The ACIT Central-1, Bhopal V. Surendra Singh Yadav, Bhopal

ITSSA 117/Ind/2019

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0527 (ITAT-INDORE)
• Duration Of Justice: 4 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-10-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-10-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 02-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Capital asset; Business income; Search and seizure; Loose papers; Document seized; Source of fund; Additional evidence; Accommodation entries; Onus to prove; Documents seized
• Section: 132; 69C; 143(3); 2(14); 133A; 250; 43; 48; 13; 22

Judgement Text

Page 1 of 50 आयकर अपीलȣय अͬधकरण, इंदौर Ûयायपीठ, 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 No. 116 to 118/Ind/2019 Assessment Year: 2013-14 to 2015-16 ACIT, (Central)-I, Bhopal बनाम/ Vs. Shri Surendra Singh Yadav, C-55, Padmanabh Nagar, Bhopal (Revenue / Appellant) (Assessee / Respondent) PAN: AAOPY 1750 D Assessee by Shri Kunal Agrawal, CA Revenue by Shri P.K. Mishra, CIT DR Date of Hearing 26.07.2023 / 25.10.2023 Date of Pronouncement 26.10.2023 आदेश / O R D E R Per Bench: Feeling aggrieved by a consolidated appeal-order dated 22.03.2019 passed by learned Commissioner of Income-Tax (Appeals)-3, Bhopal [“CIT(A)”], which in turn arises out of a consolidated assessment-order dated 02.12.2016 passed by learned DCIT (Central-I), Bhopal [“AO”] u/s 153A/143(3) of Income-tax Act, 1961 [“the Act”], the Revenue has filed these appeals for Assessment-Year [“AY”] 2013-14 to 2015-16. 2. Heard the learned Representatives of both sides at length and case- records perused. 3. Brief facts leading to present appeals are such that a search u/s 132 was conducted by Income-tax Department on one “Regal Homes Group” Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 2 of 50 including assessee on 12.08.2014. Surveys u/s 133A were also conducted on connected entities. Pursuant to same, assessments were framed u/s 153A read with section 143(3) for AY 2009-10 to 2014-15 and u/s 143(3) for AY 2015-16 wherein certain additions were made. The present appeals, however, pertain to three years only, namely AY 2013-14 to AY 2015-16 wherein the assessee contested additions in first-appeal before CIT(A) and succeeded substantially. Now, the revenue has come in next appeal before us assailing the relief granted by CIT(A). 4. Since all these appeals emanate from common orders of lower- authorities, we have heard them together at the request of parties and proceed to dispose of by this common order. AY 2013-14: 5. The grounds raised in this appeal are as under: 1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 3,69,90,578/- made by the AO on account of unaccounted investment. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 8,75,635/- made by the AO on account of undisclosed business of mining. Ground No. 1: 6. In this ground, the revenue claims that the CIT(A) has erred in deleting addition of Rs. 3,69,90,578/- made by the AO on account of undisclosed investment. 7. The AO has dealt this issue in Para No. 9 of assessment-order. He has noted that during survey upon one of connected entity M/s Envo Promoters & Developers Pvt. Ltd. (“M/s Envo”), a document Page No. 1 to 8 of LPI-1 was impounded which contained working of a “Triveni Height” project of another connected firm called M/s Regal Samarth Krishna Builders (“M/s Regal”); the details of amounts paid for purchase of a land admeasuring Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 3 of 50 2.23 acres situated at Khasra No. 100/2/2, Village-Nishatpura, Bhopal for “Triveni Height” project; and the A/c of partners of firm indicating contributions/payments made by them. The AO has scanned all these papers in assessment-order. When the AO show-caused assessee to explain these papers, the assessee submitted that these papers were loose and dumb papers and do not have any relevance with financials of assessee. However, the AO rejected assessee’s submissions by observing that the papers contained systematic details of total cost of land alongwith respective shares/contributions of partners; there are details of cheque and cash portions; certain amounts mentioned in the documents tallied with the amounts of registries of land done; and the details mathematically tallied with each other. He also noted that the firm M/s Regal was having these persons as partners, namely (i) Shri K.L. Sharma, (ii) Shri Surendra Singh Yadav (assessee), (iii) Shri Rajeev Majumdar, and (iv) Shri B.S. Yadav, from time to time. In Para 9.5(vi), he noted that during the course of search Shri K.L. Sharma, one of the partners, was confronted with the impugned documents and his statements were recorded wherein he admitted that those papers related to “Triveni Height” project of M/s Regal. The AO also noted that Shri K.L. Sharma admitted his share in M/s Regal as well as capital contribution in cash which was not entered in books of account. The AO further noted that Shri K.L. Sharma also admitted to have paid his share of cash portion out of undisclosed income and therefore offered undisclosed investment of Rs. 1,08,31,251/- in AY 2012-13. The AO has re-produced statements of Shri K.L. Sharma. The AO has also made observations on capital contribution made by Shri B.S. Yadav, another partner of M/s Regal. Ultimately, on the basis of impounded documents, the AO gained an understanding that the land was actually purchased for Rs. 7,94,20,770/- (excluding registry expenses) whereas the cost recorded in books of account was Rs. 3,01,00,000/- (excluding registry expenses) only. Thus, the AO concluded that the difference of Rs. 4,93,20,770/- was undisclosed investment made in cash by all partners (including assessee). The AO Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 4 of 50 computed assessee’s share at Rs. 3,69,90,578/- and made addition in the hands of assessee in AY 2013-14 on substantive basis and on protective basis in the hands of M/s Regal. In Para No. 9.9 of assessment-order, the AO also noted that although the sale-deed of impugned land was executed on 31.03.2012 but from the seized documents, namely Page 1 to 8 of LPI-1, it was clear that the cash payments had been made after 31.03.2012 falling with previous year 2012-13, hence he made addition in AY 2013-14 8. The CIT(A) has dealt this issue in Para No. 6.4 of appeal-order. He has extracted the detailed submission made by assessee before him. Thereafter, he has deleted addition by making an extensive analysis and thereby holding as under: “6.4.3 I have considered the facts of the case, evidences on record, findings of the AO and submission of the appellant. It is seen that a land admeasuring 2.25 acres was purchased on 31.03.2012 by M/s. Regal Samarth Krishna Builders for a consideration of Rs. 3,01,00,000/-. During the course of survey at business premises of M/s. Envo Promoters and Developers(P) Ltd page no. 1 to 8 of LPI-I were impounded which contained entries of payments in cash/cheque by the partners towards above said land. On the basis of above LPI, the AO had made addition of Rs. 3,69,90,578/- in the case of the appellant treating the same as ‘unaccounted investment’ in the impugned land. The crux of the submission of the appellant in this regard is as under :- 1. Impugned LPI were not found from the premise of the appellant/firm in which he was partner. 2. The loose papers are not in the handwriting of the appellant. Further, these papers are unsigned and undated. 3. All the related parties to above transaction (except Shri K.L. Sharma) have denied the transactions recorded in these LPI in their statements recorded on oath. The statement of Shri K.L.Sharma was not offered to the appeal for cross examination/confrontation. Even Shri K.L.Sharma has not offered the ‘surrendered sum’ on above count in his return of income filed u/s 153A. 4. The sellers (Tanwani family) in their statement on oath, have also denied of having received any ‘on money’ in respect of the impugned transaction. The affidavits of the sellers in this regard were also placed on record. Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 5 of 50 5. The entries in the impugned LPI are not corroborated by any other document. Even, the cheque entries contained in impugned LPI do not match with the books of the appellant/other related parties. 6. The ld. AO has erratically computed the addition in the hands of the appellant on the basis of percentage of profit sharing of the appellant in the firm M/s. Regal Samartha Krishna Builders to the total on-money as per the impugned LPI. Thus, the addition in the case of the appellant was made purely on guess work, surmise and conjecture. 7. The impugned LPI are in fact rough scribbling/dumb documents which do not have any impact on the total income of the appellant. If the facts of the case, findings of the AO on above count, evidences available on record and submission of the appellant are kept in juxtaposition and analyzed, it can be reasonably inferred that there is substantial force in the arguments of the appellant that the impugned LPI do not have much bearing on the determination of the total income of the appellant. On perusal of entries of the impugned LPI, it is also evident that the possibility of these LPI for estimating/computing the total cost of ‘Triveni Project’ [including land and development cost] for third parties cannot be ruled out. Further, there are no corroborating evidences to support the entries of the impugned LPI with books of the appellant/other related parties or any other document. The entries in various pages of the impugned LPI do not coincide with each other. Further, on careful perusal of the entries in the impugned LPI, it is seen that there are several entries containing narration as ‘cost of boundary’, ‘DD Nagar Nigam’ etc. Such narration suggest that the impugned LPI are ‘estimated cost of the project named as ‘Triveni Project’ whereas the AO has considered all entries therein pertaining to cost of land purchased. Further, the AO has determined the ‘on money transaction’ on the basis of the entries of the ‘cash portion’ of the LPI without corroborating the ‘cheque entries’ therein with the books of the appellant/other related parties. While making addition in the hands of the appellant, the AO has applied percentage of the share of the appellant in the firm namely M/s. Regal Samarth Krishna Builder to the ‘total on money’ on the strength of impugned LPI. This approach of the AO leads to apprehend that the addition has been made on ‘guess work’. This is settled legal position that any ‘dumb document’ cannot be used as an evidence to draw an adverse inference against the assessee. Case laws supporting this proposition are as under: ACIT vs. Satyapal Wassan (2007) 295 ITR (AT)352 (Jab.) 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 transaction of the assessee in the relevant assessment year. Any gap in various components as mentioned in Section 4 of the I.T. Act must be filled up by the AO through investigations and correlations with other material Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 6 of 50 found either during the No. 7 course of the search or on investigation. As a result, we hold that document No. 7 is a non-speaking document.” Most important ratio laid down in the said judgment is that “impugned document” must be speaking one and without any second interpretation and must reflect all the details about transactions of the assessee. It would not be out of world to point that neither any of the member of Tanwani family nor any of the partner of the firm or the appellant has ever stated that on money was received/paid in purchase of impugned land. Further, none of the entry as mentioned on the impugned loose paper is matching with the bank account statement of appellant or with regular books of accounts. It is also important that the said land was purchased in A.Y. 2012-13 and the additions on account of on money has been made by the AO in A.Y. 2013-14. Absence of these vital details is making the loose paper under consideration as “deaf & dumb document”. The onus was solely on the AO to fill such vital gaps by brining positive evidence on record and prove the allegation about alleged “unaccounted investment by the assessee, which he utterly failed to do so. CBI vs. VC Shukla 3SCC 410 Hon'ble Supreme Court has held that loose sheets of paper cannot be termed as ‘book’ within the meaning of s. 34of Evidence Act. It has also been held therein by the Hon'ble Supreme Court that even correct and authentic entries in books of accounts cannot, without independent evidence of their trustworthiness, fix a liability upon a person. Hon'ble Supreme Court also observed that even assuming that the entries in loose sheets are admissible u/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.” Rakesh Goyal vs. ACIT, (2004) 87 TTJ (Del) 151 The finding of Hon'ble Tribunal was as under :- "20.1 After perusing the findings of the CIT(A) and the submissions of both the parties, we do not find any infirmity in these findings. Firstly the finding of the CIT(A) has not been controverted by the learned Departmental Representative by filing any positive evidence. The copies of the pages found from the possession of the assessee are placed in the paper book and after going through these papers, we find that these are simply deaf and dumb documents and they cannot be considered for making any addition. This is a settled principle of law that any document or entry recorded in those documents should be corroborated with positive evidence. Here in the present case nothing has been corroborated or proved that assessee was dealing in money lending business." Mohan Foods Ltd. Vs. DCIT, (2010) 123 ITR 590 (Del) Held that – Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 7 of 50 Although the contents of the relevant seized documents show that the amounts mentioned therein relate to some expenditure, in the absence of any other evidence found during the course of search or brought on record by the AO to show that the said expenditure was actually incurred by the assessee, the same cannot be added to the undisclosed income of the assessee by invoking the provisions of s. 69C – Assessee explained that the said entries represented estimates made by its employees in respect of proposed expenditure – There is no evidence on record to rebut/controvert the said explanation – additions not sustainable. CIT vs. S.M. Agarwal, (2007) 293 ITR 43 (Del)- Held that – “In this case the Department seized documents “Annexure A-28 p. 15 – gives the details of certain handwritten monetary transactions which shows that the assessee had given a loan of Rs. 22.5 lacs on interest and earned interest income of Rs. 3.55 lacs on it. The Tribunal hold this document as dumb document. The relevant findings of the Tribunal as mentioned in the above order is as under :- “We have ourselves examined the contents of the document and are unable to draw any clear and positive conclusion on the basis of figures noted on it. The letters 'H.S.', 'T.2' and 'D-Shop' cannot be explained and no material has been collected to explain the same. Likewise, the figures too are totally unexplained and on the basis of nothings and jottings, it cannot be said that these are the transactions carried out by the assessed for advancing money or for taking money. Thus, in our opinion, this is a dumb document.” Hon'ble High Court confirmed the findings of the Tribunal and relevant findings was as under:- “12. It is well settled that the only person competent to give evidence on the truthfulness of the contents of the document is the writer thereof. So, unless and until the contents of the document are proved against a person, the possession of the document or hand writing of that person, on such document by itself cannot prove the contents of the document. These are the findings of fact recorded by both the authorities, i.e., Commissioner of Income Tax (Appeals) and the Tribunal.” “15. Similarly, in the present case as already held above, the documents recovered during the course of search from the assessed are dumb documents and there are concurrent findings of Commissioner of Income Tax (Appeals) and the Tribunal to this effect. Since the conclusions are essentially factual, no substantial question of law arises for consideration.” Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 8 of 50 Jayantyilal Patel vs. ACIT & Ors, (1998) 233 ITR 588 (Raj) Held that – “During search of the residence of Dr. Tomar, the Department Official found a slip containing some figures. This piece of paper claimed to have been recovered of the time of search contains figures under two columns. In one column, the total of these figures comes to Rs. 17,25,000 from 31 st May, 1989, to 8 th Dec.,1989, and in the other column, the total of these figure comes to Rs. 22,12,500/- An addition of Rs. 22,12,500/- on the basis of figures on a small piece of paper in respect of purchase of plot No. B-4, Govind Marg, Jaipur was made by the AO. This plot B-4, Govind Marg, Jaipur, has been purchased jointly by Dr. Tomar, Dr. Mrs. Tomar and B. S. Tomar, HUF. Held that no addition on account of entries on a piece of paper which is claimed to have been found at the time of search, can be made, treating the figures as investment for purchase of plot No. B-4, Govind Marg, Jaipur in the hands of Dr. Tomar, Dr. Mrs. Tomar and B. S. Tomar HUF.” N. K. Malhan vs. DCIT ,(2004) 91 TTJ (Del) 938 – Held that - “We have perused the aforesaid explanation and the seized document placed at assessee's paper book-I pp. 48 and 50. The document does not state of any date or the year against the entries written therein. It does not show whether the assessed has made or received any payment. It also cannot be deciphered from the said documents that the entries therein pertain to the block period. The assessing officer also did not bring on record any material to show that any investment has been made by the assessed in any chit fund company or otherwise. The document found and seized might raise strong suspicion, but it could not be held as a conclusive evidence without bringing some corroborative material on record. The document contained only the rough calculations and was silent about any investment. On the basis of such a dumb document, it cannot be said that there were investments made in fact by the assessed. Heavy onus lay upon the revenue to prove that the document gives rise to undisclosed investment by the assessed. This onus has not been discharged. Accordingly no addition of undisclosed income could be made on the basis of such a document. Such a view has also been entertained by the Hon'ble Allahabad High Court in CIT v. Dayachand Jain Vaidya (1975) 98 ITR 280 (All). The addition so made, therefore, is directed to be deleted.” Stanamsingh Chhabra v. Dy. CIT (2002) 74 TTJ (Lucknow) 976: Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 9 of 50 None of the loose papers seized are in the hand writing of the assessee. There is some jotting by pencil n some coded form on the loose papers made by the surveyed person or some other person. Moreover, no entries are supported by any corroborative evidence; such loose papers cannot be called even the documents as they are imply the rough papers to be thrown in the waste paper basket. In this connection, the assessee relies upon the court decisions. CIT vs. Chandra Chemouse P.Ltd. (2008) 298 ITR 98 (Raj): It is held that- (i) Addition can be made only when evidence is available as a result of search or a requisition of books of accounts or documents and other material. However additions cannot be made on the basis of inferences. (ii) No facts were available to AO after search and inference of AO did not fall within the scope of Section 158BB. (iii) Deletion of additions made by Tribunal of assumed undeclared payments made for purchase of property was on basis of facts. Ashwani Kumar v. ITO, (1991) 39 ITD 183 (Del) and Daya Chand v. CIT (2001) 250 ITR 327 (Del) and S.P. Goel v. DCIT (2002) 82 ITD 85 (Mum): Nine out of 19 slips found were without any name or amount and therefore were dumb documents and no adverse inference could be drawn. Common Cause (A Registered Society) vs. Union of India – 30 ITJ 197 (S.C.): 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 u/s 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 accounts, that such Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 10 of 50 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 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 u/s 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 an whom they refer to.” Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 11 of 50 Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 12 of 50 Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 13 of 50 Land was Rs. 7,94,20,770/- excluding registry charges. In fact the AO erred in totality in treating the narration ‘cash of land’ as ‘cost of land’. It is 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 deny the existence of the fact. The loose paper i.e. page 1 to 8 of LPI-1 are is rough working/jotting. The AO has failed to discharge his onus of proof especially when addition has been made under “deeming fiction” and in AY 2013-14. If the transactions jotted on the impugned loose papers are on money, as alleged by the AO, the entries narrated in cheques should have been reconciled by the AO with regular books of accounts, which he failed to do. In view of this lacune on the part of AO, impugned addition is legally not sustainable. As held in the case of CIT vs. K.P. Varghese, 131 ITR 574 (SC) by Hon'ble Apex Court in absence of evidence that actually assessee paid more amount than declared in registered deed, no addition can be made. In the case of Bansal Strips (P) Ltd & Ors v. ACIT (2006) 99 ITD 177 (Del), it has been held that :- “If an income not admitted by assessee is to be assessed in the hands of the assessee, the burden to establish the such income is chargeable to tax is on the AO. In the absence of adequate material as to nature and ownership of the transactions, undisclosed income cannot be assessed in the hands of the assessee merely by arithmetically totally various figures jotted down on loosed document” 6.4.5 This is an undisputed fact that neither any incriminating material was found or seized during search proceedings nor the seller has ever admitted about on payment of Rs. 3,69,90,578/-. On the contrary, the AO firstly as assumed narration ‘cash of land’ as ‘cost of land’ and secondly has made addition in A.Y. 2013-14 which is factually incorrect as the lands have been purchased in A.Y. 2012-13. In absence of any corroborative evidence to prove that there was any exchange of money by CASH/CHEQUE/KIND on account of on money for purchase of land, AO has no locus to assume that appellant has paid Rs. 3,69,90,578/- towards the same. It is settled law that AO cannot make any addition merely on basis of suspicion, however strong kit may be The AO is not justified in presuming certain facts without having anything to corroborate. Hon'ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd vs. CIT, (1954) 26 ITR 775 (S.C.) 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. vs. CIT 37 ITR 21 (S.C.) that suspiciion, however, strong cannot take place of evidence. Similar views have been expressed by Apex Court in the case of Dhiraj Lal Girdhari Lal vs. CIT, (1954) 26 ITR 736 (SC). Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 14 of 50 6.4.6 In view of the above discussion, material evidences on record and case laws cited, firstly, the AO ought to have done independent enquiries regarding the impugned land from Tanwani family who were actual recipients of the on money as alleged by the AO. Secondly, the land has been purchased in A.Y. 2012-13, therefore, addition is not justified in A.Y. 2013-14. Thirdly, no incriminating material was found during the course of search suggesting on money payment to Tanwani family by the appellant. Fifthly, the addition has been made on sheer assumption and presumption basis. Last but not the least, the impugned loose paper is undated and unsigned by the appellant. My findings on the issue under consideration are based on the various conclusions drawn by me which have been discussed in the above paras. Therefore, the AO was not justified in making addition of Rs. 3,69,90,578/- being on sheer assumption and presumption basis. Thus, the addition made by the AO amounting to Rs. 3,69,90,578/- is deleted. Therefore, appeal on this ground is allowed.” 9. Before us, Ld. DR for revenue strongly defended the order of AO and opposed the order of first appeal on following contentions: (i) It is contended that the impounded documents give systematic and complete details of investment in land as well as contributions made by different partners. That the cheque portion is clearly mentioned in the impounded documents. When the cheque portion is genuine, entire document is genuine. Therefore, it is wrong to claim the impounded documents as ‘dumb’. (ii) It is contended that Shri K.L. Sharma, one of the partners of M/s Regal, had clearly admitted his part of cash-contribution and also admitted that he made investment out of undisclosed sources. Therefore, the impounded documents revealing undisclosed investment in land is corroborated by the statements of Shri K.L. Sharma, one of the partners of M/s Regal. 10. Per contra, Ld. AR for assessee supported the order of CIT(A) on following contentions: (i) It is contended that the impounded documents were not found from assessee’s premise. Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 15 of 50 (ii) It is contended that the impounded documents do not contain any detail of land, detail of seller, etc. The documents are unsigned, undated and not in the handwriting of assessee. There are serious infirmities in the documents, even the entries mentioned with caption “ch” at various places in the documents, which are interpreted as ‘cheque entries’, do not represent actual cheques issued by any one nor they have been recorded in the books of any person or entity of assessee-group and this fact is very much accepted in CIT(A)’s order. There is no corroborating evidence to support the notings made in the impounded documents. (iii) It is submitted that the impugned land was purchased on 31.03.2012 falling within previous year 2011-12 relevant to AY 2012-13, which is evident from copy of sale-deed filed at Page 1-15 of Paper-Book. Drawing our attention to copy of sale-deed, it is submitted that the actual consideration of Rs. 3,01,00,000/- paid by assessee is clearly mentioned therein. It is further submitted that the stamps authority has also accepted valuation at Rs. 3,01,00,000/- and charged stamps duty as well as registration fee on 3,01,00,000/-. Therefore, it is not and it cannot be a case of revenue that the assessee has shown purchases below ‘market valuation’. It is submitted that the Clause No. 3 of sale-deed clearly reveals that that the consideration of Rs. 2,93,00,000/- was paid through various cheques dated 17.10.2011 to 31.03.2012 and lastly the remaining consideration of Rs. 8,00,000/- was also paid in cash on 31.03.2012. Thereafter, in Para No. 4 of the sale-deed, the joint-sellers have clearly acknowledged that entire consideration had been received by them; nothing remained to be received and upon receipt of entire consideration, the sellers gave possession to M/s Regal. Further, the joint-sellers have also made a categorical and unequivocal averment in the sale-deed that none of them would be entitled to raise any dispute over the receipt of Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 16 of 50 consideration or to claim any consideration from M/s Regal. Thus, Ld. AR strongly contended, the whole consideration was already paid by 31.03.2012 and nothing remained to be paid thereafter; in such a case it is grossly wrong on the part of AO to allege that the cash payments for purchase of land were made subsequent to 31.03.2012. Therefore, Ld. AR contended, the AO is seriously wrong in making addition in AY 2013-14. (iv) It is further contended that the ADIT (Inv.)-II, Bhopal recorded statements of Shri Swaroop Tanwani, one of the joint-sellers, on 25.09.2014 u/s 131 and in Q.No. 7, raised a specific question to him as to whether he received any “additional amount other than mentioned in registry” towards sale of land to M/s Regal? In reply, Shri Swaroop Tanwani clearly stated that neither he nor any of his family members received any “additional amount”. Copy of statement is placed at Page No. 33-35 of Paper-Book. Same is the case of reply given by another joint-seller Shri Suresh Kumar Tanwani in reply to Q.No. 10 recorded by same authority u/s 131 on 13.10.2014, copy of statement is filed at Page 36-40 of Paper-Book. Thus, Ld. AR contended, even during independent verification done by ADIT (Inv.)-II directly from joint-sellers, it has clearly come on record that not a single penny was paid beyond what is stated in sale-deed. (v) It is contended that the ADIT (Inv.)-II, Bhopal also recorded statement of Shri Rajeev Majumdar, one partner of M/s Regal, on 30.10.2014 u/s 131 where in reply to Q.No. 6 raised by authorities, Shri Rajeev Majumdar categorically denied having made any cash payment/ contribution. Copy of statement is placed at Page 95-105 of Paper- Book. (vi) It is contended that in Para No. 9.5(vi), the AO has very much harped on the admission made by Shri K.L. Sharma, one partner of M/s Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 17 of 50 Regal, revealing cash-payment out of undisclosed sources. The AO has noted “He (means K.L. Sharma) admitted that he had paid this amount out of his undisclosed income and thus he offered Rs. 1,08,31,251/- as his undisclosed investment for the assessment-year 2012-13.” But the correct fact is that Shri K.L. Sharma has not declared any income of undisclosed sources in his return for AY 2012-13, copy of his ITR is filed at Page No. 41-61 of Paper-Book. This fact was also brought to the knowledge of CIT(A) and the CIT(A) has recorded on Page No. 146 of his order. (vii) Lastly, it is contended that the AO has made erratic addition on mere conjecture, surmise and wild guess work. Such addition cannot be sustained. 11. At that juncture, the Bench raised a query to Ld. AR as to what is then mentioned in the impounded documents, if the notings do not represent realistic transactions? Ld. AR instantly submitted that the impounded documents merely contained the estimation of project cost of “Triveni Height”. Ld. AR carried us to the order of first-appeal where the CIT(A) has noted “On perusal of entries of the impugned LPI, it is also evident that the possibility of these LPI for estimating/computing the total cost of ‘Triveni project’ (including land and development cost) for third parties cannot be ruled out.” The CIT(A) has further noted that the impounded documents contain several entries with the captions “cost of boundary”, “DD Nagar Nigam”, etc. which suggest that the documents give estimated cost of entire “Triveni project” whereas the AO has considered all entries as pertaining to the ‘cost of land’ purchased. 12. We have considered rival submissions of both sides and perused the orders of lower-authorities. On a careful consideration, we firstly find that the assessee has purchased the impugned land vide sale-deed dated 31.03.2012 which fact cannot be disputed by anyone. On a careful reading Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 18 of 50 of clauses of sales-deed to which our attention has been drawn by Ld. AR, we find that the consideration of Rs. 3,01,00,000/-, mode of payments and the last date of payment as on 31.03.2012 are duly mentioned therein. Further, in the sale-deed, the joint-sellers have clearly accepted to have received their respective shares of full consideration and also averred that they shall not claim any consideration from assessee after 31.03.2012. It is also a point worth mentioning that the consideration of Rs. 3,01,00,000/- mentioned in the sale-deed is well accepted by sub-registrar of stamps and it is not the case of revenue that the consideration so mentioned/paid does not correspond the valuation done by stamps authorities. From these facts/evidences on record, one can safely and easily find that the deal of land and payment of entire consideration got completed by 31.03.2012. That means, there cannot be any payment to sellers after 31.03.2012. This is also a practicality that the on-money payment, if any, is made before registration and not after registration of sale-deed. Therefore, the AO’s addition in AY 2013-14 with the presumption that the assessee made cash payment during previous year 2012-13, after registration of sale-deed on 31.03.2012, falls short of any merit. In so far as the contents of the impounded documents are concerned, the assessee has very categorically explained that even cheque-entries mentioned therein are not realistic entries of actual cheque payments recorded in anybody’s books. The CIT(A) has also noted that the notings in the impounded documents with the captions “cost of boundary”, “DD Nagar Nigam”, etc. indicate that those documents contain the estimated ‘cost of project’ and the AO has wrongly attributed them to the ‘cost of land’ purchased from sellers. It is further on record that the ADIT (Inv), Bhopal carried out independent enquiries from sellers of land by summoning them u/s 131 wherein the sellers have categorically denied to have received any consideration beyond what was recorded in sale-deed. This clear denial by sellers in independent verification done by revenue, is clearly something which dislodges the revenue’s allegation of on-money payments by assessee. Lastly, one of the basis of escalating on-moneys payments adopted by AO is Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 19 of 50 such that Shri K.L. Sharma, one partner of M/s Regal, accepted payment of cash portion and also disclosed income in return of AY 2012-13. But the assessee has, not only before CIT(A) but also before us, strongly claimed that Shri K.L. Sharma has not declared any amount of undisclosed income in his return, copy of his return is also filed for evidence. Therefore, the reasoning of Shri K.L. Sharma’s disclosure of undisclosed income, given by AO, is also dislodged by assessee. Thus, it is very much clear, after due consideration of all these facts/evidences, that the revenue is not having any case to prove the alleged on-money payments by assessee. We find that the Ld. CIT(A) has also considered all facts/evidences rightly and thereafter deleted the addition made by AO. Therefore, there is nothing to interfere with the order of CIT(A) qua this issue. We therefore uphold the deletion made by CIT(A). This ground is therefore dismissed. Ground No. 2: 13. In this ground, the revenue claims that the CIT(A) has erred in deleting addition of Rs. 8,75,635/- made by the AO on account of undisclosed business of mining. 14. The AO has dealt this issue in Para No. 16 of assessment-order. He noted that during the course of search-proceeding, certain documents inventorised as BS-1 to BS-22 were seized from assessee. These documents were in the nature of “transit passes” issued by the Directorate of Geology and Mining, M.P. in the name of “Pattadhari-Shri Sohan Singh Yadav”, “Pattadhari-Shri Govind Singh Yadav” and “Private Land-Shri Surendra Singh Yadav” (the last person is assessee). From these documents, the AO inferred that the assessee did ‘mining business’ not disclosed in his returns of income. The AO further noted that the assessee did not file any explanation qua those documents. The AO conducted direct enquiry from Ministry of Mining and Geology, M.P. Govt. and got information that the assessee had paid a royalty of Rs. 5,62,000/- on various dates during the Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 20 of 50 financial year 2011-12 to 2014-15. Based on information of royalty- payments so gathered and after taking into account (i) the rates of royalty per cubic meter of excavation notified by MP Govt from time to time, (ii) the prices paid by assessee’s connected entities (M/s Regal and M/s Envo) on purchase of mined product ‘gitti’, and (iii) the prices charged by assessee’s connected entity (M/s Yadav Stone Crusher) on sale of ‘gitti’, the AO estimated turnover of assessee for various years and computed undisclosed income @ 20% net profit on such estimated turnover. Accordingly, the AO made additions in various years including addition of Rs. 8,75,635/- in AY 2013-14, Rs. 5,47,390/- in AY 2014-15 and Rs. 79,040/- in AY 2015-16 under consideration. 15. The CIT(A) has dealt this issue in Para No. 6.2 of appeal-order. After due consideration of the facts, the CIT(A) deleted addition by observing thus: “6.2.3 I have considered the facts of the case, written submissions filed the appellant and findings of the AO. During the course of search, books of transit passes issued by Directorate of Geology and Mining, M.P. were found and seized from premises of the appellant. The AO on the basis of these impugned loose papers held that the appellant is involved in undisclosed mining business and subsequently made additions to the income of the appellant. On the contrary appellant during the course of appellant proceedings submitted that the mining operations have been executed by M/s. Yadav Stone Crusher and not by appellant individually. Appellant in support filed, additional evidences u/s 46A of the I.T. Rules, copies of ITRs, copy of partnership deed, audited accounts of M/s. Yadav Stone Crusher, challans for payment of royalty which were also forwarded to AO for comments. The AO in reply on 16.082018 submitted that the assessee during the assessment proceedings did not file any documentary evidence even after sufficient opportunity of being heard were provided. Therefore, the contentions of the assessee is not acceptable. 6.2.4 On perusal of the above-mentioned evidences filed by the appellant, it was observed that M/s. Yadav Stone Crusher is engaged in the business of crushing and mining of stones. The partners of the firm are Shri Surendra Singh Yadav, Shri Sohan Singh Yadav and Shri Govind Singh Yadav. A partnership deed dt. 31.03.2012 was executed between Shri Surendera Singh Yadav (20%), Shri Sohan Singh Yadav (60%) and Shri Govind Singh Yadav (20%) and it was mutually implied that the mining business will be carried out by M/s. Yadav Stone Crusher and none of the partner will do any mining activity individually. The royalty of Rs. 5,62,000/- has been paid by M/s. Yadav Stone Crusher on behalf of assessee and the entire amount paid towards royalty is fully recorded in books of accounts. In support the Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 21 of 50 appellant has also filed copies of royalty account (enclosed as annexure 75 to 83 of paper book). It is not the case where the AO was unaware with the existence of the firm M/s. Yadav Stone Crusher which does not have any independent mining license in its name. On the contrary the AO has treated the payment of royalty as undisclosed income of the appellant, being fully disclosed in audited books of accounts of M/s. Yadav Stone Crusher. 6.2.5 Further, the AO in para 16.3(5) has made reference of books of accounts of M/s. Yadav Stone Crusher from where the AO has adopted price of Rs. 988/- per cubic meter of ‘gitti’. The AO has alleged that the assessee has purchased ‘gitti’ for its running project namely M/s. Regal Samarth Krishna Builders and M/s. Envo Promoters & Developers Pvt. Ltd. As alleged, if the appellant would have been doing any sort of mining business then why he would purchase the building material such as gitti from M/s. Yadav Stone Crusher which would have been more profitable for the appellant. No prudent businessman doing business of his own will make purchases from other businessman. 6.2.6 Nevertheless, statement of appellant was also recorded on oath wherein when confronted with the impugned loose papers under consideration, the appellant submitted that the said loose papers BS-1 to BS-9 are royalty books and belongs to M/s. Yadav Stone Crusher. Once the assessee has explained that the royalty books pertain to M/s. Yadav Stone Crusher, the AO ought to have verified the facts from the books of accounts of the said firm and if the said firm was found to be guilty of unrecorded royalty payments then the additions should have been made in the hands of the firm and not in the hands of the appellant. As mentioned above, M/s. Yadav Stone Crusher does not have any independent mining lease/license, however, the said firm was utilizing mining license of the appellant for carrying out mining activities within the meaning of partnership deed dt. 31.03.2012. 6.2.7 Apart from the above, the AO has estimated income of the appellant @ 20% of the turnover on sheer assumption and presumption basis. The AO from the beginning to the end has continuously harped upon the fact that the appellant has been involved in undisclosed mining business without having any iota of evidence on record suggesting mining activities performed by the appellant. It is settled law that AO cannot make any addition merely on basis of suspicion, however, strong it may be. The AO is not justified in presuming certain facts witihout having anything to corroborate. Hon'ble Supreme Court in the case of Dhakeshwari Cotton Mills Limited vs. CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence act do no 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. vs. 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 vs. CIT (1954) 26 ITR 736 (SC). It is also settled legal position that onus of proof is on the person who makes any allegation and not 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 Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 22 of 50 probation qui digit non qui negat” i.e. burden lies upon one who alleges and not upon one who deny the existence of the fact. 6.2.8 In view of the above discussion, material evidences on record and case laws cited, firstly, the AO ought to conduct independent enquiries regarding the impugned mining business of the appellant. Secondly, once the assessee in his statement recorded on oath has clearly admitted that the said papers are royalty books of M/s. Yadav Stone Crusher, the AO cannot put baseless allegation on appellant without any corroborative evidence on record. Thirdly, the evidence should be a speaking one having direct nexus with the assessee, which was not in the case of appellant. Fourthly, M/s. Yadav Stone Crusher does not have any mining license and was executing mining business on the basis of license issued in the name of appellant and other two partners as per terms and condition of the partnership deed. Fifthly, no incriminating material was found suggesting mining business being performed by the appellant. My findings on the issue under consideration are based on the various conclusions drawn by me which have been discussed in the above paras. Therefore, the AO was not justified in making addition of Rs. 2,76,400/- in A.Y. 2012-13, Rs. 8,75,635/- in A.Y. 2013-14, Rs. 5,47,390/- in A.Y. 2014-15 and Rs. 79,040/- in A.Y. 2015-16 as unaccounted payment. Thus, the additions made by the AO amounting to Rs. 2,76,400/- in A.Y. 2012-13, Rs.8,75,635/- in A.Y. 2013-14, Rs. 5,47,390/- in A.Y. 2014-15 and Rs. 79,040/- in A.Y. 2015-16 are deleted. Therefore, appeal on this ground is allowed.” 16. During hearing before us, Ld. DR vehemently supported the order of AO and submitted that the AO has computed assessee’s turnover and net profit of mining business on the basis of ‘transit passes’ seized by department which indicated that the assessee carried ‘mining business’ and taking into account the realistic data relating to ‘royalty payments’, ‘royalty rates’ and ‘rates of gitti’. Therefore, the addition made by AO is very right and must be upheld. 17. Per contra, Ld. AR relied upon order of CIT(A). Ld. AR submitted that there is no denial about carrying on ‘mining business’ but the ‘mining business’ was in fact carried on by a partnership firm ‘M/s Yadav Stone Crusher’ and not by assessee himself. Ld. AR drew our attention to partnership-deed of M/s Yadav Stone Crusher filed at Page No. 131-137 of Paper-Book and referring to same, pointed out that the said partnership was run by all 3 persons, namely (i) Shri Sohan Singh Yadav, (ii) Shri Govind Singh Yadav, and (iii) Shri Surendra Singh Yadav (assessee), in whose Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 23 of 50 names the “transit passes” inventorised as BS-1 to BS-22 were seized. Further referring to Clause No. 4 of partnership-deed, Ld. AR demonstrated that it is clearly agreed upon by partners that the ‘mining business’ shall be done only in partnership firm and the partners shall not do in individual capacity. Then, Ld. AR also drew our attention to Page No. 141-153 of Paper-Book and successfully demonstrated that during the course of search u/s 132 itself, statements of assessee very recorded on 13.08.2014 and a specific question No. 21 was raised by authorities on the seized documents. In reply, the assessee submitted to the authorities that the seized documents related to ‘M/s Yadav Stone Crusher’, a partnership firm in which the assessee was having only 5% share. Thus, the real fact was narrated by assessee instantly at the first stage itself. Ld. AR went further to submit that all ‘royalty payments’ were already recorded in the books of M/s Yadav Stone Crusher which is also evident from copies of Ledger A/cs filed in Paper-Book. Lastly, it is submitted that the factum of sales of ‘mining business’ by M/s Yadav Stone Crusher is also accepted by AO himself in the “Notes” in Para No. 16.3 of assessment-order wherein the AO has adopted the selling rate charged by M/s Yadav Stone Crusher for estimating turnover of assessee. Ld. AR submitted that income of mining business is already disclosed by M/s Yadav Stone Crusher and assessment of same in the hands of assessee has resulted in double taxation which cannot happen. With these submissions, Ld. AR concluded that the CIT(A) has rightly taken into account all facts and deleted addition by arriving at a cogent finding that the ‘mining business’ was carried on by M/s Yadav Stone Crusher and not by assessee. Ld. AR prayed to uphold the order of CIT(A). 18. We have considered rival submissions of both sides. After a careful consideration, we find that the CIT(A) has pass a well-reasoned order taking into the account the correct facts and evidences of the issue. The same line of reasoning as adopted by CIT(A) is also pleaded by Ld. AR in his arguments. In nutshell, the conclusion derived by CIT(A) is such that the Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 24 of 50 mining business was carried on by M/s Yadav Stone Crusher and not individually by assessee. We have already re-produced the order of CIT(A) and the pleadings made by Ld. AR in preceeding paragraphs which supports this conclusion. Therefore, without re-producing the same for the sake of brevity, we only suffice to say that we are in agreement with the CIT(A)’s order on this point. Ld. DR for revenue is not able to controvert the findings/conclusions made by CIT(A) or to show any perversity or adversity therein. Hence, we approve his order. This ground of revenue is also dismissed therefore. AY 2014-15: 19. The grounds raised in this appeal are as under: 1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 1,15,00,000/- made by the AO on account of unaccounted receipts. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 5,47,390/- made by the AO on account of undisclosed business of mining. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 1,08,00,980/- made by AO on account of unaccounted investment. Ground No. 1: 20. In this ground, the revenue claims that the CIT(A) has erred in deleting addition of Rs. 1,15,00,000/- made by AO on account of undisclosed receipts. 21. The AO has dealt this issue in Para No. 10 of assessment-order. He has noted that during search-proceeding, Page No. 46 to 48 of LPS-1 were seized. These documents contained two sale-agreements of lands, namely (i) agreement dated 14.03.2014 of 10 acres of land situated at Chandbad, Tehsil–Berasia, Bhopal sold by assessee to Shri Anil Kumar Malviya for a consideration of Rs. 1,15,00,000/-, and (ii) agreement dated 19.05.2014 of 5 Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 25 of 50 acres of land situated at same location and sold by assessee to same purchaser for a consideration of Rs. 60,00,000/-. The AO further noted that under these agreements, the purchaser paid Rs. 30,00,001/- and Rs. 35,00,000/- respectively in cash as advance-moneys to assessee. The AO has scanned and re-produced both of these agreements in assessment- order. The AO noted that during search, statements of purchaser Shri Anil Kumar Malviya were recorded on 12.08.2014 wherein he also accepted transactions. The AO also show-caused assessee seeking explanation wherein the assessee also accepted transactions but submitted that the impugned lands were ‘rural agricultural lands’ and therefore resultant capital gain was not taxable; hence not disclosed in returns of income. However, the AO rejected assessee’s submission on the premise that the land was approved for mining purpose and mining activity was actually done [Para No. 10.5(ii) and (iii) of assessment-order]. Ultimately, the AO made addition of Rs. 1,15,00,000/- in AY 2014-15 and Rs. 60,00,000/- in AY 2015-16, equivalent to the sale consideration mentioned in those agreements as ‘unrecorded business receipts’. 22. The CIT(A) has dealt this issue in Para No. 6.5 of appeal-order wherein he narrated the submissions made by assessee. Ultimately, upon consideration of assessee’s submissions, he deleted addition by observing and holding thus: “6.5.2 I have considered the facts of the case, written submissions filed by the appellant and findings of the AO. Appellant during A.Y. 2014-15 has sold land admeasuring 10 acres for total sale consideration of Rs. 1,15,00,000/- to Shri Anil Kumar Malviya. A sum of Rs. 30,01,001 was received in cash and balance amount was paid in two installments of Rs. 50,00,000/- on 31.08.2014 and Rs. 34,98,999/- on 31.12.2014 through cheques. A sale agreement for another land was executed in A.Y. 2015-16 for land admeasuring 5 acres for total sale consideration of Rs. 60,00,000/- to Shri Anil Kumar Malviya. A sum of Rs. 35,00,000/- was received in cash and Rs. 5,00,000/- through cheque, however, the transaction did not materialize and it was agreed that the advance paid for impugned 5 acres of land should be adjusted withy the other land i.e. 10 acres and a cancellation of sale agreement was signed on 27.08.2014 (Annexure 106-107 of PB). The AO while framing the assessment order has concentrated his findings on the facts Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 26 of 50 that the appellant has carried out mining activities on the impugned land under consideration, therefore, the same was not agricultural land. Appellant through his firm M/s. Yadav Stone Crusher has performed mining activities on 22000 sq.ft. area of the land, however, the licence was approved for mining on 10 acres of land. Appellant has filed a copy of certificate issued by O/o Directorate of Mining, Bhopal dt. 28.11.2014, wherein it has been clearly mentioned that the mining license was issued on 15.04.2010 and till 30.06.2014 the mining/production activities have been made by the appellant to the extent of 12231.5 cub. Meter and the total surface of land utilized for mining was approx. 22000 sq. ft. which is around 0.505 acre of land. Thus, one thing 01 is very clear that mining activities were performed on a very small area of land and not on entire 10 acres of land. 6.5.3 The appellant has also strongly contended that the land has been used for agricultural purpose and in support has filed copies of sale deed, registry, khasara of the land, certificate of sarpanch, certificate of tehsildar indicating the fact that agricultural activities has been carried out on the said land (annexure 1-112 & 114-116 of PB). On perusal of the evidences filed by the appellant, it was observed that the land sold by the appellant was an agricultural land. On the contrary the AO has allegedly that the said land was not agricultural land. Now the issue which arises out of allegation of AO and plea of the appellant, whether the land was agricultural land or not. The definition of capital assets held by the assessee has been defined u/s 2(14) of the Act which states that :- “Capital asset” means property of any kind held by the assessee, whether or not connected with his business or profession, but does not include – (i) any stock-in-trade, consumables, store, raw materials held for the purposes of his business or profession; (ii) personal effects, that is to say, movable property (including wearing apparel, jewellery and furniture) held for personal use by the assessee or any member of his family dependent on him; (iii) Agricultural land in India, not being land situated: (a) In any area which is comprised within the jurisdiction of a municipality (whether known as municipality, municipal corporation, notified area committee, town area committee, town committee or any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year; or (b) in any area within such distance, nor being more than eight kilometers, from the local limits of any municipality, or cantonment board referred to in item (a), as the Central Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 27 of 50 Government may, having regard to the extent of, and scope for, urbanization of that area and other relevant considerations, specify in this behalf by notification in the official gazette.” From the above, it is very clear that the land which need to be considered as agricultural land must fulfill two basic and primary conditions:- (i) The land must be situated in any area which is comprised within the jurisdiction of a municipality or cantonment board ; (ii) The population o,f the area where the land is situated should not be less than 10,000 according to the last preceding census. On perusal of copy of certificate issued by Gram sarpanch and Tehsildar dt. 08.06.3025, it was observed that the impugned land under consideration is an agricultural land and is around 15 kms. Away from jurisdiction of Nagar Nigam, Bhopal. The population of village Jetpura according to census 2011 was only 838. Further, it is important to mention here that appellant has been doing agricultural activities was certified by Sarpanch of gram panchayat Jetpura. The agricultural activity has also been confirmed by khasara kcopies of the said land, according to which appellant has been growing ‘soyabean’ on the said land. Hon'ble Bombay High Court in the case of CIT vs. Minguel Chandra Pais & Anr., (2006) 282 ITR 0618 has held that the land classified as agricultural land in land record subjected to land revenue and land acquisition officer, while acquiring the portion of the land treating the land as agricultural land, same was rightly held to be agricultural land by the tribunal. 6.5.4 In view of the above discussion and judiciously following the decision of Hon'ble Bombay High Court in the case of CIT vs. Minguel Chandra Pais & Anr. (supra), the AO was not justified in treating the amount received on sale of agricultural land as unaccounted receipts. Since, the impugned land was agricultural land and sale proceeds received on sale of agricultural land are exempted from taxation, therefore, addition made by the AO amounting to Rs. 1,15,00,000/- is deleted. Therefore, appeal on this ground is allowed.” 23. Before us, Ld. DR relied upon order of AO and submitted that the AO has rightly made addition taking into account the sale-agreements found during search. Ld. DR submitted that the assessee does not have any dispute over existence or genuineness of sale-agreements. 24. Per contra, Ld. AR for assessee supported the order of first-appeal and re-iterated the same line of reasoning as accepted by CIT(A), as under: (i) Regarding 2 nd agreement dated 19.05.2014 for sale of 5 acres of land for Rs. 60,00,000/-, it is submitted that the transaction did not materialize as the same was cancelled vide Cancellation-Agreement Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 28 of 50 dated 27.08.2014, copy of Cancellation-Agreement at Page No. 65-66 of the Paper-Book. Further, the advance-payment of Rs. 35,00,000/- made under sale-agreement was adjusted towards sale of 10 acres of land which is clearly mentioned in Clause No. 2 of the registered sale- deed dated 01.12.2014 executed in respect of 10 acres of land, copy of sale-deed at Page No. 67-77 of Paper-Book. Ld. AR pointed out that the reference of Cancellation-Agreement dated 27.08.2014 is clearly mentioned in the aforesaid Sale-deed of 10 acres of land. (ii) Regarding 1 st agreement dated 14.03.2014 for sale of 10 acres of land for Rs. 1,15,00,000/-, Ld. AR submitted that the said land was agricultural and situated in a village called “Jetpura” having population only of 838 as per 2011 census falling within Gram Panchayat and outside 15 kilometers from outer limit of Municipal Corporation of Bhopal, which is confirmed by the office of Tehsildar vide certificate No. 560/Reader/15 dated 08.06.2015, copy filed at Page No. 104 of Paper-Book. Ld. AR submitted that the basic nature and character of land was never changed and it has been constantly used for agricultural purpose. He submitted that no diversion to commercial use was done and the land was classified as agricultural land in revenue records. However, Ld. AR agreed that out of 10 acres of land, a small portion of 22,000 square feet was used for mining purpose and that too in the nature of surface collection; there was no deep mining. 25. At that stage, the Bench referred to an affidavit filed by assessee to lower-authorities, copy at Page No. 106-107 of Paper-Book, and countered Ld. AR that the assessee has, in Para No. 2 of affidavit, himself accepted that he obtained mining lease of 10 acres. In reply, Ld. AR drew attention to immediate next Para No. 3 and 4 of affidavit wherein the assessee has clearly stated that he was actually using 22,000 square feet area only for mining purpose and during the period 2008 to 2015, the remaining area of Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 29 of 50 land was used for agricultural purposes. Ld. AR submitted that the ‘agricultural use’ of land is also certified by a Certificate issued by Gram Panchayat, Jetpura filed at Page No. 103 of Paper-Book. Further, the office of Collector (Mining branch) has also issued Certificate No. 2566/khanij/2014 dated 28.11.2014 in which it is clearly certified that only 22,000 square feet was used for mining and rest of the area was not used for mining. Further, copies of Form P-II (revenue record) for the period 2009 to 2017 have also been filed on Page No. 78 to 102 of Paper-Book wherein the crop “Soyabeen” is certified to have been grown on the land. With these submissions, Ld. AR continued to insist that the land was de facto used for agricultural purposes (except a small portion of 22,000 square feet used for mining purpose). 26. We have considered rival submissions of both sides and perused the orders of lower authorities as well as the documents placed in the Paper- Book to which our attention has been drawn. After a careful consideration, we arrive at following conclusions: (i) Regarding sale-agreement dated 19.05.2014 for sale of 5 acres of land, the assessee does not have any dispute; in fact the assessee has accepted the agreement at all stages. But the stand of assessee is that the deal was ultimately cancelled and could not materialize. The assessee has filed a Cancellation-Agreement dated 27.08.2014 by which the deal was cancelled and the advance-receipt of Rs. 35,00,000/- from purchaser was adjusted towards sale of another land of 10 acres. The details of Cancellation-Agreement and adjustment of advance-money are also mentioned in registered Sale- deed dated 01.12.2014 of 10 acres of land. As the deal of land of 5 acres is cancelled, there remains no tax liability. The AO has made addition of Rs. 60,00,000/- qua this issue in AY 2015-16 but the CIT(A) has deleted. The revenue has challenged CIT(A)’s action in Ground No. 5 of AY 2015-16; hence we shall be adjudicating this Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 30 of 50 issue subsequently in Para No. 54-55 of this order while dealing Appeal of AY 2015-16. (ii) Regarding sale of 10 acres of land also, the assessee does not have dispute about genuineness agreement dated 14.03.2014 seized during search. Further, the assessee has also filed the registered sale-deed dated 01.12.2014 for this transaction. Thus, the deal is accepted by assessee. Now the limited point for adjudication by us is - Whether the AO has validly/rightly taxed transaction? Admittedly, the AO has taxed the entire sale consideration of Rs. 1,15,00,000/- as ‘undisclosed business receipt’ in AY 2014-15 and the CIT(A) has deleted addition by accepting assessee’s pleading that the land was ‘rural agricultural land’ and therefore capital gain was not taxable in view of section 2(14)(iii) taking the impugned land out of definition of ‘capital asset’. We would first examine whether the CIT(A) is accepting such a plea. From assessee’s own affidavit filed to AO as narrated earlier (copy in Paper-Book at Page No. 106-107) and Certificate of Collector (mining) (Copy in Paper-Book at Page No. 105), we clearly find that the assessee obtained mining lease of entire 10 acres of land for the period 15.04.2010 to 14.04.2020. Then, from perusal of Page No. 3-4 of the registered sale-deed dated 01.12.2014 wherein the background history/details of the purchase of land by assessee are noted, we find that the assessee purchased impugned land of 10 acres in piecemeal on 31.08.2009/10.09.2009/02.09.2009. Thereafter, the assessee obtained mining lease from 15.04.2010 for entire 10 acres. That means, the assessee obtained mining lease on 15.04.2010 within a period of just 7 months after purchase and that too for entire land of 10 acres. When it is so, we are afraid to accept assessee’s pleading of agricultural land on the basis of mere de facto use for agricultural purpose. In our considered view, we have to see both aspects i.e. the nature/character of land permitted by Govt. as well as de facto use. Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 31 of 50 We feel that a land can be said to be agricultural only when its nature/character from Govt. permissions is ‘agricultural’ and de facto use is also for agricultural purpose. In other words, de facto use alone is not decisive. Therefore, in the situation of present case, we are unable to accept the claim of exclusion u/s 2(14)(iii) accepted by CIT(A). However, we find that the AO has taxed entire sale consideration of Rs. 1,15,00,000/- in AY 2014-15 as ‘undisclosed business receipt’ which is seriously wrong for several other reasons. Firstly, it is not the case of AO at all that the impugned land was held was held by assessee as ‘stock-in-trade’. From the details available on record, at the best only it can be concluded that the land was ‘capital asset’ and its sale can give rise to taxability under ‘capital gain’ but certainly not as a business receipt. Secondly, the AO has taxed the entire consideration of Rs. 1,15,00,000/- without giving deduction of cost which does not fit in the scheme of ‘capital gain’ prescribed u/s 48. Thirdly, the agreement dated 14.03.2014, which is the basis of taxation by AO, is basically in the nature of ‘agreement to sell’; the assessee has received just an advance of Rs. 30,01,001/- on 14.03.2014 within previous year 2013-14 relevant to AY 2014-15 and balance consideration of Rs. 84,98,999/- was agreed to be received/ paid by 31.12.2014; the possession of land was also not given till final payment as is evident from Para No. 12 of agreement; and moreover the agreement itself is ‘unregistered’ attracting the decision of Hon’ble Supreme Court in landmark decision in Balbeer Singh Maini Civil Appeal No. 15619 of 2017 where it was categorically held by apex court that the unregistered agreement cannot effectuate any transfer. At the cost of repetition, we may mention that the registered sale-deed of impugned land was executed on 01.12.2014 falling within previous year 2014-15, AY 2015-16. For all these reasons, the AO is very much wrong in assessing an income of Rs. 1,15,00,000/- in AY 2014-15. Consequently, we are inclined to delete the addition made by AO Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 32 of 50 which is clearly unsustainable and we do so. With this, the revenue’s ground is dismissed. Ground No. 2: 27. In this ground, the revenue claims that the CIT(A) has erred in deleting addition of Rs. 5,47,390/- made by the AO on account of undisclosed business of mining. The issue involved in this ground has the same facts as in Ground No. 2 of AY 2013-14 adjudicated in foregoing part of this order. Hence the view taken therein shall apply mutatis mutandis. Applying the same view, this ground is also dismissed. Ground No. 3: 28. In this ground, the revenue claims that the CIT(A) has erred in deleting addition of Rs. 1,08,00,980/- made by the AO on account of undisclosed investment. 29. The AO has dealt this issue in Para No. 15 of assessment-order. During assessment-proceeding, the AO found that the assessee had purchased House No. E-3/204, Arera Colony for Rs. 1.52 crore. When the AO show-caused assessee to explain source of payments, the assessee submitted a detailed chart showing total investment of Rs. 1,64,00,980/- toward cost of house, stamp duty and registration. With regard to sources, the assessee submitted to have taken Unsecured Loans from certain parties as well as a home loan of Rs. 56,00,000/- from Axis Bank; the details of all loans are mentioned in the said chart. The AO has extracted chart in assessment-order. Ultimately, the AO accepted home loan from Axis Bank as genuine but made addition of balance of Rs. 1,08,00,980/- [Rs. 1,64,00,980 (-) Rs. 56,00,000] for the reason that no documentary evidences were submitted to establish identity, creditworthiness and genuineness of Unsecured Loans. Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 33 of 50 30. The CIT(A) has dealt this issue in Para No. 6.6 of appeal-order where he has deleted entire addition by observing and holding thus: “6.6.3 I have considered the facts of the case, evidences filed before me and perused the assessment order. During the course of appellate proceedings, appellant has filed copies of confirmation, affidavits along with address and Id proofs, copies of bank account statement, copies of registered sale deeds in respect of plot sold by the lenders in support of source of funds for lending it to the appellant. A copy of the additional evidences was also provided to the AO for comments. The AO, however, has accepted these additional evidences and stated that the case of the assessee may be decided on merits. 6.6.4 The appellant during the year under consideration has purchased a residential house at E-3/204, Arera Colony, Bhopal, for total sale consideration of Rs. 1.52 crores from Shri Shashank K. Vaman Bhalerao. The appellant submitted that a housing loan of Rs. 56,00,000/- was taken from Axis Bank, Bhopal and unsecured loan of Rs. 69,00,000/- was taken from different persons. The brief details of the lenders are as under :- Name of the Lender Date of payment Mode of payment Unsecured loan amount Shri Phool Singh Yadav, r/o H.No.5, S-13, Sangam Colony, Bhopal 04.10.2013 Cheque no. 193001 of Krishna Mercantile Coop. Bank Ltd., Bhopal 2350000 Shri Jagdish Singh Thakur, r/o H.No. S-13, Sangam Colony, Bhopal (PAN ABXPT0741M) 07.06.2014 Cheque no. 200651 of Krishna Mercantile Coop. Bank Ltd., Bhopal 1200000 Shri Ram Das r/o Padamnabh Nagar, Bhopal (PAN AAUKPA4329L) 18.10.2013 Cheque no. 196103 of Krishna Mercantile Coop. Bank Ltd., Bhopal 2625000 Shri Govind Singh Yadav, r/o C-55, Padamnabhnagar, Bhopal (PAN: AANPY2261L) 09.06.2014 12.06.2014 13.06.2014 13.06.2014 14.06.2014 Ch No. 202302 Ch No. 202302 Ch No. 202302 Ch no. 202302 Ch no. 202302 1000000 1000000 1000000 1000000 1000000 Krishna Mercantile Coop. Bank Ltd., Bhopal Total 5000000 Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 34 of 50 Appellant has also filed confirmations and affidavits of all the lenders and bank account statement of housing loan of Axis Bank, Bhopal. 6.6.5 The loan party furnished the loan confirmation, copy of bank account and proof of filing of the return. By filing the above documents the appellant is able to establish the – i. Identity of the creditors – the creditors are income tax payer and filed the loan confirmations and are assessed by the same AO. ii. Genuineness of the transaction – the appellant has taken the loan through banking channel. The appellant is in the receipt of loan by cheque. Copies of bank statements of lenders are placed on record and perusal. iii. Creditworthiness of the creditors – the creditors are income tax payer and filing the income tax return. The lenders have not only given the loan to the appellant but to other parties. From the above it is clear that the appellant has satisfied all the three conditions required for genuineness of the transaction. The same view has been upheld by Hon'ble ITAT in the following cases :- i. Umesh Electricals vs. ACIT (2011) 18 ITJ 635 (Trib–Agra) : (2011) 131 ITD 127 : (2011) 141 TTJ Establishment of identity and creditworthiness proved – Assessee produced the bank account of creditor in his bank account on the same day on which loan was given – Assessee furnished the cash flow statement of creditor - Based on inquiry, AO noted that creditor was engaged in providing accommodation entries – HELD. In group cases, it has been held that there was no evidence against the creditor to prove that he was providing accommodation entries – Further, mere deposit of money by the creditor on the same day, does not establish that the loan is not genuine – Assessee has proved the source of credit and also, the source of source – Addition cannot be made. ii. Aseem Singh vs. ACIT, (2012) 19 IRJ 52 (Trib.-Indore) - Identity and creditworthiness proved – Assessee took loan of Rs. 1,00,000/- confirmation of creditor was filed – Lower authorities made addition u/s 68 holding that amount was deposited in cash in the bank account of lender immediately prior to date of loan – HELD – Assessee has established the identity – The party has confirmed the transaction – If AO doubted the transaction, AO should have called creditor u/s 131 – Addition cannot be made. Thus, appellant has furnished all the required details in order to prove genuineness of the transaction and creditworthiness of the creditor. 6.6.6 Hon'ble Jurisdictional MP High Court in the case of Metachem Industries (2001) 245 ITR 160 (MP) has held that law does not cast any Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 35 of 50 obligation on the assessee to explain the source of source for the amount borrowed. Therefore, in view of the above discussion and case laws cited above, the AO was not justified in making addition of Rs. 1,08,00,980/- in A.Y. 2014-15 on account of unsecured loan taken by the assessee to purchase residential house. Thus, keeping in view facts of the case, the documentary evidences filed by the appellant and the case laws cited above, the additions made by the AO amounting to Rs. 1,08,00,980/- in assessment year 2014-15 is deleted. Therefore, appeal on this ground is allowed.” 31. Before us, Ld. DR supported the order of AO whereas Ld. AR relied upon the order of CIT(A). 32. We have considered rival submissions of both sides and perused the orders of lower-authorities and the documents placed in the Paper-Book. We find that the assessee filed the details of all unsecured loans to AO in the form of a chart where names of the lenders, dates of cheques, cheque numbers and amounts were clearly mentioned. During first-appeal before CIT(A), the assessee re-filed the same chart with further evidences in the shape of addresses of lenders, their PANs, their bank statements and copies of ITRs, A/c confirmations, their ID proofs and Sources from which loans were given to assessee. The CIT(A) forwarded those evidences to AO and called comments. In reply, the AO accepted additional evidences and asked CIT(A) to decide the case of assessee on merit (Para No. 6.6.3 of appeal- order). Thereupon, the CIT(A) analysed evidences and after being fully satisfied, deleted addition. Thus, the CIT(A) has taken a meritorious and judicious decision after calling remand-report from AO and after considering assessee’s evidences. Faced with this situation, the revenue is hardly having any merit in its ground, the same is hereby dismissed. 33. At this stage, we may also make a mention that during hearing before us, Ld. AR for assessee made an additional submission that the impugned property was purchased on 07.06.2014 falling within previous year 2014-15 relevant to AY 2015-16 and all unsecured loans (as well as loan from Axis Bank) were taken during AY 2015-16 except loan of Rs. 23,50,000 (+) 26,25,000 from Shri Phool Singh and Shri Ram Das; therefore the AO was Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 36 of 50 very much wrong in making addition in AY 2014-15. Ld. AR also filed a copy of registered-deed of the impugned property as well as bank statement of assessee on 27.07.2023, vide Inward Entry No. 654 of the office of ITAT, after conclusion of hearing as per direction given by Bench. Since we have already agreed, in the preceding paragraph, with the deletion of addition made by CIT(A) on merit itself, there is no necessity to look into this additional submission of Ld. AR; however we have recorded the same to keep clarity on facts. AY 2015-16: 34. The grounds raised in this appeal are as under: 1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 15,00,000/- made by the AO on account of unaccounted receipts. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 79,040/- made by the AO on account of undisclosed business of mining. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 65,01,000/- made by the AO on account of unexplained cash found at residence. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 42,07,000/- made by the AO on account of unexplained receipts. 5. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 60,00,000/- made by the AO on account of unexplained receipts through clear implication by deleting addition of Rs. 1,15,00,000/- made by the AO in assessment year 2014- 15 at para 10 of the impugned assessment order. Ground No. 1: 35. In this ground, the revenue claims that the CIT(A) has erred in deleting addition of Rs. 15,00,000/- made by the AO on accounts of unaccounted receipts. Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 37 of 50 36. The AO has dealt this issue in Para No. 11 of assessment-order. While conducting assessment-proceeding of M/s Envo Promoters & Developers Pvt. Ltd. [“M/s Envo”], the AO found that the assessee had given cash loans to M/s Envo on different dates aggregating to Rs. 15,00,000/-. When the AO show-caused assessee seeking explanation qua the sources of giving loans, the assessee submitted that M/s Envo is a private company having 3 directors and 2 shareholders. The shareholders were (i) assessee himself, and (ii) Shri Lateef-ur-Rahman. Due to dispute between directors, Shri Lateef-ur-Rahman wrote a letter to bankers and got all bank accounts of M/s Envo blocked. The assessee submitted copies of correspondence with ICICI Bank to AO to demonstrate the factum of blocking of bank account. Hence, due to business exigencies, the assessee (being director-cum- shareholder of M/s Envo) had to collect moneys directly from customers of M/s Envo for execution of projects as well as repayment of loan/interest liabilities of M/s Envo and induct funds in M/s Envo, which assessee did. In nutshell, the assessee submitted that the funds inducted in M/s Envo by way of loans of Rs. 15,00,000/- were generated by way of collections from customers of M/s Envo, hence the assessee had an explainable source. Accordingly, the assessee requested the AO to neither make any addition nor invoke any penal provision of section 269SS/269T. However, the AO did accept assessee’s submission and made addition. 37. The CIT(A) has dealt this issue in Para No. 6.8 of appeal-order and deleted addition by observing and holding thus: “6.8.2 I have considered the facts of the case, evidences on record and findings of the AO M/s. Envo Promoters is a private limited company having three directors and two equal shareholders i.e. 1. Surendra Yadav, 2. Lateef– Ur-Rahman. Due to some mutual disputes between both the directors, the second shareholder/director Mr. Lateef–Ur-Rahman has written an application to the existing bankers and ceased/blocked all bank accounts of the M/s. Envo Promoters (page no. 151 & 152 of paper book). The appellant in true spirit for doing business took another path and requested customers to give cash as advance against sale of their respective plots. The only reasons for taking cash was that the accounts were freezed due to some mutual disputes. Appellant has filed details of customers through additional evidences. A copy Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 38 of 50 of these additional evidences were also forwarded to AO for comments, however, the AO vide remand report dt 17.08.2018 has stated that the affidavits and additional evidences seems to be afterthought and are not acceptable. The AO remained silent on merits and relevance of these documents with the impugned addition. On perusal of these additional evidences, it was found that the appellant through these evidences has filed all the desired details as required by the then AO. A brief detail of these evidences is as under :- S.No. Cash received from Date of receipt Amount 1 Shri Dharmendra Yadav 14.05.2012 125000 2 Shri Mahesh Verma 16.05.2012 125000 3 Shri Kailash Chand Sahu 07.06.2012 100000 4 Shri Kailash Chand Sahu 24.06.2012 100000 5 Smt. Madhusudhan Chouhan 25.06.2012 100000 6 Shri Manish Verma 26.06.2012 100000 7 Shri Manoj Singh Rajput 27.06.2012 125000 8 Shri Vinod Sahu 28.06.2012 50000 9 Smt. Neerja paliwal 30.06.2012 100000 10 Smt. Neerja paliwal 02.07.2012 100000 11 Shri Netalal 05.07.2012 100000 12 Smt. Preeti Shrivastava 06.07.2012 100000 13 Smt. Premlata 07.7.2012 100000 14 Shri Murlidhar Malviya 07.07.2012 100000 15 Smt. Rekha Pawle 09.07.2012 100000 16 Smt. Rekha Pawle 10.08.2012 100000 17 Smt. Sangita Malviya 25.08.2012 100000 18 Smt. Sangita Malviya 04.09.2012 100000 19 Smt. Urmila Mishra 13.09.2012 100000 20 Shri Vaman Rao Mande 18.09.2012 50000 21 Shri Vaman Rao Mande 10.10.2012 75000 22 Shri Ranjeet Kapoor 14.10.2012 200000 Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 39 of 50 23 Shri Sanjay Kumar Soni 01.11.2012 100000 24 Shri Sushil Shrivastava 05.11.2012 100000 25 Shri Murlidhar Malviya 27.12.2012 50000 26 Shri Murlidhar Malviya 27.12.2012 50000 27 Shri Sanjay Kumar Soni 11.02.2013 100000 28 Shri Susheel Shrivastava 19.03.2013 100000 29 Shri Vinod Sahu 20.03.2013 90000 Total 2840000 Thus, the appellant has provided details of payments, date of payments and details of customers from whom the alleged cash was received. Further, the appellant has filed copies of registered sale deeds, copy of ledger account and affidavits of the customers from whom cash has been received. Therefore, the appellant has discharged his onus of proving that the advance has been received from customer’s against sale of plots and has also explained the circumstances which forced the appellant to receive cash from customers. It was beyond control of the appellant to put things normal with other director Shri Lateef-ur-Rahman, however, he failed to do so. The AO has alleged that cash have been given by appellant to M/s Envo Promoters & Developers Pvt. Ltd. In fact, the same are not in the nature of cash loans, the same represents advance received from customers against sale of plots. In view of the above, the AO was not justified in making addition of Rs. 15,00,000/- being advance received from customers. Thus, the addition made by the AO amounting to Rs. 15,00,000/- is Deleted. Therefore, appeal on this ground is allowed.” 38. Before us, Ld. DR for revenue strongly supported the order of AO. He submitted that during assessment-proceeding, the assessee did not supply names of customers to AO. He submitted that even in remand-report, the AO has reported to CIT(A) for not accepting assessee’s evidences. Ld. DR prayed to uphold the addition made by AO. 39. Per contra, Ld. AR for assessee relied upon the order of CIT(A). He drew our attention to Paper-Book Page No. 140-141 where a letter of ICICI Bank dated 17.12.2013 to show freezing of bank a/c is submitted. He submitted that the assessee has shown the valid reason of business- exigency due to which the assessee was compelled to make direct collections Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 40 of 50 from customers. He submitted that it was necessary for assessee to resort to extreme step in order to keep M/s Envo working and alive. He submitted that the assessee has filed necessary documentary evidences to CIT(A) in support of collections made from customers and the CIT(A) has deleted addition after considering those evidences. Therefore, the order of CIT(A) must be upheld. 40. We have considered rival submissions of both sides and perused the orders of lower-authorities as well as documents filed in the Paper-Book. The assessee’s stand is such that he collected moneys directly from customers of assessee-company due to the reason that there was deadlock in the management of assessee-company and based on complaint of one shareholder, Mr. Lateef-Ur-Rahman, the assessee’s banker blocked/freezed assessee’s bank A/c. This fact of freezing of bank account is evident from letter of ICICI Bank at Page No. 140-141 of Paper-Book to which Ld. AR drew our attention as well as attention of Ld. DR. Then, from order of first- appeal, we find that the CIT(A) has noted complete details of customers as well as date-wise moneys collected by assessee from those customers. The CIT(A) has also noted that the assessee filed copies of registered sale-deeds, copies of ledger accounts and affidavits of customers from whom the cash was collected. Finally, CIT(A) has categorically mentioned that the assessee had discharged his onus of proving collections made from customers. These findings made by CIT(A) are clear, cogent and sufficient enough and the Ld. DR is not able to rebut the same. Faced with such situation, we find no reason to interfere with the order of CIT(A). This ground of revenue is, therefore, dismissed. Ground No. 2: 41. In this ground, the revenue claims that the CIT(A) has erred in deleting addition of Rs. 79,040/- made by the AO on account of undisclosed business of mining. The issue involved in this ground has the same facts as Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 41 of 50 in Ground No. 2 of AY 2013-14 adjudicated in foregoing part of this order. Hence the view taken therein shall apply mutatis mutandis. Applying the same view, this ground is also dismissed. Ground No. 3: 42. In this ground, the revenue claims that the CIT(A) has erred in deleting addition of Rs. 65,01,000/- made by AO on account of undisclosed cash physically found at the residence of assessee. 43. The AO has dealt this issue in Para No. 8 of assessment-order. The AO has noted that during search-proceeding, physical cash of Rs. 72,77,020/- was found with assessee. During assessment-proceeding, the AO show- caused assessee to explain source of cash. In reply, the assessee submitted that he received advance-payments in cash through sale-agreements dated 14.03.2014 & 19.05.2014 of two agricultural lands, one of 10 acres and other of 5 acres (we have already dealt the issue of sale of agricultural lands in earlier part of this order; refer the same for immediate reference), and the same cash was kept at home. However, the AO did not believe assessee’s submission on the reasoning that the search was conducted on 12.08.2014 and the assessee cannot keep such huge cash at home for about 5 months period after 14.03.2014 & 19.05.2014. 44. The CIT(A) has dealt this issue in Para No. 6.7 of appeal-order. Before CIT(A), the assessee submitted two sources of physical cash, namely (i) the advance of Rs. 35,00,000 (+) Rs. 30,01,001 = Rs. 65,01,001/- received towards sale of lands, and (ii) Rs. 8,93,000/- belonging to his two sisters Smt. Archana Yadav and Smt. Anita Yadav who had kept cash with assessee for security reasons. The CIT(A) accepted first part of Rs. 65,01,001/- and deleted addition to that extent but upheld addition for balance amount of Rs. 7,76,019/- [Rs. 72,77,020 (-) Rs. 65,01,001]. The revenue is aggrieved by part-relief given by CIT(A). Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 42 of 50 45. Ld. DR for revenue strongly contended that the assessee has linked physical cash with advance-moneys received against sale of lands whereas the AO has de-linked those two incidents. Ld. DR also submitted that the assessee has changed his stand from time to time before authorities. He submitted that the CIT(A) has wrongly accepted assessee’s version of linking the advance-receipts towards sale of lands with physical cash found by authorities. 