/08/2021 the Ld AO passed the assessment order without taken to consider valid & legal submission and documentary evidences and assessed the total income of Rs. 91,45,928/- by making addition of Rs. 34,79,818/- in the returned income. 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 5 relating to validity of assessment order. a] 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. 6 to 11 relating to addition of Rs. 11,51,931/- in respect of gold jewelry and Rs. 93,220/- in respect of Silver items u/s 69(B) of the Act. a] That the gold jewellery weighing 1324.250 gram found in the room of assessee and his wife at the time of search. The description of gold jewellery are as under: - SR. NO. DISCRIPTION WEIGHT VALUE 1 pSu 8 132.000 414480.00 2 dMk 8 211.000 662540.00 3 fjaXl 90.000 282600.00 4 pqMh 11 180.000 565200.00 I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 13 5 xtjk 2 94.000 295160.00 6 VksIl gFkQqy 195.000 612300.00 7 lsV 153.000 480420.00 8 eaxylq= j[kMh 86.500 271610.00 9 ukstfiu 2.800 8792.00 10 IykfLVd pqMh 15.200 47728.00 11 is.My lsV 89.250 280245.00 12 ON Jewellery 75.500 237070.00 1324.250 4158145.00 b] Further also the gold jewellery weighing 355.810 gram was found in locker No. 239 of ICICI Bank which was joint name of appellant and his wife Smt Parvati. The description of gold item are as under: - SR. NO. DISCRIPTION WEIGHT VALUE 1 dUnksMk 87.250 273965.00 2 gkFkiku 86.270 270887.00 3 ykWxlsV 81.090 254622.00 4 pksSdjlsV 101.200 317768.00 355.810 1117242.00 I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 14 c] That at the time of search the authorized officer has raised specific question in respect of source of acquisition of such gold jewellery which reads as under:- ^^iz-35 vkids ,oe vkids ifjokj dksbZ Cash, Jewellery, Bullion ,oa vU; nLrkost vkids fuokl LFkku ds vykok vU; dgha j[ks gSa rks d`i;k crk;sA mRrj esjs ,oe esjs ifjokj dk leLr lkeku esjs fuokl LFkku IyksV ua- 163 esa j[kk gqvk gSA dqN ToSyjh gekjs ykWdjks es j[kh gqbZ gS tks fd ICICI Bank, Mandore Krishi Mandi, Branch, Jodhpur esa gSA ;gkWa ds vykok gekjk dksbZ Hkh leku vU;= ugha j[kk gqvk gSA iz'u47 vkids fuokl LFkku ij lpZ dh dk;Zokgh ds nkSjku vkids cSM:e ls Gold & Silver Jewellery ik;h xbZ ftldk Registered Valuer }kjk Valuation fd;k x;kA mlds }kjk fd;s x;s valuation ds vuqlkj gold jewellery 1324.250 grams rFkk silver jewellery 2360 gram ik;h xbZ ftldk valuation :- 4251365@& :i;s ewY;kafdr fd;k x;k bl izdkj vkids rFkk vkidh iRuh ds joint name ls ik;s x;s ykWdj u- 239] vkbZvkbZlhvkbZ eaMksj d`f"k e.Mh czkap tks/kiqj dks Hkh vkidh presence es operate fd;k x;k vkSj vkids vuqjks/k djus ij ykWdj es ik;h x;h jewellery dk valuation vkids fuokl LFkku ij fd;k x;kA bl ToSyjh dk valuation registered valuer }kjk 355-810 xzke rFkk 11]17]242@& :i;s ewY;kafdr fd;k x;kA d`i;k crk, fd D;k vki jftLVMZ valuer }kjk fd;s x;s valuation ls lger gS\ d`i;k vkids fuokl LFkku rFkk ykWdj es ik;h xbZ jewellery dh izkfIr dk lzksr e; lk{; izLrqr djsaA mRrj esjs fuokl LFkku rFkk ykWdj es ikbZ xbZ ToSyjh dk oSyq,'ku esjs] esjs ifjokj dh rFkk nks xokgks dh mifLFkfr esa fd;k x;k gSA registered valuer }kjk fd;s x;s osyq;s'ku ls es iw.kZr lger gwWA mlds }kjk fd;s x;s valuation ls eq>s dksbZ vkifRr ugha gSA esjs ykWdj rFkk esjs fuokl LFkku ij ikbZ xbZ ToSyjh esjh iRuh] esjs nksuksa csVs rFkk esjs lkFk jg jgh esjh nknh Jherh irk'kh nsoh dh gSA ;g ToSyjh esjh 'kknh esa esjs llqjky rFkk esjs ?kjokyks us nh FkhA esjh nknh dh Tosyjh Hkh mldh 'kknh ds le; ls gh gSA esjh ToSyjh esjh cPpksa dh esjh 'kknh esa rFkk esjs cPpks dh birthday party es fofHkUu fj'rsnkjks }kjk gift nh gqbZ gSA bu ikbZ xbZ ToSyjh dk eSa dksbZ l{; izLrqr ugha dj ldrkA iz'u49 vkids fuokl LFkku rFkk vkids ykWdj la- 239 esa ikbZ xbZ ToSyjh dk dqy ewY; ¼42]51]365 + 1117242/-)= 5368607/- registered valuer }kjk ewY;kWafdr fd;k gqvk gSA vkius bl ToSyjh ds ckjs esa crk;k gS fd ;g ToSyjh vkidh vkidh iRuh] vkids nksuksa yM+dks rFkk vkidh nknhth dh gSA vk;dj vf/kfu;e @ /kudj vf/kfu;e ds vuqlkj ikbZ xbZ jewellery dh exemption limit dze'k 100+500+200+500 = 1300 gram gksrh gSA ftldk vkt dh date esa valuation 4082000@& :i;s gksrk gS bl izdkj D;ksa u ikbZ xbZ excess jewellery 1286607/- :i;s pkyw foRrh; o"kZ dh v?kksf"kr vk; ekurs gq, tCr dj yh tk,\ mRrj esjs fuokl LFkku rFkk ykWdj es ikbZ xbZ ToSyjh ds laca/k esa eSaus vkidks iwoZ esa I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 15 crk;k gS fd esjh 'kknh rFkk esjh nknhth ds 'kknh ds le; dh gS] pwWafd eSa buds izkfIr ds lk{; izLrqr ugh dj ldrk gwWa blfy, ikbZ xbZ excess jewellery dks vki seize dj ldrs gSA^^ d] It is further submitted that at the time of search the authorized officer had recorded the statement u/s 132(4) of Smt. Patasi Devi, the grandmother of assessee who is oldest family member of the assessee and at the time of search the age of Smt. Patasi Devi was more than 83 years. Further also had furnished the documantry evidences that she was owner of 3500 grams gold jewellery etc which was acquired at the time of her marriage and also various occasion and functions had received gifts from family members and also her husband in his life time had purchased the gold jewellery etc. In statement the authorized officer had also raised the question in respect of acquisition of source of gold jewellery amounting to Rs. 53,68,607/- from grandmother of assessee. In reply to question No. 13 of statement she had explained as under:- ^^iz-13 lpZ dh dk;Zokgh ds nkSjku vkids ?kj ,oa cSad ykWdj ls 5368607@& :i;s ewY; dh ToSyjh ikbZ xbZ gSA d`i;k blds vtZu dk lzksr nLrkosth lk{;ksa ds lkFk Li"V djs\ mRrj lpZ dh dk;Zokgh ds nkSjku gekjs ?kj ,oa cSad ykWdj ls :i;s 53]68]607@& dh ToSyjh ikbZ xbZ gSA ;g ToSyjh gekjs ifjokj dh gSA bles esjh] esjh iq=o/kqvks dh 'kknh dh Hkh ToSyjh gSA blds ckjs esa foLr`r tkudkjh esjk iq= Jh Hkaojyky lksuh crk ldrk gSA^^ e] That during the assessment proceedings, the affidavits of appellant, his wife and father in law had been submitted in which it was claimed that gold & silver ornament/jewellery weighin 2000 gms were received at the time of marriage and also in support of same the photograph of marriage which established beyond doubts that the gold & silver ornament/jewellery were old one and had obtained at the time of marriage. The reconciliation chart which shows the gold jewellary sized and gold jewellary obtained at the time of marriage items wise had also been furnished before ld AO. However the ld AO had not been considered such legal & valid evidences and statements recorded at the time of search in right perspective and judicious manner merely on the I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 16 basis of assumption and presumption had made such addition which is against the principle of natural justice. f] That the Ld AO without taken to consider the legal & valid explanation and evidences furnished before him and made arbitrarily allegation in the assessment order while making addition which reads as under: - "From the above reply and the gross weight of gold jewellery found from the assessee's premises, it is noticed that the assessee was found in possession excess gold jewellery beyond the permissible limit of reasonableness as per the CBDT Instruction No. 1916 by a gross weight of 380.06 Gms (1324.25 + 355.81 - 1300) and assessee has got no evidence with him to substantiate the procurement with its source of above excess gold except to the submission that marriage photographs substantiates the ownership. Thus, even if the reasonability aspect as per the CBDT Instruction No. 1916 is considered and given credence for the excessive gold jewellery worth Rs. 13,31,704/- was not found explained from the end of the assessee. Accordingly, it held that 380.06 Gms of gold jewellery was purchased by the assessee out of unexplained source of income and the same is added u/s 69B of the Income Tax Act, 1961 and therefore, an addition of Rs. 13,31,704/- is made to the total income of the assessee. Penalty proceeding u/s 271AAC is also initiated as the assessee is found in possession of gold jewellery out of undisclosed sources of income as per provisions of section 69B of the Income Tax Act, 1961. (Addition of Rs. 11,51,931/-) 4.1. Further, the assessee has furnished no explanation in regard to source of procuring 2300.60 Gms of silver utensils/ articles of aggregated value Rs. 93,220/-. Obviously, the silver utensils/ articles are not covered in the said instruction of the CBDT which could be held explained and assessee was required to furnish a plausible explanation in regard to source of procurement of these silver valuables. Unfortunately, the assessee is silent on this aspect and it appear that he has got no explanation whatsoever with him. Accordingly, in absence of any declaration regarding source of I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 17 availability of silver bullion and utensils worth Rs. 93,220/-, the assessee is found to have violated the provisions of section 69B of the Income Tax Act, 1961 and therefore, an addition of Rs. 93,220/- is made to his total income for A.Y. 2019-20. Penalty proceeding u/s 271AAC is also initiated as the assessee is found in possession of silver bullion and utensils purchased out of undisclosed sources of income as per provisions of section 69B of the Income Tax Act, 1961. (Addition of Rs. 93,220/-)" g] That the families of appellant are engaged in the business activities since more than 3 decade and also assessed to tax. Perusal of the returned income speaks volumes about the richness of the family. The assessee belongs to Baniya (Mahaeshwari) Community of Rajasthan and as per customs of the Community, some of the Gold/Silver Jewellery/articles are passed on to the subsequent generations and some of the jewellery was received on various festivals/ auspicious occasions and ceremonies. In fact, the assessee had furnished photographs of functions and marriages to show that ladies of his family wearing heavy gold jewellery which is a part of STREEDHAN. The jewellery is "streedhan" of the assessee's wife, evidenced in the form of declaration which was finished by father-in-law of the assessee stating that he had given the jewellery in question to her daughter. Similarly evidences of grandmother of appellant that jewellery is "streedhan". h] That as result of search, no material or evidences had found