Indian Kanoon - Search engine for Indian Law

Income Tax Appellate Tribunal - Delhi

Swapnil Properties (P) Ltd.,, New Delhi vs Assessee on 31 May, 2012

                IN THE INCOME TAX APPELLATE TRIBUNAL
                      DELHI BENCH : G: NEW DELHI

              BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT
                                 AND
                 SHRI I. C. SUDHIR, JUDICIAL MEMBER

                          ITA No. 2063/Del/2013
                         Assessment Year: 2006-07

Swapnil Properties (P) Ltd.      vs. ACIT
D-20, NDSE Part-II                   Central Circle-21
New Delhi.                           New Delhi.
PAN AAJCS006IR
(Appellant)                                 (Respondent)

             Appellant by : Shri R.S. Singhvi, Advocate
            Respondent by : Shri Ramesh Chandra, CIT DR

                              ORDER

PER I.C. SUDHIR, JUDICIAL MEMBER

The assessee has questioned first appellate order on the following grounds:-

" 1.(i) That on the facts and circumstances of the case, the Ld. CIT(A) was not justified in sustaining addition of Rs.4,80,97,125/- towards alleged cash payment said to be made by the appellant company to various farmers based on the seized annexure from Sh. Surender Modi which did not belong to the appellant company and could not be made basis for addition u/s 153C of the Income Tax Act.

(ii).That the seized annexure contains details of property purchase transaction by the third party with reference to draft payment and stamp duty charges and these facts having been verified by AO and CIT(A), the said annexure could not be attributed to the appellant in terms of provisions of Section 153 (C) or could be basis for any such addition in the case of appellant.

(iii).That having accepted the fact that details in the said annexure contain property transaction by third party, whole basis of addition is illegal, arbitrary and misconceived.

2 That the details of alleged cash payment in the seized annexure is neither related to any investment or trading activities and as such there could be no basis to contemplate any addition on the basis of same in the case of appellant.

3.That impugned addition is based on presumption and surmises and without proper application of mind and same is not sustainable under the law."

2. We have heard and considered the arguments advanced by the parties in view of orders of the authorities below and material available on record, and the decisions relied upon.

3. The facts in brief are that search and seizure operation u/s 132 of the Act was carried out in case of Shri Surender Modi on 19/6/2009. During the course of the search at their residential/business premises certain documents belonging to the assessee were seized and proceedings u/s 153 C read with Section 153 A of the Act were initiated. In response to notice issued u/s 153C the assessee filed its return of income declaring income at Nil. On the basis of seized papers marked as A-29, Page 66 the AO made addition of Rs.4,80,97,125/- towards unaccounted cash payment. Before the Ld. CIT(A) the assessee objected the addition on the basis that the seized documents did nto belong to the assessee as no plots of land were purchased by the assessee from the parties mentioned in those loose papers. The assessse had merely paid advance amount of Rs.30,04,559/- to those parties on behalf of Inmon Buildcon (P) Ltd and the amount advanced was refunded back in subsequent years. It was contended that the seized document did not contain the name of the assessee company nor it represent transactions of purchase of properties supported by the documents of purchase. It was also contended that the addition was beyond the scope of the provisions laid down u/s 153C of the Act. Reliance was placed on the following decisions:-

Al Cargo Global Logistics Ltd. 137 ITD 287 (Mum) (SB) Kailash Auto Finance 32 SOT 80 (Luck)

4. The Ld. CIT (A) did not agree with the contentions of the assessee and has upheld the action of the A.O. While affirming the addition made by the A.O, the Ld. CIT(A) has followed the decision of Hon'ble Delhi High Court in the cases of CIT Vs. Anil Kumar Bhatia 24, Taxman.com 98 (Delhi). CIT Vs. Chetan Das 25 Taxman.com 227 (Delhi) SSP Aviation Ltd. Vs. DCIT 346 ITR 177 (Delhi).

5. Ld. AR has reiterated the submissions made before the authorities below. He submitted that the assessment proceedings for the year under appeal was not pending on the date of recording of satisfaction u/s 153 C, hence the proceedings did not abate and also that the Assessing Officer was not justified in making addition in the absence of seized material relating to the assessee. The Ld. AR also referred Page No. 25 and 26 of the paper book filed on behalf of the assessee i.e copy of the satisfaction note for issuance of notice u/s 153C of the Act to the assessee. He submitted that during the course of pendency of assessment proceedings in the case of Shri Surender Modi for the A.Y 2004-05 to 2010-11 u/s 153A read with Section 143 (3) of the Act, the material seized from the premises of the assessee was examined. The A.O has written his satisfaction note that after examining seized material, he was satisfied that some documents belong to persons other than Shri Surender Modi. The Ld. AR submitted that from the satisfaction note, it is evident that the documents allegedly belonging to the assessee were seized from the possession of some other person searched u/s 132 of the Act. The sole addition amounting to Rs.4,80,97,125/- being alleged cash payments said to be made by the assessee company to farmers as advance against purchase of property on the basis of Annexure A-29 page 66 made available at page NO. 24 of the Paper Book was seized during the course of search at the premises of Shri 4 ITA No. 2063/Del/2013 Surender Modi. He submitted that the satisfaction note recorded u/s 153C which forms basis of assessment does not support the case of the AO as there is no reference to Annexure A-29 page 66. The other documents seized during the course of search and refer to the satisfaction note are of general nature and are part of regular books of accounts and there is no dispute about correctness of the same or any adverse inference in respect of the same. The Ld. AR submitted further that satisfaction note is the basis of assuming jurisdiction u/s 153C of the Act. In the present case, since the satisfaction note itself failed to make reference to the seized Annexure A-29 Page 66 on the basis of which addition was made, the assessment so framed is illegal and without jurisdiction and in contravention to the scheme of the Act. Even otherwise the said Annexure does not belong to the assessee. It does not contain name of the assessee, neither it is signed by any Officer of the assessee company nor it is found from the premises of the assessee company nor it contain details of any transaction relating to the assessee and as such deeming provisions of Section 292C are not applicable to the case of the assessee company. In support he placed reliance on the following decisions:-

" CIT Vs. Meghmani Organics Ltd (ITA No. 2077/2009) (Gujarat H.C) DSL Properties Pvt. Ltd DCIT (ITA No. 1344/Del/2012) (Delhi ITAT) order dated 31/5/2012 ACIT Vs. Therapeutic India (P). Ltd. (ITA No. 4514 & 4515/Del/2012) (Delhi ITAT)order dated 22/3/2013.

5.1. He submitted further that there is no dispute that contents of Annexure A-29, Page 66 are relating to property transaction of Inmon Buildcon (P) Ltd and as such the said document may be related to Inmon Buildcon (P) Ltd and not to the assessee. The Ld. AR pointed out further that in the context of Annexure A-29, page 66, the Ld. CIT(A) issued enhancement notice u/s 251 (2) in respect of other transactions in the said 5 ITA No. 2063/Del/2013 annexure relating to cheque/draft payment amounting to Rs.2,07,04,754/- and stamp purchasing worth Rs.15,62,280/- however, as per reply dated 3/1/2013 to the Ld. CIT(A) in the context of enhancement notice u/s 251 (2), the Ld. CIT(A) made detailed enquiry and recorded the finding that the draft payment and stamp purchases are relating to M/s Inmon Buildcon (P) Ltd and accounted for by M/s Inmon Buildcon (P) Ltd. For a ready reference he drew our attention on Para Nos. 6.7 of the First Appellate Order. He submitted further that on the basis of verification of contents of Annexure A-29, Page 66, the Ld. CIT(A) has dropped the enhancement proceedings and has also observed about enhancement in the case of Inmon Buildcon (P) Ltd in respect of alleged cash transactions referred to in the years in Annexure A-29 , Page 66. He submitted that the copies to draft by Inmon Buildcon (P) Ltd have been made available at Page 49 to 59 of the paper book which buttresses the fact that all the payments through drafts were made by Inmon Buildcon (P) Ltd. Thus, it supports the case of the assessee that Annexure A-29 Page 66 belong to Inmon Buildcon (P) Ltd.

He submitted that all the bank drafts were purchased through Bank Account No. CD2846(Indian Overseas bank) which belongs to Inmon Buildcon (P) Ltd as per copies of cheques found during search. He submitted that the Ld. CIT(A) having accepted the fact that the cheque and stamp purchase transactions referred to Annexure A-29 page 66 are in respect of the property purchased by Inmon Buildcon (P) Ltd, hence there is no basis for sustaining the addition in respect of alleged cash transactions referred to the in the Annexure A-29 page 66 in the hands of the assessee. The Ld. AR reiterated that the assessee has not purchased any property during the year under reference or in subsequent years and factual position to this effect he supported from the copy of the audit balance-sheet made available at Page Nos. 16 to 21 of the paper book. He submitted that in respect of addition of Rs.30,04,559/- made by the A.O during the year under consideration refer to in Annexure A-29 page 66 the transactions were duly recorded in 6 ITA No. 2063/Del/2013 the books of accounts and correctness of the same were duly verified by the Assessing Officer during the assessment proceedings and there is not case of any dispute or adverse inference in respect of the same. He submitted that the assessee has obtained copies of purchase deeds relating to Inmon Buildcon (P) Ltd and details of cheques and drafts transactions relating to Annexure A-29 page 66 are fully supported and corroborated from the relevant purchase dates. As per verification of facts and finding of Assessing Officer and the Ld. CIT(A) it is self-evident that seized Annexure A-29, Page 66 does not belong to assessee and thus there is no factual or legal basis for assuming jurisdiction u/s 153C of the Act or for making any addition even on merits. The Ld. AR submitted further that as per observation and direction of the Ld. CIT(A) proceedings u/s 148 have already been initiated in the case of Inmon Buildcon (P) Ltd in relation to the alleged cash payment of Rs.4,80,97,125/- referred to in the Annexure A-29 Page 66. While concluding his argument the Ld. AR submitted that there is no direct or indirect nexus between the assessee and Inmon Buildcon (P) Ltd and there is no common directorship or share holding. He also placed reliance on the following decisions in support:-

Al Cargo Global Logistics Ltd 137 ITD 287(Mum) (SB) Kailash Auto Finance 32 SOT 80 (Luckn) Kusum Gupta vs. DCIT ITA No. 4873/D/2009 & ors. Order dated 28.3.2013

6. The Ld. CIT DR on the other hand placed reliance on the orders of the authorities below. He pointed out that neither before the Ld. CIT(A) nor before the Tribunal statement of facts have been filed by the assesssee, the grounds of appeal preferred by the Ld. CIT(A) suggest that the assessee has shifted its stand before the Tribunal. The specific grounds questioning the assessment on the basis that Section 153C was not maintainable because on the date of recording satisfaction no proceedings 7 ITA No. 2063/Del/2013 were pending, that Section 153C assessment is to be restricted to assessment in respect of the seized documents and the AO has ignored legal objections filed before him, have not been raised before the Tribunal. The averment of the assessee in reference to contents of impugned document i.e Annexure A-29 Page 66 made before the AO that Shri Surender Modi had made a declaration of Rs.20 crores during his statements recorded u/s 132(3) of the Act in respect of undisclosed income, undisclosed investment etc particularly papers containing notings on loose papers seized no adverse inference may be drawn, itself goes to show that there is an implied admission that the impugned document belongs to the assessee and that the payments and income as mentioned therein also are attributable to the assessee company, submitted the Ld. DR. Had it not been so there was no occasion for the assessee to cover its (Page No. 66) contents with the surrender made of Rs. 20 crores u/s 132(4) of the Act. The Ld. DR drew out attention to the contents of Page No. 12 of the First Appellate Order, wherein the Ld. CIT(A) has recorded its finding that the presence of the original copy of the Board Resolution of Inmon Buildcon (P) Ltd appointing an authorized signatory to get the lands registered in its name, amounts shown in the seized records(Page 67 of A-29) further buttresses the inference about the appellant company's primary involvement in these transactions. He pointed out that the above finding of the Ld. CIT(A) is uncontroverted. It clearly shows that the assessee company and Shri Surender Modi were not the stranger to the land transactions undertaken for and on behalf of Inmon Buildcon (P) Ltd. This coupled with the fact that the assessee company had made advance payments (may be on behalf of Inmon Buildcon (P) Ltd) from its own books goes to clinch the issue in favour of the AO that cash payments as reflected in A-29/66 were made by the assessee only specially when there is no evidence pointing out the payment to have been made by Inmon Buildcon (P) Ltd. Conclusion is thus that the cash payments have been made by the 8 ITA No. 2063/Del/2013 assessee only may be partly or fully on behalf of Inmon Buildcon (P) Ltd. Had it not been so the documents would not have been found in original from the custody of Shri Surender Modi, the Director of assessee company nor its contents (though partly) would have been found recorded in the books of the assessee company. The Ld. DR submitted that there has not been any ownership of these documents by anybody else and the claim of events clearly show that the documents reflected the financial transactions undertaken by the assessee company only. Very clearly the assessee company through its Director Shri Surender Modi besides being facilitator was active partner even financially in these land transactions.

7. Regarding the submission of the assessee that initiation of action u/s 148 by the Revenue in the case of Inmon Buildcon (P) Ltd goes to show tacit acceptance on Revenue's part that the document and its contents do not belong to the assessee, the Ld. DR submitted that firstly this is a bald assertion made by the assessee because there is not documentary evidence placed before the Tribunal proving the initiation action qua this very impugned document.

8. Further, it is presumed that Revenue has takne action u/s 148 in the case of Inmon Buildcon (P) Ltd qua the document (A-29/66) it would not ipso facto nullify the addition made in the hands of the assessee because as seen from the cheque payments first being made by the assessee and later claimed as reimbursement from Inmon Buildcon (P) Ltd which logically prove that even the cash payment was first made by the assessee only. From which sources this cash payment was made is not explained and hence addition was rightly made by the A.O.

9. Without prejudice to above submission, the Ld. DR submitted that so long as there is no admission on the part of Inmon Buildcon (P) Ltd that it was it which made the cash payment to M/s Swapnil Properties to be 9 ITA No. 2063/Del/2013 made to various parties finding mentioned on impugned Page NO. 66 or that the action qua the taxability of these very payments in the hands of Inmon Buildcon (P) Ltd does not become conclusive i.e it is not challenged further in appeal etc by Inmon Buildcon (P) Ltd in whose hands, these very sums would be taxed by the AO, the action of the Assessing Officer cannot be faulted. In this regard, the Ld. DR drew out attention to Page NO. 22 of the paper book which is a copy of letter dated 27/2/2006 by the assessee company to Inmon Buildcon (P) Ltd from which modus operandi of acquisition of properties would become clear. As per this letter, initially the payment of Rs.30,04,559/- was made by Swapnil Properties (P) Ltd on behalf of Inmon Buildcon (P) Ltd and thereafter re-imbursement of the advances given by the assessee out of own funds, was claimed. He submitted further that this letter goes to establish that like the payment of Rs.30,04,559/- cash payment as recorded on Page Nos. 66 of Rs.4.84 crores was also initially made to various parties by the assessee and when it was so, this payment which might have been claimed as reimbursement from Inmon Buildcon (P) Ltd, was necessarily required to be considered in the hands of the assessee and it was the assessee to explain the sources of this cash payment. When it is so irrespective of any possible action in the hands of Inmon Buildcon (P) Ltd independently in the assessee's hands also necessary action qua the taxability was required to be taken which the AO actually did. These facts also show that just because the land documents are in the name of Inmon Buildcon (P) Ltd. one cannot necessarily infer that the cash payments too should be presumed to have been made by them only ( and not by the assessee company) as per the arrangement and understanding discernible from Page No. 22 of A-29 refer to above fund arrangement (though partly or fully) initially required to be done by the assessee and later on to be reimbursed to it by Inmon Buildcon (P) Ltd. It since initially payments (Cheque, draft or cash) were being made for Inmon Buildcon (P) Ltd only, from naturally transfer of 10 ITA No. 2063/Del/2013 land was to take place in the name of Inmon Buildcon (P) Ltd. Thus, just because land stands transferred in the name of Inmon Buildcon (P) Ltd in the light of the facts discussed above, AO's action in bringing to tax cash payments to those very land parties (sellers) by the assessee company cannot be faulted with. Thus, it is clear that possibility of action in the hands of Inmon Buildcon (P) Ltd does not affect adversely taxability of the impugned sum in the hands of the assessee, submitted the Ld. DR.

10. The Ld. DR submitted further that during the course of hearing before the Tribunal the Ld. AR had averred that seized Page Nos 66 on the basis of which addition has been made by the AO is not the part of the documents referred to in the satisfaction recorded u/s 153 and hence it was not permissible for the AO to treat addition on the basis of the documents on the basis of the satisfaction has not been recorded u/s 153(C) of the Act. Against this contention of the assessee the Ld. DR submitted that the contention does not merit consideration because there is no such law that in the proceedings initiated u/s 153(C) documents other than ones mentioned in the satisfaction note cannot be considered.

11. Against the contention of the assessee that Page No. 66 is not the part of the satisfaction note, hence, on this ground also addition confirmed by the Ld. CIT(A) needs to be deleted, the Ld. DR submitted that even if Page 66 of Annexure A-29 is not mentioned in the documents on the basis of which the satisfaction note for initiating action u/s 153(C) written, the addition made by the AO cannot be opposed for the simple reason that firstly the impugned document was also found during the course of search at the premises of Shri Surender Modi, Director of the company and secondly, because this document has direct contribution to the affairs of the assessee company and hence was required to be considered for the purpose of framing the assessment. He reiterated that there is no law that in the proceedings u/s 153C addition has to be necessarily restricted to the 11 ITA No. 2063/Del/2013 documents on the basis of which satisfaction to initiate action u/s 153(C) was taken.

12. The Ld. DR submitted that it needs too be appreciated that the document was found from the office/residence premises of Shri Surender Modi, Director of the Company. If Shri Surender Modi or the assessee had nothing to do with these documents it would not have been found from their possession. Very fact that Shri Surender Modi was found in possession of these documents goes to indicate that these documents belongs to the assessee company. He submitted that possession is the prima facie evidence of the title of ownership. Apart from the possession even the contents (names of the parties etc) of these documents are found partly recorded in the books of the assessee which only goes to establish that the assessee company was primarily involved in the land transaction mentioned therein the document. In support, the Ld. DR placed reliance on the decision of Hon'ble Delhi High Court in the case of CIT Vs. Sonal Constructions, 28 Taxman.com 127 and also on the decision in the case of Shri Ram Mills, 95 ITR 279 (Patna).

13. Ld. CIT DR submitted further that when part of the document that is the very names from whom land was bought though transfer in the name of Inmon Buildcon (P) Ltd are found recorded in the books of the assessee, it has to be appreciated that the rest of the contents which depict cash payments etc are also true and belong to the assessee. Thus there were also sufficient incriminating material available in the seized material to initiate proceedings against the assesse u/s 153C of the Act. In this regard, he has placed reliance on the decisions in the case of Glass Lines Equipment Co. Ltd. vs. CIT 253 ITR 454 (Gujrat) & Biren V. Selva vs. ACIT 100 TTJ (Mum) 1006 and CIT Vs. Anil Kumar Bhatia, 24 Taxman.com 98 (Del).

14. Ld. CIT DR also tried to distinguish the facts of the cases cited by the Ld. AR in the cases of ACIT Vs. Therapeutic India (P) Ltd (ITA No. 4514 & 4515/Del/12 & DSL Properties (P) Ltd Vs. DCIT (ITA No. 1344/Del/12). He submitted that decision in the case of ACIT Vs. Therapeutic India (P) Ltd (Supra) is distinguishable on facts as well as law. In that case, the controversy was in reference to documents/books of accounts which were prima facie not indicative of unaccounted/unrecorded transactions. As against this it would be notice that there is no such challenge by the assessee further addition has been made by the AO on the basis of documents which was seized during the search which clearly indicated unaccounted/unrecorded transactions.

15. Likewise, the decision in the case of DSL Properties (P) Ltd. Vs. DCIT (Supra) is distinguishable on facts as well as of law. In that case, the assessee had raised the grounds arguing that the documents being audit profit and loss account and balance-sheet belonging to share holder Director on the basis of which proceedings u/s 153(C) was initiated was not belonging to it to which the Tribunal agreed and allowed the appeal. It would be noticed that in the present appeal there is no such controversy or ground of appeal involved, contended the Ld. CIT DR. He submitted further that copies of certain documents (Bearing No. 48, 49, 50 & 51) being the photo copies of some cheques issued by Inmon Buildcon (P) Ltd furnished by the assessee before the Tribunal. The Ld. DR submitted that these documents were neither filed before the AO nor before the Ld. CIT(A) and hence are in the nature of additional evidences which cannot be considered without following the provisions of Rule 29 of the I.T Rules 1962.

16. Considering the above submissions made by the parties we find that there are certain undisputed material facts in the present case. These facts are that the seized document marked as Annexure A-29 page 66 was not found from the premises of the assessee nor was it signed by the employee of the assessee nor the name of the assessee was appearing in this seized document on the basis of which addition in question of Rs. 4,80,97,125/-

was made by the AO in the assessment framed u/s 153C read with section 153A of the Act. It also remained undisputed fact that proceedings u/s 148 of the Act in relation to the alleged cash transaction of Rs. 4,80,97,125/-

referred to in the Annexure A-29 page 66 have been initiated by the department in the case of Inmon Buildcon (P) Ltd. Besides even on the merits of the addition in question there are certain admitted facts that the contents of Annexure A29 page 66 are relating to property transactions of Inmon Buildcon (P) Ltd. as in its inquiry during the proceedings initiated for enhancement u/s 251(2) of the At in the context of Annexure 29 Page 66 transactions, the Ld. CIT(A) has recorded that the draft payment and stamp purchases are relating to Inmon Buildcon (P) Ltd. and accounted for by Inmon Buildcon (P) Ltd. and has accordingly dropped the enhancement against the assessee. In support the Ld. AR has also furnished copies of drafts through which payment in question was made by Inmon Buildcon (P) Ltd., made available at page Nos. 49 to 59 of the paper book. He also pointed out that all the bank drafts were purchased through bank account 14 ITA No. 2063/Del/2013 No. CD2846 (Indian Overseas Bank) which belongs to Inmon Buildcon P Ltd. as per copies of the cheques found during search. We thus also find substance in the contention of the Ld. AR that the Ld. CIT(A) having accepted the fact that the cheque and stamp purchase transaction referred to annexure A 29 page 66 are in respect of the property purchased by Inmon Buildcon P. Ltd., there is no basis for sustaining the addition in respect of alleged cash transactions referred to in the Annexure A 29 page 66 in the hands of the assessee. The Ld. AR also reiterated that the assessee has not purchased any property during the year under reference or in subsequent years and in support he has made available the copy of the audit balance sheet at page Nos. 16 to 21 of the paper book. Further submissions of the assessee also remained that in respect of addition of Rs.

30,04,559/- made by the AO during the year under consideration referred to in the said annexure, the transactions were duly recorded in the books of accounts and correctness of the same were duly verified by the AO during the course of assessment proceedings and there is no case of any dispute or adverse inference in respect of the same. The submission of the assessee also remained that there is no direct or indirect nexus between the assessee and Inmon Buildcon P Ltd. nor is there any common director or share holding. In absence of rebuttal of these material facts of the case we are of the view that the Ld. CIT(A) was not justified in sustaining the addition in question made by the AO in proceedings u/s 153C read with section 153A 15 ITA No. 2063/Del/2013 of the Act on the basis of inference remotely drawn. Supporting the action of the authorities below Ld. CIT DR before us has however tried to draw an inference to justify the additions in question with this submission that the averment of the assessee in reference to contents of impugned document made before the AO that Shri Surender Modi had made a declaration of Rs.

20 crores during his statements recorded u/s 132(4) of the Act in respect of undisclosed income undisclosed investment etc. does not absolve the assessee, rather it itself goes to show that there is an implied admission that the impugned document belongs to the assessee and that the payments and income as mentioned therein also are attributable to the assessee and that had it not been so there was no occasion for the assessee to cover its (page No. 66) contents with the surrender made of Rs.

20 crores u/s 132(4) of the Act. The Ld. CIT DR has also taken assistance of the observation of the Ld. CIT(A) made at page No. 12 of the first appellate order that the presence of the original copy of the board resolution of Inmon Buildcon (P) Ltd. appointing an authorized signatory to get the land registered in its name, and the amounts shown in the seized record further buttresses the inference about the assessee company's primary involvement in these transactions. On the basis of these observations the Ld. CIT DR tried to advance its case that the assessee company and its Director Shri Surender Modi were not the stranger to the land transactions undertaken for and on behalf of Inmonn Buildcon (P) Ltd..

He submitted further that this coupled with the fact that the assessee company had made advance payments may be on behalf of Inmon Buildcon (P) Ltd. from its own books goes to clinch the issue in favour of the AO that cash payments as reflected in A-59 page 66 were made by the assessee only especially when there is no evidence pointing out the payment had been made by Inmon Buildcon (P) Ltd. Without prejudice to the above submission the Ld. CITDR submitted further that so long as there is no admission on the part of Inmon Buildcon (P) Ltd. that it was it which made the cash payment to M/s. Swapnil Properties i.e. the assessee to be made to various parties finding mentioned on impugned page No. 66 (A-29) or that the action qua the taxability of these very payments in hands of Inmon Buildcon (P) Ltd. does not become conclusive. In the letter dated 27.2.2006 by the assessee company to Inmon Buildcon Ltd. it has been stated that initially the payment of Rs. 30,04,559/- was made by the assesee on behalf of the Inmon Buildcon (P) Ltd. and thereafter reimbursement of the advances given by the assessee out of own funds was claimed. This letter goes to establish that like the payment of Rs.

30,04,559/- cash payment as recorded on page No. 66 of the annexure 29 of Rs. 4.84 crores was also initially made to various parties by the assesee and when it was so, this payment which might have been claimed as reimbursement from Inmon Buildcon (P) Ltd. was necessarily required to be considered in the hands of the assessee and it was the assessee to 17 ITA No. 2063/Del/2013 explain the sources of this cash payment. We do not find substance in the submissions of the Ld. CIT(DR) in absence of evidence in support especially in a case of search where onus is heavy on the AO to establish that the documents seized not from the possession of the assessee and the transactions mentioned therein belong to the assessee that too when the document seized is undisputedly not signed by the employee of the assessee nor is there any reference of the assessee and the Ld. CIT(A) while dropping the enhancement proceedings against the assessee u/s 251(2) in the context of the transactions recorded in Anneuxre A-29 page 66 himself has recorded after inquiry that the draft payments and stamp purchases are relating to Inmon Buildcon (P) Ltd. Under the above facts and circumstances we came to the conclusion that there was no basis with the AO to make the addition in question in the hands of the assesee in a proceedings u/s 153C read with Section 153A. The ratio laid down in the cited decisions by the Ld. CIT DR nowhere allow the AO to make an addition without any basis or support in evidence. Just and proper assessment is the very object of our legislature in the provisions laid down under the I.T. Act, 1961. We thus while setting aside orders of the authorities below regarding making and affirming the addition in question, direct the AO to delete the addition of Rs. 4,80,97,125/- towards alleged cash payment said to be made by the assessee company to various farmers 18 ITA No. 2063/Del/2013 based on the seized annexure from Shri Surender Modi. The grounds questioning the addition are accordingly allowed.

17. Consequently appeal is allowed in favour of the assessee.

The order is pronounced in the open court on 29th January, 2014.

           sd/-                                        sd/-
      (G.D. AGRAWAL)                              ( I.C. SUDHIR )
      VICE PRESIDENT                            JUDICIAL MEMBER

Dated 29th January, 2014

Reshma/Veena

Copy of order forwarded to:
   1. Appellant
   2. Respondent
   3. CIT(A)
   4. CIT
   5. DR
                                                   By Order

                                                   Asstt. Registrar, ITAT