UPKAR MANI,DELHI vs. ACIT CC-8, JHANDEWALAN

6. That the impugned CIT(A) order is arbitrary, illegal bad in law and in violation of rudimentary principles of contemporary jurisprudence.

4.1. The satisfaction note dated 13.05.2021 in the case of the assessee recorded by the Assessing Officer on the perusal of the satisfaction note and incriminating material received from the AO of the searched person i.e. in the case of Navneet Dawar & others group (DOS-03.01.2018) as the Assessing Officer of Shri Upkar Mani is reproduced as under:-

4.2. During the search and seizure action at the premises of Shri Gurvinder Singh Duggal at G-9, Greater Kailash-3, Masjid Moth, New Delhi, seized documents bearing page no.95 and 96 of Annexure-A12, as referred in the above satisfaction note are reproduced as under:-

4.3. Based on the above documents, the Assessing Officer issued a show cause notice on 21.12.2022 to the assessee stating that the above receipt shows that the assessee along with Gurvinder Singh Duggal and Ravi Narang had received a sum of Rs.1,48,50,000/- out of the total consideration of Rs.6,41,00,000/- from Mr. Shamit Chowksi. According to the Assessing Officer, as per the above details mentioned in the said seized documents, out of the total transactions/receipts of Rs.1,48,50,000/-, an amount of Rs.1,30,50,000/- was cash receipt against sale of property B- 766, Sushant Lok, Phase-1, Gurugram. It was also stated in the show cause notice that the above documents were confronted by Shri Anil Narang and Shri Gurvinder Singh Duggal and their statement was recorded which revealed that Shri Upkar Mani was the co-owner of the said property with 25% share. Accordingly, the Assessing Officer was of the view that the cash receipt of Rs.32,62,500/- (25% of total cash receipt of Rs.1,30,50,000/-) pertains to Shri Upkar Mani, which is unaccounted cash in the hands of the assessee for the relevant assessment year.

4.4. In this regard, it was noted that in the show-cause dated 21.12.2022, it was stated that the above seized document was inter-alia confronted to Shri Anil Narang and his statement was recorded, whereas, in the seized document being page no.95, 96 of Annexure A-12 seized from the premises of Shri Guruvinder Singh Duggal at G-9, Greater Kailash III, Masjid Moth, New Delhi, the name of Shri Ravi Narang appears along with Shri Guruvinder Singh Duggal and Shri Upkar Mani showing the receipt of Rs.1,48,50,000/- including the cash of Rs.1,30,50,000/- (share of Rs.32,62,500/- being 25% of total cash receipt pertaining to Shri Upkar Mani) out of Rs.6,41,00,000/-. Therefore, the case was fixed for clarification to clarify the relationship of Shri Anil Narang and Shri Ravi Narang with the property mentioned in the said seized document A-12, Page no.95 and 96. During the clarification hearing on 11.03.2025, it was submitted by the Ld. AR that Shri Anil Narang and Shri Ravi Narang are own brothers and Shri Ravi Narang was one of the co-owners of the property being B-766, Shushant Lok, Phase-1, Gurgaon mentioned in the aforesaid seized document.

4.5. The Assessing Officer stated that the seized document as referred above shows that the property bearing no.B-766, Sushant Lok, Phase-1, Gurugram was sold by three parties. Further, the Assessing Officer stated that the share of the three parties in the said property was Mr. Anil Narang (25%), Shri Gurvinder Singh Duggal (50%) and Shri Upkar Mani Sadh (25%) and it was sold to Ms. Heena Chowksi, wife of Mr. Shamit Chowksi.

The Assessing Officer further noted that during the post search proceedings, the document was confronted to Shri Anil Narang, wherein, Shri Anil Narang stated that he neither knew Mr. Shamit Chowksi nor he had any business dealing with him. However, he confirmed co-owning the said property.

4.6. Further, the Assessing Officer noted that during post search investigation, the RTGS payment appearing in the above seized document was verified and the same was confronted to Shri Gurvinder Singh Duggal, Shri Upkar Mani and Mr. Shamit Chowksi. Shri Shamit Chowksi denied having paid the amount of Rs.1,30,50,000/- in cash but confirmed having paid Rs.18 lakhs (in instalments) through banking channel as appearing in the seized documents. When confronted that Mr. Chowksi was accepting the payment through banking channel but was denying about the cash payment, Shri Chowksi stated that he could not say anything and that he had no clue about the document and denied to have making any cash payment.

4.7. Further, it is noted by the Assessing Officer that the said entries were confronted with the seller Shri Gurvinder Singh Duggal and his statement was recorded u/s 132(4) of the Act, where he also denied having received the cash amount but confirmed receiving part payment of Rs.18 lakhs from Shri Shamit Chowksi for sale of the property as mentioned in the seized document. In addition, Shri Gurvinder Singh Duggal also stated that no registered agreement has been made so far in the respect of the property and the project is in pipeline.

4.8. The Assessing Officer noted that Shri Gurvinder Singh Duggal in his statement recorded u/s 132(4) of the Act confirmed the receipt of Rs.18 lakhs received from Shri Shamit Chowksi for the sale of the property as mentioned in the seized document through RTGS and Shri Gurvinder Singh Duggal further stated that the deal did not go through eventually.

According to the Assessing Officer that the transactions made were related to the property B-766, Sushant Lok, Phase-1, Gurugram and the incriminating document found cannot be said to be invalid. Further, the Assessing Officer held that the reply filed by the assessee has been perused but not found to be satisfactory. According to the Assessing Officer, in his reply, the assessee has accepted that the assessee and its co-owners had accepted the RTGS payment from Heena Chowksi and Shri Shamit Chowksi but denied of any cash transaction made. The Assessing Officer held that it is clear that the assessee was denying the cash payment intentionally to avoid payment of due taxes on it.

4.9. Further, the Assessing Officer issued notice u/s 133(6) on 17.10.2022 to HDFC Bank and upon receipt of the information, found that the payment of Rs.18 lakhs through RTGS matched with the seized document as referred above. The Assessing Officer held that it was clear that all the payments made through banking channel are matched with the seized documents and therefore, it is clear that cash transaction mentioned in the document is being denied intentionally by both the parties to avoid the payment of taxes. The Assessing Officer further held that since Shri Upkar Mani was the one of the co-owners with 25% share in the property B-766, Sushant Lok, Phase-1, Gurugram, therefore, the part of sale consideration received in cash amounting to Rs.32,62,500/- attributable to him was unexplained money in the hands of the assessee. The Assessing Officer also noted that moreover the cash receipt of Rs.32,62,500/- as part of sale consideration was not declared by the assessee in the return of the income filed by the assessee for the year under consideration i.e. AY 2018- 19 and, therefore, added the sum of Rs.32,62,500/-as unexplained money u/s 69A of the Act.

The Ld. CIT(A) agreed with the finding of the Assessing Officer and confirmed the addition by agreeing with the reasoning of the Assessing Officer and also relying upon the presumption available against the assessee as per the provisions of section 132(4A) and 292C of the Act. The ld. CIT(A) also held that since the banking transaction entries are correct and pertains to the assessee then it will not be appropriate to accept that cash transaction mentioned in the same receipt do not pertain to the assessee. The Ld. CIT(A) further observed that either the accounting entries recorded in the seized document was correct or not correct but it could not be partially incorrect and the assessee could not selectively choose the entries in the account to be correct or incorrect. The Ld. CIT(A) also declined the request for cross-examination in this case by holding that the primary evidence in this case is the seized document found during the course of search in the case of Shri Gurvinder Singh Duggal and held that the Assessing Officer was not under obligation to grant cross-examination of concerned person/s. The relevant discussion of the Ld. CIT(A) in para nos. 4.1.5, 4.1.8, 4.1.13 and 4.1.14 is reproduced as under:-

“4.1.5 As per the seized document, there are certain banking transactions which relate to the appellant, Sh. Gurvinder Singh Duggal and Sh. Anil Narang. Since the banking transaction entries are correct and pertain to the appellant; it will not be appropriate to accept that the cash transactions mentioned in the same receipt do not pertain to the appellant. Either the accounting entries recorded in seized document are correct or not correct but it cannot be partially correct. The appellant cannot selectively choose the entries in the account to be correct or incorrect. If the banking transactions are found to be correct then the rest of the cash entries are also to be considered as correct only. xxxxxxxxxx 4.1.8 As regards the appellant's contention regarding lack of opportunity to cross-examine the evidence relied upon by the Assessing Officer, it is worth mentioning that where the statement supports and corroborates the seized material and is not the primary evidence on the basis of which addition has been made, then there is no mandatory requirement to grant cross-examination of the relevant person/s. In the case of the appellant also, the statement/s recorded during the search proceedings are collateral/corroborative in nature and is not the sole evidence relied upon by the Assessing Officer. The primary evidence in this case is the seized document found during the search of Sh. 'Gurvinder Singh Duggal, Therefore, the Assessing Officer was not under obligation to grant cross- examination of concerned person/s. xxxxxx 4.1.13 This issue has been analysed and due consideration has been given to the submissions made by the appellant. The following points are noteworthy:

1. 1. As per the receipt Sh. Gurvinder Singh Duggal, Sh. Upkar Mani and Sh. Anil Narang have a received a sum of Rs. 1,48,50,000/- out of the proposed sale consideration of Rs. 6,41,00.000/- from Sh. Shamik Chokshi against sale of First and Second floor plus Terrace of the property bearing no. B-766, Sushant Lok- 1, Gurgaon.

2. As per the receipt, the appellant and his business associates have received Rs.1,48.50,000/-; out of which Rs. 1,30,50,000/- was in cash and the remaining amount of Rs. 18,00,000/- was paid through banking channels.

3. The appellant did not dispute the receipt of the amount through banking channels and the same is verifiable from bank account of the appellant and his business associates also.

4. This receipt shows the receipt of cash till 18.12.2017 and it is noted that the search in the case of Sh. Gurvinder Singh Duggal was carried out on 03.01.2018.

5. Subsequent to the search the proposed transaction of sale of first and second floor plus terrace of the property hearing no. B-766. Sushant Lok-1, Gurgaon did not materialize and the First Floor was sold to Sh. Chand Dhameja and the Third Floor was sold to Sh. V V Chokshi (father of Sh. Shamik Chokshi, as informed by the appellant).

6. The appellant and his business associates return the RTGS amount to Ms. Hena Shamik Chokshi. However, there is no mention of return of the cash amount allegedly paid to the appellant and his business associates for the above mentioned transaction. 4.1.14 In views of provisions of Section 132(4A) and 292C of Income Tax Act, it is clear that there is a presumption that any books of account or documents found from premises of the appellant or any other person during search belong to the search person and that the contents of such books of account and other documents are true. The onus is upon the appellant to explain the entries in the books of account or documents seized during search and reconcile them with his books of account. Despite being given adequate opportunity, the appellant has not furnished any explanation regarding entries on the above seized papers and thereby failed to reconcile them with his books of account by merely stating them to be dumb documents. The appellant has failed to discharge the onus cast upon him and hence, it is held by the Assessing Officer in the case of Sh. Gurvinder Singh Duggal and also in the case of the appellant that they are in possession of unexplained money u/s 69A of Income Tax Act. The share of above mentioned cash received by Sh. Gurvinder Singh Duggal has already been added in the hands of Sh Gurvinder Singh Duggal us 69A of Income Tax Act and the addition has already been confirmed by the CIT(A) and the Assessing Officer has subsequently levied penalty on this addition. The appellant had received 25% of this cash and same has therefore been correctly added in his hands during the year as unexplained money received us 69A of Income Tax Act. As per the documents available as a result of search, there is sufficient evidence that the appellant was in receipt of undisclosed money in cash amounting to Rs. 32.62,500/- and therefore was the owner of this money which was not recorded in the books of accounts. The case laws mentioned by the appellant in his submissions do not address the issues raised in appeal as their facts are different from the facts of the present case. In view of the above, I am of the considered opinion that the seized document was true and correct and had correctly stated the fact that the appellant did receive an amount of money, which was not disclosed in his books of accounts. Therefore, the amount was correctly added to the income of the appellant u/s 69A of Income Tax-Act. The addition made by the Assessing Officer of an amount of Rs. 32,62,500/- on account of cash received as unexplained money w/s 69A of Income Tax Act in the hands of the appellant is therefore confirmed. Accordingly, Ground Nos. 1 & 2 of appeal are dismissed.”

3. Presumption of section 132(4A) applies on the searched person and not other person: Ld CIT(A) while adjudicating the impugned case has rejected the appeal of the assessee by taking the shelter of section 132(4A) rws 292C. In this regard it is submitted that reasoning given by Ld CIT(A) is factually incorrect. Provisions of section 132(4A) rws 292C applies on the person on whom search is conducted and not on the third person. In the impugned case search has been conducted on Sh. Gurvinder singh Duggal and case of the assessee has been reopened u/s 153C. Hence when search has not happened on assessee; this presumption cannot be applied. For this proposition reliance is placed on the judgment of Hon'ble Bombay High Court passed in the case of Lata Mangeskar.

4. No opportunity of cross examination has been provided to the assessee.: This plea has been taken up by the assessee before Ld CIT(A) which he has disposed stating that in case were material found during the course of the search is supported by the statement of the person, hence there is no need of providing any cross examination. In this regard it is again reiterated that no person who is party in this search as well as whose name is involved has ever accepted anything in their statement. 7.1. The Ld. AR also submitted that the loose sheet found during the search of third person cannot form the basis of addition in the case of the assessee without any corroborative evidence. In this regard, the written submission of the assessee is reproduced as under:-

i. DCIT vs Sunil Sharma [2024] 168 taxmann.com 77(SC) ii. CIT vs Singhad Technical Education Society (84 taxmann.com 290) iii. DCIT vs Sunil Sharma [2024] 159 taxmann.com 179 (Karnataka) iv. Gopi Apartment (365 ITR 411)

7.3. In view of the above submissions, the Ld. AR submitted that since the satisfaction was not recorded properly, the assessment order for AY 2018-19 should be quashed and even on merits in view of the above submissions, the addition should be deleted.

He further submitted that in the seized document, the payments of Rs.18 lakhs received through banking channels and the cash receipt of Rs.1,30,50,000/- in respect of the property referred in the seized document is recorded to have been received in F.Y. 2017-18 and has a bearing on the determination of undisclosed income of the assessee amounting to Rs.32,62,500/- for the F.Y. 2017-18 relevant to AY 2018-19. In view of this fact, relying upon the above decision of the Hon’ble Delhi High Court, he submitted that the recording of the combined satisfaction will be legally valid satisfaction in the case of the assessee for F.Y. 2017-18 relevant to AY 2018-19 and the assessment order dated 31.12.2022 in the case of the assessee u/s 153C of the Act was a valid assessment order. The Ld. CIT-DR also submitted that the assessee was not a third party because the search had taken place in the case of Shri Gurvinder Singh Duggal, who was the 50% owner of the property along with the assessee being 25% of the owner along with Mr. Ravi Narang (25%). According to the ld. CIT-DR, the assessee’s partner was searched and therefore the document was not seized from a third party but from the partner of the assessee, and thus for this transaction, the assessee i.e. Shri Upkar Mani was the same party against whom the search was conducted and therefore the ld. CIT(A) was correct in invoking the presumption u/s 132(4A) r.w.s 292C of the Act against the assessee. He further submitted that the amount, date and mode is mentioned in the seized document and the payment through banking channels was matching with the seized document and therefore the presumption will be against the assessee that the cash component being Rs. 32,62,500/- being the share of the assessee was also correct as all the three persons are the co-owners of the property, which was being sold to Shri Shamit Chowksi. The Ld. CIT-DR submitted that in view of the above submissions, the case laws relied upon by the assessee will not be applicable in the case of the assessee. He further submitted that the in the case of the assessee, the corroborative evidence was the bank statement obtained by the Assessing Officer from the HDFC Bank, wherein, the payment of Rs.18 lakhs received through banking channel was matching date wise/amount wise with the entries in the seized document. The Ld. CIT-DR submitted that the action of the Assessing Officer should be confirmed.

“23. For the purposes of invoking Section 153C of the Act it is incumbent upon the AO to be satisfied that the material gathered in the course of the search and pertaining to the non- searched person would have a bearing on the determination of the total income of such other person either for six AYs‘ or for the relevant AY or AYs‘. Since the provision itself requires and enables the AO to undertake an assessment for a block period of ten years, it would clearly not be incumbent upon it to draw separate or independent satisfaction notes for each AY. A composite Satisfaction Note would suffice the requirements of Section 153C of the Act provided it embody details of the material gathered in the course of the search and pertaining to the AYs forming part of the block as a whole. As long as the common Satisfaction Note includes sufficient particulars of the incriminating material relevant to the block of AYs‘, the same would, in our considered opinion, satisfy the statutory requirement as imposed by the Act. Singhad Technical Education Society as also the decision of the Supreme Court in Principal Commissioner of Income Tax, Central-3 vs. Abhisar Buildwell P. Ltd speak of incriminating material being found and which may impact the estimation of income likely to have escaped assessment for a particular AY. As we read and go through the Satisfaction Note as well as the orders disposing of objections, it is manifest that the respondent has rested its decision on incriminating material found for AYs 2014-15, 2015-16, 2016-17 and stretching up to AY 2020-21.

upon the person to furnish a return of income for each of the six AYs‘ or the relevant AY or AYs‘. This too appears to suggest that while the notice could be composite and based on a common satisfaction note which encapsulates the incriminating material pertaining to the AYs‘ in question, it is only returns which must and mandatorily be filed separately.” 9.1. In this case in the satisfaction note dated 13.05.2021 as reproduced on page no.3 of this order, it seen that the Assessing Officer has mentioned inter alia the following details.

9.2. Thus, the Assessing Officer has correctly recorded the satisfaction note for the year by recording the fact that the amount of Rs.32,62,500/- received in cash from Sh. Shamik Choksi for purchase of 1st and 2nd Floor + Terrace of B-766, Sushant Lok, Phase-1, Gurgaon, has a bearing on determination of the total income of the assessee for AY 2018- 19 as in the above seized document, the transactions relate to FY 2017-18 relevant to AY 2018-19 in the case of the assessee. Therefore, relying upon the decision of the Hon’ble Delhi High Court in the above case, no fault can be found in the single/combined satisfaction note recorded by the Assessing Officer in the case if the assessee as the entries of the undisclosed transaction referred in the seized document relate to FY 2017- 18 relevant to AY 2018-19. Therefore, the said satisfaction note is held to be validly recorded and consequently, it is also held that the assessment order u/s 153C dated 31.12.2022 in the case of the assessee is also a valid assessment order. Hence ground no. 3 of the appeal is dismissed.

However, no submission was made in respect of this ground and therefore the same is dismissed.

Further, the receipt of the payment of Rs.18,00,000/- through RTGS has been accepted by the sellers Shri Gurvinder Singh Duggal, Shri Anil Narang and also confirmed by the buyer Shri Shamit Chowksi. It has to be kept in mind that cash received in a transaction along with cheque receipts through banking channels is usually with an intent to conceal it and not to declare the same in its return of income. Therefore, by its very nature, it becomes a secret document, which will not be easily found even during the course of search and even when found, at times, all the entries will not be mentioned in a very clear and explicit manner. However, the entries in the present seized document are very clearly mentioned but the assessee contends that the same is undated and unsigned and the receipt of cash as mentioned in the said seized document has been denied by the seller and the buyer in their respective statement as narrated earlier in this order.

12.1. Therefore, in such a situation, an incriminating document has to be analysed from the evidences/facts available in the said document and its veracity with other verifiable facts. Firstly, it is mentioned in the said seized document before making the entries of cash receipts and payments by RTGS as ‘Now we have received Rs.1,48,50,000/- (Rs. One Crore Forty Eight Lakhs and Fifty Thousand) in the following manner’ which shows that the entries are record of actual financial transactions in respect of the said property. Further, on perusal of the said seized documents, it is seen that there are 15 entries out of which 9 entries are of cash receipt and 6 entries of receipt through RTGS. As discussed above in the seized document, the date and the amount of receipt of Rs.18 lakhs received through banking channels by way of RTGS is clearly matching with bank account No.50100058984345 of Shri Gurvinder Singh Duggal, Shri Upkar Mani and Shri Anil Narang with HDFC Bank, Nehru Place, New Delhi. Similarly, the date of receipt of the cash are clearly mentioned date-wise, amount wise.

Further, the third column of the seized document being the ‘RECEIPT’ reads ‘chq. No./cash’, which shows that the assessee had all the intent to receive cash in the sale of said property which it is noted to have been received as per the entries in the said seized document. Further, out of the nine entries of cash receipt, four entries in cash are preceded by four entries by RTGS and succeeded by two entries by RTGS which shows that the entries in the said documents have been systematically recorded on real time basis and it cannot be said in the given facts of the case that the said entries are hypothetical entries. As held earlier that for this transaction as appearing in the seized document, the assessee is the same party as the searched party and therefore the presumption u/s 132(4A) r.w.s. 292C of the Act will be applicable against the assessee. The parties have accepted what suits them and denied the contents of the seized documents, which does not suit them. But the documents have been found and seized from the premises of Shri Gurvinder Singh Duggal, who along with the assessee is the co-owner of the said property and it has not been explained by the assessee as to why the said seized documents were available at the premises of Shri Gurvinder Singh Duggal, when the assessee was having 25% co-ownership in the said property at the time of search in the case of Shri Gurvinder Singh Duggal. In view of these facts, it is held that the contents of seized document showing receipt of a sum of Rs.1,30,50,000/- in cash is true and correct. For the same reasons, the seized documents as contended by the assessee cannot be termed as a dumb document.

12.2. Further, the case laws relied by the assessee with respect to its contention that no addition can be made in respect of loose sheet found during the search of third person without any corroborative evidence will also be not applicable in the present case as it has been held that the seized document was not seized from third party because for this transaction, the assessee is the same party as the searched party and therefore no corroborative evidences are required in this case as contended by the assessee and in this particular case the presumption u/s 132(4A) r.w.s. 292C of the Act will be applicable against the assessee.

12.3. Further, the plea of the assessee that no opportunity has been provided to cross examine is also not acceptable because no reasons or any ground for cross examining any person has been mentioned. Further, in the given facts of the case when there is denial of receipt of the cash by all the parties concerned and there being no dispute with other material details relating to the details mentioned in the seized documents, we are of the considered view that no cross examination is required in this case.

12.4. Further, the assessee submitted that this deal finally did not take place and the amount received through RTGS was returned back to Ms. Heena Shamit Chowksi. However, the Ld. CIT(A) noted at Sr. No.6 in para no.4.1.13 that there is no mention of return of cash when the said deal was cancelled. Moreover, the cancellation of the deal will not alter the receipt of the undisclosed cash amounting to Rs.32,62,500/- and its taxation u/s 69A of the Act in the case of the assessee because the said receipt of undisclosed cash has not been declared by the assessee in his return of income or having confirmed that the said amount has been returned back to Ms. Heena Shamit Chowksi.

12.5. In view of the above facts and discussion, it is held that the addition of Rs.32,62,500/- made by the Assessing Officer in the case of the assessee being the 25% of cash receipt out of Rs.1,30,50,000/- as unexplained money u/s 69A of the Act and confirmed by the ld. CIT(A) is justified and the same is confirmed. Ground No.5 of the appeal is dismissed.

Order pronounced in the open court on 06th June, 2025.