AG-8 VENTURES LTD.,BHOPAL vs. ACIT, CENTRAL-1, BHOPAL

per this page, it was mentioned that the consideration for flat was

Rs. 16,00,000. The paper also mentioned the date, installment

amount and mode of payment. An amount of Rs. 5,00,000 was

mentioned to be received in cash, and thus total amount received

was shown at Rs. 16,00,000. Ld. CIT(A) deleted the addition holding

that as per the books of accounts Rs. 16,00,000 was only received.

Thus, there was no difference in the amount received as per the

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

books and as per the loose paper. The only difference was in the

mode of receipt. Further, no inquiry was conducted from the

customer to inquire into the truth of the matter, moreover when the

assessee had clearly denied to have received any cash amount from

the customer.

for the assessee relied on the order of Ld. CIT(A).

discrepancy in the order of the Ld. CIT(A). Ld. CIT(DR) could not

point out any evidence to prove that any amount was received in

cash from the customer. The amount received as per the books

tallies with the amount received as per the loose paper. The

addition is uncalled for. We therefore dismiss this ground of

department’s appeal.

2011-12 relating to unexplained investment of Rs. 21,00,000 as per

LPS 3 pg. 23 to 39.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

course of search action at the residence of Shri Hemant Kumar

Soni, who was the CMD of the assessee company, a Joint

Development Agreement between M/s. Aashirwad Sky Heights Pvt

Ltd. and M/s. AG8 Ventures Ltd for development of a land at Indore

was found and seized. As per this document payment of Rs.

5,92,00,000 was to be made including inter-alia a payment of Rs.

21,00,000 which was in cash. The alleged payment was stated to

have been made on 11.08.2010. Rest of the payments were stated

to be by cheques as per this agreement. Ld. AO noted that this cash

payment of Rs. 21,00,000 was not recorded in the books. He

therefore added this sum of Rs. 21,00,000.

the Ld. CIT(A). Ld. CIT(A) deleted the addition at page 96 to 98

holding as under:

“4.4.2 I have consideration the facts of the case, evidence on record and findings of the AO. This is an undisputed fact that appellant has entered into an agreement with M/s. Aashirwad Sky Heights Tower Pvt. Ltd. The AO has alleged that appellant has paid sum of Rs. 21,00,000/- towards security deposit as per agreement. However, appellant has contended that all the payments were made through cheque to the tune of Rs. 89

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

4,80,00,000/- and no transaction was made in cash. Appellant has also brought to may notice that statement of Shri Mahendra Singh Namdeo was also recorded wherein, he has admitted that the all the payments of Rs. 4,80,00,000/- were received thought cheque and the balance amount is still outstanding. After considering the facts interalia plea raised by the appellant it can be safely held that the AO has no cogent/corroborative evidence on record which could prove that any such exchange of cash actually took place. Further, neither the appellant or its director nor Shri Mahendra Singh Namdeo has ever stated/admitted that a sum of Rs. 21,00,000/- was received from appellant company towards the security deposit. The entire adition has been made on assumption and presumption basis which is neither justified nor correct in the eyes of law. It is a settled facts that presumption how strong may cannot take place of evidence. 4.4.3 Nevertheless, the AO has grossly erred in making addition simply of the basis of guess work, assumption and presumption. It is well settled that no disallowance can be made as a leap in the dark. The AO has is not entitled to make a guess without evidence. The assessment of any particular year cannot be based on mere suspicion or bare guess, but on a legitimate material from which a reasonable inference of any expenditure being of the disallowable nature could be drawn and that the initial burden of finding such material is on the AO as held by Hon’ble High Court Orissa in the case of Bansidhar Onkaramall Vs. CIT (1953) 23 ITR 353 (Orissa). Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v/s. CIT (1954) 26 ITR 775 (SC) has hold that although strict rules of evidence Act do not apply to income tax proceeding, still assessment cannot be made on the basis of imagination and guess work. It has been held in the case of Umacharan Saha & Bros co. v/s CIT 37 ITR 21 (SC) that suspicion, however strong cannot take place of evidence. Similar views have been expessed by Apex court in the case of Dhiraj Lal Girdharilal v/s CIT (1954) 26 ITR 736 (SC). Also, once the assessee has discharged its onus of

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

proving that the parties under consideration are genuine, now the ball lies in the court of AO to prove that the claim of appellant is false and incorrect. Further, Shri Mahendra Singh Namdeo has never stated that a sum of Rs. 21,00,000/- was received in cash from appellant against the security deposit. Thus, in view of the above, the AO was not justified in making addition without bringing any clinching evidence on record which could prove any such exchange of cash took place. Thus, keeping in view the various case laws cited above, the addition made by the AO amounting to Rs. 21,00,000/- is Deleted being made on assumption and presumption basis. Therefore appeal on this ground is Allowed.” 77. Against this order of Ld. CIT(A), the department is in appeal.

Ld. Counsel for the revenue contended that during search, the Joint

Development Agreement was found, which clearly stated that a

payment of Rs. 21,00,000 was made in cash. The addition is

therefore justified. Ld. Counsel for the assessee, on the other hand

submitted that no cash payment of Rs. 21,00,000 was made as

stated in the agreement. A payment of Rs. 4,80,00,000 was made

upto the date of search, which was made by banking channel. This

fact was also confirmed by Shri Mahendra Singh Namdeo of

Aashirvad Sky Heights Tower Pvt Ltd. in his statement recorded

u/s. 131 on 29.05.2014. Shri Mahendra Singh Namdeo denied cash

receipt from assessee company, and also the cash payment was

denied by assessee company. Ld. Counsel contended that the

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

writing in the agreement was not corroborated. He therefore relied

on the order of Ld. CIT(A).

Lower authorities and the evidence on record. It is an undisputed

fact that appellant has entered into an agreement with M/s.

Aashirwad Sky Heights Tower Pvt. Ltd. The Ld. AO has alleged that

assessee has paid sum of Rs. 21,00,000/- towards security deposit

as per agreement. However, assessee has contended that all the

payments were made through cheque to the tune of Rs.

4,80,00,000/- and no transaction was made in cash. Assessee has

also brought to our notice that statement of Shri Mahendra Singh

Namdeo was also recorded wherein, he has admitted that the all the

payments of Rs. 4,80,00,000/- were received through cheque and

the balance amount is still outstanding. We find that although the

agreement raises suspicion that cash payment was made by

assessee company of Rs. 21,00,000; but this suspicion is not

confirmed by the department by providing any evidence on record.

Both the parties to the transaction denied this cash payment. In the

books of M/s. Aashirvad Sky Heights Tower Pvt Ltd, this amount is

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

not shown to have been received. On being asked, it was informed

that no action was taken in the case of M/s. Aashirvad Sky Heights

Tower Pvt Ltd. The addition therefore lacks merits. We therefore

dismiss this ground of appeal of the department.

3,10,00,000) and Ground No. 3 of A.Y. 2012-13 (Rs. 54,62,000) of

revenue’s appeal relating to Loose paper LPS A-28 page 75 dealing

with unaccounted investment in shares of M/s. Maa Bhagwati

Sugar Mills Ltd (MBSM).

the office premises of the assessee company, a loose paper LPS A-28

page no. 75 was seized. The title was “Details of Investment in

Shares of Ma Bhagwati Sugar Mills Ltd.” On the upper part of the

loose paper some details were mentioned showing cheque payments

for investment in MBSM which was computer generated. On the

lower part of the loose sheet, a hand written jotting was mentioned

whereby it was mentioned as under:

Total Sale Consideration 575.62 Less Paid till 20.03.11 350

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Cash 310 Cheque due 40 Balance due in cheque 171 Balance must have been paid in ‘B’ 54.620 (Not accounted) Pls confirm?

the Ld. AO in his order that on-money was paid at Rs. 310 lakhs in

the F.Y. 2010-11 and Rs. 54.62 lakhs in the F.Y. 2011-12. Ld. AO

further referred to an unsigned MOU found between Shri Bharat

Bhushan Patel and assessee-company. As per this unsigned

document, it was mentioned that both the parties would destroy

certain documents and in case the document is found from either of

the parties, any losses to the party because of such discovery would

be the responsibility of the party from whose possession such

documents were found. Ld AO therefore concluded that

unexplained investment were made by assessee company in

acquisition of shares of M/s. Ma Bhagwati Sugar Mills Ltd and he

added Rs. 3,10,00,000 in A.Y. 2011-12 and Rs. 54,62,000 in A.Y.

2012-13.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Ld. CIT(A). Ld. CIT(A) deleted the addition at page 101-112, vide

para 4.5.3 onwards: Similar finding was given by Ld.CIT(A) dealing

with the same issue for A.Y. 2012-13 deleting the addition of Rs.

54,62,000.

CIT(DR) referred to the Loose paper LPS A-28 page no. 75 and

contended that it clearly mentions that Rs. 310 lakhs is paid in

cash till 20/3/11. Further, against balance Rs. 54.62 lakhs as

mentioned at the end of the page, it is mentioned “Balance must

have been paid in ‘B’ (Not accounted)”. This document is clinching

document to establish on-money payment. He further stated that

the MOU found also stated that certain documents would be

destroyed later on. He therefore submitted that the addition for

unexplained investment as done by the Ld. AO be confirmed.

it is uncontroverted that assessee company purchased the shares of

Maa Bhagwati Sugar Mills (in short ‘MBSM’) from Bharat Bhushan

Patel and his family members. The transaction was made by cheque

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

and were duly recorded in the books. He referred to the Balance

sheet of 31.03.2009, at PB 64 and stated that the investment in

MBSM was recorded at Rs. 6.59 crores. Further, at PB 88, in

Balance Sheet of 31.03.2010, the investment in MBSM was

reflected at Rs. 9.27 crores. Further, at PB 163, in Balance sheet of

31.03.2011, investment in MBSM of Rs. 20.47 crores was reflected.

Further, at PB 188, in the Balance sheet of 31.03.2012, investment

in MBSM was reflected at Rs. 21.72 crores. He also referred to PB

232, which was the balance sheet of 31.03.2013, where the

investment in MBSM was reflected at Rs. 21.72 crores. Ld. Counsel

for the assessee submitted that although this loose paper was

found from the premises of the assessee company, the printed

document referred to the cheque payments, which were duly

recorded in the books. However, at the bottom of the page, some

handwritten rough noting was made. He submitted that who made

the rough noting and for what purpose the same was made was

unknown and was never enquired by the department during and

after search. Further, no enquiry was made from Shri Bharat

Bhusan Patel regarding alleged cash payment. During search, Shri

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Hemant Kumar Soni was asked about the alleged document and he

stated that no cash payment was made. So far as the MOU was

concerned, it was contended that neither the parties, nor the

witness have signed it. The document had no value, as it was a

mere type written document. Who made it and for what purposes it

was made is unknown. It was found from the residence of one

employee Shri Yashovardhan Jain. The MOU stated only the

proposed payments through post dated cheques. It does not say

that any excess amount was paid by the assessee company. It was

further contended that MSBM was in losses, as stated before the

search party and later during assessment. The construction of

building was also going on. Thus, there was no reason for making

any excessive payment. It was contended lastly, that no excessive

payment was made, and the amount recorded in the books was

already higher than the amount mentioned in the loose sheet. Thus,

the allegation of unexplained expenditure was baseless.

submissions, evidence on record and the arguments of both the

parties. After carefully examining the contents of the document,

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

alongwith the books of accounts, we find that this document is

nothing but a dumb document. The investment in shares of MBSM

was recorded in the Balance Sheet at Rs. 9.27 crores on

31.03.2010. On 31.03.2011, the investment was reflected at Rs.

20.47 crores. Thus there was an increase of Rs. 11.20 crores.

Similarly on 31.03.2012, the investment was reflected at Rs. 21.72

crores; and thus there was an increase of Rs. 1.25 crores. This

loose paper mentions the consideration of Rs. 5.75 crores. The

figure in the loose paper is substantially lower than that recorded in

the books. The transaction mentioned in the loose paper does not

correlate with the accounted transaction; moreover, the accounted

transaction is at a higher value. It seems that there was some rough

noting on this loose paper by some unknown person, which Ld. AO

has interpreted as unaccounted payment. Had the maker of the

loose paper and the purpose for which it was made been enquired,

the transaction therein could have been deciphered. No effort was

made by the Ld. AO in this regard. A transaction which is already at

Rs. 11.20 crores in F.Y. 2010-11 and Rs. 1.25 crores in F.Y. 2012-

13, how can such transaction be compared with the loose jotting

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

which states the transaction at Rs. 5.75 crores, moreover when it is

unknown as to who wrote it and for what purposes. In so far as the

MOU is concerned, we agree with the contention of the Ld. Counsel

for the assessee that the document is unsigned by any of the

parties, and not even signed by the witnesses. The document is a

mere typewritten document, not even found from the office of

company. This MOU stated only the proposed payments through

post dated cheques and does not state about any excess amount

paid by assessee company. No inquiry what-soever was brought on

record to have been conducted from Shri Bharat Bhushan Patel.

Relevant extract of finding of Ld.CIT(A) deleting the impugned

addition reads as follows:-

“4.5.3 I have considered the factual matrix of the case, written submission filed and assessment order. During the course of search page no. 75 of LPS- A-28 was found and seized from office premises of appellant which is also scanned on page no 61 of assessment order. The impounded paper i.e. page no75 of LPS-A-28 is a MOU for purchase of share of M/s Maa Bhagwati Sugar Mills Ltd and is a document which contain some rough nothings/jottings in the bottom of the page. Appellant during appellate proceedings submitted that no over and above consideration was paid in addition to what is disclosed in books of account. The impuged loose paper found in possession is an undated, unsigned and only represents rough working/jottings/scribbling. After considering the entire factual matrix and 99

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

evidence/material on record inter alia written submissions filed. I reach to conclusion that impunged addition was made on the basis of assumption and presumption which neither sustainable on facts nor in law. The AO has reached to conclusion that appellant has made unexplained investment of Rs. 3,10,00,000/- in purchase of shares of M/s Maa Bhagwati Sugar Mills Ltd. Appellant during appellate proceedings has strongly contented that appellant never paid any amount over and above that is mentioned in audited books of account. This document has been scanned on page 61 of assessment order. On a plain and cursory look would make it amply clear that this paper is relating to “some working on investment in shares of M/s Maa Bhagwati Sugar Mills Ltd”. The AO has alleged that sum of Rs. 3,10,00,000/- was paid in cash by the appellant to Bharat Bhushan Patel and Others. On the contrary appellant submitted that the presumption made by the AO is without any incriminating material on record which could prove that sum of Rs. 3,10,00,000/- was paid over and above the consideration as mentioned in books of account. Appellant has argued that the rough workings as mentioned in the bottom of loose paper cannot be made basis of addition, until and unless any cogent or incriminating document is found in support of transaction. Further, the AO has neither examination Bhart Bhushan Patel nor his brother or family member regarding the impunged loose paper and the entire addition has been made on sheer presumption and assumption basis. Further, the AO has also failed to bring on record any cogent evidence, creating direct nexus of receipt of Rs. 3,10,00,000/- by the appellant. Therefore, in absence of any cogent evidence having direct nexus with the impunged transaction, the said impunged paper i.e. page no 75 of LPS-A-28 cannot be used against the assessee. 4.5.4 This is settled legal position that any ‘dumb document’ cannot be used as an evidence to draw an adverse inference against the assessee.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

4.5.5 The AO has made allegation against the assessee that the has received that he has received Rs. 3,10,00,000/- to Shri Bharat Bhushan patel and other as mentioned on loose papers 75 of LPS-A- 28 in cash. In absenceof any admission any entire by Shri Bharat Bhushan patel and other or any incriminating documents/paper to establish that assessee has paid sum of Rs. 3,10,00,000/-. In cash, the impunged addition is not sustainable in the eyes of laws. The appellant has also stated that the AO by making a general observation has stated that previous promoters has paid some consideration in cash to the seller party. Appellant has brought to my notice that another loose paper (another MOU, undated and unsigned) was found in possession of Shri Yashovardhan Jain i.e. page no. 64 which states that appellant shall pay sum of Rs. 1,41,00,000/- towards purchase of share of Maa Bhagwati Sugars Mill Ltd. has been accepted as true by the AO without any thorough examination.Thus, the only inference which can be drawn from this is that the seized loose paper is nothing but represent rough workings/jottings/scribbling. It is settled legal position that onus of proof is on the person who makes any allegation and not on the person who has to defend. As per legal maxim “affairmanti non neganti incumbit probation” means burden of proof lies upon him who affirm and not upon him who denies. Similarly as per doctrine of common law “incumbit probation qui digit non qui negat” i.e. burden lies upon one who alleges and not upon one who deny the existence of the fact. The loose paper i.e. page 75 of LPD-A-28 is rough working/jotting. The AO has filed to discharge his onus of proof especially when addition has been made under “deeming fiction”. In view of this lacune on the part of AO, impunged addition is legally not sustainable. As held in the case of CIT v/s KP Varghese 131 ITR 574 (SC) by Hob’ble Apex Court in absence of

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

evidence that actually assessee paid more amount than declared in regarded deed, no addition can be made. In the case of Bansal Strips (P) Ltd. & Ors Vs. ACIT (2006) 99 ITD 177 (Del) it has been held that:- “If an income not admitted by assessee is to be assessee in the hands of the assessee. The burden to establish the such income is chargeable to tax is on the AO. In the absence of adequate material as to nature and ownership of the transactions, undisclosed income cannot be assessed in the hands of the assessee merely by arithmetically totally various figures jotted down on loosed documents”. 4.5.7 In view of the above discussion, material evidences on record and case laws cited, firstly, the AO ought to have examined beneficial i.e. Shri Bharat Bhushan patel and order who were actually involved in the impugned transaction Secondly, the AO should have done independent enquiry regarding the impugned transaction. Thirdly, the loose paper or rather say it as dumb documents should be a speaking one having direct nexus with the assessee, which was not in the case of appellant. Fourthly, the AO being of considered opinon that vash of Rs. 3,10,00,000/- was paid by the appellant company for purchasing shares of M/s Maa Bhagwati Sugar Mill Ltd. Should have rejected books of account of the appellant which was also not done. Fifthly, it is settled legal pronouncement that presumption how strong may, cannot take place of evidence. Last but not the least, neither the beneficery nor any of the partner of appellant has ever stated that such transaction actually occurred. My findings on the issue under consideration are based on the various conclusions drawn by me which have been discussed in the above paras. Therefore, the AO was not justifies in making addition of Rs. 3,10,00,000/- being on sheer assenting and presumption basis.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Thus, the addition made by the AO amounting to Rs. 3,10,00,000/- is Deleted. Therefore appeal on this ground is Allowed.” 86. In the given set of facts and circumstances of the case and

settled judicial precedents followed by Ld.CIT(A), we are of the view

that Ld. CIT(A) was justified in holding that this document was not

sufficient to make addition for unaccounted investment, against the

assessee company. Thus no interference is called for in the finding

of Ld.CIT(A) .In the result, Revenue’s Ground no. 4 and Ground

no.3 for A.Y. 2011-12 and A.Y. 2012-13 respectively are dismissed.

3,16,00,000); and Ground No. 5 (Rs. 1,81,00,000) and Ground No.

6 (Rs. 4,00,00,000) for A.Y. 2012-13 of the Department’s appeal.

Ground No. 5 for A.Y. 2011-12 and A.Y. 2012-13 relate to

unexplained investment as per LPS 1/3 pg. 99 to 103 found from

the residence of Shri Yashovardhan Jain, General Manager Finance

of assessee company. Further Ground No. 6 for A.Y. 2012-13 relate

to alleged commission payment in respect to the same loose paper.

Since all these issues are interconnected these grounds are

adjudicated together.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

the course of search and seizure action, at the residential premises

of Shri Yashovardhan Jain, General Manager (Finance) of the

assessee company, copy of agreement dated 09/02/2012 was found

marked as LPS 1/3 page no. 99 to 103. The said agreement was

duly signed and on stamp paper for assignment of rights to

purchase 13.314 hectares (32.89 acres) of land at Village Phanda

between M/s. Citi Infraventure Pvt. Ltd. and Shri Kunal Agrawal

(Assigner/ First Party) and M/s. AG8 Ventures Ltd. (Assignee/

Second party). Ld. AO stated that as per Annexure A of the

agreement, the total consideration for the land between the first

party and the Bhumi Swamis was Rs. 11,97,08,000 out of which

Rs. 2.30 crores had already been paid by the first party. These land

were sold by the assigner under this agreement to assessee

company for Rs. 51.51 lakhs per acre totalling to Rs. 16,94,16,000.

Thus, as per this agreement, difference amount of Rs. 4,97,08,000

has to be paid by the assessee company to the first party for the

said land. Further, Ld. AO referred to LPS 1/2 page no. 67 which

was ledger of ‘Munna Agrawal – Highland Land’ for the period

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

01.04.2011 to 07.06.2013. This ledger allegedly contained date wise

entries of cash payment to Munna Agrawal at Rs. 1,52,00,000 .

Further LPS 1/2 page no. 65 was ledger account of Pradeep

Agrawal. As per this ledger cash payment of Rs. 75,00,000 was paid

to him. LPS 1/2 page 56 was also reffered by Ld. AO. As per this

loose sheet it was mentioned ‘Month wise Amount paid’. Total

amount payable was “Rs. 225 + 470.03 = 695.03”. Month-woie

amount paid for Feb 12 to June 13 was Rs. 377.00 lakhs. Ld. AO

further referred to LPS 1/2, page 55 which contained details of

“Agreement revised area – 31.20 acres” dated 07.06.2013. Ld. AO

further referred to BS-1/2 page no. 7 which was a page of diary on

which certain hand written notings have been made. Ld. AO

therefore alleged that unaccounted payment was made by the

assessee company to M/s. Citi Infraventures Pvt Ltd. through their

Directors Shri Pradeep Agrawal and to Shri Kunal Agrawal. He

therefore added Rs. 3,16,00,000 in A.Y. 2011-12 and Rs.

1,81,00,000 in A.Y. 2012-13. Further, Ld. AO noted that in the

Annexure A to the agreement, it was mentioned that “both side

commission paid by AG8 (4 crores) from 1 Feb. 2012. Agreement Amt

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

(9 crore) Intt. Will be charge 3% Per month”. Ld. AO further added

commission Rs. 4 crores on the basis of said noting which is

covered in Ground no. 6 for A.Y. 2012-13.

land, assessee preferred appeal before the Ld. CIT(A) who deleted

the addition in view of his finding at page 119 to 134 of the

impugned order.

