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

Per Laxmi Prasad Sahu, Accountant Member 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: 1. The appellate order passed by the Hon’ble Commissioner of Income-tax [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, 2 probabilities, facts and circumstances of the Appellant’s case, requires to be quashed. 2. The appellant denies itself liable to be assessed on total income of Rs. 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. 3. The Hon’ble CIT(A) has erred in not holding that the order of assessment 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. 4. The Hon’ble CIT(A) has erred in not holding that the statutory notice 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. 5. The Hon’ble CIT(A) has erred in not holding that centralisation of the appellant’s case from regular circle to Central Circle is without juri iction on the facts and circumstances of the case and the assessment order passed by the present assessing officer is without juri iction on the facts and circumstances of the case. 6. The Hon’ble CIT(A) has erred in not holding the assessing officer is not justified in passing the Order as the assessing officer as the same officer was part of the investigation team which conducted the search on the appellant. 7. The Hon’ble CIT(A) has erred in not holding that the assessment order is bad in law as the Permanent Account Number on the Order does not belong to the Appellant. 8. The Hon’ble CIT(A) failed to appreciate that the statutory presumption u/s. 292C is on the person from whom search material is found and admittedly nothing was found and seized from the appellant premises and consequently no part of the alleged material can be considered as income in the hands of appellant. 3 9. The Hon’ble CIT(A) is not justified in confirming the addition of a sum of Rs.41,03,600/- by invoking sec. 69A of the act as the sum of money belong to appellant and savings of his family members. 10. The Hon’ble CIT(A) is not justified in confirming the addition of a sum of Rs.1,37,36,500/- by invoking sec.69A of the act, since the said amount belongs to one Mr. Sachin Narayan who has accepted it in his sworn statement u/s.132(4) of the act. 11. The Hon’ble CIT(A) is not justified in confirming the addition of a sum of Rs.6,61,26,000/- by invoking sec.69A of the act, since the said amount belongs to one Mr. Sunil Sharma who has accepted it in his sworn statement u/s.132(4) of the act. 12. The Hon’ble CIT(A) is not justified in confirming the invocation of section 69A of the Act in respect of some loose sheets/documents which is contrary to the plain reading of the section and thus all additions in this regard needs to be deleted. 13. The Hon’ble CIT(A) is not justified in confirming the addition of a sum of Rs.15,00,000/- under section 69A of the act, since the money is admittedly belong to one Mr. Sachin Narayan and not the Appellant. 14. The Hon’ble CIT(A) is not justified in confirming the addition of a sum of Rs.2,30,00,000/- under section 69A of the act, on the basis of some dairy noting maintained by some third person, which has already been treated as dumb notings by the Hon’ble Karnataka High Court. 15. The Hon’ble CIT(A) is not justified in confirming the addition of Rs.4,00,00,000/- under section 69B of the act for property transactions done by appellant relative. 16. The Hon’ble CIT(A) is not justified in confirming the addition of Rs.43,18,00,000/- under section 69A of the act on based on some dumb notings & loose sheets. 17. The Hon’ble CIT(A) is not justified in confirming the addition of Rs.28,00,00,000/- under section 69A of the act which was based on some dumb notings & loose sheets. 4 18. The Hon’ble CIT(A) is not justified in confirming the addition of Rs.9,26,00,000/- under section 69A of the act which was based on some dumb notings & loose sheets. 19. The Hon’ble CIT(A) is not justified in confirming the addition of Rs.3,28,00,000/- under section 69A of the act which was based on some dumb notings & loose sheets. 20. The Hon’ble CIT(A) is not justified in confirming the addition of Rs.6,51,53,000/- under section 69A of the act which was based on some dumb notings & loose sheets. 21. The Hon’ble CIT(A) is not justified in confirming the addition of Rs.4,50,00,000/- under section 69A of the act which was based on some dumb notings & loose sheets. 22. The Hon’ble CIT(A) is not justified in confirming the addition of Rs.1,85,00,000/- under section 69 of the act which was based on some dumb notings & loose sheets. 23. The Hon’ble CIT(A) is not justified in confirming the addition of Rs. 50,00,000/- under section 69 solely relying on the statements given by one Mr. Chandrashekar. 24. The Hon’ble CIT(A) erred in not holding that the learned Assessing officer does not have the Juri iction to invoke Section 69A on the facts and circumstances of the case. 25. The Hon’ble CIT(A) failed to appreciate that none of the alleged dumb 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. 26. The Hon’ble CIT(A) erred in not holding that learned assessing officer is not justified to make addition only based on dumb notings and statements made without any corroborative evidences. 27. Ground on addition of Rs. 1,03,36,94,904/- under the head Capital Gain: 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. 5 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. 28. Ground on addition of Rs. 104,97,55,888/- u/s. 56(2)(vii)(b): a. The Hon’ble CIT(A) is not justified in holding that this ground is treated as dismissed for statistical purposes without expressing any opinion on the merits of the issue. b. The Hon’ble CIT(A), having confirmed the substantial addition ought to have deleted the protective addition. 29. TheHon’ble CIT(A) has erred by not holding that the Order of Assessment is against principles of natural justice in so far as the learned assessing officer did not provide an opportunity for cross examination of the persons whose statements have been relied upon by the learned Assessing Officer. 30. TheHon’ble CIT(A) has erred by not holding that the Order of Assessment is against principles of natural justice in so far as the learned assessing officer did not even provide a proposition notice before making such huge addition. 31. Hold that the learned assessing has not followed the due procedure u/s.153D of the act while passing the impugned assessment order. 6 32. The learned Commissioner of Income-tax [Appeals] and the learned assessing officer were not justified in relying upon certain judicial precedents which are not applied in right perspective to the facts of the case of the appellant and further the learned authorities failed to properly appreciate and apply the ratio of the decisions and judicial precedents relied upon by the appellant to the facts of the present case and consequently passed a perverse order, on the facts and circumstances of the case. 33. Without prejudice, to the right to seek waiver as per the parity of reasoning of the decision of the Hon’ble Apex Court in the case of Karanvir Singh 349 ITR 692, the Appellant denies itself liable to be charged to interest under section 234 B of the Income Tax Act on the facts and circumstances of the case. The appellant contends that the levy of interest under section 234 A & 234 B of the Act is also bad in law as the period, rate, quantum and method of calculation adopted by the learned assessing officer on which interest is levied are not discernible and are wrong on the facts of the case. 34. The appellant denies himself liable to be assessed in excess of returned income on the facts and circumstance of the case. The additions made are all unsustainable in law and contrary to the material on record and consequently liable to be deleted in full or substantially reduced as not in accordance with the scheme of the income tax act. 35. The appellant craves leave of this Hon’ble Tribunal to add, alter, amend, substitute or delete any or all of the grounds of appeal urged above at the time of hearing of the appeal by this Hon’ble Tribunal. 36. For the above and other grounds to be urged during the course of hearing of the appeal the Appellant prays that the appeal be allowed in the interest of equity and justice. 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 7 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/- . 8 (1) Unaccounted money seized at Flat No. 107, B-2, Safdarjang Enclave Rs. 41,03,600 /- (2) Unaccounted money seized at Flat No. 17, B-4, Safdarjang Enclave Rs. 1,37,36,500/- (3) Unaccounted money seized at Flat No. 201, B-5, Safdarjang Enclave Rs. 6,61,26,000/- (4) Unaccounted money seized from residence of Mr. Anjaneya Rs. 15,00,000/- (5) Unexplained investment towards Late Mrs. Vishalakshi Devi Property Rs. 4,00,00,000/- (6) Unexplained investment made by Mr. Chandrashekhar Sukhapuri on behalf of the Assessee Rs. 50,00,000/- (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/- 9 (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/- (15) Capital gain on transaction with M/s. Davanam Constructions Private Limited Rs. 103,36,94,904/- (Substantive addition) (16) Income from other sources on account of transaction with M/s. Davanam Constructions Rs. 104,97,55,888/- (Protective addition) 3. Aggrieved by this order, the assesse filed an appeal before the learned CIT (A), which came to be dismissed. Aggrieved by the order of the ld. CIT (A), the assesse has filed this appeal before the ITAT. We have gone through the order of both the authorities below and we note that the Learned CIT (A) has brought out the relevant facts from the assessment order in his appellate order. Therefore, for the sake of convenience and brevity, we are reproducing the order of the ld. CIT (A) from page no 37 to 197 which deals with the additions made and as listed out in item no 1 to 14, hereinabove, and have appended the same by way of annexure “A” to this order. 4. The ld. Counsel for the assesse relied on the submissions made before the lower authorities and argued extensively. He has filed written synopsis, the relevant part of the written synopsis are as under:- 1. ADDITION OF RS. 41,03,600/- UNDER SECTION 69A OF THE ACT: 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. 10 It is a fact that the HUF has not been filing income tax returns, but that is for the reason that it has only agricultural income and no taxable income. The assessee has placed before the ITAT the details of land holdings of the assessee and his family members, who are all members of the Kempegowda HUF. It is clear from the statements furnished that the total holdings as on date is about 174 acres, held in different names. Further it is also on record of the department that three members of the HUF, ie. the assessee, his brother DK Suresh and his mother Gowramma, who were assessed to tax had declared agricultural income over about Rs.15 lakhs each, year after year from A.Y 2015-16 and Rs.10 to 12 Lakhs before that. These can be easily verified from the records of the department. It is the plea of the assessee that the Hon’ble ITAT, set aside this issue to the file of the AO, to reconsider the same in the light of these facts, for the limited purpose of verifying the veracity of the same. 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 11 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 Juri ictional 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. 3. ADDITION OF RS. 6,61,26,000/- UNDER SECTION 69A OF THE ACT. 12 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 13 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 Juri ictional 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. 4. ADDITION OF RS. 15,00,000/- UNDER SECTION 69A OF THE ACT. 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 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. 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 14 refused on the ground that it would serve no purpose as he had already retracted his statements. A Division Bench of The Juri ictional 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. 5. ADDITION OF RS. 4,00,00,000/- u/s 69 UNEXPLAINED INVESTMENT OF THE ACT. Mr Sachin Narayan, who has owned up the cash payment made to Vishalakshi devi , 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 the onus of having made such a huge cash payment in an Income Tax Proceeding, without actually of having done so, in view of the fact that it exposes that person to payment of Taxes, Interest, Penalty and also to Prosecution Proceedings.Further the AO does not dispute the fact that Sachin Narayan has also made a payment of Rs. One Crore by cheque to Vishalakshi Devi, on behalf of Shashikumar Shivanna, the person who has entered into a transaction with Vishalakshi Devi.Another important point is the fact that the AO has in the satisfaction note, initiating proceedings u/s 153C in the case of Sachin Narayan, has arrived at a satisfaction that Sachin Narayan has made a payment of Rs. Four Crores in cash to Vishalakshmi Devi, on behalf of Shashikumar Shivanna. 15 6. ADDITIONOF RS. 50,00,000/- UNDER SECTION 69 UNEXPLAINED INVESTMENTOF THE ACT. 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 does 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 Kantha Raju 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 Kantha Raju 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: a. Commissioner of Income-Tax vs Nipani Tobacco Stores. 145 ITR 128. b. 4679/Mum/2016. 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 has erred in placing the onus on the 16 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 juri iction u/s 69 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 assessee and not accounted for and hence does not come under the purview of Section 69 of the Act. 7. ADDITION OF RS. 2,30,00,000/- UNDER SECTION 69A OF THE ACT. Sri. Rajendran, whose statements u/s 132(4) are relied upon by the AO, has retracted these statements 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. Rajendra, the same was refused on the ground that it would serve no purpose as he had already retracted his statements. 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 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 CIT (A) to take a view that the retraction was self serving in nature. 17 A Division Bench of The Juri ictional 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 No. 830 to 834 of 2022 , order dated 22/01/2014, 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 Order of the Hon’ble juri ictional High Court is straight on the point of the loose sheets / diaries, relied upon by the assessing officer to make additions in the hands of the assessee, where the High Court has held that the loose sheet / diaries do not have any evidentiary value following the supreme court order in the case of central bureau of investigation Vs. V C Shukla. However, the Hon’ble CIT(A) has decided not to agree to the findings of the Hon’ble juri ictional High Court of Karnataka. The Hon’ble 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. The Hon’ble CIT(A) has misplaced reliance of several case laws which are not relevant to the Assessee’s case. Further the addition which is made by invoking juri iction 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. 8. ADDITIONOF RS. 43,18,00,000/- UNDER SECTION 69A OF THE ACT. 18 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. The assesse relies upon the decision of the Division Bench of The Juri ictional Karnataka High Court in the case of Sri. Sunil Kumar Sharmain WA No’s 830 to 834 supra. The Order of the Hon’ble juri ictional High Court is straight on the point of the loose sheets / diaries relied upon by the assessing officer to make additions in the hands of the assessee, where the High Court has held that the loose sheet / diaries do not have any evidentiary value following the supreme court order in the case of central bureau of investigation Vs. V C Shukla. However, the Hon’ble CIT(A) has decided not to agree to the findings of the Hon’ble juri ictional High Court of Karnataka. Further the addition which is made by invoking juri iction 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. 