DY.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, AURANGBAD, AURANGBAD vs. SANJAY SUGANCHAND KASLIWAL, AURANGABAD

आदेश / ORDER

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

3. Based on the police complaint and the statement given by the assessee, when the information was received by the Assessing officer, he again issued notice u/s.148 of the Act on 15.03.2021 to the assessee after recording the reasons alleging that as per the information available and more precisely the statement given by the assessee before the police authorities, it is found that the assessee has taken cash loan from Late Shri Radheshyam Agrawal against Hundi. When the assessee was asked to give the reply as to why the alleged sum should not be added u/s.69D of the Act, the assessee vide letter dated 08.03.2022 stated that the alleged advance was agreed to be given against sale of immovable properties and the same would be in the nature of business receipt and it is not a loan or advance against Hundi. In this reply, the assessee attached the copy of FIR recorded by the police authorities at the request of Mr. Pankaj Radheshyam Agrawal where also Mr. Pankaj Radheshyam Agrawal has stated that alleged sum has been given as advance towards sale of immovable properties and it was nowhere admitted that it is a cash loan given to the assessee against Hundi. The reply by the assessee was not tenable to the ld. AO and he again raised show cause notice dated 12.03.2022 levelling the same allegation as to why not section 69D be invoked for cash loan against Hundi followed by initiation of penalty proceedings u/s.271D and 271E of the Act. Again, the assessee filed reply on 14.03.2022 and stated that the statement given by him before the police authorities was under and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal coercion, threat and undue pressure and even that statement was not signed and thus he denied the contents of his statement recorded by the police authorities. It was also stated that Mr. Pankaj Radheshyam Agrawal has filed a Criminal Complaint FIR No.0598 dated 23.06.2017 alleging that during the period 27.09.2014 to 27.11.2014 assessee has taken the amount of Rs.8,61,80,284/- from Late Shri Radheshyam Agrawal out of which Rs.4.50 crore was paid against sale of flats, row houses etc. in the Marvel Project and remaining amount was paid against some immovable properties at Paithan Road, Aurangabad. In the statement, it was also stated that no such huge cash was deposited in his bank account nor there is purchase of any land or other asset in cash which could corroborate the receipt of such a huge amount. Further it was requested that to verify the veracity of the claim made by Mr. Pankaj Radheshyam Agrawal before the police authorities the Assessing Officer should call for the income-tax return, financial statements, books of account and other details of Mr. Pankaj Radheshyam Agrawal and his father about the source of cash available with them in their books and the proof of the said cash being given to the assessee. However, the reply of the assessee did not find any merit in the view of the Assessing Officer and he concluded the reassessment proceedings observing that the assessee has taken loan against Hundi and thus invoked section 69D of the Act and made addition of the alleged sum and assessed the income at Rs.8,61,80,284/-.

4. Aggrieved assessee preferred appeal before the ld.CIT(A) and apart from challenging the grounds on merit, the assessee challenged the validity of the reassessment proceedings on the and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal ground that no actual reasons recorded were supplied; reasons were based on wrong assumption of facts; no proper sanction u/s.151 of the Act; conditions of the first proviso to section 147 were not fulfilled; there was no ‘reason to believe’ within the meaning of section 147 of the Act and also the assessment order did not contain Document Identification Number.

5. So far as the merits of the case are concerned, it was stated that no such sum was received by the assessee from anybody during the year and without prejudice no such money was received within the meaning of section 69D of the Act and without further prejudice that no such money was borrowed by the assessee in his individual capacity. It was also submitted that the statement given before the police authorities is not an admissible evidence as per the provisions of section 25 of the Indian Evidence Act, 1872 and therefore the sole reliance placed by the Assessing Officer on the said statement is not in accordance with law.

6. So far as the Hundis and Cheques are concerned, it was stated that the asessee was having good relations with late Shri Radheshyam Agrawal. There were some investment plans of Shri Radheshyam Agrawal in the immovable properties and as a security the assessee gave the cheques and the promissory notes but the promissory notes were not filled in. Thereafter, Shri Radheshyam Agrawal was suffering from acute illness and whatever deals he initiated for purchase of the immovable properties were also cancelled and even he received back the stamp duty amount. The assessee requested Shri Radheshyam Agrawal to give back the promissory notes and blank Cheques. and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal It was stated by Shri Radheshyam Agrawal that they were misplaced and will be given as and when they are found but subsequently Shri Radheshyam Agrawal died on 03.03.2015. At the later stage, the cheques and the promissory notes given in good faith by the assessee to Late Radheshyam Agrawal were used by Shri Pankaj Radheshyam Agrawal alleging that the assessee received the alleged sum for sale of immovable properties and the said action has not been carried out by the assessee and therefore went before the police authorities for getting the immovable properties transferring in his name against the alleged sum given as advance.

7. The ld.CIT(A) called for the remand report from the Assessing Officer on various issues mainly regarding the proper sanction u/s.151 of the Act, supply of correct reasons recorded, DIN not mentioned on the body of the assessment order and after duly considering the comments of the assessee ld.CIT(A) finally dismissed all the legal grounds. So far as the merits of the case are concerned, the ld.CIT(A) after elaborately discussing the submissions of the assessee as well as the complaint given by Shri Pankaj Radheshyam Agrawal and the statement recorded by the assessee before the police authorities as well as during the course of survey finally came to conclusion that the statement recorded by the police authorities is not an admissible evidence as per the provisions of section 25 of the Indian Evidence Act, 1872 and that the Assessing Officer did not bring any cogent material on record to prove that the assessee has accepted the cash loan against Hundi giving rise to invocation of the provisions of section 69D of the Act and further held that the and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal transaction between the assessee and late Shri Radheshyam Agrawal was in the nature of a business transaction.

8. Aggrieved Revenue is now in appeal before the Tribunal challenging the finding of the ld.CIT(A) deleting the addition on merits by raising the following grounds :

“1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and in facts by deleting the addition made as per provisions of section 69D of the 1.T. Act of Rs 8,61,80,284/- on account of cash received as Hundis as per documents found during the course of survey action.

2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in ignoring the fact that the AO had in his possession credible evidence in the form of loose paper documents impounded during the course of survey u/s.133A of the Act which indicated that the assessee had actually taken a loan of Rs. 8,61,80,284/- during the F.Y. 2014-15 and given blank cheque and hundis against the loan, before arriving at a conclusion that AO did not bring any cogent material to prove that assessee has accepted cash.

3. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in law and in facts by not appreciating the facts that the then AO had brought all the facts on record such as copy of FIR, Statement recorded of the assessee during the course of survey & statement given by the assessee to Police Authorities which proved that the amount received by assessee is nothing but the Hundi and is liable to be taxed as per section 69D of the I.T. Act, 1961.

4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and in facts by not appreciating the fact that the assessee himself accepted vide question No.12 & 13 in his statement recorded during the course of survey action that he himself had approached Shri Radhesham Agrawal for loan and had given signed blank hundis and blank cheques as security which corroborates with statement given by the assessee before Police authorities.

5. The appellant craves leave to add, alter, modify, delete and amend any of the grounds as per the circumstances of the case.”

9. On the other hand, the assessee has raised the following grounds of appeal in its Cross Objection challenging the validity of the reassessment proceedings on account of various reasons as mentioned in the grounds of appeal : and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal

1. CHALLENGE TO THE INITIATION OF REASSESSMENT PROCEEDINGS 1.1 The Learned Commissioner of Income Tax (Appeals) ["the Ld. CIT(A)) has erred in affirming the jurisdiction of the Ld. AO to initiate the reassessment proceedings.

1.2 The Ld. CIT(A) erred in affirming the action of the Ld. AO despite pre-conditions required for initiating the reassessment proceedings has not been fulfilled.

1.3 In the facts and circumstances of the case and in law, the initiation of reassessment proceedings in the present case is bad in law and therefore the notice issued u/s 148 deserves to be quashed.

WITHOUT PREJUDICE TO THE ABOVE

2. THE ASSESSMENT ORDER OASSED IN VIOLATION TO CIRCULAR NO. 19/2019 DATED 14.08.2019 2.1 The Ld. CIT(A) has erred in affirming the legality of the assessment order, demand notice u/s 156 passed by the Ld. AO which is contrary to the CBDT Circular No. 19 /2019 dated 14.08.2019.

2.2 In the facts and circumstances of the case and in law, the assessment order passed deserves to be quashed.

3. LIBERTY The Appellant craves leave to add, alter, amend, delete or substitute any of the above grounds of appeal.”

10. Since legal issues have been raised by the assessee in the Cross Objection, we will first take up the legal issues and then while dealing with the Revenue’s appeal we will deal with the merits of the case. Summarily, the legal issues raised by the assessee in the Cross Objection read as under :

“A. The reassessment is bad, illegal and without jurisdiction, as the following conditions necessary for initiation as well as completion thereof were not fulfilled:

1. No actual reasons were supplied to the Assessee.

2. The reasons were based on wrong assumption of facts. and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal

3. The condition of the first proviso to section 147 of the Act was not fulfilled.

4. There was no "reason to believe" within the meaning of sec. 147 of the Act.

5. No proper sanction in terms of section 151 of the Act was obtained.

B. The assessment order is bad in law as the same was passed without valid DIN.”

11. So far as the issue of validity of the assessment order without mentioning Document Identification Number (DIN) is concerned, the assessee has made reference to CBDT Instruction No.19/2019, dated 14.08.2019 which has been issued stating that it is mandatory to quote DIN of all communications issued by any income-tax authority regarding assessments or appeal. Admittedly, the assessment order in question has been framed on 31.03.2022 and on the very same date, the intimation letter has been issued for the order u/s.143(3) r.w.s.147 of the Act on 31.03.2022 having DIN No.ITBA/AST/M/147/2021-22/ 1042354895(1). The assessee has referred to various judgments in support of its contention that mentioning of DIN in the body of the assessment order is mandatory. We however considering the fact that the issue of DIN has reached for adjudication before the Hon’ble Apex Court and recently the Hon’ble Apex Court stayed the order of Hon’ble Delhi High Court in the case of CIT vs. Brandix Mauritius Holdings Ltd. (2023) 149 taxmann.com 238/456 ITR 34 (Delhi)/293 taxmann 385 and Hon’ble Apex Court has observed that not mentioning of DIN in the assessment order may be an irregularity but does not make it an illegality and that quashing the assessment orders that did not contain the DIN is “of serious or consequence”. However, since the matter is subjudice before the Hon’ble Apex Court for the and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal hearing on the issue of DIN, we refrain from adjudicating this ground. If the outcome of the judgment of the Hon’ble Apex Court is in favour of the assessee, then the assessee would be at liberty to file a Miscellaneous Application for adjudicating this ground.

12. So far as the remaining legal issues are concerned, arguments of the assessee along with placing reliance on various judicial pronouncements read as under :

Sr.No. Proposition Facts Judicial Precedents 3.1.1 The assessment order (i) There appears to be two sets of (i) CIT v. Videsh passed without reasons, one provided to SK along Sanchar Nigam supplying the actual with the communication dated Limited (Bom)] [(2012) reasons recorded for 27.01.2022 and the other, which 340 ITR 66 reopening of the was given at the time of remand assessment vitiates the proceeding (Refer 159 to 161 of the (ii) CIT v. Trend entire reassessment OPB). This gets evident from the Electronics - [(2015) proceeding. (Abridged following differentiations: 379 ITR 456 (Bom)] reasons supplied during the assessment (iii) PCIT v. Shodiman Sr.No. Purported Actual proceeding or the actual reasons reasons Investments P. Ltd. reasons supplied after supplied in supplied [(2018) 93 the assessment order is taxmann.com 153 the along with passed does not annexure the (Bom)] mitigate the to notice approval jurisdictional defect) (iv) CIT v. IDBI Ltd. dated attached to [(2016) 76 27.01.2022 the Remand taxmann.com 227 Report (Bom)] a. Undated Dated (v)PCIT v. Hexaware Date of Reasons Technologies recording recorded Ltd.((2020) 191 DTR of reasons on 73 (Bom)] not 05.02.2021 mentioned (vi) PCIT v. V. b. Name of Name of Ramaiah - [(2019) the officer the officer 103 taxmann.com recording recording 201 (Kar)] the the reasons reasons Not Not mentioned mentioned c. Signature Signature of the of the officer officer recording recording the the reasons reasons and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal

Not signed Signed by Mr. Vijay Netke d. Para 5 Para 5 Last para Last para of para 5 of of Para 5 of the the reasons reasons supplied recorded along with dated Remand 05.02.2021 Report not not part of part of this the reasons reasons supplied earlier

(ii) Therefore, the purported reasons provided on 27.01.2022 were not the correct reasons, and, therefore, SK was not supplied the reasons during assessment proceeding, in the eyes of law.

(iii) Therefore, the averments at Para 2.1 of the Remand Report depict non - application of mind.

(iv) The CIT (A) admits that the purported reasons provided to SK during the assessment proceeding were not the actual reasons recorded for reopening of the assessment.

(v) The CIT (A) further admits that the contents of the purported reasons provided to SK during the assessment proceeding and the actual reasons recorded are similar (and not identical). 3.1.2 The validity of the (i) The sanction of PCIT (Central), (i) Chhugmal Rajpal approval u/s. 151 of Pune dated 04.03.2021, as v. S. P. Chaliha - the Act is in doubt and, available in the ITBA system, was [(1971) 79 ITR 603 in any, is granted not a valid approval. This is (SC)] mechanically and because, it was not obtained from without application of the authority provided u/s. 151 of (ii) German Remedies mind. the Act. The notice u/s. 148 of the Ltd. v. DCIT -[(2006) Act also mentioned PCIT (Central), 287 ITR 494 (Bom)) Pune as the sanctioning authority. (iii) CIT v. Suman (ii) However, a copy of the sanction Waman Chaudhary - of PCIT(Central), Nagpur was [(2010) 321 ITR 495 supplied as Annexure -'2', along (Bom)] with the Remand Report, which was different from. This is different (iv)Sharvah from a copy of the sanction Multitrade Company provided during the assessment P. Ltd. V. ITO - proceeding. [(2022) 134 taxmann.com 134 and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal

(iii) This approval of PCIT(Central), (Bom)] Nagpur was obtained manually and (v) is not system generated. (v) Nirmal Bang Therefore, no trail of this manual Securities P. Ltd. v. approval is available in the ITBA ACT-[W.P. No. 671 of system. 2022, Order dated 08.02.2022 (Bom HC)] (iv) The A.O. as well as the CIT (A) are completely silent on the aspect - (vi) United Electrical (vi why the sanctioning authority Co. P. Ltd. v. CIT - mentioned in the notice u/s. 148 of [(2002) 258 ITR 317 the Act is PCIT (Central), Pune, if (Del)] the correct sanctioning authority to the admission of both the authorities was PCIT(Central), Nagpur.

(v) Thus, issuance of the notice u/s. 148 of the Act with the approval of the wrong sanctioning authority vitiates the reassessment proceeding. (vi) In any case, the approval was granted mechanically and without application of mind.

(vii) It is a well settled legal position that the notice issued u/s. 148 without obtaining appropriate sanction of the concerned authority u/s. 151 of the Act is invalid. Consequently, it makes the entire re-assessment proceedings u/s. 147 bad in law. Further, while according sanction u/s. 151 of the Act, due application of mind on the part of the sanctioning authority is also must. 3.1.3 The reasons are (i) It is now a well settled legal (i) Giriraj Enterprises recorded on the basis of position that initiation of v. CIT-[(2019) 102 incorrect facts and, reassessment proceeding based on taxmann.com 188 therefore, the very wrong fact or wrong application of (Bom)] initiation of the law is bad in law, void and without reassessment jurisdiction. (ii) Ankita A. Choksey proceeding is (bad in v. ITO-[(2019) 411 law and illegal. (ii)In the present case, the reasons ITR 207 (Bom)] recorded for reopening were based on erroneous facts / non existent (iii) Dr. Ajit Gupta v. facts / erroneous assumption or (iii) CIT [W.P. No. 924 of interpretation of the actual 2014, Order dated facts/non-consideration of the 03.03.2016] actual facts. Some of such aspects are as under. (iv)Sagar Enterprises v. ACIT-[(2002) 257 a. The reasons recorded stated the ITR 335 (Guj)] wrong fact that the FIR filed against (iv) SK by PRA was that RA had (v)vCIT v. Man Mohan given loan to SK Das-[(1996) 218 ITR 730 (Guj)) and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal

(Ex-facie, the FIR says otherwise, as has been the consistent case of (v) PRA himself, that the money was not given on loan but towards purchased properties). b. Further, wrong averment in the reasons recorded that as per the FIR, it was clear that SK had accepted cash loan and repaid the same. (As is self-evident, the charge in the FIR was opposite. Neither there was cash loan nor there was any repayment). c. The A.O. did not consider SK's statement recorded u/s. 131 of the Act, while recording reasons, despite having on record. Only a very cursory reference to the Statement of PRA w/s. 131 of the Act by the DDIT(Inv), as the reasons were in contradiction / inconsistent with the statement of PRA so recorded by the A.O. himself. d. Admittedly, no enquiry was made. However, it is claimed that 'due diligence' was made, without mentioning what and how. e. The sole basis of the addition was the unsigned typed Statement of SK recorded before the Police, the reference was of which was not even part of the Charge Sheet.

3.1.4 The reopening of The premise of the formation of (i) IPCA Laboratories assessment beyond reason to believe was based on Ltd. v. DCIT - [(2001) four years from the end erroneous and misleading facts. All 251 ITR 416 (Bom)] of the relevant the documents consistently proved assessment year, in the that the dispute between SK and absence of any failure PRA is regarding acceptance or non- (ii) Hindustan Lever on the part of the acceptance of advance (ii) against Ltd. v. CIT [(2004) assessee to fully and the investment in properties and not 268 ITR 339 (Bom)] truly disclose all regarding cash loan on hundi. In material facts, is bad in any case, SK had denied having (iii) Grindwell Norton law and illegal received any cash against any Ltd. v. CIT - [(2004) investment in properties. Therefore, 267 ITR 673 (Bom)] there was no question of recording any entry in the books of accounts (iv) German or declaring income in the return of Remedies Ltd. v. income. Therefore, there was no DCIT – [(2006) 287 failure on the part of SK to fully and ITR 494 (Bom)] truly disclose any material facts. It is a well-settled legal position (v) Aventis Pharma that no reassessment can be made Ltd. v. ACIT - [(2014) unless the alleged escapement of 368 ITR 498 (Bom)] income is due to failure on the part and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal of the assessee to disclose fully and duly all material facts necessary for its assessment. 3.2.1 (i) CBDT Circular No. (i) The assessment order was (i) Hexaware 19/2019 dated passed as well as demand notice Technologies Ltd. v. 14/08/2019 makes it was issued manually, without ACIT-[(2024) 162 mandatory to quote DIN mentioning DIN in the body of the taxmann.com 225 on all communications order/notice. (Bombay)] issued by any income tax authority regarding (ii) It was only through an (ii) CIT (IT) v. Brandix assessments or intimation that the so-called DIN Mauritius Holdings appeals. was communicated to SK in manual Ltd. - [(2023) 456 ITR form, while the said intimation 34 (Delhi)J (ii) Any communication document itself did not have DIN. initiated without DIN is [Ref: 98 to 100 of OPB] (iii) Ankit Jain v. declared to be invalid DCIT-[(2023)] 155 and never to have been (iii) No exceptional circumstances taxmann.com 321 issued by the CBDT. pointed out by A.O. to pass the (Delhi - Trib.)] order/issue demand notice (iii) Paras 2 and 4 of manually. (iv) PCIT v. Tata such order has been Medical Centre Trust reproduced ( herewith- iv) Therefore, the assessment order [(2023)] 154 as well as demand notice taxmann.com 600 "2. In order to prevent passed/issued in violation of (Calcutta)] such instances and to Circular No. 19 / 2019 dated maintain proper audit 14.08.2019, is bad in law and (v) DCIT v. Ragova trail of all illegal. Developers & Auto communication, the Services (P.) Ltd. - Board in exercise of [(2023) 156 power under section taxmann.com 11 119 of the Income-tax (Hyderabad - Trib.)] Act, 1961 (hereinafter referred to as "the Act"), (vi) SPS Structures has decided that no Ltd. v. DCIT [2023] communication shall be 157 taxmann.com issued by any income- 674 (Chandigarh - tax authority relating to Trib.)] assessment, appeals, orders, statutory or otherwise, exemptions, enquiry, investigation, verification of information, penalty. prosecution, rectification, approval etc. to the assessee or any other person, on or after the 1st day of October, 2019 unless a computer-generated Document Identification Number (DIN) has been allotted and is duly quoted in the body of such communication.

3...

4. Any communication which is not in conformity with Para-2 and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal and Para-3 above, shall be treated as invalid and shall be deemed to have never been issued."

13. On the other hand, ld. Departmental Representative vehemently argued supporting the order of the Assessing Officer and also stated that in the statement given before the police authorities the assessee has specifically accepted to have received the sum against Hundis and also the cheques given by the assessee supports the statement and these were material information which were sufficient enough to carry out the reassessment proceedings by issuance of notice u/s.148 of the Act and further stated that proper approval u/s.151 of the Act has been taken and therefore reassessment proceedings are valid and not liable to be quashed. In support of contentions of Revenue, ld. Departmental Representative further referred to the following written submissions :

“Subject – Written submission in the above case. 1. Brief facts of the case :

The assessee is an individual and a proprietor engaged in the business of builders and developers. He is one of the partners in various firms engaged in the same business. He is also proprietor of M/s Kasliwal Construction.

A Survey action u/s 133A of the 1.T.Act, 1961 was carried out by the ADIT(Inv.), Aurangabad on 24/08/2018 at the office premise of M/s Raaj Kasliwal at 215-216, Apna Bazar, Jalna Road, Aurangabad. During the course of survey proceedings some loose papers documents were impounded as Annexure-'A' containing total pages 1 to 67. The loose papers numbered at page number 54 to 56 are a copy of the statement given by Shri Sanjay Suganchand Kasliwal before the Police against the complaint filed by Shri Pankaj Radheshyam Agrawal on 23/06/2017 in Kranti Chowk Police Station, Aurangabad. and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal On perusal of the statement, it is observed that the assessee Shri Sanjay Suganchand Kasliwal has accepted that he had taken cash loans against hundi from father of Shri Pankaj R. Agrawal ie Shri Radheshyam Agrawal to the tune of Rs.8,61,80,284/ on different dates during financial year 2014-15. The statement contains details of 15 Hundis and 15 post dated cheques of different amounts and different dates totaling to Rs.8,61,80,284/-.

During the course of post survey enquiries, this issue of cash loan against Hundi was confronted to the assessee in a statement recorded u/s 131(1) of the IT Act, 1961 on 12.11.2018. In reply to question no. 12 of the said statement, the assessee has accepted that he has issued these Hundis and post dated cheques. However, he has denied that he has received any cash loans against these Hundis. Relevant portion of the statement is a part of the assessment order (page no. 22 & 23)( Statement is attached in paper book at page no. 5).

During the post survey enquiry, statement u/s.131(1) of the complainant Shri Pankaj Radheshyam Agarwal was also recorded on 02.11.2018. Shri Pankaj Agarwal in reply to question no. 7 has stated that he has made advance payment of Rs.8,61,80,284/- for purchase of row houses and twin bungalows from Shri Sanjay Kasliwal. He has accepted that Hundis and post dated cheques were kept as security (Statement is attached in paper book at page no. 10).

From the above it emerges that the assessee received cash loans against Hundis and post dated cheques. The understanding between the assessee, Shri Pankaj Agarwal and his father was that these cash loans would be adjusted in the investment in row houses and bungalows being developed by the assessee at a later state. It is clear that at the time when the hundis were issued the nature of the transaction was that of cash loan only.

Based on the above facts the assessment was completed and addition of Rs.8,61,80,284/- was made u/s 69D of the IT Act, 1961 as the assessee had borrowed the said amount on hundi in cash.

Aggrieved by the assessment order the assessee filed appeal before the CIT(A). The Ld. CIT(A) has deleted the entire addition and held that the addition cannot be sustained as the amount received was not a hundi loan but an advance against the investment in property. The Ld. CIT(A) has deleted the addition only on the basis of the nature of the transaction. In this regard it is submitted that the assessee has issued 15 Hundis and 15 post dated cheques under his own name and signature in favour of Shri Radheyshyam R. Agarwal who is the father of the complainant. The assessee has nowhere denied that he has not issued these hundis and post dated cheques. In the statement before the police authorities he has stated that he received loan on interest against these hundis and he has repaid the loan. Therefore, there is no outstanding amount to be paid to Mr. Pankaj Agarwal. However, before and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal the Income Tax Authorities the assessee has stated that he never received any loan and has given the hundis and post dated cheques in anticipation of loan. This is clearly a contradictory statement and it is self serving and an afterthought.

As regards the nature of transaction it is clear that the amount has been received by the assessee against hundi. Therefore, at the time of the transaction it is clearly an amount which is borrowed on a hundi and is clearly hit by the provisions of section 69D of the IT Act, 1961.

The Ld. CIT(A) has also relied on the fact that the statement recorded by the police authorities is not admissible evidence as per the provisions of section 25 of the Indian Evidence Act, 1872. In this regard it is submitted that the addition has not been made solely on the basis of statement. There are strong corroborative evidence in the form of physical hundis and post dated cheques under the name & signature of the assessee Shri Sanjay Kasliwal in favour of Shri Radheyshyam Agarwal. The Ld. CIT(A) has erred in holding that the AO did not bring any cogent material on record to prove that the appellant has accepted cash loan against hundi in violation of provisions of section 69D. The hundis and the post dated cheques are clear evidence that loan has been accepted by the assessee. The assessee himself accepted in the statement before the police that he received cash loans against these hundis.

In view of the above, it is humbly prayed that the addition made by the AO may kindly be confirmed.”

**Reason for re-opening of assessment in the case of Shri Sanjay Suganchand Kasliwal for AY 2015-16 under section 147 of the Income Tax Act, 1961.

1. Brief Details of Assessee: The assessee Shri Sanjay Suganchand Kasliwal is engaged in the business of builders and developers. He is one of a partners in various firms engaged in the same business and derive income from interest and shares of profit of the firms. He is also a proprietor of M/s Kasliwal Construction, which is also engaged in same business. For the year under consideration a notice u/s 148 was issued on 04/10/2017 to the assessee after recording the reason by and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal the then ACIT, Circle-3, Aurangabad as the assessee had not filed his return of income. Accordingly, assessment has been completed u/s 143(3) r.w.s 147 of the Act on 27/12/2018 assessing total income at Rs. nil.

2. Brief details of information received: A Survey action u/s 133A of the I.T.Act, 1961 was carried out by the ADIT(Inv.), Aurangabad on 24/08/2018 at the office premise of M/s RaajKasliwal at 215-216, Apna Bazar, Jalna Road, Aurangabad. During the course of survey proceedings some loose papers documents have been impounded as Annexure-'A' containing total pages 1 to 67. The loose papers numbered at page number 54 to 56 are a copy of the statement given by Shri Sanjay Suganchand Kasliwal before the Police against the complaint filed by Shri Pankaj Radheshyam Agrawal on 23/06/2017 in Kranti Chowk Police Station, Aurangabad. On perusal of the statement it is seen that Shri Sanjay Suganchand Kasliwal had taken loan against hundi from father of Shri Pankaj R. Agrawal Shri Radheshyam Agrawal to the tune of Rs. 8,61,80,284/- on different dated during financial year 2014-15 and on behalf of this amount Hundis issued to Shri Pankaj R. Agrawal by Shri Sanjay Suganchand Kasliwal.

4. Enquiries made by AO as sequel to information collected/received: On perusal of documents impounded during survey proceedings, which are possession with this office and material available with this office it is seen that assessee has taken hundi loan from father of Shri Pankaj R. Agrawal and repaid the same to the tune of Rs.8,61,80,284/- as per impounded material.

5. Finding of the AO: On the basis of documents in possession and statement recorded of Shri Sanjay Kasliwal and findings provided by investigation wing and due diligence thereof from the records, it is found that assessee has borrowed amounting to Rs. 8,61,80,284/-on and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal hundies and such amount is liable to taxed under the I.T. Act., However, the assessee has not offered the same for taxation in his income tax return. The provision of 69D of the Act is reproduced as under.

"69D. Where any amount is borrowed on a hundi from, or any amount due thereon is repaid to, any person otherwise than through an account payee cheque drawn on a bank, the amount so borrowed or repaid shall be deemed to be the income of the person borrowing or repaying the amount aforesaid for the previous year in which the amount wasborrowed or repaid, as the case may be:

Provided that, if in any case any amount borrowed on a hundi has been deemed under the provisions of this section to be the income of any person, such person shall not be liable to be assessed again in respect of such amount under the provisions of this section on repayment of such amount.

Explanation. For the purposes of this section, the amount repaid shall include the amount of interest paid on the amount borrowed."

In view of the above, this office has also examined the facts of the case independently and it is found that, there is failure on the part of the assessee to disclose fully and truly all the material facts necessary for its assessment for the year under consideration. Therefore, I have reason to believe that the income chargeable to tax under the provisions has escaped assessment to the extent of Rs. 8,61,80,284/-.

6. Basis of forming reason to believe and details of escapement of income: In this case assessee was a non-filer for the year under consideration and assessment has been completed u/s 143 r.w.s 147 of the Act on 27/12/2018. This fact of acceptance and repayment of cash loan against hundi was not brought before the AO during earlier assessment proceedings. Accordingly, there is failure on the part of the assessee to disclose fully and truly all the material facts necessary for its assessment for the year under consideration hence, is reason to believe that income to the extent of Rs. 8.61 crore has escaped assessment for AY 2015-16. Accordingly, reason to believe has been recorded.

7. Details of escapement of income chargeable to tax in relation to any asset located outside India : Not acceptable.

It is evident from the above facts that the assessee had not fully and truly disclosed material facts necessary for its assessment for the year under consideration thereby necessitating re-opening u/s 147 of the Act.

It is true that the assessee has filed a copy of profit and loss account and balance sheet along with return of income where various other information/material were also disclosed. However, the requisite full and true disclosure of all material facts necessary for assessment has not been made as noted above. It is pertinent to mention here that even though the assessee has produced books of accounts, profit and loss account and balance sheet or other evidence as mentioned above, the requisite material facts as noted above in the reasons for reopening were embedded in such a manner that material evidence could not be disclosed by the AO and could not have been discovered except with due diligence, accordingly attracting provisions of explanation 1 of section 147 of the Act.

In this case more than four years have lapsed from the end of the assessment year under consideration. Hence, necessary sanction/approval to issue notice u/s 148 is required from the Pr. Commissioner of Income-tax(Central), Nagpur as per the provisions of section 151 of the Act.”

15. Now the reopening is beyond four years and proviso to section 147 clearly provides that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return u/s.139 or in response to a notice issued under sub-section (1) or section 142 or section 148 had to disclose fully and truly all and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal material facts necessary for his assessment for that assessment year. We note that the assessee though did not file the return of income but has been served with the notice u/s.148 of the Act during the year 2017 and after carrying out the detailed scrutiny proceedings where also one of the reason of reopening was that there were certain cash deposits/time deposits and sale of immovable properties during the year under consideration. The assessee duly replied to the notice issued by ld. AO and also explained the source of cash deposits and other transactions to the utmost satisfaction of the AO and the assessment order was passed accepting the return of income, i.e. loss declared at Rs.2,07,72,322/-. These facts prove that the assesse’s books of account including financial statements were properly scrutinised and whatever issue for which the assessment was reopened, assessee satisfied the AO with the source of cash deposits and other transactions referred in the reasons recorded. Now before the conclusion of the assessment proceedings on 27.12.2018 survey action took place in one Tapadia group and survey proceedings were also carried out u/s.133A at the office of M/s. Raaj Kasliwal who is partner of the assessee. In the survey action, certain unsigned typed statements mentioning that assessee has received alleged sum from Late Radheshyam Agrawal against Hundi and blank cheques given as security were found which seems to be kept ready by the police authorities for assessee’s signature which the assessee allegedly refused to sign but then on 12.11.2018 the statement of the assessee was again recorded u/s.131 of the Act by the Revenue authorities where he strongly denied of receiving any money from Late Shri Radheshyam Agrawal/Shri Pankaj Radheshyam Agrawal and and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal stated that the cheques were given blank but in case the assessee had taken the loan against Hundi and has not repaid why these cheques were not lodged in the bank. It was also stated in the statement that these alleged Hundis and Cheques were demanded back from Shri Radheshyam Agrawal because no transaction of sale of immovable property took place and Shri Radheshyam Agrawal stated that they were misplaced and assured that they will not be misused. It was also stated that the statement given before the police authorities was given under immense pressure and the copy found with M/s. Raaj Kasliwal was unsigned.

16. We further note that in the complaint lodged by Shri Pankaj Radheshyam Agrawal to the police authorities, the allegation was regarding payment of advances against immovable properties. It was never the allegation that assessee took cash loan from Shri Radheshyam Agrawal against Hundi. Now inspite of having recorded the statement of the assessee u/s.131 and there being no proof of any cash loan taken by the assessee from Shri Radheshyam Agrawal in the complaint filed by Shri Pankaj Radheshyam Agrawal and also that the AO while carrying out the first round of reassessment proceedings was not aware about the survey proceedings also creates a doubt about the correctness of reasons recorded and the independent application of mind by ld. AO. But the fact remain that after the conclusion of the survey proceedings, first round of reassessment proceedings concluded on 27.12.2018 and no addition was made in the hands of assesssee. It means that till that date, no information was available with the AO about the and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal alleged transaction of assessee having taken loan from Shri Radheshyam Agrawal.

17. Now turning to the reasons recorded for the second round of reassessment proceedings, ld. AO should have taken note of the fact that this is not a general enquiry but it is a case where first round of assessment proceedings have been carried out u/s143(3) r.w.s.147 of the Act and now to again assess the income of the assessee by serving with the notice u/s.148 of the Act for carrying out the reassessment proceedings there should be some material information which the assessee has not disclosed in his regular return or any information which could prove that income has escaped assessment. However, ld. AO has straight away taken the basis of the statement of the assessee given before the police authorities and without even making further enquiry from the complaint given by Shri Pankaj Radheshyam Agrawal about the source of cash available with him or his father Shri Radheshyam Agrawal for giving alleged loan to the assessee. Further, ld. AO also did not consider the fact that there is no allegation of cash loan given by Shri Radheshyam Agrawal to the assessee but it is claimed to be purely a business transaction for purchase of immovable property. However, ld. AO brushing aside all these facts and without making proper application of mind and no proper reason to believe, proceeded ahead to again assess the income of the assessee which already stood assessed u/s.143(3) r.w.s.147 of the Act and that too for no failure on the part of the assessee to fully and truly disclose all material facts and proceeded for issuing notice u/s.148 of the Act based on wrong inference drawn from the statement of the assessee before the police and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal authorities allegedly given under immense pressure and coercion. Since all the documents consistently prove that the dispute between the assessee and Shri Pankaj Radheshyam Agrawal is regarding the acceptance or non-acceptance of advance against investment in immovable properties and not regarding cash loan against Hundi. We find that the reason to believe are based on erroneous and misleading facts and the reassessment proceedings are illegal and bad in law.

and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal

20. Now we take up the grounds of appeal raised by the Revenue on merits. On going through the grounds, it emerges that the only issue raised for our consideration is that whether ld.CIT(A) erred in holding that ld. AO was not justified in invoking section 69D of the Act and further erred in holding that the alleged sum of Rs.8,61,80,284/- was not received in cash as loan against Hundi by the assessee from Late Shri Radheshyam Agrawal.

21. Ld. Departmental Representative vehemently argued referring to the detailed observation of the AO and also referring to the statement of the assessee given before the police authorities along with referring to the alleged document referred to as Hundi mentioned at pages 3 and 4 of the assessment order and 15 cheques allegedly issued by the assessee for various sums totalling to Rs.8,61,80,284/-. Ld. DR stated that the cheques issued by the assessee clearly prove that they were given as security against the loan taken by the assessee from Late Shri Radheshyam Agrawal and the amounts are mentioned in the documents allegedly named as Hundis and therefore it proves that the assessee has taken the alleged sum and therefore provisions of section 69D of the Act are clearly attracted.

22. On the other hand, ld. Counsel for the assessee firstly referred to the following written submissions filed before the ld.CIT(A) on various occasions :

“3.1 The appellant in support of the grounds raised

, filed submission dated 31.10.2023, the contents of which are as under. and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal

1. At the cost of repetition, I submit that Mr. Agrawal had launched an FIR against me by raising an allegation that he and his father had given cash to the tune of Rs.8,61,80,284/- to me during the relevant year to invest out of the said amount Rs. 4.50 crores in the sixteen row houses and two twin bungalows in one of my projects of namely Kasliwal Marvel and balance amount in the property at Paithan Road. His further allegation is that I have not registered the said properties in their name. On the basis of these facts, Mr. Agrawal has filed an FIR in the Kranti Chowk police station.

2. Thereafter there was a survey on M/s Raaj Kasliwal on 24.08.2018 and during a survey, a loose paper was found and the said loose paper was allegedly unsigned copy of the statement recorded by the police authority in relation to the FIR filed. On asking about the statement found during survey at the time of recording survey statement, I specifically mentioned that the said statement is unsigned and categorically denied the contents of the statement recorded as the statement was taken under pressure by the police authority.

3. Subsequently, on 02.11.2018 a statement was recorded u/s 131 of the Act of Mr. Agrawal the relevant question and question of the statement is reproduced as follows:

Q 7. On verification of the document it is found that you have given an advance of Rs 8,61,80,284/- to Shri Sanjay Kasliwal. Please state whether the amount was advanced by you and also state the purpose of the same along with necessary detail and evidence in support of the allegation you have made against Shri Sanjay Kasliwal.

Ans: I confirm that I have made advance payment of Rs.8,61,80,284/- for purchase of row houses and twin bungalows from Shri Sanjay Kasliwal the sale price was fixed in a meeting orally and accordingly I have received sale deed draft on my email (rhishisteel@yahoo.co.in) on 29.03.2015 from email address of Sanjay Kasliwal (sanjavykasliwal@gmail.com) at 09.03 pm. I have also paid franking amount (stamp duty) Rs. 49.85 Lakhs on 27.03.2015, on confirmation by SMS at my mob number on 9325002909 sent by Mr. Sanjay Kasliwal dated 25.03.2015 from his number 9326361555. The copies of stamp duty challans, email and SMS will be submitted within two days in support of my say.'

4. From the aforesaid statement it is clearly evident that the allegation leveled against me by Mr. Agrawal is of advance given against the purchase of the properties and nowhere he has stated and neither confirmed that the cash loan was given to me against the hundi. and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal

5. Further during course of the assessment proceedings, the Ld. AO issued a notice u/s 142(1) dated 22.02.2022 and show cause notice dated 12.03.2022, wherein he asked to explain why addition of Rs. 8,61,80,284/- should not be made u/s 69D of the Act.

7. It is brought to Your Honour's notice that Mr. Agrawal has lodged criminal complaint against me and as well as filed Special Civil suit no. 39/2018 before Civil Court, Senior Division, Aurangabad alleging that his father has given me cash of Rs. 8,61,80,284 from time to time between 27.09.2014 and 27.11.2014 for investment in the properties but same has not been registered in his name.

8. In the Special civil Suit filed by Mr. Agarwal, in response to the same I have filed written statement dated 12.01.2019 before the Hon'ble Civil Judge (S. D.) therein 1 categorically denied to have taken cash of Rs. 8,61,80,284/- from father of Mr. Agrawal or Mr. Agrawal. Attention is also sought to my written statement filed before the Court where I have made very detailed submission and denied all the allegation raised in the suit filed by Mr. Agrawal.

9. During course of the assessment proceedings it was also requested to the Ld. AO to verify the books of account, income tax return, financial statements and other documents of Mr. Agrawal, father of Mr. Agrawal and other family members so as to confirm whether the said amount of cash was given or not to me. Further it was also requested grant an opportunity to me to cross examine Mr. Agrawal.

10. The Ld. AO for reopening of the assessment as well as while passing of an order has merely relied merely on the statement recorded before the Police authorities and neither brought any corroborative evidence on record for making such huge addition.

11. It is apposite to mention that such statement recorded by the police authorities has no evidentiary and provision in that regard is provided in Section 25 of Indian Evidence Act, 1872. Further, support to the same can be taken from the charge sheet filed by the police authorities before the MPID Court. In the chargesheet and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal filed by the police authority there is no copy of my statement recorded by police authority and neither there is any reference to the same and further in the description of the facts by the police authorities in charge sheet the allegations levelled against me is that the cash was given against the investment in properties.

12. Further a reference is made to the communication by police station, Kranti Chowk, Aurangabad, addressed to the Ld. AO, in response to notice u/s 133(6) of the Act vide letter dated 28.03.2022. In the said communication also the police authority- has stated that the allegation against me is of the cash given against the investment in properties. There is absolutely no mention about the cash loan against the hundi.

Therefore, neither the police authorities have any findings that there is cash loan given and neither there is allegation of Mr. Agarwal against me regarding cash loan given against hundi. This itself shows that there is no evidentiary value to the said statement recorded by the police authority.

13. In none of the statement, petition, FIR filed by Mr. Agrawal it has been alleged that cash was given to me towards to loan against the hundi. Therefore, the findings of the Ld. AO in Para 4 that 'FIR has been filed by Mr. Agrawal against me on the issue that I have taken cash from father of Mr. Agrawal and failed to repay it' is absolutely baseless and without application of mind.

14. Interestingly, the Ld. AO has doubted the allegations of Mr. Agrawal itself and has also gone to justify his stand that Mr. Agrawal and his father has given cash loan to me against hundi just to make the huge addition, that too without any corroborative evidence. The Ld. AO has not even taken effort to even verify the facts from the police authority before making such a huge addition.

15. It is pertinent to submit that on the basis of FIR filed, on the similar facts Mr. Agrawal has also filed a civil suit against me and the same is pending before the Hon'ble Special Civil Judge (S.D.) and therein I have filed its written statement denying all the allegations levelled against me by Mr. Agrawal. Considering my written submission as well as the oral submission, the Hon'ble Court have made observation in my favour and has also granted unconditional leave to defend.

16. Further, the Ld. AO has referred to the question no. 12 and 13 of my statement recorded during the survey proceedings and pointed out that I have accepted the fact in the statement that he had given signed hundis and blank cheques to father of Mr. Agrawal and the Ld. AO vaguely referring to the same concluded that I have accepted the loan in cash from Mr. Agrawal. and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal

17. In this regard it is humbly submitted that in the statement recorded during the survey it was clearly mentioned that blank hundis and blank cheques were given to father of Mr. Agrawal in the anticipation of receiving some amount from them but no amount was given to me. Further, to justify my statement I stated that if the loan would have been given to me by father of Mr. Agrawal then Mr. Agrawal should have deposited the cheques which were allegedly given for security of loan. As he has not deposited the cheques, it clearly shows that he has not given any loan to me. Also, it was pointed out that the said matter is pending before the Court.

18. In the said statement during survey, I have not acceded to the fact that I have received cash loan from father of Mr. Agrawal. In fact I clarified that I have not received cash in any form from them. The Ld. AO without pointing out on which basis or on the basis of which statement he concluded that I have accepted the fact of taking cash loan. This shows that there is completely non-application of mind by the Ld. AO and without appreciating the documents available on the record in right spirit, the Ld. AO has made such huge addition mechanically without justifying his stand.

19. Despite I filed various documents to prove that the allegation of Mr. Agrawal against me is not of the cash loan given but the allegation is about cash given for the investment in immovable property purpose, the Ld. AO has not dealt with these documents much less not even referred to these documents and has completely ignored those documents.

22. The additions made merely based on (he confession statement recorded by any authority is invalid. The reliance in this regard is placed on following case laws: a) CIT v. S. Khader Khan Son - [(2012) 25 taxmann.com 413 (SC)

Statement recorded under section 133A has no evidentiary value and any admission made during such statement cannot be made basis of addition. b) PCIT v. Nageshwar Enterprises [(2020) 122 taxmann.com 41 (Guj)

Where Assessing Officer made addition in hands of assessee firm for unaccounted investment and purchases merely on basis of confessional statement of assessee firm's partner before DRI, but no other evidences were bought on record, said addition was to be deleted c) Shri Ratan Babulal Lath v. DCIT- [(I.T.A. No. 355/Bang/2017, Order dated 15.06.2018)

Facts:

The Appellant (Assessee) Ratan Babulal Lath, an individual filed his return of income for A.Y 2009-10 at total income of Rs. 13,44,160/-. Later, the Appellant was interrogated by CBI in connection with providing accommodation entries to the companies of Shri. Y S Jagan Mohan Reddy and the noticed that the appellant has provided a sum of Rs.60 crores to Shri. Navneet Kumar Singhania which was deposited in the accounts of 2 companies viz. M/s. Sugam Commodeal Pvt. Ltd., and M/s. Chandelier Tracon Pvt. Ltd. It was ultimately invested as share capital into M/s. Jagati Publications Pvt. Ltd. In the statement recorded by the CBI the appellant deposed that he had supplied cash of Rs.60 crores through local cash carrier Shri. Navneet Kumar Singhania, whose statement was also recorded. The CBI forwarded the information collected to the AO. On the basis of this information, the AO reopened the assessment under section 147 of the Act, by issuing notice under section 148 of the Act.

In the case of addition of Rs 60 crore the ITAT held that the sole basis for making an addition in the hands of the Assessee is a statement of the Assessee as well as Shri Navneet Kumar Singhania recorded by the CBI. The ITAT observed that the settled position of law is that the statements recorded by the CBI and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal or police authorities/investigating authorities cannot be made the sole basis for making additions. Moreover, the statement recorded by the police authorities are not admissible as evidence as per provisions of Section 25 of Indian Evidence Act, 1982 and also in the light of judgment of the Supreme Court in the case of Zwinglee Ariel Vs. State of MP. For making addition, some more efforts were to be required on the part of the AO. In the present case, AO did not bring any material on record to show that Assessee has made the investment in Jagati Publications Ltd., by acquiring its shares during the impugned assessment year. Except such statements, the AO has not brought anything on record to establish that assessee had made such investment in Jagati Publications through Shri. Navneet Kumar Singhania and the same was not declared in its return of income. In the light of these facts, we are of the considered opinion that addition cannot be made in the hands of the assessee in the absence of the relevant evidence. d) Ajay sharma v. ACIT - ((2006) 101 TTJ 1065 (Delhi)] Where no evidence was collected during search to show that assessee was taking money for fixing cricket matches, reports of CBI and Madhavan Commission on match fixing could not be relied upon for making additions. e) DCIT v. NIBR Bullion Pvt. Ltd [I.T.A. No. 6320/Mum/2011, Order dated 05.12.2022, (Mumbai Trib)] Facts:

During search proceedings, statement of Ajay C. Arora, Director of the assessee company was recorded u/s 132(4) of the Act. In his disclosure statement, he offered Rs. 12 crores towards undisclosed income in F.Y. 2008-09 to cover up discrepancies in the seized documents, digital data, stock, excess jewellery, etc. Thereafter, Ajay C. Arora retracted from his statement and restricted his disclosure to Rs.3.75 crores in respect of discrepancies aforesaid. AO vide assessment order dated 31/12/2010 passed u/s 143(3) of the Act assessed total income of assessee at Rs. 12,10,70,727/-. The AO rejected assessee's retraction of statement and made the addition of entire declaration made during search.

Held:

Held that the AO was not able to point any seized document that could be correlated to the disclosure statement. Therefore, that addition merely on the basis of confession during the course of search operation without supporting evidence is unsustainable in law. and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal

24. It is once again submitted that the addition made by the Ld. AO of Rs. 8,61.80,284/- u/s 69D on the basis of mere statement is baseless and without bringing any corroborative material on record and without appreciating the documents filed by me before him and therefore, in the above circumstances, the huge addition made deserves to be deleted as illegal.

These are our preliminary submissions. If Your Honour still intends to confirm the action of the A.O., we request Your Honour to grant us a further opportunity of being heard to enable us to put further submissions. Needless to say, in the meanwhile, if any further clarification or information is sought, the same shall be supplied immediately upon intimation."

3.2 In continuation to the above, the appellant filed a rejoinder on 29.02.2024 as under.

"3. Addl. Ground: 3 The reopening notice issued without application of mind and wrong assumption of facts 3.1 In the submission filed before Your Honour, it was submitted that at the time of recording of the reasons for reopening, the Ld. AO had unsigned copy of my statement recorded before the Police Authorities and other documents as mentioned in Para 3.2 of the submission dated 31.10.2023. Further, by placing reliance on my unsigned statement recorded before the police authority, FIR and statement recorded u/s 131 of Mr. Agrawal the Ld. AO erroneously concluded that Mr. Agrawal has filed an FIR against me alleging that I have taken loan from Mr. Agrawal's father to the tune of? 8.61 crores but failed to repay the same, 3.2 This is absolutely a wrong fact mentioned by the Ld. AO in the reasons as in none of the documents available before the Ld. AO relating to Mr. Agarwal, he has alleged that I have taken loan from him. This fact has been recorded without application of mind.

5. However, in the remand report, the Ld. AO stated that my statement recorded by police authority available on record is and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal signed copy. In this regard, I submit that the Ld. AO who passed the order himself has mentioned in the para 6 of the assessment order that he issued notice u/s 133(6) vide dated 17.03.2022 and 28.03.2022 to the police authority for obtaining the signed copy of the statement recorded by police authority. Further, vide reply dated 31.03.2022 as reproduced in the assessment order, the police department submitted the copy of statement. These sequence of Ground: Addition u/s 69D of Rs. 8,61,80,284/- 5.1 The Ld, AO without discussing or controverting the detailed submission made before Your Honour has mechanically shown his agreement to the addition made. The Ld. AO being the quasi- judicial authority is expected to record his finding and bring on record the cogent evidence for making / agreeing to the addition. The Ld. AO in the present case has utterly failed in his duty as a quasi-judicial authority in the present case,

6. The Ld. AO has not controverted the additional ground: there is no reasonable formation of belief of escapement of income. This shows that the Ld. AO had nothing to controvert the submission made in that regard.

In the aforesaid circumstances, it is humbly submitted before Your Honour, the Ld. AO has mechanically drafted the present remand report without going through the submission and documents filed. Therefore, it is prayed to quash the notice issued u/s 148 and/or delete the addition made of Rs. 8,61,80,284/- on the grounds raised in the submission filed before Your Honour."

3.3 The appellant made further submission on 8.3.2024 as under.

"With reference to the above appeal, and in addition to the previous submissions, I submit as follows:

1. The short issue raised to be decided by Your Honour in the present case is that whether addition u/s 69D can be made merely on the basis of a statement recorded by the police authority?

2. The Ld. AO has reopened my case merely by relying on the statement recorded by the police authority wherein under duress and tremendous pressure I have been compelled to accept that I have obtained a cash loan against hundi from Mr. Pankaj Agrawal [Mr. Agrawal'] and his father.

3. During the assessment proceedings, following documents were filed to prove no cash loan against hundi was taken by me from Mi'. Agrawal: and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal a. Copy of First Information Report (FIR) filed by Mr.Agrawal against me.

[Ref: Pg. No. 32 to 36 of the PB] b. Statement recorded of Mr. Agrawal u/s 131 of the Income-tax Act, 1961 ['the Act'] [Ref: Pg. No.78 to 81 of the PB] C. Copy of suit filed by Mr. Agrawal before the Hon'ble Civil Court Senior Division, Aurangabad [Ref: Pg. No. 38 to 52 of the PB] d. Interim order of the Hon'ble Civil Court Senior Division, Aurangabad. [Ref: Pg. No. 62 to 67 of the PB] e. Chargesheet filed by the police authority before the MPID Court, Aurangabad [Ref: Pg. No. 68 to 72 of the PBJ f. A communication dated 28.03.2022 from the police authority to the Ld. AO in response to the notice issued u/s 133(6) [Ref: Pg. No. 82 of the PB]

5. Despite filing all the aforesaid documents, the Ld. AO not even referred to all these documents remotely or tried to deal with the same, he bypassed all these documents by ignoring the same. It is apposite to mention that at various stages of the assessment the Ld. AO made a wrong statement even in recording the reasons, in Para 3, by referring to the FIR and statement recorded u/s 131 of Mr. Agrawal the Ld. AO stated that from the said documents it is clear that I have obtained a cash loan and failed to repay it. Which is absolutely false and nowhere in those documents there is single sentence about the cash loan given to me against hundi. Similarly in the assessment order various misstatements have been made.

6. Interestingly, in Para 8 of the assessment order the Ld. AO stated that on the basis of documents in possession and statement recorded of the assessee and Mr. Agrawal, it is clear and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal that I have borrowed loan against hundi and therefore the same is liable to be taxed u/s 69D of the Act. Accordingly, the Ld. AO made the addition of Rs. 8,61,80,281/-.

7. Despite filing the documents of the Judicial Court, the police authorities and a person who has made the allegations against me, the Ld. AO neither rejected the same and not even dealt with the same. The Ld. AO by merely relying on the statement before the police authority which has no evidentiary value in the eyes of law and court and by ignoring the documents filed during the assessment has made the addition.

8. Further, in the last hearing Your Honour had raised a question that what is the development of the case pending before the Civil Court. In this regard, I humbly submit a copy of the statement recorded by the Hon'ble Court of Mr. Agrawal on 26.02.2024. The said statement is attached herewith is Annexure tAl Even in the statement recorded by the Court, Mr. Agrawal alleged that he and his father has given cash to me against investment in the row house and plots etc.

10. In the aforesaid circumstances, it is humbly submitted that the Ld. AO has made the addition on the basis of transactions which never took place and despite proving the same to the Ld. AO by filing various documents, the Ld. AO chose to ignore the same and made a huge addition u/s 69D and the same is illegal and therefore deserves to be deleted."

23. Further, he referred to the number of points summarising the contents on merits during the previous dates of hearing :

“SOME POINTS SUMMARIZED

1. Admittedly, there is absolutely no proof of Mr. Agarwal/ his father having given any cash to the Assessee.

2. In fact, Mr. Agarwal lied and misguided the Income Tax Department by claiming that he had receipt/proof of having given cash to the Assessee, but did not bring on record any such and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal proof. In fact, before the Court in cross-examination on oath, he admitted the he had no proof/ document in support

3. Even otherwise, it is impossible for a businessman to not to obtain a receipt or execute a document/writing at the time of lending such a huge amount of Rs. 8.61 crores.

4. In fact, it is highly improbable to give a such huge amount of Rs. 8.61 crores in cash. This was neither practical nor feasible in the circumstances of the case.

6. In fact, in the succession certificate obtained after the death of the father of Mr. Agrawal there is no mention about such a huge amount allegedly given to the Assessee. This fact has been admitted by Mr. Agrawal during the cross examination.

8. Mr. Agarwal again lied and mislead the Income Tax Department by claiming that he had accounted these transactions in his books of the account. In the cross- examination on oath, he admitted that nothing was accounted.

9. It is also impossible/highly improbable that a lender, who had lent such a huge amount of money (Rs. 8.61 crores) would not present the cheques for clearance or present the hundi for clearance.

WITHOUT PREJUDICE (ii) It had been the consistent stand of the Assessee throughout, including in the statement on oath, that he had handed over blank hundis / cheques to Mr. Radheshyam Agarwal and that they were filled in by Mr. Agarwal clandestinely much afterwards, for the obvious ulterior motives. This vital fact has remained undisputed / uncontroverted. This is also proved from the fact that the Bank has certified that the concerned cheque book itself was issued later on.

(iii) There are obvious inconsistencies in the dates of the hundis and of the cheques.

14. Re: Police Statement (i) First of all, the Police Department itself has not even referred, much less relied upon, such alleged statement. In fact, interestingly, this statement is not found in the police records.

(ii) Pertinently, there is not even a reference to this statement in the criminal proceeding (including in the Charge Sheet) or in the civil proceeding launched by Mr. Agarwal.

(iii) There are inconsistencies in the signed and the unsigned statement. and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal (iv) In any case, such a statement even otherwise has no evidentiary value in the eyes of the law.

(ii) Nothing is brought on record by the Department to rebut this crucial fact, as affirmed by its own star witness.

11. Bombay Engineering & Metal Works Pvt Ltd v. ITO. [1986] 24 ITJ 341 (Bom) 12. ACIT v. Bissheshwarlal Mannalal & Sons - [(2002) 80 ITD 69 (Calcutta Trib.)] 13. Himalaya Distributors v. ITO - [2009] 125 TTJ 705 (Pune)]

“4.1.1 The contention of the appellant in the aforesaid submission is that the sole basis of initiation of the reassessment proceedings is the copy of the unsigned statement recorded by the police authority which was impounded during the course of survey action. Further, the appellant submitted that while recording the reasons for reopening, in Para 3, the AO has mentioned wrong facts. The AO in the said para stated that Shri Pankaj Radheshyam Agrawal has filed an FIR against Shri Sanjay Kasliwal on the issue that Shri Sanjay Kasliwal has taken loan from Late Radheshyam Agrawal to the tune of Rs. 8.61 crore but he has failed to repay it. Whereas, the contention of the appellant is that as per the FIR filed against him by Shri Agrawal, the allegation levelled is that the cash was given against the investment in the properties and not against the loan. Therefore, the submission of the appellant is that the reasons are recorded without application of mind and by recording wrong facts in reasons.

4.1.2 Further, the AO in the communication dated 25.01.2024, on the aforesaid submission of the appellant commented as under.

"In this regard, it is submitted that the concerned Police Station has recorded the statement of assessee on 26/06/2017 after filing of FIR by Mr. Agrawal on the matter of cash transaction with his father late Sh. Radheshyam R. Agrawal. The statement bears the signature of the assessee on the perusal of the statement, it is clear. that the assessee has accepted the cash loan of Rs. 8,61,80,284/-from Shri Pankaj R. Agrawal and Late Radheshyam R. Agrawal on cheques and hundis. A copy of the statements of the assessee dated 26/06/2017 and relevant part of the statement of the assessee dated 22/08/2018 are enclosed herewith as per Annexure 'C' for kind perusal. In the view of the above, the assessee has made false allegation that the reasons was recorded by the AO without application of Mind and on the basis of the unsigned copy of statement before the Police authority. Then A.O. has information in physical form and the then A.O., has after due application of mind and facts available on record, framed the reasons to believe for reopening of the assessment proceedings in the assessee's case. Hence, the ground raised by the deserves to be rejected.

4.1.3 Further, in rejoinder to the comments of the AO, the appellant in written submission dated 29.02.2024 once again stated that at the time of recording of the reasons, the AO had in his possession- i) Unsigned statement recorded by the police authority ii) Appellant statement recorded during survey proceedings iii) The official copy of the FIR filed by Mr. Agrawal and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal iv) Statement recorded of Mr. Agrawal u/s 131 by DDIT (Inv)

4.1.4 The AO by placing reliance on the unsigned statement recorded by the police authority, FIR and statement recorded u/s 131 of Shri Agrawal, has erroneously concluded that Shri Agrawal has filed an FIR against the appellant alleging that he has taken loan from Shri Agrawal's father to the tune of Rs. 8.61 crores but failed to repay the same. The appellant further submitted that this is a wrong fact recorded by the AO in the reasons to believe. As per the appellant, in none of the documents available before the AO relating to Shri Agrawal, there is allegation that appellant had taken loan from Shri Agrawal.

4.1.5 For better appreciation of the submission of the appellant and AO, the relevant contents of the aforesaid documents are reproduced hereunder. xxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxx 4.1.6 The relevant portion of the statement recorded u/s 131 by the DDIT (Inv) of Shri Agrawal is as under.

"Q. 7 On verification of the document it is it is found that found that you have given an advance of Rs. 8,61,80,284/- to Shri Sanjay Kasliwal. Please state whether the amount was advanced by you and also state the purpose of the same alongwith necessary detail and evidences in support of the allegation you have made against Shri Sanjay Kasliwal.

Ans. I confirm that I have made advance payment of Rs. 8,61,80,284/- for purchase of row houses and twin bunglows from Shri Sanjay Kasliwal. The sale price was fixed in a meeting orally and accordingly I have received sale deed draft on my email ( rhishisteel@yahoo.co.in) on 29.03.2015 from email address of Sanjay Kasliwal (sanjaykasliwal@gmail.com) at 09.03 pm. I have also paid franking amount (stamp duty) Rs. 49.85 Lakhs on 27.03.2015 on confirmation by SMS at my mobile number on 9325002909 sent by Mr. Sanjay Kasliwal dated 25.03.2015 from his number 9326361555. The copies of stamp duty challans, email and SMS will be submitted within two days in support of my say."

4.1.7 From the aforesaid documents, which were available before the AO at the time of recording the reasons before issuing notice u/s 148, it is clear that the allegation of Shri Agrawal against the appellant was that he and his father had given cash of Rs. 8.61 crores to the appellant towards investment in the immovable properties. The finding of the AO vide Para 3 of the reasons to believe are reproduced as under. and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal "3. Analysis of information collected/received: On verification of documents available with this office, it is seen that Shri. Pankaj Radheshyam Agarwal has filed an FIR against Mr. Sanjay Kasliwal on the issue that Mr. Sanjay Kasliwal has taken loan from his father to the tune of Rs. 8.61 crore but he has failed to repay it. Onthe contrary, Sanjay Kasliwal as per page no. 54 to 56 of impounded loose paperbundle accepts that he took the cash loan against hundi but he has repaid thesame. In this regard Statement of Mr. Pankaj Radheshyam Agarwal was recordedu/s 131 by Office of DDIT(Inv.) Aurangabad. In the statement Pankaj Agarwal hasstated that the amount of Rs. 8.61 crore was advanced to Sanjay Kasliwal forpurchase of residential units from Sanjay Kasliwal. Further, Pankaj Agarwal hasstated that Hundi's original have been submitted to the police by him. The page no. 54 to 56 of impounded lose paper bundle once read in the context of copy of FIR filed before police by Pankaj Agarwal and statement of Pankaj Agarwal u/s 131 of IT Act it is clear that Sanjay Kasliwal has accepted cash loan and repaid the same in cash."

(emphasis supplied)

4.1.8 The AO in the aforesaid para has wrongly stated that Shri Agrawal has filed an FIR against the appellant on the issue that the appellant has taken loan from father of Shri Agrawal.

4.1.9 On perusal of the FIR and statement of Shri Pankaj Agrawal recorded u/s 131 of the Act it is clearly evident that there is no allegation by Shri Agarwal that the loan was given to the appellant. In the FIR and statement recorded u/s 131 of the Act of Shri Agrawal, the allegation is only about advance of Rs. 8.61 crores given to the appellant for investment in immovable properties.

4.1.10 Further, the appellant submitted the copy of the charge sheet filed by the police authority before the Hon'ble MPID Court, Aurangabad which was also produced before the AO during the assessment proceedings and explained that there is no reference to such statement recorded by the police authority in the said charge sheet and further invited attention to the relevant facts mentioned in the said charge sheet, the same are reproduced as follows (translated in English): xxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxx 4.1.11 Further, during the assessment proceedings the appellant had filed the copy of the petition filed by Shri Agarwal against the appellant before the Civil Court, Senior Division, Aurangabad. It is clear that in the said suit as well the allegation levelled against the appellant is that Rs. 8.61 crores were given by the father of the appellant towards and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal investment in immovable properties and the said properties have not been transferred in the name of Shri Agrawal. Further, the copy of the interim order of the Hon'ble Civil Court, Senior Division, Aurangabad was also filed before the AO, wherein at Para 10 of the interim order, the Hon'ble Court had also recorded that the dispute in the suit filed by Mr. Agrawal is that the allegation levelled against Shri Kasliwal is that his father had given Rs. 8.61 crores towards investment in immovable property.

4.1.11 Further, during the assessment proceedings the appellant had filed the copy of the petition filed by Shri Agarwal against the appellant before the Civil Court, Senior Division, Aurangabad. It is clear that in the said suit as well the allegation levelled against the appellant is that Rs. 8.61 crores were given by the father of the appellant towards investment in immovable properties and the said properties have not been transferred in the name of Shri Agrawal. Further, the copy of the interim order of the Hon'ble Civil Court, Senior Division, Aurangabad was also filed before the AO, wherein at Para 10 of the interim order, the Hon'ble Court had also recorded that the dispute in the suit filed by Mr. Agrawal is that the allegation levelled against Shri Kasliwal is that his father had given Rs. 8.61 crores towards investment in immovable property.

4.1.12 All the aforesaid documents filed before the AO during the assessment proceedings depict that the allegation of Shri Agrawal against the appellant is that his father had given advance to the appellant towards investment in property and it is not the allegation of Shri Agrawal that he or his father had given cash loan against hundi to the appellant. The AO during the assessment proceedings, without appreciating the relevant documents submitted before him has made the addition merely on the basis of the statement of the appellant recorded by the police authority.

4.1.13 Further, the AO has reproduced the copy of the statement recorded by the police authority of the appellant on page no.s 3 to 5 of the assessment order. On perusal of the same, it is seen that the said statement is unsigned and on denying the content of the said statement by the appellant, the AO issued a notice u/s 133(6) dated 17/03/2022 to the Police Inspector, Kranti Chowk Police Station, Aurangabad and requested to provide signed copy of the complete statement. In response, the Police Authority vide letter dated 28.03.2022 submitted as follows (translated in English): xxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxx 4.1.14 On perusal of the aforesaid response from the Police Authority it is clear that the complaint filed against the appellant by Shri Agrawal is that the amount of Rs. 8.61 crores was given to the appellant towards investment in immovable properties. and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal 4.1.15 The appellant further argued that the confession statement recorded before the Police Authorities has no evidentiary value as per section 25 of the Indian Evidence Act, 1872. To buttress his submission, the appellant also relied on the following case laws relating to the Income Tax Act: i) CIT v. S. Khader Khan Son - [(2012) 25 taxmann.com 413 (SC)] ii) PCIT v. Nageshwar Enterprises taxmann.com 41 (Guj)) [(2020) 122 iii) Shri Ratan Babulal Lath v. DCIT - [(I.T.A. No. 355 / Bang /2017, Order dated 15.06.2018)] iv) Ajay sharma v. ACIT - [(2006) 101 TTJ 1065 (Delhi)] v) DCIT v. NIBR Bullion Pvt. Ltd - [I.T.A. No. 6320 / Mum /2011, Order dated 05.12.2022, (Mumbai Trib)] 4.1.16 Further, during the hearing, the current status of the case pending against the appellant was asked. In response to the same, the Appellant filed the submission dated 08.03.2024 and along with the same, he filed a copy of the statement recorded of Shri Agrawal before the Additional Session Judge on 26.02.2024. In the said statement, Shri Agrawal has once again levelled the allegation against the appellant that he and his father gave appellant Rs. 8,61,80,284/- towards investment in immovable properties.

4.1.17 The AO in the assessment order is completely silent about such hefty documents filed by the appellant to prove that there is no allegation against the appellant that he has taken cash loan against hundi from Shri Agrawal. The AO in the assessment order states that "after dispute between them, Mr.Agrawal has took stand that he has given cash to the appellant to purchase properties." Merely by this statement he denied all the contentions of the appellant. However, there are no documents brought on record by the AO to prove that Shri Agrawal has changed his stand.

4.2 On perusal of the documents filed and the factual and legal submissions made before me, it is noted that- i) The only issue for adjudication is that whether the appellant has accepted the cash loans against hundi in contravention of the provisions of section 69D of the Act. ii) The AO while recording the reasons to believe has mentioned that Shri Agrawal had filed FIR against the appellant on the issue that the appellant has taken loan from his father. In fact, in the said FIR there is no mention about the loan given to the appellant. and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal iii) The appellant filed the copies of the charge sheet filed by the Police Authorities before the MPID Court, copy of the FIR, copy of the statement recorded u/s 131 of Shri Agrawal by the DDIT(Inv), copy of the suit filed by Shri Agrawal before the Civil Court, Senior Division, Aurangabad against the appellant and copy of the interim order passed by the Hon'ble Civil Court, Senior Division. Further, in a communication dated 28.03.2022, from the Police Authority to the AO, it has been stated that complaint has been filed against the appellant that he has accepted amount against the investment in the properties from Shri Agrawal and his father and he has failed to abide by the commitment. All the aforesaid documents consistently prove that the dispute between the appellant and Shri Agrawal is regarding the acceptance or non acceptance of advance against the investment in properties. It is not the case that the appellant has accepted cash loan against hundi from Shri Agrawal and his father. iv) The sole basis of making addition by the AO of Rs. 8,61,80,284/- is a statement of the appellant recorded by the Police Authority. It is well settled position of law that the statement recorded by the Police Authorities cannot be the sole basis for making additions. Moreover, the statement recorded by the Police Authority is not admissible evidence as per the provisions of Section 25 of the Indian Evidence Act, 1872. In the present case, the AO did not bring any cogent material on record to prove that the appellant has accepted the cash loan against the hundi violating the provision of section 69D.

5. In view of the above discussion and based on the judicial pronouncements relied upon by the appellant, the impugned addition of Rs. 8,61,80,284/- made u/s 69D by the AO cannot be sustained as the amount received was not a hundi loan but an advance against the investment in properties. The addition is, therefore, deleted. Thus, the Original Grounds No. 1 to 3 raised by the appellant are allowed.”

Amount borrowed or repaid on hundi. 69D. Where any amount is borrowed on a hundi from, or any amount due thereon is repaid to, any person otherwise than through an account payee cheque drawn on a bank, the amount so borrowed or repaid shall be deemed to be the income of the person borrowing or repaying the amount aforesaid for the previous year in which the amount was borrowed or repaid, as the case may be : and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal Provided that, if in any case any amount borrowed on a hundi has been deemed under the provisions of this section to be the income of any person, such person shall not be liable to be assessed again in respect of such amount under the provisions of this section on repayment of such amount. Explanation.—For the purposes of this section, the amount repaid shall include the amount of interest paid on the amount borrowed.

“Q.7 On verification of the document it is found that you have given an advance of Rs.8,61,80,284/- to Shri Sanjay Kasliwal. Please state whether the amount was advanced by you and also state the purpose of the same alongwith necessary detail and evidences in support of the allegation you have made against Shri Sanjay Kasliwal. Ans. I confirm that I have made advance payment of Rs. 8,61,80,284/- for purchase of row houses and twin bungalows from Shri Sanjay Kasliwal. The sale price was fixed in a meeting orally and accordingly I have received sale deed draft on my email (rhishisteel@yahoo.co.in) on 29.03.2015 from email address of Sanjay Kasliwal (sanjayskasliwal@gmail.com) at 09.03 pm. I have also paid franking amount (stamp duty) Rs.49.85 Lakhs on 27.03.2015, on confirmation by SMS at my mobile number on 9325002909 sent by Mr. Sanjay Kasliwal dated 25.03.2015 from his number 9326361555. The and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal copies of stamp duty challans, email and SMS will be submitted within two days in support of my say Q.8 Please state as to whether you have any proof of advance such as receipt etc. If yes, please produce the copy of the same.

Ans. Sir, we have cheques and receipts (hundis) duly signed by Mr. Sanjay Kasliwal in support of proof of advance, I have made to him. I will submit the copies of those cheques and hundis within two days. Original cheques and hundis are with the Police authorities for investigation purpose.

Q.9 In reply to above question you have stated that you have given advance of Rs.8,61,80,284/-. Please furnish the mode of such advance.

Ans. Sir, I have made payment in cash.

Q. 10 Please give the sources of advance given by you for Rs. 8,61,80,284/- to Shri Sanjay S. Kasliwal.

Ans. Sir, the said advance is paid by legitimate sources of my income such as business income & agricultural income in HUF status. Also, the cash advance is reflected in my books of account. I will submit the details of source with evidence within two days.

Q. 11 You have stated that you derive income from agricultural activities in HUF status. Please give the details land holding and the crops from which you have derived income.

Ans. Sir, in this regard I want to state that I have agricultural land more than 100 acres. I will submit the 7/12 extracts and other details relevant to agricultural land holding and income from agriculture within two days.

Q. 12 Please state as to whether the sale deed in respect of row houses for which you have given advance has been executed.

Ans. Sir, sale deed in respect of row houses for which I have given advance has not been executed till date.

Q. 13 In reply to above question, you have stated that sale deeds have not been executed till date. Then please state whether the said advance has been returned by Shri Kasliwal. If yes, please furnish the mode of receipt.

Ans. Sir, the said advance of Rs.8.61 crore has not been returned by Shri Sanjay Kasliwal till date. Therefore I have filed complaint against him.” and Co.No.31/PUN/2024 Sanjay Suganchand Kasliwal

Order pronounced on this 24th day of March, 2025.