RAJU MOHAN GURNANI,NAVI MUMBAI vs. DCIT CENTRAL CIRLE - 5(2), MUMBAI

आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeals have been filed by the assessee against separate impugned orders of even date, 26/10/2021 passed u/s.153C r.w.s. 143(3) for the A.Y.2014-15; and A.Y.2015-16 and u/s.143(3) for the A.Y.2016-17.

A.Y. Amount Loose Papers 2014-15 Rs.68,38,600/- 65 6. 2015-16 Rs.3,52,66,960/- 64-79 2016-17 Rs.1,60,28,900/- 61-63 & 67-79 Another issue which has been raised is, deemed income from house property u/s .22 of Rs.3,91,467/- in all the years. Apart from that assessee has also taken ground that ld. AO has erred in law and on facts in acquiring jurisdiction u/s.153C of the Act and the additions made therein by the ld. AO are beyond the scope of Section 153C.

5 to 2092/Mum/2021 Shri Raju Mohan Gurnani our attention to the loose papers and submitted that AO cannot point out that any transaction pertains to the assessee or relate to activity or income of the assessee. Apart from that, there is no statement or admission of any income by the assessee or by her husband or by her daughters. He further pointed out that the ld. AO has falsely stated that the said loose papers wherein the personal possession of the assessee is also in her handwriting. In this regard he has given point wise rebuttal of ld. AO‟s reasoning, which are quite relevant to understand the entire background of the case, in the following manner:- a) The Search Warrant No. 12203 dt. 04.02.2016 was issued in the case of Mohan Thakurdas Gurnani and his two daughters, Priyaa Mohan Gurnani and Deepa Mohan Gurnani, for search of premises situated at Flat 2101, 21st Floor, Moraj Casa Grande CHSL, Plot No. 57, Sector - 17, Koperkhairne, Navi Mumbai - 400 709. b) Mohan Thakurdas Gurnani was the owner of the premises where such search was carried out and from where the loose papers Pg. 1 to 83 of Ann. A-l of Panchnama for warrant No 12203 c) Assessee was not the owner of the premises where the said search was carried out. d) The seized loose papers were not found in assessee's personal possession, neither they were in handwriting of the assessee.

6 to 2092/Mum/2021 Shri Raju Mohan Gurnani e) Nothing pertaining to the loose seized papers was questioned or inquired by search authority, while recording her statement dt. 04.02.2016 and 06.06.2016. f) No questions were asked in relation to undisclosed income to lose papers during the course of her Statement dt. 04.02.2016 and 06.06.2016. g) Neither assessee had owned up the seized loose papers nor the statements recorded that the loose papers were seized from her personal possession, or were in her handwriting, h) The ld. AO has falsely stated in Para 4.1 of assessment order that the papers were in the handwriting of the assessee. i) The ld. AO has not obtained any forensic investigation report to prove and support his alleged claim that the loose papers belonged to the appellant or were in her handwriting. j) The ld. AO allegedly stated that the loose papers are in her handwriting and were in her possession in spite of the specific denial by the appellant in her letter dt. 16.12.2017. k) The papers were not in assessee's handwriting. In any case, they were not proved to be in her handwriting and no inquiry was made to ascertain that the papers were in her handwriting. l) An affidavit has been obtained and placed before the Tribunal from CA Sanjay Kabra, who appeared in her case before AO for confirming that the fact that papers that did not belong to her was communicated to the AO in assessment proceedings. This affidavit is not an Additional Evidence and is 7 to 2092/Mum/2021 Shri Raju Mohan Gurnani filed only to support a fact that was communicated in writing to AO vide letter dt. 16.12.2017. Without prejudice, an application for addition of affidavit on 29.11.2022 under Rule 29 of ITAT Rules has been made separately. m) The loose papers were not found from her possession nor do they belong to her nor has any relation to her activity of any nature. No questions relating to lose papers were asked to her or to her husband or daughters during the course of search. n) The fact that notice was issued to her of 153C confirmed that the loose papers were not seized in her hand. o) No recording of satisfaction was made by the AO of Mohan Thakurdas Gurnani, Priyaa Mohan Gurnani and Deepa Mohan Gurnani stating the seized loose papers belonged to the assessee and not to the person being searched.

8 to 2092/Mum/2021 Shri Raju Mohan Gurnani iii. It was clearly explained vide letter dt. 16.12.2017 (Pg. 76 to 80 of PB-I), that the loose papers did not belong to the assessee, Raju Mohan Gurnani. iv. No presumption was possible in law that loose papers belonged to assessee as the premises from where they were found did not belong to assessee. No search was conducted in her case or hands, or the said premises. v. Neither any statement of assessee was recorded concerning loose papers nor has the assessee ever admitted the ownership of loose papers. vi. Priya Mohan Gurnani in her letter dt. 25.04.2016 addressed to ADIT had in detail explained the facts relating to loose papers which were seized in her hands, she has nowhere stated that the loose papers belonged to the assessee. vii. The loose papers were not in handwriting of assessee and ld.AO has not proved that handwriting on loose papers was of your assessee. In absence on any forensic investigation, AO could not have alleged that handwriting was of your assessee. viii. The assessee is a housewife and neither have any business nor any business income and the transactions of such volume could not have been her transactions or could be attributed to her. The fact that notice was issued u/s. 153C, confirmed that the loose papers were seized in some another persons' case and hands. ix. No inquiry was made with the searched persons for verifying ownership of loose papers.

9 to 2092/Mum/2021 Shri Raju Mohan Gurnani x. The ld. AO has admitted that he has no proofs or evidence to support his action of making large scale addition to income when he supported his action simply by stating that the loose papers did not contain any narration compelling him to make additions to the total income. xi. Without prejudice, i. the loose papers were rough jottings and were dumb papers, ii. they did not carry any date in most of cases. iii. they were not signed by assessee or anyone else iv. they did not reveal that the amounts/ numbers mentioned were debit or credit, receipt or payment, income or expenditure v. No addition could have been made simply because the said papers did not contain any 'narration'. This fact rather supported that no addition was possible. xii. AO has made additions on basis of loose papers found and seized in the search action in the case of third party from the premises not owned by the assessee and that too in respect of loose papers (rough jottings) not belonging to or pertaining to her. The assessee had tendered explanation to AO and had also stated that the said papers did not belong to her. xiii. It is the settled principle of law that no additions could be made in the above facts more so where no statement was 10 to 2092/Mum/2021 Shri Raju Mohan Gurnani recorded of any person relating the said loose papers, in view of following judgements:- a. T.S. Venkatesan v. Asstt. CIT [2000] 74 ITD 298 (Cal.) b. Miss Lata Mangeshkar, 97 ITR 696 (Bom HC) c. Saif Ali Khan Mansurali [2012] 13 ITR(T) 204 (Mum.) d. Smt. K.V.Lakshmi Savitri Devi, 30 taxmann.com 117 (Hyd- Trib.) e. Pradeep Amrutlal Runwal, 47 taxmann.com 293 (Pune - Trib.) 12. The AO‟s observation that “the notings were not mere scribbling made during the day to day activity. There was a continuous flow of cash throughout the year and that too over a period of time. This excludes the chits which are already destroyed after the application of cash has been finalized by the group. The reasons given by the AR of the assessee do not explain the reasons for preparing these chits. Further, the quantification explained in terms of rupees in lacs and not in thousand has also not been contradicted by the assessee. The narrations available in the chits only indicate that the assessee had undisclosed source of income which was diverted to Ms. Priyaa Gurnani for further use”. 12.1 Ld. Counsel submitted that: i. The ld. AO's findings that the papers were not scribbling of day to day nature and that was a continuous each flow over a period of time are imaginary and feverous without any basis in facts so was his presumption that many chits were destroyed. ii. It was also presumptuous to have assumed that her income was diverted to Priyaa Mohan Gurnani though in Priyaa Mohan Gurnani's case no questions were asked. iii. As explained the loose papers were not found in her possession nor any questions were asked to her during search nor was ownership of such papers claimed by assessee. No search was conducted in her case. Assessee could not have explained the conduct nor was she obliged to do so. It is beyond assessee's knowledge that figures as alleged by AO were in lakhs and not in thousands. In any case appellant was never asked to explain that why figures in loose papers are not assumed to be in lakhs though noted in thousands. iv. Assessee had expressly denied the ownership of the papers. v. There was no presumption in law to hold that the papers belonged to her. vi. Assessee was not under any obligation to explain or offer any explanation for loose papers found in a search on third persons cases. vii. Ld .AO had falsely stated that the papers belonged to her. viii. Her explanation was tendered as an attempt to assist ld.AO on being issued and served with the show cause notice. ix. Ld.AO had falsely and without any basis had alleged that some papers were destroyed and not found. x. The explanation was given without prejudice and subject to the fact that the papers did not belong to her. Letter dt.

12 to 2092/Mum/2021 Shri Raju Mohan Gurnani 16.12.2017 was an attempt to based on reproduction of reply of Priyaa Mohan Gurnani dt. 25.04.2016. xi. AR could not have given reason for preparing chits not prepared by her xii. It is incorrect to expect AR to accept that figures were in 'Lacs' and not in Thousand' no such assumption of AO was communicated to ld.AR with a request to explain 11 to 14.

13 to 2092/Mum/2021 Shri Raju Mohan Gurnani furnished to DDIT by Priyaa Mohan Gurnani (Pg. 47 to 58 of PB-I) a. Pg. 61 of Seized loose papers - Rs. 40 has been written and is rough jottings. In other pages, rupees. in lakhs has been mentioned, on no grounds it shall be presumed that it is 40 lakhs following the consistency and in absence of statement of oath. b. Pg. 62 of Seized loose papers - It mentions 16,23,750 and 350 and raghav is mentioned. It is dumbed papers which is not related to assessee. c. Pg. 63 of Seized loose papers Payment to contractor of 9,70,870 of Feelwell Garments and Accessories Pvt. Ltd. and was paid through cheques. Further 13,00,000 has been mentioned and is relating Narayan Gem which is unrelated to the appellant. d. Pg. 64 of Seized loose papers - Approx payment to be done contractors. Expenses in relation to Feelwell Garments and Accessories Pvt. Ltd. e. Pg. 65 of Seized loose papers - It is rough jottings and does not have any financial implications and it belongs to Priyaa Mohan Gurnani. f. Pg. 66 of Seized loose papers - Petty amounts are mentioned in seized papers - 680, 3667.5, 1006, 76, 34 and are expenses belonging to employees of Feelwell Garments and Accessories Pvt. Ltd. namely Ramesh and Raghav.

14 to 2092/Mum/2021 Shri Raju Mohan Gurnani g. Pg. 67 of seized loose papers - The information on this page is same as on Pg.

63. It is rough jottings and doesnot have any financial implications. h. Pg. 68 of seized loose papers - Payment made through banking channel in relation to professional services and is accounted in the books of Feelwell Garments and Accessories Pvt. Ltd. i. Pg. 69 of seized loose papers - Approx amount of billing from supplier of Feelwell Garments and Accessories Pvt. Ltd. namely Ganesh Kali Trading Company j. Pg. 70 of seized loose papers - The information on this page is same as on Pg. 63. k. Pg. 71 of seized loose papers - Rough jottings of anticipated expenditure were pertaining and belonging to Feelwell Garments and Accessories Pvt. Ltd. l. Pg. 72 of seized loose papers - The amount mentioned is the approximately fund availability with the assessee. m. Pg. 73 of seized loose papers It is the same amount as mentioned in Pg. 65 and Pg. 63.. n. Pg. 74 of seized loose papers It is the approx. fund availability with the Yes Bank EEFC Euro Account of Feelwell Garments and Accessories Pvt. Ltd. and Raje is the office boy of Feelwell Garments and Accessories Pvt. Ltd. o. Pg. 75 of seized loose papers - The same does not have any relation to the assessee and assessee does not have knowledge about the said seized paper.

15 to 2092/Mum/2021 Shri Raju Mohan Gurnani p. Pg. 76 of seized loose papers - It is the same noting as Pg.72 of seized loose paper i.e. the amount mentioned is the approximately fund availability with the assessee. q. Pg. 77 of seized loose papers - The same does not have any relation to the assessee and assessee does not have knowledge about the said seized paper. r. Pg. 78 of seized loose papers - It is the same noting as Pg. 72 and Pg. 76 of seized loose paper i.e. the amount mentioned is the approximately fund availability with the assessee. s. Pg. 79 of seized loose papers - The same does not have any relation to the appellant and appellant does not have knowledge about the said seized paper. IV. Without prejudice, a. the loose papers were rough jottings and were dumb papers. b. they did not carry any date in most of cases, c. they were not signed by appellant or anyone else. d. they did not reveal that the amounts / numbers mentioned were debit or credit, receipt or payment, income or expenditure.

13. On the other hand ld. DR in her counter submissions had stated as under:-  Incriminating material in the form of loose papers relating to assessee was found and seized during the search in the case of Moraj Group of entities including Mohan Gurnani (assessee's

16 to 2092/Mum/2021 Shri Raju Mohan Gurnani husband) and Priya Gurnani (assessee's daughter), on the basis of which notice u/s.153C was issued and assessment was completed.  The assessee has raised an amended ground that locker owned by the assessee was searched by way of Warrant No. 12223 dated 17.02.2016 by the Department and was therefore, covered under search action u/s.132 of the I. T. Act, 1962. The assessee argued that notice u/s. 153A should have been issued instead of 153C.  It is submitted that Warrant No.12223 dated 17.02.2016 was issued in the name of Shri Mohan Thakurdas Gurnani, Ms. Priya Mohanlal Gurnani and Ms. Deepa Mohan Gurnani and not in the name of Raju Mohan Gurnani. A copy of Warrant of Authorisation and Panchnama have already been filed during the course of hearing (alongwith copy to the assessee). Hence, assessment was rightly completed u/s.153C.  The assessment is u/s. 153C and a copy of the satisfaction note recorded by the AO before the issue of notice was given to the assessee (placed at Pg 59-60 of the assessee's paper book-I). Para 4 of the note clearly states that the satisfaction has been drawn based on the seized documents in Annexure Al to Panchanama dated 18.02.2016. With reference to various documents in Annexure AI, it is pertinent to take note of pages 15, 28, 61 etc which have also been specifically mentioned in Para 1 of the satisfaction note. Pgs 15 & 28 clearly show that cash is being received by 'mummy' ji ie. the assessee, evident from the document itself and various statements recorded during

17 to 2092/Mum/2021 Shri Raju Mohan Gurnani the course of search. A copy of the assessment orders of M/s. Feel well Garments and Accessories Pvt. Ltd. for A.Y.2015-16 and 2016-17 were filed during the course of hearing, which clearly establish this fact. It may be noted that the assessee group has accepted this factual position and has offered income in relevant years on this account. This proves the veracity of the documents and also the claim of the department that these loose sheets pertain to the assessee.  Pg 61 also highlights the above facts, wherein it clearly mentioned "the amount given to me from Karigar. This clearly shows that the seized documents pertain to the assessee and records the cash flow with the assessee and its source. Based on these documents, satisfaction was arrived at, notice u/s 153C was issued and the additions have been made in the assessment orders.  The assessee has contended that loose papers did not belong to her nor they were in her handwriting. This argument is not tenable. o In this regard, it is important to refer to Para No.4.1 and 4.2 of the assessment order. This clearly shows that the papers were in the handwriting of the assessee. o Further, in Para 4, the ld. CIT(A) has discussed the addition based on these documents. Para 4.1 of the CIT(A)'s order clearly shows that the loose papers belong to the assessee. o Para 4.2 is the reproduction of the submissions made by the assessee before the ld. CIT(A). Nowhere in the submission, the 18 to 2092/Mum/2021 Shri Raju Mohan Gurnani assessee has denied the ownership of the documents, nor refuted that it is not written by her. o Para 4.3 also strengthens this fact. In fact, the assessee has also taken a legal ground that these loose papers are not books of accounts and, therefore, the additions cannot be made. She did not refute that these documents did not relate to her and were not in her handwriting. o Submission of assessee's letter dated 16.12.2007 is placed at Page No.76-80 of the Paper book filed vide letter dated 20.05.2022. On Page No.78 of the paper book therein is an explanation to page no.69 (seized documents) wherein the assessee has accepted that she has written the above. The explanation given in respect of the other sheets also show that they are recorded by the assessee. For instance, against pg 64 and 65 - these are rough jottings made with regard to expense; pg 66 approximate amount of petty expenses; pg 67, 68- explain the entry; pg 71 rough jotting of anticipated expenditure; pg 72 & 78 - approximate fund availability with the assessee; pg 74 & 76 - fund availability and etc. o Submission of assessee's letter dated 05.11.2018 is placed at Page No.81-87 of the Paper book filed vide letter dated 20.05.2022. In Para No.8.1 at page no. 82, the assessee herself has submitted that "The items mentioned in the loose papers are mere rough scribbling made by the appellant. Further, in Para No. 8.4 on Page No.83, the assessee again submits that "The loose papers found in possession of the appellant are not covered within the definition of books of account or document".

19 to 2092/Mum/2021 Shri Raju Mohan Gurnani Therefore, the argument that the loose papers are not of assessee and do not record any transactions pertaining to her is incorrect. o The fact that the assessee has given comments in order to explain the entries on the sheets, clearly show that the assessee has not refuted the documents. o Explanation of the assessee on loose papers seized with respect to Page No.64, 66, 67, 68, 69, 71, 72 which are placed at Page Nos. 70-80 of Paper Bundle filed vide letter dated 20.05.2022 clearly shows that the transactions recorded pertains to her. o The assessee has wrongly alleged the AO of falsehood in her submission when she herself has accepted that the said papers were found in her possession and was in her handwriting. Refer to page no 78, 82, 83 etc. of paper book filed vide letter dated 20.05.2022. o In addition to the above, this contention was neither raised before AO or CIT(A). This contention has been raised for the first time before the Hon'ble ITAT. Since this needs factual verification and is not a pure legal argument, it should not be considered at this stage.  The said documents were found in safe custody and clearly bear reference to the assessee. Therefore, are important and relevant to her. Had these documents been merely rough notes or scribbling, they would not have been kept in safe custody.  Page No.63 of the loose paper bundle shows details of payment of professional tax/fees and 'H' form on 06.04.2015. Hence, the 20 to 2092/Mum/2021 Shri Raju Mohan Gurnani contents cannot be said to be scribbling and incorrect. When certain entries on the sheets can be corroborated independently, the other entries are bound to be true and not mere scribbling.  At number of places, the assessee has mentioned amount given to Ms.Priya Gurnani (her daughter), this clearly shows that the assessee is recording the transactions and the amounts. The AO has analyzed in detail and has accordingly made the additions. In accordance with the directions of the Hon'ble Bench during the course of hearing, comments on the loose sheets after examining them is tabulated hereunder. A legible copy of these loose sheets is also enclosed.

S. Pg.No. Date Noting Amount Remark No. 1) 61 02.06.2015 The amount 40 lacs Added in the hands given to me of the assessee in from karigar A.Y.2016-17. This is the amount received by the assessee from the karigars, as also accepted by the assessee group evident from the assessment order of M/s. Feelwell Garments and Accessories Pvt. Ltd. (The other noting on the sheet shows that out of this amount, 10 lacs given to Priya).

21 to 2092/Mum/2021 Shri Raju Mohan Gurnani 2) 62 10.04.2015 Ragav 1623750 Added in the hands of the assessee in A.Y.2016-17 {The other noting on the sheet shows that out of this amount, 15 lacs given to Priva). The number 16 implies 1 6 lacs and the number 15 implies 15 lacs is clearly evident from the notings. Hence the conclusion by the department while making the additions in respect of all these loose sheets. 3) 62 11.04.2015 Ragav 35 lacs Added in the hands of the assessee in A.Y.2016-17 4) 63 06.04.2015 Professional 2,70,000/- The assessee claimed Tax that the same is through banking channels. Since this entry can be corroborated, the other entries on the sheet are bound to be true. Also refer to comments at s.no.25. 5) 63 06.04.2015 H - Form 9,26,300/- Also refer to comments at s.no.26. 6) 63 08.04.2015 Rajesh (over) 9,70,870/- Added in the hands of the assessee in A.Y.2016-17 7) 63 08.04.2015 Paid 13,00,000/- Added in the hands to Narayan of the assessee in Gems A.Y. 2016-17 8) 63 With Priya 20 lacs It shows amount given to Priya. 9) 64 30.03.2015 With Priya 20 lacs It shows the running balance with Priya.

22 to 2092/Mum/2021 Shri Raju Mohan Gurnani 10) 64 31.03.2015 Rajesh 10 lacs Added in the hands of the assessee in A.Y.2015-16. Refer to comments at s.no.13, which clearly shows receipt. 11) 64 31.03.2015 Narayani 20 lacs Added in the hands of the assessee in A.Y.2015-16. Refer to comments at s.no.13, which clearly shows receipt. 12) 64 31.03.2015 49,42,400/- Added in the hands of the assessee in A.Y.2015-16. Refer to comments at s.no.13, which clearly shows receipt. 13) 64 31.03.2015 Total 79,42,400/- This total figure clearly shows that the number 10 and 20 mentioned Therein (discussed at s.no. 9 & 10 above) are in lacs and are the amounts received bit the asses see. The total receipt of Rs.79,42,400/- includes 10 lacs, 20 lacs and 49,42,4007-. The other noting shows that out of this total amount received, 75 lacs have been given to Priya.

23 to 2092/Mum/2021 Shri Raju Mohan Gurnani 14) 65 17.03.2014 Total 68,68,600/- Added in the hands of the assessee in A.Y.2014-15. (The other noting on the sheet shows that this amount of 68,68,600/- has been received by the assessee, and out of this amount, 65 lacs given to Priya). 15) 65 25.03.2015 48,52,800/- Added in the hands of the assessee in A.Y.2015-16.(The other noting on the sheet shows that this amount of 48,52,800/- has been received by the assessee, and out of this amount, 45 lacs given to Priya on 26.03.2015).

16) 65 32 lacs 32 lacs given to Priya. Total 80 lacs with Priya. This shows the running cash balance of the amounts given to Priya. 17 66 09.02.2015 From 6,80,000/- Added in the hands Ramesh of the assessee in A.Y.2015-16. Amount received from Ramesh. . 18 66 09.02.2015 From 36,67,5QO/- Added in the hands Raghav of the assessee in A.Y.2015-16. Amount received from Raghav.

24 to 2092/Mum/2021 Shri Raju Mohan Gurnani 19) 66 19.02.2015 10,06,760/- Added in the hands of the assessee in A.Y.2015-16, Implying same as above i.e. amount received from Raghav 20) 66 20.04.2015 Through 40 lacs Added in the hands Minakshi of the assessee in A.Y.2015-16. Implying amount received from Raghav, through Minakshi , 21) 66 02.03.2015 Bablu 10 lacs Added in the hands of the assessee in A.Y.2015-16. 22) 66 17.02.2015 65 lacs Added in the hands of the assessee in A.Y.2015-16. 23) 66 18.03.2015 In house 3,68,000/- Added in the hands of the assessee in A.Y.2015-16. , 24) 67 08.04.2015 Rajesh 487,660 Apparently, gives details of entry on page 63 483,210 (discussed at s.no.6 970,870 above). It also shows a running balance of total 21,67,170/- of which 20 goes to Priya. This fact that 20 with Priya is also mentioned on page 63 (discussed at s.no.8 above).

25 to 2092/Mum/2021 Shri Raju Mohan Gurnani 25) 68 06.04.2015 Fees 2,70,000/- Apparently, gives details of Mosam entry on page 63 Shah relating to professional tax or fees (discussed at s.no.4 above).The assessee claimed that the same is through banking channels. Since this entry can be corroborated, the other entries on the sheet are bound to be true 26) 69 06.04.2015 Ganesh 9,26,300/- Apparently, gives Kadar details of entry H Form on page 63 relating to H Form (discussed at s.no.5 above). 27) 70 08.04.2015 13,00,000/- Apparently, it is the entry on page 63 relating to Narayan Gems (discussed at s.no.7 above).

28) 71 07.04.2015 Kamru 1,00,000/- Added in the hands of the assessee in A.Y.2016-17.

29) 72 30.03.2015 20,00,000/- Apparently, it is the entry on page 64 relating to Priya (discussed at s.no,9 above).

30) 73 25.03.2015 48,52,800/- Apparently, it is the entry on page 65 (discussed at s.no.15 above). 31) 74 31.03.2015 10,00,0007- Apparently, it is the entry on page 64 relating to Rajesh (discussed at s.no.10 above). 32) 75 31.03.2015 To Priya 75 lacs Apparently, it is the entry on page 64 relating to Priya (discussed at s.no.13 above). 33) 76 31.03.2015 20,00,000/- Apparently, it is the entry on page 64 relating to Narayani (discussed at s.no.ll above). 34) 77 Total 80 48 lacs Apparently, it is the entry With Priya 32 lacs on page 65 relating to 80 lacs Priya (discussed at s.no.16 above). 35) 78 26.03.2015 20,00,000/- Added in the hands of the assessee in A.Y.2015-16. 36) 79 26.03.2015 Total 13,50,000/- Added in the hands 20,00,000/- of the assessee in 33,50,000/- A.Y.2015-16. Further, this clearly shows that 20,00 implies 20 lacs and 33,50 implies 33.5 lacs.of this, 32 lacs have been given to Priya

27 to 2092/Mum/2021 Shri Raju Mohan Gurnani  The background of the case is that a search action was conducted in the case of Moraj Group of entities including Mohan Gurnani (assessee's husband) and Priya Gurnani (assessee's daughter). The basic allegation and finding of the search action was 'Bogus Long Term Capital Gain' and 'Bogus Unsecured Loans & Advances' from entities operated by Vipul Bhatt, a known accommodation entry provider. Various statements including the statement of Piyush Shah, CA of the Moraj group, were recorded during the course of search, wherein it was categorically admitted that cash has been exchanged for availing accommodation entries by the group. These documents have to be considered in the backdrop of the findings of the entire search and not in isolation. These loose sheets clearly show notings of cash being received from karigars and others by the assessee, out of which cash is being repeatedly given to Priya. This is apparently a part of the complete gamut of transactions wherein cash has been introduced in the books through accommodation entries.

 The assessee has repeatedly said that the jottings are rough in nature and do not have financial implication. However, as explained in the table and submission above, they clearly have financial implication. The assessee clearly writes that out of the sum mentioned therein, certain amount is given to Priya. This clearly shows receipt of these amounts. Along with the amount received, date and name of the person has also been mentioned.

28 to 2092/Mum/2021 Shri Raju Mohan Gurnani  The facts are in knowledge of the assessee. The assessee's claim that it is a rough jotting is a general statement. The same noting on multiple sheets cannot be just a rough jotting as being claimed. It is certain that they have been made for certain transactions which are in complete knowledge of assessee but she is not revealing. The only explanation given is rough jottings which is a baseless statement. Further on certain places there are transactions written (professional fees, H-Form etc.) which are clearly corroborated independently. This indicates that the other transactions noted have also been executed and are not mere rough jottings. She should have given complete cash flow, however, she failed to do so. The assessee has failed to discharge the onus casted upon her. The assessee failed to explain the transactions noted in the loose sheets but are not recorded in the books of account and are therefore, unaccounted and unexplained. Hence, based on the incriminating documents seized, the notings thereon, the additions have been made.

 In view of the above facts and discussion, these documents cannot be termed as dump documents. The AO has analyzed in detail and has accordingly made the additions.

 The assessee has raised amended grounds vide letter dated 29.11.2022. It is submitted that the grounds raised by way of amendment were never raised before CIT(A) (refer para 3 on pg 2 of CIT (A)'s order), and are therefore, not admissible at this stage. Even on merits, since there was no search in the case of  The assessee has filed an application for admission of additional evidence vide letter dated 29.11.2022. It is an Affidavit of Shri Sanjay Kabra, CA. In this regard, it is submitted that the assessee is going back on her own submissions. She is contradicting her own stand taken before AO and CIT(A), based on which the orders have been passed, by way of filing an Affidavit from CA. Since this is an entirely new dimension being brought in the Appellate proceedings before ITAT and in complete contradiction to the stance before AO or CIT(A), it can't be admitted as additional evidence at this stage. ITAT rules also do not provide for the same.  Reliance is placed on the decision of Indian Steel and Wire Products Ltd. (1994) 208 ITR 740 (Cal).  Besides the above submissions, the orders of AO and ld. CIT(A) are strongly relied upon. In view of the above discussion, there is sufficient incriminating material which clearly shows continuous flow of cash including receipts and payments. Since the above cash transactions are not recorded in the books of account the same have been rightly upheld as unaccounted income of the assessee by the AO. It is requested that the additions made may kindly be upheld.

30 to 2092/Mum/2021 Shri Raju Mohan Gurnani  Incriminating material in the form of loose papers relating to assessee was found and seized during the search in the case of Moraj Group of entities including Mohan Gurnani (assessee's husband) and Priya Gurnani (assessee's daughter), on the basis of which notice u/s, 153C was issued and assessment was completed:-

 Appellant’s Response: The observation of CIT(DR) confirms that loose papers were found on 04.02.2016 from the premises and in the search action of Shri. Mohanlal Thakurdas Gurnani and Ms. Priyaa Mohan Gurnani on 04.02.2016 which is confirmed by the Punchnama and Annexure to Panchnama on Page No. 42 to 44 of the Paper Book II. There was no search action on 04.02.2016 in case of your appellant Smt. Raju Mohan Gurnani. • Please refer to Page No. 6 of the Factsheet dt. 09.01.2023 and additional Factsheet filed on 25.04.2023 with ITAT. • The issue is whether jurisdiction w/s. 153C was obtained as per law or not. Both the AOS i.e. the AO of the persons searched and the AO of the appellant have totally failed to establish and prove that the loose papers in question 'belonged to your appellant or 'contained information pertaining to' your appellant or owned by your appellant or 'pertained' or 'related to your appellant.  There is no findings by any of the AOS in their 'Satisfactions Notes' that the loose papers Page No. 1 to 83 of the Annexure I satisfied the requirements of S. 153C for assuming the jurisdiction w/s. 153C.  The assessee has raised an amended ground that locker owned by the assessee was searched by way of Warrant No. 12223 dated 17.02.2016 by the Department and was therefore, covered under search action u/s. 132 of the I T. Act, 1962. The assessee argued that notice u/s 153A should have been issued instead of 153C.

• Appellant's Response: The fact of the issue of search warrant No. 12223 dt. 17.02.2016 (Page No. 42 of Paper Book II) is accepted and recorded by the AO in assessment order for A. Y. 2015-16. Paragraph 1 of the Order reads as under "A search and seizure action was taken up in Gurnani group on 04.02.2016. The assessee was covered by issue of a search warrant No.12223. The case has been centralized with the undersigned vide N o. Pr. CIT-15Juris.L27/transfer/2016-17 dated 14. 12.2016." The Bank Locker was owned by the appellant and could not have been opened by the search party without the issue of search warrant in her name. Search Warrant does record her name. Please see the Search Warrant on Page No. 42 of Paper Book II.  It is submitted that Warrant No. 12223 dated 17.02.2016 was issued in the name of Shri Mohan Thakurdas Gurnani, Ms. Priya Mohanlal Gurnani and Ms. Deepa Mohan Gurnani and not in the name of Raju Mohan Gurnani. A copy of Warrant of Authorisation and Panchnama has already been filed during the course of hearing (along with copy to the assessee). Hence, assessment was rightly completed U/s.153C.

• Appellant's Response: Proceedings w/s. 153C were initiated just to cover the lapse and failure to initiate proceedings u/s. 153A in time. Notice u/s. 153C dt. 17.03.2017 (Page No. 7 of Paper Book 1) was issued much beyond the time for issue of notice us. 153A. Proceedings should have been initiated u/s 153A and not u/s. 153C as clearly explained in the additional factsheet submissions filed on 25.04.2023.

 The assessment is u/s 153C and a copy of the satisfaction note recorded by the AO before the issue of notice was given to the assessee (placed at Page 59-60 of the assessee's paper book-1). Para 4 of the note clearly states that the satisfaction has been 32 to 2092/Mum/2021 Shri Raju Mohan Gurnani drawn based on the seized documents in Annexure Al to Panchanama dated 18.02.2016. With reference to various documents in Annexure Al, it is pertinent to take note of pages 15, 28, 61 etc which have also been specifically mentioned in Para 1 of the satisfaction note, Page 15 & 28 clearly shows that cash is being received by 'mummy' ji i.e. the assessee, evident from the document itself and various statements recorded during the course of search. A copy of the assessment orders of M/s. Feelwell Garments and Accessories Pvt. Ltd. for A.Y 2015-16 and 2016-17 were filed during the course of hearing, which clearly establish this fact (refer to para 5 on pages 2-3 of the orders). It may be noted that the assessee group has accepted this factual position and has offered income in relevant years on this account. This proves the veracity of the documents and also the claim of the department that these loose sheets pertain to the assessee, • Appellant's Response: Page No. 59 and 60 of Paper Book - I referred to by CIT(DR) in the copy of the 'Satisfaction Note' of the AO of the appellant and not that of the AO of the persons searched. The note is recorded by the appellant's AO on receipt of the papers as the AO of the appellant which is clear from a bare reading of the said note.  Without prejudice, the AO of the persons searched has recorded his satisfaction without identifying the material or the papers in particular, which are believed by him to be 'belonging to the appellant or containing information pertaining to the appellant or pertaining or retailing to appellant.  There was an absolute failure of the 40 for assuming the valid Jurisdiction over appellant as required w. 153 of the Act. • The satisfaction note was recorded without application of mind.

33 to 2092/Mum/2021 Shri Raju Mohan Gurnani  In any case, even the AO of the appellant has till date not identified the relevant papers which are believed by him to be belonging to the appellant or are found to be containing 'information pertaining to the appellant.

• Unless the AO identifies the relevant papers, it was not possible for the appellant to lead reasonable evidence and furnish adequate explanation. Accordingly, the jurisdiction assumed w/s. 153C by the AO of the appellant was bad in law. There was no prima facie satisfaction that the appellant had anything to do with the search action not in her case, more so when; a. The loose papers are not found from the possession of the appellant nor are they in her handwriting and they do not represent any transactions pertaining to her affairs. She is a housewife not engaged in any business. b. Then is no presumption in law at all that permitted the AO/ CIT(A) to assume that the loose papers automatically represented her income/deemed income simply because the AO of the search persons had forwarded the said papers to the appellant's AO with a satisfaction note. c. The onus to prove that the loose papers were of the appellant and further that they represented appellant's income was on AO alone and the AO had failed to discharge the onus.  Reliance on the assessment order of the Feelwell Garments and Assessories Pvt. Ltd. is totally misplaced in as much as the said order was passed on 27.12.2017 which was much latter in time after recording of satisfaction by AO on 17.03.2017 and issue of Notice w/s. 153C dt. 17.03.2017. The said assessment order of Feelwell Garments and Assessories Pvt. Ltd. Could not ever be the reason for obtaining or deriving satisfaction.

 Pg 61 also highlights the above facts, wherein it clearly mentioned "the amount given to me from Karigar" This clearly shows that the seized documents pertain to the assessee and 34 to 2092/Mum/2021 Shri Raju Mohan Gurnani records the cash flow with the assessee and its source. Based on these documents, satisfaction was arrived at, notice U/S. 153C was issued and the additions have been made in the assessment orders.

• Appellant's Response: The issue at the outset is that who is 'me' referred to in Page 61. The AO has not established that 'me' is your appellant, nor has he even alleged in the Assessment Order that it is so. • Secondly, it in any case the said loose papers confirmed that the alleged amount in question pertained to Feelwell Garments and Accessories Pvt. Ltd and its affairs and cannot be a ground for addition in your appellant's case; it might result into disallowance of an expenditure of Feelwell Garments and Accessories Pvt. Ltd, if claimed and can never be the income of your appellant. • Thirdly, as explained earlier, the Assessment Order of Feelwell Garments and Accessories Pvt. Ltd was passed on 17.12.2017 and could not have been the ground for recording satisfaction and issue of notice u/s. 153C. • No questions were asked to your appellant or to the searched persons during the course of search seeking explanation, if any, for the loose papers in question. In fact, explanation, if any, for the loose papers was sought by the Investigation Wing in the post search inquiry from Ms. Priyaa Mohan Gurnani and not from appellant (Page No. 47 to 57 of the Paper Book). • Without prejudice, without conceding, even where some papers are written by her, such papers may still not belong to or pertain to her. For example the case of an accountant or a person who writes or scribbles something of the request of another person.

 The assessee has contended that loose papers did not belong to her nor they were in her handwriting. This argument is not tenable. i) In this regard, it is important to refer to Para No 4.1 and 4.2 of the assessment order. This clearly shows that the papers were in the handwriting of the assessee.

 Appellant's Response: The claim of CIT(DR) is false. The appellant had stated in writing, in her reply to AO dt. 16.12.2017 (Page No. 79 of Paper Book 1) that the loose papers did not belong to her. She never admitted that the said papers were in her handwriting or were found in her possession as has been falsely alleged by the AO which has then become the sole basis for his action.  There is no presumption in law that the loose papers in question are owned by me, belong to me or pertain to me and I am not burdened with any obligation in law to explain the contents of the papers where; o The papers are not found in my possession from my house. o The papers are not in my handwriting. o I have never admitted the ownership or the possession of the papers. o The person in whose possession the papers were found and in whose hands they were seized have never claimed that they belong to me. o No statements have ever been recorded of the persons or myself about the ownership and the contents of the papers. o I had categorically stated in writing in my letter to AO dt. 16.12.2017 (Pg. No. 79 of Paper Book) that the said papers did not belong to me. o The AO had falsely accused without any evidence or inquiry that the said papers were found in my possession and were in my handwriting. o The explanation was furnished to Investigation Wing vide letter dt. 25.04.2016 by Priyaa Mohan Gurnani and not by me in whose search and in whose hands the papers were found and seized.

36 to 2092/Mum/2021 Shri Raju Mohan Gurnani ii) Further, in Para 4, the Id. CIT(A) has discussed the addition based on these documents. Para 4.1 of CIT(A)'s order clearly shows that the loose papers belong to the assessee.

• Appellant's Response: It was presumptuous on the part of the CIT(A) to have observed what he had done without, in any manner, showing that how the loose papers belonged to your appellant and therefore it is not permissible in law for CIT(DR) to reply on such a bland observation devoid of any facts. Nothing has been explained when specifically asked to do so.  The loose papers were not found in the possession of the appellant as, been falsely alleged by the AO which has then become the sole basis for his action. There is no dispute that the loose papers were seized in the search action, not in her case. This fact is also proved by the transfer of papers by the AO of the third parties and the initiation of proceeding u/s. 153C by the appellant's AO in her case. iii) Para 4.2 is the reproduction of the submissions made by the assessee before the Id. CIT(A). Nowhere in the submission, the assessee has denied the ownership of the documents, nor refuted that it is not written by her.

 Appellant's Response: Again is this false. The appellant had stated in writing, in her reply to AO dt. 16.12.2017 (Page No. 79 of Paper Book I that the loose papers did not belong to her. She never admitted that the said papers were in her handwriting as has been falsely alleged by the AO. She had denied the ownership at the first available opportunities offered to her. iv) The appellant had repeatedly explained the above facts in in Factsheet filed on 09.01.2023.Para 4.3 also strengthens this fact.

37 to 2092/Mum/2021 Shri Raju Mohan Gurnani In fact, the assessee has also taken a legal ground that these loose papers are not books of accounts and, therefore, the additions cannot be made. She did not refute that these documents did not relate to her and were not in her handwriting.

 Appellant's Response: This is once again false. The appellant, as explained, had clearly disowned the ownership and/or relation to the loose papers in writing vide letter dt. 16.12.2017 (Page No. 79 of Paper Book 1) about the first available opportunity to her. The fact that the loose papers were forwarded by the AO of the searched party to her confirmed that the loose papers were not found in her possession and were seized in the hand of her husband and daughter in the search conducted in their cases. • Only on reading of the assessment order, she came to learn that the AO had alleged that the loose papers were in her handwriting. • Affidavit of three persons Le. CA Sanjay Kabra, Shri. Mohanlal Thakurdas Gurnani and Ms. Priyaa Mohan Gurnani have been filed with the ITAT with copies to DR for confirming that the loose papers were not found in her possession and that she has informed of the fact to the AO that they do not belong to her. Pg. 103 to 130 of PB-II.  No questions were asked to your appellant or to the searched persons during the course of search seeking explanation if nay for the loose papers in question beloved to your appellant or not. In fact, explanation, if any, for the loose papers was sought by the Investigation Wing in the post search inquiry from Ms. Priyaa Mohan Gurnani and not from appellant (Page No. 47 to 57 of the Paper Book). • The explanation furnished by the appellant Smt. Raju Mohan Gurnani were nothing but the reproduction of the explanation given by the searched person Ms. Priyaa Mohan Gurnai to the Investigation Wing vide her letter dated 25.04.2016 for explaining the loose papers 1 to 83. Please refer to Page No. 47 to 54 of the Paper Book for A. Y. 2014-15 to A. Y. 2016-17. These facts clearly confirm;

38 to 2092/Mum/2021 Shri Raju Mohan Gurnani A. The loose papers were not found in possession of the appellant Smt. Raju Mohan Gurnani and, B. The appellant has not admitted that they belonged to her. • The appellant has clarified the above facts in the Factsheet filed on 09.01. 2023. v) Submission of assessee's letter dated 16.12.2017 is placed at Page No.76-80 of the Paper book filed vide letter dated 20.05.2022. On Page No.78 of the paper book therein is an explanation to page no.69 (seized documents) wherein the assessee has accepted that she has written the above. The explanation given in respect of the other sheets also show that they are recorded by the assessee. For instance, against pg 64 and 65 - these are rough jottings made with regard to expense; pg 66 approximate amount of petty expenses; pg 67, 68 explain the entry; pg 71 rough jotting of anticipated. expenditure; pg 72 & 78 approximate fund availability with the assessee pg 74 & 76 - fund availability and etc.

• Appellant's Response: The claim of CIT(DR) is false. The appellant in her reply to AO vide letter dt. 16.12.2017 (Page No. 79 of Paper Book 1) has clearly denied the ownership of the loose papers and also the fact that the said loose papers are handwritten by her.  The explanation furnished by the appellant Smt. Raju Mohan Gurnani were nothing but the reproduction of the explanation given by the searched person Ms. Priyaa Mohan Gurnai to the Investigation Wing vide her letter dated 25.04.2016 for explaining the loose papers 1 to 83. Please refer to Page No. 47 to 54 of the Paper Book for A. Y. 2014-15 to A. Y. 2016-17. • Explanation to Loose Paper No. 69 on Page No. 78 of the Paper Book for A.Y. 2015-16 relating to Ganesh Kali should not be read

39 to 2092/Mum/2021 Shri Raju Mohan Gurnani in isolation in as much as under the said letter dated 16.12.2017 on Page No. 79, the appellant in conclusion has clearly stated that seized material did not belong to the appellant Smt. Raju Mohan Gurnani. • The breakup of the addition of Rs. 1,60,28,900/- by the Id. AO towards Pg. 67 to 79 was not given.  The figures and numbers on most of the loose papers were extrapolated by Id. AO without any basis to make large addition aggregated to Rs. 1,66,37,080 (Rs. 1,20,02,800 for A. Y. 2015-16 and Rs. 46,34,280 for A.Y. 2016-17). For example, numbers 10,20,79 and 75 on Pg. 18 of PB-1, numbers 65 and 45 on Pg, 19 of PB-1, numbers 65, 10 and 1006 on Pg. 20, number 75 on Pg. 29 and 48 and 32 on Pg. 31 of PB-I and number 3350 on Pg. 33 of PB.-I  Pg. 64, 65, 66 and 75 of Annexure A (Pg. 18, 19, 20, 29 of PB-I) recording of 75 to 31/3/15' is mischievously taken as Rs. 65,00,000, 45,00,000, and 74,00,000 of and is alleged by ld. AO to have been given to Priya (not even named in the paper).

 Jottings of simple amounts only without any text or name or nature of transaction have been assumed to be represented as income by AO. Pg. 21, 22, 23, 24, 25, 26, 27, 28, 30, 31, 32 and 33 of PB-1.

 Many loose papers pertained to transactions of Feelwell Garments and Assessories Pvt. Ltd. and were duly accounted in their books(Pg. 18, 20, 22, 23, 25, 28 of PB-1). This fact with evidence was highlighted in letter dt. 16.12.2017 to (Pg. 76 to 80 of PB-I) (Pg. 57 to 69 of PB-II) vi) Submission of assessee's letter dated 05.11.2018 is placed at Page No.81-87 of the Paper book filed vide letter dated 20.05.2022. In Para No.8.1 at page no. 82, the assessee herself has submitted that "The items mentioned in the loose papers are 40 to 2092/Mum/2021 Shri Raju Mohan Gurnani mere rough scribbling made by the appellant". Further, in Para No. 8.4 on Page No.83, the assessee again submits that "The loose papers found in possession of the appellant are not covered within the definition of books of account or document". Therefore, the argument that the loose papers are not of assessee and do not record any transactions pertaining to her is incorrect.

 Appellant's Response: The assessee's letter dated 05.11.2018 on Page No.81-87 of the Paper book I was submitted/filed before CIT(A) and not AO. This letter to CIT(A) had to be read with Pg. 79 addressed to Id. AO.  In any case, the reference by the Ld. DR to the letter dated 05.11.2018 (Para 8.1 of Page No. 82 para 8.4 on Page No. 83) should be read in context that the appellant was asked to furnish an explanation which she has qualified by precisely stating that on Pg. 79 that the seized material does not belong to her and therefore by reference to some isolated page should not be considered as her admission to the possession of papers or to her handwriting. vii) The fact that the assessee has given comments in order to explain the entries on the sheets, clearly show that the assessee has not refuted the documents.

• Appellant's Response: During the course of investigation, the explanation was sought from Ms. Priyaa Mohan Gurnani vide her letter dated 25.04.2016 (Page No. 47 to 54 of the Paper Book for A.Y. 2014-15 to A.Y. 2016-17), who was searched to explain the contents of loose papers, which she had explained page wise without at any point claiming that the loose papers belonged to or pertained to the appellant in her letter dt. 16.12.2017 (Page no. 76 of the paper book 1) • The explanation furnished by the appellant Smt. Raju Mohan Gurnani are nothing but the reproduction of the explanation given by the searched person Ms. Priyaa Mohan Gurnai to the 41 to 2092/Mum/2021 Shri Raju Mohan Gurnani Investigation Wing vide her letter dated 25.04.2016 for explaining the loose papers 1 to 83. Please refer to Page No. 47 to 54 of the Paper Book for A. Y. 2014-15 to A.Y. 2016-17. viii) Explanation of the assessee on loose papers seized with respect to Page No.64, 66, 67, 68, 69, 71, 72 which are placed at Page Nos. 70-80 of Paper Bundle filed vide letter dated 20.05.2022 clearly shows that the transactions recorded pertains to her.

• Appellant's Response: As stated in the Factsheet dt. 09.01.2023, Appellant was not under any obligation to explain or offer any explanation for loose papers found in a search on third persons cases.  Her explanation was tendered as an attempt to assist AO on being issued and served with the show cause notice.  The explanation was given without prejudice and subject to the fact that the papers did not belong to her. Letter dt. 16.12.2017 (Pg. 76 to 80 of PB) was an attempt based on reproduction of reply of Priya Mohan Gurnani dt. 25.04.2016 (Pg. 47 to 38 of PB).  Without prejudice, none of the above papers pertained to or related to your appellant. No mention of her name on any of the loose papers.  Further, the appellant hereby states the significance of noting/ jottings on loose papers Page No. 64 to 72 (Page No. 18, 20, 22, 23, 25, 28 of Paper Book 1) as per the explanation furnished to DDIT by Priya Mohan Gurnani. o Pg. 64 of Seized loose papers Approx payment to be done contractors. Expenses in relation to Feelwell Garments and Accessories Pvt. Ltd. o Pg. 65 of Seized loose papers - It is rough jottings and doesnot have any financial implications and it belongs to Priya Mohan Gurnani 42 to 2092/Mum/2021 Shri Raju Mohan Gurnani o Pg. 66 of Seized loose papers - Petty amounts are mentioned in seized papers - 680, 3667.5, 1006, 76, 34 and are expenses belonging to office boys of Feelwell Garments and Accessories Pvt. Ltd. namely Ramesh and Raghav. o Pg. 67 of seized loose papers - The information on this page is same as on Pg.

63. It is rough jottings and doesnot have any financial implications. o Pg. 68 of seized loose papers - Payment made through banking channel in relation to professional services and is accounted in the books of Feelwell Garments and Accessories Pvt. Ltd. Pg. 69 of seized loose papers-Approx amount of billing from supplier of Feelwell Garments and Accessories Pvt. Ltd. namely Ganesh Kali Trading Company Pg. 70 of seized loose papers - The information on this page is same as on Pg.

63. Pg. 71 of seized loose papers - Rough jottings of anticipated expenditure were pertaining and belonging to Feelwell Garments and Accessories Pvt. Ltd. Pg. 72 of seized loose papers - The amount mentioned is the approximately fund availability with the assessee.

ix) The assessee has wrongly alleged the AO of falsehood in her submission when she herself has accepted that the said papers were found in her possession and was in her handwriting. Refer to page no.78, 82, 83 etc. of paper book filed vide letter dated 20.05.2022.

• Appellant's Response: Again the allegation of the CIT(DR) is a new falsehood. The appellant has never accepted that papers were found in her possession. Rather she could not have ever done this as it is beyond doubt that the papers were found and 43 to 2092/Mum/2021 Shri Raju Mohan Gurnani seized on 04.02.2016 in the search action in case of Priyaa Mohan Gurnani and Mohan Thakurdas Gurnani. In fact, the proceedings u/s. 153C confirms that the papers were not found in her hands. • Secondly, never ever appellant has stated that the loose papers were in her handwriting nor has AO established that it was in her handwriting. No reference was made by AO or Investigation Wing to any handwriting experts for forensics. • The facts that the papers did not belong to her, were not found from her and were not in her handwriting was clearly informed to AO vide letter dt. 16.12.2017 (Pg. 76 to 80 (Pg.79) of Paper Book 1). There is no dispute that papers were found from the premises and in the search action of Shri. Mohanlal Thakurdas Gurnani and Ms. Priyaa Mohan Gurnani on 04.02.2016 which is confirmed by the Punchnama and Annexure to Panchnama on Page No. 42 to 44 of the Paper Book-II. • Secondly, the fact that the loose papers were forwarded by the AO of the searched party to her AO confirmed that the loose papers were not found in her possession and were seized in the hands of her husband and daughter in the search conducted in their cases. • The explanation relating to the above facts was clearly given by the appellant vide Additional Submissions filed on 25.04.2023. x) In addition to the above, this contention was neither raised before AO or CIT (A) This contention has been raised for the first time before the Hon‟ble ITAT Since this needs factual verification and is not a pure legal argument, it should not be considered at this stage.

• Appellant's Response: Once again, the CIT(DR) is wrong in stating that the contention of the appellant that the papers did not belong to her was not raised by your appellant before the AO or CIT(A). The fact is otherwise. The appellant did raise this 44 to 2092/Mum/2021 Shri Raju Mohan Gurnani contention in writing vide letter dt. 16.12.2017 (Pg. 76 to 80 of Paper Book 1)(Pg. 79) • As clearly stated above, the appellant had expressly denied the ownership of the papers. There was no presumption in law to hold that the papers belonged to her. The appellant had categorically stated in her letter to AO dt. 16.12.2017 (page No. 79 of the Paper Book that the said papers did not belong to her.

 The said documents were found in safe custody and clearly bear reference to the assessee. Therefore, are important and relevant to her. Had these documents been merely rough notes or scribbling, they would not have been kept in safe custody.

 Appellant's Response: The loose papers were found from the premises of Mohan Thakurdas Gurnani and not from the safe custody. Nothing is established by AO or DR that the papers were relevant to her Le your appellant. In fact the DR herself has shown that they related to affairs of Feelwell Garments and Accessories Pvt. Ltd. by reviewing and bringing on record the Assessment Order of Feelwell Garments.

 Page No.63 of the loose paper bundle shows details of payment of professional tax/fees and 'H' form on 06.04.2015 Hence, the contents cannot be said to be scribbling and incorrect. When certain entries on the sheets can be corroborated independently, the other entries are bound to be true and not mere scribbling • Appellant's Response: It was explained in writing vide letter dt. 16.12.2017 (Pg. 76 to 80 of Paper Book 1) that many of the seized loose papers belonged to or pertained to Feelwell Garments and Accessories Pvt. Ltd. (Pg. 64, 66,68,69,71 and 74 of Ann A) which are placed in Paper Book I at Pg. 18, 20, 22, 23, 25 and 28.

• As stated above, the DR herself has shown that they related to affairs of Feelwell Garments and Accessories Pvt. Ltd.  At number of places, the assessee has mentioned amount given to Ms. Priya Gurnani (her daughter), this clearly shows that the assessee is recording the transactions and the amounts. The AO has analyzed in detail and has accordingly made the additions.

• Appellant's Response: The appellant disowned the papers and explained that the papers were not in her handwriting at the first available opportunity. • The loose papers were 'dumb papers' as far as the appellant was concerned as they did not belong to her. Even otherwise they are dumb in as much as; - they were jottings and scribblings with no evidentiary value not representing any transactions with income element. - They did not indicate whether the jottings represented a receipt/ payments or debits/credits or income/ expenditure or purchase/sale or loans or gifts to /by the appellant. -The jottings did not represent the name of the recipient or the payer. -None of them had any reference or relevance to the appellant Raju M. Gurnani. -Her name does not appear on the loose papers. -they did not carry any date in most of cases. -Jottings of simple amounts only without any name or nature of transaction have been assumed to be represented as income by AO. Pg. 21, 22, 23, 24, 25, 26, 27, 28, 30, 31, 32 and 33 of PB. - they were not signed by appellant or anyone else - they did not reveal that the amounts/numbers mentioned were debit or credit, receipt or payment, income or expenditure No 46 to 2092/Mum/2021 Shri Raju Mohan Gurnani addition could have been made simply because the said papers did not contain any 'narration'. This fact rather supported that no addition was possible.”

s. PG. Date Noting Amount Remark No No. 1) 61 02.06.2015 The 40 Lacs Added in the hands of the amount assesse in A.Y.2016-17. This given to is the amount received by the me from assessee fromthe karigars, karigar as also accepted by the assessee group evident from the assessment order of M/s. Feelwell Garments and Accessories Pvt. Ltd. (The other noting on the sheet shows that out of this amount, 10 lacs given to Priya). 62 10.04.2015 Ragav 16,23,750 2) Added in the hands of the assesse in A.Y.2016-17 (The other noting on the sheet shows that out of this amount, 15 lacs given to Priya) The number 16 implies 16 lacs and the number 15 implies 15 lacs is clearly evident from the noting. Hence the conclusion by the department while making the additions in respect of all these loose sheets. 3) 62 11.04.2015 Ragav 35 Lacs Added in the hands of the assessee in A.Y.2016-17 4) 63 06.04.2015 Professional 2,70,000/- The assessee claimed that the same is through banking Tax channels. Since this entry can be corroborated, the other

47 to 2092/Mum/2021 Shri Raju Mohan Gurnani entries on the sheet are bound to be true. Also refer to comments at s.no .25. 5) 63 06.04.2015 H-Form 9,26,300/- Also refer to comments at s.no .26 6) 63 08.04.2015 Rajesh 9,70,870 Added in the hands of the assessee in A.Y.2016-17 (Over) 7) 63 08.04.2015 Paid to 13,00,000 Added in the hands of the assessee in A.Y.2016-17 Narayan Gems 8) 63 WithPriya 20 lacs It shows amount given to Priya. 9) 64 30.03.2015 With Priya 20 Lacs It shows the running balance with Priya. 10) 64 31.03.2015 Rajesh 10 Lacs Added in the hands of the assessee in AY 2015-16. Refer to comments at s.no 13, which clearly show receipt. U) 64 31.03.2015 Narayan 20 Lacs Added in the hands of the assesee in AY 2015-16. Refer to comments at s.no/ 13, which clearly shows receipt. 12) 64 31.03.2015 49,42,400/- Added in the hands of the assessee AY 2015-16. Refer to comments at s.no/ 13, which clearly shows receipt. 13) 64 31.03.2015 Total 79,42,400 This total figure clearly shows that the number 10 and 20 mentioned therein (discussed at s no. 9 & 10 above) are in lacs and are the amounts received by the assesse. The total receipt of Rs. 79,42,400/- The other noting shows that out of this total amount received, 75 lacs have been given to Priya.

48 to 2092/Mum/2021 Shri Raju Mohan Gurnani 14) 65 17.03.2014 Total 68,68,600/- Added in the hands of the assesse A.Y. 2014-15. (The other noting on the sheet shows that this amount of 68,68,600/- has been received by the assesse, and out of this amount, 65 lacs given to Priya).

15) 65 20.03.2015 48,52,800 Added in the hand of assesse in AY.2015-16. (The other noting on the sheet shows that this amount of 48,52,800/- has been received by the assesse, and out of this amount, 45 Lacs given to Priya on 26.03.2015) 16) 65 32 lacs 32 lacs given to Priya. Total 80 lacs with Priya.This shows the running cash balance of the amount given to Priya. 17) 66 09.02.2015 From 6,80,000/- Added in the hands of the assesse in AY. 2015-16. Ramesh Amount received from Ramesh. 18) 66 09.02.2015 From 36,67,500 Added in the hands of the assesse in AY. 2015-16. Raghav Amount received from Raghav 19) 66 19.02.2015 Through 1006760/- Added in the hands of the assesse in AY. 2015-16. Minakshi Implying amount received frqm^aghav_ 20) 66 20.04.2015 Through 40 lacs Added in the hands of the assesse in AY. 201 5-1 6. Minakshi Imply ing amount received from Raghav, through Minakshi 21) 66 02.03.2015 Bablu 10 Lacs Added in the hands of the assessee in A.Y. 2015-16 22) 66 17.02.2015 65 Lacs Added in the hands of the assessee in A.Y. 2015-16 23) 66 18.03.2015 In house 3,68,000/- Added in the hands of the 49 to 2092/Mum/2021 Shri Raju Mohan Gurnani assessee in A.Y. 2015-16 24) 67 08.04.2015 Rajesh 487,660 Apparently, gives details of entry on page 63 (discussed at 483,210 s. no. 6 above). It also shows a 970,870 running balance of total 21,67,170/- of which 20 goes to priya. This fact that 20 with Priya is also mentioned on page 63(discussed at s.no. 8 above) 25) 68 06.04.2015 Fees Mosam 2,70,000/- Apparently, gives details of entry on page 63 relating to Shah professional tax or fees (discussed at s.no.4 above). The assesee claimed that the same is though banking channels. Since this entry can be corroborated, the other entries on the sheet are bound to be true. 26) 69 06.04.2015 Ganesh 9,26,300/- Apparently, gives details of entry on page 5=3 relating to Kadar H Form (discussed ats.no. 5 HForm above). 27) 70 08.04.2015 13,00,000/- Apparently, it is the entry on page 63 relating to Narayan Gems (discussed atsno. 7 above) 28) 71 07.04.2015 Kamru 1,00,000/- Added in the hands of the assesse in A.Y. 2016-17 29) 72 30.03.2015 20,00,000/- Apparently, it is the entry on page 64 relating to Priya (discussed at s.no. 9 above), 30) 73 25.03,2015 48,52,800/- Apparently, it is the entry on page 65 (discussed at s.no.15 above), 31) 74 31.03.2015 10,00,000/- Apparently, it is the entry on page 64 relating to Rajesh (discussed at s.no.10 above). 32) 75 31.03.2015 To Priya 75 lacs Apparently, it is the entry on 50 to 2092/Mum/2021 Shri Raju Mohan Gurnani page 64 relating to Priya (discussed at s.no.13 above). 33) 76 31.03.2015 20,00,000/- Apparently, it is the entry on page 64 relating to Narayani (discussed at s.no.ll above). 34) 77 Total 80 48 lacs Apparently, it is the entry on page 65 relating to Priya With Priya 32 lacs (discussed at s.no.16 80 lacs above).

35) 78 26.03.2015 20,00,000/- Added in the hands of the assessee in A.Y.2015-16. 36) 79 26.03.2015 Total 13,50,000/- Added in the hands of the assessee in A.Y.2015-16, 20,00,000/- Further, this clearly shows 33,50,000/- ihat 20.00 implies 20 lacs and 33.50 implies 33.5 lacs of this, 32 lacs have been given to Priya.

Pg. 61 of Seized loose papers - Rs. 40 has been written and is rough jottings. In other pages, rupees. in lakhs has been mentioned, on no grounds it shall be presumed that it is 40 lakhs following the consistency and in absence of statement of oath. o Pg. 62 of Seized loose papers - It mentions 16,23,750 and 350 and raghav is mentioned. It is dumbed papers which is not related to appellant. o Pg. 63 of Seized loose papers - Payment to contractor of 9,70,870 of Feelwell Garments and Accessories Pvt. Ltd. and was paid 51 to 2092/Mum/2021 Shri Raju Mohan Gurnani through cheques. Further 13,00,000 has been mentioned and is relating Narayan Gem which is unrelated to the appellant. o Pg. 64 of Seized loose papers - Approx payment to be done contractors. Expenses in relation to Feelwell Garments and Accessories Pvt. Ltd. o Pg. 65 of Seized loose papers - It is rough jottings and doesnot have any financial implications and it belongs to Priya Mohan Gurnani Pg. 66 of Seized loose papers - Petty amounts are mentioned in seized papers - 680, 3667.5, 1006, 76, 34 and are expenses belonging to office boys of Feelwell Garments and Accessories Pvt. Ltd. namely Ramesh and Raghav. o Pg. 67 of seized loose papers - The information on this page is same as on Pg.

o Pg. 74 of seized loose papers - It is the approx. fund availability with the Yes Bank EEFC Euro Account of Feelwell Garments and Accessories Pvt. Ltd. and Raje is the office boy of Feelwell Garments and Accessories Pvt. Ltd. o Pg. 75 of seized loose papers - The same does not have any relation to the appellant and appellant does not have knowledge about the said seized paper. o Pg. 76 of seized loose papers - It is the same noting as Pg. 72 of seized loose paper i.c. the amount mentioned is the approximately fund availability with the assessee. o Pg. 77 of seized loose papers - The same does not have any relation to the appellant and appellant does not have knowledge about the said seized paper. o Pg. 78 of seized loose papers - It is the same noting as Pg. 72 and Pg. 76 of seized loose paper i.e. the amount mentioned is the approximately fund availability with the assessee. o Pg. 79 of seized loose papers - The same does not have any relation to the appellant and appellant does not have knowledge about the said seized paper

53 to 2092/Mum/2021 Shri Raju Mohan Gurnani in the case of Shri Mohan Gurnani and Ms. Priya Gurnani and accordingly, proceedings u/s.153C has been initiated in the case of the assessee. This fact is also evident from the panchnama dated 04/02/2016. These loose papers were forwarded by the ld. AO to the search party which itself goes to show that these loose papers were not found in the possession of the assessee as noted by the ld. AO wrongly.

54 to 2092/Mum/2021 Shri Raju Mohan Gurnani received by “Mummyji”, i.e., assessee, and that itself constitutes the basis for assuming jurisdiction u/s.153C. The assessee was though connected with M/s. Feelwell Garments and Accessories Pvt. Ltd. and some of the documents do pertain to payment made to karigars who were alleged to be doing work for M/s.Feelwell Garments and Accessories Pvt. Ltd. which we have already incorporated the narration of various pages of the loose papers, herein above.

57 to 2092/Mum/2021 Shri Raju Mohan Gurnani document or paper or any entry or narration pertains to the assessee based on which any adverse inference can be drawn. Any receipt from karigars of M/s.Feelwell Garments and Accessories Pvt. Ltd. has nothing to do with the addition made in the case of assessee, albeit, if any adverse inference was to be drawn, then the same should have been made in that case, wherein no such addition has been made by the ld. AO in his assessment.

58 to 2092/Mum/2021 Shri Raju Mohan Gurnani and despite that, the ld. AO has presumed that these annexure of loose papers belongs to or pertains to the assessee. Accordingly, we hold that none of the additions based on these loose papers can be made in the hands of the assessee atleast there has to be some basis.

59 to 2092/Mum/2021 Shri Raju Mohan Gurnani use of the company and therefore, it is not a vacant house and therefore, no deemed income should have been charged. We are unable to accept his contention because even if the property has been given for use by the company for the business, the rental income should have been shown by the assessee and therefore, we direct the ld. AO to take standard municipal rent under the Maharashtra Control Act and accordingly, compute the income from the house property.

Order pronounced on 31st July, 2023.