19 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:    DCIT, Circle – 1(4) Vs. Sunil Kumar Sharma, W.A.NO. 830/2022 AND W.A.NO. 831/2022 (Karnataka High Court) 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. 9. ADDITIONOF RS. 28,00,00,000/- UNDER SECTION 69A OF THE ACT. 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 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. 20 The assesse relies upon the decision of the Division Bench of The Juri ictional 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 juri iction 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:    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 21 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. The assesse relies upon the decision of the Division Bench of The Juri ictional Karnataka High Court in the case of Sri. Sunil Kumar Sharmain WA No’s 830 to 834 supra. Further the addition which is made by invoking juri iction 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:    DCIT, Circle – 1(4) Vs. Sunil Kumar Sharma, W.A.NO. 830/2022 AND W.A.NO. 831/2022 (Karnataka High Court) 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 22 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. 11. ADDITIONOF RS. 3,28,00,000/- 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 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. The assesse relies upon the decision of the Division Bench of The Juri ictional Karnataka High Court in the case of Sri. Sunil Kumar Sharmain WA Nos. 830 to 834 supra. 23 Further the addition which is made by invoking juri iction 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:    DCIT, Circle – 1(4) Vs. Sunil Kumar Sharma, W.A.NO. 830/2022 AND W.A.NO. 831/2022 (Karnataka High Court) 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. 12. ADDITIONOF RS. 6,51,53,000/- UNDER SECTION 69A OF THE ACT. 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 some dumb notings made in 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 24 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. The assesse relies upon the decision of the Division Bench of The Juri ictional 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 juri iction 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:    DCIT, Circle – 1(4) Vs. Sunil Kumar Sharma, W.A.NO. 830/2022 AND W.A.NO. 831/2022 (Karnataka High Court) 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 25 hence these statements which stand retracted also do not have any evidentiary value. 13. ADDITIONOF RS. 4,50,00,000/- UNDER SECTION 69A OF THE ACT. 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 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 brought on record even one single corroborative evidence in support of this addition. The assesse relies upon the decision of the Division Bench of The Juri ictional 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 juri iction 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:    DCIT, Circle – 1(4) Vs. Sunil Kumar Sharma, W.A.NO. 830/2022 AND W.A.NO. 831/2022 (Karnataka High Court) 26 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. 14. ADDITIONOF Rs. 1,85,00,000/- UNDER SECTION 69A OF THE ACT. 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 Value 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: 27 a. Commissioner of Income-Tax vs Nipani Tobacco Stores. 145 ITR 128. b. 4679/Mum/2016. 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 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 juri iction 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 Evidence Act. Reliance is placed on following decisions:    DCIT, Circle – 1(4) Vs. Sunil Kumar Sharma, W.A.NO. 830/2022 AND W.A.NO. 831/2022 (Karnataka High Court) The AO has also not adduced any corroborative evidence from the Jeweller, to support the addition. As regards additions made based on entries in loose papers/loose sheets/diaryentires and dumb documents, the assessee wishes to place reliance on the following decisions to submit that no addition can be made on dumb documents in the form of loose sheets/slips/diaries etc: 28 (i) Common Cause v. UOI [2017] 394 ITR 220 (SC) (iii) DCIT v. Sunil Kumar Sharma [2024] 159 taxmann.com 179 (Karnataka) (iv) Sri Tarun Kumar Goyal v. ACIT ITA No.456/Hyd/20 dt. 20.04.2021: (v) ITO v. Ramachandra Setty and Sons [2024] 163 taxmann.com 666 (Bangalore - Trib.) (vi) Sri Devaraj Urs Educational Trust for Backward Classes (Regd.) v. ACIT in ITA Nos.500 to 506/Bang/2020 dt. 16.08.2021 (vii) PCIT v. Ajanta Footcare (India) (P) Ltd [2017] 84 taxmann.com 109 (Cal) (viii)CIT v. S.M. Agarwal [2007] 162 Taxman 3 (Del) 5. In view of the above submissions and judicial pronouncements, the ld. Counsel for the assessee pleads that his appeal be allowed for the cause of substantial justice in respect of the grounds which pertain to the additions listed above as Nos. 1 to 14. 6. The ld. DR relied on the order of the lower authorities and submitted that during the course of serach statemnts were recoded of various connected persons . They have admitted that the cash belongs to the assesse. The AO has made additions on the basis of materials found and these materials are corroborated with the statemnts recorded . The assesse has send money to Delhi through hawal route. The AO and CIT(A) has discussed this issue in detail and it does not require any interference. 29 7. The AO has made in all 16 additions which we broadly classify into the following categories: A. Additions arising out of Cash Found and Seized During the Search Operations – 4 additions - item no’s (1) to (4) B. Additions arising out of Documents found and seized during the Search Operations – 2 additions - item no’s (5) and (6) C. Additions arising out of Loose slips / diary notings etc found during the Search Operations – 8 additions - item no’s (7) (8) (9) (10) (11) (12),(13) and (14) D. Additions arising out of Land transactions with M/s Davanam Constructions Pvt Ltd – 2 additions ( item no’s (15) and (16)) Now we consider the additions one by one as under:- 7.1 The following additions are made based on Cash Found and seized during the search operations: (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/- 30 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 31 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/- 32 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, 33 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. 34 7.2.2 Considering the above observation and submissions it is a fact that he Apartment where the cash was found and seized belongs to one M/s Zeus Constructions Pvt Ltd. It also not in dispute that Mr. Sachin Narayan, the Managing Director of Zeus constructions Pvt Ltd has admitted to being the owner of the seized cash of Rs.1,37,36,500/- in his statement u/s 132(4),It is also not in dispute that Mr Sachin Narayan 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 . 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 Sachin Narayan has accepted ownership of the cash, without being the owner thereof,either as a mere after thought or otherwise. 7.2.3 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 Ms Zeus Constructions Pvt Ltd, whose Director, Sri Sachin Narayan has admitted to ownership of the entire cash found and seized therein. The 35 Revenue has not brought any compelling evidence on record to support its stand that the cash found and seized belongs to the assessee. 7.2.4 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. Sachin Narayan. 7.2.5 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 within a reasonable time, though the AO and the 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 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 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 CIT (A) also does not explain the damage if any, caused to these two persons, had the statements not been retracted. We also noted from the search of K. 36 Rajendran’s premises a diary was found where the hawala transactions are recorded and one Mr. Rawat has delivered the cash and movement of cash are also recorded in the diary as per instructions of the assesse. The AO has relied on the judgement of Hon,ble Apex Court in the case of CIT vs Durga Prasad More reported in 82 ITR 540 (SC) and other judgements which in our opinion are not applicable in the present facts of the case since in the case on hand, Mr. Sachin Narayan has accepted the ownership of cash in the statements recorded u/s 132(4) of the Act. Merely giving direction for movement of cash by assessee to K. Rajendran does not prove the ownership of cash. 7.2.6 During the course of hearing the Learned AR has relied on the Judgement of the Division Bench of The Juri ictional 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. 7.2.7 WE also do not find any corroborative evidence available with the revenue to make the above addition.Considering the above facts and the judgement relied upon this addition is deleted. 7.3 Cash seized at Flat No. 201, B-5, Safdarjang Enclave, Rs.6,61,26,000/- 7.3.1 During the course of search cash of Rs. 6,61,26,000/- was found and seized at Flat No. 201-B-5, Safdarjang Enclave, a residential premises 37 belonging to the legal heir of late. Suresh Sharma, at New Delhi. The warrant of authorization was in the name of H. S. Anjaneya. Suresh Kumar Sharma had died long before the search and the premises was admittedly under the control of his brother Sunil Kumar Sharma.The AO and the ld. CIT (A) concur on the addition for the following reasons:  Sunil Kumar Sharma has in his statement said that the bedroom in which the cash was found was the bedroom in which the assessee would sleep, whenever he stayed in the apartment and he has no idea about the contents of the said room.  The keys to the said room were with Sri. Anjaneya.  Sunil Kumar Sharma changed his statement within 21 days of giving the original statement and claimed ownership of the cash found and seized, which is clearly an afterthought.  Sri. Anjaneya had in sworn statement u/s 132(4) had confirmed that the cash belonged to the assessee. He had also confirmed about how that money was received by him and stored in that bedroom, where it was found.  The objection raised by the assessee that the legal presumption u/s 292C is that the money found in an apartment is presumed to belong to the owner of the apartment is not applicable in this case as the statements of Sri. Anjaneya and Sri. Rajendran, clearly proves that it does not belong to Sunil Kumar Sharma, but belongs to the assessee and in any case Sri. Sunil Kumar Sharma is not the actual owner of that apartment as the same is owned by 38 his deceased brother and that the apartment is used by both Sunil Kumar Sharma and the assessee. 7.3.2 The assesse contended that the Apartment where the cash was found and seized belongs to one Late Suresh Kumar Sharma. Mr. Sunil Kumar Sharma, the brother of the Late Suresh 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 entire seized cash of Rs.6,61,26,000/- 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. The Revenue has not brought any compelling evidence on record to support its stand that the cash found and seized belongs to the assessee. 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 39 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 40 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. 7.3.4 During the course of hearing the Learned AR has relied on the Judgement of the Division Bench of The Juri ictional 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 41 decision of the Division Bench has been approved by the Supreme Court, when the SLP filed by the Revenue was dismissed. Most importantly inthis decision the Hon’ble High Court has also confirmed that the seized cash of Rs.6,61,26,000/- belongs to Sunil Kumar Sharma. 7.3.5 Considering the above facts and the judgement relied upon this addition is deleted. 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 42 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 juri ictional 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 43 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. Additions arising out of Documents found and seized during the Search Operations 8.1 Unexplained investment towards Late Mrs. Vishalakshi Devi Property Rs. 4,00,00,000/- 8.1.1During the course of search an agreement dated 28/06/2017, which was entered into between one Mrs. Vishalakshi Devi and Sri. Shashikumar Shivanna was found and seized, wherein Sri. Shashikumar Shivanna had agreed to purchase a property from Vishalakshmi Devi for a consideration of Rs.5,00,00,000/- . As per the 44 said agreement, Smt. Vishalakshi Devi was paid a sum of Rs.1,00,00,000/- by Cheque and the balance of Rs. 4,00,00,000/- by cash. Sri. Shashi Kumar Shivanna happens to the co brother of the assessee. The AO has made an addition of Rs.4,00,00,000/- u/s 69B of the Act, in the hands of the assessee, holding that the cash amount of Rs. 4,00,00,000/- is paid by the assessee. It is also on record that Sri.Sachin Narayan has admitted to the payment of Rs. 4,00,00,000/- by cash.The AO’s conclusion which has been upheld by the ld. CIT(A) is that,Sachin Narayan has not made the payment of Rs.4 crores to Vishalakshi Devi. His owning up to having done so is false and an afterthought. His statements contradict the statement of three different persons who are aware of the transaction, namely Vishalakshi Devi, Shivakumar Shivanna and Chandrashekar Shukhapuri. The payment has actually been made by the assessee. The statements of Sachin Narayan is to be disbelieved and addition made in the hands of the assessee is correct. 8.1.2 The ld. Counsel for the assesse submitted that Mr Sachin Narayan, who has owned up the cash payment made to Vishalakshi Devi, 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 the onus of having made such a huge cash payment in an Income Tax Proceeding, without actually of having done so, in view of the fact that it exposes that person to payment of Taxes, Interest, Penalty and also to Prosecution Proceedings.Further the AO does not dispute the fact 45 that Sachin Narayan has also made a payment of Rs. One Crore by cheque to Vishalakshi Devi, on behalf of Shashikumar Shivanna, the person who has entered into a transaction with Vishalakshi Devi.Further none of the three persons, whose statement are relied upon, to make the addition have said that the assessee made the payment himself. They have only stated that he arranged for the payments. It so happened that the assessee arranged for the payments by asking Sri. Sachin Narayan, who was known to him, to make the payments, both in cheque and cash, which Sri. Sachin Narayan has confirmed making both these mode of payments in statement u/s 132(4). Another important point is the fact that the AO has in the satisfaction note, initiating proceedings u/s 153C in the case of Sachin Narayan, has arrived at a satisfaction that Sachin Narayan has made a payment of Rs. Four Crores in cash to Vishalakshmi Devi, on behalf of Shashikumar Shivanna. 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 46 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 47 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. 8.1.5 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 for addition in the hands of the assessee.Another important point is the fact that the AO has initiated proceedings u/s 153C in the case of Sachin Narayan in respect of the very same addition. 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 48 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 Unexplained investment made by Mr. Chandrashekhar Sukhapuri on behalf of the Assessee Rs. 50,00,000/- with respect to immovable property at Kogilu:- 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 49 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 50 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 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 juri iction 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. 8.2.3 From the above submissions from both sides we noted that the assessee has denied making the payments. The Statement recorded u/s 132(4) 51 from Chandrashekar Shukhapuri does not implicate the assessee. There is no statement to the effect that payment is made by the assessee. It only shows that the amount was given to him by one Lokesh, PA of the assessee. The assessee has in his reply stated that Kantharju, who was his cousin, was a bachelor and used to utilize the services of the personal staff of the assessee for his personal requirements. There is no statement recorded from the said Lokesh, PA of the assessee by the revenue to ascertain the fact that who gave him the money to be given to Chandrashekhar Shukhapuri. It is also clear that the property was being purchased by Kantharaj and the agreement being in his name. The Presumption u/s 292C is also that money must have been paid by Kantharaju, who is to be held primarily responsible for the same. The Revenue has not brought any compelling evidence on record to support its stand that the cash paid belongs to the assessee. 8.2.4 Considering the above facts and circumstances this addition is deleted. 9. Additions arising out of Loose slips / loose sheets/ diary notings etc found during the Search Operations – 8 additions - item no’s (7) (8) (9) (10) (11) (12),(13) and (14) 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 52 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 53 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 54 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 Juri ictional 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. 55 (vi) Further the addition which is made by invoking juri iction 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. 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 56 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 Juri ictional 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.ar further submitted that addition which is made by invoking juri iction 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: 57    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) filed with the department on 12.03.2018 and hence these statements which stand retracted also do not have any evidentiary value. He further submitted the case law relied by the revenue is on different footings and wrongly not considered the judgemnts relied by the assesse. Item no.9 - Unexplained money based on material seized from residence of the Assessee Rs. 28,00,00,000/-. (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 58 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 Juri ictional 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 juri iction 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 59 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:    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 60 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 Juri ictional 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 juri iction u/s 69A of the Act is unsustainable in law. The addition is made on 61 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:    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/- 62 (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 63 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 Juri ictional 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 juri iction 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:    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. Item No.12 - Unexplained money based on material seized from residence of the Assessee Rs. 6,51,53,000/- (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 PAGE No. 164 and 165 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) of the Act given by Anjaneya and Rajendran. 65 (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 Juri ictional 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 juri iction 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’ 66 under the Indian Evidence Act. Reliance is placed on following decisions:    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 67 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 Juri ictional 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 juri iction 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 68 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:    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/- 69 (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 70 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 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 juri iction 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 71 of loose sheets of documents, which does not come under Evidence Act. Reliance is placed on following decisions:    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, 72 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 73 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.\ 11. Our Decision on items (7) to (14) enumerated above: (i) We have considered the facts and circumstances as well as the underlying reasons which prompted the AO to make the above 74 additions in the assessment order passed by him. We have also considered the reasons given by the ld. CIT (A) which made him to arrive at the decision of confirming the additions and also strengthening the same in the appellate order passed by him.It is important to take note of the fact that these additions arise out of loose slips/ loose sheets/ diaries etc which were found during the course of search at different places. The statements are also recorded from various persons connected with these seizures. We have also considered the submissions of the assessee placed before us and also the arguments placed by the ld. DR and AR during the course of hearing before us. (ii) We now consider the several decisions relied upon by the AR in support of the stand of the assessee and the relevance of these case laws to the issues of the assessee: (1).CBI vs V.C. Shukla (1998) 3 SCC 410 37.“In Beni v. Bisan Dayal, AIR 1925 Nagpur 445 it was observed that entries in books of account are not by themselves sufficient to charge any person with liability, the reason being that a man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of the parties. There must be independent evidence of the transaction to which the entries relate and in absence of such evidence no relief can be given to the party who relies upon such entries to support his claim against another. In Hira Lal v. Ram Rakha, AIR 1953 Pepsu 113 the High Court, while negativing a contention that it having been proved that the books of account were regularly kept in the ordinary course of business and that, therefore, all entries therein should be considered to be relevant and to have been proved said that the rule as laid down in Section 34 of the Act that entries in the books of account regularly kept in the course of business are relevant whenever they refer 75 to a matter in which the Court has to enquire was subject to the salient proviso that such entries shall not alone be sufficient evidence to charge any person with liability. It is not, therefore, enough merely to prove that the books have been regularly kept in the course of business and the entries therein are correct. It is further incumbent upon the person relying upon those entries to prove that they were in accordance with facts. 38. The evidentiary value of entries relevant under Section 34 was also considered in Hiralal Mahabir Pershad, (supra) I. D. Dua, J. (as he then was) speaking for the Court observed that such entries though relevant were only corroborative evidence and it is to be shown further by some independent evidence that the entries represent honest and real transactions and that monies were paid in accordance with those entries.” 39. A conspectus of the above decisions makes it evident that even correct and authentic entries in books of account cannot without independent evidence of their trustworthiness, fix a liability upon a person. Keeping in view the above principles, even if we proceed on the assumption that the entries made in MR 71/91 are correct and the entries in the other books and loose sheets which we have already found to be not admissible in evidence under Section 34) are admissible under Section 9 of the Act to support an inference about the formers' correctness still those entries would not be sufficient to charge Shri Advani and Shri Shukla with the accusations levelled against them for there is not an iota of independent evidence in support thereof. ……. 12. When applied to the fact of the case of the present assessee the loose sheets, slips, diary entries etc, even if considered as being part of books of account maintained by the assessee, the entries therein cannot be relied upon to come to a conclusion that the figures in these seized materials represent unexplained income or expenditure of the assessee in order make an addition in the assessment of the assessee’s income, in the absence of independent corroborative evidence which will validate these additions. 76 (2).Common Cause v. UOI [2017] 394 ITR 220 (SC) 20. “It is apparent from the aforesaid discussion that loose sheets of papers are wholly irrelevant as evidence being not admissible under Section 34 so as to constitute evidence with respect to the transactions mentioned therein being of no evidentiary value.” (4).DCIT v. Sunil Kumar Sharma [2024] 159 taxmann.com 179 (Karnataka) 48. “In the given facts and circumstances of the matter, it is relevant to refer to the case of Nishant Construction (P.) Ltd. v. ACIT [IT Appeal No. 1502 (Ahd.) of 2015, dated 14-2-2017], wherein it is held that, in the absence of any corroborative evidence, loose sheet can at the most be termed as "dumb document" which did not contain full details about the dates, and its contents were not corroborated by any material and could not be relied upon and made the basis of addition. Reliance can also be placed on the judgment of the Panaji Bench of ITAT in the case of Abhay Kumar Bharamgouda Patil v. Asstt. CIT [2018] 96 taxmann.com 377, wherein the judgment of the Apex Court was relied upon.” 13. In the above cited case the Juri ictional Karnataka High Court after relying upon the decisions of the Hon’ble Apex Court in the VC Shukla Case and the Common Cause case, held that the Revenue cannot even assume juri iction and issue a notice to assess a person u/s 153C on the basis of entries in a diary, as diary entries are not considered as themselves, which are not supported by any not corroborative evidence.When such is the proposition of law, laid down by the Hon’ble Juri ictional High Court, the AO has no power to make an addition to income based on such entries in loose sheets, which have no corroborative evidence. 77 (5).Sri Tarun Kumar Goyal v. ACIT ITA No.456/Hyd/20 dt. 20.04.2021: 13. Lastly comes the crucial issue as to whether the impugned seized material / ‘Excel’ sheet (not mentioning the assessees’ names) forms a dumb document or not. We make it clear that the department has failed to corroborate the impugned seized document indicating assessee’s alleged on money payment over and above the sale price itself. All it has done is to rely on their father’s name only. It is nowhere clear as to whether it is an alleged document forming part of the books of account maintained in the regular course of business either by the vendor or vendee side. All it contains therefore is rough notings and jottings only. This tribunal co-ordinate bench’s decision Nishan Constructions Vs. ACIT ITA No.1502/Ahd/2015; after considering the hon'ble apex court’s landmark decision in Common Cause, Vs. Union of India (2017) 77 Ltd., (2017) [184 TTJ 469] (Mumbai) and ITO Vs. Kranti Impex Pvt Ltd., ITA No.1229/Mum/2013, dt.28-02-2018 (dealing with a seized document seized not either bearing the taxpayer’s name or signature). Shri Neeraj Goyal Vs. ACIT, ITA No.5951/Del/2017, dt.21-03-2018, (Del) (2012) 23 taxmann.com 269] Nagarjuna Construction Co. Ltd., Vs. DCIT, CIT Vs. S.M.Agarwal, [293 ITR 43], CIT Vs. Shri Girish Chaudhary (2008) 296 ITR 619 (Del) also echo the very principle. We accordingly hold that the impugned addition of on-money payment made in both these assessees’ hands on the basis of a mere dumb document and not corroborated by any other evidence is not sustainable. We thus direct to delete the impugned identical addition forming subject matter of adjudication in both these cases.” (6). ITO v. Ramachandra Setty and Sons [2024] 163 taxmann.com 666 (Bangalore - Trib.) 13.13 The AO extracted the loose sheets in page Nos.5 to 8 in the assessment order and confronted the same to Mr. R. Ravish. The reply of Mr. R. Ravish is reproduced at page 9 of the assessment 78 order vide question No.16 and he offered an amount of Rs.3 crores towards undisclosed sales and answered question No.17 reproduced in page Nos.10 & 11 of the assessment order, he offered an amount of Rs.1 crore towards unaccounted purchases. It is not known who has written in these loose slips and what details it contains. It was mentioned therein that estimate with some random figures. These details therein cannot be presumed as unaccounted sales or unaccounted purchases. These are dumb sheets which have no relevance and its authenticity to rely upon on its face value. Such loose sheets and scribblings cannot be the primary evidence to base the assessment upon. These sheets also cannot be relied upon to hold that the assessee has earned any undisclosed income by way of unaccounted sales or unaccounted investments in the form of unaccounted purchases. 13.14 Further, in reading the above, it cannot be inferred that the unaccounted transactions have taken place in the hands of assessee and it's not in good faith to presume it to be the unaccounted transaction. From this sheet of seized material, it can also be seen there are various figures mentioning that it is estimate and in such scenario it would not be prudent to assume as per the whims and fancy of the AO that the said figures mentioned therein is the undisclosed transactions of the assessee to make an addition basing the decision on such loose sheets trough it is a dumb document and not to be considered while making such assessment in search cases as they are not preliminary evidence to prove that any unaccounted transactions has been carried on by the assessee. 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 79 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 80 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 81 material. Reliance can be placed in this regard on the following decisions…….: 14. In the above decision rendered by a coordinate bench of this Tribunal, it is seen that the bench has held additions cannot be made when the entries relied upon to make addition to income are not supported by any corroborative evidence and where there are no statements recorded from those who have alleged to have paid monies to the assessee, to confirm the veracity of the entries. The Tribunal also holds that there is a duty cast upon the AO to establish with necessary corroborative evidence that the entries relied upon to make additions to income are unaccounted transactions actually carried out by the assessee. In the absence of these necessary ingredients, the additions were deleted. 15. It is seen from the facts of this assessee’s case; the AO has not established the veracity of the loose sheets/ slips/ diary entries etc. with necessary corroborative evidence. He has also not recorded statements from the persons who are alleged to have paid monies to the assessee, confirming the said payments and also purpose of these payments. The AO has also not recorded any statements from persons who are supposed to have received monies from the assessee, confirming such receipts and the purpose of these receipts. Mobile No.s are also there in some above noted case but the AO has not confirmed from them. In these circumstances, the additions made by relying on loose sheets/ loose slip/ diary entries etc need to be necessarily deleted. This decision is also squarely applicable to the facts of the assessee’s case and is in favour of the assessee: 82 (ix) Sri Devaraj Urs Educational Trust for Backward Classes (Regd.) v. ACIT in ITA Nos.500 to 506/Bang/2020 dt. 16.08.2021 240. In our opinion, the unsubstantiated and uncorroborated seized material alone cannot be considered as conclusive evidence to frame these assessments. The revenue authorities cannot draw inference on the basis of suspicion, conjectures and surmises. Suspicion, however strong, cannot take place the material in place of evidence of the AO. 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 AO without examining the students / parents who have paid the capitation fees cannot come to the conclusion that the assessee has received unaccounted capitation fees. The basis for donation is notebook / loose sheet. 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 collected unaccounted capitation fees. The notes in the diary/loose sheets are required to be supported by corroborative material. Since there was no examination or cross-examination 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 revenue that assessee is collecting huge unaccounted capitation fees in the guise of carrying on educational activities. 245 ….In the present case, we have already held that there are various loose sheets, scribblings, jottings and Excel sheets taken from the computer 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 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. In such circumstances, we are of the 83 opinion that the decisions relied on by the ld. DR cannot be applied to the facts of the assessee's case.” 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) 84 16. In this decision also, which is rendered by a coordinate bench of this Tribunal, it is seen that the bench has held that entries relied upon to make addition to income are not supported by any corroborative evidence, there are no statements recorded from those who have alleged to have paid monies to the assessee, to confirm the veracity of the entries. The tribunal observes that suspicion, however strong, cannot be the basis of making additions, in the absence of independent proof. The Tribunal also holds that there is a duty cast upon the AO to establish with necessary corroborative evidence that the entries relied upon to make additions to income are unaccounted transactions which are carried out by the assessee. In the absence of these necessary ingredients, the additions were deleted. 17. It is seen from the facts of this assessee’s case, that the AO has not established the veracity of the loose sheet entries with necessary corroborative evidence. He has also not recorded statements from the persons who are alleged to have either paid / received monies to/ from the assessee, confirming the said receipts / payments and also purpose of these receipts/payments. In these circumstances, the additions made by relying on loose sheets need to be deleted. 18. All these decisions relied by ld. Counsel noted supra are also squarely applicable to the facts of the assessee’s case and are in favour of the assessee 19. On the issue of the Statutory presumption under section 292C of the Act, the assessee has submitted as under: 85 (a) The AO has invoked the statutory presumption available in section 292C of the Act in holding that the contents of the material in question belongs to the assessee and that the transactions inferred therefrom are undisclosed income of the assessee. In this regard, it is most respectfully submitted that the reliance placed by the AO on this statutory presumption is totally ill-founded. (b) There can be no presumption drawn that the entries in the seized materials represents income or expenditure of the assessee. The provisions of section 292C of the Act relied upon by the AO merely enables the AO to consider the notings as true and correct and it does not enable the AO to make further presumptions that the notings represents any income of the assessee. 20. The Assessee relies upon the following decisions to buttress his argument that the provisions of section 292C do not come into play under the facts and circumstances of the assessee’s case. (x) PCIT v. Ajanta Footcare (India) (P) Ltd [2017] 84 taxmann.com 109 (Cal) 9. The interpretation given by the Hon'ble Supreme Court in the case of P. R. Metrani (supra) so far as the construction of the expression "may be presumed" is concerned does not support Ms. Das De's submission. Ms. Das De seeks to counter this submission referring to provisions of 292C of the Act. Her stand is that the Statutory Appellate Authorities ought to have concluded that unexplained expenditure reflected in the aforesaid document constituted undisclosed income of the assessee and such conclusion was inevitable. We, however, find applying the ratio of 86 the judgment of the Supreme Court in the case of P. R. Metrani (supra), that the legislature in employing the expression may be presumed left it to the discretion of the statutory bodies to decide as to whether the fact sought to be established by the Revenue is to be presumed or not in the manner the Revenue wants to. It is not legislative mandate to impute duty on the authority to presume certain fact which may be the case where the law requires that an authority shall presume certain facts. So far as the subject-document is concerned, both the Statutory Appellate Authorities found insufficient evidence to link the document with the assessee in the first place. Thus, primary fact was not established from which presumption could be drawn. 10. In the subject proceeding, two Statutory Appellate Authorities have exercised their discretion against the Revenue and in favour of the assessee. The reason for exercising such discretion is that no stock discrepancy could be demonstrated and there was no corroboration of the figures forming the basis of addition to the income of the assessee as was directed by the Assessing Officer. No question about the said document was put to the Director of the assessee in course of search. This factor was also taken into consideration by the aforesaid Appellate bodies. The two Statutory Appellate Authorities doubted the inherent probative value or quality of the above-referred document upon applying their mind on it. In substance, the said authorities found no reason to draw presumption against the assessee on the basis of scribbled figures appearing on the document in question. This is how two fact finding bodies chose to deal with that document. In our view, even without proper explanation from the assessee, when the mandate of law is that authorities may presume certain facts under Section 292C of the Act to come to a conclusion in favour of Revenue, the nature of information contained in or revealed by such document would have to be examined to link such document to undisclosed income of the assessee. Both the Commissioner and the Tribunal found no linking factor. Both these authorities rejected the reasoning of the Assessing Officer on this basis of which the latter came to his finding that the figures appearing on the said document could be computed to arrive at undisclosed income of the assessee. The findings of the Statutory Appellate Authorities cannot be held to be perverse or based on no evidence in this case. The Statutory Appellate Authorities had examined the said document and found that the same could not be connected with assessee's transactions for the relevant assessment year. 87 21. In the case of this assessee, even though the Revenue is of the opinion that the assessee has not given a satisfactory explanation of the contents of the Loose slips/ loose sheets/ diary entries etc. found in the course of search, that by itself does not warrant an addition. An addition can be made only if these contents in the loose sheets which was found are actually connected to the assessee’s transactions in the assessment year 2018-19. The AO has not brought any evidence on record to conclusively prove that the entries represent transactions of the assessee and also represent his undisclosed income/expenditure/investment. This decision is also squarely applicable to the facts of the assessee’s case and is in favour of the assessee (ii) CIT v. S.M. Agarwal [2007] 162 Taxman 3 (Del) "12. It is well-settled that the only person competent to give evidence on the truthfulness of the contents of the document is the writer thereof. So, unless and until the contents of the document are proved against a person, the possession of the document or handwriting of that person, on such document by itself cannot prove the contents of the document. These are the findings of fact recorded by both the authorities, i.e., Commissioner of Income- tax (Appeals) and the Tribunal.” 22. It is also an undisputed fact in the case of the Assessee that the author of the entries in all these loose slips found, other than the ones at Sl.No.9, 12 and 13 above, is unknown and that the assessee is not its author. The Assessee has also denied any knowledge of these loose slips or its contents. Under these circumstances the AO was entirely wrong in treating the figures in these loose sheets to be representing the undisclosed income of the Assessee. As regards the slips which are in the handwriting of the assessee, ie, items no. 9,12 and 13, the 88 figures in the slips do not by themselves denote that these represent the income earned or expenditure incurred by the assessee in his personal capacity. The explanations offered by the assessee were not found to be satisfactory, but that by itself does not mean that additions can be made based on the same without any corroborative evidence to support the same. 23. Furthermore, if these amounts were really the income of the assessee, there must have been assets to represent these corresponding incomes which ought to have been unearthed during search proceedings. The very fact that there are no such unearthed assets only points to the truth that there are no such incomes in the first place. Thus, there is no corroboration of any undisclosed income even by way of any unexplained asset in the hands of the assessee. 24. This decision is also squarely applicable to the facts of the assessee’s case and is in favour of the assessee 25. Considering the decisions of the Hon’ble Supreme Court and the Juri ictional Karnataka High Court which are binding in nature andconsidering the decisions of the other High Courts which have a persuasive value and the decisions of the Coordinate benches of this Tribunal, with which we agree and have no reason to differ from, we delete all the additions made in Items No.(7) to (14) above as these are all made without any corroborative evidence, which is absolutely necessary make an addition to the income of the assessee. 89 26. As regards the addition made in item no (14) above which pertains to unaccounted Jewellery, we find that the AO has not brought any evidence from the Jeweller to support the addition. There is also no finding that the jewellery which was inventoried during the search, also had items which the assessee states were not purchased at all. The addition is not made on the ground that the value of the jewellery actually found during search, exceeded the value of the jewellery actually accounted for in the books of accounts of the assessee. We are therefore compelled to delete this addition as no addition can be made based on suspicion, however strong the suspicion may be. 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 Juri ictional 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 90 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." 91 In this regard, it is relevant to extract Section 69A of the Act, which reads thus: "69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Income-tax Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year." The lack of corroborative evidence to show how the loose sheets found at the house of Sri K Rajandran are connected to the Respondents herein, or their occupation, is evident from the panchanama provided by the Assessing Officer. 22. The entire allegation is made out on the basis of loose sheets of documents, which does not come under the ambit and scope of 'books of entry' or as 'evidence' under the Indian Evidence Act. 23. In view of the aforementioned aspects, we have carefully examined the law declared by the Hon'ble Apex Court with regard to acceptance of diaries/loose sheets by the respondent-Revenue. In the case of V.C. Shukla (supra), at paragraphs 16 to 18 of the judgment, it is observed thus: "16. To appreciate the contentions raised before us by the learned counsel for the parties it will be necessary at this stage to refer to the material provisions of the Act. Section 3 declares that a fact a relevant to another when it is connected with the other in any of the ways referred to in the provisions of the Act relating to the relevancy of facts; and those provisions are to be found in Section 6 to 55 appearing in Chapter II. Section 5, with which Chapter II opens, expressly provides that evidence may be given in any suit or proceeding of the existence or non-existence of every fact in issue and the facts declared relevant in the aforesaid section, and of no others. Section 34 of the Act reads as under:- "34. Entries in books of account when relevant - Entries in book of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the court has to inquire but such statements shall not alone be sufficient evidence to charge any person with liability." 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 92 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." 24. The aforesaid approach is in accordance with good reasoning and we are in full agreement with it. Applying the above tests, it must be held that the two spiral note books (MR 68/91 and 71/91) and the two spiral pads (MR 69/91 and MR 70/91) are "books" within the meaning of Section 34, but not the loose sheets of papers contained in the two files (MR 72/91 and MR 73/91)." 25. The Hon'ble Supreme Court in the case of Common Cause (supra) at paragraphs 278 to 282 of the judgment, has observed thus: "278. With respect to the kind of materials which have been placed on record, this Court in V.C. Shukla case has dealt with the matter though at the stage of discharge when investigation had been completed by same is relevant for the purpose of decision of this case also. This court has 93 considered the entries in Jain Hawala Diaries, note books and file containing loose sheets of papers not in the form of "books of accounts" and has held that such entries in loose papers/sheets are irrelevant and not admissible under section 34 of the Evidence Act, and that only where the entries are made in the books of accounts regularly kept, depending on the nature of occupation, that those are admissible. 279. It has further been laid down in V.C. Shukla case as to value of entries in the books of account, that such statements shall not alone be sufficient evidence to charge any person with liability, even if they are relevant and admissible, and that they are only corroborative evidence. It has been held that even then independent evidence is necessary as to trustworthiness of those entries which is a requirement to fasten the liability. 280. This court has further laid down in V.C. Shukla that meaning of account book would be spiral note book/pad but not loose sheets. The following extract being relevant is quoted herein below: (SCC pp.423-27, paras 14 and 20) "14. In setting aside the order of the trial court, the High Court accepted the contention of the respondents that the documents were not admissible in evidence under section 34 with the following words: "70. ….an account presupposes the existence of two persons such as a seller and a purchaser, creditor and debtor. Admittedly, the alleged diaries in the present case are not records of the entries arising out of a contract. They do not contain the debts and credits. They can at the most be described as a memorandum kept by a person for his own benefit which will enable him to look into the same whenever the need arised to do for his future purpose. Admittedly the said diaries were not being maintained on day-to day basis in the course of business. There is no mention of the dates on which the alleged payment were made. In fact the entries there in are on monthly basis. Even the names of the persons whom the alleged payments were made do not find a mention in full. they have been shown in abreviated form. Only certain 'letters' have been written against their names which are within the knowledge of only the scribe of the said diaries as to what they stand for and whom they refer to." 20. Mr. Sibal, the learned counsel for the Jains, did not dispute that the spiral note books and the small pads are 'books' within the meaning of Section 34. He, however, strongly disputed the admissibility of those books in evidence under the aforesaid section on the ground that they were neither books of account nor they were regularly kept in the course of business. he submitted that at best it could be said that those books were memoranda kept by a person for his own benefit. According to Mr. Sibal, in business parlance 'account' means a formal statement of money transactions between parties arising out of contractual or fiduciary relationship. Since the books in question did not reflect any such 94 relationship and, on the contrary, only contained entries of monies received from one set of persons and payment thereof to another set of persons it could not be said, by any stretch of imagination that they were books of account, argued Mr. Sibal. He next contended that even if it was assumed for argument's sake that the above books were books of account relating to a business still they would not be admissible under section 34 as they were not regularly kept. It was urged by him that the words 'regularly kept' mean that the entries in the books were contemporaneously made at the time the transactions took place but a cursory glance of the books would show that the entries were made therein long after the purported transactions took place. In support of his contentions he also relied upon the dictionary meanings of the words 'account' and 'regularly kept'. 281. With respect to evidentiary value of regular account book, this Court has laid down in V.C. Shukla, thus: (SCC p.433, para 37) "37. In Beni v. Bisan Dayal [AIR 1925 Nagpur 445] it was observed tat entries in book s of account are not by themselves sufficient to charge any person with liability, the reason being that a man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of the parties. There must be independent evidence of the transaction to which the entries relate an din absence of such evidence no relief can be given to the party who relies upon such entries to support his claim against another. In Hira Lal v. Ram Rakha [ A. I. R. 1953 Pepsu 113] the High Court, while negativing a contention that it having been proved that the books of account were regularly kept in the ordinary course of business and that, therefore, all entries therein should be considered to be relevant and to have been prove, said that the rule as laid down in Section 34 of the Act that entries in the books of account regularly kept in the course of business re relevant whenever they refer to a matter in which the court has to enquire was subject to the salient proviso that such entries shall not alone be sufficient evidence to charge any person with liability. It is not, therefore, enough merely to prove that the books have been regularly kept in the course of business and the entries therein are correct. It is further incumbent upon the person relying upon those entries to prove that the were in accordance with facts. 282. It is apparent from the aforesaid discussion that loose sheets of papers are wholly irrelevant as evidence being not admissible under section 34 so as to constitute evidence with respect to the transactions mentioned therein being of no evidentiary value. The entire prosecution based upon such entries which led to the investigation was quashed by this Court." 26. It is established in law by the Hon'ble Apex Court that a sheet of paper containing typed entries and in loose form, not shown to form part of the 95 books of accounts regularly maintained by the assessee or his business entities, do not constitute material evidence. Following the law declared by the Hon'ble Apex Court, we are of the view that the action taken by the respondent/Revenue against the Assessee based on the material contained in the diaries/loose sheets, are contrary to the law declared by the Hon'ble Apex Court. In that view of the matter, impugned notices issued under section 153C of the Act, based on the loose sheets/diaries are contrary to law, which require to be set aside in these writ appeals, as the same are void and illegal." 28. The Assessee has also raised another objection stating that the additions in items (7) to (14) are all made u/s 69A of the Act and the same is erroneous as none of these additions fall under the purview of section 69A of the Act. We have examined the provisions of section 69A of the Act, the primary condition to be fulfilled is that the assessee has to be found to be the owner of any money, bullion, jewellery or any article or thing and such money, bullion, jewellery or any article or thing and is not recorded in the books of accounts maintained by him for any source of income, and the assessee offers no explanation about the source for such money, bullion, jewellery or any article or thing or the explanation offered is not found to be satisfactory. In this case there is no finding that the assessee is the owner of any such money, bullion, jewellery or any article or thing. The additions are all made based on loose slips/ loose sheets/ diary entries, which do not reveal that the assessee is the owner of any such money, bullion, jewellery or any article or thing. We concur with the assessee that these additions cannot be made u/s 69A of the Act and the additions fail on this ground also as provisions of section 69A are not attracted in any of these additions. The Co-ordinate bench of Tribunal has taken view in the case of ACIT vs Layer Exportt (P) ltd reported in(2017) taxman. Com 620 (Mumbai- Trib) in which it has been held as under:- 96 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 97 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 98 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." 36. Further in the case of Pioneer Publicity Corpn. v. Dy. CIT [2000] 67 TTJ 471, (Copy enclosed at pages 373-437 of Paper Book) the Delhi Tribunal held that "no addition could be made simply on the basis of a noting on a visiting card found during search directing certain payment to bearer of card when there was nothing to establish that the assessee paid the amount to the said person. The Department had not made any enquiry from the person named. In the card about the amount given and as such, no addition could be made in the hands of the assessee." 37. Again in the case of Ashwani Kumar v. ITO [1991] 39 ITD 183 (Delhi), the Delhi Tribunal observed as under (Copy enclosed at pages 303-315 of assessee's Paper Book):— "Then for presuming that the contents of the books of account or document are true the document must be a speaking one. In this case the slip, said to have been recovered by the revenue, does not contain any narration in respect of the various figures noted therein. The slip does not indicate whether the figures referred to quantities of money or to quantities of goods and whether one side, and if so, which side represents receipts and which side represents outgoings. This is, thus a dumb document and as the orders of the authorities below would show they have merely added the total of the right side of the slip without supplying the figures any language to indicate their meaning. In the case of such a dumb document, the provisions of Section 132(4A) do not permit any one to presume that the total of the figures of right side of the slip represents the assessee's income. The presumption at the most is attracted to the figures and a further presumption that they represent the income of the assessee Is not permissible under Section 132(4A). When a dumb document, like the present slip, is recovered and the revenue wants to make use of it, it is the duty of the revenue to collect necessary evidence which may provide an acceptable narration to the various entries. The evidence collected should be such that any reasonable man would accept, the hypothesis advanced by the revenue that the figures written on the right side of the slip represent incomes earned by 99 the assessee. It was conceded by the learned Departmental Representative that no such evidence has been brought on Record……..Therefore the additions cannot be sustained and they are hereby deleted." (Emphasis supplied). 38. In view of the aforesaid judgments, it is submitted that since the impugned seized papers are undated, have no acceptable narration and do not bear the signature of the assessee or any other party, they are in the nature of dumb documents having no evidentiary value and cannot be taken as a sole basis for determination of undisclosed income of the assessee. When dumb documents like the present loose sheets of papers are recovered and the Revenue wants to make use of it, the onus rests on the Revenue to collect cogent evidence to corroborate the noting therein. The Revenue has failed to corroborate the noting by bringing some cogent material on record to prove conclusively that the noting in the seized papers reveal the unaccounted on-money receipts of the assessee. Further, no circumstantial evidence in the form of any unaccounted cash, jewellery or investments outside the books of account was found in course of search in the case of assessee. Thus, the impugned addition was made by the AO on grossly inadequate material or rather no material at all and as such, deserves to be deleted. Hence, we are of the view that an assessment carried out in pursuance of search, no addition can be made simply on the basis of uncorroborated noting in loose papers found during search because the addition on account of alleged on-money receipts made simply on the basis of uncorroborated noting and scribbling on loose sheets of papers made by some unidentified person and having no evidentiary value, is unsustainable and bad-in-law. As such, the same is deleted. This issue of the assessee's appeal is allowed and that of the Revenue is dismissed. In the above judgemt it has been held 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. The fact of the case in hand or similar . Ta AO cannot make addition only on the basis of loose sheets, diary entries.relying on the above judgment we are deleting the addition on this counts.. 29. In the present case we notice that the Revenue has heavily relied upon the statements given by Rajendran and Anjaneya to support many of the additions 100 and the cross examination of these persons were not afforded as they had retracted and the revenue felt that it would not serve any purpose. The Revenue has however relied on these staements to frame the assessment. 30. We take note of the fact that the Hon’ble Apex Court in the case of Andaman Timber Industries vs Commissioner of Central Excise reported in 62 taxmann.com 3 (SC)(2015), have in para 6 of this judgement held as under: 6. According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guesswork as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. 31. The Apex Court has categorically held that not allowing cross examination of those witnesses, whose statements are relied upon to frame the assessment, is a serious flaw & makes the assessment a nullity in as much as it amounted to violation of principles of natural justice because of which the assesse is adversely affected. The Apex Court went onto hold that in view of the fact that cross 101 examination of the witnesses being not afforded, the testimony of these witnesses stand discredited.In view of the decision of the Apex Court in Andaman Timbers the statements of both Anjaneya and Rajendran stand discredited and have no value and cannot be relied upon to make any addition. Thus all thoseadditions, the AO has made on the basis of the statements of these two persons, have to be necessarily be deleted on this count also. 32. We also notice that the AO & the Learned CIT A have relied on two decisions of the Apex Court, namely (a) Sumati Dayal case reported in 80 taxmann 89(SC) (1995) & CIT vs Durga Prasad More reported in 82 ITR 540 (SC), to support the additions for the reason that what is apparent is not real & surrounding circumstances have to be considered while framing the assessment. These decisions would have been of help to the Revenue had the AO gathered corooborative evidence to demonstrate that additions are warranted in the hands of the assesse & not other persons who have claimed responsibility for the transactions. However since the AO has not brought on record any corroborative evidence, these decisions do not support the additions made in the hands of the assesse. The fact that notice u/s 153C is issued to Sunil Kumar Sharma & Sachin Narayan & protecteive additions are made in their cases, defeates the case of the Revenue. 33. Considering the facts & circumatances brought out above & the case laws relied upon, we delete all the additions made in item Nos.7 to 14 above. 102 Item No. 15 - Capital gain on transaction with M/s. Davanam Constructions Private Limited Rs. 103,36,94,904/- (Substantive addition) Item No.16 - Income from other sources on account of transaction with M/s. Davanam Constructions Rs. 104,97,55,888/- (Protective addition) 34. During the course of serach it found that the assesee is involved in land transactions with various parties. The assesee was asked to justify the documents found and assesse submitted reply. For the sake of convenience we are reproducing the Assessment Order which has been confirmed by the ld. CIT(A) which is as under:- "10.1 The following facts are noticed and found from the materials seized from the premise of the and other group cases and from the submissions filed during the course of t proceedings with respect to land transactions pertaining to CTS - 1, CTS -2 and and CTS - 1297. 1. On 17.9.2004, M/s Davanam Constructions Pvt Ltd has purchased land measuring 5,08,345 sq ft at CTS — 2 and 1,70,755 sq ft of land of CTS-1297 through an auction held by National Textiles Corporation Pvt Ltd. 2. It was submitted by DCPL that it had entered an unregistered agreement to sell 3,50,757 sq ft of land of CTS 2 to Sh D K Shivakumar for the consideration of Rs 25,51,75,718/- and 50,834 sq ft land for the consideration of Rs 3,69,82,099/- to Late Sh DK Kempegowda on 10.10.2004. 3. On 12.2.2005, DCPL has transferred 1,57,841 sq ft to Sh. DK Shivakumar by way of registered sale deed dt 13.02.2005. This sale deed talks about transfer of 1,57,841 sq ft of undivided share of land of CTS -2. The sale consideration of Rs.11,48,30,000 was mentioned in the said deed and also stated that it has already been paid. 103 4. Meanwhile on 29.07.2005, DCPL had relinquished 58,400 sq ft of land of CTS 2 by way of relinquishment deed to BBMP. It is to be noted as per this relinquishment deed that DCPL was the only signatory for the said deed whereas Sh D K Shivakumar was not a signatory. 5. On 9.9.2005, DCPL had entered into a sale deed and purchased land of 44,866 sq ft of CTS - 1 from Bhagyanagar Metals Pvt Ltd. This land is adjacent and is contiguous to that of CTS 2. 6. It was found from the books of accounts of DCPL that Sh D K Shivakumar and Sh D K Kempegowda had advanced Rs 42,54,93,887/- either directly by themselves or by any of advances paid by other parties to M/s Davanam Constructions Pvt Ltd initially and subsequently transferred to their accounts for the purchase of CTS 1,2 and 1297 by DCPL in the FY 2003-04 to 20O5-06. The details of source for the sale consideration as submitted by DCPL is as under: 7. Similar to CTS 2, DCPL also submitted that it had entered another unregistered movement to sell 30,958 sq ft of land of CTS 1 to Sh D K Shivakumar for the consideration of Rs 3,80,78,340/- and 4486 sq ft land for the consideration of RS 55,19,010/- to Late Sh D Kempegowda on 9.9.2005. 8. On 12.10.2005, DCPL along with Sh. DK Shivakumar and Sh. D K Kempegowda entered into a registered agreement with Sobha Developers PVt Ltd for development CTS -2 and CTS -1 in the sharing ratio of 45:55. In the said agreement Sh D K B¥mpegowda was also a signatory (even though he was not the owner of any parcel of land). it was mentioned in the agreement that all three parties ie D. K. Shivakumar and and D K Kempegowda are the land owners with 21%,69% and 10% respectively. It is to be mentioned here that as on the date of said agreements Sh. D K Shivakumar was the owner of 1,57,841 sq of CTS 2 by virtue of sale deed dt 12.02.2005 and not owner of CTS 1 and Sh D K Kempegowda was not owner of either CTS 2 or CTS 1 as on that date since there was no registered sale deed in his name. 9. Subsequently, on 21.02.2008 DCPL had relinquished 31,919 sq ft of land of CTS 1 by way of relinquishment deed to BBMP and 42,908 sq ft of CTR 2 by way of relinquishment deed to BDA vide release deed 2.01.2013. The fact to be noted here is that DCPL was the only signatory to the deed dated 21.02.2018 and Sh D K Shivakumar was signatory to the 2.10.2013 deed. Sobha Developers Ltd was not a signatory to both the deeds. 104 10. Thereafter on 15.03.2017 Sh DK Shivakumar and SA DK Suresh (L/H DK Kampegowda) had entered an unregistered memorandum of settlement with DCPL as per whi¢h it was claimed that Sh DK Shivakumar and DK Kempegowda had not entered into any sale agreements with DCPL for the purchase of land at CT5 1297, but they were entitled for entire land of CTS 1 and 2. As per this memorandum, it was agreed by all the three parties that the balance share of land owned by DCPL, In CTS 1 and 2 would be transferred to Sh. DK Shivakumar and Sh. DK Suresh (in the capacity of L/H of Kempegowda) and entire CTS 1297 would be held by DCPL. 11. Further, In the books of accounts of DCPL, 79% of land at CTS - 2 and 76% of land at CTS -1297 In AY 2005-06 and 79% of land at CTS - 1 in AY 2006- 07 was recognized as a sale and credited in its profit and loss account. The balance share of 21% of land at CTS 1 and 2 and 24% of land at CTS 1297 was recognized as capital asset in its fixed assets schedule. Subsequently 24% of land at CTS 1297 in the FY 2015-16 and 21% land of both CTS 1 and 2 on 15.03.2017 has been converted from fixed asset to stock in trade by DCPL in its books of accounts. 12. During the FY 2016-17 and 2017-18, the extent of land as mentioned below and by virtue of agreement dt 12.10.2005 entered by M/s Davanam Constructions Pvt Ltd, Sobha Developers Ltd and Sh D K Shivakumar and D K Kempegowda, the proportionate super built up area was also transferred to Sh. DK Shivakumar and Sh. DK Suresh (in the capacity of L/h D K Kempegowda) i. On 31.3.2017, 1. 18316.35 sqft of CTS -2 was transferred to Sh. DK Suresh ii. 582 sq ft of CTS -1 was transferred to Sh DK Suresh iii. 4020 sqft of CTS -1 was transferred to Dk Shivakumar On 12.4.2017, i. 1223.68 sq ft of CTS -1 was transferred to DK Shivakumar ii. 38,465 sq ft of CTS -2 was transferred to DK Shivakumar Details filed by the assessee as per his election affidavit in 2008 and 2013 10.2 Further. it is noticed from the election affidavits filed by Sh D K Shivakumar for the Karnataka Assembly Elections 2008 and 2013 that Sh D K Shivakumar had disclosed details & non-agricultural land to include extent of land at CTS 1,CTS 2 and CTS 1297 as under. 105 Details of non agricultural land filed by Mr. DK Shivakumar as per the election affidavit in the year 2008 are as under: i) CTS 2 in local area Gopalpura Bangalore Ramachandrapura 157841 sqft. ii) CT52 in local area Banagalore Ramachandrapura 192916 sqft. iii) CTS 1297 in locaI area Gopalpura Banagalore Okalipuram 117821 sqft. iv) CTS 1 local area Gopalpura Bangalore Okalipuram 30958 sqft. Details of non agricultural land filed by Mr.DK Shwakumar as per the election affidavit in the year 2013 are as under: As a registered owner on V-2 Land in Local area map No.56 of Gopalpura, Bengaluru, (Ramachandra Pura), Sy. No.CTS-2 No.19/2 (Map No.56), Total Area 1,57,841 sqft Purchase Date 2005-02-21, Purchase Cost 12,62,67,458/- As an Agreement holder on CTS -2 Land in Local Area Map No.56 of Gopalpura, Bengaluru (Ramachandra Pura), Sy.No. CTS-2 No.19/2 (Map No.56), Total Area 1,52,636 sqft Purchase Date 2004-10-10, Purchase Cost 10,90,87,662/- As a agreement holder on CTS-125 Land in Bengaluru (Oklipuram), SY.No.CTS- 1297 No.2/4 Total Area 117821 sqft Purchase Date 2004-09-17 Purchase Cost 8,59,63,514/-. CTS-1 Land in local area Map No.56, Gopalpura, Bengaluru (Oklipuram), Sy.No.CTS-1 No.19/11(Map No.56) Total Area 8935 sq.ft Purchase Date 2005- 09-09 Purchase Cost 1,09,90,050/- Details of transfer of land at CTS-I, CTS-2, CTS-1297 10.3 On perusal of the above stated facts, it is noticed that Initially the lands at CTS 1, CTS 2 and CTS 1297 were purchased by DCPL in its name. Details of transfer of the land during the period FY 2005-06 to 2017-18 as given below: 106 On 21.2.2005, 1,57,841 sq ft of CTS 2 to Sh D K Shlvakumar by way of registered sale deed. On 29.7.2005, 58,400 sq ft of CTS 2 to BBMP was relinquished by way of relinquishment deed signed by DCPL which is to be considered on behalf of DCPL for 40,263 sq ft. and Sh D K Shivakumar of 18,133 sq ft attributable to the proportion of his holding in CTS 2. On entering into agreement with M/s Sobha Developers Pvt Ltd on 12.10.2005, 55% of the balance share of land held by DCPL as on the date of agreement that is 3,10,241 sq ft, 1,70,632 sq fi of CTS-2 and 24,676 sq ft of CTS 1 is transferred to Sobha Developers Pvt Ltd. Similarly Sh D K Shivakumar had transferred 55% of balance land held by him as on the date of agreement, to the extent of 1,39,708 sq ft, 76,839 sq ft of CTS 2 land was transferred to M/s Sobha Developers Pvt Ltd. On 21.2.2008, 31,919 sq ft of CT5 1 was relinquished to BBMP by way of a relinquishment deed signed by DCPL only. On this, the proportion of area of 14,363 sq ft of CTS 1, pertaining to its own share and 17,555 sq ft of CTS-1 from the share belonging to M/s Sobha Developers Pvt Ltd to BBMP. On 2.1.2013, 41,908 sq ft of CTS 2 to BDA was relinquished by way of relinquishment deed signed by DCPL and Sh DK Shivakumar which is to be considered on behalf of DCPL for 13,313 sq ft, Sh D K Shivakumar of 5995 sq ft and M/s Sobha Developers Pvt Ltd of 23,599 sq ft on account of their respective holdings in CTS 2 as on 2.1.2013, considering the sale deed dt 12.02.2005 (whereby 1,57,841 sq ft of CTS-2 was sold to Sh D K Shivakumar) and also development agreement dt 12.10.2005. On 31.3.2017, an extent of land of 18316 sq ft of CTS 2 and 582 sq ft of CTS 1 was transferred to Sh D K Suresh. On 31.3.2017, 4020 sq ft of CTS 1 was transferred to Sh D K Shivakumar. On 12.4.2017, an extent of land of 38,465 sq ft of CTS 2 and 1223 sqft of CTS1 was transferred to Sh D K Shivakumar. Details of land remaining with respective parties after the transfer as discussed above 10.4 As per above transfer details, after 31,919 sq ft of land at CTS-1 was relinquished to BBMP, the entire balance land of CTS 1 had been transferred to M/s Sobha Developers Ltd which has possession of 7121 sq ft of land by virtue of development agreement dt 12.10.2005 while Sh D K Shivakumar has possession 107 of 5,243 sq ft of CTS-1 and Sh D K Suresh has possession of 582 sq ft of CTS-1 as on 12.04.2017 by virtue of sale deeds dt 31.03.2017 and 12.04.2017 . Similarly, it is seen that in CTS 2, M/s Sobha Developers Ltd has possession of 2,23,871 sq ft of land and Sh D K Shivakumar has possession of 95,338 sq ft and Sh D K Suresh has possession of 18,316 sq ft as on 12.04.2017, while 69,512 sq ft of land at CTS 2 is still owned by DCPL after considering all the above transfers. As per the unregistered supplementary agreement dt 4.4.2014 entered by DCPL, M/s Sobha Ltd, D K Shivakumar and D K Suresh, it was agreed that the land owners share of super built i i area is entire commercial portion of 7,11,734 sq ft and it was also mentioned that CTS 1 is taken out from the development agreement which was entered on 12.10.2005. It is to be noted that while the agreement dated 12.10.2005 is a registered one, the agreement dated 4.4.2014 is unregistered. However, by virtue of entering into a registered development agreement dt 12.10.2005 with M/s Sobha Developers Pvt Ltd, the possession of SSL of CTS 1 i.e., 7121 sq ft of land had been transferred to M/s Sobha Developers Pvt Ltd. Based on the above-mentioned facts related to the transactions of Sh D K Shivakumar with respect to the lands at CTS 1, CTS 2 and CTS 1297, the assessee was given an opportunity to show cause on the following vide this office letter dt 19.12.2019. The showcause notice is reproduced here below: 1) The land measuring 4020 sq ft in CTS-1 in FY 2o16-17 and 39,688 sq ft of CTS 1 and 2 in FY 2017-18 along with the right of proportionate super built up area by virtue of agreement dt 12.10.20505 and 4.4.2014 has been transferred to you by M/s Davanam Constructions Pvt. Ltd. It has been stated in the memorandum of settlement and respective sale deeds that you did not enter any agreement to sell for the land at CTS 1297 and entire land in CTS 1 and 2 belongs to you and your father. Whereas it is noted from the sale agreement dr 10.10.2004 and 9.9.2005 that these are for purchase of 3,50,757 and 30,958 sq ft only of CTS 2 and CTS 1 respectively from M/s Davanam Constructions Pvt Ltd for the consideration of Rs 25,51,75,718/- and Rs 3,80,78,340/- respectively. Further, you had mentioned in your election affidavit filed during Karnataka Assembly Elections 2008 and 2013 you are the agreement holder for the land of CTS 1297 108 of 117821 sq ft and shown as purchase cost of Rs 8,59,63,514/- wrt the sole agreement. 2) In this regard , please show cause as to why file provisions of Section 45 should not be invoked in your case as the land measuring 4020 sq ft in CTS-1 in FY 2016- 17 and 39688 sq ft of CTS 1 and 2 in FY 2017-18 along with the right of proportionate super built up area by virtue of agreement dt 12.10.2005 and 4.4.2014 has been transferred to you by M/s Davanam Constructions Pvt Ltd in lieu of you surrendering your rights over the purchase of land of CTS 1297 of 117821 sq ft which was acquired by making the payment of Rs 8,59,63,514/- as per the sale agreement as submitted In the election affidavit. 3) Please show cause as to why the guide line value of the land as on 31.03.2017 and 12.04.2017 along with cost of construction for the proportionate super built up area by virtue of agreement dt 12.10.2005 and 4.4.2014 corresponding to the land transferred should not be adapted as fair market value far the land transferred or 31.3.2017 and 12.04.2017 and taxed in the respective AYs. 4) Also please provide your working of capita/ gains with respect to the above. Observations on the reply of the assessee 10.7 The reply submitted by the assessee was considered but is not acceptable for the following reasons: 1. The assessee Sh D K Shivakumar claimed that he has acquired and purchased the entire property described as CTS 2 in accordance with the sale agreement dated 10.10.2004. The assessee had also claimed the entire property of CTS 2 was purchased by him and his father by virtue of sale agreement dated 10.10.2004 as per transfer within the meaning of Income Tax Act, 1961 and was also complete. Further, he has stated that this fact has been confirmed by DCPL in the memorandum of settlement dated 15.03.2017. 109 The assessee's claim is not correct both factually and legally. Agreement dated 10.10.2004 entered by Shri D K Shivakumar and Shri D K Kempegowda with DCPL for purchase of 3,50,757 sq ft and 50,834 sq ft of land at CTS 2 has been read thoroughly. It is clearly stated vide clause 8, that there is no possession given/handed over by DCPL to Shri D K Shivakumar and D K Kempegowda and it will be handed over at the time of registration of sale deed, whereas the memorandum of settlement dated 15.03.2017 states vide clause 11 Sh D K Shivakumar and D K Kempegowda was having the possession of both CTS 1 and 2 from 2005 onwards. This clearly shows that the assessee has given distorted facts so as to claim the said agreement dated 10.10.2004 and 9.9.2005 have given Sh D K Shivakumar and D K Kempegowda the possession of entire CTS 2 and 1 since 2005, whereas the said agreements clearly prove that, that was not the case. Further, DCPL was also a signatory in the development agreement dated 12.10.2005 entered by DCPL, D K Shivakumar, D K Kempegowda and M/s Shobha Developers Pvt Ltd which also shows that DCPL is also party to the agreement being the land owner for 21 per cent of land in both CTS 1 & 2. The assessee had also submitted that he was also the party to the relinquishment date dated 29.07.2005 even though he was not a signatory. Subsequently, the assessee had received TDR which was offered to tax in the subsequent years. This stand of the assessee clearly proves that the assessee had relinquished 18,133 sq ft of land at CTS 2. The balance land available with him as on 12.02.2005 was 1,39,708 sq ft only. The assessee has also submitted that the DCPL had reflected sum of Rs. 12,54,93,887/- initially as advance received from the assessee and his father and subsequently the entire consideration of Rs. 42,54,93,887/- has been declared as sale of land in its financials which shows that entire immovable property referred cs CTS 1 & 2 had been transferred to him. This is factually incorrect. DCPL in its books of accounts had shown the advances from D K Shivakumar, D K Kempegowda, M/s Sobha Developers Pvt Ltd and various other parties which were subsequently transferred to Shri D K Shivakumar and Shri D K Kempegowda at the time of recognizing the sales of 79% of land at CTS 2 and 76% of land at CTS1297 in FY 2004-05 and 79% of CTS 1 in the FY 2005-06. DCPL had recognized the sale of CTS 2 and CTS-1297 in the year 2004-05 and 110 CTS 1 in 2005-06. Further, DCPL had also kept its balance share of 21% of CTS 1 & 2 and 24% of CTS1297 in the fixed assets schedule which clearly shows that DCPL has recognized the sale of only 79% of CTS 1 & 2 and 76% of CTS-1297 to Shri D K Shivakumar and Shri D K Kempegowda by virtue of agreements dated 10.10.2004 and 09.09.2005. On going through the terms of these two said agreements dt 10.10.2004 and 9.9.2005, it is found that it is an unregistered agreement to sell 3,50,757 sq ft of land of CTS 2 to Sh D K Shivakumar for the consideration of Rs.25,51,75,718/- and 50,834 sq ft land for the consideration of Rs 3,69,82,099/- to Late Sh D K Kempegowda on 10.10.2004. As per clause 8 of this agreement, it is mentioned that the possession of the said property was not handed over to Sh D K Shivakumar and Late Sh D Kempegowda on the date of entering into agreement and it would be handed over at the time of registration of sale deed. Similarly, DCPL had entered into another unregistered agreement to sell 30,958 sq ft of land of CTS 1 to Sh D K Shivakumar for consideration of Rs 3,80,78,340/- and 4486 sq ft land for consideration of Rs 55,19,010/- to Late Sh D K Kempegowda on 9.9.2005. As per clause 8 of this agreement, it is also mentioned that the possession of the said property was not handed over to Sh D K Shivakumar and LateSh D Kempegowda on the date of entering into agreement and it would be handed over at the time of registration of sale deed. 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 111 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. 3. The assessee had claimed that he and his father had entered into the development agreement dated 12.10.2005 along with DCPL with M/s Sobha Developers Pvt Ltd since he and his father are the owners of CTS 1 & 2 by way of the said sale agreements. It is also found that as on 12.10.2005 Shri D K Kempegowda was not the owner of CTS 1 & 2 for the reason that he did not have any registered sale deed in favour of him executed by DCPL unlike Shri D K Shivakumar who had got the ownership of 1,57,841 sq ft of land at CTS 2 by way of a registered sale deed dated 12.02.2005. Whereas, the said agreements dated 10.10.2004 and 09.09.2005 clearIy shows that there was no possession handed over to Shri D K Shivakumar and Shri D K Kempegowda as on those dates. On these facts, the assessee cannot claim that his father was also an owner in CTS 1 & 2 by virtue of the said agreements. Whereas, DCPL had also entered as a land owner since the DCPL was holding 3,10,241 sq ft of CTS 2 land as on that date by virtue of the registered sale deed held by it. It confirms the stand that DCPL is owner of CTS 1 and 2 at the time of entering into development agreement dated 22.10.2005. The assessee had also relinquished on 02.01.2013, 5995 sq ft for his share and 7327 sq ft for the land transferred to M/s Sobha Ltd of CTS 2 from his balance share of 62868 sq ft and 76839 sq ft of 5596 of land being transferred to M/s Sobha Ltd at the time of entering into Development Agreement on 12.10.2005. After relinquishment to BDA on 02.01.2013 and Development Agreement on 12.10.2005, the assessee is holding 56,873 sq ft of land out of 1,57,841 sq ft which was transferred to him by DCPL on 12.02.2005 as on 02.01.2013. The assessee had also submitted that as per the memorandum of settlement dated 15.03.2017 entered into by the assessee, Shri D K Suresh and DCPL confirms that there was no agreement entered between the parties in relation to CTS 1297 and the entire CTS 1 & 2 are the absolute property belonging to him and his 112 brother, Shri D K Suresh (legal heir of Late Shri D K Kempegowda) and the CTS1297 is absolutely owned by DCPL. As per the terms of said memorandum of settlement, the entire CTS 1 & 2 belonged to him and his brother and in pursuant to the agreement prior to 31.03.2005 in which even the 21% in the said property was agreed to be sold to him and his brother and the consideration for the same was received through banking channels in 2003 & 2004. Further the assesse has submitted that the memorandum of settlement also states that the DCPL is only the title holder and the same will be transferred to the assessee, assessee's brother and the developer M/s Sobha Ltd. This claim of the assessee is in contrary to the terms of the agreement dated 10.10.2004 and 09.09.2005 which clearly states that Shri D K Shivakumar and Shri D K Kempegowda had entered an unregistered agreement for the purchase of proportionate area of 79% of CTS & 2 only. The claim of assessee that the balance 21% was agreed to sell to him or his father as per clause 5 the said memorandum of settlement was not existing in the said agreements dt 10.10.2004 and 9.9.2005 which again proves that Sh D K Shivakumar and D K Kempegowda was not intended to purchase entire CTS 1 and 7 in 2004 and 2005 as claimed later in 2017. The assessee has contended that he was not signatory in the Development Agreement entered by DCPL and M/s Pacific Heights for the development of land at CTSI297 which shows that he is not having any ownership or rights in CTS1297. This argument of the assessee does not hold good for the reason that since 17.09.2004 the DCPL is the owner of CTS1297 by virtue of sale deed entered with M/s NTC Ltd. The DCPL never transferred any of its ownership to Shri 0 K Shivakumar or his father, Shri D K Kempegowda as on the date of entering into Development Agreement with M/s Pacific Heights. DCPL has entered Development Agreement with M/s Pacific Heights as it is the whole owner of the land at CTSI297 as on the date. By considering this fact, the DCPL had rightly entered a development agreement with M/s Pacific Heights whereas the Sh D K Shivakumar and D K Kempegowda are not having any title deed in respect of land at CTS-1297 as on that date. Hence, claim of the assessee being non- signatory to CTS-1297 will not change the position of being having rights on CTS 1297. However, in contrary Shri D K Kempegowda, who was not the owner in CTS 1 & 2 as on 12.10.2005, had entered into a Development Agreement with 113 M/s Sobha Developers Pvt Ltd and on the said date he was only an agreement holder which was again an unregistered one. Shri D K Shivakumar had submitted that in the election affidavit filed for 2008 and 2013 Karnataka state assembly elections, he had mentioned 1,17,821 sq ft of immovable property at CTS1297 as an asset held by him. This was done as there was no clarity on the ideal ownership of the said land. Further, he had submitted that the amount of investment in the properties mentioned in the application is correct and there is mere error in the reference to the properties and a typo error in the election affidavit cannot decide the ownership of the property. Further, reiterated that there was no agreement for the purchase of any part of CTS1297. In this regard, it is worthwhile to see the Stents of election affidavit filed by Shri D k Shivakumar in the Karnataka state assembly elections 2008 and 2013. The following is the image of election affidavit filed by Shri D K Shivakumar: 8. The assessee also submitted that the CTS 1 has been deleted from the Development Agreement entered by DCPL, Shri D K Shivakumar, Shri D K Kempegowda with M/s Sobha Developers Pvt Ltd on 12.10.2005 by virtue of the supplementary agreement dated 04.04.2014. This supplementary agreement dated 04.04.2014 is an unregistered document whereas the registered Development Agreement dated 12.10.2005 vide schedule in page no 97 and 98 clearly mentions that both land at CTS 1 & 2 were put jointly by DCPL and Shri D K Shivakumar for the development by M/s Sobha Developers Pvt Ltd. It is also a fact that the CTS 1 land is in the corner and 31,919 sq ft out of 44,866 sq ft was relinquished to BBMP on 21.02.008, that is, after the development agreement was entered by DCPL and Shri D K Shivakumar. After this relinquishment, it is only 12,947 sq ft left. By virtue of Development Agreement dated 12.10.2005, 55% of possession ie 7121 sq ft has been handed over to M/s Sobha Developers Pvt Ltd and it is left with and the balance 5,827 sq ft of CTS 1 was also transferred to Shri D K Shivakumar and D K Suresh in 2016- 17 and 2017-18. Further, the claim of the assessee that CTS 1 is not a part of joint development cannot be accepted for the reason that the land at CTS 1 is also mentioned in the Schedule of property put for development by the developer. Later the supplementary development agreement dt 4.4.2014 which is an unregistered document. This document cannot take away the transfer that has happened by way development agreement dt 12.10.2005. Hence, for the purpose of 114 development of the property it considered that both CTS 1 and 2 were put for development by Sh D K Shivakumar and DCPL. Further, the sale agreement entered by M/s Sobha Ltd with its buyers of residential apartments also states that the said property Sobha Indraprastha is being constructed in CTS 2, where as the entire development ie., both commercial and residential portions are constructed involving both CTS 1 and 2 by virtue of development agreement dt 12.10.2005. The assessee's claim that CTS 1 was deleted by entering into unregistered supplementary development agreement dt 4.4.2014 cannot be accepted. 9. Another major claim of the assessee is that the registered sale deeds for the undivided interest in the share of land in CTS 2 transferred by DCPL to Shri D K Shivakumar is nothing but in pursuant of memorandum of settlement dated 15.03.2017 and this is part of the 21°4 of the balance land in CTS 2 for which payments have been made way back in 2005. In respect of the CTS 1 land transferred to the assessee and Shri D K Suresh was nothing but it is registration pursuant to the agreement entered on 09.09.2005 as the registration has not taken place and the same was executed in 2016-17 & 2017-18. Further, the assessee also contended that as per the sale deeds dated 31.03.2017 and 12.04.2017 there is no mention about the proportionate super- built up area was transferred. These arguments of the assessee cannot be accepted for the reason that the memorandum of settlement dated 15.03.2017 is a unregistered document in which it was mentioned that Shri D K Shivakumar and D K Kempegowda had owned entire land in CTS 1 & 2 and taken the possession of the entire property as per the said agreements since 3005. Whereas the agreement dated 10.10.2004 and 09.08.2005, clearly mentions that the DCPL did not hand over the possession of CTS 1 and 2 to the assessee and his father as on date of entering into said agreements, whereas the memorandum of settlement states that the said agreements had given the possession to them which is factually not correct. For the reasons stated above, it is considered that Sh D K Shivakuamar had rights for 117821 sq ft and Shri D K Kempegowda had rights for 11953 sq ft of CTS 1297 as on 31.3.2017. Hence, the assessee's claim that in pursuant of memorandum of settlement deed he had received 38,465 sq ft of CTS 2 cannot be accepted. 115 Further, the assessee also claimed that 5243 sq ft of CTS 1 on 31.03.2017 and 12.04.2017 in pursuant to that of agreement entered dated 09.09.2005. This claim of the assessee also cannot accepted for the reason that Sh D K Shivakumar and D K Kempegowda had rights over 129774 sq ft of land in CTS 1297 which was relinquished and In exchange 62606 sq ft of land at CTS 1 and 2 was received by both Sh D K Shivakumar and D K Suresh(L/H of Late D K Kempegowda). The same is brought to tax under section 45(1) of Income Tax Act 1961. Since the total area relinquished by Sh D K Shivakumar and D K Kempegowda had rights over 1,29,774 sq ft of land in CTS 1297 is more than land area received in exchange in CTS 1 and 2, the entire land of 62,606 sq ft of land is considered as the land exchanged for computation of LTCG in the hands of both assessees. The claim of assessee that CTS 1 4020 sq ft in AY 2017-18 and 1223 sq ft in AY 2018-19 was transferred wrt to sale agreement dt 9.9.2005 was not accepted. The main contention of the assessee is that the assessee had received only the undivided share of land in 2016-17 and 2017-18 whereas there is no super built- up area being transferred in both the sale deeds dated 31.03.2017 and 12.04.2017. This argument is without any basis for the reason that the assessee along with DCPL had entered into a Development Agreement of 12.10.2005 as land owners, by virtue of this Development Agreement, the land of CTS 2 & 1 had been Put for the development of the land into a built-up area which will be shared at the ratio of 55% for developer and 45% for the land owners. Subsequent to this agreement in 2005, the developer had commenced its constructions into two plots, that is, commercial mall and residential units in the name of Global Mall and Sobha lndraprastha respectively. In 2017, almost the entire construction was nearing the completion and when the undivided share of land was transferred, it also goes along with the proportionate built-up area since the super built-up structure has already been standing on the land which was transferred by way of registered sale deed. It cannot be right to say it is only the undivided share of land owned by DCPL was transferred and not along with the super built-up area. When the undivided share of land was transferred by DCPL to Shri D K Shivakumar and D K Suresh (L/H D K Kempegowda) the right for the proportionate built-up area to the land was also transferred by DCPL. Hence, it is considered that Shri D K Shivakumar had received 4020 sq ft of CTS 1 in AY 2017- 18 and 38,465 sq ft of CTS 2 and 1223 sq ft of CTS 1 in AY 2018-19 along with proportionate built up area along with Sh. D K Suresh(L/H D K Kempegowda) of 1,8316 sq ft of land of CTS 2 and 582 sq ft of CTS 1 in AY 2017-18. 116 Transaction entered by way of unregistered documents are not held to be in the nature of transfer 10.7 The following reliance is placed in relation with transaction entered by way of unregistered documents which the assesses sh D K Shivakumar and D K Suresh and DCPL bad entered with respect to the properties at CTS 1, CTS 2 and CTS 1297. Hon'ble Supreme Court of India in the case of CIT V. Balbir Singh Maini (2017) 86 Taxmann.com 94 has held as follows: "It is also well-settled by this Court that the protection provided under Section 53A is only a shield, and can only be resorted to as a right of defence. RambhauNamdeoGajre v. Narayan BapujiDhgotra [2004) 8 SCC 614 , para 10. An agreement of sale which fulfilled the ingredients of Section 53A was not required to be executed through a registered instrument. This position was changed by the Registration and Other Related Laws (Amendment) Act, 2001. Amendments were made simultaneously in Section 53A of the Transfer of Property Act and Sections 17 and 49 of the Indian Registration Act. By the aforesaid amendment, the words "the contract, though required to be registered, has not been registered, or” in Section 53A of the 1882 Act have been omitted. Simultaneously, Sections 17 and 49 of the 1908 Act have been amended, clarifying that unless the document containing the contract to transfer for consideration any immovable property (for the purpose of Section 53A of 1882 Act) is registered, it shall not have any effect in law, other than being received as evidence of a contract in a suit for specific performance or as evidence of any collateral transaction not required to be effected by a registered instrument. Section 17(IA) and Section 49 of the Registration Act, 1908 Act, as amended, read thus:………… ” The Hon'ble Supreme Court has relied on the following provision of section 17(1)(A) introduced in the Registration Act, of 1908 to hold that, unless the agreement in respect of immovable property is registered, the provlslons of section 53A of Transfer of Property Act cannot be invoked. 117 10.8 Further, it Is also pertinent to look Into the provisions of 17(1A) of Registration Act, 1908 reads as follows: The documents containing contracts to transfer for consideration, any immovable property for the purpose of section 53A of the Transfer of Property Act, 1882 (4 of 1882) shall be registered if they have been executed on or after the commencement of the Registration and Other related laws (Amendment) Act, 2001 (48 of 2001) and if such documents are not registered on or after such commencement, then, the' shall have no effect for the purposes of the said section 53A. In the light of the above findings, the position of law is that, unless a document is registered, the transfer as contemplated U/s.2(47) of the Income Tax Act r.w.s 53A of the Transfer of Property Act cannot be presumed. 10.9 In the instant case, the Agreements to sale dated 10.10.2004 and 9.9.2005, the supplementary JDA entered into with Sobha dated 4.4.2014 and most importantly the Memorandum of Settlement dated 15.3.2017 are all unregistered. It cannot be held that land has been transferred vide unregistered agreement to sale as per the discussion above. Memorandum of settlement is an act of afterthought and is self serving in nature 10.11 It is pertinent to mention here that the entering for Memorandum of Settlement vide MOS dated: 15-03-2017 is an act of afterthought and is self serving both Sh DK Shivakumar and SH DK Suresh and DCPL. The same has been created without any basis, proper documents or records with distorted facts. This fact is clearly evident from the page No.35, 34 and 33 of the impounded material marked as DKS/P11/1 found and impounded during the course of survey u/s 133A of the I.T. Act conducted at the Residence of Sri.N.Chandrashekar at No.8, 2“ Cross, S" Cross Road, K block, Lower Palace Arcade, Sadashivanagar, Bangalore on 04-08-2017. The page No. 33 to 35 are reproduced below wherein the comments and discussion are recorded before drafting the memorandum of settlement agreement by the parties involved. It is also discussed in the said pages that some adjustment documents are created just 118 to avoid the Stamp duty and huge implications income and lokayuktha prospective and applicability of Benami Transactions (Prohibition) Act. As seen in Note 4 in page 34 of the above seized material it is seen that, a suggestion has been made by on Kusuma Muniraju, advocate to partition and settlement deed in order to transfer 152621 sq ft to Mr. DK Shivakumar in pursuance of agreement dated 10.10.2004. It has been further mentioned that to call it a "settlement, there should be a dispute/case pending before the court of Ian’ and now arbitration route is adopted for out of court settlement.’ Further, in Part IV of the above document comments are made on Income Tax Matters. Here, the terms of settlement of dispute have been mentioned. The terms of settlement are as follows: DCPL shall transfer to Mr. DK Shivakumar its rights in entirety over the undivided share in land and developed area as per JDA with Sobha in respect of Sobha Global Malls to DKS. Mr.DK Shivakumar shall transfer / relinquish his rights in property in CTS 1297 and CTS 1 Khatha 19/11 Two important points emerge from a reading of this section of the document. They are: 1) The fact that Mr. DK Shivakumar had rights over CTS - 1297 has been further substantiated as per this document also. This is again in direct contrast to what Mr. DK Shivakumar presently claims. 2) The fact that superbuilt-up area or developed area has also been transferred by virtue of JDA along with undivided share of land is once again substantiated. Therefore the claims made by Mr. D. K. Shivakumar that if only the land and not the superbuiltup area that is transferred, is not acceptable on this account also. Page No. 73 to 79 of Seized material A/DVS/1 which are reproduced below which be various options and methods of calculation adopted to calculate possible tax liability if the said income is offered as business income or as capital gains. 119 The above sheets show that different options were being explored in order to evade taxes. A small example of this can be seen by comparing 'Option 1A' and 'Option 2A' where the difference in tax liability is arrived at Rs.55,76,883 as per 'Option 2A' while the tax liability as per 'Option 1A' is Rs.1,24,70,041. All these evidences show that there has been effort to evade taxes by the parties concerned in this transaction. Further it is also necessary to look into the judgement of the Hon‘ble Supreme Court of India in the case of CIT v. Durga Prasad More lv 82 ITR 540 (SC) where it has been held as follows: “It Is true that an apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real. Party who relies on a recital In a deed has to establish the truth of those recitals, other wise it will be very easy to make self-serving statements in documents either executed or taken by a party and rely on those recitals. if all that an assessee who wants to evade tax is to have some recitals made in a document either executed by him or executed in his favour then the door will be left wide open to evade tax. A little probing was sufficient in the present case to show that the apparent was not the real. The taxing authorities were not required to put on blinkers while looking at the documents produced before Item. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in those documents." In the instant case, the assessee Mr. DK Shivakumar has entered into a Memorandum of Settlement and as per the recital of this Memorandum of Settlement, it Is clearly seen that the intention has been to evade taxes. Probing imo available documents in this case and looking at the scenario and circumstance in all its entirety and after thoroughly analyzing all pieces of evidences, books of accounts and other available details, brings one to the irrefutable conclusion that this document that is termed as Memorandum of Settlement dated 15.3.2017 is self-serving in nature and is in the nature of an afterthought. 120 In the Instant case on perusal of the finer details of the unregistered agreement to Sale dated 10.10.2004 and 9.9.2005 entered into by the assessee Mr. DK Shivakumar with DCPL and also by Mr. DK Kempegowda with DCPL, sale deed dated 21.2.2005, analysis of how these entries are recorded in the books of DCPL, the terms and conditions of the Agreement dated 12.10.2005 between Sobha Developers Ltd with the three parties DCPL, Mr. DK Shivakumar and Mr, DK Kempegowda followed by the unregistered supplementary JDA dated 4.4.2014, the relinquishment deeds signed with BBMP and BDA, the details of non- agricultural properties held by the assessee Mr. DK Shivakumar, sale deeds dated 31.3.2017 and 12.4.2017 entered into by DCPL with Mr. DK Shivakumar and with Mr. DK Suresh and also the sale deeds entered into by M/s Sobha Developers Pvt Ltd with customers, it is clearly and irrefutably proved that the contents of the Memorandum of Settlement is a colourable device fabricated in order to evade taxes. Further, as per the decision of the Hon'ble ITAT, Ahmedabad Bench in 71 ITD 95, in the case of Income-tax Officer Vs. Skyjet Aviation (P.) Ltd. It has been held that material that is self-serving cannot be given weightage. In the instant case, it is clearly established that this Memorandum of Settlement is a self-serving document tailor made for evasion of taxes. As per this Memorandum of Settlement, the benefit with respect to Income Tax matters accrues to all three parties involved. The same is established as seen from the contents of the seized material as shown above. Therefore, the contents of this self-serving document is not considered as valid. This Memorandum of Settlement is not a registered document and the same has been executed for mutual benefit and to evade taxes and violate provisions of Income Tax Act and other acts between M/s.DCPL and Mr.D. K. Shivakumar and Mr. D. K. Suresh. 121 10.8 Further, as per 20 taxmann.com 430, the Hon'ble High Court of Karnataka in the case of Commissioner of Income Tax v. H Anil Kumar has held as follows: "The word ’capital asset‘ means property of any kind held by the assessee which does not necessarily be confined to on Immovable property. Similarly, when the word ’transfer' in relation to a capital asset though includes sale, exchange or relinquishment of the asset, the said asset need not necessarily be an immovable property. It has been held that the amount received for giving up the right of specific performance i.e., to give up right in a capital asset constitutes capital gains." In the instant case, the assessee has relinquished his rights over his share of property in CTS — 1297 as already established as per the elaborate discussion in the above paragraphs. Therefore, there is an incidence of applicability of capital gains in the instant case for the AY 2017-18 and AY 2018-19." 35. From the Assessment Order we noted that the AO observed that the assessee gave up his right in the property at CTS 1297 in exchange for acquiring a right in the property at CTS I and II.The assessee did not have any right on 21% of the Property at CTS I and II, held by DCPL. This is proved by the fact that the statement of assets of the assessee, filed by the assessee himself with various statutory authorities, clearly shows that the assessee himself admits that he has no right in 21% of the property at CTS I and II, which is held by DCPL.There is no registered agreement in writing which confers right on 21% of the Property at CTS I and II, held by DCPL, to the assessee, as claimed by the assessee. Further the assessee and his family members do have a right in 79% of the property at CTS 1297, which is also held by DCPL. This is also proved by the fact that the statement of assets of the assessee, filed by the assessee himself with various statutory authorities, clearly shows that the assessee himself admits 122 that he has no right in 69 % of the property at CTS 1297,and that the HUF has right in 10% of the same property, which is also held by DCPL. The MOU dated 15/03/2017, has been made with the sole purpose to avoid taxes. The content of the MOU, which states that the assessee had possession of the entire property at CTS I and II, ever since 10/10/2004 and 09/09/2005, is not supported by any registered document to support the same. The agreements dated 10/10/2004 and 09/09/2005, relied upon by the assessee clearly state that possession will be transferred when the Sale Deed is executed. 36. Further the conduct of the assessee and that of DCPL ever since 09/09/2005, till the MOU is signed on 15/03/2017, clearly proves the case of the revenue and disproves the case of the assessee.The AO is absolutely correct in treating the transaction entered into between the assessee and DCPL as a transaction of exchange and not as a reconfirmation of a position which has all along existed since 10/10/2004 and 09/09/2005, as falsely stated in the said MOU and as claimed by the assessee. Further the Development agreement entered into between DCPL, the assessee and the HUF with Shobha Developers Ltd, dated 12/10/2005, clearly supports the stand of the AO.The contention of the assessee that he did not enter as a party in the development agreement, dated 06/11/2014, between DCPL and M/s Pacific Heights, to develop the property at CTS 1297, was on account of the fact that he had no rights in any portion of the property at CTS 1297, is not correct in as much as there was no document giving him any rights in the same and the entire property being in the name of DCPL, the assessee and his HUF could not have been made parties to the said agreement. 123 37. The transaction of exchange will definitely attract the provisions of section 45 of the Income Tax Act, wherein the difference in the value of the properties exchanged will have to be decided and the amount gained by the assessee in this exchange i.e. getting a property of a higher value than the one ceded in exchange, will be subjected to Capital Gains Tax and taxed in accordance with the provisions of Income Tax Act, which govern the exchange.The stand of the Revenue is that this transaction is primarily a transaction of exchange, which attracts Income From Long Term Capital Gain u/s 45(1) of the Act and the AO has worked Income from Long Term Capital Gain of Rs.103,36,94,904/-, based on certain parameters and has made substantive addition of the same. 38. In the alternative, the AO states that in the event the transaction is not held to be one of an exchange, then income from the same has to be taxed u/s 56/(2)(vii)(b)/56 (2) (x) of the Act, as Income from Other Sources and has accordingly quantified a sum of Rs. 104,97,55,888/- based on certain parameters and has made protective addition of the same. 39. The learned ARsubmitted written synopsis & relevant submissions are as under: "The assessee has not entered into any transaction of exchange with DCPL, as alleged by the AO. The AO is wrong in treating this as a transaction of exchange and the same is based only upon pure suspicion and surmise and not on any facts.The registered sale deeds only conferred transfer of title and not transfer as contemplated u/s. 2(47) of the Income tax act as the entire sale consideration was paid and possession was transferred to the 124 assessee as at the date of sale agreement as confirmed in the registered agreement dated 12.10.2005, memorandum of settlement dated 15.03.2017 and registered sale deed dated 31.03.2017 and 12.04.2017.M/s. Davanam Constructions Private Limited had recognised the sale and had declared the entire sale consideration of Rs. 42,54,93,887/-, paid by the assessee and his father, as income in the F.Y. 2004-05 and 2005-06. It is further relevant to note that the said years were all re-opened u/s. 147 and the return of income of M/s. Davanam Constructions Private Limited had been accepted in the Assessment Order.It is also relevant to note that M/s. Davanam constructions private limited had entered into development agreement with M/s. Pacific Heights to develop the property CTS 1297 vide registered agreement dated 06.11.2014 and in the recitals of said registered development agreement M/s. Davanam Constructions Private Limited have represented that they were absolute owners of CTS-1297. It is very important to point out that the assessee is not a party to this agreement which also demonstrates that he had no right in CTS – 1297. The assessee has always believed and stated that there is no agreement or any other document which was entered into with respect to CTS 1297 and accordingly he does not have any right over the property CTS 1297. The stand of the assessee that he has no right in the property CTS 1297 and the assertion of Davanam Constructions Private Limited in the development agreement dated 06.11.2014 with Pacific heights clearly indicates that Davanam Constructions Private Limited have agreed that they are the owners of CTS 1297 much before the memorandum of settlement dated 15.03.2017.The assessing officer on the one hand says that the unregistered agreement dated 10.10.2004 and 09.09.2005 does not confer ownership to the assessee as the agreements are not registered and on the other hand he 125 takes the contention that the assessee has relinquished his right over his share of property CTS-1297 which is absurd. It can also be noted that even in the registered joint development agreement dated 06.11.2014 entered into between M/s. Davanam Constructions Private Limited and M/s. Pacific heights has no mention of any such sale agreement entered into between the assessee and M/s. Davanam Constructions Private Limited. The assessing officer in para 6 of the Order has stated that Davanam Constructions Private Limited have rightfully entered into development agreement with Pacific Heights as they were the title holders and the assessee did not have any title in respect of the land CTS 1297 then where is the question of relinquishing the title or right when as per the assessing officer’s own finding that the assessee did not have any.It is an undisputed fact that Davanam Constructions Pvt Ltd is the owner of 39688 sft. of land as well as the entire land at CTS 1297. The Title Deeds are in the name of DCPL. There is no agreement to show that the assessee had 79% right in lands at CTS1297. The question of exchange of properties between the assessee and DCPL does not arise at all and what has actually happened is that the assessee got 39688 sft. of land at CTS1and2 registered in his name in the A.Y. 2018-19, pursuant to the MOU dated 15/03/2017. It is a settled proposition in law that one cannot relinquish any property without having title to the same. In this case the assessee did not have any right whatsoever in CTS 1297 for him to relinquish the same thereof. Accordingly, it is evident that there was no exchange between the assessee and DCPL and that a Sale Deed was registered in favour of the assessee by DCPL in consideration against the advance received by it in 2005 from the assessee. The assessee has not given anything in exchange for the same , except the advance paid by him in 2005, which is an admitted fact. 126 Further income, if any , arising out of this transaction has to be assessed in accordance with section 50C of the Act and not u/s 50D as erroneously done by the AO. Section 50D will come into play only when it is not possible to determine the value of the transaction and not otherwise. In this case the value of the land registered in favour of the assessee by DCPL, has been subjected to a valuation by the District