4.6.9 This is an undisputed fact that neither any incriminating material was found or seized during search proceedings nor Shri Pradeep Agarwal or any of the farmer/seller has ever admitted about payment of Rs. 4,97,00,000/- by the appellant in cash. On the contrary, not only from the five farmers/bhuswamis whose names as mentioned on page no 99 of LPS- 1/3 but from various other farmers/bhuswamis, appellant has directly purchase agricultural land in village Phanda Kalan, Bhopal. The payment made for purchase of lands are duly recorded in books of account and through cheques. In absence of any corroborative evidence to prove that there was any exchange of money by CASH, AO has no locus to assume that appellant has paid sum of Rs. 4,97,00,000/- to M/s Citi Infraventures P.Ltd. It is settled law that AO cannot make any addition merely on basis of suspicion, however strong it may be. The AO is not justified in presuming certain facts without having anything to corroborative. Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v/s CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, still assessment cannot be made on the

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

basis of imagination and guess work. It has been held in the case of Umacharan Saha & Bros co. v/s CIT 37 ITR 21 (SC) that suspicion, however strong cannot take place of evidence. Similar views have been expressed by Apex Court In the case of Dhiraj Lal Girdharilal v/s CIT (954) 26 ITR 736 (SC). 4.610 In view of the above discussion, material evidences on record and case laws cited, firstly, the AO ought to have provided opportunity of cross examination of Shri Yashovardhan Jain. Secondly, the AO should have examined Shri Pradeep Agarwal and Shri Munna Agarwal before making any addition to the income of the appellant. Thirdly, the AO should have brough some independent evidence suggesting exchange of cash of Rs. 4,97,00,000/-. Fourthly, the impubged loose paper 55, 56, 65 & 67 of LPS- 1/3 were found in possession of Shri Yashovardhan Jain and not in possession of appellant. Fifthly, none of the loose paper under consideration is signed by the appellant or any of its authorized representative. Sixthly, the impunged loose paper should be speaking one without having any second interepration, which is not in the case of appellant. Seventhly, the AO has also relied upon the statement of farmers/sellers, who during appellant proceedings had filed affidavits stating that no cash was received from appellant company against the sale of their land. One of the seller has stated that he was under pressure and therefore, has accepted cash receipt of Rs. 5,00,000/- from appellant before the AO. My findings on the issue under consideration are based on the various conclusions drawn by me which have been discussed in the above paras. Therefore, the AO was not justifies in making addition of Rs. 3,16,00,000/- being on sheer assenting and presumption basis. Thus, the addition made by the AO amounting to Rs. 3,16,00,000/- is Deleted. Therefore appeal on this ground is Allowed.”

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Similar findings were given for deleting the addition of Rs.

1,81,00,000 for A.Y. 2012-13.

commission payment, Ld. CIT(A) deleted that addition as per page

144 to 150 of his order as under:-

The AO has made allegation against the assessee that the has made payment of Rs. 5,96,000/- towards Part B and salary of drive. In absence of any admission by Shri Rajeev Soni or order directors of appellant company or any incriminating document/paper to establish that assessee has made payment of Rs. 5,96,000/- It is settled legal position that onus of proof is on the person who makes any allegation and not on the person who has to defend. As per legal maxim “affairmanti non neganti incumbit probation” means burden of proof lies upon him who affirm and not upon him who denies. Similarly as per doctrine of common law “incumbit probation qui digit non qui negat” i.e. burden lies upon one who alleges and not upon one who deny the existence of the fact. It is important to note that Shri Rajeev Soni was appointed director of M/s Aakriti Dwelling Pvt. Ltd. on 28.06.2008 and not on 26.06.2008 as alleged by the AO. Further, the loose paper i.e. page no 38 of LPS-A-14 is rough working/jotting. The AO has filed to discharge his onus of proof especially when addition has been made under “deeming fiction”. In view of this lacune on the part of AO, impunged addition is legally not sustainable. As held in the case of CIT v/s KP Varghese 131 ITR 574 (SC) by Hob’ble Apex Court in absence of evidence that actually assessee paid more amount than declared in

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

regarded deed, no addition can be made. In the case of Bansal Strips (P) Ltd. & Ors Vs. ACIT (2006) 99 ITD 177 (Del) it has been held that:- “If an income not admitted by assessee is to be assessee in the hands of the assessee. The burden to establish the such income is chargeable to tax is on the AO. In the absence of adequate material as to nature and ownership of the transactions, undisclosed income cannot be assessed in the hands of the assessee merely by arithmetically totally various figures jotted down on loosed documents”. 4.7.5 This is an undisputed fact that neither any incriminating material was found or seized during search proceedings nor the payer has ever admitted about payment of Rs. 5,96,000/-. In absence of any corroborative evidence to prove that there was exchange of money by CASH/Cheques/Kind, AO has no locus to assume that appellant has paid Rs. 5,96,000/-. It is settle law that AO connot make any addition merely on basis of suspicion, however stong it may be. The AO is not justified in presuming certain facts without having anything to corroborative. Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v/s CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, still assessment cannot be made on the basis of imagination and guess work. It has been held in the case of Umacharan Saha & Bros co. v/s CIT 37 ITR 21 (SC) that suspicion, however strong cannot take place of evidence. Similar views have been expressed by Apex Court In the case of Dhiraj Lal Girdharilal v/s CIT (954) 26 ITR 736 (SC). 4.7.6 In view of the above discussion, material evidences on record and case laws cited, firstly, the AO ought to have provided completed details of beneficiaries who has received commission of Rs. 4,00,00,000/- from appellant. Secondly, the AO should have done independent enquiry regarding the impunged transaction. Thirdly, no corroborative evidence was

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

found during serach suggesting payment of commission of Rs. 4,00,00,000/- by the appellant. Fourthly, the nothing/scribbling on loose paper should be a speaking one having direct nexus with the assessee and transaction mentioned therein, which was not in the case of appellant. Fifthly, the AO being of considered opinon that cash Rs. 4,00,00,000/- was paid by the appellant company toward commission for purchasing lands, should have rejected books of account of the appellant which was also not done. Sixthly, the AO failed to bring on record vital details such as date of payment, name of beneficiary. Commission paid against which land, mode of payment of commission etc. My findings on the issue under consideration are based on the various conclusions drawn by me which have been discussed in the above paras. Therefore, the AO was not justifies in making addition of Rs. 4,00,00,000/- being on sheer assenting and presumption basis. Thus, the addition made by the AO amounting to Rs. 4,00,00,000/- is Deleted. Therefore appeal on this ground is Allowed.”

Departmental Representative submitted that during the course of

search at the residential premises of Shri Yashovardhan Jain,

General Manager (Finance) of the assessee-company a document on

stamp paper was found, which was duly signed by the parties. As

per Annexure A of the document, it was clear that the assessee

company purchased 32.89 acres of land @ 51.51 lac/ acre from

M/s. Citi Infra ventures Ltd. The amount payable to the farmers

was Rs. 11,97,08,000 and therefore excess amount of Rs. 110

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

4,97,00,000 was paid in excess by the assessee-company. Further,

he referred to LPS 1/2 page no. 55, 56, 65, and 67 and further BS-

1/2 page no. 7 and contended that the documents further gave the

details of payments made to Shri Munna Agrawal alias Shri Pradeep

Agrawal, and Shri KBL Agrawal. He therefore submitted that

sufficient evidences were found during the course of search to

establish the payment of Rs. 4.97 crores as on-money to M/s. Citi

Infraventures Pvt Ltd. In respect of commission payment , he

further referred to Annexure A of the agreement and submitted that

the fact of commission payment of Rs. 4 crores was clearly

mentioned in the agreement. He therefore submitted that the order

of the Ld. AO may kindly be restored and addition so made may be

confirmed.

submitted that the impunged MOU contains details of agreement

signed between M/s City Infraventures Pvt. Ltd. and AG8 Ventures

Limited on 09.02.2012 for assigning rights to purchase 13.314

hectare (32.89 acres) of land at village Phanda kalan, Bhopal.

According to the agreement the total consideration to be paid by the

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

M/s City Infraventures P Ltd. to the farmers/bhuswamis was Rs.

11,97,08,000/- out of which sum of Rs. 2.30 crores have already

been paid. The agreed sale rate for the assessee company was

finalised at Rs. 51.51 lacs per acres and the total cost for the

assessee company would come out at Rs. 16,94,16,000/-. He

submitted that although, the assessee wanted to acquire the land

for its project and therefore entered into an agreement with M/s.

Citi Infraventures Ltd, yet later the land was purchase directly from

different farmers subsequently. Therefore, this agreement was later

not registered. The farmers were examined on oath and they

accepted that the transaction was done with assessee company.

Further statement of Shri Pradeep Agrawal and Shri Kunj Bihari Lal

Agrawal of M/s. Citi Infraventures Ltd. was also recorded by the Ld.

AO. In their statement also, they accepted that this transaction was

directly done by assessee-company with the farmers. Further in

respect of the allegation of received on certain amount in cash by

the farmers, Ld. Counsel for the assessee tried to summarise the

allegeation of cash received in the following chart:-

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Name of farmer Khasara no Date of Sale Summary of Statement and details registry consideration recorded of land/Area Shri Deep Singh 346/1 & 16.02.201 2,43,44,000 1. On 05.02.2016 S/o Late Shri 348 7.10 2 Recived cash of Rs. 10 lac. Gurubk Singh acres (PB 867- (PB 880-885) 877) 2. On 08.02.2016 No Cash received (PB 886- 888) 3. on 12.02.2016 No Cash received (PB 889- 891) 4. on 26.02.2016 Shri Dinesh S/o Deep Singh that cash of Rs. 3,64,000/- was received.(PB 892-894) Affidavit – PB 879 No cash received - Smt. Harkuwar 359 & 16.06.201 1,66,72,000 1. On 04.02.2016 & Bai w/o Shri 350/2 2 08.02.2016 – No cash Gurubaksh received. (PB 949-966) - Shri Bhagwan 6.52 acres (PB 924- 2. Affidavit from Bhagwan Singh S/o Shri 948) Singh and Soram Bai Gurubaksh (PB.967-968) that no cash - Smt Soram bai received from sale of land. and Smt - Sugan Bai d/o Gurubaksh

Shri Suresh s/o 362/21 01.11.201 1,20,00,000 1. On 05.02.2016 that no Shri Ram Singh 3 acres 2 cash received. (PB 1025-

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

1029) (PB 1004- 2. Affidavit – PB 1030, No 1024) cash received. Shri Rajmal s/o 362/1/2/ 24.05.201 1,90,00,000 No recorded. Shri Shambhulal & 375 2 6 acres (PB 898- 919) Shri Govind 362/1/1 13.09.201 1,75,20,000 1.On 28.04.2014 no cash Singh s/o Shri 4.38 acres 2 received. Shambhulal 2. On 26.02.2016 stated (PB 973- that cash of Rs. 5 lac 993) received. (PB 999) 2. Affidavit on 11.05.2018 that no cash was received. (PB 994)

Ld. Counsel for the assessee submitted that none of the sellers

accepted to have received any amount in cash. In respect of two

sellers, who had accepted to have received cash, they subsequently

filed affidavit stating that no such cash was received. Further, in

respect of the allegation regarding payments to Shri KBL Agarwal

against purchase of land at village Phanda, Bhopal, Ld. Counsel

referred to the copy of ledger account of Shri Kunj Behari Lal

Agarwal and copy of registered deed for land at village Phanda,

Bhopal. He submitted that assessee company purchased 9 acres of

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

land from Shri KBL Agarwal for a total sale consideration of Rs.

3,67,59,000/-. All the payments were made through different

cheques. This transaction was recorded in books. This transaction

was different. Further, referring to LPS 1/2 page nos. 55, 56, 65 &

67 it was submitted that the maker of these documents was not

known. It was not enquired as to who had written it. The same were

even not found from the premises of assessee company. Further,

Ld. Counsel for the assessee submitted that no commission as

mentioned in the Annexure A was paid. It was unknown as to who

wrote it, and why such scrubbling was made. Further, Ld. AO did

not enquire as to when such commission, if any was paid, and to

whom such commission was made. Merely on a rough scrubbling

this addition of huge amount of Rs. 4 crores was made. Ld. Counsel

therefore relied on the order of Ld. CIT(A) and contended that the

same may be confirmed.

and the orders of the Ld. Lower authorities. We find that assessee

company entered into an agreement with M/s. Citi Infraventures

Ltd. for purchase of land. The land was to be purchased for Rs.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

16,94,16,000/-. As per this agreement, M/s. Citi Infraventures Ltd.

had already entered into an agreement with the farmers for

purchase of the land for Rs. 11,97,08,000/- of which Rs. 2.30

crores were paid to the farmers. Ld. AO therefore alleged that the

difference between Rs. 16,94,16,000 Less Rs. 11,97,08,000 i.e. Rs.

4,97,08,000 was on-money paid by the assessee company. Ld. AO

relied on various documents to corroborate his conclusion that on-

money was paid. However, when enquired from the farmers, they

stated that the land was directly sold to the assessee company. The

sale deeds also state that the sale was directly by those farmers to

the assessee company. Ledger accounts of the farmers have been

filed, whereby payments have been made by the assessee company

to the farmers. Even Shri Pradeep Agrawal and Shri KBL Agrawal

were enquired and both accepted that the land deal was directly

done by the assessee company with the farmers. The basis of the

Ld. AO in the present case remains the agreement which is on

stamp paper and duly signed by the parties. However, in our

humble opinion, this agreement was never executed. All the parties

denied the transaction as per the agreement. The sale deeds and

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

other evidences prove the contrary. Had the parties intended to

execute this agreement, it would have been registered. So far as the

evidence regarding the payment to KBL Agrawal is concerned, the

assessee accepted payment to KBL Agrawal, but in respect of

purchase of another land. Further, the department is contending

that payment to Munna Agrawal is payment to Pradeep Agrawal. No

evidence has been produce to establish that Munna Agrawal is the

alias name of Pradeep Agrawal. Infact this fact was denied by

Pradeep Agrawal in his statement. In respect of on-money received

by the farmers, the farmers have already denied to have receive on-

money. In respect of Shri Deep Singh, his statement was recorded

on multiple occasions. On 05.02.2016, he stated that he received

on money of Rs. 10 lakhs. Further, on 08.02.2016 and 12.02.2016

he stated that no cash was received. Later, in his statement on

26.02.2016, he stated on money of Rs. 3,64,000 received. He

further denied the same by filing affidavit. How his statement can

be relied. In respect of Smt. Karkuwar Bai and others. Statement

were recorded on 04.02.2015 and 08.02.2016, whereby the sellers

denied on-money; and further reaffirmed the fact by filing affidavit.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

In respect of Shri Suresh, he denied on money receipt and

thereafter reaffirmed the fact in affidavit. Also, in respect of Shri

Rajmal, his statement was not recorded. Lastly, in respect of Shri

Govind Singh, his statement was recorded on two occasions. On

28.04.2014, he denied to have received on-money. Later, on

26.02.2016, he accepted receipt of on-money of Rs. 5 lakhs.

However, subsequently, he retracted receipt of on-moeny by filing

affidavit. In these circumstances, all the sellers have either not

accepted to have received any on-money or the same was later

retracted. In these given facts and circumstance we do not find any

infirmity in the finding of Ld. CIT(A) on the issue under

consideration deleting the addition of Rs.3,16,00,000/- and

Rs.1,81,00,000/- and the same stands confirmed.

we have held that the agreement was not acted upon, therefore the

commission mentioned therein cannot be said to have been paid.

Also, the notings in the agreement are mere rough scrubbings. Who

wrote it, and commission, if any, was paid to whom was never

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

enquired upon. We therefore confirm the order of Ld. CIT(A) on this

ground also.

and Ground No. 5 (Rs. 1,81,00,000) and Ground No. 6 (Rs.

4,00,00,000) for A.Y. 2012-13 of the Department’s appeal are

hereby dismissed.

A.Y. 2011-12, which relates to addition of Rs. 30,00,000 in respect

of LPS A-13 relating to on-money in respect of 21 registries found

from the office assessee-company and 6 registries found from the

site office of Aakriti Aqua City.

registries found, one registry in respect of purchase of land from

Shri Narayan Singh and Shri Jairam Singh was found. The

assessee had purchased 10.70 acres of land on 29.10.2010 for a

total sale consideration of Rs. 6,33,18,000 from Shri Narayan Singh

and Shri Jairam Singh. During the post search inquiries, statement

u/s. 131 was recorded of both Shri Narayan Singh and Shri Jairam

Singh in May 2014. In their statement, they stated that they have 119

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

received Rs. 15 lakhs each over and above the recorded

consideration. Thus total amount of Rs. 30 lakhs was held by the

Ld. AO to be on-money payment by the assessee.

the Ld. CIT(A). The Ld. CIT(A) at page no. 158 para 4.8.5 onwards of

his order deleted the addition as under:

“4.8.5 Due consideration is given to the submission filed by the appellant inter alia the evidence furnished. Let me first summarise the basis on which additions have been made by the Assessing Officer. The AO has solely relied upon statement recorded of sellers Shri Narayn Singh and Shri Jai Ram Singh. The addition made by the AO are purely hypothetical and without any independent corroborative evidence. The AO has consistently harped on the statements of sellers. This is an admitted fact that statements of 21 were recorded. This is also an admitted fact these statements were recorded behind the back of appellant. No opportunity of cross-examination was allowed to the assessee though specifically asked for the assessee. It has been held by hon’ble High Court in the case of DCIT V/s Mahendra AMbbalal Patel & CIT V/s Kantilalbhai Ravidas Patel that statement has no evidentiary value if opportunity of cross-examination is not allowed. Besides this, apparently the AO did not independently verified the facts about the genuineness of the said party as well as the impunged purchase transaction. It is not understandable as to how independently and impartially, the AO could reach to the final conclusion that on money amounting totaling to Rs. 30,00,000/- was paid for purchased of land from different sellers without even bringing a single iota of positive evidence on record except the 120

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

statement of farmers which was also recorded behind the back of assessee. Hence, the addition made by the AO was based on mere guess work, conjuctures and surmises, which has no place in tax jurisprudence. In sum & substance, action of the AO is neither sustainable on facts nor in law, being based on statement of sellers. 4.8.7 It is a settled legal principal that addition cannot be simply made on the basis of third party statement and without giving any opportunity of cross examination. The following judicial pronouncement supports the case of appellant. • CIT v. J.M.D. Communications P. LTD (2010) 320 ITR 17 (ST) (SC) (ITA NO 106 OF 2007 DT 16-1-2009(Delhi)(HC). Person who has issued the bills has given the statement that he was carrying on the business of issuing bogus accommodation bills on commission basis with the assessee, and this was not put to the assessee for rebuttal or cross-examination, High Court held no substantial question of law. On SLP by revenue the court held that it the AO wants to use some statement made before him, then on request by the assessee, is bound to put the deponent for cross examination. • Kishinchand Chellaram v. CIT (1980) 125 ITR 713 (SC)

Though the proceedings under the income tax Act are not governed by the strict rules of evidence, the department is should to afford an opportunity to controvert and cross examine on which the department places its reliance. Opportunity of cross examination must be given. The consequence of breach of natural justice is that either the addition is void or matter may have to be to be remanded to lower authorities. • Hon’ble Delhi High Court in the case of Basudev Garg Vs. Commissioner of Customs. • Hon’ble Delhi High Court in the case of CIT Vs. Ashwani Gupta, 322 ITR 396 (Del) 121

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd. • Hon’ble ITAT, Delhi in the case of DCIT Vs. Heminder Kumar in ITA No. 4210-4213/Del/2013 Date of order 29.08.2014. • Hon’ble Rajasthan High Court in the case of Commissioner of Income- Tax-I, Jaipur Vs. A.L. Lalpuria Construaction (P) Ltd. • Hon’ble Calcutta High Court in the case of Commissioner of Income-Tax Vs. Eastern Commercial Enterprises (1994) 210 ITR 103 (Cal.)(HC) • Commissioner of Income-Tax Vs. Surise Tooling System (P) Ltd. [2014] 47 TAXMANN 20 (Delhi High Court)- “Where Assessing officer made addition to assessee’s income on basis of statement recorded by director company in course of survey to effect that said amount represented non-existent transaction, since statement so made did not have any evidentiary value and, moreover, Assessing Officer had not even rejected assessee’s books of account while treating transaction in question to be bogus, impugned addition deserved to be deleted”

• Hon’ble Gujarat High Court in the case of Pr. Comm. Of Income Tax –I vs. Chartered Speed Pvt. Ltd. and also Hon’ble Gujarat High Court in the case of CIT Vs. Indrajit Singh Suri (2013) 33 TAXMANN 281 (Guj.)- “where additions were mad on basis of statement of persons who were not allowed to be cross examined by assessee, additions were not sustainable.”

• Radha Madhav Ind. (P) Ltd. Vs. Commissioner of Central Excise, Raipur (2015) 54 TAXMANN 404 (New Delhi – CESTAT)- “Non-supply of documents and not allowing cross-examination of said witnesses would violate principles of natural justice” • CIT v. Eastern Commercial Enterprises (1994) 210 ITR 103 (Cal.) (HC)-

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

“The assessee in entitled to cross-examine the person who was examined by the A.O. Cross- examination is the sine qua non of due process of taking evidence and no adverse inference can be drawn against a party unless the party is put on notice of the case made out against him. He must be supplies the contents of all such evidence both oral and documentary, so that he can prepare to meet the case against him. • Decision of Hon’ble Gujarat High Court in the case DCIT vs. Mehendra Ambalal Patel Tax wherein the Hon’ble High Court held as under: “Though the AO has placed reliance upon the statements of Shri Monoj vadodaria and Shri G.C. Patel for the purpose of taxing the amount in the hands of the assessee, despite request being made by the assessee for Cross-examining both the said persons, the AO has not permitted the assessee to Cross-examining them. In the circumstances, no reliance could be placed upon the statements of the said persons as the respondent assessee had no opportunity to cross-examine them. The statements made by the aforesaid persons would have no evidentiary value and as such, would not be admissible in evidence.”

• Decision of Hon’ble Gujarat High Court in the case CIT Vs. Kantibhai Revidas Patel Tax wherein it was held as under: “The Ld. AO had used this statement without allowing cross examination of vikas A. shah which is against the principle of natural justice.” 4.8.8 The AO further presumed that appellant has paid consideration over and above the registered value. Hon’ble Rajasthan high Court in the case of CIT vs. Bhanwarlal Morwatiya (2008) 215 CTR 489 (Raj) has held as under:- “Apart from the fact, that even if, it were to be assumed that the price of the land was different than the one recited in the sale deed unless it is

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

established on record by the department, that as a matter of fact the consideration as alleged by the department did pass to the seller from the purchase it cannot be said that the department had any right to make an addition. If the case of the appellant stands in a much better footing in as much as there is no iota evidence found in course of search that the appellant had paid more money than what was stated in the purchase document. In the case of the appellant the exercise carried out by the assessing officer is without the authority of law and therefore the same cannot be a basis for addition. Hon’ble Bombay High Court in the case of Mrs. Nirmal Laxminarayan Grover v. Appropriate Authority, 223 ITR 572. The relevant portion of the judgment is extracted below: “However, as regards the contention raised on behalf of the petitioner that the market rate fixed for the area in question at the relevant time in the land rates fixed by the Nagpur Municipal Corporation, Nagpur, as well as by the stamp authority for the purposes of levy of stamp duty on registration of the documents was Rs. 1,500 per sq. meter, i.e., Rs. 145 per sq. ft. and therefore, the rate of Rs. 225 per sq. ft. agreed to between the parties for purchase of the suit land was more than the market rate for such land, it may be seen that the rates of properties maintained by the above authority or officers for the purposes of checking evasion to stamp duty upon transfer deeds are not pursuant to the provision in any statute, relating even to stamp duty. At any rate it cannot be a basis for determination of the market value for acquisition of for compulsory purchase of any land where the usual test is of a prudent buyer and a prudent seller determined by the evidence of sale transaction, if available in the vicinity, of the land in question whose market rate is to be determined possessing the same or more or less similar advantageous features. This is the view taken by the Supreme Court in the case of Jawajee Nagnatham v. The Revenue Devisional officer [1994] 2 JT (SC) 604; AIR 1994 SCW 2852. The submission on behalf of the petitioners

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

based upon the rates of properties maintained by the Sated Government for the purposes of checking evasion of stamp duty on transfer deeds cannot, therefore be accepted. 4.8.9 In view of the above, firstly, the AO ought to have given opportunity of cross examination to the appellant. Secondly, the AO should have brought evidence having direct nexus with the alleged on money payment of Rs. 30,00,000/-. Thirdly, the additions made by the AO are on assumption and presumption basis. Fourthly, the loose papers were found in possession of Shri Yashovardhan Jain and not from appellant. Fifthly, the statements were recorded by the then ADIT who was not appropriate jurisdictional officer. My findings are based on the findings given in above mentioned paras. Thus, keeping in view the above discussion and judiciously following the decision of Hon’ble Supreme Court in the case of Krishinchand Chellaram (supra), the AO was not justified in making addition of Rs. 30,00,000/-. Thus, addition made by the AO amounting to Rs. 30,00,000/- is Deleted being on the basis of statement recorded behind the back of appellant and no meaningful opportunity of cross examination was provided. Therefore, appeal on this ground is Allowed.” 99. Against this order of the Ld. CIT(A), the department is in

appeal. Ld. Counsel for the revenue, during the course of hearing,

submitted that the Ld. AO was justified in making the addition. He

referred to the statements of Shri Narayan Singh and Shri Jairam

Singh and contended that the order of Ld. CIT(A) may be set-aside

and the addition made by the Ld. AO may be restored.

assessee had purchased the land for Rs. 6,33,18,000 from Shri 125

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Narayan Singh and Shri Jairam Singh. The purchase was duly

recorded in the books of the assessee. All the payments were made

by cheque. No evidence was found during the search showing any

on-money. In the post search inquiries, the seller, Shri Narayan

Singh and Shri Jairam Singh, for reasons best known to them

stated that on money was paid Rs. 30,00,000. This statement was

not corroborated by bringing any material on record. Further, Ld.

AO did not grant opportunity of cross-examination of these persons.

He therefore contended that the mere statement of third persons,

therefore, cannot be relied on for making the addition.

Lower authorities and the evidences on record. We find that Ld.

CIT(A) was justified in deleting the addition. At the first instance, no

incriminating material was found during the course of search. The

addition in search cases, shall be limited to incriminating material

found during the course of search. The transaction for purchase of

land was duly recorded in the books. It was only in the statement

recorded later on, after the search, the fact of on-money was stated.

Secondly, cross-examination of the sellers was not granted by the

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Ld. AO. The statement of the sellers cannot be relied as cross-

examination was not granted. Thirdly, there is no corroborative

material, brought on record, except the statement of the sellers. In

these circumstances, we find merit in the finding of Ld CIT(A) which

is duly supported by various decision squarely applicable on the

instant issue and thus hold that the addition cannot be sustained.

This Ground no. 7 of the Department’s appeal for A.Y. 2011-12

is therefore dismissed.

expenditure covered in Ground no. 8 of A.Y. 2011-12, Ground No.

10 of A.Y. 2012-13, Ground No. 12 of A.Y. 2013-14 amounting to

Rs. 79,22,875; Rs. 70,08,192; and Rs. 6,39,49,728 respectively.

assessee company had booked expenditure towards purchase of

sand, building material and for certain job works from M/s. Maa

Mahima Traders, M/s. S.K. Contractors and M/s. Lake City

Suppliers P Ltd. The expenditure were done during the A.Y. 2011-

12 to A.Y. 2013-14. The details of expenditure done party-wise were

as under:- 127

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Name & Address of party A.Y A.Y A.Y 2011-12 2012-13 2013-14 Lake City Suppliers Pvt Ltd, 0 0 60,083,427 Flamingo 21, Aakriti Eco city, Bhopal Maa Mahima Traders, C-171, 39,33,900 70,08,192 38,66,301 Rajat vihar, Hoshangabad Road, Bhopal S.K. Contractor, E-6-J-222, 39,88,975 0 0 Asha Niketan, Arera Colony, Bhopal Year wise total 79,22,875 70,08,192 6,39,49,728

the aforesaid parties and concluded that the whereabouts of these

parties could not be ascertained. In respect of M/s. Lakecity

Suppliers Pvt Ltd., Ld. AO stated that it is a non-descript entity,

and had no real economic existence. In the assessment order, Ld.

AO referred to the visit by Inspector and he stated that as per the

Inspector’s report, no such party was found at the address of the

aforesaid party. The neighbours informed that, premises was on

rent and it was informed that a family resides at the premises. Also,

Ld. AO referred to the statement of Shri Verghese Joseph, owner of

the premises, to contend that the same was not given on rent to

M/s. Lake City Suppliers Pvt Ltd. In respect of M/s. Maa Mahima

Traders, Bhopal, Ld. AO referred to Inspectors report and

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

contended that no such party resided at the given address. Instead

the house was residential house and it was locked everytime

Inspector visited. As enquired from the neighbours, some students

resided there on rent, and they used to come during late evening

and leave the premises early in the morning. Lastly, in respect of

M/s. S.K. Contrator, Bhopal, Ld AO again referred to Inspector’s

report and stated that no such party resided at the address. The

premises was occupied by one family for last 7-8 years. The

statement of owner of the premises Smt. Malti Gaur was also

recorded, and denied to have known M/s. S.K. Contractors. Ld. AO

therefore made the addition treating the expenditure as bogus.

before the Ld. CIT(A). Ld. CIT(A) deleted the addition at page nos.

169 to 171 of his order, holding as under:

“4.9.5 I have considered the facts of the case, various case, law replied upon by the appellant and findings of the AO. The appellant during the year FY 2010-11 has purchased send material of Rs. 39,33,900/- from M/s Maa Mahima Traders and plaster work was done by M/s SK Contractor of Rs. 39,88,975/-. The AO during assessment proceedings deputed Inspector of Income Tax in order to unearthing correct facts regarding that transaction made with these parties. The Inspector of Income Tax visited the address of

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

these parties as provided by the appellant, however, was not able to trace either of them. Therefore the AO required assessee to explain the transaction and produce these sellers for examination on oath. The AO has alleged that appellant failed to prove genuineness as well as during appellant proceedings has filed copies of bills and vouchers, supporting ledger account, part bank account statement of these parties, PAN No, TIN No, TDS certificate, name and address and mobile No of these parties. 4.9.6 It is important to mention here that the AO in para 25.6 (i) of assessment order has stated that “none of the three parties have responded to the summons issued by this office for verification of the transaction with the assessee company.” This statement of AO prime-facia shows that the summons were served upon these parties, however, they deliberately did not responded for whatever reason. Thus, the AO has continuously harped upon the fact that the assessee failed to produce the impugned parties for examination on oath. Hon’ble Supreme Court in the case of LIC of India v/s CIT (1996) 216 ITR 410 (SC) has held that the law does not compel a man to perform. In the present case, it was impossible for assessee to produce the parties who are not willing to appear before the AO. Law does not expect a man to do impossible. I find it suitable and appropriate to quote decision of Hon’ble Bombay High Court in the case of CIT vs. Nikunj Exirnp Enterprieses (P) Ltd. [2013] 216 Taxman 171 (Bom.) which is very similar to the case of appellant wherein it has held that where sales supported the purchases and payment was made through banks, merely because suppliers has not appeared before AO, the purchase could not be treated as bogus. 4.9.7 Nevertheless, the AO has grossly erred in making addition simply of the basis of guess work, assumption and presumption. It is well settled that no disallowance can be made as a leap in the dark. The AO is not entitled to make a guess without evidence. The assessment of any particular year cannot be based on mere suspicion or bare guess, but on a legitimate

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

material from which a reasonable inference of any expenditure being of the disallowable nature could be drawn and that the initial burned of finding such material is on the AO as held by Hon’ble High Court Orissa in the case of Bansidhar Onkarmall Vs. CIT (1953) 23 ITR 353 (Orissa). Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v/s CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, still assessment cannot be made on the basis of imagination and guess work. It has been held in the case of Umacharan Saha & Bros co. V/s CIT 37 ITR 21 (SC) that suspicion, however strong cannot take place of evidence. Similar views have been expressed by Apex court in the case of Dhiraj Lal Girdharilal v/s CIT (1954) 26 ITR 736 (SC). Also, once the assessee has discharged its onus of proving that the parties under consideration are genuine, now the ball lies in the court of AO to prove that the claim of appellant is false and incorrect. Further, the AO has neither done any independent enquiry even when PAN No, TIN No, bank account statement of these parties were provided to AO. Thus, in view of the above, the AO was not justified in disallowing payments to various parties simply on the basis of assumption, presumption and surmise basis. The AO ought to have brought on record any clinching evidence which could prove that the payments were brought on record made against bough bills and vouchers. Thus, keeping in view the various case laws cited above, the addition made by the AO amounting to Rs. 79,22,875/- is Deleted. Therefore, appeal on this ground is Allowed.”

Similar findings were given in A.Y. 2012-13 and A.Y. 2013-14.

appeal. Ld. Counsel for the revenue referred to the Assessment

Order and submitted that detailed inquiries have been done by the 131

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Ld. AO. The reports of the Inspector and the statement of the owner

of the premises clearly establish that the parties are non-existing.

The addition made by the Ld. AO may therefore be confirmed.

order of the Ld. CIT(A). He contended that the purchases from the

parties were duly verifiable. He submitted the following chart.

M/s. Maa Mahima Traders M/s. S.K. Contractor Lake City Suppliers Pvt. Ltd Prop: Tularam Chouhan Prop: Zakir Hussain Flamingo-21, Aakriti Eco City, C-171,Rajat Vihar, Hoshanagabad E-6, J-298, Asha Niketan , Arera Bhopl. Road, Bhopal Colony, Bhopal R.N. Sahu & Praveen Misra Contact No. 9630707251 Contact No. 9507516087 Contact No. ,998103138 PAN : - AAUPH9884R PANo.AACCL2144H PAN: -AIHPC0618D TIN - 23924008615 TIN. 23839046908 TIN - 23273606568 Purchase of 50% shares of the company is proved by seized paper

Nature of Sand supplier Plaster work and other job work. Building material supplier transaction (mainly Iron & Cement) Assmt. year 2011-12 2012-13 2013-14 2011-12 2012-13 2013-14 2011-12 2012-13 2013-14 Addition 3933900 7008192 3866301 3988975 - - - - 60083427

TDS deducted TDS not applicable 11474 TDS certificate and copies of a/c of S.K. Contractor in the books of the appellant for A.yrs.2011-12 to 2013-14 are enclosed. Evidences to prove PB 1060-1154 PB 1155-1196 PB 1444-1509 transaction Ld. Counsel for the assessee submitted that the transactions with

the above parties were duly recorded in the books. The payments

were made by cheques. The same were duly reflected in the bank

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

accounts of the assessee and also in the bank accounts of those

parties. He stated that for the expenditure, the assessee had given

following evidences:

(a) Address (as available with assessee) (b) PAN (all were income-tax assessees and their address on record of Income-tax department was same) (c) Telephone Nos. (d) Nature of expenditure (e) VAT Registration No. (f) Payments were subjected to TDS (g) All payments were through banking channels. (h) TDS Certificates (i) Bank accounts of parties and of assessee. (j) Ledger of assessee in their books and cross-accounts.

He further submitted that Ld. AO’s reliance on the Inspector’s

report and the statement u/s. 131 is bad in law, as the same were

never brought on record. Copy of the same were not provided and

no opportunity of cross-examination was granted. He therefore,

submitted that these evidences cannot be relied on. He further

referred to the statement of Shri Hemant Soni, CMD of the

company, as recorded during search, and later the affidavit filed by

him and contended that it has been submitted time and again that

the expenditure is genuine. He further submitted that the fact that

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

construction was done, has been verified and accepted by the

department during search and no discrepancy has been found in

the same. He therefore submitted that these grounds of the

department may be dismissed.

parties and the order of the Ld. Lower authorities. Issue of

disallowance of expenditure deleted by Ld.CIT(A) is for adjudication

before us. At the first instance, the primary evidences in support of

the transactions in the form of PAN and TIN of the parties were

available, bank statements, bills etc were on record and these

transactions were already recorded in the books, before the search

was conducted. No evidence whatsoever has ever been stated by the

department to have been found out during the course of search to

show that the expenditure was bogus. Secondly, Ld. AO referred to

the report of the Inspector during the assessment. However, the

said Inspector’s report was never brought on record. Even in the

Department’s Paper Book before us, the same has not been filed. If

such report is available, why the department has never brought the

same on record. Similarly, the statement recorded on oath of Shri

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Verghese Joseph and Smt. Malti Gaur has never been brought on

record. In the absence of the same, the reliance of the Department

on these evidence is uncalled for. If the department intended to use

any evidence against the assessee, it was incumbent on the

department to provide the copy of the same to the assessee and

allow assessee to rebut the same. The Ld AO failed to do so. Thus,

these evidences cannot be used against the assessee. Thirdly, we

notice that a search was conducted at the premises of the assessee.

No discrepancy was found in the work done. Rather the department

got the valuation done by the Registered Valuer and later by the

DVO. The department on one hand contended that work done was

more as disclosed in the books; but on the other hand, they are

doubting the expenditure towards work done. The stand of the

department is contradictory and inconsistent. We therefore in

absence of any concrete evidence placed before us the Revenue

authorities and also since Learned Departmental Representative

being unable to disprove the evidences filed by the assessee to

support of genuineness of expenditure, find no merits in the action

of Ld AO making disallowance of expenditure. Thus no interference

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd. is called for in the finding of Ld.CIT(A) . In the result, Ground no. 8 for A.Y. 2011-12; Ground No. 10 for A.Y. 2012-13; and Ground No. 12 for A.Y. 2013-14 of the Revenue’s appeals are dismissed.

is as under:

“Q30. इन �ोजे�ट म� �या आपक� क�पनी �वारा on money (on accounted receipt) भी �लये जाते है। य�द हो थो इसके बारे म� जानकार� द�।

मेर� क�पनी के अंतग�त �व�भ�न �ोजे�ट चल रह� है। इसम� से कुछ residential है। एवं चुक� ये �ोजे�ट ब�क �व�भ�न �ल�डं�स ब�क �वारा supported अतः customers �वारा इसनका पूण� भुगतान चैक �वारा ह� करता है। इसम� �कसी तरह क� on money क�पनी को �ा�त नह�ं होती है । मेर� क�पनी का एक �ोजे�ट आ���त हाई लै�ड भी �नमा�णाधीन है। 136

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

िजसमे �लाट एवं आवासीय इकाइय� का �नमा�ण हो रहा है। मै यह भी जानकार� देना चाहता हूँ। �क इस �ोजे�ट �क से इकाइय� �क �व�भ�न ब�को �वारा supported है। इसम� भी �कसी तरह क� on money नह�ं ल� जाती है। मै यह जानकार� देना चाहता हूँ �क हाई लै�ड �ोजे�ट �क �लाट (भू- ख�ड) के �व�य के समय बहुत थोड़ा सा on money �ा�त होती जो कभी कम तथा कभी �यादा होता है ओर मेर� समझसे यह 5% से 10% के बीच होना चाइये यह 5% से 10% �लाट �क वा�त�वक �ब�� मू�य का होता है” Based on this categorical admission and the discrepencies found

during the course of search, Ld. AO added 10% of the total sale

proceeds of Highland Proceeds of Highland project as on-money

receipts. The addition, inter-alia was made as under: -

A.Y Total sales On-Money @ value of Plots of 10% of sales Highland Project 2011-12 15,64,32,831 1,56,43,283 2012-13 26,77,17,714 2,67,71,771

before the Ld. CIT(A). The assessee contended that, in the Highland

project, there were sale of Land as well as sale of constructed

properties. The categorical statement during search stated only

about the on-money in respect of sale of ‘land’. During the A.Y.

2011-12 and A.Y. 2012-13, there was no sale of land in the

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Highland project. Considering the same, the Ld. CIT(A) deleted the

addition holding as under:-

4.10.2 I have consideration the facts of the case, written submission filed by the appellant and finding of the AO. During the course of search statement of Shri Hemant Soni was recorded on oath wherein he has stated that on money of 5-10% was received on Sale of Plots of project Highland. The relevant extract of statement of Shri Hemant Soni is as under:- From the above the above statement it is very clear that Shri Hemant Soni has only admitted on money on sale of plots and not for sale of flats/duplex of project Highland. However, the AO erred in presuming that on money @ 10% has been received on entire project. Now the main question which arise from the above finding is that whether any Plot was sold in FY 2010-11 relevant AY 2011-12 in project High Land. In this regard , appellant was required to file chart showing sale of plots of project Highland. Appellant in compliance has filed chart showing sale of plots of project highland along with affidavit of Shri Hemant Soni. The details filed by the appellant are as under:-

A.Y. Total sales of On-money @ Onmoney recd plots of 7.5% on sale of @ 7.5% as per Highland Plots as per appellant (sic appellant Peroject as per – Profit on appellant same @ 5%) 2011-12 NIL 0 0 2012-13 NIL 0 0 2013-14 434081000 32556075 1627804

Thus, from the above it is very crystal clear that appellant company has not sold any plot in AY 2011-12, therefore, no on money would have been received by the appellant in AY 2011-12. Further the addition made by the AO was on 138

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

presumption basis because once the assessee has clearly narrated in his statement given on oath that he has received on money on sale of project then the AO has no locus to assume that on money was received on entire project. In view of the above discussion, the AO was no justified in making addition simply on guess work and presumption. It is settled legal principal that presumption how strong may cannot take place of evidence. Thus, the addition made by the AO amounting Rs. 1,56,43,283/- is Deleted, firstly, on account that no plot was sold by the appellant company during the year under consideration and secondly that the addition were made on presumption basis. Therefore, appeal on this ground is Allowed .” 112. Against this, the revenue is in appeal. The Ld. CIT(DR) relied

on the order of the Ld. AO and contended that the same may be

confirmed. On the contrary, the Ld. Counsel for the assessee

contended that there was no evidence except the statement of Shri

Hemant Soni. No material has been brought on record. He inter-

alia, contended that the categorical statement was made whereby it

was stated that on-money was received on the sale of ‘land’ in the

highland project. Since no land was sold in the highland project

during the year, no addition is called for in any case.

record. On a plain reading of the statement as reproduced above, it

is very clear that the acceptance in any case, was only in respect of

on-money received in respect of the sale of ‘land’ on the Highland 139

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

project. It is uncontroverted fact, that no sale of ‘land’ took place

during the A.Y. 2011-12 and A.Y. 2012-13. Thus, there exists no

basis for assessing on-money during the current years. We

therefore confirm the order of Ld. CIT(A) and dismiss the Ground

No. 9 for A.Y. 2011-12 and Ground No. 12 for A.Y. 2012-13 of the

revenue’s appeal.

for A.Y. 2012-13 relating to addition on account of unaccounted

receipts LPS A-2 of Rs. 68,50,000.

loose papers marked as LPS A-2 were found during the course of

search from the office premises of the assessee company. These

loose papers purportedly covered details of amount received from

the customers against the sale of units to them. In these loose

sheets, certain amounts were mentioned to be received in cash. On

verification for the same with the books of accounts, Ld. AO noticed

that the cash receipts were not recorded in the books. He therefore

added the cash receipts from the customers. In the current year,

Ld. AO added amount as under: 140

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Sl. No. Name of Cash Date of LPS/ Page customer Transaction Transaction no. 1. Shalini Jain 4,00,000/- 29.03.2012 A-2/33 2. Smt. Nirmala 20,00,000/- 30.09.2011 A-2/21 Chandra 3. Smt. 16,00,000/- 02.09.2011 A-2/17 Sadhana 4,00,000/- 09.09.2011 Tiwari 3,50,000/- 21.09.2011 Total: 23,50,000/- 4. Shri Vinod 4,00,000/- 15.09.2011 A-2/13 Semwal & 3,00,000/- 19.09.2011 Archana 6,00,000/- 29.09.2011 Semwal 5,00,000/- 30.09.2011 3,00,000/- 24.03.2012 Total Rs. 21,00,000

before the Ld. CIT(A). The Ld. CIT(A) after considering the evidences

and the law, deleted the addition on page 90 to 101, holding as

under:

The AO has made allegation against the assessee that the has received that he has received Rs. 68,50,000/- from various customer as mentioned on loose papers 13,17,21 & 33 of LPS-A-2 in cash. In absence of any admission by either of the customer/payer or any incriminating documents/paper to establish that assessee has received sum of Rs. 68,50,000/-. The assessee

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

has filed copy of ledger ledger account of these customer wherein it is seen that appellants has received advance from Smt Nirmala Chnadra, Smt Sadhana Tiwari Shri Vinod Semwal & Semwal of Rs. 50,000/- each through cheque and the same has been returned through cheque onlyt. The advance received from Smt. Shalini Jain of Rs. 28,00,000/- is still outstanding in books of account. Thus, the only inference which can be drawn from this is that the seized loose paper is nothing but represent rough workings/jottings/scribbling. It is settled legal position that onus of proof is on the person who makes any allegation and not on the person who has to defend. As per legal maxim “affairmanti non neganti incumbit probation” means burden of proof lies upon him who affirm and not upon him who denies. Similarly as per doctrine of common law “incumbit probation qui digit non qui negat” i.e. burden lies upon one who alleges and not upon one who deny the existence of the fact. The loose paper i.e. page13,17,21 & 33 of LPS-A-2 is rough working/jotting. The AO has filed to discharge his onus of proof especially when addition has been made under “deeming fiction”. In view of this lacune on the part of AO, impunged addition is legally not sustainable. As held in the case of CIT v/s KP Varghese 131 ITR 574 (SC) by Hob’ble Apex Court in absence of evidence that actually assessee paid more amount than declared in regarded deed, no addition can be made. In the case of Bansal Strips (P) Ltd. & Ors Vs. ACIT (2006) 99 ITD 177 (Del) it has been held that:- “If an income not admitted by assessee is to be assessee in the hands of the assessee. The burden to establish the such income is chargeable to tax is on the AO. In the absence of adequate material as to nature and ownership of the transactions, undisclosed income cannot be assessed in the hands of the assessee merely by arithmetically totally various figures jotted down on loosed documents”. 4.3.5 This is an undisputed fact that neither any incriminating material was found or seized during search proceedings nor the payer has ever

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

admitted about payment of Rs. 68,50,000/- On the contrary the advance received by the appellant was either due to cancellation or the same is duly reflected in books of account. In absence of any corroborative evidence to prove that there was any exchange of money by CASH, AO has no locus to assume that appellant has received Rs. 68,50,000/-. It is settled law that AO cannot make any addition merely on basis of suspicion, however strong it may be. The AO is not justified in presuming certain facts without having anything to corroborative. Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v/s CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, still assessment cannot be made on the basis of imagination and guess work. It has been held in the case of Umacharan Saha & Bros co. v/s CIT 37 ITR 21 (SC) that suspicion, however strong cannot take place of evidence. Similar views have been expressed by Apex Court In the case of Dhiraj Lal Girdharilal v/s CIT (954) 26 ITR 736 (SC). 4.3.6 In view of the above discussion, material evidences on record and case laws cited, firstly, the AO ought to have examined the customer in question from whom as alleged the impugned cash has been received. Secondly, the AO should have done independent enquiry regarding the impugned transaction. Thirdly, the loose paper or rather say it as dumb document should be a speaking one having direct nexus with the assessee and transaction mentioned therein, which was not in the case of appellant. Thirdly, the AO did not reject books of account of the appellant. Fourthly, neither the customer nor any of the partner of appellant has ever stated that such transaction actually occurred. Last but not the least, the impugned loose papers were not found in possession of the appellant. My findings on the said issue under consideration are based on the various conculsions drawn by me which have been discussed in the above paras. Therefore, the AO was not justified in making addition of Rs. 68,50,000/- being on sheer

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

assumption and presumption basis. Thus, the addition made by the AO amounting to Rs. 68,50,000/- is Deleted. Therefore appeal on this ground is Allowed.” 117. Against these findings of Ld. CIT(A), the revenue is in appeal.

Ld. Counsel for the revenue relied on the order of Ld. AO and

submitted that the loose sheets were found from the office of

assessee company. Cash receipts were duly recorded in the loose

sheets, which could not be verified from the books. Thus the

addition ought to have been confirmed. On the contrary, Ld.

Counsel for the assessee submitted that in respect of alleged

amount received from Smt. Nirmal Chandra, Rs. 20,00,000; the

booking had already been cancelled and the amount was refunded

to her. The books showing the cancellation are at PB 1339-1340.

Thus in any case, since the booking had been cancelled and the

amount refunded, no income in fact arose to the assessee. Similarly

in case of Smt. Sadhana Tiwari, Rs. 23,50,000; the booking was

cancelled. Cancellation is at PB 1333-1334. Further in case of Shri

Vinod Semwal & Smt. Archana Semwal, Rs. 21,00,000; the booking

had been cancelled and amount refunded PB 1336-1337. It was

therefore submitted that in these cases, since the income was not

booked from these parties and the entire amount was refunded, in 144

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

any case, no addition could be made. Further, Ld. Counsel for the

assessee submitted that these all LPS are some computer generated

sheets and are unsigned. The maker of the document is unknown

and for what purpose same were made are unknown. Had the Ld.

AO any doubt as to the amount received from the customers, he

could have enquired the facts from the customers. Ld. AO did not

do so. Further, the assessee submitted that the amount received

from Smt Shalini Jain was a booking advance. Therefore, even if the

amount is treated as unaccounted, it can be taxed in the year in

which the income is booked on mercantile basis. He therefore relied

on the order of Ld. CIT(A) and contended that the order of Ld. CIT(A)

be confirmed.

and the arguments of the parties. We find that the assessee is

correct in contending that in respect of amount received from Smt.

Nirmala Chandra, Smt. Sadhana Tiwari and Shri Vinod Semwal and

Smt. Archana Semwal; the amount received, if any was refunded as

the booking was cancelled. We therefore have no doubt in

confirming the order of the Ld. CIT(A) and dismissing the ground of

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

revenue in respect of these three parties. So far as the amount of

Rs. 4,00,000/- alleged to be received from Smt. Shalini Jain, we

find that in the loose sheet found from the office premises of the

assessee, Rs. 4,00,000 it was clearly mentioned as received in cash.

Analysis of the paper established that the assessee has received this

amount from Smt. Shalini Jain. This amount of Rs. 4,00,000 ought

to be treated as unaccounted receipt of the assessee. We therefore

confirm the addition of Rs. 4,00,000 as done by the Ld. AO, and to

this extent the order of Ld. CIT(A) is reversed. However, we notice

that assessee have not booked income from sale of this unit in the

current A.Y. We therefore remand this issue to the file of Ld. AO to

verify as to when the income from sale of unit has been booked in

the case of Smt. Shalini Jain and add the amount in the hands of

assessee in that year.

allowed for statistical purpose. Deletion of Rs. 64,50,000 by the Ld.

CIT(A) is accepted and balance amount Rs. 4,00,000 shall be

treated as income of the assessee in the year the sale of the unit to

Smt. Shalini Jain is treated as income.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

A.Y. 2012-13 relating to addition u/s. 40A(3) of Rs. 51,000.

submitted that assessee purchased 5.20 acres of agricultural land

from Shri Lakhan Singh and Smt. Shanti Bai for Rs. 2,57,40,000.

Out of this amount Rs. 51,000 was paid by cash as per the sale

deed. He took us to Paper Book page 1343, whereby in the sale

deed Rs. 51,000 was paid by cash. Ld. Counsel for the assessee, on

the other hand, stated that entire amount of Rs. 2,57,40,000 was

paid by cheque. The same is clear from the ledger in the books of

assessee at PB 1363-1365. Ld. Counsel submitted that although it

was mentioned that Rs. 51,000 would be paid in cash in the sale

deed, but no amount was paid in cash. Ld. Counsel further referred

to the affidavit of the sellers placed at PB 1369 and contended that

since there was no non-compliance of the section 40A(3), no

disallowance was called for.

on record. The fact that Rs. 51,000 was paid in cash was mentioned

in the sale deed. This resulted in confusion, and therefore addition. 147

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

However, the fact can very well be verified from the ledger account

that entire amount was paid by cheque. Further, the affidavit of the

sellers support this fact. No addition is therefore called for. We

therefore confirm the order of Ld. CIT(A) on this ground and

dismissed Ground No. 4 of department’s appeal for A.Y. 2012-13.

Department’s appeal for A.Y. 2012-13 (Rs. 1,16,60,000) and

Ground No. 10 of Department’s appeal for A.Y. 2013-14 (Rs.

4,00,000). These grounds relate to addition on account of

unexplained expenditure as per Loose papers LPS 1/2 page no. 69-

71.

the course of search and seizure, at the residential premises of Shri

Yashovardhan Jain, General Manager (Finance) of the assessee

company, a loose paper titled as “New Land at Phanda” was found.

The same was marked as LPS 1/2 page no. 69 to 71. This was a

computer generated ledger noting whereby certain amount was

stated to be paid and received. Ld. AO noted that on being

confronted, Shri Hemant Soni could not explain the entries 148

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

contained therein. Further, some persons named therein were

identified and called and their statements on oath had been

recorded. They had accepted on-money. Ld. AO on the basis of

same, held that the same represents on-money paid by the assessee

in respect of purchase of land at Phanda. He therefore added Rs.

1,16,40,000 in A.Y. 2012-13 and Rs. 4,00,000 in A.Y. 2013-14.

Ld. CIT(A). Ld. CIT(A) in his order, deleted the addition, discussing

the issue at page 163 to 175 of his order,

Similar findings were given in A.Y. 2013-14.

appeal. Ld. Counsel for the revenue submitted that during the

course of search at the residential premises of the General Manager

(Finance), Shri Yashovardhan Jain were also searched. At his

residence, loose paper LPS 1/2 page 69 ot 71 was found, which

contained a ledger account of cash paid for the purchase of land at

Phanda. Thus, loose paper contains the details of payment made.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

He therefore relied on the detailed findings of the Ld. AO in this

regard.

the document was not found from the premises of the assessee

company. The same was found from the residence of Shri

Yashovardhan Jain. The said document was a computer sheet,

which was unsigned in a ledger form. It was unknown as to who

created it and for what purposes it was made. He further contended

that most of the entries in the said document were dumb, it was

mentioned as to “CASH PAID THRU M D SIR”; but to whom cash

was paid and for what purposes was unknown. Ld. Counsel further

submitted that the entries made in the loose sheet were not

corroborated and no effort was made to correlate these entries with

any unaccounted payment as alleged. Ld Counsel further

contended that the Ld. AO adopted an approach of pick and choose

and choose some entries for making the addition while ignored

other entries. The basis for such pick and choose was unknown. He

therefore contended that the document found was a mere dumb

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

document and the entries in the document were not corroborated

by the revenue with any document.

the orders of the Ld. Lower authorities. The document marked as

LPS 1/2 page 69 to 71 was found during the course of search at the

residence of Shri Yashovardhan Jain, General Manager (Finance) of

the assessee company. However, no enquiry was ever brought on

record as to who was the maker of the document, for what purposes

it was made. The entries in the document were incomplete. It was

unknown to whom cash was paid. The entries in any case could not

be corroborated by bringing any material on record. It is also

unknown as to why Ld. AO adopted a pick and choose method and

added some entries while not making addition on other entries. In

any case, in respect of on-money payment for purchase of land at

Phanda, Ld. AO has already made addition in respect of 27

registries found and the same shall be dealt by us in subsequent

paras. In respect to the purchase of land, separate discussion is

made in respect of the statements of the parties. The entire

approach of making addition based on this document seems to be

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

uncalled for. We therefore are in full agreement with the following

finding of Ld. CIT(A) (relevant extract):

4.9.2 I have consideration the plea raised by the appellant and findings of the AO. It is seen that loose paper i.e. page no. 69 to 71 of LPS-1/2 was found in possession of Shri Yashovardhan Jain. The impounded paper i.e. page no. 69 to 71 of LPS-1/2, contain details of cash payment for purchase of new land of Phanda, is a document which is not signed by appellant or its authorized representative and contain some rough nothing/jottings. Appellant during appellate proceedings submitted that the AO relied upon the statement given by Shri Yashovardhan Jain and other sellers. The Sellers who has given statement under presume as retracted and has fuiled affidavit stating that no cash has been received from the appellant compant. This is admitted fact that statements of 21 sellers were recorded. This is also an admitted fact these statements were recorded behind the back of appellant. No opportunity of cross-examination was allowed to the assessee though specifically asked for by the assessee. It has been held by hon’ble Gujrat High Court in the case of DCIT V/s Mahendra Ambala Patel & CIT V/s Kantilalbhai Ravidas patel that statement has no evidentiary value if opportunity of cross-examination is not allowed. Besides this, genuineness of impunged loose paper. It was Shri Yashovardhan Jain who has to prove that hoe the transaction mentioned in the loose papers were executed. It is not understandable as to how independently and impartially, the AO could reach to final conclusion that on money amount totaling to Rs. 1,16,60,000/- was paid for purchase of land from different sellers without even bringing a single iota of positive avidence on record. Hence, the addition made by the AO was based on mere guses work, conjuctures and surmises which was no place in tax jurisprudence. In sum & substance, action of the AO is neither sustainable on facts nor in law, being based on either Third party

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

statement or statement sellers who lateron retracted from their statements by staing that statements given before AO were given under pressure.

4.9.6 In view of the above, firstly, the AO ought to have given opportunity

of cross examination to the appellant. Secondly, the AO should have brought

evidence having direct nexus with the alleged on money payment of Rs.

1,16,60,000/- for purchase of land. Thirdly, the addition made by the AO

are on assumption and presumption basis. Futher, the loose papers were

found in possession of Shri Yashovrdhan Jain and not from appellant.

Fifthly, statements of sellers/owners of lands were recorded, the appellant

has filed copies of their Affidavit, dully retracting their earlier statements

recorded by the AO, wherein they have denied receipt of any cash over and

above the amount as mentioned in registered sale deed. This has been held

by the Hon’ble Supreme Court in the case of Andaman Timber Industries

Vs. Commissioner of Central Excise Kolkata in Civil Appeal No. 248

of 2006 that in absence of cross-examination of parties, the assessment

proceedings to be quashed. My findings are based on the findings given in

above mentioned paras. Thus, keeping in view the above discussion and

judiciously following the decision of Hon’ble Supreme Court in the case of

kishanchand Chellaram (supra) & Andaman Timber Industries Vs.

Commissioner of Central Excise Kolkata (supra), the AO was not

justified in making addition of Rs. 1,16,60,000/- on deemed fiction and

without giving opportunity of cross examination to the appellant. Thus, the

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

addition made by the AO amounting to Rs. 1,16,60,000/- is Deleted.

Therefore appeal on this ground is Allowed..

We therefore dismiss ground no. 8 of Department’s appeal for A.Y.

2012-13 and Ground No. 10 for A.Y. 2013-14.

the department’s appeal whereby the department has challenged

the deletion of addition Rs. 1,77,65,000 in respect of LPS A-13

relating to on-money in respect of 21 registries found from the office

assessee-company and 6 registries found from the site office of

Aakriti Aqua City.

following lands from respective persons:

Name of farmers Land Serial Date of Regd. Market Addition Remarks situated No. sale sale value made by at and consider A.O. Area P .No. ation towards of Rs. unexplaine assmt. Rs. d order expenditure Amt. (Rs.

Smt. Rajshwari Deepdi S.No.6 26-07- 325100 3251000 2900000 Mukesh S/o. Anand Patwari 2011 0 patidar Rawat Halka P. No . s/o.shri

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Smt. Sonali Total 101 PB 1376- shivcharan W/o/Shri Mohit 0.81 1392 patidar power Kumar & hectre of attorney smt.Shano devi 2. 00 holder w/o. Hari acres recorded the Prakash Saxena statement that vill. Rapadia he received the. Huzur, Rs. 28,34000 Bhopal through in cash against power of two land attorney holder Mukesh Patidr /s. Shri /shivcharan Patidar Deep Singh Vikash Sl. No. 16-02- 243440 24344000 364000 Statement Khand 7 2012 00 recorded on Vill.. Phanda Phanda P.NO. 26-02-2015 . kalan Distt. 2.876he 101 PB 867- 7.10 acres Huzur, Bhopal cre 897 agri.land Rs. 7.10 3480000 per acres acre sold to AG8 ventures ltd

Shri Lakhan Gram Sl.No. 14.03.20 257400 25740000 51000 Shri singh S/o. shri Phanda 8 12 00 Lakhansinghs/ Kamla Singh Kalan P.No. o. Kamal singh Smt. Shanti Bai 2.108 102 PB 1393- admitted that W/o. Kamal hectre 1412 he received singh 5.20 Rs.51000 in acres cash . statement recorded o 26- 02-2015

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Smt. Mathri Bai Vill. Sl. No. 23-03- 710000 8100000 900000 Statement w/o Shankarlal Phand 9 2012 0 recorded by shri premnarayn kalan Rajmal s/o. shri Rajmal both The. PB 1413- Shankarlal on were s/o. Huzur, 1421 05-02-2016 Shankarlal Bhopal that he 0.810 received hectre 900000 in cash Rs. 51000 as advance and Rs. 849000 at the time of registry. 42,15,000

that on-money was paid by the assessee-company. He therefore

made addition of Rs. 1,77,65,000 in respect of on-money.

Ld. CIT(A). Ld. CIT(A) deleted the addition, observing as under at

page 191 onwards of his order:-

4.10.3 Due consideration is given to the submission filed by the appellant inter alia the evidence furnished. Let me first summaries the basis on which additions have been made by the AO. The AO ha solely relied upon statements recorded of seller or POA holder. The addition made by the AO are purely hypothetical and without any independent corroborative to the

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

appellant. The AO also did not provide opportunity of cross examination to the appellant. The AO has consistently harped on the statements of sellers. This is an admitted fact that statement of 21 were recorded behind the back of appellant. No opportunity of cross-examination was allowed to the assessee though specifically asked for by the assessee. It has been held by hon’ble Gujrat High Court in the case of DCIT V/s Mahendra AMbbalal Patel & CIT V/s Kantilalbhai Ravidas Patel that statement has no evidentiary value if opportunity of cross-examination is not allowed. Besides this, apparently the AO did not independently verified the facts about the genuineness of the said party as well as the impunged purchase transaction. It is not understandable as to how independently and impartially, the AO could reach to the final conclusion that on money amounting totaling to Rs. 1,77,65,000/- (correctly Rs. 42,15,000/-)was paid for purchase of land from different sellers without even bringing a single iota of positive evidence on record except the statement of farmers or POA holder which was also recorded behind the back of assessee. Hence, the addition made by the AO was based on mere guess work, conjuctures and surmises,which has no place in tax jurisprudence. In sum & substance, action of the AO is neither sustainable on facts nor in law, being based on Third party statement or sellers. 4.10.8 In view of the above, firstly, the AO ought to have given opportunity of cross examination to the appellant. Secondly, the AO should have brought evidence having direct nexus with the alleged on money payment of Rs. 1,77,65,000/- (correctly Rs. 42,15,000/-). Thirdly, the addition made by the AO are on assumption and presumption basis. Futher, the loose papers were found in possession of Shri Yashovrdhan Jain and not from appellant. Fifthly, statements were recorded by the then ADIT who was not appropriate jurisdictional officer. My findings are based on the findings given in above mentioned paras. Thus, keeping in view the above discussion and judiciously following the decision of Hon’ble Supreme court in the case

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

of Kishanchand Chellaram (supra), the AO was not justified in making addition of Rs. 1,77,65,000/- (correctly Rs. 42,15,000/-). Thus, addition made by the AO amounting to Rs. 1,77,65,000/- is deleted being on the basis of statement recorded behind the back of appellant and no meaningful opportunity of cross examination was provided. Therefore, appeal on this ground is Allowed.”

the revenue submitted that there were sufficient evidences in the

form of statement of the sellers to make addition for on-money

payments. He further submitted that the cash received by the

sellers were deposited in the bank accounts, and hence the

payment of on-money was corroborated. He therefore relying on the

Assessment order contended that the addition as made by Ld. AO

shall be confirmed.

the addition is uncalled for. At the outset, he submitted that the

addition made is Rs. 1,77,65,000; but the total of the on-money as

per the chart came to Rs. 42,15,000. Hence the balance addition

has no legs to stand. Now in respect of the addition of Rs.

42,15,000, he submitted that during the year the assessee

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

purchased land from four sellers. In respect of first seller Smt.

Rajeshwari w/o Shri Anamd Rai (addition Rs. 28,34,000), 2 acres of

land was purchased. Statement allegedly of one Shri Mukesh

Patidar was recorded. Ld. Counsel for the assessee took us to PB

1385 and submitted that it is unknown that it was statement of

Shri Mukesh Patidar or Shri Arjun Patidar as the same is not clear

from the statement itself. Further, he submitted that in either case,

neither Shri Mukesh Patidar nor Shri Arjun Patidar had any

relation with the transaction. Why ld AO choose not to record

statement of seller herself is unknown. Further, the fact of payment

of on-money was not corroborated. In respect of the second seller

Shri Deep Singh (addition Rs. 3,64,000), Ld. Counsel for the

assessee submitted that 7.10 acres of land was purchased by the

asssessee for Rs. 2,43,44,000. All the payments were made by

cheque. No incriminating material was found during the course of

search to show on-money. Subsequently, his statement was

recorded. He stated total consideration as correct i.e. Rs.

2,43,44,000; but stated amount received in cash Rs. 3,64,000 as

on-money. Thus, the statement itself was contradictory. Further,

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

the said statement was not corroborated by producing any bank

account as alleged by ld AO. In respect of third seller Shri Lakhan

Singh and Smt. Shanti Bai (addition Rs. 51,000), Ld. Counsel

contended that 5.20 acres of land was purchased from them. There

was no on-money payment and all the payment was by cheque and

duly recorded in the books. No evidence was found during the

course of search to show on-money. Subsequently, the statement of

the seller was recorded. The statement as available at Page 110 -

112 of the Assessment Order does not refer to any on-money

payment. How the Ld. AO arrived at this figure is unknown.

Further, an affidavit of the seller was also filed to establish that

there was no on-money. In respect of the fourth seller Smt Mathri

Bai w/o Shri Shankarlal, Shri Rajmal and others (addition Rs.

