Deputy Commissioner of Income Tax 1 (1), Bhopal V. Shri Neeraj Mandloi, New Delhi

ITA 680/Ind/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8724 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-04-2021
• Assessment Year: 2009-2010
• Appeal Filed On: 26-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S MANTRI
• Assessee Lawyers: PIYUSH PAR
• Keywords: Unexplained investment; Search and seizure; Loose papers; Document seized; Corroborative evidences; Assessment record; Onus to prove; Reason to believe; Documents seized; Reassessment proceedings
• Section: 143(3); 142(1); 260A; 250; 191; 64; 158BC; 48; 13; 153; 22; 153C; 148; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE MANISH BORAD, ACCOUNTANT MEMBER AND HONBLE MADHUMITA ROY, JUDICIAL MEMBER ITA NO.680/IND/2018 ASSESSMENT YEAR 2009-10 DCIT-1(1) : APPELLANT BHOPAL V/S SHRI NEERAJ MANDLOI, 7/7 BHAGWANDAS ROAD, MANDI ROAD, NEW DELHI : RESPONDENT PAN ADRPM0776H C.O.NO.04/IND/2020 ARISING OUT OF ITA NO.680/IND/2018 ASSESSMENT YEAR 2009-10 SHRI NEERAJ MANDLOI, 7/7 BHAGWANDAS ROAD, MANDI ROAD, NEW DELHI : APPELLANT PAN ADRPM0776H V/S DCIT-1(1) : RESPONDENT SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 2 REVENUE BY SHRI S.S. MANTRI, CIT - DR ASSESSEE BY S/ SHRI SUMIT NEEMA, SR. ADV WITH GAGAN TIWARY & PIYUSH PARASHAR, ADVOCATES DATE OF HEARING 24 .0 6 .2021 DATE OF PRONOUNCEMENT 28 . 0 7 . 202 1 O R D E R PER MANISH BORAD, A.M THE ABOVE CAPTIONED APPEAL & CROSS APPEAL FOR ASS ESSMENT YEAR 2009-10 ARE DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-I (IN SHORT LD. CIT], BHOPA L DATED 24.05.2018 WHICH IS ARISING OUT OF THE ORDER U/S 1 43(3) R.W.S. 147 OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DAT ED 31.12.2016 FRAMED BY ACIT-1(1), BHOPAL. 2. REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- ITA NO.680/IND/2018 ASSESSMENT YEAR 2009-10 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE CASE, THE CIT(APPEAL) HAS ERRED IN: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 3 HAS ERRED IN DELETING THE ADDITION OF RS. 2.21 CROR ES BY HOLDING THAT IN THE ABSENCE OF ANY COGENT, INCRIMINATING OR POSITIVE CO RROBORATIVE MATERIAL, THE LOOSE PAPERS FOUND AND SEIZED FROM THE PREMISES OF SHRI MUKESH SHARMA HAVE NO EVIDENTIARY VALUE, WHEN ONE OF THE AWARDEE S OF CONTRACT, NAGARJUNA CONSTRUCTION LTD, ADMITTED TO EXPLAINED E XPENDITURE OF RS.9.68 CRORES IN INDORE PROJECT, WHICH TANTAMOUNT TO SIPHO NING THE CASH FROM BOOKS OF ACCOUNTS, AND THEREFORE, ESTABLISHES THE N EXUS BETWEEN THE DOCUMENTS SEIZED (CODED DOCUMENTS) FROM THE PREMISE S OF SHRI MUKESH SHARMA, THE LIAISON AGENT AND THE NEED FOR SIPHONIN G MONEY FROM THE INDORE SEWERAGE PROJECT? 2. THE APPELLANT RESERVES HIS RIGHT TO ADD, AMEND OR A LTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE, THE APPEAL IS FINALLY HEARD FOR DISPOSAL.. 3. ASSESSEE HAS RAISED THE FOLLOWING CROSS OBJECTIO N; C.O.NO.04/IND/2020 ASSESSMENT YEAR 2009-10 1. THAT THE LD CIT (A) ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE VALIDITY OF REASSESSMENT PROCEEDINGS U/S 147. 2. THAT THE LD CIT (A) FAILED TO APPRECIATE THAT REASS ESSMENT WAS INITIATED PURSUANT TO SEARCH AND SEIZURE OPERATION CARRIED OU T AT THE PREMISES OF THIRD PARTIES WHEREIN CERTAIN DOCUMENTS WERE FOUND WHICH ALLEGEDLY BELONGED TO THE PRESENT APPELLANT AND THUS UNDER SU CH FACTS REASSESSMENT COULD HAVE BE DONE ONLY U/S 153C AND NOT U/S 147 AND THUS THE IMPUGNED ASSESSMENT ORDER WAS LIABLE TO BE QUASHED AS BEING WITHOUT SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 4 JURISDICTION. 3. THAT THE LD CIT(A) FAILED TO APPRECIATE THAT SECTIO N 153 C OVERRIDES SECTION 147/148 AND THUS PROCEEDINGS WHICH ARE INIT IATED PURSUANT TO DOCUMENT SEIZED UNDER SEARCH & SEIZURE OPERATIONS IN THIRD PERSONS PREMISES CAN ONLY BE UNDER SECTION 153C AND NOT UND ER SECTION 147/148. 4. FACTS, IN BRIEF, ARE THAT THE ASSESSEE FILED ORI GINAL RETURN OF INCOME ON 01.5.2009 DECLARING TOTAL INCOME AT RS.7, 06,164/-. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED AT THE BUSINESS AND RESIDENTIAL PREMISES OF SHRI MUKES H SHARMA ON 21.7.2008 WHEREIN SOME DOCUMENTS WERE SEIZED. AS PE R THE ASSESSING OFFICER, THE SEIZED DOCUMENTS INDICATED T HAT THE ASSESSEE HAD RECEIVED CERTAIN PAYMENTS IN FACILITATING THE A WARD OF SEWERAGE CONTRACTS UNDER JNNRUM TO M/S. NAGARJUNA CONSTRUCTI ON CO. LTD., HYDERABAD AND M/S. SIMPLEX INFRASTRUCTURE P. LTD., KOLKATA WHILE HOLDING THE POST OF COMMISSIONER, NAGAR NIGAM, INDO RE. NOTICES U/S 148 & 142(1) WERE ISSUED ON 27.3.2014 & 03.2.20 15, RESPECTIVELY, TO FILE RETURN OF INCOME AND IN RESPO NSE, THE ASSESSEE SUBMITTED THAT THE ORIGINAL RETURN FILED MAY BE TRE ATED AS FILED IN COMPLIANCE TO NOTICE U/S 148. THE ASSESSEE OBJECTED TO THE PROCEEDINGS INITIATED U/S 148 BY FILING A WRIT PETI TION IN THE HONBLE SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 5 MP HIGH COURT AND HONBLE MP HIGH COURT VIDE ITS OR DER DATED 03.11.2016 REMANDED THE MATTER BACK TO THE ASSESSIN G OFFICER TO CONSIDER AND DECIDE THE OBJECTIONS AFRESH AND THE A SSESSING OFFICER DECIDED THE SAME. AS PER THE ASSESSING OFFICER, SHR I MUKESH SHARMA WAS A CONTRACTOR CUM LIAISON AGENT WHO USED TO MANAGE CONTRACTS ON BEHALF OF THE STATE GOVT. HE USED TO P LAY INFLUENTIAL ROLE IN THE DEPARTMENT OF URBAN ADMINISTRATION AND NAGAR NIGAM, INDORE. THE ASSESSING OFFICER NOTED THAT THE SEIZED DOCUMENTS INDICATED THAT THE ASSESSEE HAD RECEIVED CERTAIN PA YMENTS IN FACILITATING THE AWARD OF SEWERAGE CONTRACTS UNDER JNNRUM TO M/S. NAGARJUNA CONSTRUCTION CO. LTD., HYDERABAD AND M/S. SIMPLEX INFRASTRUCTURE P. LTD., KOLKATA WHILE HOLDING THE P OST OF COMMISSIONER, NAGAR NIGAM, INDORE AND THEREFORE, HE ACTED AS MEDIATOR AGENT IN PROVIDING COMMISSION TO THE CONCE RNED AUTHORITIES FOR AWARDING THE CONTRACTS. THE FOLLOWI NG DOCUMENTS (SCANNED) WERE SEIZED FROM THE RESIDENCE OF SHRI MU KESH SHARMA: - SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 6 SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 7 ANALYSING THE ABOVE SEIZED DOCUMENTS, THE ASSESSING OFFICER NOTED THAT LETTERS M, P, C AND M WRITTEN DENOTE T HE VERTICAL CHAIN OF GOVT. HIERARCHY INVOLVED IN THE SEWERAGE DEAL. TH E ASSESSING SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 8 OFFICER NOTED THAT M, P, C AND M DENOTE MIN ISTER OF DEPARTMENT OF URBAN DEVELOPMENT, PRINCIPAL SECRETAR Y OF DEPARTMENT URBAN DEVELOPMENT, COMMISSIONER OF DEPAR TMENT OF URBAN DEVELOPMENT AND MAYOR, INDORE NAGAR NIGAM AND THE LAST C DENOTES THE COMMISSIONER, INDORE NAGAR NIGAM. T HUS, THE ASSESSING OFFICER NOTED THAT ALL THESE PERSONS PLAY ED A VITAL ROLE IN AWARDING OF SEWERAGE CONTRACTS. THE ASSESSING OFFIC ER WAS OF THE VIEW THAT THE LAST PERSON IN RESPECT OF WHOM 267 - --- % 1.33.50 IS MENTIONED IS THE COMMISSIONER, INDORE NAGAR NIGA M AS THOUGH C WAS NOT WRITTEN EXPLICITLY, IT WAS CLEAR THAT T HE MISSING PERSON WAS THE COMMISSIONER, INDORE NAGAR NIGAM, UNDER WHO SE SIGNATURE, WORK ORDERS WERE ISSUED AND WHO PLAYED K EY ROLE IN AWARDING CONTRACTS. THUS, THE ASSESSING OFFICER NOT ED THAT APART FROM OTHER PERSONS, THE ASSESSEE IS PRESUMED TO HAV E RECEIVED 0.5% OF THE TOTAL CONTRACT AMOUNT. THE ASSESSING OFFICER FURTHER NOTED THAT DURING SEARCH OPERATION ON 06.10.2010 IN THE C ASE OF M/S. NAGARJUNA CONSTRUCTION CO. LTD., MR. AGVK RAJU OFFE RED RS.9,68,16,275/- AS INCOME ON ACCOUNT OF UNEXPLAINE D EXPENDITURE TO CONTRACTORS, INVOLVED IN SEWERAGE PROJECT IN IND ORE WHICH TANTAMOUNT TO ADMISSION OF PAYMENT OF COMMISSION IN THE AWARD OF SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 9 CONTRACTS. THUS, THE ASSESSING OFFICER ISSUED A SHO W CAUSE NOTICE TO THE ASSESSEE ON 19.12.2016 AND THE ASSESSEE CONTEND ED THAT THE PAPERS AND NOTINGS REFERRED BY THE ASSESSING OFFICE R DID NOT HAVE EVIDENTIARY VALUE AND THE ALLEGATION IS BASED ON AS SUMPTIONS, PRESUMPTIONS, CONJECTURES AND SURMISES. HOWEVER, TH E ASSESSING OFFICER DID NOT AGREE WITH THE SUBMISSION OF THE AS SESSEE AND HELD THAT THE ASSESSEE HAD RECEIVED RS.1.335 CRORE AND R S.0.875 CRORE ON ACCOUNT OF ILLEGAL GRATIFICATIOIN @0.5% OF THE C ONTRACT AMOUNT AWARDED TO THE AFORESAID PARTIES. THUS, THE ASSESSI NG OFFICER ADDED RS.2,21,00,000/- TO THE TOTAL INCOME OF THE ASSESSE E AS UNDISCLOSED INCOME. FELT AGGRIEVED, THE ASSESSEE FILED AN APPEA L BEFORE THE LD. CIT(A) WHO HAVING GONE THROUGH THE FACTS/CIRCUMSTAN CES, MATERIAL AND SUBMISSIONS THEREOF DELETED THE ADDITION. THE O PERATIVE PART/FINDINGS RECORDED BY THE LD. CIT(A) ARE REPROD UCED HEREUNDER: 8. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE, ASSESSMENT ORDER, REMAND REPORT AND THE SUBMISSIONS MADE BY THE APPELLANT. THE APPEAL IS DECIDED IN THE SUCCEEDING PARAGRAPHS. 9. IT HAS BEEN BROUGHT TO MY NOTICE THAT ON THE BAS IS OF THE SAME SET OF LOOSE PAPERS SEIZED FROM THE POSSESSION OF SHMUKESH SHARMA, ADDITIONS WERE ALSO MADE IN THE CA SE OF SHNAROT TAM MISHRA, A MINISTER IN THE STATE GOVERNMENT OF M.P. AND SHRAGHAV CHANDRA, PRINCIPAL SECRETARY I N THE GOVERNMENT OF M.P. IN THEIR RESPECTIVE ASSESSMENTS. IT IS SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 10 RELEVANT TO EXAMINE THE STATUS AND FATE OF ADDITIONS IN THESE TWO CASES. 