Appeal details
Counselvise Citation
[2023] 102 COUNSELVISE.COM (IT) 6318 (ITAT-SURAT)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
7 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
09-08-2023
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
20-07-2023
Assessment Year
2016-2017
Appeal Filed On
01-01-2023
Judgement Text
आयकर अपीलȣय अͬधकरण,स ु रत Ûयायपीठ,स ु रत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER आयकर (खोज और जÞती) सं. /IT(SS)A No.03/SRT/2023 (AY 2015-16) (Hearing in Physical Court) Assistant Commissioner of Income-tax, Central Circle-4, Room No.508, 5 th Floor, Aayakar Bhavan, Majura Gate, Surat-395001 Vs Shri Vinod Kumar Goswami 405, Surya Palace, City Light, Surat-395002 PAN : ACJPG 6973 H अपीलाथȸ /Appellant Ĥ×यथȸ /Respondent आयकर (खोज और जÞती) सं. /IT(SS)A No.04/SRT/2023 & ĤǓत आपƣी/C.O. No.02/SRT/2023 (a/o IT(SS)A No.04/SRT/2023) (AY 2016-17) Assistant Commissioner of Income-tax, Central Circle-4, Room No.508, 5 th Floor, Aayakar Bhavan, Majura Gate, Surat-395001 Vs Shri Vinod Kumar Goswami 405, Surya Palace, City Light, Surat-395002 PAN : ACJPG 6973 H अपीलाथȸ /Appellant Ĥ×यथȸ /Respondent / Cross-objector Ǔनधा[ǐरती कȧ ओर से /Assessee by Shri Ramesh Malpani, CA राजèव कȧ ओर से /Revenue by Shri Ashok B.Koli–CIT-DR अपील पंजीकरण/Appeal instituted on 02.01.2023 सुनवाई की तारीख/Date of hearing 21.07.2023 उɮघोषणा कȧ तारȣख/Date of pronouncement 10.08.2023 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This set of two appeals by Revenue for AY 2015-16 & 2016- 17 and Cross Objection (CO) by assessee in appeal for IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 2 assessment year 2016-17 are directed against the separate orders of ld. Commissioner of Income tax (Appeals)-4, Surat [‘CIT(A)’ for short] both dated 12.10.2021. In both the appeals the facts are common and revenue has raised common grounds of appeals in both the years, except variation in figure of additions, therefore, with the consent of parties both the appeals and CO were clubbed, heard together and are decided by common order to avoid the conflicting decisions. For appreciation of facts, the facts in AY 2015-16 are treated as “lead case”. The Revenue has raised the following grounds of appeal: - “1) On the facts and in the circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs.3,40,00,000/- made u/s 69A of the I.T. Act despite the facts that the addition was based on the documents found from the premises of the assessee during the course of search. 2) In addition to Ground No.1,on the facts and in the circumstances of the case and in law, the CIT(A) has erred in observing that the jottings in the diary cannot be conclusive proof of money transactions of the assessee despite the facts that the seized papers duly signed, name of the person as V.G. (in coded language and which corresponds to initials of the assessee) has also mentioned on the documents and the assessee has totally failed to explain the contents noted on the seized papers, as such the provisions of section 132(4A) and 292C of the I.T. Act are clearly applicable in the case of the assessee. 3) Without prejudice to and in addition to the grounds No. 1 & 2 on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the Assessing IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 3 Officer ignoring the principles of “Human Probability Test” i.e, preponderance of probabilities which is applicable for Income Tax proceedings. 4) On the facts and in the circumstances of the case and in law, the Ld. CIT(A)-4 ought to have upheld the order of the Assessing Officer. 5) It is, therefore, prayed that the order the Ld. CIT(A) may be set aside and that of the AO may be restored to the above extent.” 2. Brief facts of the case are that assessee is an individual and filed his return of income on 07.10.2015 declaring total income of Rs.2,44,700/-. A search and seizure action under section 132 of the Act was carried out on 06.02.2020 in Kuberji Group Surat. The assessee was also covered by said search action. The search action was carried out at the residence of assessee also. During the course of search action various documents of incriminating nature were found and seized, which allegedly indicate that assessee has not offered true and correct income in his return filed. Consequent upon such search action, a notice under section 153A of the Act dated 26.02.2021 was served to assessee to file return of income for various assessment years. In response to notice under section 153A, the assessee filed his return of income for AY-2015-16 on 16.03.2021 declaring income of Rs.2,44,700/-. The IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 4 Assessing Officer after serving notice under section 143(2) of the Act proceeded for re-assessment. During assessment, Assessing Officer noted that in the search proceedings at the residential premises of assessee at C-405, Surya Palace, City Light Road, Surat on 06.02.2020, various loos papers were found and inventorized from serial no. 1 to 63 in Annexure-A-1. Page Nos. 1 to 5 are copies of pages of one of the diary recovered from the Car of assessee. On analysis of such photocopies pages of diary, the Assessing Officer was of the view that the numbers / figures in the diary are written in the coded format with the suppression of three zeroes as “2500”. The coded format will be expanded to 2500 to like “25,00,000”. The Assessing Officer tabulated all the figures on pages No.1 to 5 in para-6 of assessment order and on the basis of which, the Assessing Officer was of the view that on every entry / occasion of payment, date and signature of the person is appearing all most all the payments have been received by one and only person as can be evident from the signatures in the diary. The Assessing Officer was of the view that the assessee has made total investment of Rs. 8.20 Crore, out of which transaction of IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 5 Rs.3.40 crores is for AY 2015-16. On the basis of recording of such entry in seized loose papers, the assessee was asked to explain whether the transaction recorded in his books of account and to provide copy of individual ledger to whom the payments were made or received and their complete address and copy of PAN be provided for verification. The assessee also asked to provide supporting evidence and relevant return of income with profit and loss account and balance-sheet of respective transactions appeared do not belong to assessee furnished name, complete address, PAN of the persons who are associated with such transactions with relevant documentary evidence. In response to the show cause notice of assessing officer, the assessee furnished his reply. The contents of reply furnished by the assessee recorded in para-6.2 of assessment order. In the reply, assessee stated that such loos papers were not found from his residence but found in the back seat of assessee’s car and such documents were brought from assessee’s car and thereafter seized at the residence of assessee. Such loose papers are in the form xerox copies and not original document or diary. Thus, those loos papers do not belong to IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 6 assessee nor such loose papers contain the signature of assessee. The assessee stated that he is in real estate brokerage business and carrying many clients, brokers, sub-brokers in his car to show them projects / sites / properties, and such loose papers must have been forgotten / mistakenly left by somebody else or his clients in his car during that time. The assessee is not aware of such loose documents and he came to know only when search team shown such loose papers and told that such loose papers found in his car. Such papers do not pertain to assessee and he has no knowledge of his loose papers. The assessee further stated that it is totally incorrect to say that these loose papers are a diary in assessee’s name, his name is not written at all on such documents, nor such documents are in his hand-writing and that the assessee has no knowledge about such loose paper and same do not pertain to him at all. There is nothing in these loose papers pointing the name of assessee. Thus, it is totally incorrect to say that these loose papers are in his name or pertain to assessee, he completely denied the same before search party. IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 7 3. The assessee in his without prejudice submission explained that there is no basis for reading the figure jotted in these loose papers by putting three zeros after these figures i.e., reading the figure ‘2500’ as ‘25,00,000’ or ‘5,000’ as ‘50,00,000’. There is no basis of this presumptive calculation and there is no basis or reason for assuming that such jotted are in coded format. The figures mentioned is also written in words also. The figures of 25,00 is written as ‘Two Thousand Five Hundred’ in words and all figures jotted are the same figures as well as in words. Thus, there is no basis for assuming that figure so jotted which exactly match in figures as well as words in coded format. There is no basis at all for decoding the same by putting “three zeros” which is just a bald presumption without any reasonable or lawful basis and such presumption is completely wrong. 4. The explanation furnished by assessee was not accepted by Assessing Officer. The Assessing Officer in his observation recorded that “as per the law prevailing, it is the duty of the subject to explain the transactions in respect of papers/ material found from his / her possession” if he or she fail to IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 8 explain such transaction appearing in the loose papers of such transactions deem to have been carried by him / her and revenue is free to hold that transaction appearing in the diary are nothing but the unaccounted transactions of the subjects. The Assessing Officer after referring the provision of Section. 132(4A) held that as per aforesaid provision, it is clear that when the pages have been found and seized from the residence of assessee, it is his responsibility to explain the details of the said loose papers and the Assessing Officer presumed that amount of Rs.3.40 crores is unaccounted income of the assessee for the year under consideration. The Assessing Officer thereby made addition of Rs.3.40 crores as unexplained money under section 69A and taxed the same under section 115BBE of the Act while passing the assessment order under section 143(3)/153A of the Act dated 30.09.2021. 5. Aggrieved by the addition in the assessment, the assessee filed appeal before Ld. CIT(A). Before Ld. CIT(A) the assessee filed detailed written submission as recorded in para-7.2 of the order of Ld. CIT(A). In the submission, assessee in sum and substances submitted that certain loose papers were IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 9 found from the back seat of assessee’s car, which was brought to his residence and seized. Such loose papers were not in original form but copy of some loose papers, where no original of such papers were found. Such loose papers do not belong to assessee and name of assessee of such loose papers are not mentioned. There is no reference about transaction or details of property or other meaningful narration from which nature and type of jottings in these papers can be inferred or construed. Only some amounts in figure and words are written with some initials / signatures. It is not clear on whose signature are putting therein and handwriting on such loose papers are not of the assessee or his family members and assessee was totally unaware about it. The assessee repeatedly explained during the assessment proceedings that such loose papers do not pertain to him. The assessee prayed to delate the entire additions. To support his submission, assessee relied upon the decision of Hon'ble Supreme Court in the case of Common Cause vs. Union of India (2017) 77 taxmann.com 245 (SC) and Hon'ble jurisdictional High Court in the case of PCIT vs. Nishant Construction Pvt. Ltd. (2019) 101 taxmann.com 179 (Guj) IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 10 and Hon'ble Punjab and Haryana in the case of CIT vs. Ravi Kumar (2007) 294 ITR 78 (P&H) etc. 6. The Ld. CIT(A) after considering the submission of the assessee and contents of the assessment order noted that there is no dispute about the loose papers found were photo copies of diary and no evidence has been brought on record that diary belongs to assessee. There is no name of assessee or any other person on the said papers. On the loose papers amount of figure and in words is mentioned and there is signature of some person on all the transactions with date. However, there is no mention as to whether this amount is received or given by assessee, even nothing was brought on record on whose handwriting is therein and who singed on the said transaction. The assessee right from the beginning of search stating that neither the loose papers are in his handwriting nor signed on it and such loose papers were found from his car and not seized from the residence of assessee. The assessee explained that he is a broker and many clients and brokers have seated in his car to see various properties and someone of them left the loose papers in his car. The Ld. CIT(A) by referring the judgment IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 11 of Hon'ble Supreme Court in the case of Common Cause (supra) held that entries in loose papers / sheets are irrelevant and not admissible under section 34 of the Evidence Act, and that only where the entries are in the books of account regularly kept, depending upon the nature of occupation that those entries are admissible. The Hon'ble Court also made a reference in the case of CBI vs. V.C. Shukla (1998) 3 SCC 410 (SC) wherein it was held that the value of the entries in the books of account shall not alone be sufficient evidence to charge any person with liability, even if they are relevant and admissible if they are supported with corroborative evidence. It was further held that the independent evidence is necessary as to trustworthiness of those entries which is a requirement to fasten the liability. The Ld. CIT(A) also referred the decision of Tribunal in Nishant Construction Pvt. Ltd. vs. ACIT in ITA No.1502/AHD/2015 decided on 14.02.2017, wherein held that impounded loose sheets can utmost be termed as dumb document, if such documents do not contain full details about the dates and its contents were not corroborative by any material. It was noted that such IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 12 decision has been confronted by Hon'ble jurisdictional High Court CIT Vs Nishant Construction Private Limited (101 taxmann.com 179-Guj). By taking support of such decisions, the Ld. CIT(A) came to conclusion that photo copies of loose papers, found during the course of search, cannot be conclusive proof of money transactions of the assessee. Such details are found in the form of loose papers and not corroborated by Assessing Officer with any other evidence during assessment proceedings. The presumption under section 132(4A) r.w.s. 292C of the Act cannot be considered against the assessee unless there is no other corroborative evidence recording in question found during the course of search and such loose papers do not conclusively prove against the assessee as unexplained money for taxing under section 69A of the Act. On the basis of aforesaid observation, the Ld. CIT(A) deleted entire addition made by Assessing Officer. Aggrieved by the order of Ld. CIT(A) the Revenue has filed present appeal before the Tribunal. 7. We have heard the submissions of the learned Commissioner of Income Tax-Departmental Representative IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 13 (CIT-DR) for the Revenue and the learned Authorized Representative (AR) for the assessee and have gone through the orders of authorities below. The Ld. CIT-DR for the Revenue submits that search action was carried out in Kuberji Group as well as resident and business premises of assessee. During search action under section 132 at the residential premises of assessee on 06.02.2020 various loose papers were found and seized as Annexure-A1 from serial No. 1 to 63 and pages 1 to 5 were also seized which were photo copies of one of the diary where the number and figure in the diary are written in the coded format with suppression of “000”. The figures were written as “2500, 5000” and so on. The Assessing Officer during the assessment proceedings prepared the summary of all the figures written in the coded format. The Assessing Officer asked the assessee to explain as to whether the transaction recorded in the diary and in his books of account and asked the details of ledger to whom such payments either made or received by assessee with their complete address, PANs for verification and copy of relevant account. The assessee in his reply flatly refused to accept such noting on the seized IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 14 materials. The assessee simply stated that he is in occupation of real estate brokerage and some of his clients or somebodies may have left such seized loose papers in his car. The assessee also explained that there was no basis for reading the figure by adding “000” against the figure mentioned on such seized loose papers. The explanation furnished by assessee was not accepted by the Assessing Officer and Assessing Officer prepared the summary of such transactions and found out of entire transactions of Rs.8.20 crores; out of which Rs.3.40 crores pertain to assessment year 2015-16 and Rs.3.00 crores for assessment year 2016- 17 and remaining Rs.1.80 crores for assessment year 2017- 18 respectively. As per the figure mentioned on the diary there was crystal clear that amount of Rs.3.40 crores pertains to year is unexplained money not recorded in the books of account of assessee which constituted unaccounted income of assessee. The Assessing Officer accordingly made addition thereof and taxed the amount under section 69A as per provision of section115BBE of the Act. The Ld. CIT-DR for the Revenue submits that Ld. CIT(A) simply accepted the explanation furnished by the assessee IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 15 that loose papers of diary were nothing but a dump document and deleted the addition. The Ld. CIT(A) deleted the similar addition for assessment years 2016-17 and 2017-18 as well. As per section 132(4A) if the document is found from the possession or control of any person, it is a presumption that such document pertains to particular person in whose possession such documents were found. Further, there is presumption under section 292C of the Act that if any document during the course of search action is found in the custody of any person, it shall be presumed that such document to belong such person. Thus, as per the provision of section 132(4A) this is and the transaction mentioned therein relates to assessee, such amount was not recorded in their regular books of account which constituted unaccounted income. To support his submission, Ld. CIT- DR for the Revenue relied upon the following decision: Chuharmal vs. CIT (1988) 172 ITR 250 (SC) Bannalal Jat Constructions (P.) Ltd. Vs. ACIT (2019) 1-6 taxmann.com 128 (SC) Roshan Lal Sanchiti vs. PCIT (2023) 150 taxmann.com 228 (SC) Smt. Urmila Gambhir vs. CIT (2010) 325 ITR 171 (Del) IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 16 8. On the other hand, the ld AR for the assessee supported the order of ld CIT(A) and submits that he is strongly objected about the reference of alleged seized document as a diary, in fact, there is no such diary, the alleged documents which relates the impugned addition in the assessment year 2015-16, is in fact, photo copies of four-five pages, which were recovered from the car of assessee, and was seized on the day of search action. The Ld. AR for the assessee submits that assessee filed copy of such loose seized documents, photo copy at pages 125 of paper book, where the said photo copy only mentioned the figure. However, with the amount, the amount in figure also clearly mentioned in words e.g. “2500”, two thousand five hundred only, is also written and also bears initial/ signature of some person. The Ld. AR for the assessee submits that he reiterates that such document does not belong to assessee neither there is reference for receiving or payment nor the person on whose or by whom it was given or received. The assessee right from the beginning in his explanation submitted that such document not belonging to assessee, the documents are nothing but a dumb document. The IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 17 assessing officer as per his whims and choice decoded the alleged document by adding “three zeros”. The Assessing Officer was free to add five zeros, seven zeros or none zeros against the figure mentioned on such seized loose papers and even for adding “three zeros” there is no logic or basis. Otherwise on the seized document the figures are written in words as well as numerical, which left no doubt. The Ld. AR for the assessee further submits that he still submits that such seized loose papers do not belong to assessee as assessee right from the beginning stating that there is no other corroborative evidence to connect the impugned document with the assessee. The Ld. AR for the assessee submits that it is settled law that no addition can be made on the basis of such seized loose papers on the basis of jotted figure, in absence of any corroborative and credible evidence. To support his submission, Ld. AR for the assessee relied upon the following decisions: Common Cause (A Registered Society) vs. UOI (2017) 394 ITR 220 (SC) CIT vs. Maulik Kumar K. Shah (2008) 307 ITR 137 (Guj) CIT vs. Ravi Kumar (2008) 294 ITR 78 (P&H) IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 18 S.P Goyal vs. DCIT (2002) 82 ITD 85 (Mum)(2002) 77 TTJ 1 (Mum)[05.04.2002) Nishant Construction Pvt. Ltd. vs. ACIT in ITA No.1502/AHD/2015 dated 14.02.2017 PCIT vs. Nishant Construction Pvt. (2019) 101 taxmann.com 179 (Guj)/(2019) 101 taxmann.com 180 (SC) [SLP dismissed] Smt. Harmohinder Kaur vs. DIT (2021) 124 taxmann.com 68 (Amritsar-Trib) Ushakant N. Patel vs. CIT [2006] 282 ITR 553 (Guj) CIT vs. Babu Mohan Lal Arya Smark Education Trust (2014) 42 taxmann.com 255 (All HC) DCIT vs. Tulsibhai Mavjibhai Shankar (2010) 4 ITR (T) 670 (Ahmedabad – Trib). 9. We have considered the rival submissions of the parties and have gone through the orders of the lower authorities carefully. We have also deliberated on various case laws relied by the lower authorities as well as by ld representatives of the parties. We find that making submissions the Ld. CIT-DR for the revenue was stressing that seized documents are in the form of diary. On the contrary Ld. AR for the assessee was disputing for referring such seized loose papers as diary, so we direct the Ld. CIT- DR for the revenue to call/ produce the seized material for perusal of the Bench. On our direction Baldev Singh, IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 19 Inspector, Central Circle-4, Surat brought the seized material on 27.07.2023. On perusal of such seized loose papers, we find that the same are five pages of photo copies of some note book. Such photocopies may be of diary or small note book. However, fact remains the same all five pages are in fact photo copies, which are duly signed by ITO Ward-1(1)(3) (Investigation) (Technical) having put his signature on 07.02.2020 and it also bears the signature of two witnesses. 10. We find that Assessing Officer made addition by taking view that during the search proceedings various loose papers were found and inventorized as Annexure-A1, pages 1 to 5 are the pages of one of the diary. On analyzing diary, the contents of copy of pages of such diary, the Assessing Officer was of the view that figure written in the diary was in a coded format and that assessee has suppressed “000” in all the entries. The assessing officer on the basis of all noting’s on all copies of five pages came to the conclusion that there was a reference of payment of Rs.8.20 crores, out of which Rs.3.40 crores pertains to assessment year 2015- 16. The assessee in his reply flatly refused to accept such IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 20 diary and denied not only the contents but his connection with such diary. The assessing officer by referring provision of Section 132(4A) held that from the seized material, it is crystal clear that amount of Rs.3.40 crores (for AY 2015-16) is unexplained money, not recorded in the books of assessee, which is unaccounted income and added under section 69A of the Act. The Ld. CIT(A) granted full relief to the assessee by taking view that there is no dispute that seized loose papers are photo copy of diary and no evidence was brought on record that diary was belonging to assessee and name of assessee was not mentioned. 11. The Ld. CIT(A) recorded that assessee right from the beginning is taken a stand that neither the impugned seized loose papers are his handwriting nor signature of him. On such seized loose papers, the Ld. CIT(A) also recorded the stand of assessee that assessee is claiming that he is a broker in the real estate and someone may have left such loose papers mistakenly in his car. The ld CIT(A) also relied on certain case laws and held that no additions can be made in absence of corroborative evidences. It was also held that presumption under section 132(4A) r.w.s. 292C cannot IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 21 be considered against the assessee, in absence of other corroborative evidence. 12. We have independently examined the copy of seized material. On careful perusal of above images, we find that the figure mentioned in words as well as in numerical bears the signature of someone person on all the transaction with date. We find that there is no reference whether this amount was taken by assessee or given to someone and nothing was brought on record about the handwritten and who has signed on the said transaction. To strengthen our appreciation, the copies of one of the first pages seized loose paper is scanned below; IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 22 13. We find that statement of assessee was recorded during the search action as well as in the post-search investigation and no incriminating, connecting said documents were brought on record to treat the alleged recording as unexplained money. We find from the handwriting on the seized loose papers, it is not clear whether this amount was received by assessee or give to someone. Moreover, numerical figure clearly written in the words as well. The assessing officer has not tried to find out whose signature was mentioned on the recording such figure / payment. 14. We find the judgment of Hon'ble Supreme Court in the case of Common Cause (A Registered Society) (supra) by referring the earlier decision in the case of V.C Shukla (supra) held that note books and file containing loose sheet paper are not books of account and held that such entries in loose seized papers / sheets are irrelevant and not admissible under section 34 of the Evidence Act. It was further held that seized loose papers are wholly irrelevant as evidence being not admissible so as to constitute evidence with respect to transaction mentioned therein being of no evidentiary value. IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 23 15. Further, we find that Hon'ble jurisdictional High Court in the case of CIT vs. Maulik Kumar K. Shah (supra) held that noting in the seized diary was only mere entries and are not sufficient to prove that assessee has indulged in a transaction without bringing corroborative evidence that entries in the seized diary actually represents the sales made by assessee. And such onus had to be discharged by revenue, mere entries are not sufficient to prove that assessee indulged in such transaction. 16. We further find Hon'ble Punjab and Haryana High Court in the case of Ravi Kumar (supra) also held that when the assessee was found in possession of loose slips and not of any valuable articles or things. Neither the possession nor the ownership of any jewelry mentioned in the slips could be proved. Accordingly, the Tribunal was right in deleting the addition. 17. The Hon'ble Apex Court in the case of V.C. Shukla (supra) also held that entry in the books of account shall not alone be sufficient evidence to charge any person with liability even if there are relevant with their supportive and corroborative evidence with independent evidence is IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 24 necessary to prove the trustworthiness of such entries for requirement to fasten the liability. In view of the aforesaid factual and legal discussion, we do not find any infirmity and illegality in the order passed by Ld. CIT(A). 18. We find that the ratio of the case law relied by Ld. CIT-DR for the Revenue is not applicable on the facts of the present case. In Chuharmal (supra) the wrist watches were found from the bed room of that assessee, and no explanation was given at the time of seizure, how he was not the owner of the seized material. However, in the case in hand no valuable article was recovered, rather only copy of certain loose paper was found and the assessee right from the starting is claiming that the seized documents have no connection with assessee. Further in Smt. Urmila Gambhir (supra) it was held that once slips were found from the possession of the assessee, the onus was on the assessee to prove the contents of the slips were within his knowledge and he failed to discharge this onus. However, in the case in hand the assessee has explained that the same does not belongs to the assessee, moreover, the assessing officer, first connected the papers to the assessee, straightway assumed IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 25 that the figures mentioned on such paper are in coded form. So the ratio in Urmila Gambhir Vs CIT (supra) is not applicable on the facts of case in hand. In Roshan Lal Sancheti Vs PCIT (supra) it was held that the retraction of the statement must be within the reasonable time. However, there is no retraction in the case in hand, In Banna Lal Jat Vs ACIT (supra) it was held that when the assessee failed to discharge the onus that the statement made during the course of search was wrong and that such statement was recorded under duress or coercion, the addition to be sustained. However, in the case in hand, there is no such occasion, the assessee has right from the beginning took stand that he has no connection with the impugned documents and discharged his onus, the onus was shifted on the revenue to connect the facts that the writing on the loose paper has connection with the assessee, it was either investment or the expenditure of the assessee by bringing some corroborative evidences on record. In view of the aforesaid observations, grounds of appeal raised by revenue is dismissed. IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 26 19. In the result Revenue’s appeal IT(SS)A 03/SRT/2023 is dismissed. 20. Now coming to Revenue’s appeal in IT(SS)A No.04/SRT/2023, wherein the Revenue has raised the following grounds of appeal: “1) On the facts and in the circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs.3,00,00,000/- made u/s 69A of the I.T./ Act despite the facts that the addition was based on the documents found from the premises of the as during the course of search. 2) In addition to Ground No.1 on the facts and in the circumstances of the case and in law, the CIT(A) has erred in observing that the jottings in the diary cannot be conclusive proof of money transactions of the assessee despite the facts that the seized papers duly signed, name of the personas V.G. (in coded language and which corresponds to initials of the assessee) has also mentioned on the documents and the assessee has totally failed to explain the contents noted on the seized papers, as such the provisions of Section 132(4A) and 292C of the I.T. Act are clearly applicable in the case of the assessee. 3) Without prejudice to and in addition to the grounds No.1 & 2 on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the Assessing Officer ignoring the principles of “Human Probability Test” i.e. preponderance of probabilities which is applicable for Income Tax proceedings. 4) On the facts and in the circumstances of the case and in law, the Ld. CIT(A)-4 ought to have upheld the order of the Assessing Officer. IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 27 5) It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that the AO may be restored to the above extent.” 21. We find that the revenue has raised similar grounds of appeal raised by Revenue in AY 2015-16, wherein the addition involved in this year are part of alleged transaction of Rs.8.20 crores, out of which Rs.3.40 crores relates to assessment year 2015-16, which we have already deleted by confirming the order of Ld. CIT(A). Therefore, with the similar observation, the appeal of Revenue for assessment year 2016-17 is dismissed with similar observation. 22. In the result, Revenue’s appeal is dismissed. 23. Coming to assessee’s C.O No.02/SRT/2023, wherein the assessee has raised following grounds: “1. That on the facts and in the circumstances of the case as well as in law, the learned CIT(A) has erred in upholding the validity of the assessment order passed by the ld. AO u/s 143(3) r.w.s. 153A of the Act by not adjudicating the Ground of Appeal No.’1’ of assessee. It is humble plea of the appellant that the assessment order so passed is invalid and bad in law and ought be quashed. 2. Without prejudice to the contention of appellant that the addition made by ld. AO of Rs.3,00,00,000/- is grossly wrong and unjustified and Hon'ble CIT(A) has rightly deleted the same that the learned CIT(A) has erred in not adjudicating the ground of appeal No.’3’ of assessee to charge income tax u/s 115BBE of the Act @ 60% as against the rate of 30% as provided in said section.” IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 28 24. At the time of making submission, Ld. AR for the assessee submits that he has instructed by assessee not to press ground No.1. Considering the submissions of ld AR for the assessee ground No.1 of assessee’s C.O. is dismissed as not pressed. 25. So far as ground No.2 relates to taxing the addition of Rs.3 crores under section 115BBE. Considering the fact that we have already dismissed the appeal of Revenue by confirming the order of ld CIT(A) thereby the ground No.2 of assessee’s C.O has become infructuous and academic. This ground of assessee’s CO is dismissed 26. In the result, the C.O of the assessee is dismissed. 27. In combined result, both the appeals of the revenue are dismissed whereas Cross Objection of the assessee is also dismissed as infructuous. A copy of the instant common order be placed in the respective case file(s). Order pronounced in open Court on 10/08/2023. Sd/- Sd/- (Dr ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER स ू रत /Surat, Dated: 10/08/2023 Dkp. Outsourcing Sr.P.S. IT(SS)A Nos.03-04/SRT/2023 & CO No.02/SRT/2022 (A.Ys.15-16 & 16-17) Sh. Vinod Kr. Goswami 29 Copy to: 1. Appellant- 2. Respondent- 3. CIT(A)-2, Surat 4. CIT 5. DR 6. Guard File True copy/ By order // True Copy // Sr.P.S/P.S /Assistant Registrar, ITAT, Surat copy/
AI Insights
The case involves two appeals by the Revenue against Shri Vinod Kumar Goswami concerning additions made under section 69A of the Income Tax Act for the assessment years 2015-16 and 2016-17. The additions were based on documents found during a search operation at the assessee's premises, which the Revenue claimed indicated unaccounted income. The CIT(A) had deleted these additions, leading to the Revenue's appeal. The Tribunal examined the nature of the seized documents and the legal provisions applicable, ultimately agreeing with the CIT(A) that the documents did not conclusively link the assessee to the unaccounted income claimed by the Revenue.