9,00,000), it was submitted that 2 acres of land was purchased by

the assessee for Rs. 71 lakhs. All the payments were by cheque and

the transaction was duly recorded in the books. No evidence was

found during the course of search to show any on-money.

Subsequently, statement of only one seller, Shri Rajmal was

recorded. In his statement, he wrongly mentioned that Rs. 9,00,000

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

was received in cash as on-money. However, later-on he filed an

affidavit denying to have received any on-money. Ld Counsel lastly

submitted that the Ld. AO contended that the bank statements

were given by the sellers to show that amount was deposited in

their bank. No such bank statements were ever brought on record.

The same is not filed in the Department’s paper book also. It was

therefore contended that such bank statement, if any, cannot be

relied on.

recorded and orders of the Ld. Lower authorities. At the outset, it is

noted that the Ld. AO made addition of Rs. 1,77,65,000. However,

the basis for making such addition is not clear. The total of addition

as per the Ld. AO himself shall comes to Rs. 42,15,000. Thus

balance addition is baseless. Now in respect of addition for on-

money, we notice that during the course of search, 27 registries

were found. The transactions mentioned therein were duly recorded

in the books. No evidence showing on-money was found. Thus, in

the proceedings u/s. 153A r/w section 143(3), no addition can be

made in respect of on-money payment. The addition therefore is not

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

sustainable. In any case, we observe that the addition is not

justified. In respect of purchase of land from Smt. Rajeshwari,

statement of Shri Mukesh Patidar and Shri Arjun Patidar who are

not connected with the transaction would be futile. Further, in

respect of Shri Deep Singh, there is an apparent contradiction in

his statement, as at one place he is stating the total consideration

at Rs. 2,43,44,000 as recorded in books and paid by cheque, but on

the contrary he stated that Rs. 3,64,000 was paid in cash as on-

money. In respect of Shri Lakhan Singh and Smt. Shanti Bai, there

is no confession of on-money in the statement available on record.

In respect of Smt. Matri Bai, Shri Rajmal and others, the confession

of on-money was later retracted by the seller himself. It is a settled

law that the statement of third parties, which are not corroborated

cannot bind the assessee. No corroborative evidence has been

brought on record to show on-money. Ld. AO stated that amount

was deposited in the bank by the sellers; but why such bank

statements were not brought on record and confronted to the

assessee. At this stage also, no such bank statements were

produced. We therefore are fully in agreement with the findings of

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Ld. CIT(A) and therefore confirm the order of Ld. CIT(A). In the

result, Ground No. 9 of the Department’s appeal for A.Y. 2012-13 is

hereby dismissed.

Departments’ appeal for A.Y. 2012-13 relating to addition of Rs.

15,00,000 in respect of unaccounted cash transactions with Shri

Vishnu Gupta.

course of survey u/s. 133A at the premises of the assessee

company in August 2013, a document LPS 16 page 42 was found.

This document was a computer generated document and related to

purchase of one flat “AR 01 302 DL”. As per the Ld. AO, a

consultancy fees of Rs. 10 lakhs was credited by the assessee

company in the memorandum ledger relating Shri Vishnu Gupta,

who acted though his company, M/s. VSP Consultants P Ltd.

Further, on 17.09.2011, it has been mentioned that Rs. 5,00,000 in

cash “Has been paid”. Thus, ld AO contended that assessee

company has received Rs. 15,00,000 from Shri Vishnu Gupta

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

acting though his company M/s. VSP Consultants P Ltd. He

therefore added Rs. 15,00,000 in the hands of the assessee.

Ld. CIT(A). Ld. CIT(A) deleted the addition at page nos. 205 to 208,

holding as under:

“4.12.3 I have considered the facts of the case, written submission filed by the appellant and finding of the AO. During the course of survey page no. 42 of LPS-16 was impunged from business premises of appellant. This impunged loose paper is an unsigned copy of ledger account of M/s VPS Consultants P. Ltd. M/s VPS Consultant has booked a flat in the name of his direct Shri Vishu Gupta at project Aster Royal of appellant company on 20.04.2011 for a total sale price of Rs. 51,00,000/-. Shri Vishnu Gupta is a financial consultancy to the appellant company from past many years. When the consultancy work got completed M/s VSP Consultants P. Ltd a company of Shri Vishu Gupta raised bill of Rs. 62,92,160/- on the assessee company for consultancy services being provided by Shri Vishnu Gupta. Further, Shri Vishnu Gupta issued two cheques of Rs. 1,00,000/- and Rs. 5,00,000/- to the appellant company for purchased of flat as mentioned above, the same fact is also narrated account of Shri Vishnu Gupta in the books of appellant. Thereafter, sum of Rs. 11,00,000/- was received by the appellant from Shri Vishun Gupta on 28.12.2011 out of which Rs. 6,00,000 was returned back through RTGS on 28.12.2011. Further, sum of Rs. 6,00,000/- & 5,00,000/- were also returned on 24.07.2013. Thus, the entire receipt from Shri Vishnu Gupta were return back by appellant as the fact at project Aster Royal was purchase by Shri Vishnu Gupta. Appellant during appellant proceedings has strongly contended that cash amounting to Rs.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

5,00,000/- was neither received nor paid by the appellant to M/s VSP Consultants P. Ltd. Appellant has also submitted that the AO has only relied upon the impunged unsigned rough paper found during the course of survey, without having any corroborative evidence on record showing payment/receipt of chash of Rs. 5,00,000/-. Appelant in support has placed reliance on the decion of Hon’ble Supreme Court in the case of CBI vs VC Shukla (1980) 3 SCC 410 wherein it has been held that loose cannot be considered as books. 4.12.4 On considering the entire factual matrix of the issue, inter-alia submissions filed by the appellant I reach to a conculsion that the additions made by the AO are on presumptive belief that sum of Rs. 5,00,000/- was received by appellant from M/s VSP Consultants P. Ltd. As discussed above, all the amount received by the appellant from Shri Vishnu Gupta was retuned back by appellant because the flat was not purchased by Shri Vishnu Gupta. Therefore, no prudent will pay huge sum of Rs. 5,00,000/- for no reason to the appellant company. A bill was raised by M/s VSP Consultants P Ltd. for consultancy services provided by team to the appellant of Rs. 51,00,000/- on 14.02.2004 for total agreegate professional consultancy charges of Rs. 62,92,160/-. The appellant has paid entire amount of consultancy charges to Shri VPS Consultants P. Ltd. throught cheques. 4.12.5 It is important to mention here that flat which was earlier proposed to be purchased by Shri Vishnu Gupta was lateron purchased by his wife Smt Sunita Gupta. All the payments were made through cheques on different dates, therefore, on cash was also paid by Smt Sunita Gupta. Thus, the only inference which can be drawn on this impunged loose paper is that, the AO has made addition under deemed fiction and without having any corroborative evidence on record which could establish that there was exchange of cash for purchase of flat by Shri Vishnu Gupta/ M/s VPS Consultants P. Ltd. Hon’ble Supreme Court in the case of CIT v/s KP

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Varghese 131 ITR 547 (SC) has held that in absence of evidence that actually assesse paid more amount than declared in registered deed, no addition can be made. It is settled law that AO cannot make any addition merely on basis of suspicion, however strong it may be. The AO is not justified in presuming certain facts without having anything to corroborative. Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v/s CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, still assessment cannot be made on the basis of imagination and guess work. It has been held in the case of Umacharan Saha & Bros co. v/s CIT 37 ITR 21 (SC) that suspicion, however strong cannot take place of evidence. Similar views have been expressed by Apex Court In the case of Dhiraj Lal Girdharilal v/s CIT (954) 26 ITR 736 (SC). It is also very important to point out that neither the seller nor the buyer has ever admitted that sum of Rs. 5,00,000/- was paid/received. Thus, in view of the above discussion, I find no merit in the addition made by the AO on the basis of assumption and presumption and without any corroborative evidence on record having direct nexus with the impunged recipt/payment. Further as per the impunged loose paper or rather say dum document sum of Rs. 10,00,000/- represents recipts and sum of Rs. 5,00,000/- represents payment, however, the AO has treated the payment to be recipt. 4.12.6 In view of the above, the addition made by the AO on account of assumption and presumption basis and in absence of any congent evidence amounting to Rs. 15,00,000/- is Deleted. Therefore, appeal on this ground is Allowed.”

appeal. During the course of hearing, Ld. Counsel for the revenue 166

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

took us to the Assessment order in the case of Shri Vishnu Gupta,

and referred to the loose paper found. He contended the fact of the

receipt was mentioned in the loose paper and therefore, such

unexplained receipt ought to be added.

the correct fact of the transaction is that Shri Vishnu Gupta was a

financial advisor to the assessee-company and has been providing

financial consultancy to the assessee company from past many

years. When the consultancy work got completed, M/s. VSP

Consultants P Ltd a company of Sh. Vishnu Gupta raised bill of Rs.

62,92,160 on the assessee company for consultancy services being

provided by Sh. Vishnu Gupta. Further, Shri. Vishnu Gupta issued

two cheques for purchase of flat. The same fact is also narrated in

the ledger of Sh. Vishnu Gupta in the books of assessee. Thereafter,

sum of Rs. 11,00,000 was received by the appellant from Sh.

Vishnu Gupta on 28.12.2011 out of which Rs. 6,00,000 was

returned back through RTGS on 28.12.2011. Further sum of Rs.

6,00,000 and Rs. 5,00,000 were also returned on 24.07.2013.

Thus, the entire receipt from Sh. Vishnu Gupta were returned back

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

by assessee as the flat at project Aster Royal was not purchased by

Shri Vishnu Gupta. These tansactions were through banking

channels; further there was no on-money receipt from Shri Vishnu

Gupta. The booking of flat infact got cancelled and therefore this

amount was returned back. It was submitted that, later on the flat

was purchased by wife of Shri Vishnu Gupta, and the payment for

same was made by cheques. There was no evidence to establish any

cash receipts from Shri Vishnu Gupta.

the order of Ld. Lower authorities. During the course of survey at

the premises of the assessee-company, page no. 42 of LPS-16 was

found from business premises of appellant. This impunged loose

paper is an unsigned copy of ledger account of M/s VPS

Consultants P. Ltd. On consideration of the facts on record, it is

clear that M/s VPS Consultants P Ltd. has booked a flat in the

name of his Director Shri Vishu Gupta at project Aster Royal of

appellant company on 20.04.2011 for a total sale price of Rs.

51,00,000/-. Shri Vishnu Gupta was a financial consultant to the

appellant company from past many years. When the consultancy

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

work got completed M/s VSP Consultants P. Ltd a company of Shri

Vishu Gupta raised bill of Rs. 51,00,000 plus service tax totalling to

Rs. 62,92,160/- on the assessee company for consultancy services

being provided by Shri Vishnu Gupta. The payment of consultancy

fees was made later on by banking channel. Since huge consultacy

fees was due to Shri Vishnu Gupta during the period, instead of

insisting on the payment, a credit in advance used to be given,

anticipating the professional fees. So far that amount received for

booking of flats was concerned, same was received by banking

channels and the same was returned by banking channels when

the booking was cancelled. Consultancy fees was also paid by

cheque. The same facts are also narrated by Shri Vishnu Gupta.

There was no cash receipt from Shri Vishnu Gupta. In the given

facts, we therefore confirm the findings of Ld CIT(A). This ground of

the revenue is therefore rejected.

A.Y. 2013-14 relating to addition of Rs. 1,20,00,000 as

unaccounted receipts under LPS 1/2 page no. 68.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

course of search at the residential premises of Shri Yashovardhan

Jain, a computer printed sheet was found. It was written in the

sheet “Cash Bhopal” against various dates as “Dr” and amounts

were written on credit side of this document. The total of this sheet

was Rs. 1,20,00,000. Ld. AO contended that since the document

was found at the residence of General Manager (Finance), Shri

Yashovardhan Jain and the said document could not be explained,

hence he added Rs. 1,20,00,000.

Ld. CIT(A). Ld. CIT(A) deleted the addition, at page 71-92 by detailed

findings as under:

“4.3.2 I have considered the factual matrix of the case, written submissions filed and assessment order. During the course of search page nos 68 & 54 of LPS- ½ were found from residential premises of Shri Yashovardhan jain, employee of the appellant company. The impunged loose paper 68 of LPS – 1/2 , scanned on page no 32 of assessment order, is a unsigned ledger account with title ‘AG8’ and loose paper 54 of LPS – 1/2 , scanned on page no 35 of assessment order, is a document containing details of ‘details collection for march 13’. The AO has alleged that both the impunged loose papers represent unaccounted receipts and pertains to the appellant company. However, appellant has strongly contended that both has been

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

held by the Hon’ble Supreme Court in the case of During the course of search statement of Shri Yashovardhan Jain was also recorded on oath wherein he was also confronted with these loose papers. Shri Yashovardhan Jain submitted that there loose papers belongs to M/s AG8 Venture Ltd. and he is unaware of fact whether these are entered in the books of account. On the contractry appellant has strongly contended that no opportunity of cross examination was given by the AO to the appellant and no person/employee is allowed to take any document to his house. I find force in the contentions of the appellant that no proper and meaningful opportunity of cross examination was provided to the appellant. This is also as admitted fact that statement of Shri Yashovardhan jain was recorded behind the back of the appellant. No opportunity of cross-examination was ever allowed to the assessee. This has been held by the Hon’ble Supreme Court in the case of Andaman Timber Industries Vs. Commissioner of Central Excise Kolkata in Civil Appeal No. 248 of 2006 that in absence of cross-examination of parties, the assessment proceedings to be quashed. Further, the Hon’ble Gujarat High Court in the case of Praful Chunilal Patel Vs. Makwana [236 ITR 832 (Guj )] and JCIT & Ors. Vs. George Willimson (Assam) Ltd. [258 ITR 126 (Guj)] has held that statement of third party cannot be relied upon without having any corroborative evidence. Similarly, Hon’ble Supreme Court in the case of kishanchand Chellaram V/s. CIT 125 ITR 713 (SC) bhas held that adverse inference cannot to drawn against the assessee from the statement of third parties. Similarly, Ld. AR of the assessee has relied upon decision of jurisdictional High Court in the case of CIT V/s. Indrajit Singh Suri (2013) 33 taxmann 281 (Guj.) that where additions were addition were made on the basis of statement of persons who were not allowed to be cross examined by the appellant, addition were not sustainable.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Since, the impunged loose papers 68 & 54 of LPS-1/2 were found in possession of Shri Yashovardhan Jain, the appellant cannot be blamed to be owner of the transaction. After considering the entire factual matrix and evidence/material on record inter alia written submission filed, I reach to conclusion that impunged addition was made on the basis of assumption and presumption which neither sustainable on facts nor in law. The appellant was also not given any opportunity of cross examination. Appellant during appellate proceedings has strongly contented that appellant did not receive any such cash and the impunged loose paper represent rough working by employee of other unknown person. Further, the AO has also failed to bring on record any cogent evidence, creating direct nexus of receipts of impunged cash as alleged by the AO. Therefore, in absence of any cogent evidence having direct nexus with the impunged transaction, the said impungad paper i.e. page no 68 & 54 of LPS-1/2 cannot be used against the assessee. 4.3.5 This is an undisputed fact that neither any incriminating material was found or seized during search proceedings nor Shri Yashovardhan Jain has ever admitted about receipt of Rs. 1,20,00,000/- and Rs. 1,04,88,000/- by the appellant in cash. On the contrary, no incriminating document was found suggesting receipt of cash as mentioned on these impunged loose papers. In absence of any corroborative evidence to prove that there was any exchange of money by CASH, AO has no locus to assume that appellant has received sum of Rs. 1,20,00,000/- and Rs. 1,04,88,000/-. Furher, the AO has also alleged that amounts mentioned under column ‘B’ represents unaccounted receipts and assessee has also admitted onmoney in project High land. However, the AO failed to explain elaborately whether these payments are related to project Highland or some other project. Further, the onmoney received in project has already been confirmed vide para 4.13 of this order of this order. Nevertheless, It is settled law that AO cannot make any addition merely on basis of suspicion, however strong it may be. The

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

AO is not justified in presuming certain facts without having anything to corroborative. Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v/s CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, still assessment cannot be made on the basis of imagination and guess work. It has been held in the case of Umacharan Saha & Bros co. v/s CIT 37 ITR 21 (SC) that suspicion, however strong cannot take place of evidence. Similar views have been expressed by Apex Court In the case of Dhiraj Lal Girdharilal v/s CIT (954) 26 ITR 736 (SC). 4.3.6 In view of the above discussion, material evidence on record and case laws cited, firstly, the AO ought to have provided opportunity of cross examination of Shri Yashovardhan Jain. Secondly, no incriminating material was found during the course of search suggesting receipt of case as per impunged loose paper. Thirdly, the AO should have brought some independent evidence suggesting exchange of cash of Rs. 1,20,00,000/- and Rs. 1,04,88,000/-. Fourthly, none of the loose paper under 54 & 68 of LPS-1/3 were found in possession of Shri Yashovardhan Jain and not in possession of appellant. Fifthly, none of the loose paper under consideration is signed by the appellant or any of its authorized representatives. Sixthly, the impunged loose paper should be speaking ne without having any second interepration, which is not in the case of appellant. My findings on the issue under consideration are based on the various conclusions drawn by me which have been discussed in the above paras. Therefore, the AO was not justified in making addition of Rs. 1,20,00,000/- & Rs. 1,04,88,000/- being on sheer assumption and presumption basis. Thus, the addition made by the AO amounting to Rs. 1,20,00,000/ & Rs. 1,04,88,000/- are Deleted. Therefore appeal on this ground is Allowed.”

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

before us. Ld. CIT(DR) submitted that Shri Yashovardhan Jain was

General Manager (Finance) of the assessee company. At his

residence the document was found. The document showed “Cash

receipts” on different dates, totalling to Rs. 1,20,00,000/-. The

same was unexplained, and hence the Ld. AO was justified in

making the addition.

the document was a printed sheet. It was unsigned and it was

unknown as to who created it and for what purposes it was created.

The document was found from the residence of Shri Yashovardhan

Jain and if he was unable to explain the same, how it can be

deemed to be the unaccounted receipts of the assessee company.

Further, the entries therein are mere dumb, only date is written and

“Cash Bhopal” is written. It is not even clear whether it was cash

balance, cash received or cash paid. Who received it, from whom it

was received, for what purposes the cash was received, if any, was

never enquired. Ld. Counsel for the assessee therefore submitted

that the entries in these documents were inconclusive. He relied on

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

the order of Ld. CIT(A) and contended that the Ld. CIT(A) was

justified in deleting the addition.

authorities and the facts on record. We find that a document was

found with the heading “AG8 Bhopal” at the residence of Shri

Yashovardhan Jain. This document contained certain entries

against particular dates mentioning “Cash Bhopal”. How Ld. AO

alleged the same to be cash receipt could not be comprehended.

Whether this represents cash receipt or payment or cash balance is

also not clear. The document can at best be said to be a dumb

document in absence of any enquiry by the Ld. AO. We find that

once such document was found from the premises of one employee,

Ld AO ought to have enquired as to the contents of the documents.

Ld. AO merely choose to make his own conclusions. Going by the

verison of the Ld. AO himself, it cannot be known as to cash was

received from whom and for what purposes. We therefore are in full

agreement with the finding of Ld CIT(A) deleting the addition

holding the said document as a dumb document.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

appeal deserves to be rejected.

appeal for A.Y. 2013-14 amounting to Rs. 1,04,88,000 relating to

unexplained money marked as LPS 1/2 page 54.

search at the residence of Shri Yashovardhan Jain, a computer

printed document titled as “Daily collection sheet” was found. The

document contained certain notings related to March 2013 and had

two columns A & B. In this sheet, date wise entries from 1st March

to 17th March were made. Amount in column A was 785.7 and

amount in column B was 104.88. Ld. AO concluded that ‘B’ denotes

unaccounted and therefore treated this as unaccounted received of

the assessee company.

CIT(A) discussed this addition alongwith addition for LPS 1/2 page

68, and deleted the addition. The findings of Ld. CIT(A) are

reproduced alongwith Ground No. 2 of A.Y. 2013-14 above.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

parties made similar submissions as made in Ground No. 2 above.

Ld. Counsel for the assessee further submitted that the name of

assessee company was nowhere written on this document. This

document was not found from the possession of assessee company.

Therefore, Ld. AO could not have co-related this document with the

assessee company.

Lower authorities and the facts on record. The document, LPS 1/2

page no. 54 was not found from the office of assessee company. It

was found from Shri Yashovardhan Jain, who was an employee of

assessee company. There was no mention on this document that it

is related to assessee. It is a computer generated sheet, which is

unsigned. The maker of this document is unknown and the purpose

for which it was made was unknown. This document, even if related

to the assessee company, cannot be correlated with any

unaccounted cash receipts. Certain figures were written on this

document as A and B. How Ld. AO concluded that these figures are

in lakhs is unknown. Further, it cannot be correlated as to from

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

whom it was received, for what purpose it was received, if any. No

enquiry whatsoever was conducted by the Ld. AO. This document

may raise a suspicion that there is some ‘B’ part, but this suspicion

had to be established by certain corroborative evidences to be

produced by the department to establish this allegation. No inquiry

as to who created it, what was the purpose, from whom it was

received, how the figures are in lakhs has been done. Are these

estimates of receipts or actual receipts, if any. In the present

situation, the document remains a mere dumb document and no

addition can be made on same. We are in agreement with the Ld.

CIT(A) that this dumb document cannot be a basis for making

addition in the hands of the assessee. We therefore dismiss Ground

No. 3 of the Department’s appeal for A.Y. 2013-14.

appeal for A.Y. 2013-14 (Rs. 1,28,64,700) and Ground No. 3 of

Department’s appeal for A.Y. 2014-15 (Rs. 5,40,06,795) which

relate to unaccounted receipts. Further, Ground No. 5 of

Department’s appeal for A.Y. 2013-14 (Rs. 55,24,697) and Ground

No. 4 of Department’s appeal for A.Y. 2014-15 (Rs. 7,12,72,179)

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

relate to unaccounted investments. This all grounds are related to

document LPS 1/2 page no. 14 to 23 found during the course of

search.

during the course of search at the residence of Shri Yashovardhan

Jain, loose sheet LPS 1/2 page no. 14 to 23 were found and seized.

This sheet was a computer generated sheet. The columns therein

were Sr. No., date, name, narration, Dr., Cr. And remark. There

were 477 entries in the sheet. The column date was empty.

However, against certain entries date were written in handwriting.

Ld. AO concluded that the entries on the debit side related to

unaccounted investments and added the same. Further, entries on

the Credit side related to unaccounted receipts and therefore he

added the same.

Ld. CIT(A). Ld. CIT(A) at pages 105 to 116 of his order, deleted the

addition, holding as under:

“4.4.2 After considering the entire factual matrix and evidence/material on record inter alia written submissions filed, I reach to conclusion that

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

impunged addition was made on the basis of assumption and presumption which neither sustainable on facts no in law. The AO has reached to conclusion that appellant received Rs. 1,28,64,700/- as unaccounted receipts and has made payment of Rs. 55,24,697/- as unaccounted investment. Appellant during appellate proceedings has strongly contented that appellant never received/paid any such amount which are duly audited u/s 44AB of the Act. The loose papers under consideration are the same which were found durng the course of survey in August 2013. The AO found that the documents represent unaccounted cash receipt/unaccounted investment of the appellant company. However, appellant has contended that neither such amount was received by the appellant nor was paid, infact, the loose papers were found from possession of Shri Yashovardhan Jain who has left company of the appellant. Appellant has also placed reliance on the decision of Hon’ble ITAT Mumbai in the case of Straptex (India) Pvt. Ltd. 84 ITD 320 (Mum) wherein ithas been held that the presumption u/s 132(4) is applicable only against the person from whom possession the books of account or other documentary evidence were found and not against any other person. These documents have been scanned on page 38 to 48 of assessment order. On A plain and cursory look would make it amply clear that this paper is relating to “some ledger account statement various customers”. Appellant has argued that the said transaction has never taken place through appellant. Further the AO failed to establish direct nexus as to when the amount was received/paid by appellant company and from whome amounts were received and to whom amounts were paid, the AO has also failed to bring on recorded any cogent evidence, creating direct nexus of receipt of Rs. 1,28,64,700/- and payment of Rs. 55,24,697/- by the appellant. Therefore, in absence of any cogent evidence having direct nexus with the impunged transaction, the said impunged papers i.e. page nos 14 to 23 of LPS-1/2 found from possession of Shri Yashovardhan Jain cannot

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

be used against the assessee. These loose papers are rough jotting/scribbling and rough jottings without direct nexus with the assessee cannot be used against him.

The AO has made allegation against the assessee that the has received that he has received Rs. 1,28,64,700/- and Rs. 55,24,697/- was paid as per details mentioned on loose paper 14 to 23 of LPS-1/2. In absence of any of the person as mentioned on imunged loose paper, Shri Yashovardhan Jain or either of the director of appellant company or any incriminating document/paper to establish that assessee has received sum of Rs. 1,28,64,700/- and has made payment of Rs. 55,24,697/-. In fact these loose papers were found from possession Shri Yashwardhan Jain in his statements stated his these papers are of his one of the client, whose books were written by him. It is settled legal position that onus of proof is on the person who makes any allegation and not on the person who has to defend. As per legal maxim “affairmanti non neganti incumbit probation” means burden of proof lies upon him who affirms and not upon him who denies. Similarly as per doctrine of common law “incumbit probation qui digit non qui negat”. i.e. burned lies upon one who alleges and not upon one who deny the existence of fact. The AO has failed to discharge his onus of proof especially when addition has been made under “deeming fiction”. In view of this lacune on the part of AO, impuned addition is legally not sustainable. As held in the case of CIT v/s KP Varghese 131 ITR 574 (SC) by Hon’ble Apex Court in absence of evidence that actually assessee paid more amount than declared in registered deed, no addition can be made. In the case of Banasal Strip (P) Ltd. & Ors Vs. ACIT (2006) 99 ITD 177 (Del) it has been held that:- “If an income not admitted by assessee is to be assessed in the hands of the assessee, the burden to establish the income is chargeable to tax is on the AO. In the absence of adequate material as to mature and ownership of the

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

transactions, undisclosed income cannot be assessed in the hands of the assessee merely by arithmetically totally various figures jotted down on loosed document” 4.4.5 This is undisputed fact that neither any incriminating material was found or seized during search proceedings nor the payers has ever admitted about receipt of Rs. 1,28,64,700/- and payment of Rs. 55,24,697/-. In addition, the AO did not make any independent enquiry about the payers of the unaccounted receipts/payment and has made all allegations on the appellant. Hon’ble Supreme Court in the case of LIC of India v/s India v/s CIT (1996) 216 ITR 410 (SC) has held that the law does not compel a man to perform the act which he cannot possibly perform. In the present case, the documents were found in possession of appellant. It is Shri Yashovrdhan Jain who has to explain the entries on these impunged loose paper and cannot put baseless allegation on the appellant. In absence of any corroborative evidence to prove that these was any exchange of money by CASH/Cheque/Kind, AO has no locus to assume that appellant has received Rs. 1,28,64,700/- and made payment of Rs. 55,24,697/-. It is steeled law that AO cannot make any addition merely on basis of suspicion, however strong it may be. The AO is not justified in presumption certain facts without having anything to corroborative. Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v/s CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, still assessment cannot be made on the basis of imagination and guess work. It has been held in the case of Umacharan Saha & Bros co. v/s CIT 37 ITR 21 (SC) that suspicion, however strong cannot take place of evidence. Similar views have been expressed by Apex Court in the case of Dhiraj Lal Girdharilal v/s CIT (1954) 26 ITR 736 (SC). 4.4.6 In view of the above discussion, material evidences on record and case laws cited, firstly, the AO ought to have done independent enquiries

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

from whose as alleged the appellant has received such amounts. Secondly, Shri Yashovrdhan Jain should have been examined and should have been loose papers. Thirdly, the loose paper or rather say it as dumb document should be a speaking one having direct nexus with the assessee, which was not in the case of appellant. Forthly, no incriminating material was found during the course of search relating to the impunged receipts. Fifthly, the loose papers are undated and unsigned. My findings on the issue under consideration drawn by me which have been discussed in the above paras. Therefore, the AO was not justified in making addition of Rs. 1,28,64,700/- as unaccounted cash receipt and Rs. 55,24,697/- as unaccounted investment. Thus, the addition made by the AO amounting to Rs. 1,28,64,700/- & Rs. 55,24,697/- are Deleted. Therefore appeal on these grounds is Allowed.” Similar findings were given in A.Y. 2014-15 by the Ld. CIT(A).

Ld. Counsel for the revenue submitted that during the course of

search at the residence of General Manager (Finance), Shri

Yashovardhan Jain, these loose sheets were found marked as LPS

1/2 page 14 to 23. The loose sheets contained the details of

expenses/ investments made and the details of receipts. These

transactions could not be verified from the books of the assessee-

company. The story of the assessee that this document was just a

typed version of what was found during the course of survey is a

cooked up story. Thus, the addition was clearly called for. 183

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

submitted that the facts of this document are that a loose paper

(LPS 1-9) was found during the course of survey in Aug. 2013 at the

office of the assessee-company. This paper was handwritten rough

noting. It was found from the bag of one employee Reeta Shrivastav.

Copy of the said document is placed in the Written Submission as

Annexure 1 at pages 201-215. It was not clear whether these are

receipts or payments. In many cases, dates were not mentioned.

The figures ranged from 1 to 10,00,000. At that time, statement of

Reeta Shrivastav was recorded and she said that the said document

relates to some rough notings related to assessee-company. Later,

the department required the assessee to get the said document

typed, with increased two or three zeros as per the will of the IT

authorities. Transactions were classified as payment or receipts.

The typed version of the said loose papers with some more zeros

were found during search at the residential premises of

Yashvardhan Jain. This was marked as LPS 1/2 page 14-23. This

fact was brought to the notice of the Ld. AO and he accepted this

fact during the assessment. Ld. Counsel for the assessee referred to

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

pages 2147 and 2150 of the Paper book. He tried to compare

Annexure 1 (Page 1 to 9 found during the survey) and LPS ½ page

14-23 to demonstrate that the entires therein are same, except 2-3

zeros. He further submitted that analysis of the said document

clearly demonstrates that the document is dumb document. The

approach of adding 2 or 3 zeros in some cases and adding on zeros

in some cases is totally ad-hoc. He further submitted that the

classification of Dr. and Cr. is also totally ad-hoc. Salary has been

written on receipt side. Further, in most entries dates are not

mentioned, particulars are not mentioned, work is not mentioned.

Ld. AO simplisiter added the figures mentioned in the sheet without

corroborating any single entry therein. He therefore contended that

the addition is uncalled for.

Lower authorities and the evidences on records. On going through

the paper found during the course of survey u/s. 133A which is at

page 201 to 215 of the Written submission filed by the assessee and

the LPS 1/2 page 14-23 as placed at PB 1593-1611; we find that

the document found during the survey was a handwritten

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

document. There was no classification of amount received or paid.

Further, it was just a rough scrubbling made by one employee. The

document found during the course of search at the residence of

Shri Yashovardhan Jain were computer generated, containing the

same entries. However, in this classification was done, and further

against only a very few entries some dates were written. In many

entries 2 or 3 zeros were added. As submitted by learned counsel

for the assessee that it seems that Shri Yashowardhan Jain was

trying to compile the jottings found during the course of survey for

filing reply to the Income-tax Department explaining the entries

therein. Before he could have complied the same, this half worked

document was found at his premises during the search. Assessee

infact brought this fact, in the knowledge of Ld. AO. But the Ld. AO

merely ignored this fact Ld. AO did not consider it proper to verify

any transaction out of the said sheet, but merely added the figures

in the hands of the assessee. The document LPS 1/2 page 14 to 23

in our view is a mere dumb document and nothing else, considering

the fact that the same is just a half worked compilation of loose

sheet found during survey u/s. 133A. Most transactions are

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

undated; in many cases the parties or narration are not written.

How such a document can be made a basis for making addition,

moreover when the entries therein were not corroborated by the

department. We therefore are in full agreement with the findings of

the Ld. CIT(A) on this issue.In the result, the Ground No. 4 and 5 of

Department’s appeal for A.Y. 2013-14 and Ground No. 3 and 4 of

Department’s appeal for A.Y. 2014-15 are hereby dismissed.

A.Y. 2013-14 amounting to Rs. 8,50,000 relating to unaccounted

receipts under LPS A-2 page no. 21. The addition relating to the

unaccounted receipts are in respect to LPS A-2 page no. 21 relating

to Smt. Nirmal Chandra Rs. 5,00,000 for the current year; and LPS

A-2 page 13 in respect of Shri Vinod Semwal & Smt. Archana

Semwal Rs. 3,50,000 relating to current A.Y. The issue is already

covered by our findings in relating to Ground No. 2 for A.Y. 2012-13

earlier. We therefore dismiss this ground of the revenue’s appeal.

Department’s appeal for A.Y. 2013-14 relating to disallowance u/s.

40A(3) of Rs. 60,000. 187

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

company purchased an agricultural land from one farmer Smt.

Resham Bai, at Gram Phanda. The land was purchased for Rs.

36,60,000. Out of the total consideration, an amount of Rs.

60,000/- only was made in cash. Ld. AO held that although the

transaction is recorded in the books, yet the expenditure of Rs.

60,000 was in contravention of section 40A(3) and therefore same

shall be disallowed.

CIT(A). Ld. CIT(A) held that the payment was made in cash as

demanded by the sellers. He held that the payment was made on

business expendiency and applied the judgment of Tribunal Indore,

in the case of Tirupati Construction vide ITA No. 522/Ind/2014

dated 14.07.2016.

revenue submitted that the payment is clearly in contravention of

section 40A(3) and therefore same was to be disallowed. Ld.

Counsel for the assessee however submitted that the transaction

was genuine and was duly recorded in the books. Further, he 188

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

contended that cash was required to be paid in the present case as

the same was demanded by the sellers. He relied on the judgment of

Gurdas Garg vs CIT in TS-5374-HC-2015(P & H) and further on

Tirupati Construction vs DCIT (Trib. Indore) copy of which was

placed at PB 373-399.

Lower authorities and the case laws relied on. We are not in

agreement with the contention of the assessee. We have already

accepted that the payment if made on business expediency is

allowed while discussing Ground no. 1 for A.Y. 2008-09 of the

department’s appeal. However, in the present ground, the assessee

is unable to satisfy the parameter of business expendiency. The

assesse had paid Rs. 36,60,000/- in total. However, he contended

that the seller was unaware of the assessee-company. Had that

been the case, entire payment would have been in cash. It is not

possible that for Rs. 36,00,000 the seller accepted the payment by

cheque and for balance Rs. 60,000/- he demanded that payment be

made in cash. We therefore allow this ground of appeal of the

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

department’s appeal and hold that the Ld. AO was justified in

making addition of Rs. 60,000 u/s. 40A(3).

2013-14 amounting to Rs. 1,34,78,580/- relating to unexplained

expenditure as per LPS 1/2 page no. 51.

course of search at the residential premises of the General Manager

(Finance) of the assessee-company, Shri Yashovardhan Jain, a loose

paper sheet marked as LPS 1/2 page 51 was found and seized. The

paper was computer generated and was titled “URGENT PAYMENT

REQUIRED”. Further, details of project/ party were mentioned at

Sr. No. 1 to 4 and amounts were mentioned respectively. A sub-

total of “Rs. 94.78580 lac” was made and later it was mentioned “5.

Mr. Naresh Bhantia (Paras Singh Bhantia) return of cash part 40.00

Lac Rs. 40.00 Lacs up to 10.03.13”. Ld. AO concluded that these

are the details of unaccounted payments, and he added both Rs.

94,78,580 as mentioned in Sr. No. 1 to 4 and also Rs. 40 ,00,000 as

mentioned in Sr. No. 5. Thus he made addition of Rs. 1,34,78,580/-

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Ld. CIT(A). Ld. CIT(A) vide his order, at page 135 to 145, deleted the

addition, holding as under(relevant extract):-

“4.7.2 I have considered the factual matrix of the case, written submission filed and assessment order. During the course of search page no. 51 of LPS ½ were found from residential premises of Shri Yashovardhan Jain, employee of the appellant company. The impunged document is title as ‘urgent payment required.’ On perusal of this loose paper, prime- facts it can be seen that it is relating to some requirement of founds. During the course of serach statement of Shri Yashwardhan Jain was also recorded on oath wherein he was also confronted with these loose paper belongs to M/s AG8 Ventures Ltd. On the contrary appellant has strongly contented that on opportunity of cross examination was given by the AO to the appellant. I find force in the contentions of the appellant that no proper and meningfull opportunity of cross examination was provided to the appellant. This is also an admitted fact that statement of Shri Yashvardhan Jain was recorded behind the back of the appellant. No opportunity of cross-examination was ever allowed to the assessee. This has been held by the Hon’ble Supreme Court in the case of Andaman Timber Industries Vs. Commissioner of Central Excise Kolkata in Civil Appeal No. 248 of 2006 that in absence of cross- examination of parties, the appellant proceedings to be quashed. Further, the Hon’ble Gujrat High Court in the case of Praful Chunilal Patel Vs. M.J. Makwana [ 236 ITR 832 (Guj.)] and JCIT & Ors. Vs. George Willimson (Assam) Ltd. [258 ITR 126 (Guj)] has held that statement of third party cannot be relied upon without having any corroborative evidence. Similarly, Hon’ble Supreme Court in the case of Kishanchand Chellaram V/s. CIT 125 ITR 713 (SC) has held that adverse inference cannot be drawn against the assessee from the statement 191

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

of third parties. Similarly, Ld. AR of the assessee has relied upon the addition decision of jurisdictional High Court in the case of CIT V/s. Indrajit Singh Suri (2013) 33 Taxmann 281 (Guj.) that where additions were made on the basis of statements of persons who were not allowed to be cross examined by the appellant, additions were not sustainable. Since, the impunged loose paper 51 of LPS-1/2 were found in possession of Shri Yashovardhan Jain, the appellant cannot be blamed to be owner and author of the said loose paper. After considering the entire factual matrix and evidence/material on record inter alia written submissions filed, I reach to conclusion that impunged addition was made on the basis of assumption and presumption which neither sustainable on facts nor I law. The appellant was also not given any opportunity of cross examination. Appellant during appellate proceedings has strongly contented that the loose paper clearly represents estimate for requirement of funds wahich may have been prepared by some unknown person/employee. Further, the AO failed to bring on record any cogent evidence having direct nexus with the impunged transaction, the said impunged paper i.e. page no 51 of LPS-1/2 cannot be used against the assessee.

4.7.5 This is an undisputed fact that neither any incriminating material was found or seized during search proceedings nor the payer has ever admitted about payment of Rs. 1,34,78,580/- by the appellant. In absence of any corroborative evidence to prove that there was any exchange ot money by CASH, AO has no locus to assume that appellant has made unexplained expenditure of Rs. 1,34,78,580/-. It is settled law that AO cannot make any addition merely on basis of suspicion, however strong it may be. The AO is not justified in presuming certain facts without having anything to corroborative. Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v/s CIT (1954) 26

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, still assessment cannot be made on the basis of imagination and guess work. It has been held in the case of Umacharan Saha & Bros co. v/s CIT 37 ITR 21 (SC) that suspicion, however strong cannot take place of evidence. Similar views have been expressed by Apex Court In the case of Dhiraj Lal Girdharilal v/s CIT (954) 26 ITR 736 (SC). 4.7.5 In view of the above discussion, material evidences on record and case laws cited, firstly, the AO ought to have provided opportunity of cross examination of Shri Yashovardhan Jain. Secondly, the AO should have examined the person whose names are mentioned on the loose paper. Thirdly, the AO should have brough some independent evidence suggesting exchange of cash of Rs. 1,34,78,580/-. Fourthly, the impubged loose paper 51 & of LPS-1/2 were found in possession of Shri Yashovardhan Jain and not in possession of appellant. Fifthly, the loose paper under consideration is signed by the appellant or any of its authorized representative. Sixthly, the impunged loose paper should be speaking one without having any second interepration, which is not in the case of appellant. Seventhly, the loose paper is undated, unsigned. My findings on the issue under consideration are based on the various conclusions drawn by me which have been discussed in the above paras. Therefore, the AO was not justifies in making addition of Rs. 1,34,78,580/- being on sheer assenting and presumption basis. Thus, the addition made by the AO amounting to Rs. 1,34,78,580/- is Deleted. Therefore appeal on this ground is Allowed.”

revenue submitted that the loose paper was found from the

premises of the General Manager (Finance) of the assessee

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

company. The document clearly mentioned that they are the details

of urgent payments. The documents mentioned the name of the

party/ projects and the amounts. Thus, the Ld. AO was justified in

making the addition based on this document.

this document which is a computer generated document is a rough

noting relating to some requirements of the funds for making

payment to the parties. The document itself speaks for itself that it

relates to requirements of funds. Further, he submitted it might

have been created by some employee to ensure that funds are

available with the assessee company to make payments. The maker

of the document and the purpose for which it was made is not

known. He further contended that no enquiry was made by the

department regarding the contents of the document from Shri

Yashowardhan Jain. He further submitted that in the first part of

the document, no date is mentioned. Merely name and amounts are

mentioned. In the second part, it is mentioned “Rs. 40 Lac upto

10.03.13”. It clearly shows that it is an estimate of fund

requirements. He strongly relied on the order of Ld. CIT(A).

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Lower authorities and the evidences on record. On going through

the alleged document, we find that this document does not relate to

payments made by the assessee but to the requirement of funds for

making payments. It seems to be some rough jottings anticipating

money to be receivable “up to 10.03.13” so that the urgent

payments could be made. There is no evidence on record that the

money was received or that the payment was made. The rough

notings on this document were never enquired by the Ld. AO. Once

the rough noting in this document is not corroborated, how it can

be used against the assessee. Even it was never enquired into, as to

who created this document and for what purposes it was made.

This document, as such is a mere dumb document. Out of the 5

entries, 4 entries are without any date. Further, the entry only

speaks of some amount to be returned upto 10.03.13. It is not clear

whether this amount was to be returned to the assessee or by the

assessee. Whether this amount was returned subsequently or not.

Same has not been enquired into. We therefore do not find any

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

infirmity in the findings of Ld. CIT(A) in treating this document as a

dumb document. Ld. CIT(A) was justified in deleting the addition.

dismissed.

A.Y. 2013-14 amounting to Rs. 1,00,000 in respect of LPS A-13

relating to on-money in respect of 21 registries found from the office

assessee-company and 6 registries found from the site office of

Aakriti Aqua City.

purchased following lands from respective persons:

LPS Name of farmers Situated at Registry Market Addition Remarks as per Hectre/acr amount value/colle made by A.O. e of agri. (Rs.) ctor rate A.O. land sold (Rs.) and date of registry A-19 Smt. Binda Bai Phanda 14,00,000 48,60,000 1,00,000 Shri Ramsingh 67 to w/o. Shri kalan 0.405 husband of Smt. 81 Ramsingh R/o. vill. hectre PB 1637- Binda Bai attended Kharkhedi Teh. 1.00acre 1665 on 11-04-2014 and Huzur, Bhopal 16.04.2012 recorded statement that the received Rs. 1,00,000 in cash

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

A- 20 1. Smt. Sarju Bai Phanda 8,13,08,000 8,13,08,000 2,00,000 Shri Narayan 125 to W/o. Shri Ratan 5.145 Singh and Devi 135 Singh hectre PB 1666- singh attended and 2. Shri Devi Singh 12.71acres 1707 statement recorded S/o Ratan Singh 07.05.2012 on 05/08-02-2016 3. Shri Narayan that they received Singh S/o. Shri Rs. 1,00,000 each Gurubaksh in cash A-31 1.Ram singh Phanda 3,77,00,000 3,77,00,000 1,00,000 Shri Chandra 186 to 2.Shri Chandra Kalan Singh attended 195 singh both are S/o. 1.549 PB 1708- and statement Bahgirath hectre 6.29 1746 recorded on 3.Shri Santosh acres 26.02.2015, that Kumar S/o. 14.05.2012 he received Rs. Chainsungh 1,00,000 in cash A- 19 1. Smt. Harkubai Phanda 1,66,72,000 1,66,72,000 Shri Bhagan Singh 46 to w/o. lat Shri Kalan and Smt. Soram 66 Gurubakash 1.549 PB 924- bai attended on 2. Sh. Bhagwan hectre 6.29 972 4/8-02/2016, they Singh acres admitted that all 3. Smt. Soram Bai 11.06.2012 the payments were 4.Smt. Sugan Bai received through D/o. Late cheques. Gurubakash singh A- 19 Smt. Phanda 2,70,12,000 3,08,04,000 4,50,000 Shri Abhjeet Singh 19 to Gendkuwar w/o. Kalan S/O. of Late Shri 45 Vikram Singh 2.416 PB 1747- late Shri hectre 5.79 1790 Gendkuwar acres recorded statement 24.07.2012 on 26.02.2015 that he received Rs. 4,50,000 in cash A-18 Shri Govind singh Phanda 1,75,20,000 2,12,76,000 5,00,000 Shri Govind Singh 01 to S/o. Sh. Kalan statement recorded 17 Shambulal 1.779 PB 973- on 26.02.2016 that hectre 4.40 1003 he received Rs.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

acres 5,00,000 in cash 13.09.2012 Total 13,50,000 Amount

Ld. AO relied on the statements of the parties and contended that

on-money was paid by the assessee-company. He therefore made

addition of Rs. 1,00,000 in respect of on-money.

Ld. CIT(A). Ld. CIT(A) deleted the addition as per the finding given at

pages 183 to 189 of his order, holding as under (extracted):

4.10.8 In view of the above, firstly, the AO ought to have given opportunity of cross examination to the appellant. Secondly, the AO should have brought evidence having direct nexus with the alleged on money payment of Rs. 1,00,000/- (correctly Rs. 13,50,000/-). Thirdly, the addition made by the AO are on assumption and presumption basis. Futher, the loose papers were found in possession of Shri Yashovrdhan Jain and not from appellant. Fifthly, statements were recorded by the then ADIT who was not appropriate jurisdictional officer. Sixthly, all the sellers except Smt Binda Bai filred affidavits stating that all the payments made for purchase of land are duly recorded in books of account. Most importantly, Shri Naryan Singh, Shri Devi Singh, Shri Chandra Singh, Smt Gendhkuwar and Shri Govind vide their affidavits which are on record has stated that the statement given before the Income Tax authorities was given under pressur. My findings are based on the findings given in above mentioned paras. Thus, keeping in

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

view the above discussion and judiciously following the decision of Hon’ble Supreme court in the case of Kishanchand Chellaram (supra), the AO was not justified in making addition of Rs. 1,00,000/- (correctly Rs. 13,50,000/-). Thus, addition made by the AO amounting to Rs. 1,00,000/- is deleted being on the basis of statement recorded behind the back of appellant and no meaningful opportunity of cross examination was provided. Therefore, appeal on this ground is Allowed. 176. Against this, the department is in appeal. Ld. Counsel for the

revenue contended that the Ld. AO was justified in making the

addition for on-money. He relied on the finding of Learned

Assessing officer.

supported the finding of Learned CIT (A) and submitted that

althougth the Ld. AO mentioned of on-money paid by assessee

company amounting to Rs. 13,50,000 in the chart at page 99 of

Assessment order, however he added Rs. 1,00,000 only during the

current year. The basis of this difference was unknown. The

registries were found at the premises of the assessee during the

course of search. No incriminating material showing any on-money

was found. The transactions mentioned in the sale deeds were duly

recorded in the books of accounts. All the payments were through

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

banking channels. Thus, no addition for on-money payment can be

made in these proceedings u/s. 153A r/w section 143(3).

Lower Authorities and the evidences on record. We find that the

very basis of the addition is some statements recorded of the sellers.

However, insipte of being asked for, Ld. AO did not provide an

opportunity to cross-examine the sellers. Thus, the statements of

the sellers cannot be relied on. Further, the statements are not

corroborated by bringing any material on record. A mere statement

of third person cannot bind the assessee, unless it is corroborated

by any evidence on record. Further, Ld. AO relied on the bank

statements of the sellers. However, bank statement of not even a

single seller was ever brought on record to establish that cash was

deposited in their bank accounts. Even in the Paper book filed by

the Department, same has not been filed. Thus, no reliance can be

placed on same. In respect of Smt. Bindabai, we cannot rely on

statement of her husband who was not a party to the transaction.

Further, there were contradictions in his statements also as pointed

by the Ld. Counsel for the assessee. In respect of Smt. Sarju Bai,

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Shri Devisingh and Shri Narayan Singh, both of them later denied

on affidavit that on-money was received. Thus their statement

simplicitor cannot be relied on. Similarly, in respect of Shri Ram

Singh, Shri Chandar Singh and others, Shri Chandar Singh later

denied to have receied on-money in affidavit. In respect of Smt.

Gendkunwar, statement of Smt. Gendkunwar was not recorded.

Her son’s statement would not have any evidentiary value. Further,

Smt. Gendkunwar filed an affidavit, stating that no on-money was

received by her. Thus, considering all the facts and circumstances

of the cases, we do not find any infirmity in the order of Ld. CIT(A).

In the result, this ground of the revenue is dismissed.

Department’s appeal for A.Y. 2013-14 (Rs. 10,00,000) and Ground

No. 8 of Department’s appeal for A.Y. 2014-15 (Rs. 40,00,000)

relating to unaccounted receipts from Shri Vishnu Gupta of M/s.

VSP Consultants P Ltd.

the course of survey u/s. 133A at the premises of the assessee

company in August 2013, a document LPS 16 page 39 to 42 was 201

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

found and impounded. These papers contained the details of

purchase of one flat Aster Royal 01/ 302 by Shri Vishnu Gupta. At

the bottom of page no 40 of LPS 16, it was written on hand sticker

“Pl credit Rs. 10 lacs to Aster of Mr. Vishnu Gupta” dated “09.06”.

Ld. AO concluded that on 09.06.2012 an amount of Rs. 10 lakhs

was received from Shri Vishnu Gupta against the purchase of the

flat. Similarly there was another hand sticker with a noting “Pl

credit Rs. 40.00 L to Aster of Mr. Gupta” dated “18.05.2013”. Ld.

AO concluded that on 18.05.2013, an amount of Rs. 40 lakhs was

received from Shri Vishnu Gupta against the purchase of flat. Since

both these receipts were not recorded in the books, Ld. AO added

Rs. 10 lakhs in A.Y. 2013-14 and Rs. 40 lakhs in A.Y. 2014-15.

Ld. CIT(A). Ld. CIT(A) in pages 203 to 206, deleted the addition,

holding as under:

It is also settled law that AO cannot make any addition merely on basis of suspicion, however strong it may be. The AO is not justified in presuming certain facts without having anything to corroborate. Hon’ble Supreme Court in the case of Djakeshwari Cotton Mills Ltd. v/s CIT (1954) 26 ITR775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, still assessment cannot be made on the basis of 202

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

imagination and guess work. It has been held in the case of Umacharan Saha & Bros co. v/s CIT 37 ITR 21 (SC) that suspicion, however strong court in the case of evidence. Similar views have been expressed by Apex court in the case of Dhiraj Lal Girdharilal v/s CIT (1954) 26 ITR 736 (SC). It is also very important to point out that neither the seller nor the buyer has ever admitted that sum of Rs. 10,00,000/- was paid/received. Thus, in view of the above discussion, I find no merit in the addition made by the AO on the basis of assumption and presumption and without any corroborative evidence on record having direct nexus paper sum of Rs. 10,00,000/- represent rough jottings/scribbling made by some preson/employee. 4.12.5 In view of the above, the addition made by the AO is no account of assumption and presumption basis and in absence of nay congent evidence having cirect nexus of receipt of Rs. 10,00,000/-. It is also important to mention that the flat which was proposed was not purchased by Shri Vishnu Gupta, therefore, no prudent person will pey huge sum of Rs. 10,00,000/- for no cause. Thus, the AO was not justified in treating rough jottings and scribbling as receipts of appellant, therefore, the addition amounting to Rs.10,00,000/- on this account is Deleted. Therefore, appeal on this ground is Allowed.” Similar findings were given in A.Y. 2014-15.

Counsel for the revenue submitted that LPS 16 page 39 to 42 were

booking form for the purchase of flat. Shri Vishnu Gupta booked a

flat Aster Royal 01/ 302. In this, clearly an advise of receipt of Rs.

10 lakhs and Rs. 40 lakhs from Shri Vishnu Gupta was recorded on

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

different dates. Therefore, Ld. AO was justified in making addition

of unaccounted receipts in the hands of assessee company.

finding of Ld. CIT (A) and submitted that the Ld CIT(A) was justified

in deleting the addition.

Lower authorities and the evidences on record. We find that apart

from a rough jotting “Pl credit Rs. 10 Lacs....” and “Pl credit Rs.

40.00 L.....” the Ld. AO has not relied on any other evidence to hold

that on-money was received from Shri Vishnu Gupta. This fact that

Shri Vishnu Gupta was provided financial services to assessee-

company and huge amount was payable to him is verifiable by the

fact that bill of Rs. 51 lakhs was raised by him for professional

services. After adding services-tax Rs. 62,92,160 was payable to

him. In such circumstances, insiting him to pay amounts in respect

of booking of flats would have been unjustifiable. The notings do

not state that any amount was received, but directs the staff to

credit amount. Had Ld. AO any doubt in respect of the noting, Ld

AO should have made enquiry as to who made this noting and what 204

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

did the noting interpreted. We therefore are in agreement with the

findings of Ld CIT(A) that the addition is uncalled for in the present

case. In the result the Ground No. 13 of the Department’s appeal

for A.Y. 2013-14 (Rs. 10,00,000) and Ground No. 8 of the

Department’s appeal for A.Y. 2014-15 are rejected.

A.Y. 2014-15 relating to Cash found of Rs. 14,77,100 at the

premises of assessee company.

course of search and seizure operation at the premises of assessee-

company, inter-alia, cash of Rs. 14,77,100 was found and seized.

Ld. AO treated the said cash as unaccounted and made addition in

the hands of the assessee.

Ld. CIT(A). Ld. CIT(A) deleted the addition at page 52 of his order,

holding as under:-

“4.2.2 I have considered the facts of the case, material evidence on record and findings of the AO. During the course of search cash amounting to Rs. 14,77,100/- was found in possession of appellant and Rs. 9,00,000/- from

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

possession of Shri Hemant Soni as claimed by the appellant. Initially, at the time of search Shri Hemant Soni was unable to explain the source of cash and also failed to furnish any documentary evidence in support of his claim. However, at the later stage the appellant has filed detailed explanation regarding the source and acquisition of the impunged cash. Appellant in support has filed copies of cash book from 01.01.2014 to 30.01.2014 before the AO and during the appellate proceedings appellant has filed details of opening and closing cash balance. On perusal of chart showing cash balance it was observed that cash balance as on 01.01.2014 was Rs. 73,93,343/- and closing cash balance as on 31.01.2014 was Rs. 75,01,959/0. Thus, the assessee has discharged its onus of proving that the cash found during the search was part of cash balance as per books of accounts. Now, the onus lies on AO to contradict the say of appellant and produce some or the other documentary evidence suggesting that the cash found during the search is not recorded in books of account, which the AO failed to do. Thus, the AO has no locus of making addition on account of cash found during the course of search being fully disclosed/recorded in books of accounts. It is also very important to mention here that appellant neither pointed out any specific defect in books of account of the appellant nor has rejected books of account of the appellant. Thus, the addition made by the AO amounting to Rs. 14,77,100/- is Deleted. Therefore appeal on this ground is Allowed.”

Counsel for the revenue submitted that during the course of search

cash of Rs. 14,77,100 was found from the assessee company.

Further, cash of Rs. 9,00,000 was found from Shri Hemant Soni,

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

CMD of the assessee-company. On being confronted, Shri Hemant

Soni was unable to explain the same. Therefore, the addition of Rs.

14,77,100 was made by Ld. AO. Ld. Counsel for the revenue

therefore relied on the findings of the Ld. AO.

search took place between 29.01.2014 to 02.02.2014. As on

31.01.2014, the cash in hand as per cash book was Rs. 75,01,959

and was very sufficient to explain the cash found. Further, he

contended that on 01.01.2014 also cash in hand was Rs.

73,93,343. He further referred to a chart showing cash in hand

reported on 31st march over different years, as under:

A.Y. Balance as Cash balance PB on as per audited accounts 2008-09 31.03.2008 45,62,297 PB 37 2009-10 31.03.2009 8,93,257 PB 64 2010-11 31.03.2010 11,59,956 PB 90 2011-12 31.03.2011 16,70,448 PB 165 2012-13 31.03.2012 5,10,000 PB 190 2013-14 31.03.2013 42,96,000 PB 233 2014-15 31.03.2014 17,83,000 PB 278

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

He therefore submitted that assessee company used to maintain a

sufficient cash balance. The cash in hand on the date of search was

therefore acceptable.

the Ld. Lower authorities. On a careful consideration of the facts,

we find that the cash in hand, as on the date of search is duly

explained. As per the cash chart submitted by the assessee for

transactions between 01.01.2014 to 31.01.2014, the cash in hand

on 31.01.2014 comes to Rs. 75,01,959. The cash receipts and

payments between 01.01.2014 to 31.01.2014 have not been

doubted by the department. Therefore cash found can be duly

explained from the cash balance existing with the assessee.

Further, assessee has submitted a chart showing month-wise cash

balance, and also the cash balance in the reported Balance Sheets

over different year. This shows that assessee was maintaining

sufficient cash balance round the years, and there was no

abnormality in the cash balance taken on 31.01.2014. We therefore

do not find any infirmity in the order of Ld CIT(A). We therefore

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

dismiss the ground no. 1 of the Department’s appeal for A.Y. 2014-

15.

amounting to Rs. 10,00,000 relate to addition in respect of

unaccounted receipts covered in LPS A-2 page no. 25.

course of search a loose computer generated document LPS A-2

page no. 25 was found. As per this document, against the sale of

flat to Shri Anandjeet Singh, allegedly an amount of Rs. 10,00,000

was received in cash on 04.10.2011. Ld. AO therefore treated this

Rs. 10,00,000 as unaccounted receipts of the assessee.

the Ld. CIT(A). Ld. CIT(A) deleted that addition at page no. 97 to 106

of his order, holding as under (relevant extract):-

4.5.5 This is an undisputed fact that neither any incriminating material was found or seized during search proceedings nor the payer has ever admitted about payment of Rs. 10,00,000/- On the contrary the advance received by the appellant was either due to cancellation or the same is duly reflected in books of account. In absence of any corroborative evidence to

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

prove that there was any exchange of money by CASH, AO has no locus to assume that appellant has received Rs. 10,00,000/-. It is settled law that AO cannot make any addition merely on basis of suspicion, however strong it may be. The AO is not justified in presuming certain facts without having anything to corroborative. Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v/s CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, still assessment cannot be made on the basis of imagination and guess work. It has been held in the case of Umacharan Saha & Bros co. v/s CIT 37 ITR 21 (SC) that suspicion, however strong cannot take place of evidence. Similar views have been expressed by Apex Court In the case of Dhiraj Lal Girdharilal v/s CIT (954) 26 ITR 736 (SC). 4.5.6 In view of the above discussion, material evidences on record and case laws cited, firstly, the AO ought to have done independent enquiries from whose as alleged the appellant has received such amounts. Secondly, the AO should have done independen enqury transaction. Thirdly, the loose paper or rather say it as dumb documents should be a speaking one having direct nexus with the assessee, which was not in the case of appellant. Thirdly, the AO did not reject books of account of the appellant. Fourthly, neither the customer nor any of the partner of appellant has ever stated that such transaction actually occurred. Last but not the least, the impunged loose papers were not found in possession of the appellant. My findings on the issue under consideration are based on the various conclusions drawn by me which have been discussed in the above paras. Therefore, the AO was not justifies in making addition of Rs. 10,00,000/- being on sheer assumption and presumption basis. Thus, the addition made by the AO amounting to Rs. 10,00,000/- is Deleted. Therefore appeal on this ground is Allowed.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

for the revenue relied on the order of Ld. AO and contended that the

addition made by the Ld. AO may kindly be restored.

at the first instance, going by the receipt itself, it is clearly

established that the amount was allegedly received on 04.10.2011

which related to A.Y. 2012-13, and therefore addition by the Ld AO

in A.Y. 2014-15 was totally unjustified. Further, he contended that

the booking of Shri Anandjeet Singh was cancelled subsequently

and the amount received from him was refunded. He referred to PB

1852-1853 showing that the bookings was cancelled and the

payment was made. Thus in any case, since the booking had been

cancelled and the amount refunded, no income in fact arose to the

assessee. He therefore relied on the order of Ld CIT(A).

Lower authorities. We find that the assessee is correct in

contending that the amount received, if any, from Shri Anandjeet

Singh, was refunded as the booking was cancelled. Moreover, since

the amount was received in F.Y. 2011-12, addition in the A.Y. 2014- 211

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

15 was unjustified. We therefore confirm the finding of the Ld.

CIT(A) on this issue.In the result, this ground of the revenue is

dismissed.

A.Y. 2014-15 amounting to Rs. 5,00,000 in respect of LPS A-13

relating to on-money in respect of 21 registries found from the office

assessee-company and 6 registries found from the site office of

Aakriti Aqua City. Ld. AO relied on the statements of the parties

and contended that on-money was paid by the assessee on the

purchase of land. He therefore added Rs. 5,00,000 in the hands of

the assessee as on-money paid.

Ld. CIT(A). Ld. CIT(A) deleted the addition at page no. 144 to 146 of

his order, holding as under (relevant extract):-

4.7.8 In view of the above, firstly, the AO ought to have given opportunity of cross examination to the appellant. Secondly, the AO should have brought evidence having direct nexus with the alleged on money payment of Rs. 5,00,000/- (correctly Rs. 36,00,000/-). Thirdly, the addition made by the AO are on assumption and presumption basis. Futher, the loose papers were found in possession of Shri Yashovrdhan Jain and not from appellant. Fifthly, statements were recorded by the then ADIT who was not 212

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

appropriate jurisdictional officer. Sixthly, all the sellers except Smt Binda Bai filed affidavits stating that all the payments made for purchase of land are duly recorded in books of account. Most importantly, Shri Chand Singh vide their affidavits which are on record has stated that the statement given before the Income Tax authorities was given under pressur. My findings are based on the findings given in above mentioned paras. Thus, keeping in view the above discussion and judiciously following the decision of Hon’ble Supreme court in the case of Kishanchand Chellaram (supra), the AO was not justified in making addition of Rs. Rs. 5,00,000/- ( (correctly Rs. 36,00,000/-). Thus, addition made by the AO amounting to Rs. 5,00,000/- is deleted being on the basis of statement recorded behind the back of appellant and no meaningful opportunity of cross examination was provided. Therefore, appeal on this ground is Allowed.” 199. Against this, the department is in appeal. Ld. Counsel for the

revenue submitted that the Ld. AO was justified in making the

addition for on-money.

relied on the finding of Ld.CIT(A)

Lower Authorities and the evidences on record. We find that the

very basis of the addition is some statements recorded of the sellers.

However, insipte of being asked for, Ld. AO did not provide an

opportunity to cross-examine the sellers. Thus, the statements of

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

the sellers cannot be relied on. Further, the statements are not

corroborated by bringing any material on record. A mere statement

of third person cannot bind the assessee, unless it is corroborated

by any evidence on record. Further, Ld. AO relied on the bank

statements of the sellers. However, bank statement of not even a

single seller was ever brought on record to establish that cash was

deposited in their bank accounts. Even in the Paper book filed by

the Department, same has not been filed. Thus, no reliance can be

placed on same. In respect of Shri Ram Singh, Shri Chandar Singh

and others, Shri Chandar Singh later denied to have received on-

money in affidavit. In respect of Shri Prahalad Singh, Shri Manohar

Singh and Shri Hukum Singh, we find that out of the three sellers,

two denied to have received on-money. The third seller, Shri Hukum

Singh although stated that on-money was received and that same

was deposited in his bank; but no such bank statement was ever

produced. The receipt of on-money was not corroborated by any

evidence. Thus, considering all the facts and circumstances of the

cases, we do not find any infirmity in the order of Ld. CIT(A). In the

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

result, Ground No. 7 of the Department’s appeal for A.Y. 2014-15 is

dismissed.

assessee.

A.Y. 2014-15 relate to the validity of assessment. Since no specific

submissions were made by the Learned counsel of the assessee on

this issue it seems that assessee is not interested to press this

ground and further nothing was brought on record to show that the

assessment so framed are invalid. These grounds of the assessee

are therefore dismissed.

assessee’s appeal for A.Y. 2013-14 (Rs. 4,34,08,100) and Ground

No. 2 and 3 of the assessee’s appeal for A.Y. 2014-15 (Rs.

28,00,00,000) relating to addition on account of retraction of the

surrender made during the course of search u/s. 132.

course of search and seizure operations at the premises of the

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

assessee-company between 29th Jan. 2014 to 1st Feb. 2014,

statement on oath u/s. 132(4) of the Act was recorded of the

Chairman and Manging Director of the assessee company

Mr.Hemant Soni on multiple occasions. On 1st Feb. 2014, he

accepted surrender of income of Rs. 50 crores in the group.

Further, on 4th Feb. 2014, he gave the break-up of this 50 crores;

and in the assessee company he accepted a surrender of Rs. 30

crores; Rs. 2 crores in the A.Y. 2013-14 and Rs. 28 crores in the

A.Y. 2014-15. Later on, certain corrospondances took place between

the department and the assessee-company. Thereafter on

30.05.2014, statement of Shri Hemant Soni was again recorded,

whereby he was asked about the surrender made during the

search. He replied that voluminous documents were seized from the

premises, and therefore it is taking time for analysing the same.

Once the documents seized are verified from the books, he will

provide the breakup of same. Subsequently, on 12.11.2014, return

was filed for A.Y. 2013-14 and A.Y. 2014-15. In this return, the

income surrendered earlier was not offered. Later, on during

assessment, a retraction letter was also filed on 06.02.2016. Ld.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

AO, however, disregarded the retraction, and treated Rs. 2 crores as

income for A.Y. 2013-14 and treated Rs. 28 crores as income for

A.Y. 2014-15. In the return of income for A.Y. 2013-14, assessee

had offered income of Rs. 11,04,36,150/- in the return and the Ld.

AO after making addition on various grounds, assessed the total

income at Rs. 35,52,18,458/-. He therefore concluded that since

the total addition made during assessment for A.Y. 2013-14

exceeded Rs. 2,00,00,000/- no separate addition needs to be made.

He therefore did not make separate addition in A.Y. 2013-14.

Similarly, in A.Y. 2014-15, against the total income offered by the

assessee at Rs. 8,48,71,480/-, Ld. AO assessed the total income at

Rs. 34,80,77,254/- after making various additions on difference

grounds. He held that the total of additions made was Rs.

27,16,02,887/- and therefore he added Rs. 83,97,113/- separately

on account surrender; thus making the total addition to Rs.

28,00,00,000/-. Thus, although the Ld. AO did not accept the

retraction, the addition made by him towards income surrendered

during the course of search in A.Y. 2013-14 was nil, and in A.Y.

2014-15 was Rs. 83,97,113/-.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

appeal before the Ld. CIT(A). Ld. CIT(A) discussed the various

grounds of appeal and deleted many additions. However, in respect

of retraction of statement, he did not accept the retraction of

surrender. As he had deleted other additions, therefore, he issued

enhancement notice and enhanced the income on account of

retraction from Rs. 83,97,113/- to Rs. 28 crores in A.Y. 2014-15. In

the A.Y. 2013-14, he had enhanced the addition in respect of on-

money received on the sale of Highland project. Ld. AO made

addition of Rs. 2,05,66,065/- on account of on-money received in

the Highland project. Ld. CIT(A) enhanced the on-money received in

the highland project from Rs. 2,05,66,065/- to Rs. 4,34,08,100/-.

He relied on the statement recorded during the course of search

that on-money received on sale of plots at Highland project was 5-

10%. Since he enhanced the addition to Rs. 4,34,08,100/- i.e. more

than Rs. 2 crores surrendered during search, he stated that making

addition of Rs. 2 crores again would amount to double addition and

therefore did not make separate addition for surrender.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

before us. In the A.Y. 2013-14, by various grounds of appeal,

assessee is challenging the addition on account of on-money

received on sale of plots of Highland project and further, the

enhancement of Rs. 2.00 crores and adjusting the same against the

increase in excess profits on the sale of plots at Highland project. In

the A.Y. 2014-15, by various grounds, the assessee is challenging

the enhancement of income and sustaining the addition of Rs. 28

crores on account of surrender during search. Since both these

issues are interconnected, same are taken up together and

adjudicated together.

submitted that the search and seizure operation started on 29th

Jan. 2014 and continued upto 4 days. Search action took place

during these 4 days, day-and-night and at various premises of the

assessee concern. During the search operations statement on oath

were recorded on Shri Hemant Soni on multiple occasions. On

30.01.2014, his statement was recorded asking 33 questions. He

replied to them and tried to explain each and every question asked

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

for. Similarly on 31.01.2014 statement was recorded on two

occasions. Ld. Counsel tried to take us through the statements

recorded on these dates palced at PB 1197-1216 and submitted

that during his statement, Shri Soni tried to explain the

transactions to the best of his knowledge. Thereafter, after 3

sleepless nights, on the fourth day, when the statement was

recorded on 01.02.2014, and again more than 30 question were

asked, Shri Hemant Soni in an ill state of mind, made the surrender

of Rs. 50 crores in the group. He submitted that it can be seen from

his statement that no specific incriminating document was pointed

out or found which could show unaccounted income. Ld. Counsel

for the assessee submitted that Shri Soni was totally tired, and in ill

state of mind while making surrender. Ld. Counsel further took us

to the assessment order, and submitted that the Ld. AO did not

point out any incriminating material found during the course of

search which was made the basis of surrender. Ld. Counsel

submitted that during assessment, whatever addition were made on

account of incriminating material, had been separately contested

before the Ld. CIT(A) and before this Hon’ble Bench. There exists no

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

basis for making a separate addition on account of mere surrender

of income. Ld. Counsel for the assessee specifically took us to page

20 of the assessment order, and submitted that the Ld. AO himself

stated that it is not possible for the authorised officer u/s. 132 to

put every minute detail of the discrepancies and documents in the

statement recorded during the search proceedings. He further,

referred the findings of Ld. CIT(A) and contended that in respect of

surrender of income, Ld. CIT(A) could not also point any specific

incriminating material He submitted that the Ld. CIT(A) infact

himself deleted many additions made purportedly made by the Ld.

AO on the basis of incriminating material.

relied on a plethora of judgments. The same are cited below:

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

could not be added to assessee's income. 8. CIT vs Dhingra Held that when assessee Present case also, the addition Metal Works 196 had been able to explain was solely based on admission Taxman 488 (Del.) discrepancy in stock and hence not sustainable. found during course of survey, then addition solely on basis of statement made by partner on behalf of assessee could not be sustained. 9. DCIT v.Narendra It was held that where Present case also, the addition Garg & Ashok Garg assessee retracted from is on bare suspicion and [2016] 72 disclosure made in presumption, which the taxmann.com 355 statement under section department could not support (Gujarat) 132(4) which was not through corroborative accepted by revenue, and evidence. if no undisclosed income was found during search, revenue could not make addition on bare suspicion and presumption 10 Basant Bansal v Held that neither any The addition in our case was ACIT (2015) 63 worthwhile incriminating solely on the basis of . taxmann.com 199 material, information, statement of surrender by (Jaipur Trib.) and evidence was brother/ brother-in-law of the discovered as a result of assessee and not a single impugned multiple search reference for any operations nor the incriminating document is additions sustained are made. based on any such material. The sole basis of additions is the disclosure which we have held to be involuntary. Consequently the additions do not conform to the mandate of sec. 153A. 11 CIT v. Balaji Wire Statement made by any In our case, no chance of (P) Ltd. third party after the date cross examination on the . [2008] 304 ITR of search is of no basis of surrender was given. 393/[2007] 164 consequence; assessee The surrender was on the 223

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Taxman 559 has a right of its cross- back of the assessee. (Delhi), examination. This having not been done the additions cannot be made 12 CIT v.Harjeev A statement recorded Same as above Aggarwal [2016] 70 u/s. 132(4) can form . taxmann.com 95 basis for a block (Delhi) assessment only if such statement relates to any incriminating evidence of undisclosed income unearthed during search. 13 Vinod Solanki v. It is the burden of the In our case, the statement of UOI [2009] ELT Department that material Shri Sudeep maheshwari . 157(SC). brought on record disclosing additional income including retracted was not supported with any statement must be corrobative evidence, hence no substantially addition can be made on the corroborated by other basis of admission in the independent and cogent statement u/s 132(4) evidences. 14 Krishan v. Admission made in In our case, absence of any Kurukshetra ignorance of supporting supporting record does not . University AIR record and legal rights or bind the admission made on 1976 SC 376. under duress cannot bind our behalf by third party. such statement or disclosure. 15 CIT v. Vikas Whatever be the merits or In our case also, since the Electronics demerits of statements of undisclosed income could not . (International) (P.) 'assessee, unless they be connected to any Ltd. [2007] 166 could be directly incriminating document, they Taxman 137 (Delhi) connected with the cannot be the basis of recovery of any addition. incriminating material during the search, they could not be used against the assessee. 16 CIT Vs. Bhanwar Department should bring Same as above Lal Murwatiya on record sufficient . 39 TW 214 evidence before making addition u/s 69 of the Income Tax Act, 1961 and the retreated statement cannot be made the sole basis for making addition 224

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

as it cannot be said to be conclusion. 17 Kalishaben Addition on the basis of In our case, the statement Manharlal Chokshi retracted statement u/s was duly retracted on . Vs. CIT (2008) 220 132(4) - statement 30.11.11, at the earliest CTR (Guj) 138 : retracted by assessee occasion, as assessee came to (2010) 328 ITR 411 after two months on the know about it and thus : (2008) 174 ground that it was cannot be the basis of TAXMAN 466 : recorded under coercion addition (2008) 14 DTR 257 and duress cannot be basis of addition. 18 Shree Ganesh Held that the statement In our case also, since the Trading Co. v. CIT recorded u/s. 132(4) undisclosed income could not . [2013] without corroborative be connected to any taxmann.com 170 evidence could not fasten incriminating document, they (Jharkhand) liability cannot be the basis of addition. 19 Smt. Ranjnaben Held that AO could not In present case also, the Mansukhlal Shah make addition only on addition was merely based on . v. basis of disclosure statement, hence addition is ACIT [2004] 2 881 statement without unjustified. (RAJKOT) corroboration and evidence in support of disclosure statement. 20 ACIT V. Jorawar Held that the surrender In present case also, the Singh M. Rathod was under pressure as no addition was based on . [2005] 148 Taxman such evidence or statement of brother/brother 35(Ahd.) (MAG.) asset/evidence were in law , and nothing found in movable or incriminating was found from immovable property from the search premises. the search premises, thus addition is unsustainable. 21 Naresh Kumar Held that addition in Present case also, there was Verma vs. ACIT, respect of job work no incriminating document . Central Circle, charges merely on basis hence addition is Patiala of statement was not unsustainable. [2013] 32 sustainable as no taxmann.com 280 evidence was found in (Chandigarh - possession of assessee to Trib.) support the admission. 22 DCIT, Circle 6(1), Held that when the Present case also, the Ahmedabad vs. assessee retracted the admission was retracted and . Pramukh Builders statement and no other no evidence was on record. [2008] 112 ITD 179 evidence was on record to (Ahm.) (TM) show the undisclosed 225

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

income baring statement, addition is unsustainable. 23 Arun Kumar Held that the ld AO Present case also, the addition Bhansali V. DCIT should take cognizance of merely on basis of admission . [2006] 10 SOT 46 such correct income as by brother in law and no (Bang.) (URO) depicted in books of evidence is unsustainable. accounts as well as seized material and should not adopt figures merely as per admission of assessee. 24 Shree Chand Soni Held that where the Similar case, where addition V. DCIT [2006] 101 addition was based on was merely on statement TTJ 1028 (Jodh.) statement alone and no recorded u/s 132(4) and that such income was too, without any incriminating disclosed in return filed document. The assessee has for the block period but fully and truly disclosed all admitted and no the foreign as well as Indian incriminating document income in the return filed. was found to support the impugned addition, the addition was to be deleted. 25 Rajesh Jain V. Confessional statement Similarly, the confession was DCIT [2006] 100 should be corroborated not corroborated with any . TTJ 929 (Delhi) with some material evidence, hence addition is evidence to show that unjustified. assessment was just and fair. 26 Jyotichand It was held that no Same as above Bhaichand Saraf & addition can be made . Sons P. Ltd. V. merely on the basis of DCIT [2013] 86 statement recorded u/s DTR (Pune) 289 132(4) in absence of corroborative evidence. 27 CIT vs S. Ajit Where no material was In present case also, there Kumar 300 ITR found during search in was no incriminating material . 152 (Mad.) respect of amount or document was found from allegedly paid by assessee search premises. to a builder, material found in course of survey in premises of builder could not be used in block assessment of assessee to make addition 226

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

28 Abdul Quyme v CIT An admission or an Similarly, in present case the (1990) 184 ITR 404 acquiescence cannot be a admission cannot be binding . (All) foundation for an without findings by the assessment. A finding in authority. this regard is a condition precedent and where no such finding is recorded, the action of the authority concerned cannot be upheld. 29 CIT vs Radhe Held that the addition by In present case also, the Associates (2013) assessee construction statement was retracted and . 37 taxmann.com firm, only on basis of hence addition is 336 (Guj.) partner's statement which unsustianble. was later retracted, was not sustainable

30 CIT vs M.P. Scrap Held that except Same as above. Traders (2015) 60 statement, there was no . taxmann.com 205 other material or (Guj.) corroborative material with Assessing Officer to justify said addition – hence addition is unjustified

dated 10.03.2003 and contended that vide this Circular, a clear

mandate was put on the officers of the department that instead of

recording confessional statements, efforts shall be made on

collecting evidences. Anything contrary to this direction would be

taken adversely. This direction of the CBDT was repeated

subsequently again on 18.12.2014. He therefore contended that a

mere confession cannot be a basis for addition. In so far as the

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

material found during the course of search, same have been

impugned under various grounds of appeal. Thus, this addition,

which is purely on surrender cannot be made.

Highland project, Ld. Counsel for the assessee contended that there

was no evidence except the statement of Mr. Hemant Soni. No

material has been brought on record. He further submitted that

during the course of search, when asked about on-money receipt in

any project, Mr. Hemant Soni stated in reply to Question 30 on

01.02.2014 that on the sale of plots in the Highland Project, we

have received on-money of 5-10% above the recorded sale

consideration. There was no evidence or inquiry from any customer

to hold that such on-money was received. Ld. Counsel for the

assessee therefore submitted that no such addition of on-money

receipts, which was purely based on mere statement of Mr.Hemant

Soni was called for. He alternatively submitted that in any case, if

the on-money receipts are assessed, then those entire receipts

cannot be taxed and a reasonable profit rate be applied on same. He

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

relied on the judgment of CIT vs Balchandra Ajit Kumar 186 CTR

419 (M.P.).

relied on the order of the Ld. Lower authorities. Further, at the

residence of Shri Yashovardhan Jain, who was the General Manager

(Finance) of the assessee company, various documents, ledger and

other records were found. Shri Jain and Shri Hemant Soni were

unable to explain these documents. Shri Hemant Soni was the head

of the company; and since he was unable to explain the

transactions, he made a declaration, suo-moto regarding the

undisclosed income of the company. The contention of duress is

baseless. Decalaration of Shri Hemant Soni was binding on the

assessee-company. Ld. Counsel for the revenue further contended

that the surrender was made on 01.02.2014 and lateron, the

declaration was reitereated on 04.02.2014 and thereafter on

05.03.2014. Even on 30.05.2014, statement of Shri Hemant Soni

was recorded and he did not specify about his retraction. Retraction

letter was filed only on 06.02.2016 after two years form the date of

search. In the retraction letter, it was stated that Shri Hemant Soni

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

could not withstand the strain, and hence he made the surrender.

Such retraction was highly belated, and further no explaination was

given regarding the discrepencies found during the course of

search. He also submitted that a retraction could have been

acceptable only if assessee explains the discrepencies found during

the course of search.

Rakesh Mahajan vs CIT 214 CTR 218 (P & H) and contended that an

admission constitutes best piece of evidence. Such admission is

binding on the maker of the statement, unless it is shown by

bringing positive evidence on record that the admission was made

mistakenly. He therefore contended that no such positive material

was brought on record to show that the admission was made under

a mistake.

Counsel for the revenue contended that Mr. Hemant Soni himself

came forward on behalf of the assessee company and voluntarily

stated that the 5-10% on-money was received on the sale of plots in

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

Highland project. The said declaration is therefore binding on the

assessee.

and the case laws quoted by both the sides. Through Ground No. 2

to 5 for Assessment Year 2013-14 and Ground No.2 & 3 for

Assessment Year 2014-15 the assessee has raised a common issue

challenging the finding of Ld. CIT(A) confirming the addition made

on the basis of the surrender of the income made by the assessee

during the course of search conducted u/s 132 of the Act.

through the judicial precedents with regard to the issue that where

in case no corroborative material is found during the course of

search having its nexus with the income surrendered during the

course of search whether the addition can be made merely on the

basis of statement recorded during the courseof search. Though

Ld. Counsel for the assessee has referred and relied on plethora of

judgments, we find that this Tribunal has dealt with this issue. In

the case of ACIT vs Shri Sudeep Maheshwari, ITA 524/ Ind/ 2013,

vide order dated 13.02.2019, this Tribunal observed as under:- 231

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

“6. It is the case of the assessee that during the course of search & seizure, no incriminating material or undisclosed income or investments were found. It is stated that the assessee was under mental pressure and tired. Therefore, to buy peace of mind, he accepted and declared Rs.3 crores in personal name. It is also stated that the case laws as relied by the A.O. are not applicable on the facts of the present case. The assessee has relied on the decision of the Hon'ble Supreme Court rendered in the case of Pullangode Rubber Produce Co. Ltd. 91 ITR 18 (SC), wherein the Hon'ble Court has held that admission cannot be said that it is conclusive. Retraction from admission was permissible in law and it was open to the person who made the admission to show that it was incorrect. However, reliance is placed on the judgement of the Hon'ble Gujarat High Court rendered in the case of CIT Vs. Chandrakumar Jethmal Kochar (2015) 55 Taxmann.com 292 (Gujarat), wherein it has been held that merely on the basis of admission that few benami concerns were being run by assessee, assessee could not be basis for making the assessee liable for tax and the assessee retracted from such admission and revenue could not furnish any respectively. The A.O. failed to co-relate the disclosures made in the statement with the incriminating material gathered during the search. Therefore, no inference is called for in the finding of the Ld. CIT(A) and is hereby affirmed. Ground raised by the revenue is dismissed.”

vide order dated 22.10.2020, this Tribunal after considering

various judgments including thoseof Hon'ble Gujarat High Court as

well as Hon'ble Apex Court and also following its own decision in

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

the case of ACIT vs Shri Sudeep Maheshwari (supra) observed as

under:-

“6. We have heard rival submissions and perused the material available on record and gone through the orders of the authorities below. We find that the addition was made on the basis of admission of assessee’s son during the course of search. It was contended before us, that all these documents were properly recorded in the regular books of accounts of the persons to which these documents actually pertained. However, we find that the assessing officer did not establish the fact that any of the documents as found and seized was not recorded in the books of accounts of the persons to which these documents actually pertained. Therefore, we find force in the contention of the assesee that without referring to any of the documents was not binding on the assessee and the same cannot be used against the assessee as an evidence and that too in search assessment proceedings. Our view is supported by ratio laid down in the following judicial pronouncement:

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

submission advanced before us, we direct the assessing officer to delete the addition of Rs. 10,00,00/-.”

that an addition made on the basis of mere surrender of income

during the course of serach without referring to any of the

incriminating documents is not binding on the assessee and the

same cannot be used against the assessee as an evidence.

light of above stated principle. In the instant case during the

course of search various documents and other material were found

and seized. Assessee accepted to surrender Rs.2 crores for

Assessment Year 2013-14 and Rs.28 crores for Assessment Year

2014-15 on behalf of the various group concerns and the

individuals connected there to. During the course of assessment

proceedings Ld. A.O made various additions based on the

incriminating material seized during the course of search. Along

with these additions Ld. A.O also made addition for the income

surrendered during the course of search. It is not in dispute that

various incriminating material found during the course of search

were duly considered by the Ld. A.O and necessary additions were 234

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

made based on them which were challenged before Ld. CIT(A) and

before us. We have adjudicated and decided the issues raised before

us connected to the additions made on the basis of incriminating

material. As regards the addition made by the Ld. A.O made on the

basis of statement recorded during the course of search there was

no reference to any other incriminating material other than those

considered above for making the other additions.

any incriminating material found during the course of search

having its nexus with the impugned addition and which was not

been considered by the Ld. A.O while making the other additions.

So there remains no dispute to the fact that there is no material to

show that how the addition for Rs. 30 crores was made by Ld. A.O

for undisclosed income without corroborating with any

incriminating material found during search. What is the working of

this Rs. 30 crores, and how it was divided in two years is baseless

except the confession of Shri Hemant Soni. Ld. AO himself pointed

in the assessment order that it is not possible for the authorised

officer u/s. 132 to put every minute detail of the discrepancies and

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

documents in the statement recorded during the search

proceedings. It is clear from the findings of the Ld. AO that this

addition is purely based on a mere declaration and nothing else. We

see that after 4 days of search, on 01.02.2014, in question no. 30,

Shri Soni made a declaration that on-money of 5 to 10% was

received on sale of land in Highland project. Further in the

subsequent question, question no. 31, he made the surrender. So

far as the surrender of Rs. 30 crores in the assessee company and

the confession of receipt on Highland project are concerned, there

was no basis for making this surrender. In our view only surrender

of income would not bind the assessee company.

respectfully following the decision of this Tribunal in the case of

ACIT vs Shri Sudeep Maheshwari (supra) and Ajit Singh Melhotra

V/s ACIT (supra) which were decided after considering the settled

judicial precedence by the Hon'ble courts are of the considered view

that Ld. AO was not justified in making the additions merely on the

basis of statement given during the course of search without

referring to any incriminating material in the case of assessee-

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

company, and further Ld. CIT(A) was not justified in enhancing this

addition. We therefore delete the addition of Rs. 4,34,08,100/- in

A.Y. 2013-14 and Rs. 28,00,00,000/- in A.Y. 2014-15. Thus, these

grounds of the assessee are allowed.

assessee.

u/s. 271(1)(c) for A.Y. 2013-14 (Rs. 8,52,700/-) and assessee’s

appeal ITA 923/ Ind/ 2019 is the penalty appeal u/s. 271AAB(1)(c)

for A.Y. 2014-15 (Rs. 16,80,00,000). The penalty has been levied by

the Ld. CIT(A) in respect of the enhancement done by the Ld. CIT(A)

in relation to the amount surrendered during the course of search.

271(1)(c) of the Act and 271AAB(1)(c) of the Act i.e. the addition

already stands deleted by us as held by us in preceeding paras,

there remains no legs for the impugned penalties to stand for and

the same are therefore deleted. Accordingly Assessee’s appeal ITA

922/Ind/2019 relating to the penalty leived u/s. 271(1)(c) for A.Y.

IT(SS)A No.83,84,86,87,90,91,109,110 & ITA, No.922 &923/Ind/2019 AG8 Ventures Ltd.

2013-14 and assessee’s appeal ITA 923/ Ind/ 2019 for the penalty

levied u/s. 271AAB(1)(c) for A.Y. 2014-15 are allowed.

No.83,84,86,109 & 100/Ind/2019 for Assessment Years 2008-09,

2009-10, 2011-12, 2013-14 & 2014-15 respectively are partly

allowed, Revenue Appeal bearing No.IT(SS)A No.87/Ind/2019 for

Assessment Year 2012-13 is partly allowed for statistical purposes,

Assessee’s Appeal No.IT(SS)A No.90&91/Ind/2019 for Assessment

Year 2013-14 & 2014-15 are partly allowed, Assessee’s Appeal

bearing No.IT(SS)A No.83,84,86,109&110/Ind/2019&ITA No.922 &

923/Ind/2019 for Assessment Year 2013-14& 2014-15 are allowed.

The order pronounced in the open Court on 16.02.2021.

Sd/- Sd/- (KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 16 February, 2021 /Dev

Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file.

By Order, Asstt. Registrar, I.T.A.T., Indore