or seized which shows any investment, income earned by appellant or his family members out of books of account. It is an admitted facts that the jewellery are old one and as a "streedhan" which were obtained at the time of marriage by married ladies. Therefore, the addition made by ld AO against the principle of natural justice. i] The Hon’ble ITAT Jaipur Bench in the case of Shri Gyanendra Singh Shekhawat VS ACIT, CENTRAL CIRCLE-2, JAIPUR ITA NO.49/JP/2022 dated 27 /07/2022 “2.8 Therefore, looking into the totality of the facts and circumstances of the case, we are of the considered view that the AO had ignored the factual position as well as failed to verify the fact that the assessee is living with his parents and belonged to I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 18 a Rajput Family where the fact of having jewellery as Streedhan by the assessee’s mother and wife cannot be ignored. Thus after considering the overall factual position in this case and keeping in view of high status, family 10 tradition, deduction on account of purity and the deduction towards Streedhan, the excess jewellery found were nominal. In this view of the matter, the addition sustained by the ld. CIT(A) deserves to be deleted and the grounds raised by the assessee are allowed. We order accordingly” j] Delhi High court in the case of Ashok Chaddha [2011] 14 taxmann.com 57 wherein the Hon’ble High Court has accepted the jewellery of 906.60 grams in the case of married lady even without documentary evidence. The court stated that collecting jewellery of 906.900 grams by a woman in a married life of 25-30 years is not abnormal. The court has held that it is a normal custom for woman to receive jewellery in the form of "stree dhan" or on other occasions such as birth of a child etc. k] Hon’ble Delhi High Court following the decision of Ashok Chaddha (supra) in the case of Sushila Devi [2016] 76 taxmann.com 163 has held that the gold jewellery which is acquired through gifts made by relatives and other family members over a long period of time, is in keeping with prevailing customs and habits. l] Delhi ITAT in case of Radha Mital and Ruchie Mital Vs. DCIT in ITA No: 2810/Del/2016 dated 09/07/2016 held that Jewellery found in excess of limited prescribed by the above circular as explained on the ground that jewellery belongs to the assessees having received as “streedhan” on the occasion of marriage and also received subsequently on occasions like birth of child etc in pursuant to customs/tradition of family. The Assessee belonging to ‘ Baniya’ family have been married since 35 years and 8 years. Further they were jointly residing with their mother in law Shanti Mittal who had been married for about 65 years. Apart from the above the family comprised of husband of both the assessee and son. Thus looking to the tradition of family Hon’ble Tribunal has accepted the Jewellery in excess of limit prescribed by the above circular was in view of the fact that the same being received as Streedhan during the course of Marriage and subsequent marriage. In light of above, the addition made by ld AO may kindly be deleted. I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 19 3] As regards ground of appeal No. 12 to 20 relating to addition of Rs. 20,00,000/- in respect of unaccounted cash loan and Rs. 2,34,667/- interest thereon. a] It is submitted that the authorized officer had found and seized the loose paper bearing page No 7 of exhibit 20 in the search of father of the assessee Shri Bhanwar Lal Soni. Neither from father of appellant Shri Bhanwar Lal Soni nor from the appellant the authorized officer had raised any question about transaction as recorded on such loose paper while recording the statement u/s 132(4) of the Act. b] It is an admitted fact that such loose paper was found and seized in possession of Shri Bhanwar Lal Soni during the search proceedings and presumption u/s 132(4A)/292C is available only in the case of the person from whom possession and control the documents were found. It cannot be taken to have evidentiary value u/s 132 (4A) in the hands of the assessee. c] Perusal of seized paper, it is reveals that that there was no mentioned mode of payment, no signature/confirmation of assessee. Furthermore the date of transaction as recorded on such date the appellant was at Mumbai. This fact was dully verified by authorized officer at the time of search. Therefore, on the basis of assumption and presumption the ld AO had fasten the liabilities against the appellant which is against the principle of natural justice. d] That the finding recorded by Ld AO while making addition in the assessment order reads as under: - "The plea of the AR that this document was written by some unscrupulous person but here the big question arises, who in the house of his father Shri Bhanwar Lal Soni at 164, Polo 2nd Paota, Jodhpur created this document and planted the same in order to cause a trouble to the assessee in this regard. Further, it is very obvious that the said document was not found from the house of the assessee at H. No. 163, Polo 2nd, Paota, Jodhpur and father of the assessee Shri Bhanwar Lal