10. AS IN THE CASE OF APPELLANT, IN THE CASE OF SHR IRAGHAV CHANDRA, SAME ALLEGATION WAS LEVELED ON THE BASIS O F SAME SEIZED PAPERS THAT HE WAS PAID ILLEGAL GRATIFI CATION BY MISNAGARJUNCONSTRUCTION CO. LTD., HYDERABAD AND SIMPLEX INFRASTRUCTURE LTD, KOLKATA. A COPY OF THE ASSESSMENT ORDER DATED 30.12.2011 HAS BEEN FILED. I T IS OBSERVED THAT THE A.O. IN THAT CASE MADE DETAILED INVESTIGATION AND EXAMINATION OF THE SAID LOOSE PAP ERS. THE A.O. ALSO REFERRED THE MATTER TO THE JOINT COMMISSIONER OF INCOME TAX, RANGE U/S.144A OF THE A CT AND SOUGHT HIS GUIDANCE IN THE MATTER WHICH WAS RECEIVED ON 28.12.2011. THE A.O. FINALLY CONCLUDED IN THE ASSESSMENT ORDER THAT NO CORROBORATIVE EVIDENCES WE RE PRESENT IN THE CASE OTHER THAN THE PRIMARYEVIDENCE I.E. DIARY ENTRIES. THE A.O. HELD THAT THE ASSESSEE COUL D NOT BE CHARGED TO TAX ON THE BASIS OF SUCH EVIDENCE. TH E RETURNED INCOME OF THE ASSESSEE WAS THEREFORE ACCEP TED AND NO ADDITION WAS MADE. 11. SUBSEQUENTLY, THE LD. COMMISSIONER OF INCOME TA X, BHOPAL EXAMINED THE ASSESSMENT RECORD AND FORMED A VIEW THAT THE ASSESSMENT WAS ERRONEOUS AND PREJUDIC IAL TO THE REVENUE. THE LD. CIT THEREFORE, INITIATED PROCEEDINGS U/ S.263 OF THE ACT. THE LD. CIT IN HIS ORDER PASSED U/S.263 ON 27.03.2014 HELD THAT THE ASSESSME NT ORDER PASSED BY THE A.O. WAS ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTEREST OF REVENUE THE LD. CIT CONCLUDED THAT THE A.O. HAD FAILED TO EXAMINE THE D ETAILS AND HAD NOT CONDUCTED ANY ENQUIRY IN RESPECT OF SEI ZED DOCUMENTS REGARDING AWARD OF CONTRACT OF SEWERAGE L INE FROM NAGARJUN CONSTRUCTION CO. LTD. AND SIMPLEX INFRASTRUCTURE LTD. THE LD. CIT ALSO HELD THAT THE SEIZED DOCUMENT GAVE A REASON TO BELIEVE THAT UNACCOUNTED GRATIFICATION HAD BEEN RECEIVED IN RESPECT OF THESE CONTRACTS. IT WAS ALSO HELD THAT THE JUDICIAL PRECE DENCE RELIED UPON BY THE ASSESSEE WERE NOT APPLICABLE TO THE FACTS OF THE CASE. THE LD. CIT ACCORDINGLY CANCELLE D THE ASSESSMENT FINALIZED BY THE A.O. WITH THE DIRECTION TO REFRAME THE ASSESSMENT AFTER EXAMINING THE ISSUES A ND AFTER AFFORDING SUFFICIENT OPPORTUNITIES TO THE ASS ESSEE OF BEING HEARD. 12. IT HAS BEEN FURTHER INFORMED BY AR THAT SHRI RAGHAVCHANDRA, FILED AN APPEAL BEFORE THE ITAT, IND ORE SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 11 AGAINST THE AFORESAID ORDER U/S.263. THE ITAT IN IT S ORDER DATED 04.08.2015 IN ITA NO. 425/IND/2015 QUASHED TH E SAID ORDER IX]. 263 OF THE ACT. A COPY OF DECISION HAS BEEN FILED BY THE AR. THE RELEVANT PORTION OF THE ITAT D ECISION WHICH HAS SUBSEQUENTLY BEEN REPORTED IN (2015) 26 I TJ 551 (IND-TRIB) IS REPRODUCED BELOW: 13. NOW LOOKING TO THE ABOVE CASE LAWS AND FACTS OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSEE WAS SERVED WIT H DETAILS IN SPECIFIC QUESTIONNAIRE U/ S 141 OF THE INCOME-TAX ACT, 1961. THE ASSESSEE HAS ALSO GIVEN THE DETAILED SUBMISSION REGARDING THE ADMISSIBILITY OF DIARY AND AO HAS MAD E THE ENQUIRY FROM THE EXECUTIVE ENGINEER. VARIOUS BANK A CCOUNTS WERE EXAMINED IN DETAIL. NO INVESTIGATION OR UNEXPL AINED ENTRY WAS FOUND BY THE ASSESSING OFFICER. DETAILS O F MOVABLE AND IMMOVABLE PROPERTIES WERE CALLED FOR BY THE ASS ESSING OFFICER. NOTHING ADVERSE OR UNEXPLAINED WAS FOUND. THE GUIDANCE WAS FOUND FROM JT. COMMISSIONER OF INCOME TAX U/ S 144A WAS DULY RECEIVED AND KEPT ON RECORD. THE AO HAS DURING THE COURSE OF ASSESSMENT PROCEEDINGS MADE A DETAILED ENQUIRY OF THIS LOOSE SLIPS/ DUMB LOOSE SLIPS FOUND WITH MUKESH SHARMA. ALL THESE EVIDENCES HAVE BEEN CLASSI FIED IN THE FORM OF TABLE AND PRIMARY EVIDENCE AND EVIDENCE HAS BEEN APPRISED AS PER INCOME-TAX ACT, 1961. THE AO H AS MADE THE ASSESSMENT AS PER THE CBDT GUIDELINES AND AS PE R THE CBDT GUIDELINES, IN THE FIRST STAGE, THE AO ACQUAIN TED WITH THE APPRAISAL REPORT AND SEIZED MATERIAL AND TOOK U P THE CASE FOR ASSESSMENT AND THEREAFTER, THE AO HAS MADE THE DETAILED ENQUIRY AND AFTER FILING THE RETURN, THE AO HAD ACC EPTED, PRIMA FACIE, ACCEPTABLE EVIDENCE AND HE HAS MADE A PROPER ENQUIRY AND AFTER MAKING THE ENQUIRY THE AO HAS ALS O CALLED FOR HIS REPORT U/ S 144A OF THE ACT AND AFTER GETTING THE REPORT OF 144A, THE AO HAS COME TO THE CONCLUSION THAT THE ASSESSEE HAS NOT RECEIVED ANY MONEY. WHATEVER THE DOCUMENTS ARE ON THE RECORD ARE DUMB DOCUMENT AND ON THE BASIS OF TH ESE DOCUMENTS, NO ADDITION CAN BE MADE. WE FIND THAT TH E LD. COMMISSIONER HAS DIRECTED TO COLLECT THE ORIGINAL F ILE FROM INDORE COMMISSIONER AND BHOPAL COMMISSIONER, WHICH DO NOT SUGGEST ANYTHING. WE FOUND THAT IF THE AO HAD INITIALLY ANY SUSPICION AS TO PRIMARY EVIDENCE, HE COULD HAVE HIM SELF CORRECTED IT BY TAKING TIME TO CONDUCT THE ENQUIRY INTO THIS MATTER. AFTER ENQUIRY, HE ARRIVED AT THE CONCLUSION THAT SUSPICION OF UNACCOUNTED GRATIFICATION RECEIVED BY THE ASSESSEE BY THE PIECE OF EVIDENCE FOUND DURING THE COURSE OF SEARCH WERE NOT ADEQUATE AND SUFFICIENT TO MAKE ADD ITION. SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 12 THEREFORE, WE ARE OF THE VIEW THAT LD. COMMISSIONER IS NOT JUSTIFIED IN HIS ACTION AND HIS CASE IS DULY COVERED BY THE DECISION OF CIT VS. ASHISHRAJPAL, 320ITR 674 (DEL), WHEREIN IT IS HELD THAT IF DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IF THE ENQUIRY HAS BEEN MADE BY THE ASSESSING OFFICER AND IF THE SUFFICIENT ENQUIRY IS MADE, THEN IT CANNOT BE TERMS AS PREJUDICIAL TO THE INTERESTS OF REVENUE. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED.' 13. THE AR ALSO FILED THE COPY OF ASSESSMENT ORDER DATED 29.12.2011 IN THE CASE OF SHNAROTTAM MISHRA. ON THE BASIS OF THE SAME SET OF SEIZED LOOSE PAPERS, ADDITIONS O F RS. 14,24,60,600/- WAS MADE FOR THE ALLEGED RECEIPT OF ILLEGAL GRATIFICATION FROM M/ S NAGARJUN CONSTRUCTION CO. L TD. AND RS. 15,34,1000/- FROM M/S SIMPLEX INFRASTRUCTURE LT D. 14. SHRINAROTTAM MISHRA FILED APPEAL AGAINST THE AF ORESAID ASSESSMENT. THE LD CIT (A) DECIDED THE APPEAL OF SH NAROTTAM MISHRA VIDE HIS ORDER DATED 12.12.2012 IN APPEAL NO. 215/1 1-12. A COPY OF THE APPEAL ORDER HAS BEEN FILED. IT IS SEEN THAT THE LD CIT (A) ALLOWED THE APPEAL AND DELETED BOTH THE ADDITIONS HOLDING THAT BOTH THESE ADDITIONS WERE NOT SUSTAINABLE IN LAW AS THE SAME WERE MADE O NLY ON THE BASIS OF INFERENCES AND SUSPICION AND WITHOUT SUBSTANTIATING ANY DIRECT NEXUS WITH THE APPELLANT. 15. THE DEPARTMENT PREFERRED APPEAL BEFORE THE ITAT AGAINST THE AFORESAID APPEAL ORDER OF THE CIT (A). THE IT AT , INDORE HAS DISMISSED THE SAID APPEAL OF THE DEPARTMENT VIDE ITS ORDER DATED 30.11.2017 IN ITA N O. 92/IND/2013. A COPY OF ORDER OF THE ITAT HAS BEEN F ILED BY THE AR. THE ITAT HAS HELD IN THE CONCLUDING PARA AT P. 37 OF THE ORDER AS FOLLOWS: 'ON THE BASIS OF FORGOING DISCUSSIONS WE HAVE NOT ALTERNATE BUT TO HOLD THAT THE ASSESSING OFFICER MADE ADDITIONS ON BOTH THE ACCOUNT WITHOUT ANY BASIS AND ONLY ON THE BASIS OF SUSPICION AND DOUBTS AND THE INFERENCES DRAWN BY HIM WERE ALSO NOT BASED ON THE RELIABLE EVIDENCE AND MATERIAL THEREFORE WE INCLINED TO HOLD THAT THE CONCLUSION DRAWN BY THE CIT(A) ON THIS ISSUE DOES NOT CARRY ANY AMBIGUITY OR PERVERSITY AND THERE IS NO VALID REASON BEFORE US TO INTERFERE WITH THE SAME.' 16. IT HAS ALSO BEEN INFORMED THAT IN THE CASE OF SHRINAROTTAM MISHRA, THE LD. CIT, BHOPAL ALSO PASSE D SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 13 ORDER U/ S 263 ON 31.12.2012 ON THE GROUND THAT THE ASSESSMENT WAS ERRONEOUS IN SO FAR IT WAS PREJUDICI AL TO THE INTEREST OF THE REVENUE AS THE A.D. HAD MADE ON LY PART ADDITION AND NOT THE ADDITION OF THE ENTIRE AMOUNTS REFLECTED FROM THE PAPERS. SHNAROTTAM MISHRA FILED APPEAL BEFORE THE ITAT AGAINST THE ORDER OF CIT U/S.263. T HE HON'BLE ITAT, INDORE IN ITS ORDER DATED 25.11.2014 IN ITA NO. 83/IND/2013 HELD THE ORDER OF LD. CIT U/S 263 A S UNSUSTAINABLE IN LAW. A COPY OF THE DECISION OF THE ITAT AS REPORTED IN (2015) 25ITJ 506 (IND-TRIB) HAS BEEN FI LED. 17. THE DEPARTMENT FILED AN APPEAL IX] S. 260A OF THE ACT BEFORE THE HON'BLE M.P. HIGH COURT AGAINST THE ORDE R OF THE ITAT QUASHING THE ORDER SS] S.263. THE HON'BLE M.P. HIGH COURT DISMISSED THE DEPARTMENTAL APPEAL AND HELD TH AT THE POWER EXERCISED BY CIT U/S 263 WAS UNSUSTAINABLE IN LAW. A COPY OF THE DECISION OF HON'BLE HIGH COURT R EPORTED IN 395 ITR 138 (M.P.) HAS BEEN FILED. 18. THE APPELLANT HAS RELIED UPON VANOUS CASE LAWS. IT IS RELEVANT TO ANALYZE THE CASE LAWS ON THE MATTER. 19. THE HON 'BLE SUPREME COURT IN THE CASE OF CBI V. V. C. SHUKLA & OTHERS, REPORTED IN 3 SCC 410, HAS LAID DOWN THAT ENTRIES, NOTINGS AND JOTTINGS ON THE LOOSE PAPERS/ SHEETS ARE NOT ADMISSIBLE II] 34 OF THE EVIDENCE ACT AND WITHOUT ANY CORROBORATIVE EVIDENCE/INDEPENDENT EVIDENCE AS TO THE TRUSTWORTHINESS OF THOSE ENTRIES, ASSESSEE CANN OT BE CHARGED TO TAX. THE COURT HAS HELD THAT LOOSE SHEET S OF PAPER CANNOT BE TERMED AS 'BOOK' WITHIN THE MEANING OF S. 34 OF EVIDENCE ACT. IT HAS ALSO BEEN HELD THEREIN B Y THE COURT THAT EVEN CORRECT AND AUTHENTIC ENTRIES M BOO KS OF ACCOUNT CANNOT, WITHOUT INDEPENDENT EVIDENCE OF THE IR TRUSTWORTHINESS, FIX A LIABILITY UPON A PERSON. THE HON'BLE COURT HAS ALSO OBSERVED THAT EVEN ASSUMING THAT THE ENTRIES IN LOOSE SHEETS ARE ADMISSIBLE UNDER S. 9 O F THE EVIDENCE ACT, TO SUPPORT AN INFERENCE ABOUT CORRECT NESS OF THE ENTRIES STILL THOSE ENTRIES WOULD NOT BE SUFFIC IENT WITHOUT SUPPORTIVE INDEPENDENT EVIDENCE. 20. SIMILAR VIEW HAS BEEN TAKEN BY THE APEX COURT I N A DECISION IN THE CASE OF COMMON CAUSE V. UNION OF INDIA, 30 ITJ 197 (SC). RELEVANT PARAGRAPHS OF THE COURT'S DE CISION ARE REPRODUCED BELOW: SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 14 PARA 14 OF THE ORDER 'PLACINQ IMPLICIT RELIANCE OF THE DECISION OF THIS COURT IN C.B.I. VERSUS V. C. SHUKLA (SUPRA), IT WAS SUBMITTED THAT IT IS OPEN TO ANY UNSCRUPULOUS PERSON TO MAKE ANY ENTRY A NY TIME AGAINST ANYBODY'S NAME UNILATERALLY ON ANY SHE ET OF PAPER OR COMPUTER EXCEL SHEET. THERE BEING NO FURTH ER CORROBORATIVE MATERIAL WITH RESPECT TO THE PAYMENT, NO CASE IS MADE OUT SO AS TO DIRECT AN INVESTIGATION, AND THAT TOO AGAINST LARGE NUMBER OF PERSONS NAMED IN THE DOCUME NTS. SUCH ENTRIES HAVE BEEN HELD TO BE PRIMA FACIE NOT EVEN ADMISSIBLE IN V. C. SHUKLA'S CASE. HE URGED THAT IN CASE INVESTIGATION IS ORDERED ON THE BASIS OF SUCH DOCUMENTS, IT WOULD BE VERY DANGEROUS AND NO CONSTITUTIONAL FUNCTIONARY/ OFFICER CAN FUNCTION INDEPENDENTLY, AS PER THE CONS TITUTIONAL IMPERATIVES. NO CASE IS MADE OUT ON THE BASIS OF MATERIAL WHICH IS NOT COGNIZABLE IN LAW, TO DIRECT INVESTIGATION.' PARA 16 OF THE ORDER (( WITH RESPECT TO THE KIND OF MATERIALS WHICH HAVE BEEN PLACED ON RECORD, THIS COURT IN V.C. SHUKLA'S CASE (SUPRA) HAS DEALT WITH THE MATTER THOUGH AT THE STAGE OF DISCHA RGE WHEN INVESTIGATION HAD BEEN COMPLETED BUT SAME IS RELEVANT FOR THE PURPOSE OF DECISION OF THIS CASE ALSO. THIS COURT H AS CONSIDERED THE ENTRIES IN JAIN HAWALA DIARIES, NOTE BOOKS AND FILE CONTAINING LOOSE SHEETS OF PAPERS NOT IN THE F ORM OF 'BOOKS OF ACCOUNTS' AND HAS HELD THAT SUCH ENTRIES IN LOOS E PAPERS/ SHEETS ARE IRRELEVANT AND NOT ADMISSIBLE UNDER SECT ION 34 OF THE EVIDENCE ACT, AND THAT ONLY WHERE THE ENTRIES A RE IN THE BOOKS OF ACCOUNTS REGULARLY KEPT, DEPENDING ON THE NATURE OF OCCUPATION, THAT THOSE ARE ADMISSIBLE' PARA 19 & 20 OF THE ORDER (( 19. WITH RESPECT TO EVIDENTIARY VALUE OF REGULAR ACCOUNT BOOK, THIS COURT HAS LAID DOWN IN V. C. SHUKLA, THUS; ((37. IN BENI V. BISARI DAYAL IT WAS OBSERVED THAT ENTRIES IN BOOKS OF ACCOUNT ARE NOT BY THEMSELVES SUFFICIENT TO CHARGE ANY PERSON WITH LIABILITY, THE REASON BEING THAT A MAN CANNOT BE ALLOWED TO MAKE EVIDENCE FOR HIMSELF BY WHAT HE CHO OSES TO SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 15 WRITE IN HIS OWN BOOKS BEHIND THE BACK OF THE PARTI ES. THERE MUST BE INDEPENDENT EVIDENCE OF THE TRANSACTION TO WHICH THE ENTRIES RELATE AND IN ABSENCE OF SUCH EVIDENCE NO R ELIEF CAN BE GIVEN TO THE PARTY WHO RELIES UPON SUCH ENTRIES TO SUPPORT HIS CLAIM AGAINST ANOTHER. IN HIRA LAL V. RAM RAKHA THE HIGH COURT, WHILE NEGATIVING A CONTENTION THAT IT HAVING BEEN PROVED THAT THE BOOKS OF ACCOUNT WERE REGULARLY KEP T IN THE ORDINARY COURSE OF BUSINESS AND THAT, THEREFORE, AL L ENTRIES THEREIN SHOULD BE CONSIDERED TO BE RELEVANT AND TO HAVE BEEN PROVED, SAID THAT THE RULE AS LAID DOWN IN SECTION 34 OF THE ACT THAT ENTRIES IN THE BOOKS OF ACCOUNT REGULARLY KEPT IN THE COURSE OF BUSINESS ARE RELEVANT WHENEVER THEY REFER TO A MATTER IN WHICH THE COURT HAS TO ENQUIRE WAS SUBJEC T TO THE SALIENT PROVISO THAT SUCH ENTRIES SHALL NOT ALONE B E SUFFICIENT EVIDENCE TO CHARGE ANY PERSON WITH LIABILITY. IT IS NOT, THEREFORE, ENOUGH MERELY TO PROVE THAT THE BOOKS HA VE BEEN REGULARLY KEPT IN THE COURSE OF BUSINESS AND THE EN TRIES THEREIN ARE CORRECT. IT IS FURTHER INCUMBENT UPON THE PERSON RELYING UPON THOSE ENTRIES TO PROVE THAT THEY WERE IN ACCORDANCE WITH FACTS. ' 20. IT IS APPARENT FROM THE AFORESAID DISCUSSION THAT LOOSE SHEETS OF PAPERS ARE WHOLLY IRRELEVANT AS EVIDENCE BEING NOT ADMISSIBLE UNDER SECTION 34 SO AS TO CONSTITUTE EVIDENCE WITH RESPECT TO THE TRANSACTIONS MENTIONED THEREIN BEING OF NO EVIDENTIARY VALUE. THE ENTIRE PROSECUTION BASED UPO N SUCH ENTRIES WHICH LED TO THE INVESTIGATION WAS QUASHED BY THIS COURT.' 21. IN T.S. VENTAKESAN VS. ASSTT. CIT, 69 TTJ 66 (C AL), THE I.T.A.T. CALCUTTA HAS HELD AS UNDER: 'IN CBI VS. V. C. SHUKLA 3 SCC 410 - THE HON'BLE SUPREME COURT HAS HELD THAT LOOSE SHEETS OF PAPER TERMED AS 'BOOK' WITHIN THE MEANING OF S. 34 OF EVIDENCE ACT. IT HAS ALSO BEEN HELD THEREIN BY THE HON'BLE SUPREME COURT THAT EVEN CORRECT AND AUTHENTIC ENTRIES IN BOOKS OF ACCOUNT CANNOT, WITHOUT INDEPENDENT EVIDENCE OF THEIR TRUSTWORTHINESS, FIX A LIABILITY UPON A PERSON. THE HON'BLE SUPREME COURT ALSO OBSERVED THAT EVEN A SSUMING THAT THE ENTRIES IN LOOSE SHEETS ARE ADMISSIBLE UNDER S. 9 OF THE EVIDENCE ACT TO SUPPORT AN INFERENCE ABOUT CORRECTNESS OF THE ENTRIES STILL THOSE ENTRIES WOULD NOT BE SUFFICIENT WITHOUT SUPPORTIVE INDEPENDENT EVIDENCE. IN AM AR SINGH US. TTO (1995) 53 TTJ (DEL) 692 : (1995) 54 ITD375 (DEL) IT HAS BEEN HELD BY DELHI BENCH OF TRIBUNAL THAT A STATEMENT MADE BY A PERSON IN SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 16 ASSESSMENT PROCEEDINGS RELATING TO SLBP WILL NOT BE RELEVANT EVIDENCE UNDER S. 33 IN THE ASSESSMENT PROCEEDINGS RELATING TO A PARTY DIFFERENT FROM SLBP. IN RAMA TRADERS VS. FI RST ITO (19 98 ) 32 TT J (PAT) 483 : (1998) 25 RRO 599 (PAT) THE PATNA BENCH OF TRIBUNAL HAS HELD THAT THE ONUS FOR PROVING THE COR RECTNESS OF THE ENTRIES APPEARING IN THE BOOKS OF THIRD PARTY M/ S RAJ TRADING CO. WAS NOT ON THE ASSESSEE, BUT ON THE REVENUE. IT WAS ALSO HELD THAT PRESUMPTION UNDER S. 132(4A) COULD NOT BE RAISED AGAINST THE ASSESSEE WHO WAS A THIRD PARTY AND ADDITIONS TO THE ASSESSEE'S INCOME COULD NOT BE MADE. IN KISHIN CHAND CHELLARAM VS. CRT (1980) 19 CTR (SC) 360 : (1980) 125 N 713 (SC) IT HAS BEEN HELD THAT THOUGH PROCEEDINGS UNDER RR ACT ARE NOT GOVERNED BY STRICT RULES OF EVIDENCE AND THE LETTER COULD BE TAKEN INTO ACCOUNT AS EVIDENCE EVEN WITHOUT CALLING MANAGER OF THE BANK IN EVIDENCE TO PROVE HIS LETTER, BUT BEFORE THE RR AUTHORITIES COULD RELY ON THE LETTER THEY ARE BOUND TO PRODUCE LETTER BEFORE THE ASSESSEE THAT THE ASSESSEE COULD CONTROVERT THE STA TEMENT CONTAINED IN IT BY ASKING FOR AN OPPORTUNITY TO CRO SS-EXAMINE THE MANAGER OF THE BANK. ' ON THE BASIS OF A MERE ENTRY ON A LOOSE SHEET FOUND FROM THE POSSESSION OF A THIRD PERSON AND A STATEMENT GIVEN BY ANOTHER THIRD PERSON ZN CONNECTION WITH SEARCH/ ASS ESSMENT PROCEEDINGS OF STILL ANOTHER THIRD PERSON WITHOUT T HE COPY OF THE STATEMENT BEING FURNISHED TO ASSESSEE AND THERE BY ALLOWING THE ASSESSEE AN OPPORTUNITY TO REBUT THE C ONTENTIONS MADE THEREIN AS ALSO TO CROSS-EXAMINE THE WITNESS I T CANNOT JUSTIFIABLY BE ASSUMED/ INFERRED THAT THE AMOUNT ME NTIONED IN THE ENTRY ON LOOSE SHEET WAS PAID TO THE ASSESSE E. IN TUM THE TRIBUNAL DELETED THE ADDITION. IN OUR CONSIDERED OPINION, IT MAY HARDLY BE DENIABL E THAT THE INDIAN EVIDENCE ACT OR FOR THAT MATTER THE STATUTOR Y PROVISIONS OF THE INDIAN EVIDENCE ACT MAY NOT BE APPLICABLE ST RICTLY TO THE PROCEEDINGS UNDER THE IT ACT BUT THE BASIC/ BRO AD PRINCIPLES OF THE LAW OF EVIDENCE DO APPLY TO THE SAID PROCEEDINGS. IT IS A SETTLED POSITION OF LAW THAT THE SLIPS OR LOOSE SHEETS DO NOT FALL WITHIN THE PURVIEW OF 'BOOK'. AN ENTRY IN A BOOK OF ACCOUNTS, MAINTAINED IN THE REGULAR CO URSE OF BUSINESS, IS RELEVANT TO BE CONSIDERED IN RESPECT OF THE TRANSACTIONS REFLECTED THEREBY, NO DOUBT, BUT IS NO T CONCLUSIVELY DECISIVE THEREOF OR OF THE MATTER CONT AINED THEREIN OR LIABILITY REFLECTED THEREBY, AND MUCH LESS SO AN ENTRY IN A LOOSE SHEET. IT IS ONLY SOME OTHER EVIDENCE, WHETHER IN THE FORM OF . STATEMENT OF THE AUTHOR OF THE ENTRY OR THE STATEME NT SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 17 OF ' SOME OTHER PERSON CONNECTED WITH THE TRANSACTIONS CONTAINED IN THE ENTRY, OR IN SOME OTHER FORM, SUPPORTIVE OF THE ENTRY, WHICH LENDS WEIGHT/ CREDENCE TO THE ENTRY IN THE BOOK, DEPENDING UPON THE TRUSTWORTHINESS OF THE SAID DEPONENT OR RELIABILITY OF THE SAID OTHER EVIDENCE, AND IT IS ONLY THEN THAT THE SAID ENTRY ASSUMES THE NATURE OF A RELIABLE EVIDENCE ON THE BASIS OF WHICH SOME ADDITION CAN BE MADE/ SUSTAINED. AN ENTRY IN A LOOSE SHEET IS OF A STILL FEEBLE NATURE, AND AN ENTRY IN A LOOSE SHEET FOUND IN THE POSSESSI ON OF ANOTHER/THIRD PERSON IS MUCH MORE SO. AS SUCH A MERE ENTRY IN A LOOSE SHEET, BY ITSELF, WITHOUT THE SWORN STATEMENT OF THE RELATED PERSON, SUPPORTIVE OF THE ENTRY, HARDLY HAS ANY EVIDENTIARY VALUE, WORTH THE NAME. THE LEGAL POSITI ON BEING AS EMERGING ABOVE, WE ARE OF THE CONSIDERED OPINION TH AT NO LIABILITY CAN BE FASTENED NOR CAN AN ADDITION BE MADE ON THE BASIS OF A MERE ENTRY IN A LOOSE SHEET WITHOUT THERE BEING SOME FURTHER TRUSTWORTHY/ RELIABLE CORROBORATIVE EVIDENC E LENDING CREDENCE TO SUCH AN ENTRY.' 22. THE ITAT, PUNE IN THE CASE OF CHANDER MOHAN MEHTA VS. ACIT (INV) 65 TTJ 327 (PUNE) HELD THAT WHERE THE LOOSE PAPERS DO NOT INDICATE THE NAME OF THE ASSESSEE, THEREFORE, THE LOOSE PAPERS THEMSELVES LEAD TO NO CONCLUSION AND HAVE NO EVIDENTIARY VALUE. 23. IN THE CASE OF ACIT V. SATYAPALWASSAN 295 !TR 352, THE JABALPUR !TAT HAS HELD THAT ADDITION ARE NOT SUSTAI NABLE WHERE PAPER ARE NOT CONTAINING ANY DETAILS TO INDIC ATE NATURE OF TRANSACTION, PERIOD OF TRANSACTION, PERSO NS INVOLVED OR CODE FOR DECIPHERING FIGURES AND ASSESS EE DENYING KNOWLEDGE AND FILING AFFIDAVIT TO INDICATE TRANSACTIONS RELATED TO SOMEBODY ELSE. IT HAS BEEN FURTHER HELD THAT DOCUMENT MUST BE SPEAKING DOCUMENT AND NO ADDITION IS PERMISSIBLE ON BASIS OF DUMB DOCUMENT. 