Income Tax Appellate Tribunal - Indore
Shri Kamta Prasad Dwivedi, Bhopal vs The Acit 1(1), Bhopal on 19 September, 2018
आयकर अपील
य अ धकरण, इ दौर यायपीठ, इ दौर
IN THE INCOME TAX APPELLATE TRIBUNAL
INDORE BENCH, INDORE
BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER
AND
SHRI MANISH BORAD, ACCOUNTANT MEMBER
IT(SS)A Nos.182, 183, 184, 185 &ITA
No.1013/Ind/2016
Assessment Years:
2004-05, 2007-08, 2008-09, 2009-10 & 2010-11
Kamta Prasad Dwivedi, 19, ACIT-1(1),
Pooja Colony, Neelbad, Bhopal बनाम/ Bhopal
(Appellant) Vs. (Revenue )
P.A. No.AEFPD3159N
Appellant by Shri M.K. Sharma, AR
Respondent by Shri Lal Chand, DR
Date of Hearing: 29.08.2018
Date of Pronouncement: 19.09.2018
आदे श / O R D E R
PER KUL BHARAT, J.M.:
These five appeals pertaining to the assessment years 2004-05, 2007-08, 2008-09, 2009-10 & 2010- 11 on behalf of the assessee against the order of Ld. CIT(A)-2, Bhopal dated 9.6.2016. All the appeals were taken up together and are being disposed off by way of a consolidated order for the sake of convenience.
2. First we take up the IT(SS)A No.182/Ind/2016, wherein the assessee has raised following grounds of appeal:
1. T he learned CIT (A) has erred in law and on f acts in mak ing add itio n of Rs.1,00,000/-.
2. T he addition of opening cash bal ance sho ws in the cash f lo w s tate ment to the inco me of appellan t c annot be made, as there was no evidence on record to sho w that a su m of Rs.1,00,000/- was out of any undisclosed inco me of the appellan t and no proper reason has been g iven f or rejection of opening cash bal ance sho wn in the cas h f lo w state men t.
3. No addition can be made f or the opening c ash balance sho wn in the cash f lo w state ment when the to tal cash f ound durin g the search h as alre ady been added to the inco me of the appellan t in the year of search.
4. T hat the appell ant reserves the rig ht to add, alter or amend the grounds of appeal bef ore the appeal is decided, with the per miss ion of Honourable Bench.
3. The only effective ground in this appeal is against conformation of addition of Rs.1 lakh. Facts in brief are that a search action was carried out by 2 the revenue in the group of Shri Pushpendra Mishra. The premises of the assessee was also searched.
The A.O. issued notice u/s 153A of the Income Tax Act, 1961 (hereinafter called as 'the Act'). In response thereto, the assessee stated that the return filed originally may be treated as the return filed in response to the notice u/s 153A of the Act. The A.O. thereafter, proceeded to make assessment u/s 153A r.w.s. 153(3) of the Act. The A.O. while framing the assessment did not accept the cash flow statement furnished by the assessee and proceeded to make addition of Rs.1 lakh. Against this, the assessee preferred an appeal before the Ld. CIT(A), who also sustained the addition. Now the assessee is in appeal before this Tribunal. Ld. Counsel for the assessee submitted that the A.O. and the Ld. CIT(A) failed to appreciate the facts in right perspective. 3 He submitted that the addition so sustained was not made on the basis of any incriminating material. It was merely on the basis of not accepting the cash flow statement. Ld. Counsel submitted that the assessee is a Government employee and it cannot be in iota of imagination that he was not saving any amount. He submitted that the amount so declared as on 1.4.2003 was out of the past savings. The A.O. thus without any basis made addition.
4. Per contra, Ld. D.R. supported the orders of the authorities below and submitted that the assessee has been changing his stand in respect of the cash found during the search.
5. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. So far, the contention of the assessee in respect of the cash 4 found during the search, it was stated that the amount has been taken from Shri Anirudh Dwivedi, Krishna Dwivedi, Ganesh Prasad Dwivedi, the assessee and his wife. For the sake of clarity, the finding of the A.O. is as under:
"8. During the assess ment proceedings the assessee has sub mitted the c ash f lo w s tate me nt of the assessee star ting f rom 01.04.2003. T he opening cash balance as on 01.04.2003 has been sho wn to be Rs.1,00,000/-. No expl anation about the source of wh ich h as been given by the assessee. It is imp ortan t to men tion here th at dur ing th is time the assessee had bank accounts to keep any ex tra cash if any av ail able with him in the bank accounts. In f act the assessee see ms to be hand to mou th entity as the c ash balance in the bank account was never substan tial. Further, the sources of inco me of the assessee around 1.4.2003 do not in any way justif y the cash b alance of Rs.1,00,000/- w2 ith the assessee. For example the total inco me of assessee f or F.Y. 2003-04 is Rs.1,16,929/- only. In f act, it is this opening cash bal ance on the basis of wh ich th e assessee had tr ied to justif y the various expenses made by it. T heref ore, the opening cash bal ance of Rs.1,00,000/- with the assessee re mains unexplained and is added to the to tal inco me of the as sessee f or the A.Y. 2004-05. Penalty proceed ings u/s 271(1)(c) are also in itiated f or f urnish ing in accurate par ticul ars of the inco me f or the A.Y. 2004-05.
8.1 On perusal of the cash f lo w s tate ment sub mitted by the assessee it is f ound th at the opening cash b alance of Rs.1,00,000/- as on 1.4.2003 gradually increased to Rs.4,36,000/- as on 1.4.2004 wh ich f urther increased to Rs.4,15,000/- as on 1.4.2005 wh ich increased to Rs.5,00,000/- as on 31.3.2006 wh ich f urther increased to Rs.5,25,000/- as on 31.3.2007. T he util isation of the cash balance star ted tak ing place in F.Y. 2007-08 only. Dur ing th is year cash of Rs.3,15,000/- was p aid to Akshya Sh akti Shiksha Saman j Evam K alyan Samiti on 3.11.2007. Besides this paymen ts of Rs.39,500/- and 30,000/- were made to Adunik Gr ih Nir man S amiti on 28.7.2007 and 17.3.2008 respectively. T his reduced the cash 5 balance as on 1.4.2008 to Rs.1,27,118/-. Fin ally, the closing balance as on 31.3.2010 was sho wn to be Rs.30,508/-.
8.2. T his cash f lo w s tate ment of the assesee h as to be seen in the light of the f ollo wing f ac ts:-
1. T he assessee does not main tain its books of accounts or even de tails of day to day expenses.
2. In f act the assessee d id not even f ile his returns of inco me regularly.
3. In absence of the books of accounts or details of day to day expenses it is no t clear ho w is it possible to prepare such c ash f lo w state men t at the time of assessmen t proceeedings.
4. T he cash f lo w state men t sho ws huge cash bal ance of lakhs of rupees f or several years with the assessee, beyond his source of inco me and s tatus of living.
5. T he assessee is a govern ment serv ant and is well convers ant with the banking channels. T he assessee also main tains regular bank accoun ts, f ro m wh ich it is showing withdra wals f or day to day expenses. It is unbelievable th at on one h and the assessee has cash bal ance of lakhs of rupees with him and on the oth er hand he would make withdra wals of f ew hundred or thousands of rupees from the banks.
6. T he assessee h as very me ager income all through his lif e and his sources of inco me, his lif e style par ticularly household expenses do no t jus tif y his keep ing cash balance of lakhs of rupees at ho me f or years together f or no purpose.
7. T he cash f lo w s tate ment does no t sho w any withdra wals f or house hold expenses.
8. Further the cash f lo w state men t does no t account f or certain receip ts received by him f rom Pr akh ar Construction Builder and Developers as d iscussed later in th is order.
8.3 T heref ore, in view of the above f ac ts and circums tances it is established and held th at the c ash f lo w s tate men t sub mitted by the assessee is no thing bu t a self serv ing docu ment and theref ore deserves to be rejected. On detail ed examin ation of the cash f lo w state men t of the assessee it is apparen t that f or the f ollo wing expenses/p ayments there is no identif iable source to generate such cash in the hands of the assessee. T heref ore, the source of f ollo wing cash expenses made by the assessee re mains unexplained.6
Sl.No. Date A mount Purpose
1. 05.12.2006 42,488 Plot booking in
Adhunik Grih a
Nir man Samiti
2. 05.03.2007 31,500 Plot booking in
Adhunik Grha
Nir man Samiti
3. 18.06.2007 18,000 Plot booking in
Adhunik Grha
Nir man Samiti
4. 28.07.2007 39,500 Plot booking in
Adhunik Grha
Nir man Samiti
5. 03.11.2007 3,15,000 Paid to Akshya
Shak ti Sh iksha
Evam S amaj
Kalyan S amiti
Bhop al in cash
6 17.03.2008 30,000 Plot booking in
Adhunik Grha
Nir man Samiti
8.4 Therefore, these amount represent unexplained investments by the assessee and the same are hereby added to the total income of the assessee for respective assessment years. A summary of the year wise addition made to the income of the assessee is as under:
Assessment year Amount (in Rs.)
2007-08 73,988/-
2008-09 4,02,500/-
6. From the above finding of the assessing officer, it is clear that the same is more on presumption than on any incriminating material. It is undisputed fact that the assessee has been working in a Government department for a long period of time, therefore, it cannot be presumed 7 that he was not having any cash on hand. In our view, Rs.1 lakh as claimed by the assessee is reasonable as a cash on hand as on 1.4.2003. We hold accordingly. This ground of the assessee is allowed.
7. Now, we take up IT(SS)A No.183/Ind/2016 pertaining to the assessment year 2007-08. The assessee has raised following grounds of appeal:
1. That the learned CIT(A) has erred in law and on facts in confirming addition of Rs.73,988/-.
2. That the addition confirmed by the learned CIT(A) as unexplained investment is not supported by any evidences, but is purely based on suspicion and surmise.
3. No addition can be made as an unexplained investment in a case, where proper cash flow statement was filed by the appellant, and A.O. has not found any defect in that flow statement.
4. The cash flow statement filed by the appellant cannot be rejected merely on the basis of suspicion or surmie.
5. That the appellant reserves the right to add, alter or amend the grounds of appeal before the appeal is decided, with the permission of Honourable Bench.
8. The only effective ground is against confirming the addition of Rs.73,988/-. Ld. Counsel for the assessee reiterated the submissions as made in the written 8 submissions. The submissions of the assessee are reproduced as under:
A.Y.2007-08 A.O. has made addition of Rs 73,988/- during this year on account of payment made to Adhunik Grah Nirman Samiti for booking of plot without finding any incrementing material during the search; Even A.O has not mentioned that such addition is based on any incrementing material during the search. It is submitted that no material in respect to such investment / payment was found during the search.
Your kind attention is drawn to judgement of honourable bench Indore in case of:-
"Anant Steel Pvt.Ltd. vis Asstt. Commissioner of Income Tax (2016)28 ITJ 47 (Trib.slndare) in the ITAT, where it was held that "It was decided that Uls. 153A to 153C Of Income tax Act 1961- No incriminating Documents found and seized during search. An Additions were made in assessment uls 153A - Assessee challenged that order - HELD - In dy. CIT v. Kalani Brothers(Indore) Pvt. Ltd.,(2016) 27 ITJ 286 (TRIB. - Indore this issue has been decided that in absence of any Incriminating material or documents seized during the course of search, the AO cannot pass order uls 153A rlw Section 143(3) - Following that decision it has been held that in absence of any incriminating document found and seized during the course of search, the AO is not justify in making the addition in non abated assessment order while passing the order uls 153A rlw Section 143(3)"
Your Kind Attention is also drawn in Judgements of ACIT:-
1. Pr.Commissioner of income tax,Central-2,New Delhi v/s Meeta Gutgutia(2017)82 taxmann.com 287 (HC-Delhi)
2. Shri Basant Bansal vis ACIT Central Circle-Alwar ITA No.5341JP12012 A.Y(200B-09) and Shri Roop Bansal vis ACIT Central CirCle-Alwar ITA No. 7481JPI2012 A. Y(2008-
09),ITAT Jaipur.
3. Commissioner of Income Tax(Central)-III vis Kabul Chawala (2015)61 Taxmann.com 412(HC-Delhi)
4. Chetaben J Shah legal heir of jag dish chandra K.Shah vis The Income Tax officer, Ward 10(3)- Tax Appeal No. 143 7 of 2007 in the High Court Of Gujarat.
The only reason given for making such addition as unexplained expenditure is that the cash flow statement furnished by the appellant is not acceptable by A.O. for following reasons- 9
1. The assessee does not maintain its books of accounts or even details of day to day expenses
2. In fact the assessee did not even file his returns of income regularly.
3. In absence of the books of accounts or details of day to day expenses it is not clear how is it possible to prepare such cash flow statement at the time of assessment proceedings ..
4. The cash flow statement shows huge cash balance of lakhs of rupees for several years with the assessee, beyond his source of income and status of living.
5. The assessee is a government servant and is well conversant with the banking channels. The assessee also maintains regular bank accounts, from which it is showing withdrawals for day to day expenses. It is unbelievable that on one hand the assessee has cash balance The assessee has very meager income all through his life and his source of income, his life style particularly household expenses do not justify his keeping cash balance of lakhs of rupees at home for years together for no purpose.
6. The cash flow statement does not show any withdrawals for household expenses.
7. Further the cash flow statement does not account for certain receipts received by him from Prakhar Construction Builder and Developer as discussed latter in this order. Here we submit that the contention of A.O. cannot be accepted for following reasons-
1. The cash flow statement was prepared for cash accruals, cash receipts and cash payments made from 01104/2003 to 31103/2010 showing all the cash and bank transaction. The cash flow statement cannot be rejected for the reason that the assessee is not maintaining regular books of accounts because, he being a salaried person need not to maintain any books of account as per law. However when cash flow is prepared taking into account all the expenses, investment and receipts. It is to show the flow of money for various purposes. Merely because a book of account is not maintained on day to day basis, cash flow cannot be rejected without finding a single defect in it.
In the given case, cash flow statement for the appellant and his wife were submitted and various receipts and payments were duly disclosed and not even a single defect was found by A.O. in such cash flow.
2. The second reason given by A.O. is that the assessee did not file his return of income regularly, is incorrect, as he was regularly filing the return of income and copy of such return of income were furnished before the A.O. vide reply to questionnaire dated 25109/2011.
3. The third reason given by A.O. is more a suspecision than finding of a fact. The cash flow statement is nothing but a summary of inflow and outflow of cash, which is prepared on basis of source document like salary certificate, bank statement and such other statements. It is not necessary that appellant need to have day to day books of accounts to prepare cash flow statement. Appellant has a fair estimate of his day to day expenses or monthly expenses and accordingly; they are accounted for in cash flow statement. Therefore suspecision cannot be a reason for rejection of cash flow statement.
4. Finding of A.O. that cash flow statement shows huge cash on various dates is also incorrect because cash flow takes Rs 1000001- as opening cash balance on 1/4/2003 and in the said cash flow statement the major source of cash flow is nothing but cash withdrawals from bank. Therefore denying the cash accruals based on withdrawals from bank is not correct on the part of A.O .. Even the A.O. has not found or given any cogent finding so as to show, why he does not agree with cash accruals. He has not pointed out any defects in the cash flow but his reasons' for rejection are based on mere suspecision and hypothesis. A.O. has not shown that expenses on part of appellant are more than what is shown in the cash flow so as to reduce the cash availability in hands of appellant. Even he has not made any addition on account of household expenses of assessee. 10
5. Objections of A.O. in Para 5 is again a re-writing of suspicion raised in Para 1, 3 and 4 above. Therefore the reasons given above are applicable here.
6. The A.O. has questioned the life style of appellant so as to match with the sources of income but he has not shown any evidence or fact about the lifestyle of appellant which may lead to believe that his expenses are more than the withdrawals shown in cash flow statement. In fact his life style was very simple and humble despite husband and wife both were the earners in the family. It is again important to reiterate that A.O. has not made any addition on account of undisclosed household expenses or unexplained household expenditure. Therefore suspicion cannot be the evidence for making addition and also for not accepting cash flow statement..
7.The findings of A.O. that cash flow statement do not show any withdrawals for household expenses is again factually incorrect as the cash flow statement clearly shows the household expenses withdrawals. Even the.cash flow statement of his wife furnished during assessment proceeding also shows all the household withdrawals and details of household were duly given in Assessment proceedings also.
8. The finding of A.O. that cash flow statement does not show certain receipts received from Mis Prakhar Builder is again a finding not relevant for rejection of cash flow statement as no receipts were received from Mis Prakhar Builders. The receipts from Prakhar builder was a creation by A.O. himself, without having any material or evidences. It is also important to note that no incrementing material was found during the search, in the premise of appellant to show any receipts from Prakhar builders. Even the piece of paper claimed to be found in premises of Prakhar builder is nothing but a dunb document showing rough scribbling. The amount of Prakhar Builders was disputed by appellant therefore, it cannot be part of cash flow statement. Therefore, finding of A.O. to reject the cash flow statement furnished during. the assessment proceedings is merely a suspicion and surmise and there is no cogent material or finding to reject cash flow statement. Consequently the additions are not sustainable and may please be set aside.
9. On the contrary, Ld. D.R. opposed the submissions. The Ld. A.R. submitted that the addition has been made not on the basis of any incriminating material found during the course of search but it is on the basis of rejecting the claim of the assessee of cash on hand.
11
10. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. Ld. A.R. has placed reliance on the decision of coordinate bench in the case of Anant Steel Pvt. Ltd. Vs. ACIT (2016) 28 TTJ 47 and judgement of the Hon'ble Delhi High Court in the case CIT (Central)-III Vs. Kabul Chawala (2015) 61 Taxmann.comn 412. Ld. D.R. could not controvert the submissions of the assessee that no incriminating material was found. Moreover, we find that the addition is sustained merely on the basis of the presumption. We therefore, direct the A.O. to delete this addition.
11. Now, we take up IT(SS)A No.184/Ind/2016 pertaining to the assessment year 2008-09. The assessee has raised following grounds of appeal:
12
1. That the learned CIT(A) has erred in law and on facts in confirming addition of Rs.3,15,000/- and Rs.87,500/-.
2. That the addition confirmed by the learned CIT(A) as unexplained investment is not supported by any evidences, but is purely based on suspicion and surmise.
3. No addition can be made as an unexplained investment in a case, where proper cash flow statement was filed by the appellant, and A.O. has not found any defect in that flow statement.
4. The cash flow statement filed by the appellant cannot be rejected merely on the basis of suspicion or surmie.
5. That the appellant reserves the right to add, alter or amend the grounds of appeal before the appeal is decided, with the permission of Honourable Bench.
12. The only effective ground is against confirming the addition of Rs.3,15,000/- and Rs.87,500/-. Ld. Counsel for the assessee reiterated the submissions as made in the written submissions. The submissions of the assessee are already reproduced in para 8 above in the case of IT(SS)A No.183/Ind/2016.
13. On the contrary, Ld. D.R. opposed the submissions. The Ld. A.R. submitted that the addition has been made not on the basis of any incriminating material 13 found during the course of search but it is on the basis of rejecting the claim of the assessee of cash on hand.
14. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. Ld. A.R. has placed reliance on the decision of coordinate bench in the case of Anant Steel Pvt. Ltd. Vs. ACIT (2016) 28 TTJ 47 and judgement of the Hon'ble Delhi High Court in the case CIT (Central)-III Vs. Kabul Chawala (2015) 61 Taxmann.comn 412. Ld. A.R. could not controvert the submissions of the assessee that no incriminating material was found. Moreover, we find that the addition is sustained merely on the basis of the presumption. We therefore, direct the A.O. to delete this addition.
15. Now, we take up IT(SS)A No.185/Ind/2016 pertaining to the assessment year 2009-10. The assessee has raised following grounds of appeal:
14
1. That the learned CIT(A) has erred in law and on facts in confirming addition of Rs.2,00,000/-.
2. That the addition made for a sum of Rs.2,00,000/- merely on the basis of a document, showing some amount as payment to the appellant without any supporting evidence, is not sustainable.
3. No addition can be made in the hands of appellant for a receipt of sum, unless it is shown how the amount received, constitutes an income under the Income Tax Act, 1961.
4. No addition can be made on the basis of suspicion, surmise and conjecture and without having any evidence on record to sustain such addition.
5. That the appellant reserves the right to add, alter or amend the grounds of appeal before the appeal is decided, with the permission of Honourable Bench.
16. `The only effective ground is against confirming the addition of Rs.2,00,000/-. Ld. Counsel for the assessee reiterated the submissions as made in the written submissions. The submissions of the assessee are reproduced as under:
For 2009-10:
Addition of Rs 2,00,0001- is made on basis of some loose papers found in premises of Shri KK Sharma (These papers were not found in the premises of Appellant). The A.O. himself has given a finding that sum ofRs 2,00,0001- was paid by Mis Akshay Shakti Shiksha Evam Samaj Kalyan Samiti to the appellant in January 2009. Since, this payment is claimed to be made by the society, it is for them, to prove that such payment was made to the appellant on account of any income assessable in the hands of appellant. It is also very clear that A.O. does not have any evidence or material to prove that any such income was earned by the appellant. In fact A.O. was not even able to trace that the amount of Rs 2,00,0001- has actually travelled to assessee and no evidence during the search was found to that affect. Even A.O. has failed to assign any motive for receiving such payment on part of appellant. A.O. has made this addition merely for reason that no satisfactory explanation was given by the appellant. We again submit that assessee is not under burden to submit even explanation on this account as no incrementing material was found in the premises of assessee, so as the amount was received by assessee as income.15
It goes without saying that no receipts, signature or agreement with appellant was found to this effect in any of the searched premises. Merely some du~ paper mentioning resembling name of appellant cannot be the basis of addition in hands of appellant, particularly so in case. of assessment proceedings uls 153A.
The document which is referred to, is said to be found in the premises of Shri KK Sharma during the search, cannot be the basis of making any addition in the hands of appellant unless there is a material or corroborating evidence to show that this amount was received by the appellant. In Fact the presumption uls 292C states that any such document, if at all found, shall be treated as belonging to such searched person which means it does not belongs to other person.
Therefore, Your Honour is requested to delete such addition as it is based on merely suspicion and surmise, without discharging onus by the A.O. In The Judgement of, Anant Steel Pvt. Ltd. V. Asstt. Commissioner of Income Tax(20J6) 28 ITJ 47 (Trib. - Indore) "It was decided that U/s. 153A to 153C Of Income tax Act 1961- No incriminating Documents found and seized during search. An Additions were made. in assessment u/s 153A - Assessee challenged that order - HELD - In dy. CIT v. Kalani Brothers(Indore) Pvt. Ltd.,(2016) 27 ITJ 286 (TRIB.. -Indore this issue has been decided that in absence of any Incriminating material or documents seized during the course of search, the AD cannot pass order u/s 153A rlw Section 143(3) - Following that decision it has been held that in absence of any incriminating document found and seized during the course of search, the AO is not justify in making the addition in non abated assessment order while passing the order uls 153A rlw Section 143(3)"
It is further submitted that same amount is added to the income of MIs Akshay Shakti Shiksha Evam Sarna] Kalyan Samiti. Therefore, the same income cannot be added in two hands for the same reason. Unless, it is shown on the basis of evidences and in accordance with law that it constitutes income in hands of both the assessee.
It is further submitted that documents are already available to A.O during the earlier proceeding.
17. On the contrary, Ld. D.R. opposed the submissions. The Ld. A.R. submitted that the addition has been made not on the basis of any incriminating material found during the course of search but it is on the basis of rejecting the claim of the assessee of cash on hand. 16
18. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. Ld. A.R. has placed reliance on the decision of coordinate bench in the case of Anant Steel Pvt. Ltd. Vs. ACIT (2016) 28 TTJ 47. Ld. D.R. could not controvert the submissions of the assessee that no incriminating material was found. Moreover, we find that the addition is sustained merely on the basis of the presumption. We therefore, direct the A.O. to delete this addition.
19. Now, we take up ITA No.1013/Ind/2016 pertaining to the assessment year 2010-11. The assessee has raised following grounds of appeal:
1. That the learned CIT(A) has erred in law and on facts in confirming addition of Rs.1,53,200/- and Rs.6,00,000/-.
2. That the addition made for a sum of Rs.6,00,000/- merely on the basis of a document, showing some amount as payment to the appellant without any supporting evidence, is not sustainable.
3. No addition can be made in the hands of appellant for a receipt of sum, unless it is shown how the amount received, constitutes an income under the Income Tax Act, 1961.17
4. No addition can be made on the basis of suspicion, surmise and conjecture and without having any evidence on record to sustain such addition.
5. That no addition of Rs.1,53,000/- can be made being cash found during the course of search, when the appellant offered proper explanation, and his explanation was supported by proper cash flow statement furnished during the assessment proceedings.
6. That the appellant reserves the right to add, alter or amend the grounds of appeal before the appeal is decided, with the permission of Honourable Bench.
20. The only effective ground is against confirming the addition of Rs.1,53,200/- and Rs.6,00,000/-. Ld. Counsel for the assessee reiterated the submissions as made in the written submissions. The submissions of the assessee are reproduced as under:
For 2010-11 During this year an addition of Rs 6,00,0001- as undisclosed investment made on account of some paper found at the premises of Shri Pushpendra Mishra at the time of search upon him uls 132.
In this regard we hereby submit that Appellant has not received any money as claimed in the assessment order from Shri Pushpendra Mishra. As claimed to be paid by him.
Even the so called personal statement Shri Pushpendra-Mishra were not confronted to assessee to rebut the same. However the copy of such rough document, claimed to be the basis of receipts of Rs 6, 00,0001- is enclosed herewith for your perusal.
The document which is referred to, is said to be found in the premises of Shri Pushpendra Mishra during the search, cannot be the basis of making any addition in the hands of appellant unless there is a material or corroborating evidence to show that this amount was received by.the appellant. In Fact the presumption uls 292C states that any such document, if at all found, shall be treated as belonging to such searched person which means it does not belongs to other person.18
There is no corroborating material to support such transaction and without accepting it in any manner, even if it is accepted that any amount has been paid by Shri Pushpendra Mishra, even then, there is no material on record to show that it constitutes an income of appellant and not a loan or gift. Your kind attention is also drawn to the Par of the questionnaire dated 29/08/2011 issued by Assessing officer, where it is clearly stated that after 23/0312009 appellant was not having any connection with Swami Vivekanand Engineering College. Therefore even on account of college it is not possible to receive any money or pay it.
A.O. has not brought anything on record to show that such money travelled to appellant as income and also not able to establish any motive or purpose for which such amount could have been paid to the appellant. Consequently, A.O. has failed to discharge his onus to make such addition. Therefore this addition is not made on the basis of any incriminating material found during the search.
Therefore, there is no material on record to establish that any amount was paid to Shri Kamta Prasad Dwivedi by Shri Pushpendra Mishra (who was also searched) as an income and is liable to tax during the relevant year and also there is no corroborating material available to prove such transaction. Consequently no addition can be made to the income of appellant because it is based on hearsay without having any material.
In The Judgement of, Anant Steel Pvt. Ltd. V. Asstt. Commissioner of Income Tax(2016) 28 ITJ 47 (Trib. - Indore) "It was decided that U/s. 153A to 153C Of Income tax Act 1961- No incriminating Documents found and seized during search. An Additions were made in assessment u/s 153A - Assessee challenged that order - HELD - In dy. CIT v. Kalani Ilrothers(lndore) Pvt. Ltd., (2016) 27 ITJ 286 (TRIB. - Indore this issue has been decided that in absence of any Incriminating material or documents seized during the course of search, the AO cannot pass order u/s 153A r/w Section 143 (3) - Following that decision it has been held that in absence of any incriminating document found and seized during the course of search, the AO is not justify in making the addition in non abated assessment order while passing the order u/s 153A r/w Section 143(3)"
Your kind attention is drawn to following citations-
CITv/s Devendra K Singhal (2014) 45 Taxman.com 1'48 (Allahbad) Further addition of Rs 1,53,2001- was made to the income of appellant by the assessing officer, for the reason that, on the date of search i.e. 23/07/2009, this cash was found in the searched premises. Statement of Shri Kamta Prasad Dwivedi was recorded at the time of search and appellant in his statement, vide his reply to Question No.5, has informed that this amount of Rs 1,53,2001- includes sum borrowed by him from Shri Ganesh Prasad Dwivedi, Shri Krishan .Pal Dwivedi and Shri Anirudh Pare as a loan for the purpose of activities of the society of which he is the Chairman.19
During the course of Assessment Proceedings the appellant furnished a cash flow statement for himself and his wife Smt Chandra Kanta Dwivedi who was also searched simultaneously. The cash flow so filed clearly accounts for all the transactions and the same was verified by the Assessing Officer without rejecting it or finding any specific defects in it. The appellant has also filed affidavits of Shri Anirudh Pare, Shri Krishan Pal Dwivedi and Shri Ganesh Prasad Dwivedi confirming such loans to the assessee. The total amount of Rs 35,0001- was received as loans from these three people and sum of Rs 74,5001- was reflected in the cash flow statement of appellant and Rs 44,0001- in the cash flow statement of his wife Smt Chandra Kanta Dwivedi.
It is also Important to note that at the time of recording the statement during search uls 132, the appellant has stated that the money was received from these three people and subsequently it was confirmed by them through affidavit and remaining sum of Rs 74,5001- and Rs 44,0001- were also reflected in the cash flow statement filed before the Assessing Officer. Therefore there is no question of treating it as unexplained cash without finding any specific defects in the cash flow statement.
Even the Assessing Officer has given no specific findings to reject any of the document or cash flow statement submitted by the appellant except some suspicions. Without doing so and also without having any cogent material or evidence to contradict the document or cash flow statement, he cannot make an addition of Rs. 1,53,2001-.
21. On the contrary, Ld. D.R. opposed the submissions. The Ld. A.R. submitted that the addition has been made not on the basis of any incriminating material found during the course of search but it is on the basis of rejecting the claim of the assessee of cash on hand.
22. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. Ld. A.R. has placed reliance on the decision of coordinate bench in the case of Anant Steel Pvt. 20 Ltd. Vs. ACIT (2016) 28 TTJ 47. Ld. D.R. could not controvert the submissions of the assessee that no incriminating material was found. Moreover, we find that the addition is sustained merely on the basis of the presumption. We therefore, direct the A.O. to delete this addition.
23. In the result, the appeals filed by the assessee are allowed.
Order was pronounced in the open court on 19.09.2018.
Sd/- Sd/- (MANISH BORAD) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIALMEMBER Indore; दनांक Dated : 19/09/2018 VG/SPS
Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file.
By order Sr. Private Secretary, Indore 21