Soni, who is found to have indulged in advancement of cash loans, could have easily advanced Shri Sunil Kumar Rathi a cash loan of Rs. 20,00,000/- in the name of Shri Jagdish Soni on 08/04/2018 for which physical presence of Shri Jagdish Soni was not at all required. So, his absence on the very day of advancement of this cash loan to Shri I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 20 Sunil Kumar Rathi on 08/04/2018 was not a big issue because his father Shri Bhanwar Lal Soni, who is the key person of this group and at the helm of all the affairs of his family as well as found indulged in advancement of cash loan to various persons on interest, could have easily given this cash loan on the behalf of his son and this being an irrefutable fact which substantiates and justifies this cash transaction and the document found in this regard from the residence of his father. In view of the above discussion, I am of this considered opinion that the said loan transaction in cash was made on 08/04/2018 and which was duly acknowledged as received by Shri Sunil Kumar Rathi and the assessee has during the F.Y. 2018-19 not only advanced a cash loan of Rs. 20,00,000/- out of the unaccounted source of income but also earned an interest of Rs. 2,34,667/- (11 months and 22 days on Rs. 20,00,000/- @ 1% per month) over it. Hence, an aggregate addition of Rs. 22,34,667/- (Rs. 20,00,000/- + Rs. 2,34,667/-) u/s 69 of the Income Tax Act, 1961 is made to the total income of the assessee. " e] That the appellant had made denial of any transaction with alleged party as mentioned in loose paper and also submitted that he was not at Jodhpur on 08.04.2018. The search was carried out at residence & business premises of the appellant on 09.04.2018 and at the time of search no material or evidences found which suggested any income or investment made by appellant outside the books of account. Further also post search enquiry and during the assessment proceedings the department had neither brought on record any adverse material against the assessee nor any corroborative evidences which shows the alleged transaction belonging to appellant. Here I would like to mention that the complete details i.e. name, address, mobile no etc of respective party are mentioned on loose paper. f] The ld AO deliberately and consciously had plagiarized and represented wrong fact in the assessment order that “cash loan” whereas seized document is silent about mode of the payment. Further also show cause notice dated 01.06.2021, the ld AO had not raised any query in this regards to appellant particularly when the appellant had submitted detailed submission on such issue before ld AO on 19.01.2021. I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 21 g] It is settled principle of law, that 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. ACIT Vs. Satya Pal Wassan (2007) 295 ITR 9 AT 352 (Jabalpur) h] It is an admitted facts that no evidence was found by the department to establish that assessee has given cash loans to Shri Sunil Kumar Rathi during the course of search of appellant. The AO has abruptly concluded in his own understanding of the transactions of loose paper, the assessee has given cash loan without taken to consider the legal & valid evidences furnished by appellant. 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 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. i] 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 hence same cannot be a basis to tax undisclosed income." j] 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 assesse which had not been disposed in regular books of accounts by such assesse 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 I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 22 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. k] It is one of classic example of assessment in which the ld AO consciously and deliberately had not made either themselves any inquire or cause such inquiry to be completed. Further also had treated the inquiry in the wake of a notice under section 143(2) is an empty formality and are game of hide and seek and, 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. l] The assessee has furnished all evidences in support of real nature of transaction and truth of the transactions, the onus to disprove the same is on revenue. Reliance on the judgment of 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 I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 23 adducing evidence of a definite 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. m] 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 father of assesse Shri Bhanwarlal Soni 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." n] There is no material evidence on record from which it can be inferred or proved that such transaction has been actually 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 assessee. The presumption made by the AO appears to be without any proper base or evidence just on assumptions and presumptions hence not correct. The additions made by ld AO on such wrong presumptions cannot be sustained and also illegal in the eye of law. The AO had not made any independent enquiry in this respect before making any addition on this account. He has neither brought on record nor proved with the help of any evidence on record that the assessee has actually given 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 ignoring the record and assessment order it is very clear that the ld. AO has proceeded only on suspicion. 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), I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 24 (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). o] It is submitted that the revenue has already searched the entire business and residential premises of the assessee, there is no unaccounted assets or investment had been found. Further no single evidence, brought on record which directly or indirectly suggested that any unaccounted income earned which was invested as alleged by ld AO. Even though complete details of other party whose name, address and mobile number are mentioned on loose paper and the department has not acted upon. Once the assessee based on the evidence acted to the best of his legal duty provided the information and this in-action on the part of the revenue, assessee cannot punished or in other words non action on the part of the ld AO cannot be a burden for tax on a amount which is in fact is not earned. p] The ld AO merely disbelieved the explanation/evidences given by the assessee and has converted good proof into no proof. Hon’ble Justice Hidayatullah of the Supreme Court in the case of Sreelekha Banerjee Vs CIT [1963] 49 ITR 112 (SC); 120 observed that the Income Tax Department cannot by merely rejecting unreasonably a good explanation, convert good “proof into no proof”. Hon’ble Supreme Court in the case of Uma Charan Shaw & Bros Co Vs CIT 37 ITR 271 has held that the surmises and conjectures, and the conclusion is the result of suspicion which cannot take the place of proof. Hon’ble Punjab & Haryana High Court in the case of CIT Vs Anupam Kapoor (2008) 299 ITR 179 (P & H) also held that suspicion, howsoever strong cannot take the place of legal proof. If the department considers it as income of the assessee, it is burden on the department to prove the figures appearing on the paper found in the search represents undisclosed income of the assessee. This burden is not discharged and therefore, on the basis of such loose paper no addition can be made. Recently the Hon’ble ITAT Jodhpur Bench on the issue of on money of purchase of property had decided in the case of M/s Jodhana Homes, ITA No. 110/Jodh/2020 dated 28/01/2021. The finding recorded by Hon’ble ITAT reads 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 I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 25 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 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 I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 26 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 the basis of his estimate and surmises. Consequently, such addition made is directed to be deleted.” i. The Hon’ble ITAT Jodhpur Bench in the case of Smt Sunita Mehta ITA No 53/JODH/2018 dated 19/03/2018 held as under:- “5. We have heard the rival submissions and have perused the material on record. The Ld. CIT (A) has noted in Para 5.5 of the impugned order that the assessee had asserted before the AO that she had not received any money in cash from Shri Mufat Singh Rao but the AO did not allow any opportunity to the assessee to cross examine either the partners of M/s Varaha Infra Ltd or Shri Mufat Singh I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 27 Rao. It has also been noted by the Ld. CIT (A) that during the course of search at the premises of M/s Varaha Infra Ltd, no documents other than entries in the loose sheets were found which could suggest conclusively that entries as found in the impounded material were correct. It has also been noted that these documents were unsigned. The Ld. CIT (A) has further noted that the AO did not investigate the matter any further but concluded that the assessee had actually and factually earned extra money on sale of plots. The Ld. Sr. DR, during the course of proceedings before us, could not negate these observations of the Ld. CIT (A). 5.1 The Hon'ble High Court of Gujarat in the case of Vinod Bhai Shamjiobhai Ravani Vs. DCIT reported in [2017] 79 Taxmann.com 237 (Guj) held that where there was no tangible lable on record to form a reasonable belief that amount of sale consideration on sale of land owned by third party was received by the assessee in case, merely on the basis of Saudi Chitthi signed by the assessee for sale of such land, it could not be said that sale consideration was received by the assessee. 5.2 It is seen that in the instant case, the entire addition has been made on the basis of entries found recorded in certain loose papers and no other supporting or corroborative evidences have been brought on record by the AO to establish that the assessee had received extra amount in cash other than the amount mentioned in the sale deed. We are of the considered opinion that merely because some loose papers or notings found at the premises of a third party mention the name of the assessee, additions cannot be made unless there are concrete corroborative evidences available establishing the fact that the assesse had received unaccounted income. 5.3 In the case of CBI Vs. V.C. Shukla reported in 172 ITR 250[SC] certain diaries, small note books and various loose papers were fuond and seized from the premises of Mr. S.K. Jain. In those diaries/ loose papers, the name of V.C. Shukla and L.K. Advani were found recorded. The CBI Charge sheeted those persons, namely Shri Shukla and Shri Advani under the Prevention of Corruption Act, 1988. The Hon'ble Apex Court held that the entires in those diaries/ loose papers cannot be used against Shri Shukla or Shri Advani but can be used against Shri Jain and may be proved as admission by him. The ratio of this judgment is appliable in Income tax cases as well. 5.4 The Ld. CIT (A) has also made a reference to the judgment of the Hon'ble Gujarat High Court and the Hon'ble Apex Court, as stated above, and has placed reliance on the ratio laid by these judgments. We find that the reliance of the Ld. CIT (A) on these judgments is well placed. 5.5 Therefore, we are of the considered opinion that no liability can be fastened nor can an addition be made on the basis of mere entry in loose sheet without there being any further reliable corroborative evidence lending credence to such entry. Accordingly, we find no reason to interfere with the findings of the Ld. CIT (A) and we dismiss the grounds raised by the department.” I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 28 ii. The Hon'ble Rajasthan High Court in the case of CIT v/s Smt. Sunita Dhadda reported in 406 ITR 220 which was approved by Hon'ble Supreme Court reported in 403 ITR (St.) 309. The Hon'ble High Court held as under: - "income from undisclosed sources- burden of proof - "on money" said to have been received by assessee treated as income on basis of material recovered from third party- burden of proof on department to show consideration passed - failure to examine third party and allow cross- examination - deletion of addition by tribunal - just and proper - income -tax act, 1961, s. 69." iii. That recently Hon'ble Rajasthan High Court in the case of CIT v/s Shri Naresh Singhvi, ITA No. 114/2017 dated 19/01/2018 the Hon'ble High Court held as under: - "Against the said order of CIT (Appeals) dated 9.1.2017, an appeal was preferred by the revenue. The said appeal was registered as ITA No. 136/Jodh/2017 in which the learned ITAT of Jodhpur Bench affirmed the order of CIT (Appeals) while following the judgment of the Hon'ble Supreme Court in the case of CBI Vs. VS Shukla (1988) 8 SCC 410 and judgment of the Delhi High Court in the case of CIT Vs. Anil Khandelwal (2015) 93 CCH 0042 and DCIT Vs. Bhola Nath Radha Krishna ITA No. 5149/Del/2012, decided on 5.4.2013 in which it was held that it is well settled law that loose papers, diaries and document cannot possibly be construed as books of accounts regularly kept in the course of business. Such evidence would, therefore, be outside the purview of section 34 of the Evidence Act, 1972. Therefore, the revenue would not be justified in resting its case just on the loose papers and documents found from third party if such document contained narration of transactions with the assessee." iv. In the case of Atul Kumar Jain Vs. DCIT reported in (1999) 64 TTJ (Del) 786 had an occasion to examine the meaning word “document” and its evidentiary value for the purposes of sections 132, 132A and 132(4A) of the Act. At Para 6.4 to 6.6 of the order, the Delhi Tribunal observed as under:- “6.4 We find that the AO has made out the case for making such addition based exclusively on the said piece of paper found and seized during the course of search. It is, therefore, to be examined whether the said paper found and seized is a document having evidentiary value to prove the fact of the transaction. The word “document” has been defined in s. 32 of the Indian Evidence Act to mean – any matter expressed or describedupon any substance by means of letters, figures, or marks or more than one of those means, intended to be used or which may be used for the purpose of recording that matter. The word “document” has also been similarly defined in the General Clauses Act. The meaning of the word “describe I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 29 ................ According to the Hon’ble Supreme Court in the case of Ramji Dayawala & Sons (P) Ltd. vs. Invert Import AIR 1981 SC 2085, mere proof of the handwriting of a document wouldnot tantamount to a proof of all the contents or facts stated in the documents, if the truth of the facts 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 facts in Issue. 6.5 Further, the Hon’ble Supreme Court in the case of Mohd. Yusuf& Anr. Vs. D. & Anr. AIR 1968 Bom. 112 has observed that the evidence of the contents contained in document is hearsay evidence unless the writer thereof is examined before the Court. The Hon’ble Court, therefore, held that the attempt to prove the contents of the document by proving the signatures of the handwriting of the author thereof is set at naught, the well-recognised rule that hearsay evidence cannot be admitted. 6.6 If we consider the said piece of paper seized during search in light of the definition of the word “document” as given in the Indian Evidence Act and General Clauses Act and the truthfulness of the contents thereof in light of the aforesaid decisions of the Hon’ble Supreme Court we find that the said paper contains jottings of certain figures but the same does not describe or express the substance of any transaction and 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 the AO has deciphered them without support of corroborative evidence of the parties attributed to the alleged transaction. The said paper, therefore, does not come within the compass of the definition of the word “document” to be used as any evidence. The paper seized, therefore, has no evidentiary value and accordingly the same cannot form the basis for assessing the undisclosed Income." In light of above, the addition made by the Ld AO may kindly be deleted. 6. To support this contention so raised in the written submission the reliance was placed on the following evidences: S. No. Particulars Page No. 1 Copy of written submission filed before ld. CIT(A) 1-9 2 Copy of reply to AO in response to notice u/s 142(1) 01/06/2021 20-28 3 Copy of affidavit in support of acquisition of gold ornaments and silver items at the time of marriage. 29-36 4 Cop of loose papers found as a result of search 37 I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 30 5 Copy of statement of assessee recorded at the time of search 38-58 7. The ld. AR of the assessee in addition to the written submission so made vehemently argued that during the search two residence were searched. The holding gold and silver ornaments were considering of the whole family. He submitted that read with the affidavit and statement of the grand mother of the assessee the holding of gold and silver items found be considered as explained as the same is looking to the status of the family be considered as explained. As regards the loan and interest added in the hands of the assessee the ld. AR of the assessee relying on the submission made submitted that the alleged loan transaction has not been materialised and therefore, the addition made by the lower authorities are required to be deleted. Not only that there is no finding recorded in the order of the ld. AO that even though the name of other party and mobile number written there is no confirmation of such loan and therefore, merely based on that document the addition cannot survived. 8. Per contra, the ld. DR relied upon the orders of the lower authorities and submitted the assessee was granted the benefit of CBDT circular based relief and holding of jewellery rightly added in the hands of I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 31 the assessee. As regards the addition of loan made in the hands of the assessee ld. DR relied upon the detailed finding based on the evidence submitted by the assessee is considered but the explanation of the assessee is not correct and therefore, the addition made by the lower authority be sustained. 9. We have heard the rival contentions and perused the material placed on record and gone through the decision relied upon both the parties. The bench noted that the ground No. 6 raised by the assessee is relation to the addition of Rs. 13,31,704/- made by the ld. AO on the presumption that the gold jewellery found, was unexplained. The ld. AR of the assessee in support of ground No. 6 submitted that at the time of search the authorized officer recorded the statement u/s 132(4) of the Act of Smt. Patasi Devi the grand-mother of the assessee who is the oldest family member of the assessee and at the time of search the age of grand-mother was of 83 years old. Further, documentary evidence stating that she was owner 350 grams gold jewellery which was received by her at the time of her marriage and various other social occasions as a gift. She was also holding these jewellery which she accumulated during her life time purchase gold jewellery also. The relevant question and answer made by her at the time search is reiterated herein below:- I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 32 ^^iz-13 lpZ dh dk;Zokgh ds nkSjku vkids ?kj ,oa cSad ykWdj ls 5368607@& :i;s ewY; dh ToSyjh ikbZ xbZ gSA d`i;k blds vtZu dk lzksr nLrkosth lk{;ksa ds lkFk Li"V djs\ mRrj lpZ dh dk;Zokgh ds nkSjku gekjs ?kj ,oa cSad ykWdj ls :i;s 53]68]607@& dh ToSyjh ikbZ xbZ gSA ;g ToSyjh gekjs ifjokj dh gSA bles esjh] esjh iq=o/kqvks dh 'kknh dh Hkh ToSyjh gSA blds ckjs esa foLr`r tkudkjh esjk iq= Jh Hkaojyky lksuh crk ldrk gSA^^ In support of this contention so made by grandmother, the ld. AR of the assessee also drawn our attention to an affidavit of brother of his grandmother confirming fact that she was given 300 tola and silver jewellery/utensil at the time of her marriage the affidavit is duly sworn by his brother Sh. Champa Lal (assessee’s paper book 34). The ld. AR of the assessee also given drawn our attention to an affidavit at page 29 of the paper book wherein father-in-law of the assessee has also given statement saying that the wife of the assessee was given approximately 150 tola and 4-5 kg of silver jewellery. Both this fact were not discussed or not brought on record by bringing any contrary finding. Looking to the fact that the contention of the assessee is duly supported by the sworn affidavit which has not been disputed. Further we noted that the assessee is living in joint a family two houses were searched and the gold ornament and silver jewellery found. Looking to the affidavit and CBDT circular the holding of gold and silver jewellery found during the search and seizure action cannot be considered in excess looking to the status, income and number family members in the family and the same I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 33 cannot be considered as unexplained. The ld. AR of the assessee relied upon the decision of Co-ordinate Bench in the case of Shri Gyanendra Singh Shekhawat, Jaipur vs. ACIT in ITA No. 49/JP/2022, the relevant finding of fact is reproduced herein below. “2.8 Therefore, looking into the totality of the facts and circumstances of the case, we are of the considered view that the AO had ignored the factual position as well as failed to verify the fact that the assessee is living with his parents and belonged to a Rajput Family where the fact of having jewellery as Streedhan by the assessee's mother and wife cannot be ignored. Thus after considering the overall factual position in this case and keeping in view of high status, family tradition, deduction on account of purity and the deduction towards Streedhan, the excess jewellery found were nominal. In this view of the matter, the addition sustained by the ld. CIT(A) deserves to be deleted and the grounds raised by the assessee are allowed. We order accordingly. 3.0 In the result, the appeal of the assessee is allowed.” Considering the fact stated hereinabove and respectively following relied upon the decision cited herein above. The gold ornament for an amount of Rs. 13,31,704/- cannot be considered as excess jewellery and therefore, the same is directed to be deleted. In terms of these observations, ground No. 6 raised by the assessee is allowed. 10. Further, the bench noted that considering evidence and discussion so recorded by us while dealing with the ground No. 6 of the assessee, the addition of Rs. 93,220/- made on account of alleged unexplained silver jewellery is directed to be deleted. In terms of these observations, ground No. 7 raised by the assessee is allowed. I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 34 11. As regards ground No. 10 raised by the assessee the fact is that there was a loose paper found as Exhibit 20 page 7 in that loose paper there is an acknowledgment of Shri Sunil Kumar Rathi on 08.04.2018 having received a cash loan of Rs. 20,00,000/-. The ld. AO along with that loan amount also considered accrued interest thereupon for an amount of Rs. 2,34,667/- made u/s 69 of the Act. The ld. CIT(A) has not given any relief based on the same reasons that has been recorded in the order of the assessment. In support of this addition challenged vide ground No. 10, the ld. AR of the assessee submitted that the assessee was not in Jodhpur on 08.04.2018. The search was conducted at residence and business premises of the assessee on 09.04.2018 and at the time of search no material or evidence found which suggested any income investments made out of books. The assessee on 7 th April went to Mumbai to see cricket match and 9 th April there was searched. He came back on 10 th April from Mumbai. The ADIT had considered the explanation and loose papers which is form part of paper book page No. 37. Even the ld. ADIT has also not initiated any action against Shri Sunil Kumar Rathi. The search team or ld. Assessing Officer has not brought on record as to whether the recipient party whose name and mobile number has in fact received that money or not based on the same loose I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 35 paper relied upon. There is no finding of the lower authorities with regard to the investigation carried out for alleged loan to give Sh. Sunil Kumar is brought on record. Even the ld. CIT(A) has not given any finding in para 7.2.5 while dealing with the addition and therefore, without confirming the other party the solitary addition made in the hands of the assessee cannot be sustained and therefore, the same is directed to be deleted along with interest. In terms of these observations, the ground No. 10 raised by the assessee is allowed. 12. The other ground raised by the assessee either technical or consequential any nature and therefore, the same are not decided. Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the notice board. In the result, appeal of the assessee is allowed. Sd/- Sd/- (Rathod Kamlesh Jayantbhai) (Dr. S. Seethalakshmi) Accountant Member Judicial Member Ganesh Kumar, PS (On Tour) Copy of the order forwarded to: I.T.A. No. 365/Jodh/2023 Assessment Year: 2019-20 36 (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order 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