24. THE ITAT CHENNAI BENCH IN THE CASE OF M.M. FINANCIERS PVT LTD VS. DCFT REPORTED IN 107 TTJ 200 (CHENNAI) HELD THAT NO ADDITION COULD BE MADE IN THE HANDS OF THE ASSES SEE ON THE BASIS OF THE DUMB LOOSE SLIP SEIZED FROM HIS RE SIDENCE, IN THE ABSENCE OF ANY CORROBORATIVE MATERIAL. 25. THE ITAT, DELHI IN THE CASE OF S.K. GUPTA V DCIT REPORTED IN 63 TTJ 532 (DEL) HAS HELD AS UNDER :- THE BASIS OF ADDITION IN THIS CASE IS A SEIZED PAPER SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 18 RELATING TO PURCHASE/SALE OF PROPERTY. THE DOCUMENT BEARS THE CAPTION 'ESTIMATES'. THERE SEEMS SOME TRUTH IN THE EXPLANATION OF THE ASSESSEE WHERE IT IS ALLEGED THAT THE ENTRIES RELATE TO SOME FUTURISTIC PLANNING. SINCE T HE ASSESSEE IS CARRYING ON THE BUSINESS OF ESTATE AGENT, IN THE PROCESS OF THIS BUSINESS, HE IS REQUIRED TO DISCUSS VANOUS PLANS, PROJECTS AND PROPOSALS WITH VANOUS PARTIES L IKE BROKERS, BUILDERS, ETC. THESE DISCUSSIONS GENERALLY TAKE PLACE BEFORE A PROJECT FOR PURCHASE OF DEVELOPMENT, PLANS ARE DISCUSSED AS THE ASSESSEE ACTS AS AN AGENT ON B EHALF OF THE BUYER OR SELLER. THEREFORE, NOTINGS ON THE P IECE OF PAPER DO NOT INDICATE THE ACTUAL TRANSACTION. THE PAPER IN QUESTION DOES NOT INDICATE THAT ANY TRANSACTION HAD EVER TAKEN PLACE BECAUSE IT DOES NOT CONTAIN ANY INFORMA TION AS TO WHAT WAS THE NATURE OF TRANSACTION. IF AT ALL, A NY SUCH TRANSACTION TOOK PLACE FOR THE PARTIES TO THE TRANS ACTION, WHAT WAS THE DATE OF THE TRANSACTION, WHAT DID THE FIGURE NOTED ON THE PIECE OF PAPER REPRESENT, AND WHETHER IN ANY MANNER THE PAPER IN QUESTION HAS ANY RELEVANCY TO T HE DETERMINATION OF THE INCOME IN THE HANDS OF THE ASS ESSEE. NO EVIDENCE HAS BEEN BROUGHT ON RECORD TO CORROBORA TE THE ALLEGATION THAT THE ASSESSEE HAD ENTERED INTO ANY TRANSACTION OR HAD EARNED ANY INCOME. THERE WAS NO EVIDENCE TO SHOW THAT THERE WAS ANY UNDISCLOSED INVESTMENT OR ANY SALE OF ANY PROPERTY FOR THE AMOU NT AS GIVEN IN THIS PIECE OF PAPER. THE ASSESSEE HAS ALLE GED THAT THE PROPERTIES IN QUESTION WERE NOT SOLD DURING THA T PERIOD. THESE PROPERTIES WERE SOLD AFTER THE DATE OF THE SE ARCH. THIS FACT HAS NOT BEEN CONTROVERTED BY ANY MATERIAL OR E VIDENCE ON RECORD. THEREFORE, THERE WAS NO QUESTION OF ANY INCOME ARISING FROM SALE OF THESE PROPERTIES AT THE TIME O F SEARCH. THERE IS NO MATERIAL THAT THE SALE OF THIS PROPERTY TOOK PLA CE EARLIER AND THE ASSESSEE HAD EARNED ANY INCOME. IT IS ALLEGED BY THE ASSESSEE THAT THE ACQUISITION OF THE SAID PROPERTY AS WELL AS SALE THEREOF WAS DULY DISCLOSED IN THE RETURN OF INCOME OF THE COMPANY OWNER AND THE ASSES SMENT OF THE SAID COMPANY HAD BEEN DULY COMPLETED WITHOUT ANY DISPUTE. PARTICULARS OF ACQUISITION AND FURTHER INV ESTMENT IN THE PROPERTY IN QUESTION ARE PLACED ON THE PAPER-BO OK AND PARTICULARS OF SALE WHICH TOOK PLACE AFTER SEARCH A RE ALSO PLACED. NO MATERIAL HAS BEEN BROUGHT ON RECORD BY T HE DEPARTMENT TO COME TO THE CONCLUSION THAT THE PROPE RTY BELONGED TO THE ASSESSEE AND THE FIGURE MENTIONED I N THE SEIZED PAPER COULD BE TREATED AS THE INCOME OF THE ASSESSEE. SIMILARLY, IT IS ALLEGED BY THE ASSESSEE THAT OTHER SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 19 PROPERTY BELONGS TO THE COMPANY A LTD., WHICH IS ALSO AN INDEPENDENT ENTITY AND ITS ASSESSMENT IS COMPLETED UNDER S. 143(3) AND UNDER S. 158BC AND NO ADDITIONS WERE MADE THERE. THE DEPARTMENT COULD NOT CONTROVERT THIS ALL EGATION BY ANY MATERIAL ON RECORD. SOME JOTTINGS WERE FOUND ON THE PIECE OF PAPER, FROM WHICH IT COULD NOT BE PRESUMED THAT ANY PURCHASE OR SALE HAS TAKEN PLACE WITH REGARD TO THESE PROPERTIES. THE AD HAS NOT RAISED ANY DISPUTE REGAR DING THE FACTS ABOUT THE PROPERTIES STANDING IN THE NAMES OF R. LTD. AND A. LTD. THEREFORE, NO CORROBORATING EVIDENCE IS BROUGHT ON RECORD TO CORROBORATE THE CONCLUSION THAT THE AS SESSEE HAS ENTERED INTO ANY TRANSACTION OR HAD EARNED ANY INCOME. THE AO HIMSELF HAS MENTIONED THAT THE PAPER IN QUESTION IS A BALD ESTIMATE. THEREFORE, UNLESS THERE IS A CORROBORATING EVIDENCE TO SHOW THAT THE PURCHASE AN D SALE OF THESE PROPERTIES HAS TAKEN PLACE AND THE ASSESSE E HAS EARNED INCOME, NO AMOUNT CAN BE ADDED IN THE HANDS OF THE ASSESSEE. THE DEPARTMENT HAD NOT BROUGHT ON REC ORD ANY EVIDENCE CONCLUSIVELY THAT THE SEIZED DOCUMENTS CONTAINED DETAILS OF SALE OF PROPERTIES AND PROFIT EARNED, WHICH WAS CHARGEABLE TO TAX. ON THE OTHER HAND, THE ASSESSEE HAS NOW BROUGHT ON RECORD THAT NO SUCH SAL E OF THESE PROPERTIES HAD TAKEN PLACE PRIOR TO THE DATE OF SEARCH. NO DOUBT THE SEIZED 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 THERE IN PERTAIN TO SALE OF PROPERTIES AND SECRET PROFITS. T HUS, GOING MERELY ON THE BASIS OF THE SEIZED PAPER AND NOTHING MORE, IT COULD NOT BE PREDICATED THAT WHAT WAS SHOWN IN T HE PAPER WAS SECRETED PROFITS AND SALE PROCEEDS. IN OT HER WORDS, THE DETAILS CONTAINED IN THE SEIZED PAPERS D ID NOT BY THEMSELVES REPRESENT A PREPONDERANCE OF PROBABIL ITIES SO AS TO SUPPORT THE DEPARTMENT'S CASE THAT WHAT WAS SHOWN WAS TAXABLE INCOME. AS THE AO HAD NOT GIVEN A NY REASONING OR FINDING OR HAD NOT MENTIONED ANY EVIDE NCE OR MATERIAL AS TO HOW AND ON WHAT BASIS THE FIGURES WE RE CONSIDERED AS INCOME. CONTRARY TO THAT AS THERE WAS NO SALE OF THE PROPERTIES, IT WAS CLEAR THAT HE HAD NO T INVOKED ANY DEEMING PROVISIONS. THE REVENUE CAN TAX ONLY TH OSE RECEIPTS WHICH MUST HAVE BEEN PROVED TO BE INCOME I N THE HANDS OF THE RECIPIENT. THEREFORE, IT IS THE REVENUE'S ONUS TO PROVE, IF THE ASSESSEE HAD RECEIVED ANY INCOME. THEREFORE, IT IS THE REVENUE'S ONUS BEFORE ASSESSING ANY RECEIPT AS TAXABLE INCOME TO PROVE THAT THE RECEIPT IN THE HAN DS OF THE SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 20 RECIPIENT IS INCOME AND THIS CAN BE PROVED OR ESTABLISHED ONLY ON THE BASIS OF SOME MATERIAL OR EVIDENCE. 26. IN J.R.C. BHANDARI VS. ACIT , 79 TTJ 0001, THE ITAT JODHPUR HAS HELD AS UNDER: 'IT MAY HARDLY BE DENIABLE THAT THE INDIAN EVIDENCE ACT OR FOR THAT MATTER THE STATUTORY PROVISIONS OF THE INDIAN EVIDENCE ACT MAY NOT BE APPLICABLE STRICTLY TO THE PROCEEDINGS UNDER THE IT ACT BUT THE BASIC/ BROAD PRINCIPLES OF THE LAW OF E VIDENCE DO APPLY TO THE SAID PROCEEDINGS. IT IS A SETTLED POSITION OF LAW THAT THE SLIPS OR LOOSE SHEETS DO NOT FALL WITHIN THE PU RVIEW OF 'BOOK'. AN ENTRY IN A BOOK OF ACCOUNTS, MAINTAINED IN THE R EGULAR COURSE OF BUSINESS, IS RELEVANT TO BE CONSIDERED IN RESPECT OF THE TRANSACTIONS REFLECTED THEREBY, NO DOUBT, BUT IS NOT CONCLUSIVELY DECISIVE THEREOF OR OF THE MATTER CONTAINED THEREIN OR LIABILITY REFLECTED THEREBY, AND MUCH LESS SO AN ENTRY IN A L OOSE SHEET. IT IS ONLY SOME OTHER EVIDENCE, WHETHER IN THE FORM OF ST ATEMENT OF THE AUTHOR OF THE ENTRY OR THE STATEMENT OF SOME OT HER PERSON CONNECTED WITH THE TRANSACTIONS CONTAINED IN THE EN TRY, OR IN SOME OTHER FORM, SUPPORTIVE OF THE ENTRY, WHICH LEN DS WEIGHT/ CREDENCE TO THE ENTRY IN THE BOOK, DEPENDING UPON T HE TRUSTWORTHINESS OF THE SAID DEPONENT OR RELIABILITY OF THE SAID OTHER EVIDENCE, AND IT IS ONLY THEN THAT THE SAID ENTRY ASSUMES THE NATURE OF A RELIABLE EVIDENCE ON THE BASIS OF W HICH SOME ADDITION CAN BE MADE/ SUSTAINED. AN ENTRY IN A LOOSE SHEET IS OF A STILL FEEBLE NATURE, AND AN ENTRY IN A LOOSE S HEET FOUND IN THE POSSESSION OF ANOTHER/THIRD PERSON IS MUCH MORE SO. AS SUCH A MERE ENTRY IN A LOOSE SHEET, BY ITSELF, WITH OUT THE SWAM STATEMENT OF THE RELATED PERSON, SUPPORTIVE OF THE ENTRY, HARDLY HAS ANY EVIDENTIARY VALUE, WORTH THE NAME. THE LEGAL POSITION BEING AS EMERGING ABOVE, NO LIABILIT Y CAN BE FASTENED NOR CAN AN ADDITION BE MADE ON THE BASIS O F A MERE ENTRY IN A LOOSE SHEET WITHOUT THERE BEING SOME FUR THER TRUSTWORTHY/ RELIABLE CORROBORATIVE EVIDENCE LENDIN G CREDENCE TO SUCH AN ENTRY. ' 27. HON 'BLE DELHI HIGH COURT IN THE CASE OF CIT V. S.M.AGARWAL (2007) 293 ITR 43/47 (DEL) HAS HELD AS UNDER :_ IT IS WELL SETTLED THAT THE ONLY PERSON COMPETENT TO GIVE EVIDENCE ON THE TRUTHFULNESS OF THE CONTENTS OF THE DOCUMENTS IS THE WRITER THEREOF SO UNLESS AND UNTIL, THE CONTENTS OF THE DOCUMENTS ARE PROVED AGAINST A PERS ON, SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 21 THE POSSESSION OF DOCUMENT OR HANDWRITING OF THAT P ERSON ON SUCH DOCUMENTS BY ITSELF CANNOT PROVE THE CONTEN TS OF THE DOCUMENTS. ': 28. IN ATUL KUMAR JAIN VS. DCIT REPORTED IN 64 TTJ (DEL) 786, THE ITAT DELHI HAS ON THE ISSUE OF NOTINGS AND JOTTINGS HELD AS UNDER: 6.4 WE FIND THAT THE AD HAS MADE OUT THE CASE FOR MAKING SUCH ADDITION BASED EXCLUSIVELY ON THE SAID PIECE OF PAPER FOUND AND SEIZED DURING THE COURSE OF SEAR CH. IT IS, THEREFORE, TO BE EXAMINED WHETHER THE SAID PAPE R FOUND AND SEIZED IS A DOCUMENT HAVING EVIDENTIARY V ALUE TO PROVE THE FACT OF THE TRANSACTION. THE WORD 'DOC UMENT' HAS BEEN DEFINED IN S. 32 OF THE INDIAN EVIDENCE ACT TO MEAN-ANY MATTER EXPRESSED OR DESCRIBED UPON ANY SUBSTANCE BY MEANS OF LETTERS, FIGURES, OR MARKS OR BY 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' USED IN THE DEFINITION AS GIVEN IN THE NEW SHORTER OXFORD ENGLISH DICTIONARY IS 'PORTRAY IN WORDS, RECITE THE CHARACTERISTICS OF, IN A DETAILED OR GRAFFIC ACCOUNT OF THE MEANING OF THE WORD 'EXPRESS' USED IN THE DE FINITION AS PER THE NEW SHORTER ENGLISH DICTIONARY IS 'A GRAPHIC REPRESENTATION AS IMAGE; AN ACT OF EXPRESSING OR REPRESENTING BY WORDS, SIGNS OR ACTIONS, EXPRESSION S, A MODE OF SPEECH, OF PHRASE; AN UTTERANCE. ACCORDING TO THE HON'BLE SUPREME COURT IN THE CASE OF RAMJIDAYAWALA& SONS (P) LTD. VS. INVERT IMPORT AIR 1981 SC 2085, MERE PROOF OF THE HANDWRITING OF A DOCUMENT WOULD NOT TANTAMOUNT TO A PROOF OF ALL THE CONTENTS OR THE FACTS STATED IN THE DOCUMENTS, IT THE TRUTH OF THE FACTS STATED IN A DOCUMENT IS IN ISSUE, MERE PROOF OF THE HANDWRITING AND EXECUTION OF THE 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 CONTEN TS OF THE DOCUMENT. THE TRUTH OR OTHERWISE OF THE FACT OR CON TENTS SO STATED WOULD HAVE TO BE PROVED BY ADMISSIBLE EVIDENCE I.E., BY THE EVIDENCE OF THOSE PERSONS WHO CAN VOUC HSAFE FOR THE TRUTH OF THE FACTS IN ISSUE. ' 29. IN CIT VS. TILAKRAJANAND 373 ITR 1 (DEL), THE HON'BLE DELHI HIGH COURT HAS HELD AS UNDER :- SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 22 'IN ABSENCE OF DATES MENTIONED IN THE CONCERNED PAG ES OF SEIZED NOTES, NO ADDITION WOULD BE MADE SINCE NO PARTICULAR AMOUNT WAS ATTRIBUTABLE FOR A SPECIFIED YEAR'. 30. IN ACIT VS. DR. KAMLA PRASAD SINGH (2010) 3 ITR (TRIB) 533/ 563 (PAT), THE ITAT PATNA HAS HELD AS UNDER :- 'IT IS ALSO SETTLED LAW THAT ANY DOCUMENT FOUND AND SEIZED DURING THE COURSE OF SEARCH HAS TO BE INTERPRETED L ITERALLY AND NOTHING CAN BE ADDED OR SUBTRACTED. IF FACTS OF THE ASSESSEE'S CASE BEFORE US ARE EVALUATED IN THE LIGH T OF THE AFORESAID SETTLED PRINCIPLES OF LAW, IT WILL BE REV EALED THAT THE DOCUMENTS FOUND AND SEIZED AND RELIED UPON FOR MAKING THE ADDITION UNDER APPEAL BY THE REVENUE HAV E NEITHER DATE NOR THE NAME OF THE ASSESSEE AND THERE FORE, IT CANNOT BE ASSUMED OR PRESUMED AS TO WHEN AND BY WHOM THE NOTINGS WERE RECORDED. IT IS ALSO NOT KNOWN AS TO IN WHAT CONNECTION THE NOTINGS EVEN IF CONSIDERED AS GIVING AND TAKING-OF MONEY WERE MADE; MEANING THERE BY THAT THESE DOCUMENTS BEING DUMB DOCUMENTS, NO ADDIT ION CAN BE MADE ON THE BASIS OF ASSUMING OR PRESUMING T HE NOTINGS IN THOSE DOCUMENTS RELATING TO ANY OTHER TRANSACTION NOR RECORDED IN THE DOCUMENTS. ' 31. IN THE CASE OF NEM CHAND DAGA V ACIT 1 SOT 515 IT WAS HELD THAT, WHETHER ENTRIES FOUND IN LOOSE PAPER S CAN HAVE ANY AUTHENTICITY OR EVIDENTIARY VALUE IN ITSEL F - HELD NO. WHETHER WHERE ASSESSEE CLAIMED THAT HE DID NOT RECEIVE ANY MONEY AND OPPOSITE PARTY CONCERNED ALSO CONFIRMED ASSESSEE'LS VERSION, ASSESSING OFFICER CO ULD GIVE ANY SIGNIFICANCE TO SCRIBBLING IN LOOSE SHEETS - HE LD NO. 32. IN THE CASE OF S.P.GOYAL V. DCIT 82 LTD 85 (MUM) ( TM ) IT WAS HELD AS FOLLOWS: WHETHER AS IT WAS A MERE ENTRY ON LOOSE SHEET OF PAPER AND ASSESSEE CLAIMED THAT IT WAS ONLY PLANNING, NOT SUP PORTED BY ACTUAL CASH, THEN THERE HAD TO BE CIRCUMSTANTIAL EV IDENCE TO SUPPORT THAT ENTRY REALLY REPRESENTED CASH- HELD YE S. WHETHER WHERE NO SUCH EVIDENCE FOUND IN THE FORM OF EXTRA C ASH, JEWELLERY OR INVESTMENT OUTSIDE BOOK, EXPLANATION O FFERED BY ASSESSEE COULD NOT BE REJECTED - HELD YES. WHETHER ADDITION MADE WAS ON MERE SUSPICION WITHOUT ANY CORROBORATIV E EVIDENCE AND HAD TO BE DELETED- HELD YES. SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 23 33. IN THE CASE OF CIT V. MAULIKKUMAR K SHAH 307 ITR 137 (GUJ) , HON'BLE GUJARAT HIGH COURT HAS HELD THAT AD DITIONS MADE BY THE AO TOWARDS 'ON MONEY' ON THE BASIS OF SEIZED PAPER ALONE WITHOUT ANY CORROBORATIVE EVIDEN CE CANNOT BE SUSTAINED. 34. HON 'BLE DELHI HIGH COURT IN THE CASE OF CIT V. KULWANTRAI 291 ITR 36 (DELHI) HAS HELD THAT NO ADDITION CAN BE MADE BASED ON SURMISES AND GUESS WORK. 35. HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. D.K. GUPTA 308 ITR 230 (DEL) HAS HELD THAT SINCE THERE IS NO CORROBORATIVE OR DIRECT EVIDENCE TO PRESUME THAT TH E NOTINGSJJOTTINGS HAD MATERIALIZED INTO TRANSACTIONS GIVING RISE TO INCOME NOT DISCLOSED IN THE BOOKS BY THE AS SESSEE, THE DEPARTMENT'S PRESUMPTION CANNOT BE TENABLE IN L AW. 36. IN THE CASE OF ACIT V. SATYAPALWASSAN 295 ITR 352, JABALPUR ITAT HAS HELD THAT ADDITION IS NOT SUSTAIN ABLE WHERE PAPER IS NOT CONTAINING ANY DETAILS TO INDICA TE NATURE OF TRANSACTION, PERIOD OF TRANSACTION, PERSO NS INVOLVED OR CODE FOR DECIPHERING FIGURES AND ASSESS EE DENYING KNOWLEDGE AND FILING AFFIDAVIT TO INDICATE TRANSACTIONS RELATED TO SOMEBODY ELSE. IT HAS BEEN FURTHER HELD THAT DOCUMENT MUST BE SPEAKING DOCUMENT; NO ADDITION IS PERMISSIBLE ON BASIS OF DUMB DOCUMENT. 37. IN THE CASE OF CIT VS. RAM NARAIRI GOEL, 224 ITR 180, THE HON'BLE P & H HIGH COURT HAS HELD THAT SUSPICION, HOWEVER STRONG, CANNOT TAKE THE PLACE OF EVIDENCE OR PROOF. SIMILARLY, THE HON'BLE P & H HIGH COURT IN THE CASE OF CIT VS. FAQIRCHAMANLAL, 262 ITR 295 HAS HELD THAT IT IS A WELL SETTLED PROPOSITION THAT THE PRESUMPTION HOWSOEVER STRONG CANNOT SUBSTITUTE EVIDENCE. 38. IN AMRITLALNATWARLALVS. ACIT REPORTED IN 57 TTJ 454/482 (AHD) IN THE LOOSE PAPER, THE YEAR WAS NOT MENTIONED ALTHOUGH DATE & MONTH WERE MENTIONED. THE ITAT HELD THAT AS NO YEAR IS MENTIONED, THEREFORE, THERE IS NO BASIS FOR MAKING ADDITION IN A.Y. 1989-90. 39. IN ACIT V. DR. KAMLA PRASAD SINGH, 3 ITR (TRIB) 533 (PAT- TRIB) IT WAS HELD AS UNDER :- SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 24 (C IT IS ALSO SETTLED LAW THAT ANY DOCUMENT FOUND AND SEIZED DURING THE COURSE OF SEARCH HAS TO BE INTERP RETED LITERALLY AND NOTHING CAN BE ADDED OR SUBTRACTED. I F FACTS OF THE ASSESSEE'S CASE ARE EVALUATED IN THE LIGHT OF T HE AFORESAID SETTLED PRINCIPLES OF LAW, IT WILL BE REV EALED THAT THE DOCUMENTS FOUND AND SEIZED AND RELIED UPON FOR MAKING THE ADDITION UNDER APPEAL BY THE REVENUE HAV E NEITHER DATE NOR THE NAME OF THE ASSESSEE AND THERE FORE, IT CANNOT BE ASSUMED OR PRESUMED AS TO WHEN AND BY WHO M THE NOTINGS WERE RECORDED. IT IS ALSO NOT KNOWN AS TO IN WHAT CONNECTION THE NOTINGS EVEN IF CONSIDERED AS GIVING AND TAKING-OF MONEY WERE MADE; MEANING THEREBY THAT THESE DOCUMENTS BEING DUMB DOCUMENTS, NO ADDITION C AN BE MADE ON THE BASIS OF ASSUMING OR PRESUMING THE N OTINGS IN THOSE DOCUMENTS RELATING TO ANY OTHER TRANSACTIO N NOR RECORDED IN THE DOCUMENTS. ' 40. IN ATUL KUMAR JAIN V. DCIT REPORTED IN 64 TTJ 786 (DEL) IT WAS HELD THAT AO WAS NOT JUSTIFIED IN DECIPHERIN G THE FIGURES ON A SEIZED PAPER AT HIS WHIMS AND CAPRICE BASED ON UNFOUNDED YPRESUMPTIONS AND CONJECTURES WITHOUT BRINGING ANY CORROBORATIVE MATERIAL EVIDENCE IN SUPPORT THEREOF AND SAME CANNOT FORM THE BASIS FOR ASSESSIN G UNDISCLOSED INCOME BY WAY OF SALE PROCEEDS OF A PROPERTY. 41. IN THIS CASE ADDITIONS HAVE BEEN MADE ON THE SA ME SET OF LOOSE PAPERS ON WHICH THE ASSESSMENTS HAVE B EEN MADE IN THE CASE OF SHRAGHAV CHANDRA AND SHNAROTTAM MISHRA ON THE SAME GROUND THAT THE APPELLANT HAS RECEIVED CERTAIN PAYMENTS FROM NAGARJUN CONSTRUCTIO N CO. LTD. AND SIMPLEX INFRASTRUCTURE LTD. IN THE APP ELLANT PROCEEDINGS, THE ADDITIONS IN BOTH THE CASES HAVE B EEN DELETED ON THE GROUND THAT THE SAID SEIZED DOCUMENT S DID NOT HAVE EVIDENTIARY VALUE AND THE ASSESSMENTS WERE BASED ON ASSUMPTIONS, CONJECTURES AND SURMISES. 42. THE LOOSE PAPERS WHICH ARE THE BASIS OF ADDITIO N ARE NOT IN THE HANDWRITING OF THE APPELLANT. THE PAPERS ARE UNDATED AND DO NOT REFLECT AS TO WHICH PERIOD THEY PERTAIN. THE PAPERS HAVE NOT BEEN SEIZED FROM THE POSSESSION OF THE APPELLANT. THE LOOSE PAPERS ALSO DO NOT ANYWHERE REFLECT THE NAME OF THE APPELLANT. THE APP ELLANT HAS CATEGORICALLY DENIED THAT HE NEVER RECEIVED ANY SUCH PAYMENTS. THE A.O. HAS NOT BROUGHT ANY POSITIVE MATERIAL SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 25 ON RECORD IN THE FORM OF STATEMENT OF SOME RESPONSI BLE PERSON OF SIMPLEX INFRASTRUCTURE LTD, KOLKATA, TO T HE EFFECT THAT THE COMPANY HAD MADE PAYMENT TO THE APPELLANT. THERE IS A LSO NO STATEM ENT OF MR. RAJU OF NAGARJUN CONSTRUCTION CO. LTD. THAT THE APPELLANT WAS PAID A NY MONEY BY THE COMPANY. FURTHER, EVEN MR. MUKESHSHARM A HAS NOT STATED THAT HE HAD PAID ANY MONEY TO THE APPELLANT. THUS, NO POSITIVE OR COGENT MATERIAL HAS BEEN BROUGHT ON RECORD TO PROVE THAT THE APPELLANT WAS P AID CERTAIN MONEY BY THE NAGARJUN CONSTRUCTION CO. LTD. AND SIMPLEX INFRASTRUCTURE LTD. FURTHER, IN THE ASSESSM ENT OF THE APPELLANT, NO UNEXPLAINED INVESTMENTS HAVE BEEN FOUND. 43. THE A. D. HAS GRVEN FOLLOWING FINDING AT PAGE 13 OF THE ASSESSMENT ORDER:- 'THE LAST PERSON BEING REFERRED IS COMMISSIONER, NAGAR NIGAM, INDORE I.E. THE ASSESSEE. THOUGH ((C' IS NOT WRITTEN EXPLICITLY, IT IS CLEAR THAT THE MISSING PERSON IS COMMISSIONER, NAGAR NIGAM, INDORE UNDER WHOSE SIGNATURE, WORK ORD ERS WERE ISSUED AND WHO PAID A KEY ROLE IN AWARD OF CON TRACT. HE IS PRESUMED TO RECEIVE 0.5% OF THE TOTAL CONTRACT AMOU NT. 43.1 THE A.D. HIMSELF RECORDS FINDING THAT IN THIS CASE EVEN 'C' IS NOT WRITTEN EXPLICITLY WHICH WOULD HAVE LED THE A.D. TO DRAW INFERENCE THAT THE SAME REFERRED TO THE COMMIS SIONER, NAGAR NIGAM. FROM THE ABOVE, IT IS CLEAR THAT THE A.D. HAS DRAWN INFERENCES ONLY ON BASIS OF HIS SUBJECTIVE IMAGINATION, ASSUMPTIONS, CONJECTURES AND SURMISES. THE NAME OF THE APPELLANT IS NOT THERE IN THE SEIZED PA PERS. HIS NAME IS NOT THERE EVEN IN THE CODED FORM. NO CORROB ORATIVE EVIDENCES HAVE BEEN BROUGHT ON RECORD BY THE A.D. IN MY CONSIDERED OPINION, SIMPLY ON THE BASIS OF JOTTINGS AND NOTINGS ON SOME UNDATED DUMB PAPERS SEIZED FROM THE POSSESSION OF A THIRD PARTY, ADDITIONS CANNOT BE SU STAINED IN LAW WITHOUT ANY CORROBORATIVE EVIDENCE AND WITHO UT ANY COGENT, INCRIMINATING AND POSITIVE MATERIAL. IT IS NOW A SETTLED LAW THAT NOTINGS, JOTTINGS ON THE LOOSE PAP ERS HAVE NO EVIDENTIARY VALUE IN ABSENCE OF CORROBORATIVE EV IDENCES. 44. IN VIEW OF THE JUDICIAL DECISIONS IN THE CASES OF SHRIRAGHAV CHANDRA AND SHRINAROTTAM MISHRA AND CONSIDERING THE FACT THAT NO ADDITION WAS' MADE BY THE A.O. IN THE CASE OF SHRIRAGHAV CHANDRA AND THE ORDER II] S 263 SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 26 OF THE CIT HAS BEEN QUASHED BY I THE ITAT AND ALSO THAT THE ADDITIONS MADE IN THE CASE OF SHRINAROTTAM MISHRA H AVE BEEN FINALLY DELETED BY THE ITAT, THE ADDITION MAD E IN THIS CASE ON THE BASIS OF SAME SEIZED PAPERS CANNOT SURVIVE. FOLLOWING THE POSITION OF LAW AS LAID DOWN IN THE J UDICIAL DECISIONS DISCUSSED ABOVE, IT IS TO BE CONCLUDED TH AT THE AFORESAID LOOSE PAPERS FOUND AND SEIZED FROM THE PR EMISES OF MUKESH SHARMA HAVE NO EVIDENTIARY VALUE IN ABSEN CE OF ANY COGENT, INCRIMINATING OR POSITIVE CORROBORATIVE MATERIAL FOR THE PURPOSE OF THE ASSESSMENT OF THE APPELLANT. 45. IN VIEW OF THE TOTALITY OF FACTS AND CIRCUMSTAN CES AND VARIOUS JUDICIAL DECISIONS DISCUSSED ABOVE INCLUDIN G THE DECISIONS IN THE CASE OF SHRIRAGHAV CHANDRA AND SHRINAROTTAM MISHRA, I HOLD THAT THE ADDITION OF RS . 2.21 CRORES IS UNJUSTIFIED AND UNSUSTAINABLE BOTH IN LAW AND ALSO ON FACTS. THE SAME IS THEREFORE, DELETED. 46. AS THE ADDITION HAS BEEN DELETED ON MERITS, I D O NOT FIND IT NECESSARY TO ADJUDICATE GROUNDS OF APPEAL CHALLENGING THE PROCEDURAL ASPECTS INCLUDING REOPEN ING OF ASSESSMENT U/S 147 OF THE ACT. 47. IN THE RESULT, THE APPEAL IS ALLOWED. 5. LD. CIT-DR RELIED UPON THE ORDER OF THE ASSESSI NG OFFICER AND SUBMITTED THAT THE ASSESSING OFFICER HAS, ON THE BA SIS OF ANALYSING THE DOCUMENTS SEIZED FROM THE RESIDENCE OF SHRI MUK ESH SHARMA, RIGHTLY FORMED THE VIEW THAT THE ASSESSEE HAS ILLEG ALLY BEEN PAID GRATIFICATION AT RS.2,21,00,000/- BY THE AFORESAID TWO COMPANIES. THEREFORE, THE ORDER OF THE LD. CIT(A) IS UNJUST AN D IMPROPER WHICH NEEDS TO BE REVERSED. ON THE OTHER HAND, LD. COUNSE L FOR THE ASSESSEE RELIED UPON THE ORDER THE LD. CIT(A) AND S UBMITTED THAT THE ASSESSEE NEVER RECEIVED ANY PAYMENTS FROM THE SAID TWO COMPANIES SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 27 AS THE DOCUMENTS SEIZED DO NOT SHOW IN ANY MANNER T HAT THE ASSESSEE HAS BEEN PAID BY THESE TWO COMPANIES. THE ASSESSING OFFICER MADE THE ADDITION SIMPLY ON THE BASIS OF PR ESUMPTION. FURTHER, LD. COUNSEL FOR THE ASSESSEE ALSO RELIED U PON CERTAIN JUDICIAL PRONOUNCEMENT AS DETAILED IN THE PAPER BOO KS FILED BEFORE US AND SUBMITTED THAT VIEW DRAWN IN THESE JUDICIAL PRONOUNCEMENTS SUPPORTS THE ORDER OF THE LD. CIT(A) . HENCE, THE ORDER OF THE LD. CIT(A) IS JUSTIFIED. 6. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PART IES AND PERUSED MATERIAL AVAILABLE ON RECORD. FROM THE PERU SAL OF THE SEIZED DOCUMENTS IN QUESTION, IT IS CLEAR THAT DESPITE THE C ALPHABET IS NOT THERE IN THE SEIZED DOCUMENTS, THE ASSESSING OF FICER SIMPLY PRESUMED THAT THE MISSING C IS NOTHING BUT ITS CO MMISSIONER, INDORE NAGAR NIGAM (ASSESSEE) AND ALSO PRESUMED THA T THE ASSESSEE RECEIVED THE MONEY. THEREFORE, THE FINDINGS OF THE ASSESSING OFFICER ARE SOLELY BASED ON ASSUMPTIONS AND PRESUMPTIONS AN D WITHOUT ANY CONCRETE EVIDENCE, LEGALLY ADMISSIBLE IN LAW. T HE ASSESSING OFFICER HAD NO EVIDENCE WHATSOEVER TO SHOW THAT THE RE WAS ANY RECEIPT OF MONEY BY THE ASSESSEE. HE IS ALSO BOUND TO PROVE AND SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 28 NAMED THE PERSON WHO GAVE THE MONEY AND ON WHAT DAT E THE MONEY WAS GIVEN BUT IN THIS CASE, THERE IS NO POSITIVE AN D CONCRETE EVIDENCE WITH THE ASSESSING OFFICER TO PROVE THE RE CEIPT OF MONEY FROM THE SAID TWO COMPANIES BY THE ASSESSEE. 6.1 WE FIND THAT IN THE CASE OF ASHWIN KUMAR VS. IT O (1991) 39 ITD 183 (DEL), THE TRIBUNAL HELD THAT WHEN A DUMB DOCUMENT, LIKE THE PRESENT SLIP, IS RECOVERED AND THE REVENUE WANT S TO MAKE USE OF IT, IT IS THE DUTY OF THE REVENUE TO COLLECT NECESS ARY EVIDENCES WHICH MAY PROVIDE ACCEPTABLE NARRATION TO THE VARIOUS ENT RIES. THE EVIDENCES COLLECTED SHOULD BE SUCH THAT ANY REASONA BLE MAN WOULD ACCEPT THE HYPOTHISED ADVANCED BY THE REVENUE, THAT THE FIGURE WRITTEN ON THE RIGHT SIDE OF THE SLIP REPRESENT INC OMES EARNED BY THE ASSESSEE. IT WAS CONCEDED BY THE DEPARTMENTAL REPR ESENTATIVE THAT NO SUCH EVIDENCE HAVE BROUGHT OUT ON RECORD. 6.2 HONBLE SUPREME COURT IN THE CASE OF DHAKESHWAR I COTTON MILLS LTD V/S CIT 1954 261 ITR 775 HELD THAT IN MAKING ASSESSMENT U/S 23(3) OF THE INDIAN INCOME TAX ACT, THE ITO IS NOT FRACTURED BY TECHNICAL RULES OF EVIDENCE AND FLUCTU ATIONS AND HE IS ENTITLED TO ACT ON MATERIAL WHICH MAY NOT ACCEPT AN EVIDENCE IN THE SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 29 COURT OF LAW, BUT THE IT IS NOT ENTITLED TO MAKE AN D POWER COMES AND MAKING ASSESSMENT WITHOUT REFERENCE TO ANY EVIDENCE OR ANY MATERIAL DELIVERED. THERE MUST BE SOMETHING MORE T HAN MORE WHERE SUSPICION TO SUPPORT THE ASSESSMENT U/S 23(3). THE RULE OF LAW ON THIS SUBJECT HAS BEEN FULLY AND RIGHTLY STATED BY H ONBLE HIGH COURT IN THE CASE OF SREE SHANMUGAR MILLS LTD V/S COMMISS IONER OF INCOME TAX, PUNJAB 1944 12 ITR 393. SIMILAR VIEW W AS ALSO TAKEN BY DELHI TRIBUNAL IN THE CASE OF BANSAL STRIPS V/S ACIT (SUPRA) OBSERVING THAT THE A.O CANNOT FIRST MAKE CERTAIN CONJECTURES AND SURMISES AND THEREAFTER DEEMED PROVISIONS BASED ON SUCH CONJECTURES AND SURMISES. IN THE ABSENCE OF MATER IAL AS TO THE NATURE OF OWNERSHIP OF THE TRANSACTION, UNDISCLOSED INCOME CANNOT BE ASSESSED IN THE HANDS OF THE ASSESSEE SUMMARILY BY ARITHMETICALLY TOTAL VARIOUS FIGURES DOTTING DOWN ON THE LOOSE DOC UMENT. ANY OTHER SEIZED FOR THE PURPOSE OF EXERCISING TO DEEMED PROV ISIONS DUMB DOCUMENTS ORDER DOCUMENTS WITH NO CERTAINTY FOR NO EVIDENTIAL VALUE. 6.3 HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT V/S ANIL BHALLA (2010) 322 ITR 191 (DEL) ALSO HELD THAT WHEN NO INDEPENDENT SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 30 MATERIAL OR EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE A.O TO ESTABLISH THAT THE NOTICES OF JOTTINGS OF LOOSE SHE ETS OR ON THE PAPER WRITTEN ON ACCOUNTED TRANSACTIONS CANNOT BE MADE. HONBLE HIGH COURT OF GUJARAT IN THE CASE OF CITV/S MAULIKUMAR K SHAH 2008 307 ITR 137 HAS HELD THAT THE ADDITIONS MADE BY THE A.O ON THE BASIS OF SEIZED PAPER ALONE WITHOUT ANY CORROBORATI VE EVIDENCE COULD NOT BE SUSTAINED. 6.4 FURTHER, WE FIND THAT THE SAME ISSUE HAS BEEN DEALT WITH BY ITAT, INDORE IN THE CASE OF ACIT VS. NAROTTAM MISHR A (2018) 32 ITJ 510 (TRIB. INDORE) WHEREIN ON THE IDENTICAL FACTS AND CIRCUMSTANCES, THE TRIBUNAL DELETED THE ADDITION MA DE ON ACCOUNT OF MONEY ALLEGEDLY RECEIVED FROM TWO COMPANIES. THE RELEVANT PORTION OF THE ORDER DATED 30.11.2017 OF THE TRIBUN AL IS REPRODUCED HEREUNDER: 25. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISS IONS AND PERUSAL OF THE MATERIAL PLACED ON THE RECORD OF THE TRIBUNAL INTER -ALIA ASSESSMENT ORDER, IMPUGNED ORDER, PAPER BOOKS FILED BY THE ASSESSEE A ND CASE-LAWS CITED AND RELIED ON AT BAR BY THE PARTIES, AT THE VERY OUTSET , FROM THE ASSESSMENT ORDER, WE OBSERVED THAT THE ASSESSING OFFICER MADE FIRST A DDITION ON ACCOUNT OF ALLEGED PROCEEDS RECEIVED FROM NCCL BY DRAWING ADVE RSE INFERENCE AGAINST THE ASSESSEE ON THE BASIS OF PRIMARY EVIDENCE NO. 1 TO 8 (ASSESSMENT ORDER PAGES 2 TO 11) LISTED IN THE TABLE OF PRIMARY EVIDE NCE NO.1 WHICH ARE DOCUMENTS RELATING TO REQUEST FOR TRANSFERS AND POS TINGS OF OFFICERS AND REQUEST FOR FUND ALLOCATIONS IN THE URBAN DEVELOPME NT DEPARTMENT, DOCUMENTS RELATING TO INCURRING OF EXPENDITURE FOR TRAVEL AND OFFICIALS, DOCUMENTS RELATING TO ILLEGAL GRATIFICATIONS PAID T O OFFICERS OF URBAN SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 31 DEVELOPMENT DEPARTMENT AND DOCUMENTS RELATING TO TE NDERS/CONTRACTS OF VARIOUS NAGAR NIGAMS, NAGAR PALIKAS. PRIMARY EVIDEN CE NOS.2 TO 8 ARE LOOSE PAPERS COLLECTED FROM THE RESIDENCE OF MUKESH SHARM A DURING SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT AT HIS OFFICE AND RESIDENCE. THE ASSESSING OFFICER HAS ALSO TAKEN INTO CONSIDERATION CORROBORATIVE EVIDENCE SL. NO. 1 TO 5 (ASSESSMENT ORDER PAGES 11 TO 28) AN D THEREAFTER, HE PROCEEDED TO MAKE ADDITION BY REFERRING TO THE SEC. 34 OF THE EVIDENCE ACT AND REFERRING TO THE GUIDELINES ESTABLISHED BY THE HON'BLE SUPREME COURT IN THE CASE OF CBI VS. VC SHUKLA (SUPRA). 26. IN THE TABLES OF PRIMARY AND CORROBORATIVE EVID ENCE, THE ASSESSING OFFICER FIRSTLY IN SL. NO.1 OF PRIMARY EVIDENCE NOTED THE D ETAILS OF DOCUMENTS AND THEREAFTER, AFTER MENTIONING THE QUERIES RAISED TO THE ASSESSEE, DIRECTLY JUMPED TO THE CONCLUSION BY HOLDING THAT FROM THE D OCUMENTS SEIZED THROUGH SEARCH ACTION AGAINST MUKESH SHARMA U/S 132 OF THE ACT, IT IS FOUND THAT HE WAS AN INTERMEDIARY FOR FACILITATING WORK FROM THE MINISTERS AND OFFICERS OF THE DEPARTMENT OF URBAN DEVELOPMENT DEPARTMENT AND SHRI MUKESH SHARMA HAS BEEN FOUND TO BE LIASIONING INTERMEDIARY FOR TH E PRACTICE OF TRANSFERS AND POSTINGS AND FUND ALLOCATIONS. BUT, THERE IS NO ADJ UDICATION REGARDING EXPLANATION AND REPLY OF THE ASSESSEE TO THE QUERIE S OF THE ASSESSING OFFICER. FURTHER, ON PRIMARY EVIDENCE NO.2 TO 8, THE ASSESSI NG OFFICER NOTED THAT THE DETAILS OF LOOSE PAPERS AND THEREAFTER, FOR PRIMARY EVIDENCE NO.2, HE HIMSELF PUT MEANING TO WORD M AND NETAJI THAT THESE HAV E BEEN USED BY RECORDING THE NAME OF THE ASSESSEE BY SHRI MUKESH SHARMA ON S TANDALONE BASIS WITHOUT ANY OTHER CORROBORATIVE OR OTHER ADVERSE EV IDENCE SUPPORTING THIS ABBREVIATION AND MEANING TAKEN BY HIM ON HIS OWN WH IMS AND FANCIES. BY GIVING MEANING TO WORD M AND NETAJI, THE ASSESS ING OFFICER MADE A PRESUMPTION AND DREW AN INFERENCE THAT SHRI MUKESH SHARMA WAS AN INTERMEDIARY THROUGH WHOM THE ASSESSEE RECEIVED PRO CEEDS/GRATIFICATIONS FROM NCCL WHICH WAS FURTHER USED FOR THE PURPOSE OF MAKING INVESTMENT IN THE LAND THROUGH BENAMIDARS. 27. WHEN WE ANALYZED THE BASIS TAKEN BY THE ASSESSI NG OFFICER FOR MAKING SECOND ADDITION ON ACCOUNT OF PROCEEDS AND CASH FOU ND IN THE LOCKERS AND POSSESSION OF SHRI USMAN KHAN, WHICH WERE ALLEGED P ROCEEDS FROM SIL THEN WE FOUND THAT THE BASIS OF THIS ADDITION IS PRIMARY EVIDENCE NO.1 TO 5 AND CORROBORATIVE EVIDENCE NO.7. AS WE HAVE NOTED ABOVE PRIMARY EVIDENCE NO.1 WHICH ARE DOCUMENTS RELATING TO REQUEST FOR TRANSFE RS AND POSTINGS OF OFFICERS AND REQUEST FOR FUND ALLOCATIONS IN THE URBAN DEVEL OPMENT DEPARTMENT, DOCUMENTS RELATING TO INCURRING OF EXPENDITURE FOR TRAVEL AND OFFICIALS, DOCUMENTS RELATING TO ILLEGAL GRATIFICATIONS PAID T O OFFICERS OF URBAN DEVELOPMENT DEPARTMENT AND DOCUMENTS RELATING TO TE NDERS/CONTRACTS OF VARIOUS NAGAR NIGAMS, NAGAR PALIKAS. PRIMARY EVIDEN CE NOS.2 TO 8 ARE LOOSE PAPERS COLLECTED FROM THE RESIDENCE OF MUKESH SHARM A DURING SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT AT HIS OFFICE AND RESIDENCE. SO FAR AS CORROBORATIVE EVIDENCE NO.7 IS CONCERNED, IT IS WAR RANT OF AUTHORIZATION SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 32 AGAINST SHRI USMAN KHAN UNDER SEARCH OPERATION RS.7 3,41,000 WAS FOUND AND SEIZED FROM LOCKER NO.268 AT AXIX BANK, RS.21 L ACS FROM LOCKER NO.151 AT BANK OF RAJASTHAN AND RS.20 LACS FOUND AND SEIZED F ROM LOCKER NO.137 AT BANK OF RAJASTHAN, URJA BHAVAN, BHOPAL. THE ASSESSI NG OFFICER ALSO NOTED IN THE POST SEARCH INQUIRY THAT SHRI USMAN KHAN HAD JO INTLY PURCHASED HOUSE AT ARERA COLONY, BHOPAL WITH MOTHER-IN-LAW OF THE ASSE SSEE SMT. RATI DEVI GURBELE AND ON THIS PURCHASE OF HOUSE ACCOUNT, THE ASSESSING OFFICER MADE ADDITION OF RS.20 LACS WHICH RESULTED INTO TOTAL AD DITION OF RS.1,53,41,000/-. 28. IN THE BACKDROP OF ABOVE FACTUAL MATRIX OF THE EVIDENCE RELIED AND TAKEN INTO CONSIDERATION OF THE ASSESSING OFFICER, WHEN W E LOGICALLY ANALYSE THE CONCLUSION DRAWN BY THE LD. CIT(A) ON THE TOUCH STO NE OF THE RELEVANT PROVISIONS OF THE ACT, EVIDENCE ACT, AND OTHER RELE VANT PROVISIONS OF LAW IN THE LIGHT OF THE RATIO OF THE DECISIONS/ORDERS RELI ED BY THE BOTH THE PARTIES THEN WE FIND THAT THE LD. CIT(A) HAS TAKEN INTO CONSIDER ATION ALL THE RELEVANT FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO TAKEN INTO C ONSIDERATION THE BASIS OF THE PRESUMPTION AND INFERENCES DRAWN BY THE ASSESSI NG OFFICER FOR ESTABLISHING DIRECT OR INDIRECT NEXUS OF THE ASSESS EE WITH THE DOCUMENTS FOUND AND SEIZED FROM SHRI MUKESH SHARMA AND CASH A ND DOCUMENTS SEIZED FROM SHRI USMAN KHAN AND THEREAFTER THE FIRST APPEL LATE AUTHORITY DISMISSED FINDINGS OF THE ASSESSING OFFICER. 29. THE CIT(A) OBSERVED THAT THE PAPERS WHICH WERE TAKEN BASIS FOR MAKING ADDITION IN THE HANDS OF ASSESSEE WERE FOUND DURING THE SEARCH AND SEIZURE OPERATION IN THE PREMISES OF SHRI MUKESH SHARMA AND THEY WERE NOT IN THE HANDWRITING OF APPELLANT. IT WAS ALSO CORRECTLY OBS ERVED THAT THOUGH THE PERSONS IN WHOSE NAMES THE INVESTMENT WERE MADE WER E BELONGING TO THE DABRA, THE ELECTION CONSTITUENCY OF THE ASSESSEE APPELLANT BUT THEY WERE NEITHER RELATIVES NOR EMPLOYEES NOR CONNECTED IN MA NNER WITH THE ASSESSEE AND ON THIS BASIS IT WAS CONCLUDED BY THE FIRST APP ELLATE AUTHORITY THAT IN ABSENCE OF ANY DIRECT SUPPORTIVE EVIDENCE THE INFER ENCE DRAWN BY THE ASSESSING OFFICER THAT THOSE PERSONS HAIL FROM DABR A AND THEREFORE THEY ARE BENAMIDARS OF THE APPELLANT IS A BAIS CONCLUSION AG AINST THE APPELLANT. WE ARE IN AGREEMENT WITH THE CONCLUSION OF THE CIT(A) THAT TO HOLD THE PERSONS AS BENAMIDAR OF THE OTHER PERSON IT NEEDS TO BE EST ABLISHED THAT THE ANOTHER PERSON WHO IS NOT INFRONT OF TRANSACTION IS THE ULT IMATE BENEFICIARY AND ENJOYING THE FRUITS OF THE TRANSACTION/VENTURE AND THIS FUNDAMENTAL REQUIREMENT IS MISSING IN THIS CASE AS THERE IS NO SUFFICIENT RELIABLE EVIDENCE OR MATERIAL AGAINST THE ASSESSEE WHICH COULD SHOW A ND ESTABLISH THAT THE PERSONS IN WHOS NAME INVESTMENT HAVE BEEN MADE ARE BENAMIDARS AND THE ASSESSEE AND NONE ELSE IS THE ULTIMATE BENEFICIARY ENJOYING THE FRUITS OF THE INVESTMENT. IN ABSENCE OF BRINGING OUT ANY SUCH FAC TS ON RECORD THE ASSESSING OFFICER PROCEEDED TO DRAW INFERENCE AGAIN ST THE ASSESSEE AND THUS WE HAVE NO HESITATION TO HOLD THAT THE CIT (A) WAS CORRECT IN DISMISSING THE SAME. SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 33 30. THE LD. SENIOR COUNSEL HAS PLACED RELIANCE ON T HE DECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS GIAN GUPT A (SUPRA) WHERE IN IT WAS HELD THAT WHEN NO EVIDENCE HAS BEEN BROUGHT ON RECO RD BY THE ASSESSING OFFICER THAT THERE IS ANY INVESTMENT AND THERE IS A NY TRANSFER OF CASH THAN THERE IS NO ANY QUESTION OF INVESTMENT WHEN THE LAN D HAS NOT BEEN TRANSFERRED AND REGISTERED IN THE NAME OF ALLEGED A SSESSEE. IN THIS CASE THEIR LORDSHIP HELD THAT THE CIT (A) AND THE TRIBUNAL HAV E RIGHTLY DELETED THE ADDITION ON EXAMINATION OF THE FACT. IN THE PRESENT CASE ALSO THE PRESUMPTION DRAWN BY THE ASSESSING OFFICER AGAINST THE ASSESSEE WAS BASED MERELY ON SURMISES AND CONJECTURES WITHOUT HAVING ANY RELIABL E EVIDENCE ON RECORD TO SHOW THAT INVESTMENT HAS BEEN MADE BY THE ASSESSEE IN THE NAME OF BENAMIDARS AND WITHOUT ESTABLISHING THE MOVEMENT AN D TRANSFER OF CASH FROM THE ASSESSEE OR ON HIS BEHALF BY ANY OTHER PERSON. THEREFORE RATIO OF THIS DECISION SUPPORTS THE CONCLUSION OF CIT(A). 31. THE LD. SENIOR COUNSEL HAS ALSO PLACED RELIANC E ON THE DECISION OF I.T.A.T., HYDERABAD IN THE CASE OF DCIT VS M. AJA B ABU IN ITA 1755,1756 & 1757/HYD/2012, DATED 23/04/2014 WHEREIN THE TRIBUNA L REFERRING TO THE DECISIONS OF HONBLE HIGH COURT OF DELHI IN THE CAS E OF CIT VS ANIL BHALLA (SUPRA), CIT VS DINESH JAIN (HUF) 211 TAXMAN 23 (DE L) AND CIT VS JAIPAL AGGARWAL 212 TAXMAN 1 (DEL), ITAT MUMBAI IN THE CAS E OF ACIT VS. JP MORGAN INDIA PVT. LTD. 46 SOT 250 (MUMBAI). IT HAS BEEN HELD THAT THE ADDITION MADE BY THE ASSESSING OFFICER BASED ON LOO SE PAPERS WHICH IS NOT A CONCLUSIVE EVIDENCE THEREFORE SUCH EVIDENCE IS NOT SUFFICIENT FOR MAKING ADDITION. IN THIS CASE THE OBSERVATIONS OF THE TRIB UNAL READ AS FOLLOWS: - WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES, P ERUSED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN THI S CASE, THE ADDITION WAS MADE BY THE ASSESSING OFFICER BASED ON THE LOOSE PAPER AND THE SAME, IN OUR VIEW, CANNOT BE CONSIDERED AS CONCLUSIVE EVIDENCE. AS HELD BY THE C IT(A) IN THE IMPUGNED ORDER EXCEPT RELYING, THE NOTHINGS IN THE LOOSE SLIPS, NO ATTEMPT HAS BEEN MADE TO CORROBORATE THE NOTINGS WITH INDEPENDENT EVIDENCE. THE PARTIES TO THE TRANSACTION PARTICULARLY THE VENDOR HAS NOT EXAMINED. IN EVERY TRANSACTION THERE IS A CIRCLE CONCERNING TWO PARTIES. IT IS NOT KNOWN WHETHER THE VENDOR HAS DISCLOSED THE CONSIDERATION AS NOTED IN THE DIARY. THEREFORE, MER ELY ON THE BASIS OF PRESUMPTION AND SOME CORROBORATED NOTINGS ADDITIONS CANNOT BE M ADE. IN OUR OPINION, THE DELETION OF ADDITION BY THE CIT(A) IS JUSTIFIED AND NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT(A). THE FOLLOWING CASES SUPPORT TH E ACTION OF THE CIT(A): 1. CIT VS ANIL BHALLA [2010] 322 ITR 191 (DEL) WH EREIN HELD THAT THE NOTINGS RECORDED ON THE LOOSE SHEET OF PAPER DO NOT REPRESE NT ANY EXPENDITURE INCURRED BY THE ASSESSEE DIRECTOR AND THAT THE ENTRIES RELATED TO THE COMPANY IN AS MUCH AS THE ASSESSEE COULD EXPLAIN FROM THE BOOKS OF THE COMPANY THAT THESE PROJECTS WERE U NDERTAKEN BY IT, AND UPHELD THE DELETION OF THE IMPUGNED ADDITION UNDER S. 69C, FIN DINGS ARRIVED AT BY THE TRIBUNAL ARE PURE FINDINGS OF FACTS AND THE SAME DO NOT WQRR ANT ANY INTERFERENCE. 2. ACIT VS J. P. MORGAN INDIA (P) LTD [2011 46 SOT 250 (MUM) 3. CIT VS DINESH JAIN HUF [2012] 211 TAXMAN 23 (DEL HI) SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 34 4. CIT VS JAIPAL AGGARWAL [2013] 212 TAXMAN 1 (DELH I) WHEREIN IT WAS HELD THAT DUMB DOCUMENTS SEIZED, I.E. FROM WHICH NOTHING COUL D BE CLEARLY UNDERSTOOD, CANNOT FORM A JUSTIFIED BASE FOR MAKING ADDITIONS TO INCO ME OF THE ASSESSEE. 17.1 IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT THE ADDITION MADE BY THE ASSESSING OFFICER BASED ON THE LOOSE PAPER, WHICH I S NOT A CONCLUSIVE EVIDENCE AND, THEREFORE, THE SAME IS NOT SUFFICIENT TO MAKE THE A DDITION. IN OUR OPINION, NO ADDITION CAN BE MADE ON THE BASIS OF DUMB DOCUMENTS/NOTE BOO K/LOOSE SLIPS IN THE ABSENCE OF ANY OTHER MATERIAL TO SHOW THAT THE ASSESSEE HAS MA DE INVESTMENTS IN LAND. NOTING ON THE NOTE BOOK/DIARY/LOOSE SHEETS ARE REQUIRED TO BE SUPPORTED/CORROBORATED BY OTHER EVIDENCE AND SHOULD ALSO INCLUDE THE STATEMENT OF A PERSON WHO ADMITTEDLY IS A PARTY TO THE NOTING AND STATEMENT FROM ALL THE PERSONS WH OSE NAMES THERE ON THE NOTE BOOK/LOOSE SLIPS AND THEIR STATEMENTS TO BE RECORDE D AND THEN SUCH STATEMENT UNDOUBTEDLY SHOULD BE CONFRONTED TO THE ASSESSEE AND HE HAS TO BE ALLOWED TO CROSS EXAM INE THE PARTIES. THE VENDOR HAS NOT EXAMINED IN THIS CASE. THEREFORE, WE DO NOT FIN D ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN DIRECTING THE ASSESSING OFFICER TO DELETE THE ADDITION MADE ON THE BASIS OF LOOSE PAPER AND THE ORDER OF THE CIT(A) IS HEREBY U PHELD DISMISSING THE GROUNDS RAISED BY THE REVENUE ONTHIS ISSUE. 32. IN THE PRESENT CASE VENDOR/SELLERS HAS NOT BEEN EXAMINED AND THERE IS NOT EVIDENCE, DOCUMENTS, ADMISSION OR AVERMENT BY T HE ALLEGED PERSONS THAT THEY WERE INSTRUMENTAL OR USED BY THE ASSESSEE FOR MAKING INVESTMENTS IN PURCHASE OF LANDS. PER CONTRA, THESE PERSONS HAVE D ENIED SUCH TRANSACTIONS ON AFFIDAVIT AND IN THEIR STATEMENTS RECORDED BY TH E LOWER AUTHORITIES. AT THIS JUNCTURE IT IS ALSO RELEVANT TO TAKE NOTE OF THE RA TIO OF THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF MADHYA PRADESH IN THE CASE OF PRAKASHCHAND NAHATA VS CIT, 301 ITR 134 MP. IN THE CASE OF ACIT VS SATYAPAL WASSAN 295 ITR 352 (JABALPUR I.T.A.T.) AS RELIED BY THE LD . SENIOR COUNSEL WHERE IN IT WAS HELD BY THE COORDINATE BENCH THAT THE ADDITI ON IS NOT SUSTAINABLE WHERE PAPER NOT CONTAINING ANY DETAILS TO INDICATE NATURE OF TRANSACTION, PERIOD OF TRANSACTION, PERSONS INVOLVED OR CODE FOR DECIPHERING FIGURES AND ASSESSEE DENYING KNOWLEDGE AND FILING AFFIDAVIT TO INDICATE TRANSACTIONS RELATED TO SOMEBODY ELSE. IT HAS BEEN FURTHER HELD THAT DOCUMENT MUST BE SPEAKING DOCUMENT; NO ADDITION PERMISSIBLE ON BASIS OF DUMB DOCUMENT WHICH IS ALSO A SITUATION IN THE PRESENT CASE WHERE THE ASSESSING OFFICER HAS RELIED ON THE LOOSE SHEETS/PAPERS WITHOUT ANY OTHER CORROBORATIVE EVIDENCE OR MATERIAL AGAINST THE ASSESSEE. 33. IN THE CASE OF CIT VS ANIL BHALLA (SUPRA) IT WA S HELD THAT WHEN NO INDEPENDENT MATERIAL OR EVIDENCE HAS BEEN BROUGHT O N RECORD BY THE ASSESSING OFFICER TO ESTABLISHED THAT THE NOTING/JO TTINGS RECORDED IN THE LOOSE SHEETS OR ON THE PAPER REPRESENTED ALLEGED UNACCOUN TED TRANSACTION, THEN THE CIT (A) WAS RIGHT IN ACCEPTING THE EXPLANATION OF THE ASSESSE. IT WAS ALSO HELD THAT THE TRIBUNAL WAS RIGHT IN HOLDING THAT LO OSE PAPERS DO NOT REPRESENT ANY EXPENDITURE ON INVESTMENT INCURRED BY THE ASSES SEE THEN THE FINDINGS OF THE TRIBUNAL DO NOT WARRANT ANY INTERFERENCE. SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 35 34. IN THE CASE OF CIT VS GIRISH CHOUDHARY THE HON BLE DELHI HIGH COURT HELD THAT WHEN THERE WAS NO MATERIAL ON RECORD TO SHOW O N WHAT BASIS THE ASSESSING OFFICER HAD REACHED TO THE CONCLUSION THA T THE FIGURE 48 WAS TO BE READ AS RS. 48 LAKH, THEN THE DOCUMENT RECOVERED DU RING THE COURSE OF SEARCH WAS A DUMB DOCUMENT AND LED NOWHERE. THE REL EVANT OBSERVATIONS AND CONCLUSION OF THEIR LORDSHIP READ AS UNDER: - HENCE, IN THE PRESENT CASE THERE IS NO MATERIAL ON RECORD TO SHOW AS TO ON WHAT BASIS THE ASSESSING OFFICER HAS REACHED AT THE CONC LUSION THAT THE FIGURE 48 IS TO BE READ AS RS. 48 LAKHS. THE APEX COURT IN CENTRAL BUREAU OF INVESTIGATION VS. V. C. SHUKLA (1998) 3 SSC 410 HAS LAID DOWN THAT: - FILE CONTAINING LOOSE SHEETS OF PAPERS ARE NOT BOO K AND HENCE ENTRIES THEREIN ARE NOT ADMISSIBLE UNDER SECTION 34 OF THE EVIDENCE ACT , 1872. SIMILARLY, THE DOCUMENT ANNEXURE A-37 RECOVERED DURING THE COURSE OF SEARCH IN THE PRESENT CASE IS A DUMB DOCUMENT AND LEAD US NOWHERE. THUS, THE TRIBUNAL RI GHTLY DELETED THE ADDITION OF RS. 48 LAKHS MADE BY THE ASSESSING OFFICER ON ACCOUNT O F UNDISCLOSED INCOME ON THE BASIS OF SEIZED MATERIAL. 35. THE LD. SENIOR COUNSEL HAS ALSO PLACED RELIANCE ON THE RECENT DECISION OF HONBLE SUPREME COURT IN THE CASE OF COMMON CAUS E VS UNION OF INDIA (SUPRA). IN THE PRESENT CASE ALSO THE ASSESSING OFF ICER WITHOUT ANY BASIS PROCEEDED TO PROVIDE MEANING TO THE WORD M AND N ETAJI AS THESE WORDS DENOTES TO THE ASSESSEE BUT THERE IS NO BASIS FOR M AKING SUCH INFERENCE AGAINST THE ASSESSEE AS NEITHER THE ASSESSING OFFIC ER NOR THE LD. CIT, DR CONTROVERTER THIS FACT THAT THE ASSESSEE IS POPULAR WITHIN HIS PRIVATE AND POLITICAL CIRCLE AS DADA WHICH MEANS ELDER BROTHE R THEREFORE MEANING GIVEN BY THE ASSESSING OFFICER TO ABOVE WORDS FOR MAKING INFERENCE AGAINST THE ASSESSEE AND FOR ESTABLISHING DIRECT OR INDIRECT NE XUS WITH THE LOOSE PAPERS IS BASELESS AND WITHOUT ANY SUPPORTIVE EVIDENCE WHICH CANNOT BE TAKEN AS RELIABLE BASIS FOR DRAWING INFERENCE AGAINST THE AS SESSEE. FURTHERMORE, LOOSE PAPERS WHICH WERE FOUND AND SEIZED FROM THE PREMISE S OF OTHER PERSONS I.E. SHRI MUKESH SHARMA AND WRITTEN BY SHRI SHARMA ONLY THEN ON THE BASIS OF SUCH LOOSE PAPERS NO VALID INFERENCE CAN BE TAKEN O R DRAWN AGAINST THE ASSESSEE FOR MAKING ADDITION AND FASTENING TAX LIAB ILITY ON THE ASSESSEE. THIS CONCLUSION GETS STRONG SUPPORT FROM THE RATIO OF TH E ABOVE NOTED DECISIONS. 36. IN VIEW OF FORGOING DISCUSSION WE ARE OF THE VI EW THAT IN THE PRESENT CASE THE ASSESSING OFFICER PROCEEDED TO MAKE ADDITION ON THE BASIS OF PRIMARY AND OTHER EVIDENCE WHICH WAS IN THE FORM OF LOOSE PAPERS FOUN D AND SEIZED FROM THE PREMISES OF SHRI MUKESH SHARMA AND WAS WRITTEN BY SHRI SHARM A AND THERE WAS NO EVIDENCE OR MATERIAL WHICH COULD SHOW ANY DIRECT OR INDIRECT NEXUS WITH THESE LOSE PAPERS WITH THE ASSESSEE. THE ASSESSING OFFICER COULD NOT ALSO BRING ANY RELIABLE OR SUBSTANTIAL EVIDENCE AGAINST THE ASSESSEE TO ESTABL ISHED THAT THE PERSONS IN WHOSE NAME LAND WAS PURCHASED WERE BENAMIDARS AND THE ASS ESSEE WAS THE ULTIMATE BENEFICIARY ENJOYING THE FRUITS OF THE PURCHASED LA NDS THEN THE CIT (A) WAS RIGHT IN DISMISSING THE ACTION OF THE ASSESSING OFFICER IN T HIS REGARD AND WE ARE UNABLE TO SEE SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 36 ANY VALID REASON TO INTERFERE WITH THE SAME. WE MAY ALSO POINT OUT THAT THE ASSESSING OFFICER COULD NOT SUCCESSFULLY ESTABLISH THAT THE A MOUNT USED FOR MAKING INVESTMENT BY OTHER PERSONS WAS ACTUALLY BELONGING TO THE ASSE SSEE AND BESIDES THE PAYMENT SHOWN IN THE REGISTERED PURCHASE DEEDS THERE WAS AL SO UN RECORDED PAYMENTS WHICH WAS MADE BY THE ASSESSEE OR ON BEHALF OF THE ASSESS EE THEREFORE NO ADDITION COULD HAVE BEEN MADE IN THE HANDS OF ASSESSEE ON THE BASI S OF LOOSE SHEETS AND THE CIT(A) WAS RIGHT IN ALLOWING RELIEF TO THE ASSESSEE. THERE IS NO VALID REASON BEFORE US TO INTERFERE WITH THE IMPUGNED ORDER ON THE CONCLUSION DRAWN BY THE CIT (A) ON THE FIRST ISSUE. 6.5 IN VIEW OF THE FACTS/CIRCUMSTANCES AS NARRATED ABOVE AND ALSO IN THE LIGHT OF THE AFORESAID JUDICIAL PRONOUNCEMEN TS, WE ARE OF THE VIEW THAT IN THE PRESENT CASE, THE ASSESSING OFFICE R PROCEEDED TO MAKE ADDITION ON THE BASIS OF PRIMARY AND OTHER EVI DENCE WHICH WAS IN THE FORM OF LOOSE PAPERS FOUND AND SEIZED FR OM THE PREMISES OF SHRI MUKESH SHARMA AND WAS WRITTEN BY SHRI SHARM A AND THERE WAS NO EVIDENCE OR MATERIAL WHICH COULD SHOW ANY DI RECT OR INDIRECT NEXUS WITH THESE LOSE PAPERS WITH THE ASSESSEE. IT IS ALSO CLEAR FROM THE PERUSAL OF THE SEIZED DOCUMENTS THAT THE C AL PHABET IS NOT THERE IN THE SEIZED DOCUMENTS BUT THE ASSESSING OFF ICER SIMPLY PRESUMED THAT THE MISSING C IS NOTHING BUT ITS CO MMISSIONER, INDORE NAGAR NIGAM (ASSESSEE) AND ALSO PRESUMED THA T THE ASSESSEE RECEIVED THE MONEY. THEREFORE, WITHOUT BRINGING ANY CORROBORATIVE EVIDENCE ON RECORD, THE FINDINGS OF THE ASSESSING O FFICER SOLELY BASED ON ASSUMPTIONS AND PRESUMPTIONS ARE NOT LEGAL LY ADMISSIBLE SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 37 IN LAW IN VIEW OF THE RATIO LAID DOWN IN THE AFORES AID JUDICIAL PRONOUNCEMENTS. THE ASSESSING OFFICER IS BOUND TO P ROVE THE ALLEGATION WITH THE POSITIVE AND CONCRETE EVIDENCE BUT IN THIS CASE, THERE IS NO POSITIVE AND CONCRETE EVIDENCE WITH THE ASSESSING OFFICER TO PROVE THE RECEIPT OF MONEY FROM THE SAID TWO COM PANIES BY THE ASSESSEE. THUS, THE LD. CIT(A) WAS RIGHT IN DISMISS ING THE ACTION OF THE ASSESSING OFFICER IN THIS REGARD AND WE DO NOT FIND ANY REASON TO INTERFERE WITH THE SAME. WE CONFIRM THE FINDINGS RECORDED BY THE LD. CIT(A). 7. SO FAR AS THE GROUNDS RAISED IN THE CROSS-OBJECT ION ARE CONCERNED, WE ARE OF THE VIEW THAT AS THE DELETION OF ADDITION HAS BEEN CONFIRMED ON MERITS, WE DO NOT FIND IT NECESSA RY TO ADJUDICATE THE SAME BEING INFRUCTUOUS AND NOW ACADEMIC IN NATU RE. THUS, THE CROSS-OBJECTION FILED BY THE ASSESSEE IS ALSO DISMI SSED AS INFRUCTUOUS. SHRI NEERAJ MANDLOI ITA NO.680/IND/2020 & C.O.NO.04/IND/2020 38 8. IN RESULT, APPEAL FILED BY REVENUE AND CROSS-OBJ ECTION FILED BY THE ASSESSEE ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED AS PER RULE 34 OF IT AT RULES, 1963 ON 28.07.2021. SD/- SD/- (MADHUMITA ROY) (MA NISH BORAD) JUDICIAL MEMBER ACCOUNTAN T MEMBER / DATED : 28 TH JULY, 2021 !VYAS! COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE