Asst Comm of Income-tax, Nashik V. Shri Amit Dayanand Irshid, Nashik

ITA 988/PUN/2011

• Counselvise Citation: 98824514 RSA 2011
• Duration Of Justice: 1 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-01-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 03-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Assessee Lawyers: S N DOSHI
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI G.S.PANNU, ACCOUNTANT MEMBER. ITA.NO.988/PN/2011 (ASSTT. YEAR : 2005-06) ACIT, CENTRAL CIRCLE-1, NASHIK. .. APPELLANT VS. SHRI AMIT DAYANAND IRSHID, COIN COTTAGE, RACHANA SCHOOL ROAD, SHARANPUR ROAD, CANADA CORNER, NASHIK. .. RESPONDENT PAN: AAIPI9007P AND CO.NO.133/PN/2012 (ARISING OUT OF ITA.NO.988/PN/2011) (ASSTT. YEAR : 2005-06) SHRI AMIT DAYANAND IRSHID, COIN COTTAGE, RACHANA SCHOOL ROAD, SHARANPUR ROAD, CANADA CORNER, NASHIK. .. APPELLANT PAN: AAIPI9007P VS. ACIT, CENTRAL CIRCLE-1, NASHIK. .. RESPONDENT ASSESSEE BY : SHRI S.N.DOSHI DEPARTMENT BY : MS.ANN KAPTHUAMA DATE OF HEARING : 22.04.2013 DATE OF PRONOUNCEMENT : 29.04.2013 ORDER PER SHAILENDRA KUMAR YADAV, JM : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) ON THE FOLLOWING GROUNDS: 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-I, NASHIK ERRED IN DELETING THE ADDITION MAD E BY THE A.O. IN THE ASSESSMENT ORDER ON ACCOUNT OF LOANS AD VANCES AS PER PROMISSORY NOTES AMOUNTING TO RS.31,50,000/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-I, NASHIK ERRED IN DELETING THE ADDITION OF RS.31,50,000/- WITHOUT APPRECIATING THE FACT THAT T HE PROMISSORY NOTES IN QUESTION BEAR THE NAMES OF THE ASSESSEE AND HIS MOTHER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-I, NASHIK ERRED IN DELETING THE ADDITION OF RS.31,50,000/- BY HOLDING THE SAME AS BASELESS AND UNWARRANTED. ON THE CONTRARY, THE AO WAS RIGHT IN ADDING THE ALLEGED AMOUNTS TO THE INCOME. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-I, NASHIK ERRED IN DELETING THE ADDITION OF RS.31,50,000/- BY CONSIDERING THAT MERE DENIAL BY T HE ASSESSEE WOULD BE SUFFICIENT TO DISCHARGE THE ONUS. 2. A SEARCH AND SEIZURE ACTION U/S.132 OF THE ACT I N THE SINGH AND BHUTADA GROUP OF CASES ON 28.06.2007. THE ASSE SSEE WAS AN EMPLOYEE OF SINGH GROUP OF COMPANIES, CONTROLLED AN D MANAGED BY SHRI AMIT DIGVIJAY SINGH. DURING THE COURSE OF EXA MINATION OF SEIZED MATERIAL IN THE SINGH GROUP OF CASES, IT WAS FOUND THAT CERTAIN DOCUMENTS APPARENTLY BELONGING TO THE ASSES SEE WAS SEIZED FROM THE PREMISES SEARCHED U/S.132 OF THE ACT. ACC ORDINGLY, NOTICE U/S.153C WAS ISSUED AND SERVED ON THE ASSESSEE ON 2 8.08.2009. THE ASSESSING OFFICER MADE VARIOUS ADDITIONS OUT OF WHICH ADDITION OF RS.31,50,000/- MADE ON ACCOUNT OF ADVANCING AMOU NTS TO OTHER PERSON IS SUBJECT MATTER BEFORE US. WE FIND THAT THE ASSESSING OFFICER HAS MADE ADDITION OF RS.31,50,000/- TO THE TOTAL INCOME OF ASSESSEE FOR ADVANCING AMOUNTS TO OTHER PERSON AS S TATED ABOVE. 3. MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AU THORITY WHEREIN ASSESSEE VIDE ITS LETTER DATED 10.03.2010 S UBMITTED AS UNDER: AS EXPLAINED IN THE BEGINNING OF THIS SUBMISSION, I WAS EMPLOYED WITH MR. AMIT SINGH TILL JUNE 2005. DURING THIS PERIOD HE HAS BEEN ASKING ME TO SIGN VARIOUS PAPERS . IT IS VERY 3 DIFFICULT FOR ME TO REMEMBER THEM. IN FACT AS A SAL ARIES PERSON, I NEVER HAD ENOUGH INCOME NEITHER MY FAMILY MEMBER HAD SOURCE OF INCOME, SO AS TO LEND SOMEBODY AN AMOUNT AS BIG AS RS.31,50,000/-. I DO NOT KNOW ANY PERSON AS MENTION ED BY AO IN HIS ORDER. THE PROMISSORY NOTES FOUND IN MR. AMI T SINGH'S OFFICE ARE NOT SIGNED BY ME, NEITHER I HAVE ANY CON NECTION WITH ANY SUCH TRANSACTION. I THEREFORE PRAY TO DELETE TH IS ADDITION AND REQUEST FOR RELIEF. 4. IN RESPONSE TO ABOVE, THE CIT(A) CALLED FOR REMA ND REPORT FROM THE CONCERNED ASSESSING OFFICER, WHO VIDE HIS LETTE R DATED 07.02.2011 HAS SUBMITTED A REMAND REPORT ON THIS IS SUE, WHICH IS REPRODUCED AS UNDER: THE DOCUMENT RELATING TO PROMISSORY NOTE IN THE NA ME OF THE APPELLANT AND HIS MOTHER RESULTING INTO ADDITION OF RS.31,50,000/- IS IDENTIFIED AS ITEM NUMBER MARKED A-8 FOUND AT THE OFFICE PREMISES OF DEEGESH CONSTRUCTIO N PVT. LTD., DEEGESH TOWER, GANGAPUR ROAD, NASHIK AND ITEM NO. M ARKED A-25 SEIZED FROM THE OFFICE PREMISES OF HARIA TRAVE LS PVT. LTD., SANTACRUZ (WEST), MUMBAI. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS SHRI AMIT DIGVIJAY SINGH WAS SPECIFICAL LY ASKED TO EXPLAIN THE PURPOSE OF SUCH PROMISSORY NOTES LYING IN HIS BUSINESS PREMISES. IN HIS REPLY HE STATED THAT THE PROMISSORY NOTES WRITTEN IN HIS NAME AND IN THE NAME OF OTHER PERSONS INCLUDING MALINI DAYANAND IRSHID, MOTHER OF THE ASS ESSEE ISSUED BY MANDAR KELKAR REMAINED WITH HIM AS NO PAY MENT WAS DIRECTLY RECEIVED FORM MANDAR KELKAR WHO HAD BU SINESS TRANSACTIONS WITH HIM. HE ALSO STATED THAT AS REGAR DS TO SOURCE OF MONEY GIVEN TO MANDAR KELKAR BY THESE PERSONS, T HE SAME CAN BE EXPLAINED BY RESPECTIVE PARTIES AND HE IS NO T CONCERNED IN WHATSOEVER MANNER WITH REGARD TO SOURCE OF MONEY ADVANCED BY THESE PARTIES. IN THE DRAFT ORDER DATED 24/11/2009 IT WAS CLEARLY PROPOSED TO MAKE THE ADDI TION ON ACCOUNT OF UNEXPLAINED PROMISSORY NOTES IN THE HAND S OF THE ASSESSEE BUT THE ASSESSEE DID NOT RESPOND TO THE DR AFT ORDER AND THEREFORE IT WAS CONCLUDED THAT THE ASSESSEE HA S NOTHING TO EXPLAIN IN THE MATTER AND SINCE SHRI AMIT D. SIN GH DENIED THE OWNERSHIP OF THE SEIZED DOCUMENTS AND SHRI AMIT DAYANANT IRSHID WAS IDENTIFIED AS THE CLOSE ASSOCIA TE OF SHRI AMIT D. SINGH DURING THE RELEVANT PERIOD, IT WAS HE LD THAT DOCUMENTS BELONG TO AMIT DAYANAND IRSHID AND THEREF ORE, THE INCOME ARISING FROM SUCH TRANSACTIONS AS NOTED ON T HE SEIZED DOCUMENTS WAS ASSESSED IN THE HANDS OF THE ASSESSEE FOR WANT OF ANY EXPLANATION WHATSOEVER EITHER BY FILING RETU RN U/S 153C OR BY RESPONDING TO THE DRAFT ORDER DATED 24/11/200 9 DULY SERVED ON HIM BY PASSING ORDER U/S 144 R.W.S. 153C ON THE BASIS OF MATERIALS ON RECORDS. AS THE ASSESSEE FAIL ED TO AVAIL OF 4 THE SUFFICIENT OPPORTUNISMS GIVEN TO HIM THERE WAS NO OPTION BUT TO FRAME THE EX-PARTE ORDER. 5. IN RESPONSE TO THE REMAND REPORT, LD. AUTHORISED REPRESENTATIVE ON BEHALF OF THE ASSESSEE SUBMITTED FOLLOWING WRITTEN SUBMISSIONS: I AM IN RECEIPT OF THE COPIES OF THE PROMISSORY NO TES SIGNED BY ONE MR. SUNEEL KHOSLA AND MR. MANDAR KELKAR. ON CAR EFUL EXAMINATION OF THESE COPIES, IT CAN BE NOTED THAT, NONE OF THEM BEARS MY OR MY MOTHERS SIGNATURE OR ANY OTHER MARK WHICH CAN BE RELATED TO ME (EXCEPT THE NAME STATED IN THE TEXT OF THE DOCUMENT). IN MY EARLIER REPLY, I HAVE ALREADY STAT ED THAT I DO NOT KNOW ANY SUCH PERSONS. THE PERSONS WHO HAVE SUP POSEDLY ISSUED THE PROMISSORY NOTES HAVE NOT BEEN IDENTIFIE D AND THEIR STATEMENTS CONFIRMING THE TRANSACTIONS HAVE NOT BEE N RECORDED. THIS SHOWS THAT THE GENUINENESS OF THE TR ANSACTIONS HAVE NOT BEEN ESTABLISHED. FURTHER, MR. AMIT SINGH IN HIS STATEMENT HAS SAID THAT HE HAD BUSINESS TRANSACTION S WITH THE SAID PARTIES. HENCE, THE OWNERSHIP OF THESE DOCUMEN TS SHALL BE WITH THE PERSON IN WHOSE PREMISES THEY HAVE BEEN FOUND, I.E. MR. AMIT SINGH, AS PER THE PROVISIONS OF SECTI ON 132(4)(A). MERE DENIAL BY MR. AMIT SINGH CANNOT FORM THE BASIS FOR ADDING THE AMOUNTS TO MY INCOME. FURTHER, THE AO HA S STATED THAT I WAS A CLOSE ASSOCIATE OF MR. AMIT SINGH. I WOULD LIKE TO CORRECT THE AO AND CLARIFY THAT I WAS AN EMPLOYEE N OT AN ASSOCIATE OF MR. AMIT SINGH. WITH THE ABOVE EXPLANATION AND THE FACTS AND CIRCUM STANCES THAT HAVE COME THROUGH REMAND REPORT BEFORE YOUR HO NOR, IT IS CLEAR THAT, ADDITIONS MADE ARE ON ESTIMATED BASIS A ND ON PRESUMPTION, WITHOUT ANY SUBSTANTIAL EVIDENCE AGAIN ST ME. THEREFORE, I PRAY FOR JUSTICE AND REQUEST YOU TO DE LETE THE ADDITIONS MADE TO MY INCOME TO GRANT ME TOTAL RELIE F. 6. THE CIT(A) HAVING CONSIDERED THE REMAND REPORT A ND WRITTEN SUBMISSIONS IN RESPONSE TO THE SAME, HAS DECIDED TH E ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER: 7.5 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE RIVAL SUBMISSIONS AND THE POSITION OF LAW ON THIS S UBJECT. IN THE IMPUGNED ASSESSMENT ORDER THE LD. AO HAS NOT GI VEN SUFFICIENT REASONS FOR MAKING THE IMPUGNED ADDITION OF RS.31,00,000/-, THEREFORE, IN REMAND PROCEEDINGS HE WAS SPECIFICALLY ASKED TO CONSIDER THE APPELLANT'S OBJE CTIONS IN THIS 5 REGARD. THE IMPUGNED ADDITION OF RS.31,00,000/- CON SISTS OF THE FOLLOWING AMOUNTS:- I) PROMISSORY NOTE IN THE NAME OF MOTHER OF THE AP PELLANT SMT. MALINI D. IRSHID SIGNED BY ONE PERSON VIZ. SHR I MANDAR KELKAR - RS.9,00,000/- AND RS.12,50,000/-. (II) PROMISSORY NOTE IN THE NAME OF THE APPELLANT S IGNED BY ONE SHRI SANDEEP KHOSLA - RS.10,00,000/-. THUS ALL THE EVIDENCES WERE DISCOVERED AND SEIZED F ROM THE PREMISES OF SHRI AMIT DIGVIJAY SINGH. DURING THE CO URSE OF ASSESSMENT PROCEEDINGS IN THAT CASE THE ASSESSING O FFICER EXAMINED THE SAID PERSON AND HE REPLIED THAT HE HAD NO EXPLANATION IN RESPECT OF THESE THREE PROMISSORY NO TES. THE LD. ARS. HAVE RAISED THE ISSUE OF PRESUMPTION U/S 132(4 A) AND ARGUED THAT THE APPELLANT DOES NOT KNOW EITHER SHRI SUNIL KD. KOSLA OR SHRI MANDAR KELKAR AND IN THE IMPUGNED THR EE DOCUMENTS THERE IS NO SIGNATURE OF EITHER THE APPEL LANT OR HIS MOTHER. IT WAS ALSO PLEADED THAT EXCEPT THE APPELLA NT'S NAME IN ONE DOCUMENT AND THE NAME OF HIS MOTHER IN OTHER TWO DOCUMENTS, COUPLED WITH PRESUMPTION U/S 132(4A), TH E APPELLANT HAS NOTHING TO DO WITH THESE DOCUMENTS. T HE APPELLANT HAS CLARIFIED THAT HE WAS NOT A CLOSE ASS OCIATE OF SHRI AMIT DIGVIJAY SINGH, INSTEAD HE WAS ONLY AN EMPLOYE E. CONSIDERING THE CONTENTIOUS NATURE OF THE ISSUE, TH E AO WAS DIRECTED TO EXAMINE THIS ISSUE IN THE REMAND PROCEE DINGS. THE AO EXAMINED THE MATTER AND REPORTED THAT AS SHRI AM IT DIGVIJAY SINGH HAS DENIED THE OWNERSHIP OF THE SEIZ ED DOCUMENTS AND THE APPELLANT DID NOT RESPOND TO THE SHOW CAUSE NOTICE DURING THE ASSESSMENT PROCEEDINGS, THE IMPUGNED ADDITION WAS MADE. THE AO HAS NOT DENIED T HE FACT OF RELATIONSHIP OF AN EMPLOYEE-EMPLOYER BETWEEN THE APPELLANT OF SHRI AMIT D. SINGH IN THE REMAND REPORT. FURTHER , THERE IS NO CROSS EXAMINATION OF ANY WITNESSES IN THIS CASE EVEN THOUGH THE AO WAS SPECIFICALLY DIRECTED VIDE PARA 6 OF THE REMAND ORDER DATED 28/10/2010. THE ID. AO, HOWEVER, HAS NOT COMMENTED ON THE PRESUMPTION RAISED U/S L32(4A) IN RESPECT OF THE SEIZED DOCUMENTS FROM THE POSSESSION OF A PERSON DURING ACTION U/S 132(1). 7.6 SECTION 132(4A) IS AS UNDER: 'WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENT S, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICL E OR THING ARE OR IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH, IT MAY BE PRESUME D- (I) THAT SUCH BOOKS OF ACCOUNT, OTHER DOCUM ENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING BELONG OR BELON GS TO SUCH PERSON; 6 (II) THAT THE CONTENTS OF SUCH BOOKS OF ACCO UNT AND OTHER DOCUMENTS ARE TRUE; AND (III) THAT THE SIGNATURE AND EVERY OTHER PART OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS WHICH PURPORT TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON OR W HICH MAY REASONABLY BE ASSUMED TO HAVE BEEN SIGNED BY, O R TO BE IN THE HANDWRITING OF, ANY PARTICULAR PERSON, AR E IN THAT PERSON'S HANDWRITING, AND IN THE CASE OF A DOC UMENT STAMPED, EXECUTED OR ATTESTED, THAT IT WAS DULY STA MPED AND EXECUTED OR ATTESTED BY THE PERSON BY WHOM IT PURPORTS TO HAVE BEEN EXECUTED OR ATTESTED.' 7.7 IT IS ADMITTED THAT THESE DOCUMENTS WERE SEIZ ED FROM THE POSSESSION OF SHRI AMIT DIGVIJAY SINGH WHO HAS DENI ED THE KNOWLEDGE THEREOF AND DISASSOCIATED HIMSELF BY SAVI NG THAT THESE BELONG TO THE APPELLANT. THE APPELLANT WAS AN EMPLOYEE OF SHRI AMIT D. SINGH AT THE TIME OF ISSUE OF THE P ROMISSORY NOTES. SHRI. AMIT D. SINGH THEREFORE, WAS IN A POSI TION WHEREBY HE COULD DICTATE HIS TERMS TO THE APPELLANT. AS MEN TIONED IN PARA 4 OF THE AO'S REMAND REPORT DATED 07/02/2011, SHRI AMIT D. SINGH HAS STATED IN HIS REPLY TO THE AO, TH AT PROMISSORY NOTES GIVEN IN HIS NAME AND IN THE NAME OF OTHER PERSONS, INCLUDING MRS. MALINI D. IRSHID, MOTHER OF THE ASSESSEE, ISSUED BY SHRI MANDAR KELKAR REMAINED WIT H HIM AS NO PAYMENT WAS DIRECTLY RECEIVED FROM THE SAID PERS ON WHO HAD BUSINESS TRANSACTIONS WITH HIM. SHRI AMIT D. SI NGH HAS, THUS, ACCEPTED THAT: 1. HE HAS BUSINESS TRANSACTIONS WITH SHRI MANDAR K ELKAR. 2. THE PROMISSORY NOTES WERE IN THE POSSESSION OF SHRI AMIT D. SINGH AS NO PAYMENT WAS DIRECTLY RECEIVED FROM S HRI MANDAR KELKAR. 3. HE HAD POSSESSION OF THE PROMISSORY NOTES FOR C OLLECTION OF MONEY SHOWN AS PAYABLE IN THE SAID PROMISSORY NOTES . THUS, IT IS CLEAR, THAT THE PAYMENT WAS TO BE COLLE CTED BY SHRI AMIT D. SINGH, AND NOT BY THE OTHER PERSONS IN WHOS E NAME THE PROMISSORY NOTES WERE ISSUED. HENCE THE PROPERT Y IN THE FORM OF MONEY RECEIVABLE WAS TO BE ENJOYED BY SHRI AMIT D. SINGH AND NOT BY THE OTHER PERSONS IN WHOSE NAME TH E PROMISSORY NOTES WERE ISSUED. IN ABSENCE OF ANY COR ROBORATIVE EVIDENCE, MERE DENIAL OF THE OWNERSHIP OF THE DOCUM ENTS BY SHRI AMIT D. SINGH, DOES NOT CONSTITUTE REBUTTAL OF PRESUMPTION U/S 132(4A). FURTHER, THE AMOUNTS CANNO T BE ADDED IN THE HANDS OF THE APPELLANT ON THE BASIS OF UNDATED PROMISSORY NOTES WITHOUT ANY CORROBORATIVE EVIDENCE . IT IS SETTLED POSITION OF LAW THAT IF ANY DOCUMENT IS FOU ND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE O F SEARCH, IT MAY BE PRESUMED THAT SUCH DOCUMENT BELONGS TO SUCH PERSON AND THAT THE CONTENTS ARE TRUE. SUCH PRESUMPTION HO WEVER IS A REBUTTABLE PRESUMPTION AND RELATES TO A QUESTION OF FACT. THE 7 SAID DOCUMENTS WERE FOUND FROM THE POSSESSION OF SH RI AMIT DIGVIJAY SINGH WHO HAS DENIED THE KNOWLEDGE THEREOF . HOWEVER, BY DENYING THE SAME BEFORE THE AO IN HIS O WN CASE HE HAS NOT PRODUCED ANY COGENT MATERIAL TO REBUT TH E SAME. IN ANY CASE, EXCEPT THE MENTION OF THE APPELLANT'S AND HIS MOTHER'S NAME ON THESE NOTES, THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY FURTHER EVIDENCES EITHER DURI NG THE ASSESSMENT PROCEEDINGS OR DURING THE REMAND PROCEED INGS TO SUBSTANTIATE THE IMPUGNED ADDITIONS IN THE APPELLAN T'S CASE. IN THE IMPUGNED ASSESSMENT ORDER AND THE REMAND REP ORT, THE AO HAS OBSERVED IN SUPPORT OF THE IMPUGNED ADDITION THAT THE APPELLANT DID NOT RESPOND TO THE SHOW CAUSE NOTICE DATED 24/11/2009 WHICH HE TERMS AS THE DRAFT ASSESSMENT O RDER. THE LD. A.RS. HAVE PLACED BEFORE ME A COPY OF APPEL LANT'S LETTER DATED 29/12/2009, DULY ACKNOWLEDGED BY THE AO IN HI S TAPAL ON THE SAME DATE IN WHICH THE APPELLANT HAS CLARIFI ED THE IMPUGNED ISSUES BY STATING THAT HE HAD NOT SIGNED A NY PROMISSORY NOTE TO MR. SUNIL D. KHOSLA, NEITHER HE KNEW ANY SUCH INDIVIDUAL. AND ALSO HIS MOTHER MALANI D. IRSH ID HAS NOT TAKEN ANY PROMISSORY NOTE FROM ANY MADAR KELKAR. TH EREFORE, IT IS NOT FACTUALLY TRUE THAT THE ASSESSEE DID NOT RESPOND TO THE SHOW CAUSE NOTICE. IT IS EVIDENT THAT THE LD. AO HAS NOT AT ALL CONSIDERED THE APPELLANT'S ARGUMENTS PURPOSELY AND MADE THE IMPUGNED ADDITIONS IN A CASUAL MANNER. THE IMPUGNED ADDITIONS, THEREFORE, ARE BASELESS AND UNWARRANTED, WHICH CANNOT BE SUSTAINED. 7.8 IN THE CASE UNDER APPEAL THE AO HAS APPLIED THE PRESUMPTION U/S 132(4A) TO THE APPELLANT. IN FACT T HE SAID PRESUMPTION IS APPLICABLE TO THE PERSON FROM WHOSE POSSESSION THE DOCUMENT IS FOUND IN THE COURSE OF S EARCH ACTION. IT IS SETTLED LAW THAT THE PRESUMPTION UNDE R SECTION 132(4A) IS AVAILABLE ONLY AGAINST THE PERSON FROM W HOSE POSSESSION THE DOCUMENT IS FOUND AND NOT TO THE THI RD PERSON. THIS PROPOSITION OF LAW IS SUPPORTED BY FOLLOWING D ECISIONS:- RAMA TRADERS VS. FIRST ITO (1988) 32 TTJ (PAT) 483 (TM); SMT. BOMMANA SWARNA REKHA VS. ACIT (2005) 94 TTJ (VISAKHA) 885; AND STRAPTEX (INDIA) (P) LTD. VS. DCIT (2003) 79 TTJ (M UMBAI) 228. THEREFORE, THERE IS A MERIT IN THE SUBMISSIONS OF T HE LD. AR THAT SO FAR AS THE APPELLANT IS CONCERNED THESE ARE DUMB PAPERS AND DO NOT ANYWHERE CORROBORATE THE FINDINGS OF THE ASSESSING OFFICER THAT THE APPELLANT HAS LENT THESE AMOUNTS TOTALLING RS.31,00,000/- TO THE ABOVE TWO PERSONS V IZ. SHRI MANDAR KELKAR AND SHRI SUNIL D. KOSLA. IN VIEW OF T HESE FACTS AND THE CIRCUMSTANCES OF THIS CASE, IT IS FOUND THA T THESE ADDITIONS ARE WITHOUT ANY BASIS AND THE SAME ARE DI RECTED TO BE DELETED. THIS GROUND OF APPEAL IS ALLOWED. 8 7. BEFORE US, LD. DEPARTMENTAL REPRESENTATIVE SUBMI TTED THAT THE CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE A SSESSING OFFICER IN ASSESSMENT ORDER ON ACCOUNT OF LOAN ADVANCED AS PER PROMISSORY NOTES AMOUNTING TO RS.31,50,000/-. HE ERRED IN DEL ETING THE ADDITION OF RS.31,50,000/- WITHOUT APPRECIATING THE FACT THAT PROMISSORY NOTE IN QUESTION BEARS THE NAME OF ASSES SEE AND HIS MOTHER. ACCORDINGLY, THE ORDER OF THE CIT(A) BE SE T ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. ON THE OTHER HA ND, LD. AUTHORISED REPRESENTATIVE SUPPORTED THE ORDER OF TH E CIT(A) ON THE ISSUE. 8. AFTER GOING THROUGH THE ABOVE SUBMISSIONS AND MA TERIAL ON RECORD, WE FIND THAT THE IMPUGNED ADDITION OF RS.31 ,50,000/- CONSISTS OF FOLLOWING AMOUNTS: I) PROMISSORY NOTE IN THE NAME OF MOTHER OF THE AP PELLANT SMT. MALINI D. IRSHID SIGNED BY ONE PERSON VIZ. SHR I MANDAR KELKAR - RS.9,00,000/- AND RS.12,50,000/-. (II) PROMISSORY NOTE IN THE NAME OF THE APPELLANT S IGNED BY ONE SHRI SANDEEP KHOSLA - RS.10,00,000/-. THE EVIDENCE WITH REGARD TO ABOVE ADDITIONS WERE FO UND FROM SEIZED MATERIAL FROM THE PREMISES OF SHRI AMIT DIGVIJAY SI NGH. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE SAID CASE, THE ASSESSING OFFICER EXAMINED SHRI AMIT DIGVIJAY SINGH WHO REPLI ED THAT HE HAD NO EXPLANATION IN RESPECT OF THESE THREE PROMISSORY NOTES. ON THE OTHER HAND, LD. AUTHORISED REPRESENTATIVE FOR ASSES SEE RAISED THE ISSUE OF PRESUMPTION U/S.132(4A) AND SUBMITTED THAT THE ASSESSEE DOES NOT KNOW EITHER SHRI SUNIL KOSLA OR SHRI MANDA R KELKAR AND IN THE IMPUGNED THREE DOCUMENTS THERE WAS NO SIGNATURE OF EITHER THE APPELLANT OR HIS MOTHER. IT WAS ALSO STATED ON BEHA LF OF ASSESSEE THAT EXCEPT THE ASSESSEE'S NAME IN ONE DOCUMENT AND THE NAME OF HIS MOTHER IN TWO OTHER DOCUMENTS, COUPLED WITH PRE SUMPTION U/S 9 132(4A), THE ASSESSEE HAS NOTHING TO DO WITH THESE DOCUMENTS. THE ASSESSEE HAS CLARIFIED THAT HE WAS NOT A CLOSE ASSO CIATE OF SAID SHRI AMIT DIGVIJAY SINGH, INSTEAD HE WAS ONLY AN EMPLOYE E. CONSIDERING THE CONTENTIONS ON BEHALF OF THE ASSESSEE, THE ASSE SSING OFFICER WAS DIRECTED TO EXAMINE THIS ISSUE IN THE REMAND PROCEE DINGS, WHO REITERATED THAT SHRI AMIT DIGVIJAY SINGH HAD DENIED THE OWNERSHIP OF THE SEIZED DOCUMENTS AND THE ASSESSEE DID NOT RE SPOND TO THE SHOW CAUSE NOTICE DURING THE ASSESSMENT PROCEEDINGS , THE IMPUGNED ADDITION WAS MADE. THE ASSESSING OFFICER H AS NOT DENIED THE FACT OF RELATIONSHIP OF AN EMPLOYEE-EMPLOYER BE TWEEN THE ASSESSEE AND SHRI AMIT D. SINGH IN THE REMAND PROCE EDINGS. FURTHER, THERE WAS NO CROSS EXAMINATION OF ANY WITN ESSES IN THIS CASE EVEN THOUGH THE ASSESSING OFFICER WAS SPECIFIC ALLY DIRECTED VIDE PARA 6 OF THE REMAND ORDER DATED 28/10/2010. THE AS SESSING OFFICER HAS NOT COMMENTED ON THE PRESUMPTION RAISED U/S L32(4A) IN RESPECT OF THE SEIZED DOCUMENT FROM THE POSSESSI ON OF PERSON DURING ACTION U/S 132(1), WHICH READS AS UNDER: 'WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENT S, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICL E OR THING ARE OR IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH, IT MAY BE PRESUME D- (I) THAT SUCH BOOKS OF ACCOUNT, OTHER DOCUM ENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING BELONG OR BELON GS TO SUCH PERSON; (II) THAT THE CONTENTS OF SUCH BOOKS OF ACCO UNT AND OTHER DOCUMENTS ARE TRUE; AND (III) THAT THE SIGNATURE AND EVERY OTHER PART OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS WHICH PURPORT TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON OR W HICH MAY REASONABLY BE ASSUMED TO HAVE BEEN SIGNED BY, O R TO BE IN THE HANDWRITING OF, ANY PARTICULAR PERSON, AR E IN THAT PERSON'S HANDWRITING, AND IN THE CASE OF A DOC UMENT STAMPED, EXECUTED OR ATTESTED, THAT IT WAS DULY STA MPED AND EXECUTED OR ATTESTED BY THE PERSON BY WHOM IT PURPORTS TO HAVE BEEN EXECUTED OR ATTESTED.' 9. IT IS UNDISPUTED THAT THESE DOCUMENTS WERE SEIZE D FROM THE POSSESSION OF SHRI AMIT DIGVIJAY SINGH WHO HAD DENI ED THE 10 KNOWLEDGE THEREOF AND DISASSOCIATED HIMSELF BY SAVI NG THAT THESE 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 POSITION WHEREBY WHO COULD DICTATE THE ASSESSEE AT RELEVANT POINT OF TIME. AS DISCUSSED IN PARA 4 OF THE ASSESSING OFFI CER'S REMAND REPORT DATED 07/02/2011, SAID SHRI AMIT D. SINGH HA S STATED IN HIS REPLY TO THE ASSESSING OFFICER THAT PROMISSORY NOTES GIVEN IN HIS NAME AND IN THE NAME OF OTHER PERSONS, INCLUDING MR S. MALINI D. IRSHID, MOTHER OF THE ASSESSEE, ISSUED BY SHRI MAND AR KELKAR REMAINED WITH HIM AS NO PAYMENT WAS DIRECTLY RECEIV ED 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 PROMISSORY NOTES WERE IN THE POSSESSION OF SHRI AMIT D. SINGH AS NO PAYMENT WAS DIRECTLY RECEIVED FROM SHRI MANDAR KELKAR; (III ) HE HAD POSSESSION OF THE PROMISSORY NOTES FOR COLLECTION O F MONEY SHOWN AS PAYABLE IN THE SAID PROMISSORY NOTES. IT SHOWS THA T PAYMENT WAS TO BE COLLECTED BY SHRI AMIT D. SINGH, AND NOT BY OTHE R PERSONS IN WHOSE NAME THE PROMISSORY NOTES WERE ISSUED. ACCOR DING TO ASSESSEE, THE PROPERTY IN THE FORM OF MONEY RECEIVA BLE WAS ENJOYABLE BY SHRI AMIT D. SINGH AND NOT BY THE OTHE R PERSONS IN WHOSE NAME THE PROMISSORY NOTES WERE ISSUED. IN ABS ENCE OF ANY CORROBORATIVE EVIDENCE, MERE DENIAL OF THE OWNERSHI P OF THE DOCUMENTS BY SHRI AMIT D. SINGH DID NOT CONSTITUTE REBUTTAL OF PRESUMPTION U/S 132(4A). FURTHER, THE AMOUNT COUL D NOT BE ADDED IN THE HANDS OF THE ASSESSEE ON THE BASIS OF UNDATED PROMISSORY NOTES WITHOUT ANY CORROBORATIVE EVIDENCE . THE DOCUMENT IS ADMITTEDLY FOUND IN THE POSSESSION AND CONTROL OF ANY PERSON OTHER THAN ASSESSEE 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 THE 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 11 OWN CASE HE HAS NOT PRODUCED ANY COGENT MATERIAL TO REBUT THE SAME. EXCEPT MENTION OF ASSESSEE AND HIS MOTHERS NAME ON THIS NOTE, THE ASSESSING OFFICER HAS NOT BROUGHT ON RECO RD ANY FURTHER EVIDENCES EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING THE REMAND PROCEEDINGS TO SUBSTANTIATE THE IMPUGNED ADD ITION IN THE ASSESSEES CASE. IN THE IMPUGNED ASSESSMENT ORDER A ND THE REMAND REPORT, THE ASSESSING OFFICER HAS OBSERVED THAT ASS ESSEE DID NOT RESPOND TO THE SHOW CAUSE NOTICE DATED 24.11.2009. HOWEVER, THE LD. AUTHORISED REPRESENTATIVE PLACED BEFORE THE CIT (A) A COPY OF ASSESSEE'S LETTER DATED 29.12.2009 DULY ACKNOWLEDGE D BY THE ASSESSING OFFICER IN HIS TAPAL ON THE SAME DATE IN WHICH THE ASSESSEE HAS CLAIMED TO HAVE CLARIFIED THE IMPUGNED ISSUE BY STATING THAT HE HAS NOT SIGNED ANY PROMISSORY NOTE TO MR. SUNIL D. KHOSLA, NEITHER HE KNEW ANY SUCH INDIVIDUAL. SIMI LARLY, HIS MOTHER MALANI D. IRSHID HAD NOT TAKEN ANY PROMISSOR Y NOTE FROM ANY SHRI MANDAR KELKAR. SO THE ASSESSING OFFICER W AS NOT JUSTIFIED IN REACHING TO THE CONCLUSION. THE ASSESSING OFFIC ER HAS APPLIED THE PRESUMPTION U/S.143(4A) AGAINST THE ASSESSEE. NORMALLY, THE SAID PRESUMPTION IS APPLICABLE TO THE PERSON FROM W HOSE POSSESSION THE DOCUMENT IS FOUND IN THE COURSE OF SEARCH ACTIO N. THE PRESUMPTION UNDER SECTION 132(4A) IS AVAILABLE ONLY AGAINST THE PERSON FROM WHOSE POSSESSION THE DOCUMENT IS FOUND AND NOT AGAINST THE THIRD PERSON. IN ABSENCE OF CLINCHING EVIDENCE AGAINST THE THIRD PERSON AS STATED ABOVE, NO ACTION HAS BEE N TAKEN AGAINST HIM. IN SUCH SITUATION, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.31,50,000/- IN CASE OF AS SESSEE AND SAME HAS BEEN RIGHTLY DELETED. THIS FINDING OF THE CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 10. THE CROSS OBJECTION IN C.O.NO.133/PN/2012 ARISI NG OUT OF ABOVE ORDER OF THE CIT(A), WAS NOT PRESSED AT THE T IME OF HEARING. ACCORDINGLY SAME IS DISMISSED. 12 11. AS A RESULT, THE APPEAL FILED BY THE REVENUE AS WELL AS THE CROSS OBJECTIONS ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 29 TH DAY OF APRIL, 2013. SD/- SD/- ( G.S.PANNU ) ( SHAILENDRA KUMAR YAD AV ) ACCOUNTANT MEMBER JUDICIAL MEMBER GSPS PUNE, DATED THE 29 TH APRIL, 2013 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE ACIT, CENTRAL CIRCLE-1, NASHIK. 3. THE CIT(A)-I, NASHIK. 4. THE CIT(CENTRAL), NAGPUR. 5. THE DR A BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.