SHRI KAMTA PRASAD DWIVEDI,BHOPAL vs. THE ACIT 1(1), BHOPAL

आदेश / O R D E R

PER KUL BHARAT, J.M.: These five appeals pertaining to the assessment

years 2004-05, 2007-08, 2008-09, 2009-10 & 2010-

11 on behalf of the assessee against the order of Ld.

CIT(A)-2, Bhopal dated 9.6.2016. All the appeals

were taken up together and are being disposed off by

way of a consolidated order for the sake of

convenience.

wherein the assessee has raised following grounds of

appeal:

against conformation of addition of Rs.1 lakh. Facts

in brief are that a search action was carried out by 2

the revenue in the group of Shri Pushpendra Mishra.

The premises of the assessee was also searched.

The A.O. issued notice u/s 153A of the Income Tax

Act, 1961 (hereinafter called as ‘the Act’). In

response thereto, the assessee stated that the return

filed originally may be treated as the return filed in

response to the notice u/s 153A of the Act. The A.O.

thereafter, proceeded to make assessment u/s 153A

r.w.s. 153(3) of the Act. The A.O. while framing the

assessment did not accept the cash flow statement

furnished by the assessee and proceeded to make

addition of Rs.1 lakh. Against this, the assessee

preferred an appeal before the Ld. CIT(A), who also

sustained the addition. Now the assessee is in

appeal before this Tribunal. Ld. Counsel for the

assessee submitted that the A.O. and the Ld. CIT(A)

failed to appreciate the facts in right perspective.

He submitted that the addition so sustained was not

made on the basis of any incriminating material. It

was merely on the basis of not accepting the cash

flow statement. Ld. Counsel submitted that the

assessee is a Government employee and it cannot be

in iota of imagination that he was not saving any

amount. He submitted that the amount so declared

as on 1.4.2003 was out of the past savings. The

A.O. thus without any basis made addition.

authorities below and submitted that the assessee

has been changing his stand in respect of the cash

found during the search.

the materials available on record and gone through

the orders of the authorities below. So far, the

contention of the assessee in respect of the cash

found during the search, it was stated that the

amount has been taken from Shri Anirudh Dwivedi,

Krishna Dwivedi, Ganesh Prasad Dwivedi, the

assessee and his wife. For the sake of clarity, the

finding of the A.O. is as under:

“8. During the assessment proceedings the assessee has submitted the cash flow statement of the assessee starting from 01.04.2003. The opening cash balance as on 01.04.2003 has been shown to be Rs.1,00,000/-. No explanation about the source of which has been given by the assessee. It is important to mention here that during this time the assessee had bank accounts to keep any extra cash if any available with him in the bank accounts. In fact the assessee seems to be hand to mouth entity as the cash balance in the bank account was never substantial. Further, the sources of income of the assessee around 1.4.2003 do not in any way justify the cash balance of Rs.1,00,000/- w2ith the assessee. For example the total income of assessee for F.Y. 2003-04 is Rs.1,16,929/- only. In fact, it is this opening cash balance on the basis of which the assessee had tried to justify the various expenses made by it. Therefore, the opening cash balance of Rs.1,00,000/- with the assessee remains unexplained and is added to the total income of the assessee for the A.Y. 2004-05. Penalty proceedings u/s 271(1)(c) are also initiated for furnishing inaccurate particulars of the income for the A.Y. 2004-05. 8.1 On perusal of the cash flow statement submitted by the assessee it is found that the opening cash balance of Rs.1,00,000/- as on 1.4.2003 gradually increased to Rs.4,36,000/- as on 1.4.2004 which further increased to Rs.4,15,000/- as on 1.4.2005 which increased to Rs.5,00,000/- as on 31.3.2006 which further increased to Rs.5,25,000/- as on 31.3.2007. The utilisation of the cash balance started taking place in F.Y. 2007-08 only. During this year cash of Rs.3,15,000/- was paid to Akshya Shakti Shiksha Samanj Evam Kalyan Samiti on 3.11.2007. Besides this payments of Rs.39,500/- and 30,000/- were made to Adunik Grih Nirman Samiti on 28.7.2007 and 17.3.2008 respectively. This reduced the cash

balance as on 1.4.2008 to Rs.1,27,118/-. Finally, the closing balance as on 31.3.2010 was shown to be Rs.30,508/-.

8.2. This cash flow statement of the assesee has to be seen in the light of the following facts:-

8.3 Therefore, in view of the above facts and circumstances it is established and held that the cash flow statement submitted by the assessee is nothing but a self serving document and therefore deserves to be rejected. On detailed examination of the cash flow statement of the assessee it is apparent that for the following expenses/payments there is no identifiable source to generate such cash in the hands of the assessee. Therefore, the source of following cash expenses made by the assessee remains unexplained.

Sl.No. Date Amount Purpose 1. 05.12.2006 42,488 Plot booking in Adhunik Griha Nirman Samiti 2. 05.03.2007 31,500 Plot booking in Adhunik Grha Nirman Samiti 3. 18.06.2007 18,000 Plot booking in Adhunik Grha Nirman Samiti 4. 28.07.2007 39,500 Plot booking in Adhunik Grha Nirman Samiti 5. 03.11.2007 3,15,000 Paid to Akshya Shakti Shiksha Evam Samaj Kalyan Samiti Bhopal in cash 6 17.03.2008 30,000 Plot booking in Adhunik Grha Nirman Samiti

8.4 Therefore, these amount represent unexplained investments by the assessee and the same are hereby added to the total income of the assessee for respective assessment years. A summary of the year wise addition made to the income of the assessee is as under:

Assessment year Amount (in Rs.) 2007-08 73,988/- 2008-09 4,02,500/-

clear that the same is more on presumption than on any

incriminating material. It is undisputed fact that the

assessee has been working in a Government department

for a long period of time, therefore, it cannot be presumed

that he was not having any cash on hand. In our view,

Rs.1 lakh as claimed by the assessee is reasonable as a

cash on hand as on 1.4.2003. We hold accordingly. This

ground of the assessee is allowed.

to the assessment year 2007-08. The assessee has raised

following grounds of appeal:

addition of Rs.73,988/-. Ld. Counsel for the assessee

reiterated the submissions as made in the written

submissions. The submissions of the assessee are

reproduced as under:

A.Y.2007-08

A.O. has made addition of Rs 73,988/- during this year on account of payment made to Adhunik Grah Nirman Samiti for booking of plot without finding any incrementing material during the search; Even A.O has not mentioned that such addition is based on any incrementing material during the search. It is submitted that no material in respect to such investment / payment was found during the search.

Your kind attention is drawn to judgement of honourable bench Indore in case of:- "Anant Steel Pvt.Ltd. vis Asstt. Commissioner of Income Tax (2016)28 ITJ 47 (Trib.slndare) in the ITAT, where it was held that "It was decided that Uls. 153A to 153C Of Income tax Act 1961- No incriminating Documents found and seized during search. An Additions were made in assessment uls 153A - Assessee challenged that order - HELD - In dy. CIT v. Kalani Brothers(Indore) Pvt. Ltd.,(2016) 27 ITJ 286 (TRIB. - Indore this issue has been decided that in absence of any Incriminating material or documents seized during the course of search, the AO cannot pass order uls 153A rlw Section 143(3) - Following that decision it has been held that in absence of any incriminating document found and seized during the course of search, the AO is not justify in making the addition in non abated assessment order while passing the order uls 153A rlw Section 143(3)" Your Kind Attention is also drawn in Judgements of ACIT:-

The only reason given for making such addition as unexplained expenditure is that the cash flow statement furnished by the appellant is not acceptable by A.O. for following reasons-

Here we submit that the contention of A.O. cannot be accepted for following reasons-

In the given case, cash flow statement for the appellant and his wife were submitted and various receipts and payments were duly disclosed and not even a single defect was found by A.O. in such cash flow. 2. The second reason given by A.O. is that the assessee did not file his return of income regularly, is incorrect, as he was regularly filing the return of income and copy of such return of income were furnished before the A.O. vide reply to questionnaire dated 25109/2011.

7.The findings of A.O. that cash flow statement do not show any withdrawals for household expenses is again factually incorrect as the cash flow statement clearly shows the household expenses withdrawals. Even the.cash flow statement of his wife furnished during assessment proceeding also shows all the household withdrawals and details of household were duly given in Assessment proceedings also.

Therefore, finding of A.O. to reject the cash flow statement furnished during. the assessment proceedings is merely a suspicion and surmise and there is no cogent material or finding to reject cash flow statement. Consequently the additions are not sustainable and may please be set aside.

The Ld. A.R. submitted that the addition has been made

not on the basis of any incriminating material found during

the course of search but it is on the basis of rejecting the

claim of the assessee of cash on hand.

material available on record and gone through the orders of

the authorities below. Ld. A.R. has placed reliance on the

decision of coordinate bench in the case of Anant Steel Pvt.

Ltd. Vs. ACIT (2016) 28 TTJ 47 and judgement of the

Hon'ble Delhi High Court in the case CIT (Central)-III Vs.

Kabul Chawala (2015) 61 Taxmann.comn 412. Ld. D.R.

could not controvert the submissions of the assessee that

no incriminating material was found. Moreover, we find

that the addition is sustained merely on the basis of the

presumption. We therefore, direct the A.O. to delete this

addition.

pertaining to the assessment year 2008-09. The assessee

has raised following grounds of appeal:

addition of Rs.3,15,000/- and Rs.87,500/-. Ld. Counsel

for the assessee reiterated the submissions as made in the

written submissions. The submissions of the assessee are

already reproduced in para 8 above in the case of IT(SS)A

No.183/Ind/2016.

submissions. The Ld. A.R. submitted that the addition has

been made not on the basis of any incriminating material

found during the course of search but it is on the basis of

rejecting the claim of the assessee of cash on hand.

material available on record and gone through the orders of

the authorities below. Ld. A.R. has placed reliance on the

decision of coordinate bench in the case of Anant Steel Pvt.

Ltd. Vs. ACIT (2016) 28 TTJ 47 and judgement of the

Hon'ble Delhi High Court in the case CIT (Central)-III Vs.

Kabul Chawala (2015) 61 Taxmann.comn 412. Ld. A.R.

could not controvert the submissions of the assessee that

no incriminating material was found. Moreover, we find

that the addition is sustained merely on the basis of the

presumption. We therefore, direct the A.O. to delete this

addition.

pertaining to the assessment year 2009-10. The assessee

has raised following grounds of appeal: 14

the addition of Rs.2,00,000/-. Ld. Counsel for the assessee

reiterated the submissions as made in the written

submissions. The submissions of the assessee are

reproduced as under:

For 2009-10: Addition of Rs 2,00,0001- is made on basis of some loose papers found in premises of Shri KK Sharma (These papers were not found in the premises of Appellant). The A.O. himself has given a finding that sum ofRs 2,00,0001- was paid by Mis Akshay Shakti Shiksha Evam Samaj Kalyan Samiti to the appellant in January 2009. Since, this payment is claimed to be made by the society, it is for them, to prove that such payment was made to the appellant on account of any income assessable in the hands of appellant. It is also very clear that A.O. does not have any evidence or material to prove that any such income was earned by the appellant. In fact A.O. was not even able to trace that the amount of Rs 2,00,0001- has actually travelled to assessee and no evidence during the search was found to that affect. Even A.O. has failed to assign any motive for receiving such payment on part of appellant. A.O. has made this addition merely for reason that no satisfactory explanation was given by the appellant. We again submit that assessee is not under burden to submit even explanation on this account as no incrementing material was found in the premises of assessee, so as the amount was received by assessee as income. 15

It goes without saying that no receipts, signature or agreement with appellant was found to this effect in any of the searched premises. Merely some du~ paper mentioning resembling name of appellant cannot be the basis of addition in hands of appellant, particularly so in case. of assessment proceedings uls 153A. The document which is referred to, is said to be found in the premises of Shri KK Sharma during the search, cannot be the basis of making any addition in the hands of appellant unless there is a material or corroborating evidence to show that this amount was received by the appellant. In Fact the presumption uls 292C states that any such document, if at all found, shall be treated as belonging to such searched person which means it does not belongs to other person.

Therefore, Your Honour is requested to delete such addition as it is based on merely suspicion and surmise, without discharging onus by the A.O.

In The Judgement of, Anant Steel Pvt. Ltd. V. Asstt. Commissioner of Income Tax(20J6) 28 ITJ 47 (Trib. - Indore) "It was decided that U/s. 153A to 153C Of Income tax Act 1961- No incriminating Documents found and seized during search. An Additions were made. in assessment u/s 153A - Assessee challenged that order - HELD - In dy. CIT v. Kalani Brothers(Indore) Pvt. Ltd.,(2016) 27 ITJ 286 (TRIB.. -Indore this issue has been decided that in absence of any Incriminating material or documents seized during the course of search, the AD cannot pass order u/s 153A rlw Section 143(3) - Following that decision it has been held that in absence of any incriminating document found and seized during the course of search, the AO is not justify in making the addition in non abated assessment order while passing the order uls 153A rlw Section 143(3)"

It is further submitted that same amount is added to the income of MIs Akshay Shakti Shiksha Evam Sarna] Kalyan Samiti. Therefore, the same income cannot be added in two hands for the same reason. Unless, it is shown on the basis of evidences and in accordance with law that it constitutes income in hands of both the assessee. It is further submitted that documents are already available to A.O during the earlier proceeding.

submissions. The Ld. A.R. submitted that the addition has

been made not on the basis of any incriminating material

found during the course of search but it is on the basis of

rejecting the claim of the assessee of cash on hand.

material available on record and gone through the orders of

the authorities below. Ld. A.R. has placed reliance on the

decision of coordinate bench in the case of Anant Steel Pvt.

Ltd. Vs. ACIT (2016) 28 TTJ 47. Ld. D.R. could not

controvert the submissions of the assessee that no

incriminating material was found. Moreover, we find that

the addition is sustained merely on the basis of the

presumption. We therefore, direct the A.O. to delete this

addition.

pertaining to the assessment year 2010-11. The assessee

has raised following grounds of appeal:

addition of Rs.1,53,200/- and Rs.6,00,000/-. Ld. Counsel

for the assessee reiterated the submissions as made in the

written submissions. The submissions of the assessee are

reproduced as under:

For 2010-11 During this year an addition of Rs 6,00,0001- as undisclosed investment made on account of some paper found at the premises of Shri Pushpendra Mishra at the time of search upon him uls 132.

In this regard we hereby submit that Appellant has not received any money as claimed in the assessment order from Shri Pushpendra Mishra. As claimed to be paid by him.

Even the so called personal statement Shri Pushpendra-Mishra were not confronted to assessee to rebut the same. However the copy of such rough document, claimed to be the basis of receipts of Rs 6, 00,0001- is enclosed herewith for your perusal.

The document which is referred to, is said to be found in the premises of Shri Pushpendra Mishra during the search, cannot be the basis of making any addition in the hands of appellant unless there is a material or corroborating evidence to show that this amount was received by.the appellant. In Fact the presumption uls 292C states that any such document, if at all found, shall be treated as belonging to such searched person which means it does not belongs to other person. 18

There is no corroborating material to support such transaction and without accepting it in any manner, even if it is accepted that any amount has been paid by Shri Pushpendra Mishra, even then, there is no material on record to show that it constitutes an income of appellant and not a loan or gift. Your kind attention is also drawn to the Par of the questionnaire dated 29/08/2011 issued by Assessing officer, where it is clearly stated that after 23/0312009 appellant was not having any connection with Swami Vivekanand Engineering College. Therefore even on account of college it is not possible to receive any money or pay it.

A.O. has not brought anything on record to show that such money travelled to appellant as income and also not able to establish any motive or purpose for which such amount could have been paid to the appellant. Consequently, A.O. has failed to discharge his onus to make such addition. Therefore this addition is not made on the basis of any incriminating material found during the search.

Therefore, there is no material on record to establish that any amount was paid to Shri Kamta Prasad Dwivedi by Shri Pushpendra Mishra (who was also searched) as an income and is liable to tax during the relevant year and also there is no corroborating material available to prove such transaction. Consequently no addition can be made to the income of appellant because it is based on hearsay without having any material. In The Judgement of, Anant Steel Pvt. Ltd. V. Asstt. Commissioner of Income Tax(2016) 28 ITJ 47 (Trib. - Indore) "It was decided that U/s. 153A to 153C Of Income tax Act 1961- No incriminating Documents found and seized during search. An Additions were made in assessment u/s 153A - Assessee challenged that order - HELD - In dy. CIT v. Kalani Ilrothers(lndore) Pvt. Ltd., (2016) 27 ITJ 286 (TRIB. - Indore this issue has been decided that in absence of any Incriminating material or documents seized during the course of search, the AO cannot pass order u/s 153A r/w Section 143 (3) - Following that decision it has been held that in absence of any incriminating document found and seized during the course of search, the AO is not justify in making the addition in non abated assessment order while passing the order u/s 153A r/w Section 143(3)" Your kind attention is drawn to following citations- CITv/s Devendra K Singhal (2014) 45 Taxman.com 1'48 (Allahbad) Further addition of Rs 1,53,2001- was made to the income of appellant by the assessing officer, for the reason that, on the date of search i.e. 23/07/2009, this cash was found in the searched premises. Statement of Shri Kamta Prasad Dwivedi was recorded at the time of search and appellant in his statement, vide his reply to Question No.5, has informed that this amount of Rs 1,53,2001- includes sum borrowed by him from Shri Ganesh Prasad Dwivedi, Shri Krishan .Pal Dwivedi and Shri Anirudh Pare as a loan for the purpose of activities of the society of which he is the Chairman.

During the course of Assessment Proceedings the appellant furnished a cash flow statement for himself and his wife Smt Chandra Kanta Dwivedi who was also searched simultaneously. The cash flow so filed clearly accounts for all the transactions and the same was verified by the Assessing Officer without rejecting it or finding any specific defects in it. The appellant has also filed affidavits of Shri Anirudh Pare, Shri Krishan Pal Dwivedi and Shri Ganesh Prasad Dwivedi confirming such loans to the assessee. The total amount of Rs 35,0001- was received as loans from these three people and sum of Rs 74,5001- was reflected in the cash flow statement of appellant and Rs 44,0001- in the cash flow statement of his wife Smt Chandra Kanta Dwivedi.

It is also Important to note that at the time of recording the statement during search uls 132, the appellant has stated that the money was received from these three people and subsequently it was confirmed by them through affidavit and remaining sum of Rs 74,5001- and Rs 44,0001- were also reflected in the cash flow statement filed before the Assessing Officer. Therefore there is no question of treating it as unexplained cash without finding any specific defects in the cash flow statement.

Even the Assessing Officer has given no specific findings to reject any of the document or cash flow statement submitted by the appellant except some suspicions. Without doing so and also without having any cogent material or evidence to contradict the document or cash flow statement, he cannot make an addition of Rs. 1,53,2001-.

submissions. The Ld. A.R. submitted that the addition has

been made not on the basis of any incriminating material

found during the course of search but it is on the basis of

rejecting the claim of the assessee of cash on hand.

material available on record and gone through the orders of

the authorities below. Ld. A.R. has placed reliance on the

decision of coordinate bench in the case of Anant Steel Pvt. 20

Ltd. Vs. ACIT (2016) 28 TTJ 47. Ld. D.R. could not

controvert the submissions of the assessee that no

incriminating material was found. Moreover, we find that

the addition is sustained merely on the basis of the

presumption. We therefore, direct the A.O. to delete this

addition.

allowed.

Order was pronounced in the open court on 19.09.2018.

Sd/- Sd/- (MANISH BORAD) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIALMEMBER

Indore; �दनांक Dated : 19/09/2018 VG/SPS

Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order

Sr. Private Secretary, Indore