ACIT(Central)-2, Bhopal, BHOPAL V. PRAMADA ESTATES INDIA PRIVATE LIMITED, BHOPAL

ITSSA 10/Ind/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0533 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-07-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-06-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 18-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM KUMAR YADAV
• Assessee Lawyers: KOMAL WADHWANI
• Keywords: Unexplained cash credit; Business income; Income from undisclosed sources; Loose papers; Retraction
• Section: 68; 132; 133A; 153A; 205; 69A; 64; 73; 13; 153; 119; 22; 20

Judgement Text

Page 1 of 27 आयकर अपीलीय अिधकरण, इंदौर Ɋायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER IT(SS)A Nos. 9 & 10/Ind/2024 (AYs 2016-17 & 2017-18) ACIT (Central)-2, Bhopal बनाम/ Vs. Pramada Estates India Private Limited, TF-313/MM 11, 3 rd Floor, Aashima Mall, Hoshangabad Road, Bhopal (PAN No. AAHCP8657N) (Revenue/ Appellant) (Assessee/Respondent) Revenue by Shri Ram Kumar Yadav, CIT DR Assessee by Shri Hitesh Chimnani, CA and Ms. Komal Wadhwani, AR Date of Hearing 18.06.2024 Date of Pronouncement 31.07.2024 आदेश / O R D E R Per B.M. Biyani, AM: Feeling aggrieved by a consolidated appeal-order dated 19.12.2023 passed by learned Commissioner of Income-tax (Appeals)-3, Bhopal [“CIT(A)”] which in turn arises out of a consolidated assessment-order dated 24.06.2021 passed by ACIT, Central-2, Bhopal [“AO”] u/s 153A r.w.s. 143(3) of the Income-tax Act, 1961 [“the Act”] for assessment-years [“AYs] 2016-17 & 2017-18, the revenue has filed these appeals. ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 2 of 27 2. The background facts leading to present appeals are such that the assessee is a company incorporated on 05.09.2014 and engaged in the business of real estate. A search u/s 132 was conducted on 16.05.2018 upon assessee. Pursuant to search, the assessments of AYs 2015-16 to 2018-19 were framed u/s 153A/143(3) and the assessment of AY 2019-20 was framed u/s 143(3). In these appeals, we are concerned with two AYs 2016-17 and 2017-18. The assessee was a land owner and entered into a registered Joint Venture Agreement (“JVA”) dated 05.05.2016 with M/s Shree Signature Developers (“JV Partner”) for development and sale of residential and commercial plots over a land admeasuring 8.71 acres situated at Bawadiya Kalan, Bhopal. As per JVA, the assessee would be entitled to 63.46% of total developed area and JV Partner shall have balance 36.54%. During an earlier and independent survey on 28.11.2016 on Shri Sanjeev Agarwal / M/s Agarwal Construction, a handwritten paper was impounded from i-phone of Shri Sanjeev Agarwal which the AO has re- produced in assessment-order. From this paper, the AO inferred that the assessee received an advance of Rs. 10,57,00,000/- from JV Partner and adjusted. On the basis of this paper, the AO made addition of Rs. 10,57,00,000/- in AY 2017-18 in assessee’s hands. Further, the AO also required the assessee to explain a transaction of security deposit of Rs. 1,20,00,000/- with JV Partner. The assessee made submission but the AO rejected and made another addition of Rs. 1,20,00,000/- in AY 2016-17. Aggrieved, the assessee carried matter in first-appeal whereupon the CIT(A), ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 3 of 27 vide impugned order, deleted both additions in respective assessment-years. Now, the revenue is aggrieved by CIT(A)’s order and come in these appeals before us. 3. Since these appeals arise from common orders of lower authorities and the issues are related, they were heard together and are being disposed of by this consolidated order for the sake of convenience, brevity and clarity. We would first take up appeal of AY 2016-17 and thereafter AY 2017-18. A.Y. 2016-17: 4. The grounds raised in this appeal are as under:- 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 1,20,00,000/-? 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 1,20,00,000/-, ignoring that the transfer/sale of the relevant 4 plots of land was complete as on/before the date of signing of the JV on 05.05.2016 since the relevant para 7 of the JV reads : “उपरोÈत भूखÖड Ĥथम प¢कार ɮवारा ɮͪवतीय प¢कार को उनके ɮवारा दȣ गई ͧसÈयोǐरटȣ राͧश कȧ वापसी के Ǿप मɅ Ǒदये जा रहे हɇ, उÈत चारɉ भूखÖड का èवाͧम×व अब ɮͪवतीय प¢कार को होगा, वे अपनी èवेÍछा से उसे आज Ǒदनांक से ͩकसी भी अÛय प¢ को ͪवĐय/हèतांतरण/बंधक कर सकɅगेॽ” 3. Without prejudice to the above, whether the Ld. CIT(A) erred in admitting additional evidences, documents relevant to table at para 3.3.3 of his order, in contravention of Rule 46A of the IT Rules? 4. Without prejudice to the above, whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 1,20,00,000/-, without utilizing the wide powers available to him under the Income-tax Act to make or cause to be made any such further enquiry as he thought fit and give directions to correct the possible mistake done by the AO (directing him to make the addition in AY 2017-18), in terms of the ratio of SC decision in the case of CIT vs. Kanpur Coal Syndicate (1964) 53 ITR 225? ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 4 of 27 5. By means of above grounds, the revenue has challenged the CIT(A)’s action in deleting the addition of Rs. 1,20,00,000/- made by AO. 6. The AO has dealt this issue in Para 7.2 of assessment-order. During assessment-proceeding, when the AO asked assessee to explain the transaction of security deposit of Rs. 1,20,00,000/- with JV Partner, the assessee filed reply dated 11.06.2021 which is re-produced by AO. The assessee submitted (i) that the receipt of Rs. 1,20,00,000/- as security deposit was clearly mentioned in registered JVA, (ii) that the receipt had been properly recorded in audited books of account of assessee, (iii) that in lieu of this security deposit, four plots (B-11, B-42, B-52 & B-62) having total area of 557.24 Square Meters (or 5995.87 Square Feet) was allotted to JV Partner which is clearly mentioned in Clause 6 & 7 of JVA, (iv) that at the time of allotment of four plots to JV Partner, the entire land was raw and there was only a proposed map prepared as per mutual consent between assessee and JV Partner without any approval and development permission from authorities. The statutory approval was subsequently taken and the developmental work was also started after obtaining approval. These facts were clearly mentioned in Clause 7 of JVA, and (v) out of four plots allotted to JV partners, only one plot (B-11) could be sold till March, 2021 and all other plots remained unsold. Citing these facts, the assessee submitted that no addition could be made till Financial Year 2019-20. However, the AO made these observations, namely (i) the impounded document mentioned “Advance adjusted from JV Partners = Rs. 10,57,00,000/-”, (ii) the JV ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 5 of 27 Partner has not shown the amount of Rs. 1,20,00,000/- given to assessee as business income, and (ii) the assessee has also not shown the receipt of Rs. 1,20,00,000/- as business income. Therefore, the AO made addition by concluding thus: “Therefore, a sum of Rs. 1,20,00,000/- is treated as assessee’s unexplained cash credit as per the provisions of section 68 of the I.T. Act and the same is being added to the returned income of the assessee in AY 2016-17 (date of payment shown in the JV agreement.” 7. During first-appeal, the CIT(A) deleted addition fully. 8. Before us, Ld. DR for revenue/appellant strongly supported the order of AO. He firstly carried us to Ground No. 2 as well as Page 21 of JVA (Page 22 of Paper-Book) to show that the Clause 7 of the JVA contains following covenant: "उपरोĉ भूखÁड ÿथम प±कार Ĭारा िĬतीय प±कार को उनके Ĭारा दी गई िस³योåरटी रािश कì वापसी के łप म¤ िदये जा रहे ह§ ,उĉ चारŌ भूखÁड का ÖवािमÂव अब िĬतीय प±कार को होगा ,वे अपनी Öवे ̧छा से उसे आज िदनांक से िकसी भी अÆय प± को िवøय/हÖतांतरण/बंधक कर सक¤गे ।" Thereafter, he carried us to the first page of ultimate sale-deed of one of the plots (Page 29 of Paper-Book) to show that the ultimate sale-deed in favour of final buyer was executed by the JV Partner and not by assessee. Thus, connecting these two dots i.e. Clause 7 of JVA and the first page of ultimate sale-deed, Ld. DR contended that the assessee had already sold the impugned four plots to JV Partner at the time of entering into JVA dated 05.05.2016. Therefore, the AO was very correct in taxing the receipt of Rs. 1,20,00,000/- in the hands of assessee. ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 6 of 27 9. Per contra, Ld. AR for assessee made following submissions: (i) That the receipt of Rs. 1,20,00,000/- was as per registered JVA. Copy of JVA is filed at Page No. 17-28 of Paper-Book. (ii) That the receipt was through banking channel. (iii) That the receipt was already recorded in assessee’s audited books of account. (iv) That at the time of entering into JVA dated 05.05.2016, the entire land was raw/undeveloped/unplotted and there was no statutory approval. Therefore, the JV Partner would not pay any deposit to assessee. Since the assessee insisted to pay security, an understanding was made between assessee and JV partner under which the JV Partner was required to pay a security deposit of Rs. 1,20,00,000/- to assessee and the assessee shall allot four plots to the JV Partners out of ‘his developed share of 63.46%’. The allotment of four plots was a mere earmarking. The statutory approval was given by Municipal Corporation, Bhopal vide Approval No. 902 dated 28.04.2017, copy filed at Page 66-67 of Paper-Book. The developmental work also started after approval. Thereafter, the actual sale of plots took place subsequently as and when the possession of developed plots was handed over. At that time, the assessee accounted for sale of plots by way of adjustment against security ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 7 of 27 deposit and declared taxable income. Ld. AR strongly questioned that how can there be any sale at the time of entering into JVA or mere receipt of security deposit when there was no asset in existence? He submitted that at best one can say that the security-deposit was a mere advance-receipt against sale to be effected in future. He submitted that subsequently after statutory approval and development, the assessee sold three plots through registered sale- deeds and handed over possession from time to time and offered the transactions for taxation as per details noted by CIT(A) in a Tabular Format on Page 39 of his order. Accordingly, the actual sale-proceeds were adjusted against the security deposit of Rs. 1,20,00,000/-. The copies of registered sale-deeds of all three plots and the Ledger A/c extracted from audited books of assessee showing adjustment of sale- proceeds against security-deposit are filed at Page 29-65 of Paper- Book. This way, the assessee offered the transactions of sale in subsequent years from time to time which the AO has already taxed in subsequent years in assessee’s hands. (v) That, as mentioned above the transaction of sale of plots has been taxed by department in subsequent years and taxing the same in AY 2016-17 has resulted in double taxation which is grossly wrong. (vi) That the covenant agreed in Clause No. 7 of the JVA, which is mentioned by revenue in Ground No. 2 and also emphasised by Ld. ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 8 of 27 DR, was only to enable subsequent sale of plots and to provide full security to JV Partner because at the time when JVA was entered, the proposal was at infant stage without any approval and subject to contingencies. Further, the name of JV Partner appearing on first page of ultimate sale-deed is as per software system of registration department but if we look into page 4 of the same deed, we can easily find that the names of both assessee and JV Partner are clearly mentioned as sellers. Thus, the submission of Ld. DR regarding connectivity of two dots is not valid. (vii) Lastly, it is submitted that the CIT(A) has passed a valid and proper order appreciating the correct position of assessee’s case. His order must be preserved. 10. We have considered rival submission of both sides and perused the documents held on record including the orders of lower-authorities. At first, we extract the order passed by CIT(A) in this regard which is as under: “3.3.2 I have considered the facts of the case, plea raised by the appellant and findings of the Ld AO. The appellant during appellate proceedings has contended that it had entered into a JV agreement with M/s Shree Signture developers on 05.05.2016 for development and sale of residential and commercial plots on 8.71 acres of land in the manner as narrated in para-2 of the JV agreement. It has been agreed that the appellant being the land owner shall be entitled for 63.46% of total plotted area and the developer being the developer of project shall be entitled for 36.54% of total plotted area. It was also mutually agreed vide para-6 of the JV agreement that the developer by way of security deposit shall pay a sum of Rs. 1,20,00,000/- to the owner of the land i.e. appellant and in lieu four plots shall be allotted to the developer. It has also been mentioned that the security deposit was to be adjusted against 4 plots admeasuring 557.24 sq.mt out of total share of appellant i.e. 63.46% only after approval of the lay out by the Town and Country Planning department, Bhopal. ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 9 of 27 The appellant further stated that at the time of JV agreement the entire land was undeveloped/unplotted and the sale of plots under consideration were accounted for as and when the possession of the said plots was handed over to the developer. The appellant also stated that as per rudimentary accounting principle the accounting entry qua any sale transaction is made only on occurrence of the event of sale or when possession of immovable property is handed over and till then the amount received on such account is treated as ‘advance against sale’. The appellant out of 4 plots had only sold three and possession of the same were handed over as on date of registered sale deed and the entire sale transaction is recorded in books of account on occurrence of sale. Therefore, the ld AO erred in taxing the same amount on two occasions. Per contra the ld AO, qua the JV agreement has stated that the plots have been handed over as on date of JV agreement and the entire amount received as security deposit was income of the appellant and made addition by invoking provisions of section 68 of the Act. 3.3.3 After considering entire factual matrix of the case, I find that the said dispute is only on account of treatment of ‘security advance’ in books of account of the appellant. The ld AO has treated the same as income as per terms of JV agreement, however, the appellant has recorded the same as security deposit in the nature of advance and subsequent sale has been recorded in books of accounts as and when possession of the plots was handed over/sale of those plots were executed. On perusal of JV agreement (clause 6), it transpires that the security deposit was received as Rs. 50,00,000/- on 22.01.2016, Rs. 50,00,000/- on 11.02.2016 and Rs. 20,00,000/- on 23.02.2016 in lieu of allotment of four plots. Further, clause 7 of the JV agreement stipulates that the said security deposit shall adjusted against 4 plots being allotted by the appellant out of its share of 63.46% of total plotted area. The appellant has contended that he has adopted a basic accounting principle by which any sale was recorded only when possession of the property was handed over. In the instant case, the appellant has received advance against 4 plots viz B-11, B-52, B-62 and B-42. As per information furnished by the appellant it had only sold 3 plots till the end of AY 2023-24 and the sale consideration has been adjusted with the security deposit and the sales have been recorded in the year in which possession was actually handed over. The summary of details furnished by the appellant are tabulated as under: - S.No Plot No Details of buyer Date of sale of plot Sale consideration as per registered sale deed Date of possession 1 B-11 Shri Neeraj Kumar Kamboj 26.03.2021 35,06,150/- 13.05.2022 2 B-52 Shri Pawan Parchani 02.08.2021 20,51,000/- 02.08.2021 3 B-62 Shri Piyush Tiwari 28.10.2022 50,67,000/- 28.10.2022 ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 10 of 27 The appellant has filed copies of registered sales, ledger account of the buyers and subsequent adjustment of sale consideration with the security deposit. On perusal, I find that the appellant qua sale of three plots has recorded entire sales in its books of accounts and has shown adjustment against security deposit received by the appellant as per JV agreement. The sales have been recorded when possession of the three plots have been handed over to the respective buyers. Therefore, the income arising on sale of plots has been recorded in books of accounts in the year in which possession of plots was handed over. Once, the income arising on sale is recorded as per accounting principles followed by the appellant then further treating security deposit as income of the appellant will definitely tantamount to double taxation of same income which perse is not justified in the eyes of law and in the interest of principles of natural justice. Further, the ld AO has not doubted the accounting principles and methodology being adopted & followed by the appellant. The books have also not been rejected by the ld AO. Considering the above facts, the income arising on sale of plots has already been offered in the year in which such sale has been recorded, therefore, the security deposit received by the appellant partakes characteristics of an ‘Advance’ received against plots allotted as per mutual JV agreement. Hence, the same cannot be treated as income of the appellant in the year under consideration. 3.3.4. In view of the above discussion, the addition made by the ld AO treating security deposit as income of the appellant in AY 2016-17 is found not justified and hence, addition made by the ld AO amounting to Rs. 1,20,00,000/- is directed to be deleted. Therefore, appeal on this ground is allowed.” 11. On perusal, we find that the CIT(A) has passed a vehement order after considering the assessee’s facts and deleted addition. Without repeating the contents thereof, we only say that there is no infirmity or perversity in the order of CIT(A). We may, however, add one more aspect of AO’s action which deserves mention and consideration. The AO has made addition u/s 68 treating the impugned receipt of Rs. 1,20,00,000/- by assessee as unexplained cash-credit u/s 68. We fail to understand how the section 68 was applicable to assessee’s case? Section 68 applies where a person is not able to satisfy three ingredients regarding any credit entry in books, namely (i) the identity of the giver, (ii) the creditworthiness of the giver and (iii) the genuineness of transaction. In present case, there is hardly any dispute qua ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 11 of 27 satisfaction of these ingredients. Therefore, we arrive at a conclusion that the addition made by AO is neither sustainable on factual considerations as vehemently analysed and accepted by CIT(A) nor there is any legal strength in invoking section 68 by the AO. Accordingly, we uphold the deletion of addition by CIT(A). The revenue fails in this appeal. A.Y. 2017-18: 12. The grounds raised in this appeal are as under:- 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 10,57,000/-? 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 10,57,00,000/- : a) without appreciating that the impugned document was found during survey u/s 133A (conducted at the premises of M/s. Agrawal Construction in which Shri Sanjeev Agrawal is a partner) from the I- phone of Shri Sanjeev Agrawal, who is also a director in the assessee company holding 30% of the shares, and, therefore, the presumption u/s 292C is very much applicable in this case ? b) holding that since the document was not found in the possession of the assessee the initial onus lay one the AO to examine and establish a nexus between the contents of the loose-paper and the alleged undisclosed income of the assessee which he has failed to do so, completely ignoring that the document in question being image of hand written paper was found in the i-phone of Shri Sanjeev Agrawal who is a director of the assessee company and holds 30% shares, and, therefore, the onus lies on the assessee which it has failed to discharge? c) holding that no positive cogent and independent incriminating material has been brought on record or has been unearthed during the course of search, ignoring that one registered Joint Venture Agreement between the assessee company and its JV partner Shree Signature Developers was also impounded during survey at the premises of Shri Sanjeev Agrawal and reference to this JV agreement is made in para 7 of the assessment order? 3. Whether on the facts and the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 10,57,00,000/- on the ground that the impugned document is deaf and dumb, without ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 12 of 27 appreciating that the document in question has been reproduced in the body of assessment order itself and perusal of the said document reveals that it speaks loudly and clearly that : a) Name of Shri Sanjeev Agrawal alongwith his share of shares in the company (30%) and also the name of another director of the assessee company Shri Kriplani is clearly mentioned in the documents? b) Also, dates are mentioned thrice, i.e. ‘upto 13.05.2016’, ‘ upto 11.08.2016’, and ‘upto 11.11.2016’ and since the JV Agreement was executed on 05.05.2016 and transactions mentioned in the document in question are upto 11.11.2016, which clearly shows that the transaction pertained to F.Y. 2016-17 i.e. A.Y. 2017-18? c) It is also mentioned that the sum of Rs. 10,57,00,000/- is ‘Advance Adjusted from JV Partners’ (The JV partners of the assessee company are Shri Signature Developers which is evident from the JV Agreement dated 05.05.2016 which has also been impounded? d) Further, total cost of land (transferred to JV Partner) is also mentioned in the document along with the measurement (10.80 acres) and the rate (1400) per square feet?. 13. By means of above grounds, the revenue has challenged the CIT(A)’s action in deleting the addition of Rs. 10,57,00,000/- made by AO. 14. The AO has made this addition in Para 7.1 of assessment-order on the basis of a document impounded from i-phone of Shri Sanjeev Agarwal during impugned survey on 28.11.2016 revealing a calculation of 10.80 acres of land alongwith a noting “Advance adjusted from JV Partners – Rs. 10,57,00,000/-”. This document is re-produced here: ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 13 of 27 During assessment-proceeding, when the AO show-caused assessee to explain the transactions noted in document, the assessee filed a reply which is also reproduced by AO in assessment-order. However, the AO rejected assessee’s submission and made addition of Rs. 10,57,00,000/- in assessee’s hands by passing following order: ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 14 of 27 “On perusal of the material available on record as well as submissions made by the assessee, it is noticed that in the seized document as found from the i- phone of Shri Sanjeev Agrawal (one of the directors of the assessee company) during the survey proceeding that an amount of Rs. 10,57,00,000/- is clearly mentioned under the heading “advance adjusted from JV partners” which evidences that the said amount of Rs. 10,57,00,000/- is receipt from the JV partner in the hands of the assessee. As the date of the receipt of impugned amount is not mentioned in the said hand written incriminating document, this is being treated as receipt in the hands of the assessee in the year when the said incriminating document was found from the possession of Sri Sanjeev Agrawal. As the said document was impounded from the i-phone of Sri Sanjeev Agrawal during survey u/s 133A at the office premise of Sri Sanjeev Agrawal at 250, Sagar Plaza, Zone-II MP Nagar, Bhopal, on 28.11.2016. In view of this, it is obvious that the said receipt of Rs. 10,57,00,000/- should have been taken into consideration as business income of the assessee company for the year under consideration but failed to do the same. In view of the above discussion, the reply of the assessee is not tenable. Further, the onus was case upon the assessee company as such document was found and seized from the possession of Shri Sanjeev Agrawal, one of the directors of the company but he failed to furnish any explanation in this regard. Therefore, a sum of Rs. 10,57,00,000/- is treated as assessee’s unexplained money as per the provisions of sec 69A of I.T. Act and the same is added to the returned income of the assessee in A.Y. 2017-18.” 15. During first-appeal, the CIT(A) deleted addition fully by passing following order: “3.2.6(c) The AO erred in making the additions on the basis of deaf and dumb document impounded during survey proceedings of third party and; As discussed hereinabove, the ibid document was found during survey proceedings from i-phone of Shri Sanjeev Agrawal. For better appreciation of facts and jotting made on the said document, the relevant extract of the said document is reproduced hereunder:- XXX (already reproduced in preceding para) The ld AO during assessment proceedings has alleged that the said loose paper contained unexplained transactions qua JV agreement on premise of jotting “Advance adjusted from JV partners” made in the said document. Per contra the appellant has contended that the jotting does not mention any detail of transaction being carried out by appellant, name of the appellant is ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 15 of 27 completely missing, date of transaction is missing, details of beneficiaries, payers/receiver of the consideration are missing. Further, the JV agreement has been executed for 8.71 acres, however, the said document mentions jotting for 10.80 acres. Further, the onus u/s 292C/132(4A) of the Act was applicable qua Shri Sanjeev Agrawal and not the appellant. Shri Sanjeev Agrawal in his statement recorded during survey proceedings stated that he once decided to sell the parcel of land of the appellant admeasuring 10.8 acres @ 1400 sq.ft after getting it developed through JV and on sale of entire land he would received his share of 30% and transfer balance proceeds to Shri Bindra and Shri Kriplani other directors of appellant company. However, due to delay in permission from planning authorities and due to objection filed by one Shri Siddharth Gupta, the said project was dropped. Similar statement was recorded during the course of assessment proceedings. He further stated that the discrete calculations jotted in the said document never materialized. Therefore, the appellant stated that no adverse inference could be drawn from the statement of Shri Sanjeev Agrawal and the document is a ‘deaf and dumb document’ in the case of the appellant company. I have considered the facts of the case, material evidences on record, written submission filed by appellant and the facts and findings of the Ld. AO inter alia material brought on record. After analyzing the entire facts, I reach the conclusion that the addition was made on the basis of assumption and presumption which is neither sustainable on facts nor in law. The Ld. AO has reached the conclusion that appellant has received unaccounted income of Rs. 10.57 crores as mentioned in the document under consideration. The conclusion has been drawn on the basis of jotting made on a hand written document found from i-phone of Shri Sanjeev Agrawal, in capacity as partner in M/s Agrawal Construction, during survey proceedings on 28.11.2016. On a plain examination of the relevant seized loose paper, being reproduced hereinabove, the following has been observed: - (i) The land cost has been determined after taking total area of land at 10.80 acres, however, the JV was entered into for 8.71 acres. (ii) The jotting is made under the heading ‘Advance adjusted from JV partners’. The details of advance and for which account the same has been adjusted are completely missing. Further, if it is presumed that appellant has received advance then the details of same are not mentioned in the JV agreement. (iii) Name of the appellant is not mentioned. (iv) The actual date of receipt of alleged amount is not mentioned. (v) The mode of payment of alleged amount viz. cash, cheque or kind are completely missing. From the above, it cannot be held that the transactions pertained to the appellant. No inference of cash receipt by the appellant can be apparently drawn from the ibid document. Most importantly, no iota of evidence qua ibid document was found and seized during the course of search. The ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 16 of 27 ld AO has also not made any independent enquiry in order to unearth the true facts qua impounded document. It is also worth mentioning that statement of Shri Sanjeev Agrawal was also recorded by the ld AO and he was specifically asked about payment of Rs. 10.57 crores. However, he showed his inability to explain anything about the adjustment of Rs. 10.57 crores. These facts, show that the conclusion drawn with regard to the said documents and abbreviations mentioned therein, is made on guess work and presumption basis. The documents do not even mention the name of the appellant. There is no mention of actual receipt of amount by the appellant. Dates of transactions are completely missing and the only reason for making addition in AY 2017-18 is that the JV agreement was executed in AY 2017-18. Also, the JV was entered into for 8.71 acre, however, the ibid document mentions land area of 10.80 acres. Therefore, no meaningful conclusion can be drawn from this document. The Ld. AO has treated the jottings made on the impounded document as true and determined the quantum of cash received by appellant without establishing a direct nexus with the alleged amounts with supportive independent evidence. Therefore, in absence of any cogent evidence having direct nexus with the said transaction, the said document is nothing but a deaf and dumb document qua the appellant company and cannot be used against it. It must also be kept in mind at all times that the documents in question was not found from the premises of the appellant when a search action was conducted. Hence, the presumption u/s 292C will not come into play and onus does not rest on the appellant to explain the contents of the documents. The onus, instead, is cast upon the AO to establish that the contents of the document are true. It is a settled legal position that any ‘dumb document’ cannot be used as evidence to draw an adverse inference against the assessee. Case laws supporting this proposition are as under: - ACIT Vs. Satyapal Wassan (2007) 295 ITR 9 (AT) 352 (Jabalpur) Held that “the crux of these decisions is that a document found during the course of search must be a speaking one and without any second interpretation, must reflect all the details about the transactions of the assessee in the relevant assessment year. Any gap in the various components as mentioned in section 4 of the Income Tax Act must be filled up by the Assessing Officer through investigations and correlations with the other material found either during the course of the search or on the investigation. As a result, we hold that document No.7 is a non-speaking document.” The important ratio laid down in the said judgment is that “ibid document” must be speaking one and without any second interpretation and must reflect all the details about transactions of the assessee. In the instant case, the ibid document is nothing but a rough jotting. The dumb document does not contain details of recipient of amounts, date of transaction, mode of receipt of amount and the name of appellant. However, even in spite of this, the Ld. AO has presumed that the appellant had received the said amounts qua JV ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 17 of 27 agreement. The presumption drawn by the ld AO was that the appellant had received such sum from JV developer i.e. Shree Signature Developers, however, as evident from assessment order no enquiry was made from M/s Shree Signature Developers. Also, the Ld. AO does not have any independent corroborative evidence establishing a nexus between the loose documents and the alleged unaccounted income of the appellant. Absence of these vital details makes the loose papers under consideration a “deaf & dumb document” qua the appellant company. The onus was solely on the Ld. AO to fill such vital gaps by bringing positive evidence on record and prove the allegation about alleged “undisclosed income” of the assessee, which he utterly failed to do. The said document has not been corroborated with the independent evidences seized qua search proceedings and such document cannot be termed as books of account and thus, cannot be used to assess total income of the appellant. These propositions are also well supported by the following judicial pronouncements: CBI vs VC Shukla 3 SCC 410: The Hon’ble Supreme Court has held that loose sheets of paper cannot be 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 assuming 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. Common Cause (A Registered Society) Vs. Union of India – 30 ITJ 197 (SC).: In this case, the Hon’ble Court held that without any independent evidence or corroborative material, no addition is permissible on the basis of loose paper jottings & notings. The relevant paras of the order are as under :- 16. 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 discharge when investigation had been completed but same is relevant for the purpose of decision of this case also. This Court has considered the entries in Jain Hawala diaries, note books and file containing loose sheets of papers not in the form of “Books of Accounts” and has held that such entries in loose papers/sheets are irrelevant and not admissible under Section 34 of the Evidence Act, and that only where the entries are in the books of accounts regularly kept, depending on the nature of occupation, that those are admissible 17. It has further been laid down in V.C. Shukla (Supra) as to the value of entries in the books of account, that such statement shall not alone be sufficient evidence to charge any person with liability, even if they are relevant and admissible, and that they are only corroborative evidence. It has been held even then independent evidence is necessary ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 18 of 27 as to trustworthiness of those entries which is a requirement to fasten the liability. 18. This Court has further laid down in V.C. Shukla (Supra) that meaning of account book would be spiral note book/pad but not loose sheets. The following extract being relevant is quoted hereinbelow :- “14. In setting aside the order of the trial court, the High Court accepted the contention of the respondents that the documents were not admissible in evidence under Section 34 with the following words: "An account presupposes the existence of two persons such as a seller and a purchaser, creditor and debtor. Admittedly, the alleged diaries in the present case are not records of the entries arising out of a contract. They do not contain the debits and credits. They can at the most be described as a memorandum kept by a person for his own benefit which will enable him to look into the same whenever the need arises to do so for his future purpose. Admittedly the said diaries were not being maintained on day-to-day basis in the course of business. There is no mention of the dates on which the alleged payments were made. In fact the entries there in are on monthly basis. Even the names of the persons whom the alleged payments were made do not find a mention in full. They have been shown in abbreviated form. Only certain 'letters' have been written against their names which are within the knowledge of only the scribe of the said diaries as to what they stand for and whom they refer to." 19. With respect to evidentiary value of regular account book, this Court has laid down in V.C. Shukla, thus; “37. In Beni v. Bisan 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 chooses to write in his own books behind the back of the parties. There must be independent evidence of the transaction to which the entries relate and in absence of such evidence no relief 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 kept in the ordinary course of business and that, therefore, all 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 subject to the salient proviso that such entries shall not alone be ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 19 of 27 sufficient evidence to charge any person with liability. It is not, therefore, enough merely to prove that the books have been regularly kept in the course of business and the entries 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 upon such entries which led to the investigation was quashed by this Court.” Further, in numerous other case laws courts have consistently upheld the view that no addition could be made in the hands of the assessee on the basis of the dumb loose papers seized during search, in absence of any corroborative material to show unaccounted/unexplained money etc. Some of the case laws are as under: - (i) M M Financiers (P) Ltd Vs. DCIT (2007) 107 TTJ (Chennai) 2000 Held that “no addition could be made in the hands of assessee on the basis of the dumb loose slips seized from his residence, in the absence of any corroborative material to show payment of any undisclosed consideration by the assessee towards purchase of land”. (ii) Monga Metals (P) Ltd Vs. ACIT 67 TTJ 247 (All. Trib)— Holding that Revenue has to discharge its burden of proof that the figures appearing in the loose papers found from assessee’s possession constitute undisclosed income. [In the present case, loose papers were not even seized from assessee’s possession]. (iii) Pooja Bhatt Vs. ACIT (2000) 73 ITD 205 (Mum. Trib) Held that where document seized during search was merely a rough noting and not any evidence found that actual expenditures were not recorded in books of account, additions not justified. [In the instant case, similarly no other corroborative evidence was found in search to prove that details/figures mentioned in notings on page 117 to 119 of A/1 represent ‘on money’ payments by the assessee]. (iv) Atual Kumar Jain Vs. DCIT (2000) 64 TTJ (Del.Trib) 786 – Held that additions based on chit of paper, surmises, conjectures etc could not be sustained in the absence of any corroborative evidence supporting it. [Similarly in present case, neither either parties have admitted payment/receipt of ‘on money’ nor any corroborative evidence was seized to support the findings of the AO]. (v) S K Gupta Vs. DCIT (1999) 63 TTJ (Del.Trib) 532 Held that ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 20 of 27 “that additions made on the basis of torn papers and loose sheets cannot be sustained as same do not indicate that any transaction ever took place and does not contain any information in relation to the nature and party to the transaction in question.” (vi) Jagdamba Rice Mills Vs. ACIT (2000) 67 TTJ (Chd) 838 Held that “No addition can be made on dumb documents”. It is a settled legal position that onus of proof is on the person who makes any allegation and not on the person who has to defend. As per legal maxim “affairmanti non neganti incumbit probation” means burden of proof lies upon him who affirms and not upon him who denies. Similarly as per doctrine of common law “incumbit probation qui digit non qui negat” i.e. burden lies upon one who alleges and not upon one who denies the existence of the fact. The Ld. AO has failed to discharge his onus of proof especially when addition has been made under a “deeming fiction”. The initial onus u/s 292C was also not on appellant for the reason that the document was not found from his possession or from the premises of appellant during search proceedings. In view of these lacunae in order of the AO, the addition is legally not sustainable. In such facts and circumstances,the Hon'ble jurisdictional MP High Court in the case of PCIT vs Shri Pukhraj Soni (supra), by following the decision of Hon'ble Apex court in the case of Common Cause (supra) has held that “The Apex Court has taken into account in similar circumstances the incriminating materials in form of random sheets, loose papers, computer prints, hard disk and pen drives etc and has held that they are inadmissible in evidence, as they are in the form of loose papers”. A similar view was taken by Hon'ble jurisdictional ITAT Indore bench in the case of Shri Mohanlal Chughand Other (2021) 9 ITJ Online 139 (Trib. - Indore) and in the case of M/s KL Sharma & Sunita Maheshwari(2022) 31 ITJ Online 361 (Trib. - Indore). In absence of any corroborative evidence to prove that the alleged cash component was actually received by the appellant, the Ld. AO has no locus to assume that appellant has earned undisclosed income of Rs. 10,57,00,000/- in AY 2017-18. It is settled law that AO cannot make any addition merely on basis of suspicion, however strong it may be. The Ld. AO is not justified in presuming certain facts without corroborating them with evidence. Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v/s CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, still assessment cannot be made on the basis of imagination and guess work. It has been held in the case of Umacharan Saha & Bros co. v/s CIT 37 ITR 21 (SC) that suspicion, however strong cannot take place of evidence. Similar views have been expressed by Apex court in the case of Dhiraj Lal Girdharilal v/s CIT (1954) 26 ITR 736 (SC). In view of the above discussion, the Ld. AO was not justified in making additions simply on guess work and solely on the basis of a dumb document. ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 21 of 27 (d) The AO erred in making additions on suspicion, surmise and conjecture basis and without having any incriminating material on record found from the residential/business premises of the appellant relating to the year in which additions have been made:- The AO has grossly erred in making addition simply on the basis of guess work, assumption and presumption, as discussed above. It is well settled that no addition can be made as a leap in the dark. The AO is not entitled to make a guess without evidence. I have no hesitation to conclude that ld A.O failed to discharge his onus of proving his allegations with concrete evidence. Asking the assessee to prove that he has not received any such alleged unaccounted money is more like asking him to prove the ‘negative’ which is an impossibility. Hon’ble Supreme court in the case of LIC of India v/s CIT (1996) 216 ITR 410 (SC) has held that the law does not compel the doing of impossibilities-act- lex-non cogit as impossibilie means the law does not compel to perform an act which he cannot possibly perform. I have no hesitation to hold that the said addition was not based on any positive/ cogent material but simply based on suspicion & guess work. Hon’ble Supreme Court in case of Umacharan Saha & Bros co. v/s CIT 37 ITR 21 (SC) has held that suspicion, however, strong cannot take place of proof. Similarly, Hon’ble ITAT Mumbai in the case of ACIT v/s Shailesh S Shah 63 ITD 153 (Bom) has held that no addition can be made purely based on suspicion. Hon’ble SC in Kaishanchand Chellaram case 125 ITR 713(SC) held that positive evidence is required to covert suspicion/presumption into acceptable proof. Similar views have been expressed by Apex court in the case of Dhiraj Lal Girdharilal v/s CIT (1954) 26 ITR 736 (SC). As per law, tax has to be assessed on real income basis and not on income computed as per the whims and fancies of the A.O without having any corroborative evidence in support. In the instant case, the initial onus was solely on the ld AO to establish that the alleged amount was actually received by appellant, which the ld AO has utterly failed to do. It is also important to mention that a search was carried out on the premises of the appellant and during the course of search no evidence was found regarding receipt of alleged unaccounted money by the appellant. Thus, there existed no locus standi with the ld AO to made additions in the hands of appellant dehors without positive, concrete and direct evidence qua the alleged unaccounted money. 3.2.7. In nutshell, firstly, the impugned document was found from possession of Shri Sanjeev Agrawal, in capacity as partner in M/s Agrawal Construction and not from the premises of appellant and therefore, the presumption u/s 292C was not on the appellant to explain the contents of the loose papers. Secondly, since, the document was not found from possession of appellant, the initial onus lay on the AO to explain and establish a nexus between the contents of the loose paper and the alleged undisclosed income of the appellant which he has failed to do. Thirdly, no positive, cogent and independent incriminating material has been brought on record by the ld AO or has been unearthed during the course of the search. Fourthly, the document does not portray all the facts of the transaction viz. name of the appellant, date of transaction, mode of payment, amount paid by whom (either by Shri Sanjeev Agrawal or by JV developer), details of beneficiary etc. Therefore, the document ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 22 of 27 under consideration is deaf and dumb. Fifthly, no addition was made in the hands of JV developer (M/s Shree Signature Developer). In view of the above discussion, the Ld. AO has erred in making addition on a sheer presumption. Thus, the addition made by the Ld. AO amounting to Rs. 10,57,00,000/- in AY 2017-18 is hereby deleted. Therefore, appeal on this ground is partly allowed.” [Emphasis by underline ours] 16. Before us, Ld. DR for revenue/appellant submitted strongly supported the order of AO. He submitted as follows: (i) That, in reply to Q.No. 8 of statements recorded during survey on 28.11.2016, Shri Sanjeev Agarwal clearly admitted that he had 30% shareholding in assessee-company. Therefore, Shri Sanjeev Agarwal is closely related to assessee-company. Further, even if the assessee- company had a separate corporate existence, it is operated by key person/directors only and Shri Sanjeev Agarwal was a key functionary. Therefore, the CIT(A) is wrong in giving benefit to assessee that the presumption u/s 292C is not applicable. (ii) That, the JVA talks of 11 acres which is approximately near to 10.80 acres mentioned in impounded document. Further, the JVA is entered on 05.05.2016 and the dates mentioned in the impounded document are approximately same. Thus, the circumstances are clearly corroborated. (iii) That, there is no explanation qua the transaction of Rs. 10,57,00,000/- noted in the impounded document from assessee’s side. ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 23 of 27 17. Per contra, Ld. AR for assessee made following contentions: (i) That the impugned document was impounded during an earlier and separate survey conducted u/s 133A by department on Shri Sanjeev Agarwal / M/s Agrawal Construction. The impounded document was not found from assessee or during any proceeding of assessee. Therefore, the presumption u/s 292C is not applicable. (ii) That, during survey action on Shri Sanjeev Agarwal/M/s Agarwal Construction itself, the authorities have confronted Shri Sanjeev Agarwal in Q.No. 9 and 10 of the statements qua the impugned document and in response Shri Sanjeev Agarwal has immediately and categorically made following replies: ÿij 9 :- कृपया िनÌन िववरण ,जो िक आपके मोबाईल फोन से ÿाĮ हòआ है ,के संबंध म¤ िवÖतारपूवªक ÖपĶीकरण द¤ । उ°र - मुझे याद नहé आ रहा है िक ये calculations कब कì गई है परंतु एक बार म§ ऐसा Decide कर रहा था िक Pramada Estate कì बाविडया कलां कì भूिम को 1400 Ł.Sq.ft.से JV Ĭारा Develop करने के पIJात मेरे Ĭारा बेची जाए िजसका 30% िहÖसा म§ रखूंगा बाकìका ®ी िबंþा एवं ®ी कृपलानी को उनके िहÖसे के अनुसार पैसे दे दूँगा । परंतु शायद बाद म¤ मेरी ,®ी िबंþा एवं ®ी कृपलानी कì बैठक म¤ ये बात Permission म¤ Delay होने के कारण अÆय दो पाटªनसª ®ी िबंþा एवं ®ी कृपलानी Ĭारा अÖवीकार कर दी गई । उĉ Permission नजूल Ĭारा TNCP के संबंध म¤ थी ³यŌिक इस जमीन पर िकसी ®ी िसĦाथª गुĮा Ĭारा पुनः आपि° ली गई थी । उĉ आपि° के संबंध म¤ पेपर म§ आपको शीŅ ÿÖतुत कर दूंगा । ÿij 10 :- उपरोĉ ÿ.øं .9 के उ°र म¤ आपके Ĭारा बताई गई बैठक ,िजसम¤ आपके Plan को अÖवीकार िकया गया था ,कब आयोिजत हई थी और इसम¤ आपके plan को ³यŌ cancel िकया गया था ॽ उ°र :- मुझे ऐसा याद आता है िक उĉ बैठक माह जून-जुलाई म¤ आयोिजत हòई थी तथा इस बैठम म¤ मेरे Èलान को नजूल तथा TNCP कì permission म¤ delay होने के कारण सामूिहक łप से अÖवीकार कर िदया गया था। ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 24 of 27 Thus, Shri Sanjeev Agarwal has himself explained in the statements that there was some calculation for making a decision but it could not materialise due to technical weakness in land and delay in TNCP permission. Ld. AR further drew our attention to Page No. 94 of Paper-Book where a copy of the Order-Sheet of assessment-proceeding of assessee- company taken from record of department is filed wherein Shri Sanjeev Agarwal personally attended the office of AO. The Order-Sheet shows that Shri Sanjeev Agarwal was again asked by AO to reply qua the impounded document. In reply, he re-confirmed his earlier explanation made in the statements recorded during survey. (iii) That the impounded document does not contain name of assessee. That apart, the assessee’s land was sized 11 acres and the JVA was for 8.71 acres. These vital facts are clearly mentioned in Preliminary portion on Page 11 of JVA and Clause 19 on Page 24 of JVA (Paper- Book Page 17 and 25). However, the impounded document is for 10.80 acres. Thus, the impounded document has no corroboration with assessee/assessee’s JVA and the AO has wrongly attributed the impounded document to assessee/assessee’s JVA on mere surmise or conjecture. (iv) Lastly, he submitted that the CIT(A) has passed a detailed order considering entire position of case. Hence the same must be upheld. ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 25 of 27 18. We have considered rival submission of both sides and perused the documents held on record including the orders of lower-authorities. Admittedly, the AO has made impugned addition solely on the basis of a document impounded from i-phone of Shri Sanjeev Agarwal. Therefore, several questions arise. Firstly, it becomes important to ascertain as to where and how the impugned document was impounded by authorities and whether the presumption u/s 292C would apply? Undisputably, there was an independent survey on Shri Sanjeev Agarwal / M/s Agarwal Construction (a partnership firm in which Shri Sanjeev Agarwal was a partner) on 28.11.2016 and during such survey, the impugned document was impounded from i-phone of Shri Sanjeev Agarwal. Notably, it was not found during search upon assessee. The CIT(A) has also made a clear finding that the impugned document was found from Shri Sanjeev Agarwal in his capacity as partner in M/s Agarwal Construction and not from the premise of assessee or during assessee’s proceeding. Further, as can be seen from impounded document, it nowhere bears the name of assessee. When it is so, we agree with Ld. CIT(A) that the presumption u/s 292C is not available to AO for drawing any conclusion for or against assessee. Secondly, it becomes important to know as to what was the explanation given by Shri Sanjeev Agarwal when he was confronted by survey authorities during survey of Shri Sanjvee Agarwal/M/s Agarwal Construction itself because that explanation would be an instant explanation and credible in absence of any retraction or rebuttal. For this purpose, the Q.No. 9 and 10 as recorded ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 26 of 27 by authorities becomes relevant. We have already re-produced those questions and replies in earlier para of this order. On perusal, one can find that Shri Sanjeev Agarwal instantly replied that the noting in impounded document was some calculation for making a decision but it could not materialise due to technical weakness in land and delay in TNCP permission. Thus, the nature of document is explained by Shri Sanjeev Agarwal himself in the very statements recorded during survey. That apart, the departmental Order-Sheet filed by assessee at Page 94 of Paper-Book also shows that Shri Sanjeev Agarwal personally attended the office of AO during assessment-proceeding of assessee and in reply to question put by AO, he re-confirmed his earlier explanation during survey. Thus, when it is submitted by Sanjeev Agarwal, the person from whose custody and in whose proceeding the document was impounded, that the calculation never materialised, how can the AO assume or treat that the impounded document showed that the assessee received a sum of Rs. 10,57,00,000/-? Admittedly, the AO has no other document or basis to draw or support such a conclusion. Thirdly, the Ld. AR has successfully demonstrated that the assessee’s land was sized 11 acres and the JVA was for 8.71 acres whereas the impounded document shows financial transaction for 10.80 acres. Thus, the impounded document has no corroboration with assessee/assessee’s JVA and the AO has wrongly attributed the impounded document to assessee/assessee’s JVA. Lastly, it is also a question that what action was taken by department against the payer of money (i.e. JV Partner)? The ACIT (Central)-2, Bhopal, vs. Pramada Estates India Pvt. Ltd., Bhopal IT(SS)A Nos. 9 & 10/Ind/2024 – AYs 2016-17 & 2017-18 Page 27 of 27 CIT(A) has made a clear finding that the department has not made any addition in the hands of JV Partner. Considering all these vital aspects, the addition made by AO remains an unproved receipt/income of assessee having been inferred by AO on mere surmise and conjecture. Hence, we do not find any justification or strength in the addition made by AO. Consequently, we are inclined to approve the CIT(A)’s action of deleting the addition. The grounds raised by revenue and accordingly the present appeal is rejected. 19. Resultantly, both of these appeals are dismissed. Order pronounced in open court on 31.07.2024 Sd/- sd/- (VIJAY PAL RAO) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक /Dated : 31.07.2024 CPU/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPYAssistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore