SHRI. S ARPUTHARAJ,COIMBATORE vs. DCIT CENTRAL CIRCLE 1, COIMBATORE

PER MANJUNATHA. G, ACCOUNTANT MEMBER:

for all assessment years. From the grounds of appeal filed by the assessee, six issues has been identified by the Ld. Counsel for the assessee for our adjudication, which are as follows: (i) Loans to M/s. Kangaroo Impex and consequent interest for assessment year 2009-10 & 2010-11. (ii) Investment in M/s. Mars Export for assessment year 2010-11 & 2011-12. (iii) Unaccounted cash loans for assessment year 2009- 10 & 2010

11. (iv) Money swindled for Mrs. Dhanalakshmi, employee of the assessee for assessment years 2011-12 to 2015-16. (v) Difference between income returned originally and income returned in response to notice u/s. 153A of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for assessment year 2009-10 to 2011-12. (vi) Additions towards unaccounted sales for assessment year 2014-15.

:-3-: 1493 to 1499/Chny/2018 3. Since, the issues have been identified from the grounds of appeals filed by the assessee for all assessment years, we deem it not thought pit to reproduce grounds of appeal filed by the assessee for all assessment years.

4. The brief facts of the case are that, the appellant Shri. S. Arputharaj, is engaged in the business of real estate, money lending etc. A search u/s. 132 of the Act, was conducted in the case of the assessee on 26.02.2015. As a result of the search and post-search investigation and evidences found during the course of search, revealed undisclosed income and investment in various assets etc. In pursuant to search, notice u/s. 153A of the Act, was issued on 22.07.2015 for assessment years 2009-10 to 2014-15, requiring the assessee to file the return of income. The assessee did not filed his return of income in response to notice u/s 153A of the Act, within the due date prescribed under said notice. The Assessing Officer, has initiated penalty proceedings u/s. 271F r.w.s. 274 of the Act, for non-filing of return of income, and a show cause notice u/s. 276CC of the Act was issued for proposed prosecution. Finally, the assessee has filed return of income for assessment years 2009-10 to 2015-16 on different :-4-: 1493 to 1499/Chny/2018 dates and the details of date of filing of original return of income and dates of filing of return of income in response to 153A notice is tabulated below: AY Date of filing Income Date of filing Income Date of original R/I originally R/I u/s. returned u/s. Notice u/s. returned 153A/142(1) 153A 143(2) 2009-10 28/08/2010 3424530 29/06/2016 1400740 15/07/2016 (Revised return) 2010-11 14/10/2010 19933740 10/08/2016 1026110 11/08/2016 2011-12 30/09/2011 141230 13/08/2016 -9778276 08/09/2016 2012-13 30/09/2012 0 18/08/2016 106050 08/09/2016 2013-14 25/10/2013 -56,11,600 19/08/2016 -1,05,62,962 08/09/2016 2014-15 29/11/2014 1159470 14/09/2016 -1,76,16,113 19/09/2016 2015-16 - - 18/09/2016 -92,45,237 19/09/2016

5. The assessment has been completed u/s. 143(3) r.w.s. 153A of the Act, on 30.12.2016 and made various additions including additions towards unaccounted rental income, investment in M/s. Miracle Cars India Pvt Ltd., property in Kerala, investment in M/s. Mars Exports and loans to M/s. Kangaroo Impex and interest thereon, unaccounted cash loans, money swindled by Smt. Dhanalakshmi, unaccounted sales and difference between income returned in original return of income and income returned in the return of income filed in response to 153A notice. The assessee carried the matter in appeal before the first appellate authority, but could not succeed. The Ld. CIT(A), for the reasons stated in their appellate order dated 19.02.2018, sustained additions made :-5-: 1493 to 1499/Chny/2018 by the Assessing Officer towards various undisclosed income and dismissed appeal filed by the assessee. The assessee carried the matter in further appeal before the Tribunal and the ITAT, Chennai Benches vide their order dated 13.06.2018 for assessment years 2009-10 to 2015-16, partly allowed appeals filed by the assessee, where the Tribunal has remitted certain issues to the file of the Assessing Officer. The Tribunal had also deleted additions made towards money swindled by Smt. Dhanalakshmi and unaccounted sales for assessment years 2011-12 to 2015-16. However, confirmed additions towards investment in M/s. Mars Exports, loan to M/s. Kangaroo Impex and interest thereon, unaccounted cash loans and difference between admitted and returned income. Aggrieved by the tribunal order, the assessee as well as the revenue has filed appeal before the Hon’ble High Court of Madras. The assessee has filed appeal for assessment years 2009-10, 2010-11 & 2011-12 for the issues where additions was confirmed by the ITAT. The revenue has filed appeal for assessment years 2011-12 to 2015-16, for the issues where additions were deleted by the ITAT. The Hon’ble High Court of Madras, vide their order dated 10.12.2018, remitted the :-6-: ITA. Nos: 1493 to 1499/Chny/2018 matter back to the ITAT for the issues contested before them by both the parties.

6. The assessee has also filed another appeal before Hon’ble High Court of Madras in TCA No. 1061/2019, against order dated 13.06.2016 of the Tribunal in for assessment year 2010-11, only with regard to the question regarding discharge liabilities with regard to the property purchased by the assessee from M/s. Mars Export and added a sum of Rs. 16.5 crores as additional income, though, the assessee filed assessment and discharged its liabilities. The Hon’ble High Court of Madras, vide its order dated 06.01.2020, remitted the issue to the Tribunal to consider the matter afresh after hearing both the parties. Therefore, the present appeals have been posted for hearing in pursuant to directions of the Hon’ble High Court of Madras in their order dated 10.12.2018 and 06.01.2020.

19.2 The Assessing Officer has made additions of Rs. 3.96 crores towards unaccounted cash loans to Shri. C. Giridharan, on the ground that as per the evidence found :-25-: 1493 to 1499/Chny/2018 during the course of search, the appellant has advanced a sum of Rs. 5.06 crores to Shri. C. Giridharan, out of which Rs. 3.96 crores is paid in cash. The Assessing Officer has reproduced details of loans given to Shri. C. Giridharan, and mode of payment in para 4.2.1.2 of his assessment order. According to the Assessing Officer, although the assessee claims to have paid amount to Shri. C. Giridharan, for purchase of property, but said transaction is only a loan and further the assessee could not explain source for cash loans given to Shri. C. Giridharan. Therefore, rejected arguments of the assessee and made additions of Rs. 3.96 crores.

19.3. The Ld. Counsel for the assessee, submitted that the ld. Assessing Officer has made additions only on the basis of allegation that, the assessee has not accounted cash loans, but fact remains that the assessee has accounted all the payments made to Shri. C. Giridharan and also proved source for loan given to Shri. C. Giridharan. Further, except one or two documents seized in the name of Shri. C. Giridharan, rest of the documents does not reveal any reference to the mode of payment. No statement has been obtained from the buyer to verify the mode of payment. Therefore, he submitted that :-26-: 1493 to 1499/Chny/2018 the Assessing Officer is completely erred in making additions towards unaccounted cash loans given to Shri. C. Giridharan. He further submitted that the appellant has purchased two properties from Shri. C. Giridharan and C. Hariharan, and the Assessing Officer has considered payment made for purchase of property as also loans, ignoring all evidences filed by the assessee.

19.4. The ld. CIT-DR, Shri. R. Clement Ramesh Kumar, supporting the order of the ld. CIT(A) submitted that, there is no dispute on loans given through proper bank account. In fact, the Assessing Officer has not made any additions towards loan given to Shri. C. Giridharan through bank transfer or cheque payment. But, seized materials found during the course of search clearly shows that the assessee has paid cash loans to Shri. C. Giridharan on various dates, for which no satisfactory explanation has been furnished. Therefore, the Assessing Officer has rightly made additions towards cash loans and their order should be upheld.

19.5. We have heard both the parties, perused materials available on record and gone through orders of the authorities :-27-: 1493 to 1499/Chny/2018 below. During the course of search u/s. 132 of the Act, various incriminating materials was found and seized vide annexure SA/12, which contains details of cash loans given to Shri. C. Giridharan. As per seized documents, the appellant had given Rs. 5.06 crores loans to above party which consists of cash loan and loan through cheque and bank transfer. The Assessing Officer, has not made addition towards loans given through bank because source for said loans has been explained. However, addition has been made towards cash loans for Rs. 3.96 crores, because the assessee could not explain source for cash loans. Although, the assessee claims to have made payment for purchase of property, but it is evident from the receipts seized during the course of search, which clearly shows that these are loan transactions, but not for purchase of property. Further, the payments made for purchase of property are altogether different from reference to in seized material found during the course of search. From the above, it is abundantly clear that, the assessee could not explain source for cash loans given to Shri. C. Giridharan. Therefore, we are of the considered view that there is no error in the reasons given by the ld. CIT(A) to sustain additions made towards cash loans of Rs. 3.96 crores given to Shri. C.

:-28-: 1493 to 1499/Chny/2018 Giridharan and thus, we are inclined to uphold the findings of the ld. CIT(A) and reject ground taken by the assessee.

19.6. The next item of addition of Rs. 26 lakhs towards unaccounted cash loans to Shri C. Hariharan. Incriminating material found during the course of search reveals that the appellant had given cash loans of Rs. 26 lakhs to Shri C. Hariharan, but the assessee could not explain source for cash loans. Therefore, the Assessing Officer has made additions as undisclosed income of the assessee.

19.7. The Ld. Counsel for the assessee, submitted that the ld. CIT(A) erred in confirming additions made towards unaccounted cash loans to Shri C. Hariharan without appreciating fact that the assessee has filed evidence to prove source for said loans and further, the loans has been accounted in the books of accounts of the assessee. Therefore, he submitted that the additions made by the Assessing Officer should be deleted.

19.8. The ld. CIT-DR, Shri. R. Clement Ramesh Kumar, supporting the order of the ld. CIT(A) submitted that, :-29-: 1493 to 1499/Chny/2018 documents found during the course of search clearly shows unaccounted cash loans to above party. The assessee could not explain source. Therefore, the Assessing Officer has made additions and their order should be upheld.

19.9. We have heard both the parties and considered relevant reasons given by the Assessing Officer to make addition towards unaccounted cash loans to Shri C. Hariharan. We find that during the course of search, cash receipts cum affidavit of Shri C. Hariharan has been found which shows that the appellant had given Rs. 25 lakhs in cash on 03.03.2009 and another Rs. 1 lakh in cash on 25.06.2009, through Shri. C. Giridharan brother of Shri C. Hariharan. The assessee could not file any evidence to prove source for said loans. Even before us, except oral statement no evidence has been filed to justify source for cash loans to above party. Therefore, we are of the considered view that, there is no error in the reasons given by the ld. CIT(A) to sustain additions made towards unaccounted cash loans to Shri C. Hariharan. Thus, we reject arguments of the assessee and uphold addition made towards unaccounted cash loan of Rs. 26 lakhs given to Shri C. Hariharan.

:-30-: 1493 to 1499/Chny/2018 19.10. The next item of addition is unaccounted cash loan to Shri. C. R. Narayanasamy, amounting to Rs. 3.95 crores. The Ld. Counsel for the assessee, submitted that payment made to Shri. C. R. Narayanasamy is towards purchase of two properties, but not as loan. The appellant has purchased a residential property at Peelamedu (Bharathi Colony) and paid Rs. 2 crores through IDBI Bank vide pay order and source for said payment is loan taken from IDBI Bank, for which necessary evidences including loan sanction letter has been filed before the Assessing Officer. The appellant had also purchased office building at Singanallur, Ramanuja Nagar, for a consideration of Rs.1.60 crores and paid advance of Rs. 1.50 crores through RTGS. The balance amount of Rs. 10 lakhs is due and payable, for which evidences are found during the course of search. But, the Assessing Officer has made additions towards payment made to Shri. C. R. Narayanasamy as unaccounted loans. Further, the Assessing Officer himself in Para 4.2.3.3 of assessment order stated that the appellant had purchased two properties from Shri. C. R. Narayanasamy and paid cash payments over and above the registered value as on-money. The Assessing Officer, had also recorded statement from Shri. C. R. Narayanasamy u/s. 131(1A) of the :-31-: ITA. Nos: 1493 to 1499/Chny/2018 Act, where he has denied receipt of cash payment. Although, the Assessing Officer noticed that payment made to above party is for purchase of properties, but made addition as unaccounted cash loans. Therefore, he submitted that additions made by the Assessing Officer should be deleted.

19.11. The ld. CIT-DR, Shri. R. Clement Ramesh Kumar, supporting the order of the ld. CIT(A) submitted that, the Assessing Officer has discussed the issue in light of sale agreement between the assessee and Shri. C. R. Narayanasamy and also sale deed executed for purchase of property and ascertained the fact that the appellant has paid on-money for purchase of property over and above agreed consideration. The payment made in cash to above parties is supported by incriminating material found during the course of search. The appellant could not explain source for cash payments. Therefore, the Assessing Officer has rightly made additions and their order should be upheld.

19.12. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The Assessing Officer has made addition of Rs. 3.95 :-32-: 1493 to 1499/Chny/2018 crores towards cash payments to Shri. C. R. Narayanasamy as unaccounted income, on the ground that the appellant could not explain source for cash payment for purchase of property. According to the Assessing Officer, as per registered sale agreement between the appellant and Shri. C. R. Narayanasamy, receipt of cash by the seller is very clear. It was the explanation of the assessee that the property at Peelamedu was purchased for a consideration of Rs. 2 crores and payment is made through IDBI Bank and also, the source for said payment is loan taken from IDBI bank. The assessee further contended that the office building at Singanallur was purchased for Rs. 1.50 crores and payment has been made through RTGS. The appellant has filed copies of sale deeds and sale agreements. From the above documents, the mode of payment is not clear. Further the Assessing Officer claims that the appellant has paid cash as per registered sale agreement for purchase of residential building at Peelamedu. Even for purchase of office building at Singanallur, the Assessing Officer claims that the appellant has paid a sum of Rs. 1.50 crores in cash on 18.11.2008 and also a sum of Rs. 1.50 crores through RTGS on 18.11.2008. However, the documents furnished by the assessee shows that payment by :-33-: ITA. Nos: 1493 to 1499/Chny/2018 cheque only. The facts are not clear which needs further verification from the Assessing Officer to ascertain, is there any cash payment for purchase of property or not. Therefore, we are of the considered view that, this issue needs to go back to the file of the Assessing Officer for further verification. Thus, we set aside the addition made towards cash payment for purchase of property from Shri. C. R. Narayanasamy, to the file of the Assessing Officer and direct the Assessing Officer to reexamine the claim of the assessee in light of various evidences filed to justify source for payment for purchase of property, in light of incriminating material found during the course of search. The Assessing Officer is directed to reconsider the issue in accordance with law.

19.13. The next item of addition is unaccounted cash loans of Rs. 40 lakhs to Shri. N. Venkataraman. The Assessing Officer noticed that the assessee has paid unaccounted cash loan of Rs. 40 lakhs against surety of immovable property, but could not explain source for said loan. It was the argument of the assessee before the Assessing Officer that, he had entered into unregistered sale agreement with Shri. N. Venkataraman for purchase of property for a sum of Rs. 50 lakhs and paid :-34-: 1493 to 1499/Chny/2018 advance of Rs. 40 lakhs through Kotak Mahindra Bank Ltd and the balance amount of Rs. 10 lakhs is due.

19.14. We have heard both the parties and considered relevant material available on record. The argument of the assessee is that, he has paid Rs. 40 lakhs through Kotak Mahindra Bank Ltd for purchase of property from Shri. N. Venakataraman is an afterthought, which is clearly evident from facts brought on record by the Assessing Officer in his assessment order in Para 4.2.4.3, where it has been clearly negated arguments of the assessee that he has paid through bank. The Assessing Officer, observed that the RTGS number referred to by the assessee against payment of Rs. 40 lakhs to Shri. N. Venakataraman is incorrect, because said RTGS reference number is the payment made to Shri. T. Dhamodaran, but not to Shri. N. Venkataraman. Further, the documents found during the course of search clearly shows that, the assessee has paid loan against bank cheque, signed white blank sheets and surety of immovable property documents. The assessee could not explain source for said loan. Therefore, we are of the considered view that there is no error in the reasons given by the AO to make additions of Rs. :-35-: 1493 to 1499/Chny/2018 40 lakhs towards unaccounted cash loans to Shri. N. Venkataraman. The ld. CIT(A), after considering relevant facts has rightly made additions and thus, we are inclined to uphold the findings of the ld. CIT(A) and reject grounds taken by the assessee.

19.15. The next item of addition is unaccounted cash loan to Shri. Ponnappan proprietor of M/s. Sakthivel Casting Private Ltd. The ld. Counsel for the assessee submitted that, in the seized documents there is no reference to the mode of payment to Shri. Ponnappan, except Rs. 1,75,000/- in cash. Further, the appellant has paid Rs. 12 lakhs through bank transfer. No statement has been obtained from Shri. Ponnappan and verified to confirm its genuineness. The AO, simply made additions on the basis of seized material.

19.16. The ld. CIT-DR, Shri. R. Clement Ramesh Kumar, on the other hand supporting the order of the ld. CIT(A) submitted that, the assessee could not explain source for cash loans. Therefore, the AO has rightly made additions and their order should be upheld.

:-36-: 1493 to 1499/Chny/2018 19.17. We have heard both the parties and considered relevant material available on record. During the course of search u/s. 132 of the Act, original signed receipts cum undertaking in the official letter head of M/s. Sakthivel Casting Private Ltd, Coimbatore jointly signed by Shri. Ponnappan and Shri. K. Durairaj, Director of the company, have been seized which clearly shows that the assessee has advanced loan of Rs. 40 lakhs on various dates and out of which Rs. 31.75 lakhs has been paid in cash. From the above details, it is noticed that the assessee has paid a sum of Rs. 15 lakhs in cash for the assessment year 2009-10, but could not explain source for said loan. Even before us, except making a general statement no evidence has been filed to explain source for said loans. Therefore, we are of the considered view that there is no error in the reasons given by the AO to make additions towards unaccounted cash loans to Shri. Ponnappan for Rs. 15 lakhs and thus, we uphold the findings of the ld. CIT(A) and reject grounds taken by the assessee.

19.18. The next item of addition is unaccounted cash loan to Dr. S. Ramesh Kumar for Rs. 15 lakhs. The AO has made additions of Rs. 15 lakhs towards unaccounted cash loan Dr. :-37-: 1493 to 1499/Chny/2018 Dr. S. Ramesh Kumar, on the ground that incriminating material found during the course of search like original signed receipts, signed blank green sheets, signed blank promissory notes and cheque leafs shows that the assessee has paid loan of Rs. 50 lakhs to Dr. S. Ramesh Krishna. During the course of post-search inquiries statement u/s. 131(1A) of the Act has been recorded from Dr. S. Ramesh Krishna on 15.05.2015, where he has admitted that out of Rs. 61 lakhs a sum of Rs. 15 lakhs has been received in cash. The assessee could not explain source. Therefore, the AO made additions of Rs. 15 lakhs as undisclosed income of the assessee.

19.19. The ld. Counsel for the assessee submitted that the documents seized does not refer to cash payment to Dr. S. Ramesh Kumar. Though, the statement obtained from the party claims that the appellant has paid cash loan, but no proof has been referred or produced to confirm the cash payments. The assessee has paid loans in cheque and the same has been accounted, but the AO ignored all evidences filed by the assessee and made additions.

:-38-: 1493 to 1499/Chny/2018 19.20. The ld. CIT-DR, Shri. R. Clement Ramesh Kumar, on the other hand submitted that, the AO has not made addition towards loans given through bank and received back through cheques. The document found during the course of search clearly shows payment of loan in cash, for which there is no explanation from the assessee. Therefore, the arguments of the assessee that no evidence to prove payment in cash in incorrect.

19.21. We have heard both the parties and considered relevant material available on record. There is no dispute with regard to the fact that the appellant has paid loan to Dr. S. Ramesh Kumar, on various dates which includes payment by cheque and cash. In fact, the Assessing Officer did not made any addition on loan payment through bank account. It is also an admitted fact that, the appellant has paid a sum of Rs. 15 lakhs loans in cash and this fact has been confirmed by Dr. S. Ramesh Kumar in his statement recorded u/s. 131(1A) of the Act on 15.05.2015. The assessee could not file any evidence to negate the documents found during the course of search coupled with statement from Dr. S. Ramesh Kumar, except making an oral statement that loan given to Dr. S. Ramesh :-39-: 1493 to 1499/Chny/2018 Kumar has been accounted in the books of accounts. Therefore, we are of the considered view that there is no error in the reasons given by the ld. CIT(A) to sustain addition towards unaccounted cash loan at Rs. 15 lakhs given to Dr. S. Ramesh Kumar and thus, we are inclined to uphold the findings of the ld. CIT(A) and reject arguments of the assessee.

19.22. The next item of addition is unaccounted cash loan of Rs. 55 lakhs to Shri. Thangavel. The ld. Counsel for the assessee submitted that, the appellant has paid a sum of Rs. 55 lakhs loan to Shri. Thangavel, through bank account and same has been accounted in the books of accounts. One Shri. Thangavel on behalf of Amala Jothi & Co., accepted payment of loan and the same has been reflected in the balance sheet. The Assessing Officer, has made addition without considering the balance sheet filed by the assessee and attested by CA. Further, no confirmation has been obtained from Amala Jothi & Co., to confirm the mode of payment. Therefore, he submitted that addition made by the AO should be deleted.

:-40-: 1493 to 1499/Chny/2018 19.23. The ld. CIT-DR, Shri. R. Clement Ramesh Kumar, on the other hand supporting order of the ld. CIT(A) submitted that, incriminating documents found during the course of search shows unaccounted cash loan of Rs. 55 lakhs given to Shri. Thangavel. The assessee could not explain source for said loans. Further, the document found during the course of search clearly shows that the appellant has taken surety of immovable property owned by Shri. Thangavel. Since, the assessee could not explain source, the AO has rightly made additions towards unaccounted cash loans and their order should be upheld.

19.24. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The appellant claims to have paid total loan of Rs. 27,43,500/- through Kotak Mahindra Bank by cheque and RTGS. All loan transactions with Shri. Thangavel has been accounted in the books of accounts. But, fact remains that the additions made by the AO is towards unaccounted cash loans of Rs. 55 lakhs paid to Shri. Thangavel, which is supported by incriminating material found during the course of search. During the course of search, a copy of signed cash receipts :-41-: 1493 to 1499/Chny/2018 found, which shows that Shri. Thangavel borrowed cash loan of Rs. 55 lakhs against surety of immovable property. Further, the assessee could not explain source for cash loans. Although, the assessee claims that loans given to Shri. Thangavel has been accounted in the books of accounts, but the details filed by the assessee did not refute the evidence in the form of seized material found during the course of search which clearly shows unaccounted cash loan of Rs. 55 lakhs to Shri. Thangavel on behalf of Amala Jothi & Co., Coimbatore. Therefore, we are of the considered view that the assessee could not explain source of unaccounted cash loan given to Shri. Thangavel and thus, we uphold the addition made by the AO towards unaccounted cash loan of Rs. 55 lakhs to Shri. Thangavel.

19.25. In so far as additions made towards unaccounted cash loan for assessment year 2010-11, we find that the AO has made additions of Rs. 20 lakhs towards unaccounted cash loans given to Shri. Paulraj of APR Industries. The assessee claims that he has paid a sum of Rs. 20 lakhs loan to Shri. Paulraj, out of which only Rs. 5 lakhs was given in cash and balance of Rs. 15 lakhs has been paid through cheque. It was :-42-: 1493 to 1499/Chny/2018 the argument of the assessee that, loan given to Shri. Paulraj is out of known source of income and the assessee has paid a sum of Rs. 15 lakhs through Kotak Mahindra Bank account. The balance amount of Rs. 5 lakhs has been paid in cash, and source for said loan has been explained. The Assessing Officer, ignored all evidence and made additions only on the basis of documents found during the course of search.

19.26. We have heard both the parties and considered relevant material available on record. There is no dispute with regard to the payment made to Shri. Paulraj. In fact, the assessee himself admitted that he has paid a sum of Rs. 20 lakhs to Shri. Paulraj and he did not refund the loan amount. Further, he has entered into sale agreement with Shri. Paulraj for purchase of property and same is still pending. The addition made by the AO is towards loan, on the ground that the assessee could not explain source for cash loans. The fact remains that, as admitted by the AO himself, out of Rs. 20 lakhs a sum of Rs. 15 lakhs has been paid through Kotak Mahindra Bank for which the AO did not verify the source. In respect of balance of Rs. 5 lakhs, said loan has been paid in cash and there is no dispute. The assessee could not explain :-43-: 1493 to 1499/Chny/2018 source. Since, there is no clear finding with regard to the mode of payment of Rs. 15 lakhs and also the assessee claims that a sum of Rs. 15 lakhs is paid through bank account, in our considered view, the matter needs further examination. Therefore, we direct the AO to re-examine additions made towards unaccounted cash loan of Rs. 20 lakhs given to Shri. Paulraj, in light of various evidences filed by the assessee and decide the issue in accordance with law.

19.27. The next item of addition is unaccounted cash loan to Shri. Ponnappan, proprietor of M/s. Sakthivel Casting Private Ltd. The Assessing Officer, has made addition of Rs. 25 lakhs towards unaccounted cash loan on the basis of incriminating material found during the course of search like original signed receipt cum undertaking in the official letter head of M/s. Sakthivel Casting Private Ltd. The assessee claims that, he has paid a sum of Rs. 39,25,000/- loans on various dates through Kotak Mahindra Bank and have received a letter from Shri. Ponnappan for Rs. 15 lakhs for security purpose only.

:-44-: 1493 to 1499/Chny/2018 19.28. We have heard both the parties and considered relevant material available on record. The documents found during the course of search like original signed receipt cum undertaking from M/s. Sakthivel Casting Private Ltd, clearly shows that the appellant has paid Rs. 40 lakhs on various dates in cash and RTGS. Further, out of Rs. 40 lakhs a sum of Rs. 31,75,000/- is paid in cash. Although the assessee claims to have paid loan through RTGS, but could not reconcile payment through bank to incriminating material found during the course of search. Therefore, we are of the considered view that there is no error in the reasons given by the AO to make additions towards unaccounted cash loan of Rs. 25 lakhs given to Shri. Ponnappan and thus, we uphold additions made by the AO and reject arguments of the assessee.

19.29. The next item of addition is unaccounted cash loan of Rs. 40 lakhs to Shri. P. Selva Kumar. During the course of hearing, the ld Counsel for the assessee submitted that addition of Rs. 40 lakhs towards unaccounted cash loan to Shri. P. Selva Kumar is duplicate addition, because Shri. P. Selva Kumar is PoA holder of Shr. K. Palaniappan of Maruvoor Arasi Textiles India (P) Ltd., and the AO has already made :-45-: 1493 to 1499/Chny/2018 addition of Rs. 40 lakhs for assessment year 2009-10 towards loans given to Maruvoor Arasi Textiles India (P) Ltd. We find that Shri. P. Selva Kumar is PoA holder of Shr. K. Palaniappan of Maruvoor Arasi Textiles India (P) Ltd., which is evident from necessary documents filed by the assessee. Since, additions has already been made for assessment year 2009-10, further addition of Rs. 40 lakhs for assessment year 2010-11 in the name of Shri. P. Selva Kumar amounts to double addition on very same loan amount. After going through relevant materials considered by the Assessing Officer, it is very clear that there is no separate loan to Shri. P. Selva Kumar. Therefore, we are of the considered view that the addition made by the AO towards unaccounted cash loan to Shri. P. Selva Kumar, deserves to be deleted and thus, we direct the AO to delete the addition.

19.30. The next item of addition is unaccounted cash loan of Rs. 25 lakhs to Shri. S. Muruganathan. The ld. Counsel for the assessee submitted that, the payment to the said party was towards the purchase of property, but not loan. The assessee has entered into a sale agreement with Shri. S. Muruganathan for a purchase of property for a consideration at :-46-: 1493 to 1499/Chny/2018 Rs. 27 lakhs and paid advance of Rs. 25 lakhs and the balance amount of Rs. 2 lakhs is due and payable to the seller. But the AO has treated said transaction as loan and made addition.

19.31. The ld. CIT-DR, Shri. R. Clement Ramesh Kumar, on the other hand submitted that, the document found during the course of search including copy of signed sale agreement clearly shows cash payment of Rs. 25 lakhs to Shri. S. Muruganathan, for which no explanation was filed. Although, the assessee claims to have paid advance for purchase of property, but fact remains that source for said payment was not explained. Therefore, the AO has rightly made addition and therefore, their order should be upheld.

19.32. We have heard both the parties and considered relevant materials available on record. We find that the assessee has paid a sum of Rs. 25 lakhs in cash to Shri. S. Muruganathan in pursuant to sale agreement dated 18.11.2009. Further, Shri. S. Muruganathan in the statement of oath recorded on 01.05.2015 has admitted to have received an amount of Rs. 25 lakhs in cash from the assessee by pledging his property in the form of sale agreement. From the :-47-: 1493 to 1499/Chny/2018 above details it is abundantly clear that the assessee has given Rs. 25 lakhs cash loan to Shri. S. Muruganathan. Since, the assessee could not explain source for cash loan, in our considered view the AO has rightly made additions of Rs. 25 lakhs as undisclosed income of the assessee. The ld. CIT(A), after considering relevant facts has rightly sustained additions made by the AO and thus, we are inclined to uphold the findings of the ld. CIT(A) and reject arguments of the assessee.

23 We have heard both the parties, perused materials available on record and gone through orders of the authorities below. Admittedly, Smt. Dhanalakshmi worked for M/s. Millennium Motors, which is a unit of Miracle Cars India Pvt :-51-: 1493 to 1499/Chny/2018 Ltd. It is also an admitted fact that documents found during the course of search clearly shows swindling of money is from business income of M/s. Millennium Motors only. In fact, the Assessing Officer never disputed the fact that money swindled by Smt. Dhanalakshmi is from M/s. Millennium Motors and transaction is between M/s. Millennium Motors and Smt. Dhanalakshmi. Even the criminal complaint lodged before the police is also in the name of the company. The investigation carried out by the police and charge sheet filed in this respect is also on the basis of complaint filed by M/s. Millennium Motors. Even the case is pending before the Judicial Magistrate Court, Coimbatore is on the basis of complaint filed by managing director of M/s. Millennium Motors. Thus, all evidences found during the course of search clearly shows that transaction does not relates/pertains to the assessee. Further, the company M/s. Miracle Cars India Pvt Ltd (earlier knows as M/s. Millennium Motors) accounted the money swindled by Smt. Dhanalakshmi in their books of accounts and shown as amount receivable from her. The amount swindled by Smt. Dhanalakshmi has already been assessed in the hands of M/s. Miracle Cars India Pvt Ltd., on substantiate basis. Therefore, in our considered view additions made in the hands of the :-52-: ITA. Nos: 1493 to 1499/Chny/2018 assessee towards money swindled by Smt. Dhanalakshmi on protective basis cannot be upheld, because addition, if any, then same has to be in the hands of the M/s. Millennium Motors but not in the hands of the assessee. Therefore, the addition if any to be made, then it should be made in the hands of M/s. Millennium Motors itself. Since, the Assessing Officer already made additions towards money swindled by Smt. Dhanalakshmi in the hands of the company on substantive basis, protective addition made in the hands of the assessee has no legs to stand. Thus, we direct the Assessing Officer to delete protective addition made in the hands of the assessee towards money swindled by Smt. Dhanalakshmi for assessment year 2011-12 to 2015-16.