SHAMBHU KUMAR AGARWAL,KOTA vs. DEPUTY COMMISSIONER OF INCOME TAX , KOTA

vkns'k@ ORDER PER: VIJAY PAL RAO, J.M.

This appeal by the assessee is directed against the order dated 20.09.2018 of ld. CIT(A), Udaipur for the assessment year 2016-17. The assessee has raised following grounds:-

“1. On the facts and in the circumstances of the case and in law the ld. CIT(A) erred in confirming the addition u/s 69A of the Act as against the same made by ld. AO u/s 68 of the Act without Shri Shambhu Kumar Agarwal vs. DCIT issuing notice as required u/s 251(2) of I. Tax Act, therefore the action of ld. CIT(A) in this regard is bad in law.

2. On the facts and in the circumstances of the case and in law the ld. CIT(A) erred in confirming the addition of Rs. 80,18,500/- made by the AO by holding that the addition made by the AO is literal interpretation of the content of seized paper and a logical interference under the background.

3. On the fact and in the circumstances of the case and in law the ld. CIT(A) erred in confirmation the action of ld. AO regarding not relying on the statements of persons recorded u/s 131 of the Act or affidavits of persons submitted by the appellant during assessment proceedings by holding that due to time gap between the search and the verification by the AO, tutored persons made deposition consistent with the version of the appellant for denying any loan from the appellant and the AO deemed it fit not to make further inquiry from rest of the persons from whom the appellant obtained affidavits and filed before the AO.

4. On the fact and in the circumstances of the case and in law the ld. CIT(A) erred in confirmation the addition so made by ld. AO on the basis of guess, assumption and presumption which is completely disregard to the search statement of the assessee and without any cogent material.

5. On the fact and in the circumstances of the case and in law the ld. CIT(A) erred in confirmation the addition made by ld. AO on the basis of noting at page 62 of exhibit 1 found during the course of search which were interpreted by the ld. Ao at his own will by rejecting the explanation and evidences filed by the appellant to corroborate that no transaction even taken place which were noted on the seized document.

Shri Shambhu Kumar Agarwal vs. DCIT

He has further contended that it is settled principles of law that a document cannot be relied upon partly just to intimidate the assessee.

The entries in the seized material are nothing but names of the relatives and known persons who have sought loan or help from the assessee.

The loose paper contains the said estimation as these people requested for loan and no transaction has taken place as yet. Therefore, even if some details were found recorded in the seized paper the same would not automatically lead to the conclusion of undisclosed income. The Assessing Officer has examined some of the persons whose names were found in the said seized document and there was a consistency in the explanation of the assessee at the time of the statement recorded U/s 132(4) of the Act as well as the statement recorded by the AO U/s 131 of the Act. Therefore, in the absence of any other material or fact either found and brought on record by the AO the seized document does not indicate any undisclosed income on account of loans and advances. The assessee in his statement recorded U/s 132(4) of the Act has clearly stated that no transaction has taken place but it was only Shri Shambhu Kumar Agarwal vs. DCIT estimate in respect of the loan / help sought by various relatives and known persons but the actual amount of advances or loans yet to be given. The said loose paper seized during the search is deaf and dumb document not giving any details of nature of transaction, time of payment, therefore, the AO has only presumed that the amount mentioned in the seized document represents loan given by the assessee to those persons. The said presumption is not based on any cogent material or finding of fact but the AO has assumed the fact of loan given by the assessee. The ld. AR has further submitted that even some of the amounts mentioned in the said documents were arbitrarily enhanced by the AO to 100 times. He has referred the first entry in the seized record and submitted that it is clearly recorded as Rs. 50,000/- but the AO took the said amount as Rs. 50,00,000/- without any basis.

This question was repeatedly asked during the statement recorded U/s 132(4) of the Act and the assessee has clearly explained, therefore the AO merely on the basis of assumptions, presumptions and surmises treated Rs. 50,000/- as Rs. 50,00,000/- and Rs. 10 as Rs. 10,000/-.

Therefore, except these two figures the AO has accepted that all other amounts written in the seized material as it is and made addition of Rs. 80,18,500/- U/s 68 of the Act. The ld. AR has referred to the statement Shri Shambhu Kumar Agarwal vs. DCIT recorded U/s 132(4) as well as U/s 131 of the Act and submitted that nothing has come out from the inquiry conducted by the AO to conclude that the amounts mentioned in the seized material represents the loans and advances given by the assessee. The Assessing Officer has accepted part of the explanation and statement recorded U/s 132(4) as well as statement recorded U/s 131 of the Act by ADI Investigation, Kota but rejected the other part of the statement. The interpretation of the document in its own perception merely on the basis of assumption and presumption is against the provisions of Section 132(4) of the I.T.

Act. As per the provisions of Section 132(4A) of the Act the AO was under obligation to presume that the contents of loose paper seized during the course of search operation are true. However, the view taken by the AO is contrary to the presumption provided U/s 132(4A)(ii) of the Act. Even the statement of the assessee was also recorded U/s 131 of the Act on 21.08.2015 wherein the assessee has again furnished the name and address of each person with their mobile number. The assessee also explained the fact that there was no loan and advances by the assessee to the persons mentioned in the document. It was only noting as per request of the persons but the assessee finally had not decided to give the loan. One entry in the name of Shri Pradeep Jain in Shri Shambhu Kumar Agarwal vs. DCIT the seized document pertain to loan amount sought by her wife being Rs. 50,000/- wherein the loan advances by M/s Adila Biotech Pvt. Ltd. to M/s Parshwanath Associates has nothing to do with entry in the loose paper that this fact was clarified by the assessee in his statement recorded u/s 131 of the Act. The assessee has also filed affidavit of the witnesses/ alleged receiver of loans but the same were not considered by the AO and ld. CIT(A). The ld. AR has pointed out that the AO issued notice U/s 131 of the Act to only two persons namely Mr. Rajesh Agarwal and Smt. Alka Tayal who appeared before the AO and the statements were recorded U/s 131 of the Act. They have categorically stated that they have not received any amount as recorded in the loose paper. The AO has not issued summons to the remaining persons which shows deemed satisfaction of the AO after recording the statement of these two persons. However, despite the statement recorded U/s 131 of the Act the AO ignored the statement while making the addition. It is ridiculous that the AO even failed to believe the statement recorded by himself U/s 131 of the Act. Since, the AO did not issue summon to the other persons the assessee himself furnished affidavits of the persons mentioned in the loose paper who confirmed that they have not received any amount as mentioned in the aforesaid loose paper. Thus, Shri Shambhu Kumar Agarwal vs. DCIT the ld. AR has submitted that the Assessing Officer has neither relied upon the facts recorded in the loose paper nor statement recorded U/s 131 of the Act nor affidavits furnished by the assessee but has made addition on the basis of presumption and surmises without having any cogent reasons or corroborative evidence. The ld. AR of the assessee has submitted that it is settled law that burden to prove that what is apparent is not real is on the person who alleges so and this burden must be discharged by strict legal proof and not on conjectures and surmises. In support of his contention, he has relied upon the decisions of Hon’ble Supreme Court in case of CIT vs. Bedi & Co. Pvt. Ld. 230 ITR 580 as well as in case of CIT vs. Daulat Ram Rawatmull 87 ITR 349. The assessee has proved the real nature of the entry recorded in the seized paper. Since it has been duly proved beyond any doubt with documentary evidence, therefore the test of human probability is not applicable in the case of the assessee as it is a case of misconceived interpretation by the AO and ld. CIT(A) without any nexus with the facts of the case of the assessee. Once the assessee has furnished an explanation regarding the entry in the seized documents the burden shifts on the Department to bring cogent material on record to establish as to why the explanation offered is not Shri Shambhu Kumar Agarwal vs. DCIT satisfactory. The AO has not brought any material on record to disprove the explanation given by the assessee. Therefore, the addition made by the AO and confirmed by the ld. CIT(A) is bad in law. In support of his contention, he has relied upon the decision of Hon’ble jurisdictional High Court in case of CIT vs. Khandelwal Shringi & Co. 159 DTR 59 and also relied upon the decision of Hon’ble Delhi High Court in case of CIT vs. Dinesh Jain (HUF) & others 79 DRT 457. Thus, the ld. AR has pleaded that the addition made by the AO and confirmed by the ld. CIT(A) be deleted.

The Assessing Officer has accepted the same as recorded in the seized paper except in respect of two notings in the name of Pradeep Jain and Sonu Kabari. The AO has also given extracts of the seized document and then the enlarge the amount in respect of entry number second and third Rs. 50,000/- as Rs. 50,00,000/- and Rs. 10 as Rs. 10,000/-.

The details of the transactions and remarks of the AO are given page 4 & 5 as under:-

25,00,000/-, is treated Rs. 50,00,000/- 4. Sonu Kabari 10 10,000/- No evidences found regarding amount Rs. 10/-. Hence, amount is treated Rs. 10,000/- 5. Virendra 10,00,000/- 10,00,000/- ------ Thekdar Dilip Gagrani 2,00,000/- 2,00,000/- -------- 6. Bhagirath ji 15,00,000/- 15,00,000/- --------- 7. Rajesh 20,00,000/- 20,00,000/- ------------ 8. Alka Jiji 5,00,000/- 5,00,000/- ------- 9. Vihal Bhaiya 20,000/- 20,000/- -------- 10. Atma Ramji 30,000/- 30,000/- ----------- Jijaji 11. Surendra Sir ( 1,60,000/- 1,60,000/- ---------- Music Teacher) 12. Govindji 10,000/- 10,000/- -------------- 13. Pandey ji 10,000/- 10,000/- --------------- 14. Chhoti Bai 3500/- 3500/- ---------- 15. Prem 10,000/- 10,000/- -------------- 16. Mahendra 35,000/- 35,000/- ------------ Guard 17. Total 55,68,500/- 1,05,18,500/- The reasons given for treating Rs. 50,000/- as Rs. 50,00,000/- by the AO is that there was a transaction of loan of Rs. 25 lacs by the assessee through his company M/s Adila Biotech Pvt. Ltd. to M/s Parashwnath Associates which is concerned of Shri Pradeep Jain. We find that the said transaction of Rs. 25 lacs was not in dispute and duly recorded in the books of concern parties namely M/s Adila Biotech Pvt. Ltd. and M/s Parashwnath Associates, therefore the said transaction is not between Shri Shambhu Kumar Agarwal vs. DCIT the assessee and Shri Pradeep Jain. The AO has presumed the transaction between M/s Adila Biotech Pvt. Ltd. and M/s Parashwnath Associates as one recorded in the seized documents in the short form of 25+25. One can see from the seized document that all the amounts are given in their full digit figures and not short digit or code. The AO has also accepted these amounts as it was recorded in the seized document except against two entries. The amount of Rs. 50,000/- was clearly mentioned in the seized documents after it is recorded 25+25. The statement of the assessee was recorded U/s 132(4) as well as in the post search inquiry U/s 131 of the Act. Since nothing has come out during the search and seizure proceeding and in the statement recorded U/s 132(4) of the Act therefore, the Investigation Wing made another attempt by recorded the statement U/s 131 of the Act in the post search inquiry. We find that the assessee has duly explained the nature of transaction recorded in the seized documents. The relevant part of the statement recorded U/s 132(4) on 03.07.2015 as well as statement recorded U/s 131 on 21.08.2015 are reproduced as under:- iz’u 28 eSa vkidks Ex-I ¼ist 62 ls 66½ fn[kk jgk gwWa d`i;k bl ij fy[ks x, fooj.k dh tkudkjh nsaA iw.kZ fooj.k nsA mŸkj bl ckjs esa eSa crkuk pkgrk gwWa fd ist la[;k 62 esa esjs dqN tku&igpku ds yksxksa o fj’rsnkjska us eq>ls yksu ;k enn ekaxh gS] 13 Shri Shambhu Kumar Agarwal vs. DCIT mldk ,d ,LVhesV cuk;k Fkk fd fdl&fdldks fdruk&fdruk yksu nsuk gS tks fd eSusa vHkh rd flQZ iznhi tSu dks pSd }kjk mlds QeZ ik’oZukFk ,lksfl,V dks ns fn;s gSa ckdh vkSj dksbZ jkf’k dk ysu&nsu vHkh ugha gqvk gSA ist la-63 ds ckjs esa rFkk ist la[;k 64 ds ckjs esa crkuk pkgrk gwWa fd fnuakd 26-03-2015 dks eSusa ,d vaxqBh 23000 vkSj ,d 56000@& dh dqy :i;s 79000@& ds lkeku esa 10000@& :i;s dk fMLdkmaV ds ckn 69000@& esa yxh xbZ lkexzh dk gS ftldk Hkqxrku eq>s vHkh ToSylZ dSyk’k pan ljkZQ dks djuk ckdh gSA ist la-63 esa eSusa 3 xzke dk dku dh cfy;kWa vkSj yh Fkh tksfd 9350@& :i;s dh yh rFkk blh iphZ esa 69000@& :i;s cdk;k jkf’k Hkh fy[kk gSA bl izdkj dqy 78000@& :i;s dh ToSyjh ds :i;s eq>s nsus gSA i`"B la[;k 65 esa n’kkZ, x, jkf’k ds ckjs esa crkuk pkgrk gwWa fd ;g jkf’k dk O;kSjk esjs llqjky esa fdlh dk;ZØe ;k ikVhZ esa gyokbZ ds }kjk fn;k x;k ,LVhesV gSA ftldh eq>s T;knk tkudkjh ugha gSA bl laca/k esa dksbZ ysu&nsu esjs }kjk ugh fd;k x;k gSA bldk foLr`r C;kSjk esjs lkys jkts’k th ns ldrs gSA iz’u 30 vkius i`"B la-62-Ex-I ds mŸkj esa crk;k gS fd ;s esjs tku igpku ds yksx o dqN fj’rsnkj gS bUgsa yksu nsuk gSA d`i;k crk,Wa fd ;s yksx vkils fdl m}s’; ls yksu jkf’k ekaxs FksA mŸkj vk’kh’k] iznhi tsu] lksuw dckM+h] fojsUnz Bsdsnkj] fnyhi xxokuh esjs fe= vFkkZr tku&igpku ds gSA jkts’k th] vYdk th] rFkk vU; uke esjs fj’rsnkj gSA bu lHkh ds eq>ls lHkh O;fDrxr m}s’; gsrq yksu ekaxk FkkA iz'u 16 ryk’kh dk;ZokbZ fnuakd 2-07-2015 dh dk;ZokbZ ds nkSjku vkids vkokl ij dqN Loose Papers feys Fks] ftudks lwfpc} fd;k x;k FkkA Annexure A, Exibit-1, ftlesa dqy 79 i`"B gS vkidks fn[kk jgk gwWaA d`i;k Li"V djsa bu i`"Bksa ij D;k fooj.k gS] bu i`"Bksa ij tks figures gS mUgsa viuh ys[kk iqLrdksa ls verify djok;sA 14 Shri Shambhu Kumar Agarwal vs. DCIT mŸkj esjs }kjk Annexure A Exibit-1, tks fd gekjs vkokl ls tCr fd;s x;s Fks ryk’kh dk;ZokbZ ds nkSjkuA i`"B la[;k 1 ls 9 esa ,d IyksV dks [kjhnus ds fy, bdjkjukek o ofl;r gSA esjs }kjk o"kZ 2001 esa mDr IykV dks [kjhnus ds fy,s bdjkjukek fd;k x;k Fkks] eSusa yxHkx 40 gtkj :i;s esa [kjhnk Fkk ysfdu ekSds ij fdlh vU; O;fDr dk dCtk feyk Fkk] blfy, esjs }kjk vkxs dksbZ dk;ZokbZ ugha dh xbZA i`"B la[;k 10 ls 38 rd fdlh property ds dkxt gS] tks gfj egkohj vxzoky izks- ,loeZ izksiVhZ Mhyj esjs ikl dqN property ds papers ysdj vk;k Fkk Proposal ds :i esa] ysfdu bl izksiVhZ dks [kjhnus esa esjh dksbZ :ph ugha FkhA ;s dkxtkr esjs ;k esjs ifjokj ls lEcfU/kr ugha gSA i`"B la[;k 39 ls 47 rd ds dkxtkr Plot No.249, jaxckM+h jksM ds gS] tks esjs }kjk o"kZ 2003 esa :i;s 3]50]000@& esa [kjhnk Fkk] ftlds fy, bdjkjukek vkSj ofl;r rS;kj djok;k x;k Fkk] ;s Plot esjs }kjk o"kZ 2004 esa sale dj fn;k x;k] Power of Attorney ysdj foØsrk ls] ftlls eSusa [kjhnk FkkA i`"B la[;k 48 ls 50 ij dksVk nky fey dk Account Confirmation gS] tks esjh ys[kk iqLrdksa esa ntZ gSA i`"B la[;k 51 ls 54 esjh Balance Sheet gS As on 31-03- 2013 i`"B la[;k 55 Adila Biotech dk Bank Statement gSA i`"B la[;k 56&57 esa gekjs ifjokj dh dEiuh O.P.C.L. esa flesaV ds penal curs gS] ftudh size Millimetre esa vafdr gS L x b x h ds :i esa] ;s dkxt ejs ls lEcf/kr ugha gSA i`"B la[;k 58 ij OPCL ls lEcaf/kr gS] QSDVªh esa iqjkuk Tin shed Repair djok;k Fkk] ftldk lR;kiu OPCl dh ys[kk cfg;ksa ls fd;k tk ldrk gSA i`"B la[;k 59 ls 61 rd OPCL esa cuk;s tk jgs Penal ds eki vkSj Material Consumption dh detail gS] tks OPCL dh ys[kk iqLrdksa esa ntZ gSA i`"B la[;k 62 ij esjs dqN fj’rsnkj o tkudkj yksxksa ds uke fy[ks gq;s gS vkSj muds vkxs tk jkf’k fy[kh gqbZ gS] tks fd bu yksxksa us esjs ls loan ysuk pkgk Fkka] ftldk estimate cuk;k Fkk fd fdldks fdruk Amount nsuk gS] ftlesa ls vHkh rd flQZ iznhi tSu dks pSd }kjk mldh QeZ ik’oZukFk ,lksfl,Vl dks :i;s 25]00]000@& :i;s fn;s gS fnukad 06-05- 2015 dksA i`"B la[;k 63 o 64 ij ds ckjs esa crkuk pkgrk gwWa fd i`"B la[;k 64 fnuakd 26-03-2015 ij vafdr fooj.k esa nks vaxqBh;ksa ds [kjhn lEcU/k esa fooj.k vafdr] ftldk ewY; :i;s 69]000@& gS blh Øe esa i`"B la[;k 63 ij vafdr fooj.k esa ,d vaxqBh [kjhnus dk fooj.k ftlesa ,d Hkkjh vaxqBh ds cnys esa 5- 15 Shri Shambhu Kumar Agarwal vs. DCIT 040 xzke dh gYdh vaxqBh nh xbZ Fkh dh dher vkSj cuokbZ vkSj i`"B la[;k 64 esa n’kkZ;s xbZ cdk;k jkf’k :i;s 69000@& dks feykdj :i;s 78000@& dk Hkqxrku fd;k x;k gSA i`"B la[;k 63 o 64 ij vafdr fooj.k] tks fd Gold jewellery ls lEcaf/kr gS] ds ,ot esa esjs }kjk Jewellery isVs tks Surrender fd;k x;k gS] mlesa 'kkfey gSA i`"B la[;k 65 ij vafdr fooj.k ejs }kjk pkWanh ds crZu [kjhn ds lEcU/k esa gS] tks fnukad 01-09-2014 dks [kjhns x;s Fks ftudh dher :i;s 6]93]503@& FkhA ;s pkWanh ds Items esjs Books es entered ugha gSA vr% eSa foRr o"kZ 2014&15 esa :i;s 6]93]503@& dh vk; v?kksf"kr ekurs gq, djkjksi.k gsrq lefiZr djrk gwWaA eSa i`"B la[;k 66 o 67 ds lEcU/k esa ;g dguk pkgrk gwWa fd o"kZ 2014&15 esa Shine Electronics, Jaipur ls :i;s 3]82]200@& ds Electronics ds Items eaxok;s Fks ;kuh esjs }kjk [kjhns x;s gS] ftlds lEcU/k esa payment tks fd;k x;k Fkk mldk fooj.k i`"B la[;k 67 ij vafdr jkf’k :i;s 3]82]200@& esjh fu;fer ys[kk cfg;ksa esa ntZ ugha gSA vr% bl jkf’k :i;s 3]82]200@& dks foŸk o"kZ 2014&15 dks v?kksf"kr vk; ekurs gq;s djkjksi.k gsrq lefiZr djrk gWwaA i`"B la[;k 68 ij vafdr fooj.k esjh ifRu Jherh bUnzk ds }kjk [kjhnh xbZ Jewellery dk fcy gSA rFkk i`"B la[;k 69 o 70 ij vafdr fooj.k i`"B la[;k 68 ij vafdr fcy ds lEcU/k esa dksVs’ku gS] ftuij Items fooj.k vkSj otu fy[kk gqvk gS] bu nksuksa i`"Bksa ¼69 o 70½ esa n’kkZbZ xbZ dher ¼After discount½ Total :i;s 543000@& gSA i`"B la[;k 70 ij fy[kk gqvk gS] ftlesa ls vfrfjDr discount ¼ On bargaining ½ vkSj fn;s tkus ds ckn Net Amount :i;s 521000@& i`"B la[;k 71 ls 73 esjh ifRu Jherh bUnzk vxzoky ls lEcaf/kr gS] jewellery Purchase ds lEcU/k esa tks mudh ys[kk iqLrdksa esa ntZ gS vkSj Jherh bUnzk vxzoky us buds lEcU/k esa Li"Vhdj.k vius c;kuksa esa ns fn;k gSA i`"B la[;k 74 ls 78 rd [kkyh fyQkQs ds dkih gS] ftuesa gekjs ?kj ij ik;k x;k cash j[kk gqvk FkkA bu fyQkQksa esa ls cash fudky dj HkkSfrd lR;kiu ds nkSjku count dj fy;k x;k Fkk vkSj [kkyh fyQkQs tCr fd;s x;s gSA fyQkQksa ij tks uke fy[ks gq;s gS ds lEcU/k esa eSa ;g dguk pkgrk gwWa fd ;s fyQkQs nqckjk ¼Reused½ dke esa fy;s x;s gSA iz’u 17 eSa vkidks Annexure A dk i`"B la[;k 62 fn[kk jgk gwWa ftlij dqN uke fy[ks gq;s gS vkSj muds lkeus dqN jkf’k vafdr gS] d`i;k 16 Shri Shambhu Kumar Agarwal vs. DCIT bu lHkh O;fDr;ksa ds iw.kZ irs vkSj lEidZ uEcj crk;sA d`i;k ;g Hkh crk;s fd bu O;fDr;ksa ls vkidk D;k lEcU/k gS rFkk ;s yksx D;k O;olk; djrs gSA mŸkj esjs }kjk i`"B la[;k 62 ns[k fy;k x;k gS] tks esjs vkokl esa tCr fd;k x;k gS] buesa fy[ks ukeksa ds lEcU/k esa tkudkjh fuEu izdkj gSA 1- vk’kh’k tSu& AJ-8, foKku uxj] fnus’k xSl ds lkeus dh xyhA Jh vk’kh’k tSsu esjh dEiuh Aditla tritere esa deZpkjh gS] tks marketing dk dk;Z ns[krs gSA Mob No.9001132333 2- iznhi tSu& esjs fe= gS] ftudk irk egkohj uxj foLrkj ;kstuk edku u0 5E-910 dksVk gSa] Jh iznhi tSu Building dk dk;Z djrs gS] mudh QeZ dk uke ik’oZukFk fcYMlZ gSA Mob. No.982903785 3- lksuw dckM+h& esjk fe= gS] ftldk irk egkohj uxj&A edku ua- 193 dksVk gS Mob No.9352004546 gS] ;s Plastic ds Scrap dk dk;Z djrs gSA 4- fojsUnz Bsdsnkj& irk&1&o&25] foKku uxj dksVk gS Mob No.9887108247 gSa ;s labour contractor gSA 5- nfyi xxjkuh& esjk fe= gS] ftldk irk& ryoM+h dksVk esa jgrs gS Mob No.9413357663 gSA ;s Medical dk dke djrs gS] buds Medical dh ,tsUlh gS] foØe pkSd jkeiqjk dksVk esaA 6- HkkxhjFkth& Labour Contractor gS] dksVk nky fey esa dke djrs gS] Address iFFkj eaMh lqHkk"k uxj esa gS] edku ua-913 gSA jkts’k& izks- jkts’k esjs lkys gS] tks ukxkSj jgrs gS tks 7- vxzoky ykWt ds uke ls gksVy dk lapkyu djrs gSA Mob No.9414244411 gSA Shri Shambhu Kumar Agarwal vs. DCIT 8- vYdk thth& esjh cM+h lkyh gS] ftudk irk 1@104]10 O;kl dkyksuh ukxkSj] Mob No.8104460030 gSA Jherh vYdk th ?kjsyw vkSjr gSA esjk HkkUtk gS] ftldk irk S/o lqjs’k dqekj 9- fo’kky HkS;k& fla?ky] xksy dejk ckajk gSA Mob No.92525784 tks iFFkj O;olk; djrs gSA vkRekjke thtkth& vkRekjketh esjs thtkth gS fd’kux<+] vtesj 10- esa jgrs gS Mob No.9462509118 gSA ;s Marbel iFFkj dk dke djrs gSA 11- lqjsUnz lj ¼Music teacher½ lqjsUnz th esjs cPpksa dks laxhr fl[kkrs gSA Mob No.9929811494 edku ua-912 A R.K. Puram gSA 12- xksfoUnth& esjs MªkbZoj gS] tks xkWao dSFkwu dk jgus okyk gS Mob No.9680306181 gSA 13- ikaMs th& ikaMs th dk uke V.K Pandey gS] budk Address 644 Daela Bali gS ;s watch man security dk dke ns[krs gSA 14- NksVh ckbZ& gekjs ?kj ij crZu vknh lkQ&lQkbZ dk dk;Z djrh gSA 15- izse& ckbZ gS tks ?kj ij >kMw yxkus vkrh gSA 16- egsUnz xkMZ& esjs edku ij xkMZ dk dk;Z djrk gSA iz'u 18 eSa vkidks i`"B la[;k 62 iqu% fn[kk jgk gwWa] ftlesa 16 O;fDr;ksa ds uke ds vkxs jkf’k fy[kh gqbZ gS ds lEcU/k esa lksp fopkj dj crk;s fd bl fy[kh gqbZ jkf’k dk bu O;fDr;ksa ls D;k lEcU/k gSA d`i;k ;g fd crk;sa fd ;s dkxt fdlds }kjk fy[kk x;k gSA mŸkj ;g dkxt i`"B la[;k 62 esjs }kjk fy[kok;k x;k gS vkSj esjs csVs fnO;ka’k dh Handwriting esa fy[kk gqvk gSA esjs }kjk i`"B la[;k 62 ns[k fy;k x;k gS bl i`"B ij 16 O;fDr;ksa ds uke fy[ks gq, gS 18 Shri Shambhu Kumar Agarwal vs. DCIT vkSj muds vkxs dqN jkf’k vafdr gS] ds lEcU/k esa eSa ;g dguk pkgrk gwWa fd esjs cSad [kkrs esa djhc ,d djksM+ :i;s iM+k Fkk] eSusa tc bl jkf’k dks m/kkj nsus dh lksph rks i`"B la[;k 62 esa fy[ks ukeksa ds O;fDr;ksa us blesa :ph fn[kkbZ] ftldh esjs }kjk list rS;kj dh xbZ Fkh] ijUrq esjh ifRu Jherh bUnzk vxzoky blls lger ugha Fkh blfy, ;s jkf’k m/kkj ugha nh xbZA iz’u 19 d`i;k crk;sa fd ;s dkxt i`"B la[;k 62 dc dk fy[kk gqvk gSA mŸkj ;g dkxt twu&2015 dk fy[kk gqvk gS] ftldh rkjh[k eq>s ;kn ugha gSA iz’u 22 vkidks i`"B la[;k 62 ij vafdr fooj.k fn[kk;k tk jgk gS] ftlesa 16 O;fDr;ksa ds ukeks ds vkxs fofHkUu jkf’k;kWa fy[kh gqbZ gS] ls izfrr gksrk gS fd bu O;fDr;ksa dks vkus buds uke ds vkxs vafdr jkf’k dk ysu&nsu fd;k gS] ftldk bl i`"B ij fooj.k vafdr gSA blls ;g izrhr gksrk gS fd ;s Transaction vkidh fu;fer ys[kk iqLrdksa esa ntZ ugha gS] D;ksa ugha bu 16 ukeksa ds vkxs vafdr jkf’k dks vkidh v?kksf"kr vk; ekuh tk, Li"V djsaA mŸkj tSlk fd eSusa iwoZ esa vius c;kuksa esa crk;k gS] i`"B la[;k 62 ij vafdr fooj.k esjs }kjk m/kkj nsus ds fy, fooj.k rS;kj fd;k x;k Fkk] ysfdu fdUgha dkj.kksa ls bu O;fDr;ksa dks ;s jkf’k m/kkj ugha nh xbZ FkhA eSa ;g dguk pkgrk gwSa fd esjs }kjk i`"B la[;k 62 ij vafdr ukeksa ds lkFk Transaction ugh fd;k x;k gS] blfy, bu ukeksa ds vkxs of.kZr jkf’k dk esjh vk; ls dksbZ lEcU/k ugha gSA At the time of search, the assessee in his statement recorded U/s 132(4) of the Act has explained about the notings in the loose paper seized at page 62 of exhibit-1 that these noting are regarding the loan or help asked by some of his relatives and known persons and assessee has made an estimate on the request by these persons but there was Shri Shambhu Kumar Agarwal vs. DCIT no actual transaction of loans and advances. Even during the statement recorded U/s 131 of the Act the assessee has again explained the nature of notings and the details of all the persons mentioned in the seized loose paper. Thus, it is clear that the assessee has cooperated with the investigation and all the necessary details were given to the department for further investigation and examination to be carried out.

The Assessing Officer during the assessment proceedings summoned two persons out of the list of 15 and recorded their statements U/s 131 of the Act. These two persons who were summoned by the AO and examination during the course of assessment proceedings have clearly stated that no loan or advances was received from the assessee, therefore except the seized document which is loose paper nothing has come out in the investigation carried out by the Department during the search and seizure action and post search inquiry as well as the inquiry conducted by the AO during assessment proceedings. Even no query was raised by the Department about the correctness of the figures mentioned in the seized loose papers. Therefore, in the absence of any inquiry conducted regarding the correctness of the amount mentioned in the seized loose paper, the investigation team has not doubted or suspected about the correctness of the same. The AO has also not Shri Shambhu Kumar Agarwal vs. DCIT raised any query on this aspect either to the assessee or to the other persons summoned during the course of assessment proceedings and their statement were recorded u/s 131 of the Act. It is not in dispute that the AO examined Shri Rajesh Agarwal and Smt. Alka Tayal after notices U/s 131 of the Act was issued these two persons. The AO did not propose to examine the other persons and therefore, whatever inquiry and investigation was conducted during the search and seizure action, post search inquiry as well as during the assessment proceedings nothing incriminating was detected except the seized loose paper. Thus, the presumption of the AO that the transaction in the loose paper against the name of Shri Pradeep Jain of Rs. 50,000/- as Rs. 50,00,000/- is based on mere assumption without any material or any fact found or detected during the proceedings. It is also not in dispute that the transaction of Rs. 25 lacs between M/s Adila Biotech Pvt. Ltd. and M/s Prashwanth Associates is a separate and independent transaction between two separate parties and cannot be attributed to the transactions allegedly recorded by the assesssee in the loose papers. The AO has taken these transactions as the assessee own undisclosed income and not undisclosed income of M/s Adila Biotech Pvt. Ltd. Hence, considering the part noting in the loose papers as Shri Shambhu Kumar Agarwal vs. DCIT transaction between M/s Adila Biotech Pvt. Ltd. and M/s Prashwanth Associates and part transaction between the assessee and Shri Pradeep Jain as well as other persons are not permissible when no such facts or material was found or brought on record to support such bifurcation.

Even otherwise as per the plain reading of the seized loose paper it cannot be inferred that these transactions are in the nature of advances or loans. It is only the assessee to explain the nature of the transaction recorded in the document when the document itself is silent about the nature and does not indicate the nature of these notings. What can be gathered from the seized document is the names of the persons and amount against each of the names but whether it is loan or other trading transaction or vice versa the transactions being the amount received by the assessee from these persons. It is not possible to judge the nature of transaction from bare reading of the seized document.

Even the date of the notings and date of each individual transaction is not mentioned in the seized paper, therefore to ascertain the actual nature of transaction the assessee as well as the other persons whose names are appearing in the seized document was required to be examined. The department has done the said exercise of examination of the assessee not only once but twice. Even, the AO has also Shri Shambhu Kumar Agarwal vs. DCIT examined two of the persons namely Shri Rajesh Agarwal and Smt. Alka Tayal but both of them have denied to have received any amount as recorded in the loose paper. Therefore, by considering the statements of the assessee recorded U/s 132(4) as well as U/s 131 of the Act and the statement of these two persons namely Shri Rajesh Agarwal and Smt. Alka Tayal recorded U/s 131 of the Act we find that except the entry or notings in the loose paper nothing more has come out as a result of the intense investigation carried out by the Department. Once the assessee explained the nature of these transactions and nothing more has either brought on record or was detected during the course of investigation and inquiry carried out by the Department then the explanation of the assessee remained uncontroverted. Even the said explanation of the assessee was corroborated by the statements of these two persons examined by the AO as well as the affidavits of the remaining persons filed by the assessee.

6. Hence, in the facts and circumstances of the present case where the seized document is silent about the nature of transaction and the department has not proved the facts that the amount mentioned in the said loose papers represents the undisclosed income of the assessee then a presumption cannot be raised contrary to the evidence brought Shri Shambhu Kumar Agarwal vs. DCIT on record during the course of investigation carried out by the Department. The presumption U/s 132(4A) of the Act can be raised only for limited purpose that the seized documents found from the possession of the assessee is presumed to be the document of the assessee and the entries in the said documents are presumed to be correct unless and until contrary is proved by the assessee. The AO has exceeded the scope of presumption by taking the nature of noting as loans and advances and further in enhancing the amount by 100 times of some of the amounts. Therefore the addition made by the AO is based on assumption and presumption without any cogent material or facts founds or detected during the inquiry or investigation and the same is not sustainable in law. The law on this point is settled that if the AO is going to consider the fact as recorded in the seized documents as not real then the onus is on the AO to establish the same. We find that the AO has grossly failed to bring any material in support of his presumption that the entries or noting in the seized loose papers represents undisclosed income of the assessee on account of unexplained investment being loans and advances. Hence, the ld. CIT(A) has confirmed the addition made by the AO by ignoring investigation carried by the search team as well as by the AO and giving Shri Shambhu Kumar Agarwal vs. DCIT the benefit to the AO that witnesses may have been tutored. Even if the said apprehension may have some basis but without bringing any material on record the addition is not justified. The said observation of the ld. CIT(A) that the due to time gap the persons who were examined by the AO might have been tutored can lead only to ignore such statement but this observation cannot be a basis for addition.

Accordingly, in view of the facts and circumstances of the present case we hold that the addition made by the AO is merely on the basis of presumption without any material much less cogent material and therefore, the same is not sustainable in law and liable to be deleted.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 28/03/2019

Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vikram Singh Yadav) (Vijay Pal Rao) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 28/03/2019. *Santosh. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Shri Shambhu Kumar Agarwal, Kota. 1. izR;FkhZ@ The Respondent- DCIT, Central Circle, Kota. 2. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 25