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SRI. D. K SHIVAKUMAR ,BANGALORE vs THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(4), BENGALURU | BharatTax

SRI. D. K SHIVAKUMAR ,BANGALORE vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(4), BENGALURU

ITA 1064/BANG/2024Status: DisposedITAT Bangalore21 February 2025AY 2018-19Bench: SHRI LAXMI PRASAD SAHU (Accountant Member), SHRI SOUNDARAJAN K, JUDICIAL MEMBER Assessment Year : 2018-19 Shri. D. K. Shivakumar, No.252, “Kenkkeri” 18th Cross, Upper Palace Orchards, Sadashivanagar, Bangalore – 560 080. PAN : AKKPS 1306 F Vs. DCIT, Circle – 1(4), Bangalore. APPELLANT RESPONDENT Assessee by : S/Shri. Chandrasekhar and Narendra Sharma, Advocates Revenue by : Shri.Y. V. Raviraj, Sr. Standing Counsel. Date of hearing : 10.01.2025 Date of Pronouncement : 21.02.2025 O R D E R Pe284 pages

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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE

Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARAJAN K

For Appellant: Shri. Chandrasekhar and Narendra

Hearing: 10.01.2025Pronounced: 21.02.2025

Shri. D. K. Shivakumar, Vs. DCIT, No.252, “Kenkkeri” 18th Cross, Circle – 1(4), Upper Palace Orchards, Bangalore. Sadashivanagar, Bangalore – 560 080. PAN : AKKPS 1306 F APPELLANT RESPONDENT Assessee by : S/Shri. Chandrasekhar and Narendra Sharma, Advocates Revenue by : Shri.Y. V. Raviraj, Sr. Standing Counsel. Date of hearing : 10.01.2025 Date of Pronouncement : 21.02.2025 O R D E R

Per Laxmi Prasad Sahu, Accountant Member

1. This is an appeal filed by the assessee against Order passed by the CIT(A)- II, Bangalore, for the Assessment Year 2018-19 vide DIN : ITBA/ALP/M250/2022-23/1063495339(1) dated 27.03.2024, on the following grounds of appeal:

The appellate order passed by the Hon’ble Commissioner of Income-tax 1. [Appeals] – 11, Bangalore under Section 250 of the Act dated 27/03/2024 for the impugned assessment year 2018 - 19, in so far as it is against the Appellant is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant’s case, requires to be quashed. The appellant denies itself liable to be assessed on total income of Rs. 2. 323,49,76,572/- or as may be determined after giving effect to CIT(A) Order, as against the income reported by the appellant of Rs. 3,22,06,675/-, on the facts and circumstances of the case. The Hon’ble CIT(A) has erred in not holding that the order of assessment 3. was passed beyond the limitation period prescribed under the act and hence the assessment is barred by limitation and consequently the assessment order, demand notice and other notices are liable to be quashed on the facts and circumstance of the case. The Hon’ble CIT(A) has erred in not holding that the statutory notice 4. u/s.143(2) of the act is not in compliance with notification F.No. 225/157/2017/ITA II dated 23.06.2017 which is mandatory format prescribed the CDBT. The Hon’ble CIT(A) has erred in not holding that centralisation of the 5. appellant’s case from regular circle to Central Circle is without jurisdiction on the facts and circumstances of the case and the assessment order passed by the present assessing officer is without jurisdiction on the facts and circumstances of the case.

The Hon’ble CIT(A) is not justified in confirming the addition of 18. Rs.9,26,00,000/- under section 69A of the act which was based on some dumb notings & loose sheets. The Hon’ble CIT(A) is not justified in confirming the addition of 19. Rs.3,28,00,000/- under section 69A of the act which was based on some dumb notings & loose sheets. The Hon’ble CIT(A) is not justified in confirming the addition of 20. Rs.6,51,53,000/- under section 69A of the act which was based on some dumb notings & loose sheets. The Hon’ble CIT(A) is not justified in confirming the addition of 21. Rs.4,50,00,000/- under section 69A of the act which was based on some dumb notings & loose sheets. The Hon’ble CIT(A) is not justified in confirming the addition of 22. Rs.1,85,00,000/- under section 69 of the act which was based on some dumb notings & loose sheets. The Hon’ble CIT(A) is not justified in confirming the addition of Rs. 23. 50,00,000/- under section 69 solely relying on the statements given by one Mr. Chandrashekar. The Hon’ble CIT(A) erred in not holding that the learned Assessing 24. officer does not have the Jurisdiction to invoke Section 69A on the facts and circumstances of the case. The Hon’ble CIT(A) failed to appreciate that none of the alleged dumb 25. notings are related to the appellant and consequently no addition is sustainable based on the alleged notings seized on the facts and circumstances of the case. The Hon’ble CIT(A) erred in not holding that learned assessing officer 26. is not justified to make addition only based on dumb notings and statements made without any corroborative evidences. Ground on addition of Rs. 1,03,36,94,904/- under the head Capital Gain: 27. a. The Hon’ble CIT(A) is not justified in confirming the addition of Rs.1,03,36,94,904/- on the wrong presumption that the appellant has relinquished his right towards the property in CTS 1297. b. The Hon’ble CIT(A) is not justified in confirming the addition of Rs. 1,03,36,94,904/- without any basis to prove that the appellant had any right over the property in CTS 1297 that could have been relinquished. c. The Hon’ble CIT(A) has erred in not holding that the computation of LTCG of Rs.1,03,36,94,904/- for the AY 18-19 is absolutely without any basis as no capital gain arises when a person purchases a property and without prejudice the numbers adopted by the officer have no basis and consequently the entire addition of Rs. 1,03,36,94,904/- requires to be deleted on the facts and circumstances of the case. d. Without prejudice, the income assessed is highly excessive and without factual foundation and is liable to be reduced on the facts and circumstances of the case. The value of land and cost of construction considered for valuation is erroneous and without factual basis.

2. Briefly stated, the facts of the case are that a search was conducted under section 132 of the Act, in the premises of Shri. D. K. Shivakumar (hereinafter called ‘the assessee’) at No.602-A5, 18th Cross, Upper Palace Orchards, Sadashivnagar, Bengaluru – 560 080, under section 132 of the Income Tax Act, 1961 (hereinafter called ‘the Act’), on 02.08.2017 and other presmises at Flat No. 17 B-4, 107B-2, 201B-5 Safdarjung Enclave New Delhi and other connected premises. The Flat No. 107, B-2 belong to the assesse, Flat No. 201, B-5 belong to legal heir of late Suresh Kumar and Flat No. 17, B-4 belong to belongs to a company owned by Sachin Narayan. During the course of search operation, various incriminating documents were found and seized at the said premises mentioned above. The case was centralized as per the Order of DCIT, Central Circle – 1(4), Bengaluru, vide Order under section 127 of the Act, in F.No.Pr.CIT/BLR/1/90/Centralization/2017-18 dated 30.01.2018 of the Pr.CIT, Bangalore – 1, Bangalore. Thereafter, the notice under section 153A of the Act was issued to the assessee on 15.10.2018 for the relevant preceding assessment years and duly served and assessee was given time to file return of income within 30 days from the date of receipt of the notice. The assesse had already filed return of income on 28.07.2018 u/s 139(1) declaring income of Rs.3,06,46,680/- for the Assessment Year 2018-19. Subsequently, notice under section 143(2) of the Act was issued on 29.11.2018 requiring the assessee to produce / cause to be produced any documents / accounts and any other evidence on which it may rely in support of the return of income filed by him for the Assessment Year 2018- 19. The same was duly served. Further, notice under section 129 of the Act was also issued to the assessee. Further, other statutory notices were issued to the assessee. The assessee sought time for filing certain details. The assessee did not comply with the earlier notices. Therefore, for non-compliance of the notice after numerous opportunities, finally penalty notice under section 274 r.w.s. 274A(1)(a) of the Act was issued to the assessee on 28.11.2019. Thereafter, the assessee filed submissions on 03.12.2019 and 11.12.2019. The AO completed the assessments making additions under different heads listed below and determined the income at Rs.323,49,76,572/- .

2. ADDITION OF RS. 1,37,36,500/- UNDER SECTION 69A OF THE ACT. The Apartment where the cash was found and seized belongs to one M/s Zeus Constructions Pvt Ltd. Mr. Sachin Narayan, the Managing Director of Zeus constructions Pvt Ltd has owned up to the same in his statement given to the Income Tax Department and states that the said cash is reflected in his books of accounts.Mr Sachin Narayan is not a man of straw, but a man of substantial means and the same can be verified from his Tax Records with the Revenue. No man will accept ownership of cash in an Income Tax Proceeding, without being the actual owner of the same, in view of the fact that it exposes that person to payment of Taxes, Interest, Penalty and also to Prosecution Proceedings. The legal presumption u/s 292 C is that the cash found in a premises is presumed to belong to the owner of the premises. In this case the premises where the cash is found and seized does not belong to the assessee. It belongs to one Ms Zeus Constructions Pvt Ltd, whose Director, Sri Sachin Narayan has confirmed that the cash belongs to him. The Presumption u/s 292C coupled with the statement u/s 132(4) given by the owner of the premises, makes it clear that the same does not belong to the assessee and no addition can be made on this account. The fact that the keys to the apartment were in the possession of Sri. Anjaneya is not of any relevance as Anjaneya is not an employee of the assessee and was known to both Sri. Suresh Sharma and Sri. Sachin Narayan, the owner of the apartment. Both Sri. Anjaneya and Sri. Rajendran, whose statements u/s 132(4) are relied upon by the AO, were retracted by both of them and the AO refuses to give any weightage to the retraction, holding the same to be an afterthought. In fact when the assessee asked for cross examination of these two persons, the same was refused on the ground that it would serve no purpose as these two persons had already retracted their statements. The CIT (A) supports this view of the AO by holding that the retraction is made for self serving purposes. This view taken by the CIT (A) defies all logic as these two persons were in no affected either by their original statements or by the subsequent retraction, for the CIT (A) to take a view that the retraction was self serving in nature. A Division Bench of The Jurisdictional Karnataka High Court, upholding the order of a Single Judge in a Writ Petition filed by Sri. Sunil Kumar Sharma, the employer of Sri. Rajendran, has, in a Writ Appeal, held the materials found and seized from Rajendran’s residence have no evidentiary value and cannot be relied upon to make any addition in an income tax assessment. This decision of the Division Bench has been approved by the Supreme Court, when the SLP filed by the Revenue was dismissed.

The Apartment where the cash was found and seized belongs to one Sunil Kumar Sharma. Mr. Sunil Kumar Sharma, who runs a transport company M/s Sharma Transports has owned up to the same in his statement to the Income Tax Department and states that the said cash is reflected in his books of accounts.Mr Sunil Kumar Sharma is not a man of straw, but a man of substantial means and the same can be verified from his Tax Records with the Revenue. No man will accept ownership of cash in an Income Tax Proceeding, without being the actual owner of the same, in view of the fact that it exposes that person to payment of Taxes, Interest, Penalty and also to Prosecution Proceedings. The legal presumption u/s 292 C is that the cash found in a premises is presumed to belong to the owner of the premises. In this case the premises where the cash is found and seized does not belong to the assessee. It belongs to Late Sri Satish Kumar Sharma, whose brother Sri. Sunil Kumar Sharma, has confirmed the ownership of the cash belongsand has also asked the Revenue to adjust the same against his tax liability. The Presumption u/s 292C coupled with the statement u/s 132(4) given by the owner of the premises, makes it clear that the same does not belong to the assessee and no addition can be made on this account. The Satisfaction Note prepared to initiate proceedings u/s 153C in the case of Sunil Kumar Sharma, clearly states that the sum of Rs.6,61,26,000/- found and seized from the apartment of Sunil Kumar Sharma, belongs to him.Both Sri. Anjaneya and Sri. Rajendran, whose statements u/s 132(4) are relied upon by the AO, were retracted by both of them and the AO refuses to give any weightage to the retraction, holding the same to be an afterthought. In fact when the assessee asked for cross examination of these two persons, the same was refused on the ground that it would serve no purpose as these two persons had already retracted their statements. The CIT (A) supports this view of the AO by holding that the retraction is made for self serving purposes. This view taken by the CIT (A) defies all logic as these two persons were in no affected either by their original statements or by the subsequent retraction, for the CIT (A) to take a view that the retraction was self serving in nature. A Division Bench of The Jurisdictional Karnataka High Court, upholding the order of a Single Judge in a Writ Petition filed by Sri. Sunil Kumar Sharma, the employer of Sri. Rajendran, has, in a Writ Appeal, held the materials found and seized from Rajendran’s residence have no evidentiary value and cannot be relied upon to make any addition in an income tax assessment.In this decision the Hon’ble High Court has also confirmed that the seized cash belongs to Sunil Kumar Sharma. This decision of the Division Bench has been approved by the Supreme Court, when the SLP filed by the Revenue was dismissed.

The assesse relies upon the decision of the Division Bench of The Jurisdictional Karnataka High Court in the case of Sri. Sunil Kumar Sharma in WA No’s 830 to 834 supra. Further the addition which is made by invoking jurisdiction u/s 69A of the Act is unsustainable in law. The addition is made on unsubstantiated entries in some loose sheets and does not represent any money found and hence does not come under the purview of Section 69A of the Act.The addition is made out on basis of loose sheets of documents, which does not come under the ambit of ‘books of entry’ or as ‘evidence’ under the Indian Evidence Act. Reliance is placed on following decisions:  CBI Vs. V.C. Shukla (1998) 3 SCC 410  Common Cause and others Vs. Union of India (2017) 11 SCC 731  DCIT, Circle – 1(4) Vs. Sunil Kumar Sharma, W.A.NO. 830/2022 AND W.A.NO. 831/2022 (Karnataka High Court) 10. ADDITIONOF RS. 9,26,00,000/- UNDER SECTION 69A OF THE ACT. The loose sheet contained names of some people, mobile numbers and some other random numbers. The sheet is neither dated nor signed. The assessing officer assumed that these random numbers in the loose sheet relates to the cash paid by assessee towards some expenses and that too amount in crores arbitrarily and without any factual basis or corroborative evidence.It is now a settled position in law that notings or entries in loose sheets cannot be the basis for making additions to income, in the absence of corroborative evidence to support the same. The AO has brought on record even one single corroborative evidence in support of this addition.The assessing officer has relied on the entries in some loose sheets which are found during the course of search proceedings. The author of these entries is not known and it is an admitted fact that the same is not in the handwriting of the assessee and are also undated.The assessee was asked to provide details about the said transaction, but since the assessee has no knowledge of the transaction and all these loose sheets of paper do not reflect any of the financial transactions of the assessee. Therefore, these loose sheets of paper which are not written by the assessee cannot be considered as evidence having financial implications affecting his affairs.

(1) Cash seized at Flat No. 107, B-2, Safdarjang Enclave Rs. 41,03,600 /-. (2) Cash seized at Flat No. 17, B-4, Safdarjang Enclave Rs. 1,37,36,500/-. (3) Cash seized at Flat No. 201, B-5, Safdarjang Enclave Rs. 6,61,26,000/-. (4) Cash seized from residence of Mr. Anjaneya Rs. 15,00,000/- 7.1.1 Cash found and seized at Flat No. 107, B-2, Safdarjang Enclave, Rs. 41,03,600 /-. During the search proceedings on 02.08.2017 cash of Rs. 41,03,600/- was found and seized at B-2, Safdarjang Enclave, a residential premises belonging to the assessee at New Delhi. The AO has made addition u/s 69A of the Act, holding the same to be unexplained. Both the AO and the ld.CIT(A), have come to the conclusion that the assessee has not placed on record, any proof, about his claim that the DK Kempegowda HUF, of which he is a member, is having over 100 acres of agricultural land and that the cash of Rs.41,03,600/- belongs to the HUF. They also note the admitted fact that the HUF has also not filed any income tax return disclosing agricultural income. They further relied on the sworn statements recorded u/s 132(4) from one Sri Anjaneya and one Sri. Rajendra, about the cash transactions of the assessee at New Delhi and also the materials which were found and seized from Sri. Rajendran’s premises during search u/s 132,of the Act to support the addition made in the hands of the assessee.The assesse submitted that the assessee’s HUF has income bearing agricultural lands, which it has been owning for over four decades. This fact is already on the records of the revenue. The HUF has not been filing income tax returns as it has only agricultural income, which is not taxable and has no taxable income. The assessee has placed before us the details of land holdings measuring to about 174.28 acres, in the names of the assessee and his family members, who are all members of the Kempegowda HUF. Further the assessee has also submitted that three members of the HUF, i.e. the Assessee, his brother DK Suresh and his mother Gowramma, who are assessed to tax have declared agricultural income over about Rs.15 lakhs each per year, year after year from A.Y 2015-16 and Rs.10.00 to 12.00 Lakhs each per year before that and these could be easily verified from the records of the department.Further during the course of hearing the ld. Counsel for the assesee also stated that the return of income of the assessee, his brother D.K. Suresh and his mother Gowrammamay be verified to confirm, about the claim of declaration of agricultural income in the return of income filed by them for the assessment years i.e. from A.Y. 12-13 to A.Y. 18-19 and requested that if it is found that they have sufficient agriculture income to prove the cash found during the search then drop the addition. The ld. DR stated that the Revenue has No objection to setting aside this issue to the file of the JAO. 7.1.2 Considering the facts of the case and in the interest of justice we find it appropriate to remit this issue to the file of the JAO for fresh consideration in above terms. The assesse is directed to substantiate his case with cogent materials and not to seek unnecessary adjournment for early disposal of the case. In case of failure no second lienency shall be granted. The JAO is directed to provide reasonable oppourtunity of being heard.

7.2 Cash seized at Flat NO> 17, B-4, Safdarjang Enclave, Rs.1,37,36,500/- 7.2.1 During the course of search a sum of cash of Rs. 1,37,36,500/- was found and seized at Flat No. 17, B-4, Safdarjang Enclave, a premises belonging to M/s Zeus Constructions Pvt. Ltd, at New Delhi. The AO has made an addition u/s 69A of the Act, holding the same belong to the assessee and unexplained. Both the AO and the ld. CIT(A), have come to the conclusion that the Statements of Sri. Sachin Narayan, who has owned up the ownership of the cash found, is not believable. They hold that he does not give a satisfactory answer to the question how he transported the cash to Delhi and the purpose of having the cash at his Delhi Apartment. The Keys to the apartment was found to be with Sri. Anjaneya, which is an important fact which leads to the conclusion that the cash seized belongs to the Assessee.Further the sworn statements recorded u/s 132(4) of the Act from Sri Anjaneya and Sri. Rajendran about the cash transactions of the assessee at New Delhi and also the materials which were found and seized from Rajendra’s premises during search u/s 132, support the addition of the same in the hands of the assessee.The assessee’s contention is that the Apartment where the cash was found and seized belongs to one M/s Zeus Constructions Pvt Ltd. Mr. Sachin Narayan, the Managing Director of Zeus constructions Pvt Ltd has owned up to the same in his statement given u/s 132(4) of the Act and states that the said cash is reflected in his books of accounts.Mr Sachin Narayan is not a man of straw, but a man of substantial means and the same can be verified from his Tax Records with the Revenue. No person will accept ownership of cash in an Income Tax Proceeding, without being the actual owner of the same, in view of the fact that it exposes that person to payment of Taxes, Interest, Penalty and also to Prosecution Proceedings. The legal presumption u/s 292 C is that the cash found in a premises is presumed to belong to the owner of the premises. In this case the premises where the cash is found and seized does not belong to the assessee. It belongs to one Ms Zeus Constructions Pvt Ltd, whose Director, Sri Sachin Narayan has confirmed that the cash belongs to him. The Presumption u/s 292C coupled with the statement u/s 132(4) given by the owner of the premises, makes it clear that the same does not belong to the assessee and no addition can be made on this account. The fact that the keys to the apartment were in the possession of Sri. H. S. Anjaneya is not of any relevance as Anjaneya is not an employee of the assessee and was known to Sri. Sachin Narayan, the owner of the apartment. Both Sri. Anjaneya and Sri. Rajendran, whose statements u/s 132(4) are relied upon by the AO, were retracted by them and the AO and the CIT (A) refuse to give any weightage to the retraction, holding the same to be an afterthought. In fact when the assessee asked for cross examination of these two persons, the same was refused on the ground that it would serve no purpose as these two persons had already retracted their statements. The LD. CIT(A) supports this view of the AO by holding that the retraction is made for self serving purposes. This view taken by the AO and the LD. CIT(A) defies all logic as these two persons were in no affected either by their original statements or by the subsequent retraction, for the LD. CIT(A) to take a view that the retraction was self serving in nature.

7.3.3 It is noted thefact that the Apartment where the cash was found and seized belongs to legal heir of Late Suresh Kumar Sharma. It is also not in dispute that Mr. Sunil Kumar Sharma, the brother of Late Suresh Kumar Sharma has admitted to being the owner of the seized cash of Rs.6,61,26,000/- in his statement u/s 132(4) of the Act. It is also not in dispute that Mr Sunil Kumar Sharma is a man of means and that he is capable of being the owner of the seized cash. It is also not in dispute that he being a man of means and also assessed to tax are evidenced by his Tax Records with the Revenue. As the assessee contends it is difficult to accept that a person will accept admit ownership of cash in an Income Tax Proceeding, without being the actual owner of the same, well knowing that it exposes him to not only payment of Taxes, Interest, Penalty on a sum of money that does not belong to him but more importantly it also exposes him to Prosecution Proceedings. Under these circumstances one cannot come to a conclusion that Sri Sunil Kumar Sharma has accepted ownership of the cash, without being the owner thereof, either as a mere after thought or otherwise.We agree with the assessee that the legal presumption u/s 292 C is that the cash found in a premises is presumed to belong to the owner of the premises. In this case the premises where the cash is found and seized does not belong to the assessee. It belongs to one Late Suresh Kumar Sharma, whose brother, Sri Sunil Kumar Sharma has admitted the ownership of the entire cash found and seized therein. The presumption u/s 292C is proved to be correct by the statement u/s 132(4) given by the owner of the premises, which makes it clear that the same does not belong to the assessee and supports the view that no addition can be made on this account. The fact that the keys to the apartment were in the possession of Sri. Anjaneya is not a conclusive evidence to even presume that the cash belongs to the assessee and not to Sri. Sunil Kumar Sharma. It is also a fact that both Sri. Anjaneya and Sri. Rajendran, whose statements u/s 132(4) are relied upon by the AO, to make the addition, were retracted by them, though the AO and the ld. CIT(A) did not give any importance to the fact of retraction and dismiss the act of retraction as an afterthought. It is also a fact that when the assessee asked for cross examination of these two persons, the same was refused on the ground that it would serve no purpose as these two persons had already retracted their statements and retraction was made after seven months. We also found that the additions were made based on the statements given by the third parties, that too behind the back of the assessee and, therefore, the authorities are duty bound to give an oppourtinity to cross examine the the third parties.. Even though the assessee sought for an oppourtinity to cross examine the third parties the authorities below has not granted such an oppourtinity and thefore entire proceedings are vitiated since the same is against the principle of natural justice. The ld. CIT(A) supports this view of the AO by holding that the retraction is made for self serving purposes without explaining as to how the same is to be considered as self serving and what benefit the persons who retracted have got by the act of retraction. The ld. CIT(A) also does not explain the damage if any, caused to these two persons, had the statements not been retracted. The Satisfaction Note prepared to initiate proceedings u/s 153C in the case of Sunil Kumar Sharma, clearly states that the sum of Rs.6,61,26,000/- found and seized from the apartment of Sunil Kumar Sharma, belongs to him. Once the revenue has accepted that the provision of section 153C of the Act is applicable then on the same issue the AO should assess or reassess in the light of the provision of the section 153C of the Act.

7.4 Cash seized at Mr Anjaneya’s residence, Rs.15,00,000/- 7.4.1 During the search of residence of Mr. Anjaneya’s house a sum of Rs. 15,00,000/- was found and seized. The AO and the ld. CIT(A) concur on the addition as Sri.Anjaneya had in sworn statement u/s 132(4) confirmed that the cash belonged to the assessee.The Statements of Sri. Sachin Narayan, who has owned up the ownership of the cash found, is an afterthought and hence not believable. The assesse submitted that Mr Sachin Narayan, who has owned up the cash found and seized, is not a man of straw, but a man of substantial means and the same can be verified from his Tax Records with the Revenue. No man will accept ownership of cash in an Income Tax Proceeding, without being the actual owner of the same, in view of the fact that it exposes that person to payment of Taxes, Interest, Penalty and also to Prosecution Proceedings. The Revenue has not brought any compelling evidence on record to support its stand that the cash found and seized belongs to the assessee.The ld. CIT(A) supports this view of the AO by holding that the retraction is made for self serving purposes. This view taken by the ld. CIT(A) defies all logic as these two persons were no affected either by their original statements or by the subsequent retraction, for the ld. CIT(A) to take a view that the retraction was self serving in nature. Sri. Anjaneya, whose statements u/s 132(4) are relied upon by the AO, has retracted the same and the AO refuses to give any weightage to the retraction, holding the same to be an afterthought.In fact when the assessee asked for cross examination of the Sri. Anjaneya, the same was refused on the ground that it would serve no purpose as he had already retracted his statements. The assesse relied on the judgemnt of jurisdictional High Court of Karnataka in the case of Sri Sunil Kumar Sharma noted above. It is a fact that Sri. Anjaneya in his statement given u/s 132(4) had stated that the cash belongs to the assessee.It is also a fact that Sri. Anjaneya, whose statements u/s 132(4) are relied upon by the AO, to make the addition, retracted them, though the AO and the ld. CIT(A) do not give any importance to the fact of retraction and dismiss the act of retraction as an afterthought. It is also a fact that when the assessee asked for cross examination of the said Sri. Anjaneya, the same was refused on the ground that it would serve no purpose as he had already retracted his statement u/s 132(4). When the AO relies upon a particular statement to make an addition, despite the statement being retracted well before the assessment proceedings, he cannot refuse cross examination, when asked for by the assessee, on the ground that the witness would deny the veracity of the original statement and stick to the subsequent retraction.The AO has no basis to make the addition, other than the statement of Anjaneya, which in any case stands retracted.Mr. Anjaneya has also stated that the said cash is accounted in the books of M/s Atharvass Traders LLP Pvt. Ltd. But the AO has not examinedthis aspect. Further the fact that Mr. Sachin Narayan has owned up to the same in his statement given to the Income Tax Department and states that the said cash is reflected in his books of accounts weakens the case of the AO.Mr Sachin Narayan is not a man of straw, but a man of substantial means and the same can be verified from his Tax Records with the Revenue. No person will accept ownership of cash in an Income Tax Proceeding, without being the actual owner of the same, in view of the fact that it exposes that person to payment of Taxes, Interest, Penalty and also to Prosecution Proceedings. 7.4.2Considering the totality of the facts and circumstances we delete this addition.

8.1.3 We have gone through the above submissions & records, the undisputed facts are that Mrs. Vishalakshi Devi received a payment of Rs.5,00,00,000/- out of which Rs.1,00,00,000/- is received by Cheque and the balance of Rs. 4,00,00,000/- by cash. As per the Q. & Ans. No. 20 of Smt. Vishalakshi Devi the consideration of the property is Rs. 80.00 Lakhs aas pert the terms and conditions mentioned in the agreement for the property. Further as per statement of Smt. Vishalakshi Devi she received payment from Chandrashekhar S at the behest of Mr. DK Shivkumar. The AO observed that the entire transaction was negotiated and completed by Sri N. Chandrashekhar Shukapuri in the name of Shahshikumar and also the etire payments were arranged and delivered by Sri Sachin Narayan and N. Chandrashekhar. It is a fact that Mr. Sachin Narayan has made the payment of Rs.1,00,00,000/- by Cheque and the same is not in dispute. It is also not in dispute that he made this payment at the request of the assessee. What is in dispute is whether the sum of Rs. 4,00,00,000/- which is by cash is paid by the assessee or by Sachin Narayan.The assessee denies having made the payment, whereas Sachin Narayan, accepts having made the payment and the same is also apparently recorded in his books of accounts, as per the statement given by him u/s 132(4) of the Act. It is not the case of the Revenue that the books of Sachin Narayan do not reflect this payment. The actual benificieriy of the land is Shashi Kumar Shivanna 8.1.4 The Revenue relies upon statement recorded from the Parties to the transaction and one Chandrashekar Shukhapuri who state that payments were arranged by the assessee. The Revenue has drawn an inference that the words ‘arranged by the assessee’ means that payment is made by the assessee. This inference is not based on any other corroborative evidence. The stand of the assessee that he requested Sachin Narayan to make the payment amounts to him arranging for the payment, which is not the same as making the payment himself out of his funds. As per the Assessment Order para No. 7.13 , it is clear that Chandrashekhar has stated that amount has been given by the PA& PS of the assessee on instruction of the assesse,however, the statement of PA& PS Sri Shivshankar and Sridhar who have actually handed over the cash has not been recorded/examined by the AO. The Revenue has not brought any compelling evidence on record to support its stand that the cash paid belongs to the assessee.

8.1.6 The Revenue has relied upon the decision of the Hon’ble Apex Court in the case of Ch.Acthaiah reported in 84 taxmann 630(SC)(1996) wherein the Hon’ble Apex Court held that the Revenue is not precluded from taxing the correct person, even when that particular income stands taxed in the hands of another person.The Learned DR has relied upon this case to show that the AO was correct in taxing the assesse, on such of those additions, despite the fact the same has been accepted by others.This has relevance to such of those additions for which Sunil Kumar Sharma & Sachin Narayan have owned up the transactions/ cash found etc.In the case of Ch.Atchaiah, the income arising out of sale of land was taxed in the hands of the coowners in their individual capacity. Later the AO in that case, realised that the income ought to have been taxed in the hands of the AOP, consisting of those two coowners and issued notice u/s 148 of the Act to the AOP. The assessee therein objected to the same as they had already been taxed in their individual capacity. The Apex Court held that it was the AOP which was the correct entity that needed to be taxed and thefact that the coowners were taxed in their individual capacity was not a bar to tax the AOP as it was the correct person which ought to have been taxed.In the present case, the Revenue has not brought any cooroborative evidence to prove that the additions made actually represent the income of the assesse, despite the fact that these transactions have been owned by others. The presumption u/s 292C of the Act also works in favour of the assesee. The Revenue has also taxed these persons on a protective basis, which also goes to show that the Revenue is not sure that the transaction has not been done by those persons. It is also fact that proceedings u/s 153C of the Act were initiated in the case of Sunil Kumar Sharma & Sachin Narayan. Therefore, this case laws relied by the revenue authorities are not applicable to the facts of the present case. Considering the totality of the facts and circumstances we delete this addition.

8.2.1 During the course of search a document which evidenced purchase of a property by one Sri. H. P. Kantharaju was found and the same evidenced payment of Rs.50,00,000/- in Cash towards the said Purchase. The AO held this payment to have been made by the assessee and added a sum of Rs.50 Lakhs to the income of the assessee in the assessment order. In the statement recorded u/s 132(4) Sri.Chandrashekar Shukhapuri, states that he paid a sum of Rs.50 Lakhs in two installments of Rs.25 lakhs each to the seller Bachaya Gowda, on behalf of the purchaser Sri. Kantharaju. He also states that the assessee was aware of these payments as the cash was received from one Lokesh, who is the PA to the assessee. This statement has not been retracted. ON that basis the authorities had come to the conclusion that the assessee has made the payment of Rs.50 Lakhs from his funds and the same is treated as unexplained investment u/s 69 of the Act. The ld. Counsel submits that the addition is solely based on the statement given by Mr. Chandrashekar. The AO assumed that these amounts given in the statement relates purchase of property by the assessee.The assessee when asked to provide details about the said transaction, was unable to do so as he had no knowledge of the transaction and all these statements made by third parties do not reflect any of the financial transactions of the assessee. It may be appreciated that even the extract of the statement provided by Mr. Chandrashekar, he has stated that the amount of Rs. 50,00,000/- was paid on behalf of H P Kantharaju and not on behalf of the assessee. It is also an undisputed fact that the Agreement to purchase the property is entered into by Sri Kantharaju and not by the assessee. The presumption u/s 292C is that the property is purchased by the person who is shown as the purchaser in the document evidencing purchase.The assessing officer without considering the fact has proceeded to bring it to tax in the hands of the assessee without any further reasoning. The assessee states that the onus of proving that whether an amount is in the ambit of taxing is on the income tax department and it is wrong to place the onus of proving negative on the assessee. Reliance is placed on the parity of reasoning in the below mentioned judgements: c. Commissioner of Income-Tax vs Nipani Tobacco Stores. 145 ITR 128. d. Hemant Mansukhlal Pandya, Mumbai vs DCIT (IT) 3(3)(2). ITA No. 4679/Mum/2016. 8.2.2 In both the above judgements, it has been held that it is incorrect to place the onus of proving the negative on the assessee. Hence, with respect to the facts and circumstances of our case the assessing officer has erred in placing the onus on the assessee and making an addition for not proving the negative. This is incorrect and the entire addition has to be deleted for the advancement of substantial cause of justice.Further the addition which is made by invoking jurisdiction u/s 69A of the Act is unsustainable in law. The addition is made on unsubstantiated entries in some loose sheets and does not represent any property which is registered in the name of the assessee and not accounted for and hence does not come under the purview of Section 69A of the Act.

9.1 There are 8 additions made which arise out of loose slips/ diary entries etc, which were found and seized in the course of search. These additions are taken up together and decided upon, for the sake of convenience. All theses additions are made u/s 69A of the Act. The additions are listed out below: 7. Unexplained money based on material seized from residence of Mr. K Rajendran Rs. 2,30,00,000/- 8. Unexplained money based on material seized from residence of the Assessee Rs. 43,18,00,000/- 9. Unexplained money based on material seized from residence of the Assessee Rs. 28,00,00,000/- 10. Unexplained money based on material seized from residence of the Assessee Rs. 9,26,00,000/- 11. Unexplained money based on material seized from residence of the Assessee Rs. 3,28,00,000/- 12. Unexplained money based on material seized from residence of the Assessee Rs. 6,51,53,000/- 13. Unexplained money based on material seized from residence of the Assessee Rs. 4,50,00,000/- 14. Unexplained jewellery based on material seized from residence of the Assessee Rs. 1,85,00,000/- Item No.7 - Unexplained money based on material seized from residence of Mr. K Rajendran Rs. 2,30,00,000/- (i) The additions of Rs.2,30,00,000/- are made based on entries of figures which are noted in a diary maintained by Sri. Rajendran at New Delhi, who is an employee of Sunil Kumar Sharma. These diaries were found and seized in the search and these contained entries which implicated the assessee. It is evident from the diary entries that amounts totalling to Rs.2,30,00,000/-, belonging to the assessee, were dealt with by Sri Rajendran, Sri Anjaneya and other persons and the entries were to be considered as a record of these transactions. Further the statements recorded u/s 132(4) from Sri. Rajendra and Sri. Anjaneya reveal that these transactions were carried out at the behest of the assessee and it was thus clear that the assessee was answerable for the same and in the absence of any satisfactory explanation forthcoming from him, these are added u/s 69A of the Act, to his income. The fact that the statements u/s 132(4) given by both Rajendran and Anjaneya, stood retracted by both of them, is of no consequence as the retraction is self serving in nature and is done as an afterthought. (ii) The ld. Counsel submitted that Sri. Rajendran aged about 72 yrs old , whose statements u/s 132(4) are relied upon by the AO, has retracted these statements vide affidavit dated 17.08.2017 submitted to the income tax department on 12.03.2018 placed at paper book page No. 1101 to 1103 and the AO refuses to give any weightage to the retraction, holding the same to be an afterthought. In fact when the assessee asked for cross examination of Sri. Rajendran, the same was refused on the ground that it would serve no purpose as he had already retracted his statements vide para 6.23 of the assessment order “issue of cross examination” page No. 104 of the assessment order. When the AO relies on a statement given, before the same was retracted, in order to make an addition, then he is duty bound to give the assessee an opportunity to cross examine the person, whose statement is relied upon to make the addition, If the AO had not made any addition, relying on the original statement, then the question of affording an opportunity to cross examine does not arise. The ld. CIT (A) is wrong in supporting this view of the AO by holding that the retraction is made for self serving purposes. This view taken by the CIT (A) defies all logic as Sri. Rajendran is in no affected either by his original statements or by the subsequent retraction, for the ld. CIT (A) to take a view that the retraction was self serving in nature. (iii) During the course of hearing the Learned AR has relied on the Judgement of the Division Bench of The Jurisdictional Karnataka High Court in Writ Appeal No. 830 to 834 of 2022, order dated 22/01/2014, which we have dealt with in detail in the later part of this order. This decision of the Division Bench has been approved by the Supreme Court, when the SLP filed by the Revenue was dismissed. (iv) The ld. CIT(A) has placed reliance on the decision in the case of Sinhgad Technical Education Society wherein the court has held that the VC Shukla case is not applicable to documents where section 292C is applicable. In the present case, the documents do not belong to the assessee and nor were they found in the premises of the Assessee and accordingly section 292C is not applicable to the Assessee’s case. (v) The CIT(A) has misplaced reliance of several case laws which are not relevant to the assessee’s case.

Item No. 8 - Unexplained money based on material seized from residence of the Assessee Rs. 43,18,00,000/- (i) The addition of Rs.43,18,00,00/- which are based on material seized from the residence of the assessee marked as ANN/DKS/PS/LS/S-1 and statement recorded u/s 131 of the Act are necessary as the material found and seized are not merely loose sheets as the entries therein are relating to parties with whom the assessee has transactions which are on record. The AO has established various corroborative evidences in support of the addition. Further the entries found in the diaries maintained by Rajendran also support these additions. The Assessee is wrong in stating that the additions are made based on suspicion, surmise and conjectures as the entries relied upon to make the additions are all made are not merely loose sheets, as claimed by the assessee, but reflect true state of affairs. (ii) The ld. Counsel submitted that it is now a settled position in law that notings or entries in loose sheets cannot be the basis for making additions to income, in the absence of corroborative evidence to support the same. The AO has not brought on record even one single corroborative evidence in support of this addition.The assessing officer has relied on the entries in some loose sheets which are found during the course of search proceedings. The author of these entries is not known and it is an admitted fact that the same is not in the handwriting of the assessee and are also undated.The assessee was asked to provide details about the said transaction, but since the assessee has no knowledge of the transaction and all these loose sheets of paper does not reflect any of the financial transactions of the assessee. Therefore, these loose sheets of paper which are not written by the assessee cannot be considered as evidence having financial implications affecting his affairs. (iii) During the course of hearing the Learned AR has relied on the Judgement of the Division Bench of The Jurisdictional Karnataka High Court in Writ Appeal No. 830 to 834 of 2022 , order dated 22/01/2014, which we have dealt with in detail in the later part of this order. This decision of the Division Bench has been approved by the Supreme Court, when the SLP filed by the Revenue was dismissed.

(i) The assessee has admitted that the entries in the loose sheets which are found and seized are in his handwriting marked as DKS/ST/LS/01. The assessee has not been able to explain these entries satisfactorily that these do not represent his undisclosed income and is duty bound to answer the same properly. The explanations given by the assessee are not consistent, but contradictory and are entirely unsatisfactory. The AO has established various corroborative evidences in support of the addition. (ii) The ld. Counsel for the assesse submitted that the fact that these notings are in the handwriting of the assessee does not in any way alter the fact these entries do not represent any transactions of the assessee, but are certain estimates of requirements of the party officials and workers in the course of carrying out their official party work. The AO and the ld.CIT (A) chose not to accept the explanations given by the assessee as accepting the same would not enable to make an addition to the income of the assessee. The entries in these loose sheets cannot be relied upon to make any additions to the income of the assessee.The AO has not brought on record even one single corroborative evidence in support of this addition. (iii) During the course of hearing the Learned AR has relied on the Judgement of the Division Bench of The Jurisdictional Karnataka High Court in Writ Appeal No. 830 to 834 of 2022 , order dated 22/01/2014, which we have dealt with in detail in the later part of this order. This decision of the Division Bench has been approved by the Supreme Court, when the SLP filed by the Revenue was dismissed. (iv) Further the addition which is made by invoking jurisdiction u/s 69A of the Act is unsustainable in law. The addition is made on unsubstantiated entries in some loose sheets and does not represent any money found and hence does not come under the purview of Section 69A of the Act.The addition is made out on basis of loose sheets of documents, which does not come under the ambit of ‘books of entry’ or as ‘evidence’ under the Indian Evidence Act. Reliance is placed on following decisions:  CBI Vs. V.C. Shukla (1998) 3 SCC 410  Common Cause and others Vs. Union of India (2017) 11 SCC 731  DCIT, Circle – 1(4) Vs. Sunil Kumar Sharma, W.A.NO. 830/2022 AND W.A.NO. 831/2022 (Karnataka High Court) Item No.10 -Unexplained money based on material seized from residence of the Assessee Rs. 9,26,00,000/- (i) The addition of Rs.9,26,00,00/- which are based on material seized from the residence of the assessee are necessary as the material found and seized are not merely loose sheets as the entries therein are relating to parties with whom the assessee has transactions which are on record. The AO has established various corroborative evidences in support of the addition. The Assessee is wrong in stating that the additions are made based on suspicion, surmise and conjectures as the entries relied upon to make the additions are all made are not merely loose sheets, as claimed by the assessee, but reflect true state of affairs. (ii) The ld. Counsel for the assesse submitted that the loose sheet contained names of some people, mobile numbers and some other random numbers. The sheet is neither dated nor signed. The assessing officer assumed that these random numbers in the loose sheet relates to the cash paid by assessee towards some expenses and that too amount in crores arbitrarily and without any factual basis or corroborative evidence.It is now a settled position in law that notings or entries in loose sheets cannot be the basis for making additions to income, in the absence of corroborative evidence to support the same. The AO has not brought on record even one single corroborative evidence in support of this addition.The assessing officer has relied on the entries in some loose sheets which are found during the course of search proceedings. The author of these entries is not known and it is an admitted fact that the same is not in the handwriting of the assessee and are also undated.The assessee was asked to provide details about the said transaction, but since the assessee has no knowledge of the transaction and all these loose sheets of paper do not reflect any of the financial transactions of the assessee. HE was not able to provide fetails Therefore, these loose sheets of paper which are not written by the assessee cannot be considered as evidence having financial implications affecting his affairs. (iii) During the course of hearing the Learned AR has relied on the Judgement of the Division Bench of The Jurisdictional Karnataka High Court in Writ Appeal No. 830 to 834 of 2022 , order dated 22/01/2014, which we have dealt with in detail in the later part of this order. This decision of the Division Bench has been approved by the Supreme Court, when the SLP filed by the Revenue was dismissed. (iv) Further the addition which is made by invoking jurisdiction u/s 69A of the Act is unsustainable in law. The addition is made on unsubstantiated entries in some loose sheets and does not represent any money found and hence does not come under the purview of Section 69A of the Act. (v) The addition is made out on basis of loose sheets of documents, which does not come under the ambit of ‘books of entry’ or as ‘evidence’ under the Indian Evidence Act. Reliance is placed on following decisions:  CBI Vs. V.C. Shukla (1998) 3 SCC 410  Common Cause and others Vs. Union of India (2017) 11 SCC 731  DCIT, Circle – 1(4) Vs. Sunil Kumar Sharma, W.A.NO. 830/2022 AND W.A.NO. 831/2022 (Karnataka High Court) (vi) Further, the assessing officer and the ld. CIT(A) have stated the loose sheets found are backed by the statement made by Mr. Anjaneya and Mr. Rajendran. The assessing officer has not even shown these seized materials to the said Mr. Anjaneya and Mr. Rajendran and neither of them have given any statements relating to the above referred seized materials in their statements. These two persons have also retracted the sworn statements given by them u/s 132(4) and hence these statements which stand retracted also do not have any evidentiary value.

Item No. 11 - Unexplained money based on material seized from residence of the Assessee Rs. 3,28,00,000/- (i) The addition of Rs.3,28,00,00/- which are based on material seized from the residence of the assessee are necessary as the material found and seized are not merely loose sheets as the entries therein are relating to parties with whom the assessee has transactions which are on record marked as Ann/DKS/PS/BTD/s-1. The AO has established various corroborative evidences in support of the addition. Further the entries found in the diaries maintained by Rajendran also support these additions. The Assessee is wrong in stating that the additions are made based on suspicion, surmise and conjectures as the entries relied upon to make the additions are all made are not merely loose sheets, as claimed by the assessee, but reflect true state of affairs. Assessee is known to be involved in transporting of cash as per statements u/s 132(4) of the Act given by Anjaneya and Rajendran. (ii) The ld. Counsel for the assesse submitted that the loose sheet contained names of some people, mobile numbers and some other random numbers. The sheet is neither dated nor signed. The AO assumed that these random numbers in the loose sheet relates to the cash paid by assessee towards some expenses and that too amount in crores arbitrarily and without any factual basis or corroborative evidence.It is now a settled position in law that notings or entries in loose sheets cannot be the basis for making additions to income, in the absence of corroborative evidence to support the same. The AO has not brought on record even one single corroborative evidence in support of this addition.The assessing officer has relied on the entries in some loose sheets which are found during the course of search proceedings. The author of these entries is not known and it is an admitted fact that the same is not in the handwriting of the assessee and are also undated.The assessee was asked to provide details about the said transaction, but since the assessee has no knowledge of the transaction and all these loose sheets of paper do not reflect any of the financial transactions of the assessee. HE aws not able to provide details .Therefore, these loose sheets of paper which are not written by the assessee cannot be considered as evidence having financial implications affecting his affairs. (iii) During the course of hearing the Learned AR has relied on the Judgement of the Division Bench of The Jurisdictional Karnataka High Court in Writ Appeal No. 830 to 834 of 2022 , order dated 22/01/2014, which we have dealt with in detail in the later part of this order. This decision of the Division Bench has been approved by the Supreme Court, when the SLP filed by the Revenue was dismissed. (iv) Further the addition which is made by invoking jurisdiction u/s 69A of the Act is unsustainable in law. The addition is made on unsubstantiated entries in some loose sheets and does not represent any money found and hence does not come under the purview of Section 69A of the Act.The addition is made out on basis of loose sheets of documents, which does not come under the ambit of ‘books of entry’ or as ‘evidence’ under the Indian Evidence Act. Reliance is placed on following decisions:  CBI Vs. V.C. Shukla (1998) 3 SCC 410  Common Cause and others Vs. Union of India (2017) 11 SCC 731  DCIT, Circle – 1(4) Vs. Sunil Kumar Sharma, W.A.NO. 830/2022 AND W.A.NO. 831/2022 (Karnataka High Court) (v) Further, the assessing officer and the ld. CIT(A) have stated the loose sheets found are backed by the statement made by Mr. Anjaneya and Mr. Rajendran. The assessing officer has not even shown these seized materials to the said Mr. Anjaneya and Mr. Rajendran and neither of them have given any statements relating to the above referred seized materials in their statements. These two persons have also retracted the sworn statements given by them u/s 132(4) and hence these statements which stand retracted also do not have any evidentiary value.

(ii) The ld. Counsel for the assesse submitted the fact that these notings are in the handwriting of the assessee does not in any way alter the fact these entries do not represent any transactions of the assessee. These are only some dumb notings made during some discussions having no financial implications in the hands of the assessee. The AO and the ld. CIT(A) chose not to accept the explanations given by the assessee as accepting the same would not enable to make an addition to the income of the assessee. The entries in these loose sheets cannot be relied upon to make any additions to the income of the assessee.The AO has not brought on record even one single corroborative evidence in support of this addition. (iii) During the course of hearing the Learned AR has relied on the Judgement of the Division Bench of The Jurisdictional Karnataka High Court in Writ Appeal No. 830 to 834 of 2022 , order dated 22/01/2014, which we have dealt with in detail in the later part of this order. This decision of the Division Bench has been approved by the Supreme Court, when the SLP filed by the Revenue was dismissed. (iv) Further the addition which is made by invoking jurisdiction u/s 69A of the Act is unsustainable in law. The addition is made on unsubstantiated entries in some loose sheets and does not represent any money found and hence does not come under the purview of Section 69A of the Act. (v) The addition is made out on basis of loose sheets of documents, which does not come under the ambit of ‘books of entry’ or as ‘evidence’ under the Indian Evidence Act. Reliance is placed on following decisions:  CBI Vs. V.C. Shukla (1998) 3 SCC 410  Common Cause and others Vs. Union of India (2017) 11 SCC 731  DCIT, Circle – 1(4) Vs. Sunil Kumar Sharma, W.A.NO. 830/2022 AND W.A.NO. 831/2022 (Karnataka High Court) (vi) Further, the assessing officer and the Hon’ble CIT(A) have stated the loose sheets found are backed by the statement made by Mr. Anjaneya and Mr. Rajendran. The assessing officer has not even shown these seized materials to the said Mr. Anjaneya and Mr. Rajendran and neither of them have given any statements relating to the above referred seized materials in their statements. These two persons have also retracted the sworn statements given by them u/s 132(4) and hence these statements which stand retracted also do not have any evidentiary value.

Item No. 13 - Unexplained money based on material seized from residence of the Assessee Rs. 4,50,00,000/- (i) The assessee has admitted that the entries in the loose sheets which are found and seized marked as Ann/DKS/PS/LS/S-7 are in his handwriting. The assessee has not been able to explain these entries satisfactorily that these do not represent his undisclosed income and is duty bound to answer the same properly. The explanations given by the assessee are not consistent, but contradictory and are entirely unsatisfactory. The AO has established various corroborative evidences in support of the addition.Assessee is known to be involved in transporting of cash as per statements u/s 132(4) given by Anjaneya and Rajendran. (ii) The ld. Counsel for the assesse submitted the fact that these notings are in the handwriting of the assessee does not in any way alter the fact these entries do not represent any transactions of the assessee. These are only some dumb notings made during some discussions having no financial implications in the hands of the assessee. The AO and the CIT (A) chose not to accept the explanations given by the assessee as accepting the same would not enable to make an addition to the income of the assessee. The entries in these loose sheets cannot be relied upon to make any additions to the income of the assessee.The AO has not brought on record even one single corroborative evidence in support of this addition. (iii) During the course of hearing the Learned AR has relied on the Judgement of the Division Bench of The Jurisdictional Karnataka High Court in Writ Appeal No. 830 to 834 of 2022 , order dated 22/01/2014, which we have dealt with in detail in the later part of this order. This decision of the Division Bench has been approved by the Supreme Court, when the SLP filed by the Revenue was dismissed. (iv) Further the addition which is made by invoking jurisdiction u/s 69A of the Act is unsustainable in law. The addition is made on unsubstantiated entries in some loose sheets and does not represent the ownership of money found and hence does not come under the purview of Section 69A of the Act.The AO has not brought out any substantive evidence that these entries represent any ownership of money in the hands of the assesse. Under these circumstances an addition u/s 69A cannot be sustained. (v) The addition is made out on basis of loose sheets of documents, which does not come under the ambit of ‘books of entry’ or as ‘evidence’ under the Indian Evidence Act. Reliance is placed on following decisions:  CBI Vs. V.C. Shukla (1998) 3 SCC 410  Common Cause and others Vs. Union of India (2017) 11 SCC 731  DCIT, Circle – 1(4) Vs. Sunil Kumar Sharma, W.A.NO. 830/2022 AND W.A.NO. 831/2022 (Karnataka High Court) (vi) Further, the assessing officer and the Hon’ble CIT(A) have stated the loose sheets found are backed by the statement made by Mr. Anjaneya and Mr. Rajendran. The assessing officer has not even shown these seized materials to the said Mr. Anjaneya and Mr. Rajendran and neither of them have given any statements relating to the above referred seized materials in their statements. These two persons have also retracted the sworn statements given by them u/s 132(4) and hence these statements which stand retracted also do not have any evidentiary value.

Item No. 14 - Unexplained jewellery based on material seized from residence of the Assessee Rs. 1,85,00,000/- (i) During the search a detailed list showing different jewellery items with values written against each one of the items was found and seized and marked as ANN/DKS/PS/LS/01. The total value as per the list came to Rs.3.44 crores and the same adjusted to Rs 3.10 crores. The sum of Rs.3.10 is further bifurcated to 1.85 and 1.25, with 1.25 shown as cheque. The sum of 1.85 has no description.This list represents the jewellery purchased by the assessee’s wife from a jeweller who had prepared this list.The assessee has admitted to paying Rs. 1.26 crores in cheque, which includes 1.25 crores towards value of jewellery and 0.01 crore towards taxes.The assessee has therefore paid the balance amount of Rs.1.85 crores in cash.The assessee’s wife has acquired all the items shown in the list and hence it is to be presumed that the balance amount due is paid by cash. There is no proof that all items listed are not purchased.Hence it is clear that the assessee has paid 1.85 crores by cash and the same is an unexplained investment u/s 69A of the Act. (ii) The ld. Counsel for the assesse submitted that the note has details of various jewellery items along with the price for the same being a budget. In the next sheet details of the actual amount paid has been written along with difference from the actual and budgeted. The assumption that the assessee has actually purchased all the items in the estimate and paid the difference amount by cash is absolutely baseless. Not a single item of jewellery which is in the estimate and not paid for by cheque was found and inventoried in the search proceedings. It is not the case of the Revenue that Jewellery, physically found and valued, exceeded the value of jewellery accounted for in the books of accounts. The Revenue only suspects that all items listed in the estimate is actually purchased by the assessee and the difference amount between the amount as per estimate and the amount paid by cheque is paid by cash. The assessee states that the onus of proving that whether an amount is in the ambit of taxing is on the income tax department and it is wrong to place the onus of proving negative on the assessee. Reliance is placed on the parity of reasoning in the below mentioned judgements: c. Commissioner of Income-Tax vs Nipani Tobacco Stores. 145 ITR 128. d. Hemant Mansukhlal Pandya, Mumbai vs DCIT (It) 3(3)(2). ITA No. 4679/Mum/2016. (iii) In both the above judgements, it has been held that it is incorrect to place the onus of proving the negative on the assessee. Hence, with respect to the facts and circumstances of our case the assessing officer has erred in placing the onus on the assessee and making an addition for not proving the negative. This is incorrect and the entire addition has to be deleted for the advancement of substantial cause of justice. (iv) Further the addition which is made by invoking jurisdiction u/s 69A of the Act is unsustainable in law. The addition is made on unsubstantiated entries in some loose sheets and does not represent any excess jewellery actually found and hence does not come under the purview of Section 69A of the Act.The addition is made out on basis of loose sheets of documents, which does not come under Evidence Act. Reliance is placed on following decisions:  CBI Vs. V.C. Shukla (1998) 3 SCC 410  Common Cause and others Vs. Union of India (2017) 11 SCC 731  DCIT, Circle – 1(4) Vs. Sunil Kumar Sharma, W.A.NO. 830/2022 & W.A.NO. 831/2022 (Karnataka High Court) (v) The AO has also not adduced any corroborative evidence from the Jeweller, to support the addition.

10. The learned DR relied on the order of lower authorities for the above items No. (7) to (14). He further submitted that during the course of serach in the case of the appellant , the premises of one Sri Rajendran, who was employee of Sunil Kumar Sharma was also searched. During the course of said search, various findings with respect to hawala transactions were found. The appellant has stated that there is no direct conversation between the appellant and Sri Rajendran is incorrect. The call/message record details obtained from the phones of Sri Rajendran which are seized and maeked as A/RAJ/8 show that there are incoming messages from the Mobile Numbr of the appellant which has been stored as DKmin in the phone of Shri Rajendran. Further communication between Shri Rajendran and Shri Sunil Kumar Sharma regarding Shri Rawat strengthen the statement of Shri Rajendran. Certain entries in diary which was seized contain entries of the words – ‘kg’, tyre, box, file, drum and so on. On directions he used to go to Chandni Cowk Delhi and would meet with certain persons, after showing specific Rs. 10 note he would collect the said amount of money. He would then keep the money at B5, 201,4th floor Safdarjung Enclave, New Delhi. The AO has examined the issue in detail and decoded the coded words used. The ld. CIT (A) has relied on various judgemnts which are directly applicable to the assesse in the context of Income Tax proceedings. During the course of serach of the residential premises of the asseesee various loose sheets found and seized. In the assessment order the AO has established the money trail and how the money was stored in the Delhi premises which are corroborated with the loose sheets found in the premises of the asseesee. It is also observed that the various transactions were carried out with Shobha Ltd. and Davanam Group with respect to Minerava Mills Ltd. Properties or in terms of loans and advances. The assesse was unable to explain properly the movement of cash from Bangalore to Delhi, the explanation given is not acceptable. It can not be construed that loose sheets alone have been considered by the AO for making additions. In the assessment order the AO has established that the appellant is involved in various transactions involving unexplained money and the transactions which are not recorded in the books of account of the assesse. In exhibit DKS/ST/LS/01 the assesse himself accepted that the loose sheet contains his handwriting. The AO has remarked that the appellant has not been able to justify the explanation offered by him, regarding the noting in the loose sheet with supporting documents, though several oppourtunities were given. It was observed that contradictory reply have been given by the assessee. The ld. CIT(A) has noted that even during the appellate proceedings apart from repeating the submissions filed during the assessement proceedings, nothing was furnished by the appellant to justify his claim. In respect of addition of Rs. 9.26 crores are based on the loose sheets found during the course of search in which various persons Mobile No, and figures are mentioned but the assesee was also unable to justify the additions made. During the course of search a notebook was found with the information contained in page No. 20 marked as part of A/DKS/PS/BTD/S-01. In the notebook the information contained, the assesse was not able to rebuteven after affording various oppourtinities. The AO remarked that the loose sheet contain the names of entities that are related to the appellant such as Dr. Rangnath and C M Lingppa, amount mentioned in crores and applied the presumption clause under section 292 C of the Act. The addition made on the basis of page No. 164 , 165 and 167 marked as part of Ann/DKS/PS/LS/S-7 seized from the residence of the appellant during the course of search proceedings. The appellant has admitted that the loose sheets contain his hand writing . The AO has made observation the loose sheets which are in the handwriting of the appellant contains a number of related parties of the appellant, Sachin, GAT, PA, Chandru, Vijay Shah, Mulgund, Ravi S, Rajnish, C M Lingppa, Yogish and so on and that the appellant has not been able to justify why presumption u/s 292C of the Act should not be invoked.Further in respect of information in loose sheet numbered 88 and 88A in the folder marked as ANN/DKS/PS/LS/01 in para 8.7 of the AO’s order the information was called from his wife of the appellant Smt. Usha Shivkumar but she was unable to explain the source of balance cash payments for purchase of jewellery for Rs. 3.10 crores. The AO had accepted the cheque payment of Rs. 1,26,25,000. The assesse was unable to explain the source of cash payment of Rs. 1.85 crores even during the appellant proceedings also.\

13.18 In the case of CIT v. M/S Khosla Ice & General Mills 2013 (1) TMI 451 - Punjab & Haryana High Court, the Hon'ble Court held that assessee rightly contended that the impugned document was a non- speaking document in as much as it does not contain any intelligible narration in support of the inference drawn by the Assessing Officer that it reflected unaccounted transactions carried out by the assessee outside the regular books of account. When a dumb document, is to be made the basis to fasten tax liability on the assessee, the burden is on the AO to establish with corroborative evidence that the nature of entries contained therein reflect income and also that such income was in the control of the assessee. Thus, AO has to establish, with necessary corroborative evidence, that various entries contained in the seized document reflect unaccounted transactions effected by the assessee. Considering the entirety of circumstances, in the absence of any material to support the nature and ownership of the entries found in the seized document, no addition is permissible in the hands of the assessee as undisclosed income by merely arithmetically totaling various figures jotted down on such document. 13.19 The seized material which is placed on record shows certain receipt entries and it is very strange to believe that the assessee has authorised any person to write it as it does not contain any attestation from the assessee side being not having any name or seal of the assessee. Being so no credence to be given to this document. 13.20 The Bangalore Tribunal in the case of Kirloskar Investments Finance Ltd. v. Assistant Commissioner of Income-tax [1998] 67 ITD 504 (Bangalore) held that the provision of the copy of the statement or letters is not sufficient opportunity. Oral evidence of persons concerned with the transaction are important piece of evidence and before it could replace the written evidence, the party against whom such oral evidence is being used must be allowed the opportunity of examining the person because, both the types of evidences need to weighed properly before rejecting one for the other. 13.21 The seized material shows vague figures presumed by the AO to be unaccounted transactions. These are unsigned documents and not supported by any corroborative material. Further the alleged parties to the transactions were not examined or cross-examined. At this point, it is appropriate to rely on the judgment of the Mumbai Bench in the case of Asstt. CIT v. Layers Exports (P.) Ltd. [2017] 88 taxmann.com 620/53 ITR(T) 416 (Mumbai) wherein it was held that no addition could be simply made on the basis of uncorroborated notings in the loose papers found during the search because addition on account of alleged payment made simply on the basis of uncorroborated noting and scribbling on loose sheets made by some person have no evidentiary value and is unsustainable and bad in law. 13.31. The unsubstantiated and uncorroborated seized material alone cannot be considered as conclusive evidence to frame these assessments. The words "may be presumed" in section 132(4) of the Act given an option to the AO concerned to presume these things, but it is rebuttable and it does not give a definite authority and conclusive evidence. The assessee is having every right to rebut the same. The entire case depends upon the rule of evidence. There is no conclusive presumption with regard to unsubstantiated seized material to come to the conclusion that assessee has unaccounted transactions. In the present case, the assessee categorically denied unaccounted transactions. The AO cannot draw inference on the basis of suspicion, conjectures and surmises. Suspicion, however strong, cannot take place the material in place of evidence brought on record. The AO should act in a judicial manner, proceed in a judicial spirit and come to the judicial conclusions. The AO is required to act fairly as a reasonable person, not arbitrarily and capriciously. The assessment u/s153C of the Act should have been supported by adequate material and it should stand on its own leg. This notebook or loose sheets found during the course of search is only circumstantial evidence and not full proof evidence to sustain the addition. No addition can be made in the absence of any corroborative material. If it is circumstantial evidence in the form of loose sheets and notebook, it is not sufficient to come to the conclusion that there is conclusive evidence to hold that assessee has any unaccounted transactions. The notes in the diary/loose sheets are required to be supported by corroborative material. Since there was no examination or crossexamination of persons concerned, the entire addition in the hands of the assessee on the basis of uncorroborated writings in the loose papers found during the course of search cannot be sustained. The evidence on record is not sufficient to uphold the stand of AO that assessee has unaccounted transactions. 13.32. There are various loose sheets, scribblings and jottings having no signature or authorization from the assessee's side. These are unsubstantiated documents and there is nothing to suggest any undisclosed assets of assessee found during the course of search. More so, it does not show any recovery of the undisclosed assets in the form of landed property, building, investments, money, bullion, jewellery or any kind of movable or immovable assets. 13.45 Thus, it is settled position of law that onus lies upon the Department to collect cogent evidence to corroborate the notings on the loose sheets. The additions cannot be made merely on the basis of notings on the loose sheet papers which are in the nature of "dumb documents" having no evidentiary value. The onus lies on the Department to collect the evidence to corroborate the notings on the loose sheets. In the present case, it is undisputed position that as a result of search and seizure action in the case of respondent- assessee and its group companies, no material whatsoever was seized and found indicating payment of on-money consideration at the time of purchase of the lands. Reliance in this regard can be placed on the following decisions: 13.46 We find that the conclusions reached by the Assessing Officer are merely based on presumptions and assumptions without bringing corroborative material on record. It is settled position of law that no addition in the assessment can be made merely based on assumptions, suspicion, guess work and conjuncture or on irrelevant inadmissible material. Reliance can be placed in this regard on the following decisions…….:

247.

Being so, in our opinion the seized material relied by the assessing officer for sustaining addition is not speaking one in itself and also not speaking in conjunction with some other evidence with authorities found during the course of search or post search investigation. Thus, the well settled legal position is that a non-speaking document without any corroborative material, evidence on record and finding that such document has not materialised into transactions giving rise to income of the assessee which had not been disclosed in the regular books of accounts of the assessee has to be disregarded for the purpose of assessment to be framed pursuant to search and seizure action. In these cases, moreover these documents are relied upon by the AO without confronting them for cross examination. In our opinion, these documents cannot bring assessee into tax net by merely pressing to service the provision of Sec 132(4A) r.w.s Sec 292C of the IT act, which creates deeming fiction on the assessee subject to search wherein it may be presumed that any such document found during the course of search from the possession and control of such document are true. What has to be noted here is that deemed presumption cannot bring such a document in the tax net and the presumption is rebuttable one and the deemed provisions have no help to the department. In our opinion, in these cases addition is made by AO on arbitrary basis relying on the loose papers, containing scribbling, rough and vague noting’s in the absence of any corroborative material and these material cannot be considered as transacted into collection of capitation fees by assessee giving rise to income which are not disclosed in the regular books of accounts by assessee. We place reliance on the following judgements in support of our above findings: (i) CIT vs D.K.Gupta 174 Taxman 476 (Delhi) (ii) Ashwini Kumar vs ITO 39 ITD 183 (Delhi) (iii) S.P.Goyal vs DCIT (Mum) (TM) 82 ITD 85 (MUM) (iv) D.A.Patel vs DCIT 72 ITD 340 (Mum) (v) Amarjeet Singh Bakshi (HUF) vs ACIT 86 ITD 13 (Delhi) (TM) (vi) Nagarjuna Construction Co Ltd vs DCIT 23 Taxman.com 239 (vii) CIT vs C.L.Khatri 174 Taxman 652 (viii) T.S.Venkatesan vs ACIT 74 ITD 298 (ix) CIT vs Atam Valves Pvt Ltd 184 Taxman 6 (P&H)

27.

The Ld DR has relied upon the several decisions cited by the Learned CIT (A) in his appellate order on the issue of additions based on entries found in loose sheets, which the Ld. CIT (A) has held to be correct. We have perused the order of the Ld. CIT (A)and the judgements relied upon to confirm these additions. We find that the several judgements of different High Courts as well as those of coordinate benches of the ITAT are relied upon to confirm these additions.We are however bound by the decision of the Jurisdictional Karnataka High Court in the case of DCIT vs Sunil KumarSharma in WA No.830 to 834 of 2022, judgement dated 22/01/2024, wherein the Hon’ble High Court has taken note of the judgements of the Hon’ble Supreme Court in the case of VC Shukla and in the case of Common Cause, held that loose sheets & diary have no evidentiary value in the absence of corroborative evidence. This negates the argument that the two judgements in the case of VC Shukla & Common Cause are not applicable to Income Tax Proceedings. It is also important to note the fact that the Apex Court has dismissed the SLP filed by the Revenue in the case of Sunil Kumar Sharma and this decision of the Karnataka High Court has attained finality.It is also important to note the fact that the said Sunil Kumar Sharma was covered under the same search as that of this assesse.The relevant portions of the judgement of the Karnataka High Court which are to be found in Paras 21 to 26 are reproduced under: "21. Both the Appellant-Revenue and Respondent-Assessee entered appearance and submitted their arguments extensively. On hearing the learned counsel for both the parties, this Court finds it relevant to examine the following questions that arises for consideration in these writ appeals, which are as under: (1) Whether 'Loose Sheets' and 'Diary' have any evidentiary value? (2) Whether Centralization is in violation of Section 127 of the Income-tax Act, 1961, is valid? (3) Whether the Notice under section 153C of the Income-tax Act, 1961 is valid herein? As regards Question No. 1: Upon reading the material provided and the order of the learned Single Judge delivered on 12-8-2022, it is evident that the income that has escaped assessment and notices under section 153C of the Income-tax Act, 1961, were solely issued based on loose sheets and documents which are termed as 'diaries' found during the search. The applicability of section 69A of the Act arises only when the principles laid down under section 68 of the Act are satisfied. section 68 states that there must be books of accounts or any books with credit entry. The said Act reads thus: "Section 68: Where any sum is found credited in the books of an assessee maintained for any previous years and the assessee offers no explanations about nature and source thereof or the explanation offered by him is not, in the opinion of the assessing officer, satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previous year." The language of the Law is vague and subjective, thus making us rely on an Apex court decision in the case of V.C. Shukla (supra), wherein the relevant portion reads thus: "Collection of sheet fastened or bound together so as to form material whole. Loose sheets or scraps of paper cannot be termed as books."

17.

From a plain reading of the Section it is manifest that to make an entry relevant thereunder it must be shown that it has been made in a book, that book is a book of account and that book of account has been regularly kept in the course of business. From the above Section it is also manifest that even if the above requirements are fulfilled and the entry becomes admissible as relevant evidence, still, the statement made therein shall not alone be sufficient evidence, still, the statement made therein shall not along be sufficient evidence to charge any person with liability. It is thus seen that while the first part of the section speaks of the relevancy of the entry as evidence, the second part speaks, in a negative way, of its evidentiary value for charging a person with a liability. It will, therefore, be necessary for us to first ascertain whether the entries in the documents, with which we are concerned, fulfil the requirements of the above section so as to be admissible in evidence and if this question is answered in the affirmative then only its probative value need be assessed. 18. "Book" ordinarily means a collection of sheets of paper or other material, blank, written, or printed, fastened or bound together so as to form a material whole. Loose sheets or scraps of paper cannot be termed as 'book' for they can be easily detached and replaced. In dealing with the work 'book' appearing in Section 34 in Mukundram vs. Dayaram [AIR 1914 Nagpur 44], a decision on which both sides have placed reliance, the Court observed:- " In its ordinary sense it signifies a collection of sheets of paper bound together in a manner which cannot be disturbed or altered except by tearing apart. The binding is of a kind which is not intended to the moveable in the sense of being undone and put together again. A collection of papers in a portfolio, or clip, or strung together on a piece of twine which is intended to be untied at will, would not, in ordinary English, be called a book…I think the term "book" in S. 34 aforesaid may properly' be taken to signify, ordinarily, a collection of sheets of paper bound together with the intention that such binding shall be permanent and the papers used collectively in one volume. It is easier however to say what is not a book for the purposes of S. 34, and I have no hesitation in holding that unbound sheets of paper in whatever quantity, though filled up with one continuous account, are not a book of account within the purview of S.34."

33. In entirety of the matter, we are of the view that an addition in assessments carried out pursuant to search action u/s 132 of the Act has to be related to cogent and positive materials found during search which prove conclusively that the assessee has either earned an income or made an investment which has not been recorded in his regular books of account or that his case is covered under any of the deeming provisions contained in sections 68, 69, 69A to 69D of the Act. However, additions cannot be sustained merely on the basis of rough noting made on few loose sheets of papers unless the AO brings on record some independent and corroborative materials to prove irrefutably that the said noting reveal either unaccounted income or unaccounted investment or unaccounted expenditure of the assessee. As discussed above, in the instant case, assessments for the impugned years have been completed u/s 153A of the Act which relates to assessment in case of search or requisition. The prerequisite condition for application of Sec. 153A of the Act is a search conducted under section 132 of the Act or any requisition made under section 132A of the Act to unearth hidden income or property. Thus, the very purpose/ essence of search conduced u/s 132 of the Act is to unearth hidden income or property or get hold of books of account or documents which has not been or will not be otherwise produced by the assessee in regular course on issue of summons or notice. In the assessee's case, as stated above, the purported search action did not lead to discovery of any unaccounted money, bullion, jewellery or other valuable article or thing. Further, no books of account revealing any undisclosed transactions of the assessee were found during the course of search. The entire assessment order revolves around scribbling in loose sheets of papers seized from premises of another person in course of search action on such other person. It is a fact that the said rough loose sheets of papers scribbled by some anonymous person and seized in course of search of another person cannot be termed as 'documents' having any evidentiary value within the meaning of section 132 or section 132A of the Act. Thus, the entire assessment u/s 153A of the Act in case of the assessee rests on shaky and incorrect foundation and thus deserves to be quashed. Copies of the 19 loose sheets of papers marked as Annexure A-1 seized from the premises of PDTEPL are enclosed at pages 94-112 of the assessee's Paper Book-I.

34.

The case law relied on by assessee of co-ordinate bench of Delhi Tribunal in the case of Atul Kumar Jain v. Dy. CIT [1999] 64 TTJ (Delhi) 786 (Copy enclosed at pages 334-357 of assessee's Paper Book) had an occasion to examine the meaning word "document" and its evidentiary value for the purposes of sections 132, 132A and 132(4A) of the Act. At Para 6.4 to 6.6 of the order, the Delhi Tribunal observed as under:— '6.4 We find that the AO has made out the case for making such addition based exclusively on the said piece of paper found and seized during the course of search. It is, therefore, to be examined whether the said paper found and seized is a document having evidentiary value to prove the fact of the transaction. The word "document" has been defined in s. 32 of the Indian Evidence Act to mean - any matter expressed or described upon any substance by means of letters, figures, or marks or more than one of those means, intended to be used or which may be used for the purpose of recording that matter. The word "document" has also been similarly defined in the General Clauses Act. The meaning of the word describe …………. According to the Hon'ble Supreme Court in the case of Ramji Dayawala & Sons (P.) Ltd. v. Invert Import AIR 1981 SC 2085, mere proof of the handwriting of a document would not tantamount to a proof of all the contents or facts stated in the documents, if the truth of the facts stated in a document is in issue, mere proof of the handwriting and execution of the document would not furnish evidence of the truth of the fact or contents of the document. The truth or otherwise of the fact or contents so stated would have to be proved by admissible evidence i.e., by the evidence of those persons who can vouchsafe for the truth of the facts in Issue. 6.5 Further, the Hon'ble Supreme Court in the case of Mohd. Yusuf & Anr. v. D. & Anr. AIR 1968 Bom. 112 has observed that the evidence of the contents contained in document is hearsay evidence unless the writer thereof is examined before the Court. The Hon'ble Court, therefore, held that the attempt to prove the contents of the document by proving the signatures of the handwriting of the author thereof is set at naught, the well-recognised rule that hearsay evidence cannot be admitted. 6.6 If we consider the said piece of paper seized during search in light of the definition of the word "document" as given in the Indian Evidence Act and General Clauses Act and the truthfulness of the contents thereof in light of the aforesaid decisions of the Hon'ble Supreme Court we find that the said paper contains jottings of certain figures but the same does not describe or express the substance of any transaction and even if the said paper has been seized from the possession of the assessee the contents thereof are not capable of describing the transactions the way the AO has deciphered them without support of corroborative evidence of the parties attributed to the alleged transaction. The said paper, therefore, does not come within the compass of the definition of the word "document" to be used as any evidence. The paper seized, therefore, has no evidentiary value and accordingly the same cannot form the basis for assessing the undisclosed Income.' In light of the aforesaid judgment, we are of the view that the impugned loose sheets of papers cannot come within the ambit of definition of the word "document" to be used as evidence and the same cannot form the basis for assessing the undisclosed income of the assessee. Admittedly, the said loose papers are not in the form of pro-notes or duly executed documents or books of account or certificates or money receipts which can prove conclusively the factum of any undisclosed income earned by the assessee or any unaccounted investments or expenditure made by him. Additions cannot be made simply on the basis of rough scribbling made by some unidentified person on few loose sheets of papers.

35. Our attention was further drawn to the decision of the Kolkata Tribunal in the case of Asstt. CIT v. Sri Radheshyam Poddar [1992] 41 ITD 449 (Cal) (Copy enclosed at pages 368-372 of assessee's Paper Book) wherein it was held that no addition can be made simply on the basis of an unsigned piece of paper. Held as under (at para 5 of the order):— "After hearing the rival submissions we are of the opinion that the assessee should succeed in this regard. It is no doubt true that as per the provisions of section 132 (4A)(ii), when any document is seized pursuant to search it may be presumed that the contents of such documents are true. We have examined a copy of MOU filed before us in this appeal and we find that the same, is not signed either by the assessee or by any person for and on behalf of Naihati Jute Mills. No names whatsoever are also mentioned in the said MOU on the basis of which the Assessing Officer has made the addition of Rs. 4,93, 900. We entirely agree with the assessee's counsel that under section 132(4A) there is no presumption that if an unsigned paper or document is found during the course of search it has to be presumed that it is signed. We find in section 132(4A)(ii) that if there is signature on any document or account books recovered during the course of search then it has to be presumed that the signature and every other part of such account books and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by or to be in the handwriting of any particular person are in that person's handwriting. Needless to say that in law no document or paper can have any validity or enforceability until the same bears signature of concerned parties. Signature is the soul and any paper, notice or document is a body. Body without a soul is of no use, value or consequence. What is the significance and importance of a signature on any document can be found in the judgment of Hon'ble Calcutta High Court in the case of B.K Gooyee v. CIT [1966] 62 ITR 109. In that case the Assessing Officer issued a notice under section 34 of the Income-tax Act, 1922 but did not sign it. When the matter came up before the Hon'ble High Court at Calcutta it was held by their Lordships that the unsigned notice issued by the ITO was invalid and consequently equal to no notice. If we are to agree with the contention of the revenue that though the MOU is unsigned the same should form the basis for making additions as per the presumptive provision contained in section 1 32(4A)(ii) of the Income-tax Act, 1961 then there will be harsh, high-pitched and unreasonable assessments leading to absurd results and miserable consequences on the taxpayers. The provisions of section 132(4A) will become oppressive if applied in this manner and surely this is not the purpose or intention of the Legislature in enacting section 132(4A) in Income-tax Act. Like any other provision of a statute the provisions of section 132(4A) also have to be applied and interpreted in very reasonable manner and in consonance with justice. We say so on the basis of judgment of Hon'ble Supreme Court in the case of R.B. Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570 at p. 575."

The terms of these two agreements clearly proves that the assessee and his father consciously entered into the agreements in FY 2004-05 and FY 2005-06 to purchase 79% of CTS 1 & 2 for the consideration of 29,21,57,817 for CTS 2 and 4,35,97,350/- for CTS 1 (in total Rs. 33,57,55,167/- for both CTS 1 & 2) which is contrary to the claim of the assessee that the assessee has got the possession of CTS 1 & 2 completely by virtue of the said two agreements entered in FY 2004- 05 and FY 2005-06 and the same lands were transferred to him in 2004 and 2005 as mentioned in the memorandum of settlement dt 15.3.2017. These two agreements clearly mention that the assessee and his father had entered into an unregistered agreement to purchase only 79% in CTS 1 & 2 for the agreed consideration of Rs. 33,57,55,167/-. Further, it also leads to the fact that the assessee and his father had made advance of Rs. 8,97,38,720/- (Rs. 8,14,73,221/- + Rs. 82,65,499/-) for the purchase of CTS 1297 which was also recognized in the books of accounts of DCPL in their respective accounts on 17.09.2004. This also proves the fact that the assessee and his father had interest in CTS 1297. By considering total amount of Rs. 33,57,55,167/- for CTS 1 & 2 and Rs. 8,97,38,720/- for CTS 1297 which works out to Rs. 42,54,93,887/- was the total advance paid by the assessee and his father. Here, the point of dispute is that the assessee claims the entire consideration of Rs. 42,54,93,887/- was made to DCPL for the purchase of entire CTS 1 & 2 and not for CTS1297 cannot be accepted for the reason that the agreements dated 10.10.2004 and 09.09.2005 clearly shows that in these agreements the assessee and his father had agreed to purchase only 79% of the CTS 1 & 2 whereas the balance of Rs. 8,97,38,720/- had been considered by DCPL in Its books of accounts for the advance for the land at CTS1297 and the same was also recognized by DCPL as sale of CTS1297 in the FY 2004-05. This clearly proves that the assessee and his father had rights over the land at CTS1297.

42.

It is also an undisputed fact that the assessee has paid in all an amount of Rs.42,54,93,889/- as advance towards purchase of properties from DCPL.As per the agreements dated 10/10/2004 and 09/09/2005, these advances are paid only towards properties at CTS I and II. The agreements are no doubt for 79% of the properties at CTS I and II ( ie. 69% for the assessee and 10% for DK Kempegowda HUF, of which the assessee is a coparcener). There is no document to show that any part of the advance is for property at CTS 1297.The Revenue is not correct in presuming that the balance advance is to be held to be paid for property at CTS 1297. Since there is no document giving any rights to the assessee or the Kempegowda HUF on any portion/part of the property at CTS 1297, held by DCPL, it cannot be said that there is an exchange between the assessee and DCPL in terms of Section 2(47)(i) of the Act. The AO is not correct in coming to the conclusion that the assessee and the HUF parted with 79% share in CTS 1297 to acquire, by way of exchange, 21% of properties at CTS I and II when admittedly the assessee as well the HUF has no share in the properties in CTS 1297.No doubt the MOU between the assessee, the HUF and DCPL, dated 15/03/2017, states that Assessee and HUF had all along been in possession of the entire property at CTS I and II. But this does not mean that the possession be recognised in law as the agreements to sell clearly state that possession will be handed over at the time of registration of sale deed. The assessee can be said to be in possession of only 1,57,841 sft of land since 21/02/2005, as he has a registered sale deed registered to the said effect. The assessee cannot be said to be in possession of any extent of land in excess of 1,57,841 sft at CTS II as on the date of MOU. The assessee also cannot be said to be in possession of any extent of land in CTS I as he has not registered any portion thereof as on the date of the MOU. Similarly, D.K. Suresh who had succeeded to the rights of the Kempegowda HUF as on the date of the MOU, cannot be said to be in possession of any extent of land either in CTS I or II.Having decided that the transaction is not clearly in the nature of an Exchange, we need to now look at the fact, whether any income arises out of the same or not and if it does, what would be the nature of income and under what head should it be taxed.

d. DCPL conveyed 1,57,841 sft of land in CTS II to assessee by a registered Sale Deed dated 21/02/2005, for a consideration of Rs.11,48,30,000/- which works out to Rs.727.50 per sft. e. Thus, as on 21/02/2005, after registration of the Sale Deed for 1,57,841 sft of land in favour of assessee, DCPL had a balance advance amount of Rs.31,06,63,889/- (Rupees Thirty One Crores Six Lakhs Sixty Three Thousand Eight Hundred Eighty Nine Only) ie. (Rs.42,54,93,889/- minus Rs.11,48,30,000/-), left with it, received from D.K Shivakumar and his family. f. By Virtue of the Memorandum of Settlement dated 15.03.2017 (MOS) entered into between DCPL and assessee and family, the entire Property at CTS I and CTS II is said to belong to assessee and family. Thus, by virtue of this MOS assessee and family, are recognized as absolute owners of the Properties at CTS I and CTS II. g. In other words, the entire land of 44,866.80 sft at CTS I and the balance land of 3,49,504 sft ie. (508345 sft minus 1,57,841 sft) at CTS II are to be registered in favour of assessee and family or their nominees against the balance advance amount of Rs. 31,06,63,889/- (Rupees Thirty One Crores Six Lakhs Sixty Three Thousand Eight Hundred Eighty Nine Only) lying with DCPL. h. The Value of the Land of 44,866.80 sft at CTS I, as Per Registering Authority for purposes of Stamp Duty is Rs. 4,74,00,000/-, which is purchased on 09/09/2005, which is much later after the advance amount of Rs. Rs.31,06,63,889/- (Rupees Thirty One Crores Six Lakhs Sixty Three Thousand Eight Hundred Eighty Nine Only) is paid to DCPL by assessee and his family. i. The Value of the Land of 3,49,504 sft at CTS II, as Per Registering Authority for purposes of Stamp Duty is Rs. 25,42,64,160/- (Rupees Twenty Five Crores Forty Two Lakhs Sixty Four Thousand One Hundred and Sixty Only) ie. (349504 multiplied by Rs.727.50/- per sft, which is the value as on 21/02/2005, as evidenced by the Sale Deed, conveying 1,57, 841 sft of land at CTS II in favour of assessee), which is the rate prevailing as on the date the balance advance amount of Rs. Rs.31,06,63,889/- (Rupees Thirty One Crores Six Lakhs Sixty Three Thousand Eight Hundred Eighty Nine Only) is lying to the credit of Assessee and his family. j. Thus, the total Value of Land at CTS I and CTS II, as per the value of the Registering Authority for purposes of Stamp Duty, is Rs. 30,16, 64,160/- ie. (Rs. 4,74,00,000 Plus Rs. 25,42,64,160/-), as on 21/02/2005, the date on which the balance advance amount of Rs. Rs.31,06,63,889/- (Rupees Thirty One Crores Six Lakhs Sixty Three Thousand Eight Hundred Eighty Nine Only) is lying to the credit of assessee and his family. k. It is clear from Para 10 above that the balance advance amount of Rs. Rs.31,06,63,889/- (Rupees Thirty One Crores Six Lakhs Sixty Three Thousand Eight Hundred Eighty Nine Only) is lying to the credit of assessee and his family is sufficient to cover the total Value of Land at CTS I and CTS II, as per the value of the Registering Authority for purposes of Stamp Duty, is Rs. 30,16, 64,160/-. In fact, it exceeds the value for registration purposes, by Rs. 89,99,729/- (Rupees Eighty Nine Lakhs Ninety Nine Thousand Seven Hundred Twenty Nine Only). l. The fact that the amount lying with DCPL as advance from assessee and family is sufficient to cover the value of the larger area, including areas relinquished in favour of BBMP and BDA, clearly demonstrates that there is no escapement of income either u/s 50C or u/s 50D or u/s 56(2)(x)(b), as the case may be for any assessment year, irrespective of the assessment year in which the lands will get actually registered in the name of assessee or his family members or their nominees as the case may be. m. One very important fact that is to be noticed is that the valuation of land is on the entire extent which was acquired by DCPL in CTS I and CTS II, from which extent of land registered in favour of assessee on 21/02/2005, is reduced. The extent of 1,01,307 sft of land relinquished in favour of BBMP and BDA in CTS II and an extent of 31917.8 relinquished in favour of BBMP in CTS I has not been reduced for valuation purposes despite the fact that assessee and his family are not eligible to the get the same registered in their name. This is for the reason, that it is the averment made in the Memorandum of Settlement that the entire land at CTS I and CTS II are to belong to assessee and his family ever since the advances are paid by them to DCPL. n. The ld. Counsel for the assesse submitted that in the event he were to sell the whole or any part of this asset at any time in future, the cost that he would be eligible as deduction would be the consideration which he has paid to acquire the same and the difference between the consideration that he would receive on the sale of the asset and the cost incurred to acquire the same would be offered to tax. The Revenue would not stand to lose in any case as it would be revenue neutral. Considering this aspect also, no addition is called for on this issue in the assessment of income for the A.Y. 2018-19. o. During the course of hearing the Learned AR made a submission that it is also a fact that the assessee has offered income by way of Capital Gains, to tax for the A.Y. 2020-21 & 2021-22, in respect of Sale Deeds conveying title to Undivided Interest in Land to those buyers who have purchased apartments from M/s. Sobha Developers Ltd, after receipt of Occupancy Certficate from the Statutory authority.