DCIT, Central Circle-1, Nashik V. Shri Sandeep B. Dixit, Nashik

ITA 95/PUN/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1462 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 09-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT HALDER
• Keywords: Search and seizure; Salary income; Documents seized
• Section: 142(1); 132; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NOS. 94 & 95/PN/2013 $& ' !(' / ASSESSMENT YEARS : 2006-07 & 2007-08 ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, NASHIK ....... / APPELLANT )& / V/S. SHRI SANDEEP B. DIXIT, 9, DURGESH RESIDENCY, NAVSHA GANPATI NAGAR, ANANDWALI GANGAPUR ROAD, NASHIK PAN : AAPPD1893D / RESPONDENT ASSESSEE BY : SHRI KISHORE PHADKE REVENUE BY : SHRI ABHIJIT HALDER. / DATE OF HEARING : 30-06-2016 / DATE OF PRONOUNCEMENT : 29-07-2016 * / ORDER PER VIKAS AWASTHY, JM : THESE TWO APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK DAT ED 23-10-2012 COMMON FOR ASSESSMENT YEARS 2006-07 AND 2 007-08. SINCE, THE ISSUES RAISED IN BOTH THE ASSESSMENT YEARS AR E ARISING FROM 2 ITA NOS. 94 & 95/PN/2013, A.YS. 2006-07 & 2007-08 SAME SET OF FACTS, BOTH THESE APPEALS ARE TAKEN UP TOG ETHER FOR ADJUDICATION. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE WAS WORKING AS AN EMPLOYEE OF M/S. DEEGESH CON STRUCTION PVT. LTD. DURING THE PERIOD RELEVANT TO ASSESSMENT YEARS 2003-04 AND 2004-05 AND THEREAFTER, THE ASSESSEE WAS WORKING WITH M/S. HOTEL SAI SIDDHI PVT. LTD. DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR 2006-07. BOTH THE ABOVE SAID COMPANIES WERE RUN AND PROMOTED B Y SHRI AMIT DIGVIJAY SINGH. A SEARCH AND SEIZURE ACTION U/S. 132 OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS DONE IN THE CASE OF SINGH AND BHUTADA GROUP ON 28-06-2007. DURING THE COUR SE OF SEARCH CERTAIN DOCUMENTS WERE FOUND BELONGING TO ASSESSEE AND T HE SAME WERE SEIZED. NOTICE U/S. 153C WAS ISSUED TO THE ASSESSEE ON 05-10-2009. NOTICE U/S. 142(1) ALONG WITH QUESTIONNAIRE CALLING FOR RETURN OF INCOME AND TO FURNISH CERTAIN SPECIFIED INFORMATION WAS ISSUED TO TH E ASSESSEE ON 05-10-2009, WHICH WAS UNDISPUTEDLY SERVED. IN RESPO NSE TO THE NOTICE, THE ASSESSEE FILED RETURN OF INCOME ON 24-12-2009 DECLARING INCOME FROM SALARY ` 1,55,900/- FOR THE ASSESSMENT YEAR 2006-07. SIMILAR INCOME WAS DECLARED BY THE ASSESSEE IN ASSESSMENT YEAR 2007-08. THE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME U/S. 139 FOR THE IMPUGNED ASSESSMENT YEARS. DURING THE COURSE OF S EARCH IT WAS FOUND THAT THE ASSESSEE THAT THE ASSESSEE IS A PROPRIE TOR OF TWO FIRMS NAMELY M/S. S. DAYANAND ELECTRIC WORK AND M/S. HEMLATA ENTERPRISES. BOTH THE AFORESAID FIRMS HAD CURRENT BANK A CCOUNTS WITH BANK OF MAHARASHTRA, BANDRA (EAST) BRANCH, MUMBAI. THE AS SESSEE HAD NOT DISCLOSED THESE TWO BANK ACCOUNTS IN THE RETUR N OF INCOME AND 3 ITA NOS. 94 & 95/PN/2013, A.YS. 2006-07 & 2007-08 NO EXPLANATION WAS FURNISHED BY THE ASSESSEE DURING SCRU TINY ASSESSMENT PROCEEDINGS DESPITE THE FACT THAT SPECIFIC QUE STION WAS ASKED ABOUT THE BANK ACCOUNTS IN THE QUESTIONNAIRE ISSU ED TO THE ASSESSEE. THE ASSESSEE EVEN DID NOT PARTICIPATE IN THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER WAS CONSTRAINED TO COM PLETE THE ASSESSMENT U/S. 144 R.W.S. 153C OF THE ACT ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER MADE ADDITION OF ` 63,13,781/- IN ASSESSMENT YEAR 2006-07 ON ACCOUNT OF CR EDITS IN THE CURRENT BANK ACCOUNTS NOT DECLARED BY THE ASSESSEE. SIMILAR ADDITION OF ` 90,00,000/- WAS MADE BY ASSESSING OFFICER IN ASSESSMENT Y EAR 2007-08. AGGRIEVED BY THE ASSESSMENT ORDERS FOR THE RESPECTIVE ASSESSMENT YEARS, THE ASSESSEE PREFERRED APPEALS BEFORE THE COMMIS SIONER OF INCOME TAX (APPEALS). THE ASSESSEE FURNISHED THE DETAILS OF AMOUNTS CREDITED IN THE CURRENT BANK ACCOUNTS IN THE NAME OF TW O PROPRIETORSHIP FIRMS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). AS PER THE CONTENTIONS OF ASSESSEE, THE CURRENT BANK A CCOUNTS WERE OPENED ON THE INSTRUCTION OF SHRI AMIT DIGVIJAY SINGH AND THE AMOUNT CREDITED IN THE AFORESAID BANK ACCOUNTS WERE IN RESPECT OF DIRECT DISBURSEMENT OF LOAN FROM VARIOUS BANKS/FINANCIAL INSTITUTIONS FOR THE PROJECT OF THE SINGH GROUP. THE ASSESSEE WAS MERELY A N EMPLOYEE OF SHRI AMIT DIGVIJAY SINGH AND HAS FOLLOWED THE INSTRUCTIONS OF HIS EMPLOYER. THE COMMISSIONER OF INCOME TAX (APPEALS) ON THE BASIS OF EXPLANATION FURNISHED BY THE ASSESSEE DELETED THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER. AGAINST THE FINDINGS OF COMMISSIONE R OF INCOME TAX (APPEALS) IN DELETING THE ADDITIONS, THE DEPARTME NT IS IN 4 ITA NOS. 94 & 95/PN/2013, A.YS. 2006-07 & 2007-08 APPEAL FOR BOTH THE ASSESSMENT YEARS I.E. ASSESSMENT YE ARS 2006-07 AND 2007-08. 3. SHRI ABHIJIT HALDER REPRESENTING THE DEPARTMENT SUBM ITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELET ING THE ADDITIONS MERELY BY PLACING RELIANCE ON THE ASSERTIONS MAD E BY THE ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILE D TO APPRECIATE THAT THE ASSESSEE HAS NOT SATISFACTORILY EXP LAINED WITH COGENT DOCUMENTARY EVIDENCE THE TRANSACTIONS IN UNDISCLO SED BANK ACCOUNTS. THE LD. DR FURTHER CONTENDED THAT THE COMMISS IONER OF INCOME TAX (APPEALS) HAS NOT TAKEN INTO CONSIDERATION THE FACT THAT ADDITIONS WERE MADE BY THE ASSESSING OFFICER ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. T HE COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT VERIFIED THE SO URCE OF RECEIPTS IN THE CURRENT BANK ACCOUNTS BEFORE DELETING TH E ADDITIONS. THE LD. DR VEHEMENTLY SUPPORTED THE FINDINGS OF ASSESSING OFFICER AND PRAYED FOR SETTING ASIDE THE IMPUGNED ORDER PASSED BY T HE FIRST APPELLATE AUTHORITY. 4. ON THE OTHER HAND SHRI KISHORE PHADKE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS MERELY AN EMPLOYEE OF SHRI AMIT DIGVIJAY SINGH. INITIALLY, THE ASSESSEE WAS WORKIN G WITH M/S. DEEGESH CONSTRUCTION PVT. LTD. AND THEREAFTER WITH M/S. HOTEL SAI SIDDHI PVT. LTD. THE ASSESSEE IS NOT ENGAGED IN ANY BUSIN ESS OR VENTURE AND IS A SALARIED EMPLOYEE. THE LD. AR OF THE ASSE SSEE CONTENDED THAT SHRI AMIT DIGVIJAY SINGH HAS USED THE NA ME OF ASSESSEE AND HAS OPENED THE BANK ACCOUNTS IN THE NAME OF M/S. S. DAYANAND 5 ITA NOS. 94 & 95/PN/2013, A.YS. 2006-07 & 2007-08 ELECTRIC WORK AND M/S. HEMLATA ENTERPRISES BY SHOWING THE ASSESSEE AS PROPRIETOR OF THE SAID FIRMS. THE ASSESSEE IS ONLY A C ONDUIT OF SHRI AMIT DIGVIJAY SINGH. NO BUSINESS TRANSACTIONS WERE UNDE RTAKEN BY THE FIRMS AS IS EVIDENT FROM THE BANK ACCOUNTS IN THE NAME OF AFORESAID FIRMS. THE LD. AR CONTENDED THAT DURING THE COURSE OF SEA RCH THE BANK STATEMENTS AND SINGED CHEQUE BOOKS IN RESPECT OF CURR ENT BANK ACCOUNTS UNDER QUESTION WERE SEIZED FROM THE PREMISES O F SINGH GROUP. THE AMOUNTS CREDITED IN THE CURRENT BANK ACCOU NTS WERE THE PROJECT LOAN AMOUNTS DISBURSED TO SINGH GROUP. THE LD. A R ASSERTED THAT SHRI AMIT DIGVIJAY SINGH USED THE NAME OF HIS EMPLOYE ES FOR ENTERING INTO VARIOUS TRANSACTIONS BY OPENING BANK ACCOU NTS IN THEIR NAMES. THE EMPLOYEES WERE ON THE MERCY OF SHRI AMIT DIGV IJAY SINGH AND HAD NO OPTION BUT TO FOLLOW HIS DICTATE. TO SUPPORT H IS SUBMISSIONS THE LD. AR PLACED ON RECORD A COPY OF THE ORD ER OF TRIBUNAL IN THE CASE OF ACIT VS. SHRI AMIT DAYANAND IRSHID IN ITA NO. 988/PN/2011 FOR ASSESSMENT YEAR 2005-06 DECIDED ON 29 -04-2013. THE LD. AR POINTED THAT THE TRIBUNAL IN THE SAID CASE HAS OBSERVED THAT THE ASSESSEE IS AN EMPLOYEE OF SHRI AMIT DIGVIJAY SINGH AT THE RELEVANT POINT OF TIME AND SHRI AMIT DIGVIJAY SINGH WAS IN A POSITION WHEREBY HE COULD DICTATE HIS TERMS TO THE ASSESSEE. 4.1 THE LD. AR OF THE ASSESSEE CONTENDED THAT THE ASSES SEE HAD FILED AN AFFIDAVIT WHICH IS AT PAGES 36 AND 37 OF THE PAPER BOOK . IN THE SAID AFFIDAVIT, THE ASSESSEE HAS CATEGORICALLY STATED THAT HE W AS WORKING WITH M/S. DEEGESH CONSTRUCTION PVT. LTD. AND THEREAFTER WITH M /S. HOTEL SAI SIDDHI PVT. LTD. BEING AN EMPLOYEE OF THE COMPANY HE HAD TO FOLLOW THE INSTRUCTION GIVEN BY SHRI AMIT DIGVIJAY SINGH, MANAGING DIREC TOR OF THE 6 ITA NOS. 94 & 95/PN/2013, A.YS. 2006-07 & 2007-08 SAID COMPANIES. THE CURRENT ACCOUNT IN THE NAME OF M/S. S. DAYANA ND ELECTRIC WORK AND M/S. HEMLATA ENTERPRISES WERE OPENED O N THE INSTRUCTION OF SHRI AMIT DIGVIJAY SINGH AND THE ASSESSEE IS NO WAY CONNECTED WITH THE CONTRACTUAL WORK ALLEGEDLY UNDERTAKE N BY THE SAID FIRMS. THE ASSESSEE HAD SIGNED THE BLANK CHEQUES PERTA INING TO THE CURRENT ACCOUNTS AND HAD HANDED OVER TO THE MANAGEM ENT OF THE COMPANY. THE LD. AR SUBMITTED THAT AFFIDAVIT FILED BY THE ASS ESSEE WAS AVAILABLE BEFORE THE REVENUE AUTHORITIES FOR CROSS EXAMINAT ION. NOW, IT IS NOT OPEN TO THE REVENUE TO CHALLENGE THE CORRECTNES S OF THE CONTENTS OF THE AFFIDAVIT. IN SUPPORT OF HIS SUBMISSIONS, THE LD. AR PLAC ED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF MEHTA PARIKH & CO. VS. COMMISSIONER OF INCOME TAX REPOR TED AS 30 ITR 181 (SC). 4.2 THE LD. AR OF THE ASSESSEE SUBMITTED THAT CURRENT BA NK ACCOUNTS WERE OPENED AT THE INSTRUCTIONS OF SHRI AMIT DIGVIJAY SIN GH FOR PROVIDING FINANCIAL BENEFIT TO M/S. HOTEL SAI SIDDHI PVT. LTD., AN OTHER COMPANY OWNED BY SHRI AMIT DIGVIJAY SINGH. AN EXAMINATIO N OF DETAILS OF BANK ACCOUNTS WOULD SHOW THAT ADDRESS GIVEN FOR OPEN ING THE BANK ACCOUNTS IS NOT THAT OF THE ASSESSEE. BOTH THE ACCOU NTS WERE OPENED ON THE INTRODUCTION OF SHRI AMIT DIGVIJAY SINGH. THE WITHDR AWALS FROM THE BANK ACCOUNTS WERE IMMEDIATELY AFTER THE DISBURSEMENT OF LOA N AND MOST OF THE WITHDRAWALS ARE IN CASH. EXCEPT FOR THE CRED IT OF LOAN DISBURSEMENT AMOUNT AND THE WITHDRAWALS MADE ON THE INS TRUCTIONS OF SHRI AMIT DIGVIJAY SINGH THERE ARE NO OTHER BANK TRANSA CTIONS. THE AMOUNT CREDITED IN THE BANK ACCOUNTS WERE SATISFACTORILY EXPLAINED TO THE COMMISSIONER OF INCOME TAX (APPEALS) AND THE ASSESSING OFFICER 7 ITA NOS. 94 & 95/PN/2013, A.YS. 2006-07 & 2007-08 HAS ALSO NOT RAISED ANY DOUBT DURING THE REMAND PROCEE DINGS. THE LD. AR CONTENDED THAT SIMILAR ADDITIONS WERE MADE IN THE ASSE SSMENT YEAR 2005-06, AND SAME WERE DELETED BY THE COMMISSIONER OF IN COME TAX (APPEALS), NASHIK. THE DEPARTMENT HAS NOT FILED APPEAL AGAIN ST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) FOR ASSESSMEN T YEAR 2005-06. THE ADDITIONS HAVE BEEN MADE FOR ASSESSMENT Y EARS UNDER APPEAL FOR IDENTICAL TRANSACTIONS, THEREFORE, THE APPEALS FIL ED BY THE DEPARTMENT ARE NOT SUSTAINABLE. THE LD. AR VEHEMENTLY S UPPORTED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING TH E ADDITION. FURTHER, TO STRENGTHEN HIS ARGUMENTS, THE LD. AR PLACED R ELIANCE ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF COMMISSIO NER OF INCOME TAX VS. DWARKADHISH INVESTMENT (P) LTD. REPORTED AS 330 ITR 298 (DELHI). 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. THE ADDITIONS WERE MADE BY ASSESSING OFFICER IN RESPECT OF CU RRENT BANK ACCOUNTS WHICH WERE NOT DISCLOSED BY THE ASSESSEE IN IT S RETURN OF INCOME FILED IN PURSUANCE TO THE NOTICE ISSUED U/S. 153C OF THE ACT. THE STAND OF THE ASSESSEE IS THAT THE SAID BANK ACCOU NTS DID NOT BELONG TO THE ASSESSEE AND WERE OPENED AT THE BEHEST OF SHR I AMIT DIGVIJAY SINGH. THE CURRENT ACCOUNTS WERE IN THE NAME OF PROPRIE TORSHIP FIRMS M/S. S. DAYANAND ELECTRIC WORK AND M/S. HEMLATA ENTERPRISE S. THE AMOUNT CREDITED IN THE AFORESAID BANK ACCOUNTS WERE THE PROJECT LOAN OBTAINED FOR M/S. HOTEL SAI SIDDHI PVT. LTD. FROM STATE BANK OF INDIA, MUMBAI CORPORATION BANK, MUMBAI AND TOURISM CORPORATION BANK OF INDIA, DELHI. AS PER THE CONTENTIONS OF THE ASSESSEE, SHR I AMIT DIGVIJAY 8 ITA NOS. 94 & 95/PN/2013, A.YS. 2006-07 & 2007-08 SINGH HAS SWINDLED THE AMOUNT AFTER WITHDRAWING THE SAME FROM THE AFORESAID CURRENT BANK ACCOUNTS FOR HIS PERSONAL GAINS. T HE BLANK CHEQUE BOOK SIGNED BY THE ASSESSEE AND THE BANK STAT EMENTS WERE FOUND FROM ONE OF THE BUSINESS PREMISES OF SHRI AMIT DIGVIJ AY SINGH. THE ASSESSEE HAS NOT GAINED ANYTHING FROM THE PROPRIETO RSHIP FIRMS I.E. M/S. S. DAYANAND ELECTRIC WORK AND M/S. HEMLATA ENTERPRISES. THE DEPARTMENT HAS PRIMARILY ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) ON THE GROUND THAT T HE SOURCE OF CREDITS IN THE CURRENT BANK ACCOUNTS WERE NOT SATISFACT ORILY EXPLAINED BY THE ASSESSEE. AS PER THE CONTENTIONS OF THE ASSESS EE THE AMOUNTS WERE RECEIVED THROUGH BANKING CHANNELS AND WERE SATISFAC TORILY EXPLAINED. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS SOU GHT REMAND REPORT FROM THE ASSESSING OFFICER DURING THE FIRST APPELLATE PROCEEDINGS. THE ASSESSING OFFICER IN HIS REPORT HAS OBSER VED THAT THE CREDITS IN THE CURRENT BANK ACCOUNTS ARE IN RESPECT OF PAYMENTS RECEIVED AGAINST THE BILLS RAISED BY THE PROPRIETORSHIP FIRMS ` 40,07,654/- CREDITED IN THE ACCOUNT M/S. HEMLATA ENTERPRI SES IS AGAINST AGGREGATE OF SIX BILLS RAISED ON M/S. HOTEL SAI SIDDH I PVT. LTD. AND ` 4,56,575/- CREDITED IN THE CURRENT BANK ACCOUNT OF M/S. S . DAYANAND ELECTRIC WORK IS AGAINST ONE BILLS RAISED ON M/S. H OTEL SAI SIDDHI PVT. LTD. 6. THE COMMISSIONER OF INCOME TAX (APPEALS) IN HIS ORDER HA S OBSERVED THAT THE CREDITS IN CURRENT BANK ACCOUNTS AR E BY WAY OF BANKING CHANNELS. THERE ARE NO OTHER MAJOR TRANSACTION S EXCEPT FOR CREDIT OF LOAN ACCOUNT AND IMMEDIATE WITHDRAWAL OF SAME. TH E FACTS 9 ITA NOS. 94 & 95/PN/2013, A.YS. 2006-07 & 2007-08 ARE INDICATIVE OF ARRANGEMENT BETWEEN THE ASSESSEE AND M/S. HOTEL SAI SIDDHI PVT. LTD. THE REVENUE HAS NOT DISPUTED THE FACT THAT AT RELEVANT POINT OF TIME THE ASSESSEE WAS EMPLOYEE IN ONE OF THE COMPANIES CONTROLLED/MANAGED BY SHRI AMIT DIGVIJAY SINGH. THE ASSES SEE WAS UNDER THE CONTROL AND INFLUENCE OF SHRI AMIT DIGVIJAY SINGH AND THUS HAD TO FOLLOW THE INSTRUCTIONS OF HIS EMPLOYER. THE ASSESSIN G OFFICER IN HIS ORDER HAS OBSERVED THAT THE CURRENT ACCOUNTS WER E OPENED BY THE ASSESSEE AT THE STRENGTH OF INTRODUCTION BY SHRI AMIT DIGV IJAY SINGH. IN THE BACKDROP OF THESE FACTS, WE FIND SOME FORE IN THE ARGU MENT OF LD. AR OF THE ASSESSEE. THE LD. AR HAS ALSO REFERRED TO THE DEC ISION OF CO- ORDINATE BENCH IN THE CASE OF ACIT VS. SHRI AMIT DAYANAN D IRSHID (SUPRA) WHICH SHOWS THAT THERE WERE OTHER EMPLOYEES OF SHRI AMIT DIGVIJAY SINGH WHO HAD FALLEN PREY TO HIS SCHEMING. IN THE SAID CASE ALSO CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE WERE S EIZED DURING SEARCH FROM THE PREMISES OF SHRI AMIT DIGVIJAY SINGH. THE ASSESSING OFFICER MADE ADDITION IN THE INCOME RETURNED BY THE SAID A SSESSEE IN RESPECT OF DOCUMENTS SEIZED DURING SEARCH. THE ASSESSE E CARRIED THE MATTER IN APPEAL TO COMMISSIONER OF INCOME TAX (APPEALS). I N FIRST APPEAL THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION. IN APPEAL BY THE DEPARTMENT, THE TRIBUNAL UPHELD THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS) BY HOLDING AS UNDER : 9. IT IS UNDISPUTED THAT THESE DOCUMENTS WERE SEIZ ED FROM THE POSSESSION OF SHRI AMIT DIGVIJAY SINGH WHO HAD DENI ED THE KNOWLEDGE THEREOF AND DISASSOCIATED HIMSELF BY SAVING THAT TH ESE BELONG TO THE ASSESSEE, WHO WAS AN EMPLOYEE OF SHRI AMIT D. SINGH AT RELEVANT POINT OF THE TIME. THE SAID SHRI AMIT D. SINGH WAS IN A P OSITION WHEREBY WHO COULD DICTATE THE ASSESSEE AT RELEVANT POINT OF TIM E. AS DISCUSSED IN PARA 10 ITA NOS. 94 & 95/PN/2013, A.YS. 2006-07 & 2007-08 4 OF THE ASSESSING OFFICER'S REMAND REPORT DATED 07 /02/2011, SAID SHRI AMIT D. SINGH HAS STATED IN HIS REPLY TO THE ASSESS ING OFFICER THAT PROMISSORY NOTES GIVEN IN HIS NAME AND IN THE NAME OF OTHER PERSONS, INCLUDING MRS. MALINI D. IRSHID, MOTHER OF THE ASSE SSEE, ISSUED BY SHRI MANDAR KELKAR REMAINED WITH HIM AS NO PAYMENT WAS D IRECTLY RECEIVED FROM THE SAID PERSON WHO HAD BUSINESS TRANSACTIONS WITH SHRI AMIT D. SINGH. THUS SHRI AMIT D. SINGH HAS ACCEPTED THAT (I ) HE HAS BUSINESS TRANSACTIONS WITH SHRI MANDAR KELKAR; (II) THE PROM ISSORY NOTES WERE IN THE POSSESSION OF SHRI AMIT D. SINGH AS NO PAYMENT WAS DIRECTLY RECEIVED FROM SHRI MANDAR KELKAR; (III) HE HAD POSS ESSION OF THE PROMISSORY NOTES FOR COLLECTION OF MONEY SHOWN AS P AYABLE IN THE SAID PROMISSORY NOTES. IT SHOWS THAT PAYMENT WAS TO BE C OLLECTED BY SHRI AMIT D. SINGH, AND NOT BY OTHER PERSONS IN WHOSE NA ME THE PROMISSORY NOTES WERE ISSUED. ACCORDING TO ASSESSEE, THE PROPE RTY IN THE FORM OF MONEY RECEIVABLE WAS ENJOYABLE BY SHRI AMIT D. SING H AND NOT BY THE OTHER PERSONS IN WHOSE NAME THE PROMISSORY NOTES WE RE ISSUED. IN ABSENCE OF ANY CORROBORATIVE EVIDENCE, MERE DENIAL OF THE OWNERSHIP OF THE DOCUMENTS BY SHRI AMIT D. SINGH DID NOT CONSTITU TE REBUTTAL OF PRESUMPTION U/S 132(4A). FURTHER, THE AMOUNT COULD NOT BE ADDED IN THE HANDS OF THE ASSESSEE ON THE BASIS OF UNDATED PROMI SSORY NOTES WITHOUT ANY CORROBORATIVE EVIDENCE. THE DOCUMENT IS ADMITTE DLY FOUND IN THE POSSESSION AND CONTROL OF ANY PERSON OTHER THAN ASS ESSEE IN THE COURSE OF SEARCH. SO PRESUMPTION IS THAT DOCUMENT BELONGS TO SUCH PERSON, THOUGH SUCH PRESUMPTION IS REBUTTABLE PRESUMPTION, DEPENDING ON FACTS AND CIRCUMSTANCES. AS THE DOCUMENT WAS FOUND FROM T HE POSSESSION OF SHRI AMIT DIGVIJAY SINGH WHO HAS DENIED THE KNOWLED GE THEREOF, HOWEVER, BY DENYING THE SAME BEFORE THE ASSESSING O FFICER IN HIS OWN CASE HE HAS NOT PRODUCED ANY COGENT MATERIAL TO REB UT THE SAME. EXCEPT MENTION OF ASSESSEE AND HIS MOTHERS NAME ON THIS N OTE, THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY FURTHER EVIDE NCES EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING THE REMAND PROCEED INGS TO SUBSTANTIATE THE IMPUGNED ADDITION IN THE ASSESSEE S CASE. IN THE IMPUGNED ASSESSMENT ORDER AND THE REMAND REPORT, TH E ASSESSING OFFICER HAS OBSERVED THAT ASSESSEE DID NOT RESPOND TO THE SHOW CAUSE NOTICE DATED 24.11.2009. HOWEVER, THE LD. AUTHORISE D REPRESENTATIVE PLACED BEFORE THE CIT(A) A COPY OF ASSESSEE'S LETTE R DATED 29.12.2009 DULY ACKNOWLEDGED BY THE ASSESSING OFFICER IN HIS T APAL ON THE SAME DATE IN WHICH THE ASSESSEE HAS CLAIMED TO HAVE CLAR IFIED THE IMPUGNED ISSUE BY STATING THAT HE HAS NOT SIGNED ANY PROMISS ORY NOTE TO MR. SUNIL 11 ITA NOS. 94 & 95/PN/2013, A.YS. 2006-07 & 2007-08 D. KHOSLA, NEITHER HE KNEW ANY SUCH INDIVIDUAL. SIMI LARLY, HIS MOTHER MALANI D. IRSHID HAD NOT TAKEN ANY PROMISSORY NOTE FROM ANY SHRI MANDAR KELKAR. SO THE ASSESSING OFFICER WAS NOT JUS TIFIED IN REACHING TO THE CONCLUSION. THE ASSESSING OFFICER HAS APPLIED T HE PRESUMPTION U/S.143(4A) AGAINST THE ASSESSEE. NORMALLY, THE SAI D PRESUMPTION IS APPLICABLE TO THE PERSON FROM WHOSE POSSESSION THE DOCUMENT IS FOUND IN THE COURSE OF SEARCH ACTION. THE PRESUMPTION UNDER SECTION 132(4A) IS AVAILABLE ONLY AGAINST THE PERSON FROM WHOSE POSSES SION THE DOCUMENT IS FOUND AND NOT AGAINST THE THIRD PERSON. IN ABSEN CE OF CLINCHING EVIDENCE AGAINST THE THIRD PERSON AS STATED ABOVE, NO ACTION HAS BEEN TAKEN AGAINST HIM. IN SUCH SITUATION, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.31,50,000/- IN CASE OF ASSESSEE AND SAME HAS BEEN RIGHTLY DELETED. THIS FINDING OF THE CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 7. WE ARE OF THE VIEW THAT THE CASE OF THE ASSESSEE IS ON SAME FOOTING. THE ASSESSEE IS ONE OF THE VICTIMS OF SHRI AMIT DIG VIJAY SINGH. THE FACTS AND CIRCUMSTANCES OF THE CASE AND DOCUMENTS ON RECORD CLEARLY INDICATE THAT THERE WAS NEXUS BETWEEN THE PROP RIETORSHIP FIRMS AND M/S. HOTEL SAI SIDDHI PVT. LTD., A COMPANY CONTROLLED BY SHRI AMIT DIGVIJAY SINGH. THE PROPRIETORSHIP FIRMS WERE MERELY FAAD E TO SECURE PROJECT LOAN DISBURSEMENTS FROM BANKS/FINANCIAL INSTITUTIONS. THIS IS EVIDENT FROM THE FACT THAT THE BANK ACCOUNTS WERE OPEN ED ON THE INTRODUCTION OF SHRI AMIT DIGVIJAY SINGH AND SUBSEQUENTLY AT THE TIME OF SEARCH, THE BANK STATEMENTS AND BLANK SIGNED CHEQUES IN RESPECT OF SAID BANK ACCOUNT WERE FOUND AND SEIZED FROM THE PREMI SES OF SHRI AMIT DIGVIJAY SINGH. OUR VIEW FURTHER GETS IMPETUS FROM TH E FACT THAT PROPRIETORSHIP OF THE ASSESSEE HAD ALLEGEDLY PERFORMED SO ME WORK FOR M/S. HOTEL SAI SIDDHI PVT. LTD. ALONE AND NO OTHER TASK WAS UNDERTAKEN BY THE SAID FIRMS. 12 ITA NOS. 94 & 95/PN/2013, A.YS. 2006-07 & 2007-08 THUS, IN VIEW OF THE TOTALITY OF FACTS OF THE CASE, WE FIND NO INFIRMITY IN THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS ) IN DELETING THE ADDITION. ACCORDINGLY, THE APPEALS OF THE DEPA RTMENT ARE DISMISSED BEING DEVOID OF ANY MERIT. 8. IN THE RESULT, THE IMPUGNED ORDER IS UPHELD AND THE A PPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 29 TH DAY OF JULY, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 29 TH JULY, 2016 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-I, NASHIK 4. ' / THE CIT-(CENTRAL), NAGPUR 5. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 6. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE