DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, JAIPUR vs. SHRI SANDEEP CHHABRA, JAIPUR

1 Whether on the facts and the circumstances of the case, the ld. CIT(A) was right in deleting the addition of Rs. 68,40,468/- made on the basis of figures as per documents seized from the residence of Shri Neeraj Ajmera, one of the employee of the assessee group.

Rival contentions have been heard and record perused. Facts in brief are that the assessee derives its income from salary, house 2 DCIT Vs Sandeep Chhabra property, capital gain and other sources. Assessee belongs to Motisons Group on whose business and residential premises, a search action u/s 132 and survey action. u/s 133A of the Act was carried out on 31.10.2012. During the course of search action, cash, jewellery, valuables, stock-in-trade, documents, books of accounts and/or loose papers were found and seized from the premises of the members of the Motisons Group of which one such member was the assessee. Assessee filed his return of income declaring total income at Rs. 37,27,73,530/- on 22.10.2013 for AY 2013-14. Finally, AO completed the assessment u/s 143(3) r.w.s. 153B(1)(b) of the Act vide order dated 26.3.2015 at a total income of Rs.37,96,14,000/-.

In its order, the A.O. observed that a pen drive of Shri Banwari Lal Yogi (Accountant of assessee group) was seized from the residence of the assessee. On examination of pen drive a file of MS Excel naming ‘Accnt-19.9.11' was found therein which reflected the accounted and unaccounted expenditure in construction of Motisons Tower. On the basis of entries contained in MS Excel file `Accnt-19.9.11' the assessee made surrender of Rs.14.57 crores on account of undisclosed investment in construction of Motisons Tower. This disclosure was made on account of cash payments to various persons for the construction of Motisons Tower as 3 DCIT Vs Sandeep Chhabra evidenced by the seized material. In the Excel sheet at point no. 1, it has been noticed that company AIPL (Alumayer India Pvt. Ltd.) has done some work for Motisons Global Pvt. Ltd. for which payment of Rs. 5,23,81,924/- (Rs. 2,55,47,110/- recorded and Rs. 2,68,34,114/- unrecorded) was made by Motisons Global Pvt. Ltd. to AIPL. However, during the course of search at residence of Sh. Neeraj Ajmera (employee of assessee group who was looking after the work of construction of Motisons Tower) at pg. no. 41-43 of seized Annexure BS-11 the shape of internal correspondence and reconciliation done by Alumayer India Pvt. Ltd. and Motisons Global Pvt. Ltd. was found and as per such detail the total amount in respect of work done by AIPL comes to Rs. 5,92,22,392/-, out of which Rs. 5,23,81,924/- was only found recorded in excel sheet of Sh. Banwari Lal Yogi, therefore, the A.O. stated that an amount of Rs. 68,40,468/- was not recorded in the MS Excel sheet on the basis of which the undisclosed income of Rs.14.57 crore was surrendered by assessee thus in view of the figures recorded in seized documents, unaccounted payment to AIPL was increased by the A.O. to Rs. 68,40,468/- in the overall undisclosed figure of Rs.14.57 crore.

By the impugned order, the ld. CIT(A) deleted the addition of Rs. 68,40,468/- after observing as under:

It was vehemently argued by the ld CIT-DR Shri B.K. Gupta that during the course of search at residence of Shri Neeraj Ajmera (employee of assessee group who was looking after the work of construction of Motisons Tower) at Page No. 41-43 of seized Annexure BS-11 the shape of internal correspondence and reconciliation done by Alumayer India Pvt. Ltd. and Motisons Global Pvt. Ltd. was found and as per such detail the total amount in respect of work done by AIPL comes to 5,92,22,392/, out of which Rs. 5,23,81,924/- was only found recorded in excel sheet of Shri Banwari lal Yogi, therefore, it is clear that an amount of Rs.68,40,468/- was not recorded in the MS Excel sheet on the basis of which the undisclosed income of Rs. 14.57 crore was surrendered by assessee thus in view of the figures recorded in seized documents, unaccounted payment to AIPL was correctly increased by the A.O. to Rs. 68,40,468/- in the overall undisclosed figure of Rs. 14.57 crore.

The ld CIT-DR has further argued that during the course of search and after post search in his statements the 10 DCIT Vs Sandeep Chhabra assessee admitted the undisclosed income of Rs. 14,57,28,753/- on a/c of undisclosed investment in construction of blinding at SB-110, Lal Kothi, Tonk Road, Jaipur on the basis of figures noted in column B of excel sheet found during the course of search. So far as contention of the assessee that the entire amount written in column "B" does not represents the payments made to parties in cash but its represents to either payment made to parties in cash or payable to parties as on the date of preparation of sheet, part payment of which was made through account payee cheque, is not acceptable because no detail has been submitted during the course of search as well as during the course of assessment proceedings that out of total amount written in column B how much amount was recorded in books of accounts and how much payment was made in cash which was not recorded in books of accounts. No reconciliation as regard to figure written in column B has been submitted by the assessee. Ld. CIT-DR further invited our attention to the figure listed by assessee in column "recorded in books upto the date of search" are the figure on the date of search while the excel sheet may belong to a date previous to the date of search. Hence, comparison with the figures mentioned in

It was further submitted by the ld CIT-DR that excess payment of Rs. 68,40,468/- made to M/s Alumayer India Pvt. Ltd (AIPL) was worked out on the basis of page No. 41-43 of Annexure BS-11 seized from residence of Shri Neeraj Ajmera includes the postdated cheques is not found acceptable and rejected because in this regard no evidence was given by the assessee. Thus, amount of Rs. 68,40,468/- was correctly added to the total income of the assessee.

Our attention was also invited by the ld CIT-DR to the Annexure BS-11 seized from the residence of Shri Neeraj Ajmera, copy of statement recorded on 05/11/2012 and 08/11/2012 in support of the contention that the excess payment of Rs. 68,40,468/- was made by the assessee to M/s Alumayer India Pvt. Ltd. For which no evidence was given by the assessee and without considering the same, the ld. CIT(A) has incorrectly deleted the addition so enhanced by the A.O.

On the other hand, the ld AR of the assessee has contended that during the course of assessment proceedings, the assessee has submitted detailed reconciliation chart (Copy at PB Page 12 DCIT Vs Sandeep Chhabra 88 to 90) reconciling the figures mentioned in seized paper page No 127-131 of Annexure AS 1 seized from B-9 Vivekanand Marg, C-Scheme, Jaipur (PB pg 43-47). In the reconciliation chart submitted before the AO, the total amount against the construction expenses is same. Therefore, there is no under-statement in the total investment shown in the seized document and reconciliation chart submitted before the AO. He further submitted that the figures mentioned under Column "A" and "B" of the seized excel sheet, the assessee explained to the AO that the amount mentioned in the column "A" of this sheet represents the payments made to the parties through a/c payee cheque till the date of preparation of this sheet. As regard Column "B" the assessee explained that the amount mentioned in column "B" represents to either payment made to parties in cash or payable (Outstanding) to parties as on the date of preparation of sheet. Afterwards, out of amount mentioned in column "B", part payment was made through a/c payee cheque.

As per the ld AR, in support of the amount recorded in the books of account the assessee submitted copy of ledger account of all the parties and copy of bank statement. As per this reconciliation chart, the unaccounted payments come to Rs. 11,31,37,408/- against which the assessee declared the additional income of Rs. 14,57,28,583/- in the return filed in order to honor admission made in search statement. Therefore, the assessee made an excess surrender of Rs. 3,25,91,175/-.

We have considered the rival contentions and carefully gone through the orders of the authorities below. We have also perused the statement of assessee recorded during course of search U/s 132(4) of the Act on 05/11/2012 and 08/11/2012. We have also verified the copy of ledger account of all the parties and reconciliation statement of expenditure incurred as appearing in column ‘B’ of seized excel sheet.

From the record we also found that after the search the assessee, reconciled the figures of this excel sheet from books of accounts with the help and discussion of the accountant of the assessee and such reconciliation sheet with supporting ledger accounts was filed to AO during the course of assessment proceedings along with letter dated 09.03.2015. As per such reconciliation sheet, the total unaccounted payments made for construction of building was worked out at Rs. 11,31,37,408/- as against the tentative surrender of assessee at Rs. 14,57,28,583/-. However, the assessee honored the surrender made in search and declared income of Rs. 14,57,28,583/- to avoid prolong litigation. The AO did not point out any defects in the working so submitted by the assessee. However, the A.O. did not agree with the assessee’s contention and made addition of Rs. 68,40,468/- by presuming that the assessee has made payment to M/s Alumayer India Pvt. Ltd. over and above whatever payments found recorded in excel 16 DCIT Vs Sandeep Chhabra sheet found in PEN Drive seized from the residence of the assessee. We found that apart from the excel sheet seized from the residence of the assessee several other documents/bills relating to construction expenses were found from the residence of Shri Neeraj Ajmera who was looking after the day to day work of the constriction. Such documents/bills were examined and correlated by the department and by the assessee with such excel sheet. The department found discrepancy only in the account of AIPL. As per paper seized from Shri Neeraj Ajmera, the total payment made/to be made to this party against the work was shown at Rs. 5,92,22,392/- while the payments in the name of this party in the excel sheet found from the pen drive seized from residence of assessee comes Rs. 5,23,81,924/- and difference of Rs. 68,40,468/- is in dispute. During the course of assessment proceedings, the assessee submitted the complete working of excel sheet mentioning the amount recorded in books of accounts as well as in column ‘B’ of excel sheet alongwith supporting ledger and the AO did not find any defect in such working and could not brought to notice any contra material.

We had carefully gone through the statements of various persons recoded U/s 132(4) of the Act and found that in the statement dated 08.11.2012 in reply to question No. 7 the assessee admitted the undisclosed income of Rs. 14,57,28,753/- on the basis of 17 DCIT Vs Sandeep Chhabra figures written in column B of excel sheet. However, in the same question he clarified that after reconciliation of figure written in the excel sheet with the help of his accountant Shri Banwari lal Yogi who prepared this sheet, the surrendered amount may be increase or decrease from Rs. 14,57,28,583/-. Therefore, from the statements of the assessee it is very much clear that the surrender was tentative and subject to reconciliation. However, the assessee has honored the surrendered amount in the return, therefore, there remains no dispute over this issue. We also found that alongwith reply dated 09.03.2015, the assessee submitted a sheet to the AO wherein the reconciliation of total amount recorded in books of accounts as against amounts mentioned in the excel sheet was worked out and unrecorded payments of Rs. 13,31,37,408/- was worked out on the basis of excel sheet and other documents/evidences found as a result of search was submitted and the AO did not point out any defects in such sheet. We also found that the A.O. has not accepted the assessee’s plea that excess payment of Rs. 68,40,468/- made to M/s Alumayer India Pvt. Ltd. was worked out on the basis of page Nos. 41 to 43 of Annexure-BS-11 seized from the residence of Shri Neeraj Ajmera includes postdated cheques. In this regard, we found that on the paper the advance given is only mentioned and it is nowhere mentioned that what was the dates of the payments and what were the mode of payments. If it is presumed that the 18 ITA No. 554/JP/2018 DCIT Vs Sandeep Chhabra payments mentioned on this paper was actually made/realized to this party than the same should have been mentioned on the excel sheet seized from the residence of the assessee.

We also found that as per statement of the assessee it is very much clear that the surrender was tentative and subject to reconciliation. The relevant part of the statement dated 08.11.2012 is as under: iz’u & 7 vkids fuokl LFkku ch&9 foosdkuUn ekxZ fLFkr dk;kZy; ij ryk’kh dh dk;Zokgh ds nkSjku ,d Pen drive izkIr ,oa tCr dh xbZ ,oa ftls Annex AS Ex.12 ds :Ik esa lwphc) fd;k x;k gSA bl Pen drive esa fLFkr Files dk Print out fy;k x;kA blesa ,d Print out ij SB-110 fy[kk gqvk gSA ,oa blesa fy[ks x, [kpZ SB-110 ij fLFkr IYkkWV ij fd, x, fuekZ.k dk;Z ls lEcfU/kr [kpkZs ls lEcfU/kr gSA bl ckjs esa vki D;k dguk pkgrs gS\ mÙkj %& egksn; esjs fuokl LFkku fLFkr dk;kZy; ls ikbZ ,oa tCr dh xbZ Pen drive esjs Accountant Jh cuokjh yky ;ksxh dh gS ,oa bles tks izfof"V;ka gS ;s mlds }kjk gh dh xbZ gS ,oa bldh iw.kZ tkudkjh eq>s ugha gSA esjk Accountant Jh cuokjh yky ;ksxh ls vHkh esjk lEidZ ugha gks ik;k gS bl dkj.k u rks eq>s bl Pen drive ds ckjs esa iwjh tkudkjh rFkk blds Print out ds ckjs esa] eSa iw.kZ tkudkjh ugha ys ik;k gw¡ ,oa u gh blesa fn, Figures dk Reconciliation gh dj ik;k gwa fdURkq bu Print out dks ns[kus ls yx jgk gS fd ;s izfof"V;ka IykWV ua SB-110, Vksad fLFkr Motisons Tower ij cus gekjs 'kks:e ,oa dk;kZy; ds fuekZ.k lEcfU/kr [kpksZ ls lEcfU/kr izrhr ysrs gSA ;g gekjk fuekZ.k dk vuqekfur fglkc gks ldrk gSA bu i`"Bks ij 4 eq[; dkWye gS ftlesa [kpZ dk Head dkWye A dkWye B ,oa Total dk dkWye gSA blesa dkWye A dk Total :Ik;s 9,48,17,685/- ,oa dkWye B dk Total 19 DCIT Vs Sandeep Chhabra :Ik;s 14,57,28,583/- ntZ gSA ;gka eSa crkuk pkgwaxk fd blesa ls vf/kdka’k [kpZ gekjh dEiuh esa Motisons Global PVT. LTD. ds [kkrs ls pSd ds ek/;e ls fd, gq, gS fdURkq dqN [kpZ esjh v?kksf"kr O;fDrxr vk; ls Hkh fd;k x;k gS] ftldk esjh ys[kk&iqLRkdks es bUnzkt ugha gSA eSaus iwoZ ds c;kuks esa fnukad 05-11-2017 dks bl fuekZ.k is~Vs :Ik;s 6,00,00,000/- dh jk’kh dks viuh v?kksf"kr vk; esa ls fd;k x;k fofu;ksx ekudj djkjksi.k gsrq LosPNk ls lefiZr fd;k FkkA vkt bu Print out dks ,d ckj iqu% ns[kus ds ckn esa le>rk gwa fd dkWye B esa mYysf[kr lEiw.kZ [kpZ dh jkf’k tks :Ik;s 14,57,28,583/- gS og esjh O;fDrxr v?kksf"kr vk; esa ls gh [kpZ dh xbZ jkf’k gS ftldk bUnzkt gekjh fu;fer ys[kk iqLRkdks esa ugha gSA vr% eSa bl lEiw.kZ jkf’k :Ik;s 14,57,28,583/- dks viuh pkyw foÙkh; o"kZ dh v?kksf"kr vk; Lohdkj djrs gq, bl jkf’k ij lg"kZ vk;dj vnk djus dh lgefr nsrk gw¡A egksn; ;gka esa ;g Li"V djuk pkgrk gw¡ fd pwafd esjs Accountant Jh cuokjh yky ;ksxh ls esjk lEidZ ugha gks ik;k gSA vRk% muds vkus ds ckn eSa iwjs Account dk Reconciliation djus ds ckn tks Hkh jkf’k vk,xh ml jkf’k ij vk;dj vnk djus gsrq ck/; jgwaxkA bl izdkj esjs }kjk Åij lefiZr dh xbZ :Ik;s 14,57,28,583/- dh v?kksf"kr jkf’k Accounts ls Reconciliation ds ckn de ;k T;knk gks ldrh gSA Therefore, the assessee in his search statement clearly stated that investment mentioned in Col B of the seized excel sheet is subject to verification from books of account and it may be more or at lesser figure. After recording findings, the ld. CIT(A) reached to the conclusion that the addition of Rs. 68,40,468/- is covered by the extra surrender so made by the assessee in his return of income. Findings so recorded by the ld. CIT(A) are as per the material on record. Accordingly, we do not find any justification to interfere in the findings so recorded by the ld.

In the result, appeal of the Revenue is dismissed.