Document Fragment View

Matching Fragments

7.1 He submitted that the Tribunal in ACIT v. Layers Exports P. Ltd [20171 53 ITR (Trib) 416 (Mumbai) held as under: -

"33. In entirety of the matter, we are of the view that an addition in assessments carried out pursuant to search action u/s 132 of the Act has to be related to cogent and positive materials found during search which prove conclusively that the assessee has either earned an income or made an investment which has not been recorded in his regular books of account or that his case is covered under any of the deeming provisions contained in sections 68, 69, 69A to 69D of the Act. However, additions cannot be sustained merely on the basis of rough noting made on few loose sheets of Papers unless the AO brings on record some independent and corroborative materials to Prove irrefutably that the said noting reveal either unaccounted income or Unaccounted investment or unaccounted expenditure of the assessee. As discussed above, in the instant case, assessments for the impugned years have been completed u/s 7,53A of the Act which relates to assessment in case of search or requisition. The Prerequisite condition for application of Sec. 153A of the Act is a search conducted Under section 132 of the Act or any requisition made under section 132A of the Act to Unearth hidden income or property. Thus, the wry purpose/ essence of search Conduced u/s 132 of the Act is to unearth hidden income or property or get hold of books Of account or documents which has not been or will not be otherwise produced by the assessee in regular course on issue of summons or notice. In the assessee's case, as stated above, the purported search action did not lead to discovery of any unaccounted money, bullion, jewellery or other valuable article or thing. Further books of account revealing any undisclosed transactions of the a.33e33ee were Luu during the course of search. The entire assessment order revolves around scribbling in loose sheets of papers seized from premises of another person in course action on such other person. It is a fact that the said rough loose Sheets of papers scribbled by some anonymous person and seized in course of search of another person cannot be termed as 'documents' having any evidentiary value within the meaning of section 132 or section 132A of the Act. Thus, the entire assessment u/s 153A of the Act in case of the assessee rests on shaky and incorrect foundation and thus deserves to be quashed."

9.5. In this factual and legal background, if we examine the facts of present case, one has to see whether additions made by the AO towards unaccounted cash introduction as recorded in seized incriminating document being scribbling pad/loose paper is in fact the undisclosed income of the assessee or which is a non-speaking document having no evidentiary value. Admittedly, incriminating material found during the course of search in the possession of assessee does not bear the signature of the assessee. It is also an admitted fact that the said scribbling pad/loose papers having no signature and authentication. According to the AO, the assessee has systematically recorded cash receipts from various parties and it has been considered by ld. AO as income of assessee. The said finding has been arrived at on the basis of admission of the person who wrote the alleged scribbling pad or loose papers and which was further supported by the admission of assessee. However, fact ITA Nos.636 to 638/Bang/2023 Mr. Abdul Khader Kodi, Kasargod remains is that there is no corroborative materials to these entries in scribbling pads or loose papers. Therefore, it does not carry any evidentiary value. The assessee further stated that the alleged scribbling pad had neither any vouchers nor invoices to support the transactions mentioned therein nor any details as to the payee or the nature of expenditure or source is mentioned therein. We have gone through the statement recorded from the assessee and alleged incriminating documents found during the course of search. On perusal of the contents of the scribbling pad, we find that the said document has been written to record some cash receipts and to make some cash payments towards expenses. Similarly, the purported payment claims to have been made for expenses are also no reference to any particular expenditure or person to whom said amount has been paid. From the above, one thing is very clear that the alleged scribbling pad to be considered in whole both receipts and payments and only receipts or payments cannot be considered isolatedly. Although the there are entries both receipts and payments in the scribbling pads, ld. AO has considered only receipts and not at all considered the payments, which is incorrect. Further, the ld. AO has not made any attempt to find out from whom the assessee has received these payments and also to whom the assessee has made the payments. Hence, it is not proper to sustain these additions based on the uncorroborated materials, which lacks evidentiary value.

9.6 In the absence of any specific reference to the source of cash receipt and from whom cash has been received and also the nature of expenditure for which cash has been paid and the persons to whom said cash has been paid, it is very difficult to accept the contents of the scribbling pad as undisclosed income of the assessee outside the books of accounts. Moreover, it is highly incorrect to say that a person maintains parallel books of accounts to record unaccounted transactions would also include cash ITA Nos.636 to 638/Bang/2023 Mr. Abdul Khader Kodi, Kasargod withdrawn from regular bank accounts and record the same along with undisclosed books of accounts. From the above, it is abundantly clear that the impugned scribbling pad is part of the purported statement and declaration obtained by the Search Team to support the declaration taken towards undisclosed income for the period covered under search. It is a well settled principle of law that when non-speaking documents like the present scribbling pad are recovered during the course of search and the Revenue wants to make use of it, the onus is on the Revenue to collect cogent evidences to corroborate the noting in alleged incriminating documents. In this case, the Revenue has failed to bring on record any cogent evidences to prove conclusively that the noting in the seized papers refer the unaccounted cash receipts of the assessee. Further no circumstantial evidences in the form of unaccounted assets and liabilities outside the books of accounts were found in the course of search except cash of Rs.2,86,380/- and jewellery of Rs.21,98,520/-.

9.8. In this case, on perusal of facts available on record, we are of the considered view that the additions made by the AO towards unaccounted cash introduction recorded in alleged scribbling pad is not based on any cogent evidence or supported by any unaccounted assets and investments unearthed during the course of search, but solely on the basis of assumptions and presumptions. This principle is supported by the decision of Hon'ble Supreme Court in the case of Umacharan Shaw & Bros vs. CIT (1959) 37 ITR 271(SC). Further, the assessee has brought on record various reasons to prove that the alleged scribbling pad is part of purported statement and declaration obtained by the search team during the course of search, but it is not a cash book maintained by the assessee to record unaccounted cash introduction. Had it been the case of the AO that the alleged scribbling pad and its contents was tested by cross examining the parties as stated by the AO in his assessment order, then obviously it would give raise to an occasion to the AO to rely on said documents to make additions. In this case, the AO has not made any effort to verify the entries recorded in the scribbling pad by making further enquiries and cross examining the alleged persons or suppliers named in the said incriminating document. Further, on perusal of incriminating documents found during the course of search, we find that nothing was emanating regarding name and address of persons from whom said amount was received and the nature of expenditure for which said amount was paid. In absence of any effort from the AO by way of further enquiries, merely on the basis of a dumb paper coupled with statement recorded during the course of search, additions made towards undisclosed income cannot be sustained, more particularly when said statement has no longer in operation.