46. Per contra, Ld. AR for assessee supported the order of CIT(A). He drew our attention to the statements given by assessee to authorities before/during search, Page No. 11-12 of Paper-Book, wherein the assessee clearly stated, even before recovery of cash by authorities, that the physical cash available with him included the advance-moneys received against sale of lands. The statements of assessee recorded by authorities, to which our attention has been drawn, are re-produced below: Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 43 of 50 Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 44 of 50 Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 45 of 50 47. We have considered rival contentions of both sides. After a careful consideration, we find that the assessee has, before/during the proceeding of search itself, explained the advance-moneys received by him against sale of land as source for physical cash. Ld. CIT(A) has also given benefit to assessee to that extent and upheld rest of the addition. Ld. DR for revenue, although dutifully supported the order of AO, but could not controvert the submission of assessee or order of CIT(A). Therefore, in this situation, we do not find any reason to interfere with the order of CIT(A). The revenue’s ground is therefore dismissed being devoid of any merit. Ground No. 4: 48. In this ground, the revenue claims that the CIT(A) has erred in deleting addition of Rs. 42,07,000/- made by the AO on account of unaccounted receipts. 49. The AO has dealt this issue in Para No. 13 of assessment-order. He has noted that during survey of M/s Envo, page no. 15A of LPI-1 was impounded which contained notings such as “3,07,000/- Surendra Sir ko dena hai” “39 lacs Surendra Sir ko diye”. When the AO show-caused assessee, the assessee explained that the document is a loose and dumb document not having any financial credential. The AO rejected assessee’s submission. As the document did not mention any date of transaction, the AO made addition of Rs. 42,07,000/- in AY 2015-16 50. The CIT(A) has deleted this addition in Para No. 6.9.2. to 6.9.3 by observing as under: “6.9.2 I have considered the facts of the case, written submissions filed along with evidences and findings of the AO. During the course of survey at the office of M/s. Envo Promoters Developers Pvt. Ltd at 6/4, Chittor Complex, MP Nagar, Bhopal, page no. 15A of LPI-1 was impounded on which certain notings such as ‘Rs 17 lacs cash paid to Envo Construction’ ‘3,07,000/- Surendra Sir ko dena hai’ and ‘39 lacs Surendra Sir ko diye’ is written. Appellant during appellate proceedings submitted that the impunged loose paper notings were in the handwriting of accountant Mr Rajeev Bhatt who Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 46 of 50 noted the alleged approximated sum to bring into knowledge of concerned persons or to be used as reminder. As stated by him that Rs 39 lacs was a credit balance in books of M/s Yadav stone Crusher which was given by alleged firm to assessee. Further another notings represented the entry of unsecured loan was given to Surendra Yadav (assessee) by Shri Sohan Singh Yadav known as ‘Daau’. That the referred notings are already being recorded in the books of accounts of the Firm and individual accounts of respective assessee. Both the referred transactions have been made through account payee cheques and duly reflected in their bank accounts. In support appellant has filed additional evidences such as affidavit of Shri Rajeev Bhatt, bank and ledger account statement of Shri Surendra Singh Yadav, bank account statement of Shri Sohan Singh Yadav and bank account statement of M/s Yadav Stone Crusher. A copy of these evidences was forwarded to AO for comments. The AO in reply stated that no comments are offered. 6.9.3 Nevertheless, on perusal of these evidences it was observed that Shri Rajeev Bhatt accountant of the appellant has accepted that the said jottings on page no 15A of LPS-1 was written by him and represents various ledger entries. Further, on perusal of bank account statement of Shri Sohan Singh Yadav (Dauu) it was found that Shri Sohan Singh Yadav has given sum of Rs. 90,750/- on 05.12.2012 through cheque no 188401 and Rs. 2,26,000/- on 20.12.2012 through cheque no 187700 from his Krishna Mercantile Co-Op Bank Ltd. It is also important that no cash was deposited prior to the amount given to the appellant. In reply to impugned addition of Rs. 39,00,000/- the appellant submitted that a sum of Rs. 39 lacs was outstanding in the books of M/s Yadav Stone Crusher in the name of appellant. On perusal of copy of ledger account of appellant in books of account of M/s Yadav Stone Crusher it was observed that total outstanding amount in the name of appellant was Rs. 40,91,000/-. However, I find it convenient to reproduce the relevant part of ledger account so that each and every aspect of the addition is clear. The extract of ledger account is as under:- S.No Partculars Date Amount 1 State bank of India-9065 02.04.2011 1000000 dr 2 State bank of India-9065 02.04.2011 1000000 cr 3 State bank of India-9065 02.04.2011 1000000 cr 4 State bank of India-9065 15.04.2011 13240 dr 5 Krishna Mercantile Co-Op Bank Ltd -1707 18.05.2011 1680000 dr 6 Krishna Mercantile Co-Op Bank Ltd -1707 18.05.2011 500000 dr 7 State bank of India-9065 19.05.2011 13300 dr 8 Krishna Mercantile Co-Op Bank Ltd -1707 01.06.2011 500000 dr 9 State bank of India-9065 21.06.2011 13500 dr 10 Krishna Mercantile Co-Op Bank Ltd -1707 06.07.2011 786000 dr 11 State bank of India-9065 11.07.2011 50000 dr 12 State bank of India-9065 03.08.2011 26600 dr 13 State bank of India-9065 21.09.2011 26500 dr 14 State bank of India-9065 22.09.2011 50000 dr 15 State bank of India-9065 14.10.2011 13300 dr 16 State bank of India-9065 27.10.2011 50000 dr 17 State bank of India-9065 15.11.2011 13500 dr 18 State bank of India-9065 13.12.2011 35560 dr 19 State bank of India-9065 16.12.2011 38000 dr 20 State bank of India-9065 17.12.2011 50000 dr 21 State bank of India-9065 28.12.2011 26500 dr Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 47 of 50 22 Krishna Mercantile Co-Op Bank Ltd -1707 28.12.2011 205000 dr 23 State bank of India-9065 11.01.2012 1000000 dr Total 4091000dr The appellant further explained that on totaling entries at Sr No 1, 5, 6, 8, 10, 11, 14, 16, 19, 20 the addition comes at Rs. 59,09,000/- and sum of Rs. 20,00,000/- was credit balance, therefore, the net amount come at Rs. 39,09,000/- which is also reflected on the said loose paper. It is also very important that none of the transaction was made in cash. All the receipts and payments were made through bank account cheques. Thus, from the above it is very clear that the jottings/scribblings on impunged page no 15A of LPS-1 are duly recorded in books of account of M/s Yadav Stone Crusher. Therefore, the AO was not justified in making addition of Rs. 42,07,000/- on the basis of impunged loose paper and the addition made by the amounting to Rs. 42,07,000/- is Deleted being fully explained and recorded in audited books of accounts. Therefore, appeal on this ground is Allowed. 51. Ld. DR vehemently supported the order of AO. He submitted that from the impounded documents, it was clearly discernible and rightly observed by AO that a total sum of Rs. 42,07,000/- was paid/payable to assessee. Therefore, the AO has rightly made addition. 52. Replying to above, Ld. AR for assessee firstly objected to the approach of AO. He submitted that the impounded document is certainly a dumb document when it is silent about primary details like nature/purpose of transaction, date/month/year of transaction, the payer of money, etc. He submitted that how can AO presume it for AY 2015-16 when there is date/month/year mentioned in document? He submitted that the document was found from premise of M/s Envo and not from assessee, then in such case the department must have taken some action against M/s Envo before turning face towards assessee and making any addition in assessee’s hands. He questioned as to what department has done in the hands of M/s Envo? He submitted that one-sided addition in the hands of assessee based on such dumb document is clearly illegal, baseless and unsustainable. Having said so, Ld. AR went on explaining that subsequently on further probe, the assessee came to find that the impounded document was in the handwriting of Mr. Rajeev Bhatt (employee) who noted approximate sums for the Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 48 of 50 knowledge of concerned persons. Accordingly, the assessee collected details of transactions from Rajeev Bhatt and submitted to CIT(A) with documentary evidences including an affidavit of Shri Rajeev Bhatt, copies are filed at Page No. 313-359 of Paper-Book. The CIT(A) forwarded to AO but AO did not offer any comment. Then, the CIT(A) himself analysed the details/documents submitted by assessee and deleted addition by passing a well-reasoned order. Ld. AR submitted that the CIT(A) has correctly deleted the addition after analysis, his action must be upheld. 53. We have considered rival submissions of both sides and perused the orders of lower-authorities. We have also perused the impounded document re-produced by AO in assessment-order. On perusal, we find that the assessee is right in contending that the document does not give any detail as to the nature/purpose of payment, any date/month/year of transaction or even who was payer of the moneys mentioned therein. The document contains simple notings “3,07,000/- Surendra Sir ko dena hai” “39 lacs Surendra Sir ko diye”. The assessee has explained to CIT(A) that the notings were made by Shri Rajeev Bhatt who recorded approximate sums for knowledge of the persons. The assessee collected details of those approximate sums from Rajeev Bhatt and submitted to CIT(A) which are mentioned by CIT(A) in his order. The assessee also filed documentary evidences including affidavit of Rajeev Bhatt. The CIT(A) has, after giving opportunity to AO and after considering the details and evidences provided by assessee, arrived at a conclusion that the transactions relating to approximate sums noted by Rajeev Bhatt in impounded document were duly recorded in the books of M/s Yadav Stone Crusher. During hearing before us, though the Ld. AO strongly supported the order of AO, yet could not rebut the findings and conclusion arrived by CIT(A). In the circumstance, we do not find any merit in the ground of revenue; the same is hereby dismissed. Ground No. 5: Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 49 of 50 54. In this ground, the revenue claims that the CIT(A) has erred in deleting addition of Rs. 60,00,000/- (by necessary implication) made by AO on account of unaccounted receipts. 55. We have already noted facts apropos to this issue in foregoing paragraph No. 21, 24(i) and 26(i) of this order. The crux is such that a sale- agreement dated 19.05.2014 seized by authorities during search revealed that the assessee sold a land of 5 acres for Rs. 60,00,000/- and received advance of Rs. 35,00,000/-. The assessee does not have any dispute qua existence or genuineness of this agreement seized during search. But the stand of assessee is that the deal was ultimately cancelled and could not materialize. The assessee has filed a Cancellation-Agreement dated 27.08.2014 by which the deal was cancelled and the advance-receipt of Rs. 35,00,000/- from purchaser was adjusted towards sale of another land of 10 acres. The details of Cancellation-Agreement and adjustment of advance- money are also mentioned in registered Sale-deed dated 01.12.2014 of 10 acres of land. As the deal of land of 5 acres is cancelled, there remains no tax liability. The CIT(A) has deleted addition of Rs. 60,00,000/- made by AO, though not by a speaking order but by necessary implication by accepting Cancellation-Agreement in Para 6.5.2 of his order. We find that the Cancellation-Agreement is on record; the same is also referred in registered sale-deed of another land where the advance-money was adjusted and the Revenue is not able to rebut or dispute the genuineness of Cancellation- Agreement. Therefore, in the situation, the addition made by AO is not Surendra Singh Yadav IT(SS)A Nos. 116 to 118/Ind/2019 A.Ys.2013-14 to 2015-16 Page 50 of 50 sustainable. Hence, the CIT(A)’s decision to delete, even if by necessary implication but not by way of a speaking order, is valid. There is no merit in the ground of revenue. We, therefore, dismiss this ground. 56. Resultantly, all these appeals are dismissed. Order pronounced in the open court on 26.10.2023. Sd/- sd/- (VIJAY PAL RAO) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore Ǒदनांक /Dated : 26.10.2023. CPU/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order Assistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore