ACIT, CC- 13,, NEW DELHI vs. JAIDEV PRASAD MINDA, NEW DELHI

The aforesaid appeals have been filed by the revenue against separate impugned order of even date, 31st March 2017, passed by Ld. CIT (Appeals) – 26, New Delhi for the quantum of assessment passed u/s143(3)/153(A) for the assessment years 2010-11, 2011-12 and 2013-14. Since, in all the appeals identical issues are involved arising out of similar set of facts and findings, therefore, same were heard together and are being disposed of by way of this consolidated order. In all the three years, the assessee has challenged the addition u/s 68 of the I.T. Act made on the basis of receipts in the ledgerised cash sheets as per annexure of seized material found during the course of search. Following additions have been made in these three years:- Asstt. year 2010-11 Asstt. year 2011-12 Asstt. year 2013-14 Rs. 1,91,22,400/- Rs. 1,74,77,400/- Rs. 2,46,85,631/-

2. Since the grounds of appeal are identical, therefore, for the sake of convenience, the grounds of appeal filed by the revenue for the Asstt. year 2013-14 are reproduced as under :- “1 The Ld. CIT (A) has erred on facts and in law in deleting the addition of Rs. 2, 46, 85, 631/- u/s 68 of the I. T. Act, 1961 as the receipts in the ledgerised cash sheets inventorized under annexure A-2 by Party R-2 admittedly representing undisclosed receipts. The Ld. CIT (A) has erred on facts and in law in 2 observing that no separate income is recorded with ledger vis-a- vis Summary sheets whereas the AO has notices a difference of Rs. 2,46,85,631/- based upon such documents. The appellant craves leave to add, alter or amend 3 any/all of the grounds of appeal before or during the course of the hearing of the appeal.”

2. As a lead case we are taking the appeal for the assessment year 2013-14 and our findings given therein will apply mutatis mutandis in the appeals for the assessment years 2010-11 and 2011-12. The facts in brief, are that the search and seizure operation u/s 132 was carried out in the case of the Minda group of cases on 20.9.2013 and accordingly, notice u/s 153A was issued on 02.05.2014. Ld. AO noted that during the course of search, documents were seized and on perusal of seized material especialy annexure AA-6, Party 0-2 contains receipts out of sale of scrap of Rs. 1,19,24,500/- during the current financial year. In response to the query raised by the AO, the assessee submitted that the assessee group i.e., J P Minda group of companies vide its disclosure letter dated 28.12.2013 has taken into account these receipts of Rs.1,19,24,500/- as part of its disclosure as additional income in the respective hands. Assessee had further submitted that he has surrendered Rs. 1,19,24,500/- in the hands of his elder son Sh. Ashwani Kumar Minda, as the cash book giving the details in respect of income has been found from the residence of Shri Ashwani Minda during the course of search and as such the said income have been surrendered in the hands of Shri Ashwani Minda Assessee has also attached computation of income of his son Sh. Ashwani Kumar Minda showing total surrender of Rs. 1,19,24,500/- in the current financial year. Thus on this, no adverse inference was drawn and the similar income was accepted in the hands of the elder son of the assessee, Shri Ashwini Kumar Minda.

3. Thereafter, Assessing Officer noted that the seized material Annexure A-5 , Party R-2 contains documents which shows receipt of Rs. 3,66,10,131/- and the details were incorporated by him in the following manner :-

JPM Ji on a/c Loan (JISL) Modern Scrap Total 2007-10 1,51,30,160* 50,00,000 2,01,30,160 2010-11 85,00,000 93,00,000 1,78,00,000 2011-12 89,79,720 54,00,000 1,43,79,720 2012-13 2,46,85,631 - 1,19,24,500 3,66,10,131 5,72,95,511 1,97,00,000 1,19,24,500 8,89,20,011 He further noted that the documents seized during the course of search, i.e., annexure A-2, Party R-2 which was cash book print out, and came to an inference that there remain an unexplained amount of Rs. 2,46,85,631/-. The same were added by him after observing and holding as under :- “During the financial year under consideration the assessee received Rs.3,6610,131/- in cash out of which Rs.1,19,24,500/- have been surrendered either in the hand of the assessee or in the hand of his elder son Sh. Ashwani Minda. If the assessee's this submission of surrendered income is considered, there remains an unexplained amount of Rs.2,46,85,631/-. On being asked about it, it has been submitted that this amount is part of the out of book transactions entered into by the assessee and there is a multiplicity/rotation of cash and the same was requested for consideration. I have considered the submission made by the assessee as well as the facts of the case and in my considered opinion the assessee has not been able to bring on record any cogent explanation of the cash receipts of Rs.2,46,8.5,631/- which remains unexplained and accordingly the same are added to the income of the assessee u/s 68 of the IT Act being undisclosed receipts from undisclosed sources. (Addition of Rs. 2,46,85,631/-)”

“For instance the summary sheet at annexure A-5 of R-2 records an amount under the head receipts (J P Minda on account) to the tune of Rs. 2,46,85,631/- for the financial year 2012-13. This amount has been picked up from annexure A2/R2 which is a ledger account of J P Minda loan account and the said amount represents total on the credit side during the financial year 2012- 13. Further the perusal of the cash book seized at AA-6 of R-2 shows that the following entries from the ledger account of ] P Minda group are also recorded in the cash book as follows:

Ledger(A-2/R-2) Amount (Rs.) 04.12.2012 49,00,000 04.12.2012 13,00,000 24.12.2012 5,00,000 21.01.2013 9,41,521

Cash Book(AA-6/R-2) Amount (Rs.) 04.12.2012 49,00,000 04.12.2012 13,00,000 24.12.2012 5,00,000 21.01.2013 9,41,521

9. The perusal of the above detailed comparison shows that the amounts recorded in the cash book and ledger are duly represented in the summary sheet and therefore no independent and additional income could be taxable in respect of the entries in cash book and ledger as their impact has been recorded in the summary sheet and disclosed for tax purposes in return filed u/s 15 3A accordingly. The chart incorporating the record of entries in the cash book and ledger is as under:

JPM Ji on a/c Loan (JISL) Modern Total Scrap 2007-10 2,01,30,160 1,51,30,160 (at 50,00,000 (at Page no 10 of A- page no 6 A- 2/R-2 marked 2/R-2 as point no viii) marked as point no vii) 2010-11 85,00,000 93,00,000 1,78,00,000 (at Page no 18 (at page no of A-2/R-2 19 of A-2/R- marked as point 2 marked as no vi) point no iv) 2011-12 89,79,720(Amo 54,00,000 (at 1,43,79,720 unt mentioned page no 19 of at page no 15 A-2/R-2 of Rs marked as 1,16,19,120 point no v) minus amount mentioned at page no 18 of Rs 26,39,400 of A-2/R-2 and marked as point no iii) as point no iii) 2012-13 2,46,85,631 At - 3,66,10,131 1,19,24,500 page no 21 of (Amount A- 2/R-2 mentioned marked as at Page no point no i) 23 of A-2/R- 2 Rs 44,24,500 plus amount mentioned at page no 15 of AA-6 Rs 75,00,000 and marked as point no ii) 8,89,20,011 5,72,95,511 1,97,00,000 1,19,24,500

 That with regards to all the cash inflows as appearing in the said master cash book surrender was made by assessee and his elder son Sh. Ashwani Kumar Minda in their individual capacities, which was duly accepted by department. Breakup of the surrender so made, year wise is as under:

Assessment year Ashwani Minda JP Minda (Assessee) 2008-09 20,00,000 1,23,13,660 2009-10 1,23,72,000 2011-12 3,22,600 2012-13 14,97,000 30,09,000 2013-14 1,19,24,500 ________________________________________________________ Total Surrender: 2,81,16,100 1,53,22,660 _________________________________________________________  Thus, total surrender of Rs. 4,34,38,760/- was made by assessee and his son with respect to inflows appearing in the master cash book, which surrender was also accepted by the department for the aforesaid assessment years. That even for impugned assessment year i.e. AY 2013-14, a surrender of Rs. 1, 19, 24, 500/- was being made by Sh. Ashwani Kumar Minda, which has been duly noted and accepted by learned AO in the order of assessment (ii) Annexure A - 2, Party R - 2, Page Nos. 1 to 23 (at pages 5 to 27 of the paper book)

• This document contained print out of some ledger accounts with respect to transactions as reflected in master cash book. This document basically reflected as to how the cash was withdrawn and deposited out of the inflows of money by the assessee. Ergo, this document was nothing but a party wise record of transactions mentioned in the master cash book. For instance, if we compare page nos. 61 to 62 of the paper book with page nos. 6 and 7 of the paper book, it would become amply clear that 9 entries in the master cash book were only separately recorded in separate ledger accounts, and the ledger account merely recorded the withdrawals and deposits of cash out of inflows and did not contain any extra income or inflow. The aforesaid has been explained in detail by the Ld. Counsel in the form of tabular chart as drawn out of the seized documents, as below:

Annexure AA - 6, Party Annexure A - 2, Analysis of the seized O - 2, Page Nos. 12 to Party R - 2, Page documents 51 (at pages 28 to 68 Nos. 1 to 23 (at of the paper book) i.e. pages 5 to 27 of master cash book the paper book) i.e. ledger accounts. Page no. 51 of the Page no. 12 of A comparative study of the said seized Annexure AA - 6 and said seized document document has Annexure A - 2, makes has been placed at been placed at it amply clear that page no. 29 of the page no. 17 of both documents record paper book, which the paper book, same transactions. As contains following which contains Annexure AA - 6, is a entries: following master cash book, entries: which contains 28.02.2008 28.02.2008 various inflows and outflows in cash, Rs. 10,00,000/- Rs. 10,00,000/- whereas, Annexure A - Rs. 8,40,000/- Rs. 8,40,000/- 2, contains ledger wise 14.03.2008 14.03.2008 entries of transactions Rs. 73,13,660/- Rs. 73,13,660/- as appearing in the Rs. 3,86,600/- Rs. 3,86,600/- cash book. Thus, no Entries pertaining to Entries pertaining separate inference can impugned assessment to the impugned be drawn out of year are at Page no. 18 assessment year Annexure A - 2, as it of the said seized are at Page no. 22 contains same entries document has been of the said seized and transactions as placed at page no. 61 of document has recorded in the master the paper book, which been placed at cash book. contains following page no. 6 of the entries: paper book, which contains following The assessee - entries respondent had also 07.04.2012 07.04.2012 furnished a summary of said master cash Rs. 31,95,000/- Rs. 31,95,000/- book and ledger 10

Rs. 18,00,000/- account before learned Rs. 18,00,000/- AO to depict entry 12.04.2012 12.04.2012 wise comparison of the transactions which Rs. 46,00,000/- Rs. 46,00,000/- showed that both set of seized documents Rs. 2,00,000/- Rs. 2,00,000/- contain same entries (kindly see pages 71 to 77 of the paper book). 30.04.2012 (Pg 61 of 30.04.2012 (Pg 6 PB) of PB) That the basis of addition in the Rs. 5,00,000/- Rs. 5,00,000/- impugned case Annexure A-2, Party Rs. 9,41,600/- Rs. 9,41,600/- R-2, Page Nos. 1 to 23. Rs. 2,00,000/- Rs. 2,00,000/- Now, it can be seen that the basis of addition is a sum of Rs. 2, 46, 85, 631/- as appearing on the said document, which is at 07.05.2012 (Pg 61 of 07.05.2012 (Pg 61 page 4 of the paper PB) of PB) book and also at page 3 of the assessment Rs. 3,00,000/- Rs. 3,00,000/ order. If the same is compared with other - set of seized 18.05.2012 documents, then it 18.05.2012 would become amply Rs. 1,00,000/- Rs. 1,00,000/- clear that the said figure is summary of ledger account of assessee for the 22.05.2012 22.05.2012 impugned Assessment year, as mentioned at Rs. 15,00,000/- Rs. 15,00,000/- page 6 and 7 of the paper book, which is nothing but recording of transactions i.e. withdrawals and deposits out of inflows appearing in master cash book, which is at pages 28 to 68 of the paper book, more specifically pages 61 to 68 for the impugned assessment year (for which surrender has already been made and also accepted by department.

 Thus, the entire seized master cash book at pages 28 to 68 of the paper book can be compared with the ledger account of JPMJI so culled out from the seized ledger accounts at pages 71 to 77 of the paper book, which will amply make it clear that the said ledger is nothing but daily record of withdrawals an deposits by JPMJI in and out of cash book and never the balance in master cash book was negative. Thus, master cash book seized was the source and base of the ledger account JPMJI, which is turn was the basis of third seized document i.e. Summary Sheet Annexure A - 5, Party R - 2, Page No. 43.

 There were no separate inflows or outflows beyond the master cash book appearing in the aforesaid document and the same fact was appreciated by learned AO as well, as no separate addition was made with respect to the aforesaid seized document.

(i) Annexure A - 5, Party R - 2, Page No. 43 (at page 3 to 4 of the paper book)

 This document is nothing but summary of transactions so mentioned in the Annexure A - 2, Party R - 2, Page Nos. 1 to 23.  As it can be seen that the basis of addition is a sum of Rs. 2, 46, 85, 631/- as appearing on the said document, which is at page 4 of the paper book and also at page 3 of the assessment order. If the same is compared with other set of seized documents, then it would become amply clear that the said figure is summary of ledger account of assessee for the impugned assessment year, as mentioned at page 6 and 7 of the paper book, which is nothing but recording of transactions i.e. withdrawals and deposits out of inflows appearing in master cash book, which is at pages 28 to 68 of the paper book, more specifically pages 61 to 68 for the impugned assessment year (for which surrender has already been made and also accepted by department).

 Thus, the said seized document was just a summary of transactions, which was covered by the figures appearing in the ledger account and in turn by the aster cash book, for which surrender was already been made and accepted by department, as well. Thus, the addition so made by learned AO on the basis of this document was on misreading of all the aforesaid seized documents.