ACIT, NEW DELHI vs. SHRI AKHIL KUMAR SUREKA, NEW DELHI

This appeal filed by the Revenue is directed against the order dated 24th August, 2016 of the CIT(A)-23, New Delhi relating to Assessment Year 2013-14.

The grounds raised

The facts of the case, in brief, are that the assessee is an individual and derives income from salary and other sources. Search and seizure proceedings u/s 132 of the IT Act were conducted in the case of M/s Mauria Udyog Ltd. and its group concerns and residential/factory premises of partners/directors and proprietors of the group on 7th August, 2013. The premises of the assessee was also covered. In response to notice u/s 153A of the IT Act, the assessee filed a written submission requesting to treat the return for the assessment year 2013-14 filed on 20th June, 2013 declaring total income of Rs.15,47,630/- as return filed in response to notice u/s 153A of the IT Act. During the course of assessment proceedings, the Assessing Officer observed that the assessee has certain transactions with Amrapali group of companies. The documents found during the course of search depicted cash payment of Amrapali group to M/s Mauria Udyog Ltd. and M/s Jotindra Steel & Tubes Ltd. One such document was.xls file titled as amarpali sapphire details.xls as per Annexure-A2 Party P-17. The Assessing Officer reproduced the scanned copy of the document in the assessment order. He also referred to the statement recorded u/s 132(4) of Shri Rohtash Kumar, working as Accounts Manager in M/s Mauria Udyog Ltd. The Assessing Officer referred to the various questions put during the course of search to Mr. Rohtas Kumar and observed that he had admitted that the amounts mentioned in the .xls file are nothing but payments that have been made by different Amrapali group companies to Mauria group, namely, Mauria Udyog Ltd. and M/s Jotindra Steel & Tubes Ltd. The A.O., therefore, asked the assessee to explain as to why the cash received by Mr. Akhil Kumar Sureka as per the details below should not be added to his income:- Date Amount Through 16.02.2013 Rs.1,00,00,000/- Shri Vaibhav Jain 14.03.2013 Rs.1,00,00,000/- Shri Vaibhav Jain 21.02.2013 Rs.1,00,00,000/- Himself Total Rs.3,00,00,000/-

The assessee in his response submitted that he has not received or accepted the amount of Rs.2 crore in cash from Shri Vaibhav Jain and Rs.1 crore from M/s Amrapali group of companies. He further submitted that he is not responsible for any money which has never been received or accepted by him. The assessee stated that the same facts can be verified from the Amrapali group of companies by issuing summons to them. However, the Assessing Officer was not satisfied by the explanation given by the assessee. Invoking the provisions of section 69A of the IT Act, the Assessing Officer made addition of Rs.3 crore to the total income of the assessee.

In the result, the appeal is allowed.”

Aggrieved with such order of the CIT(A), the Revenue is in appeal before the Tribunal.

The ld. DR strongly challenged the order of the CIT(A) in deleting the addition of Rs.3 crore made by the Assessing Officer. Referring to para 5.10.2 of the assessment order, he submitted that Mr. Rohtash Kumar is a key employee of M/s Mauria Group who has tremendous control and knowledge about accounts of whole of the group. This fact came to knowledge during assessment proceedings as he was the only person who was found to be able to explain any queries related to accounting. Shri Rohtash Kumar, despite being employee of Mauria Group, not only during search & post search proceedings but also during assessment proceedings confirmed the cash received. Shri Rohtash Kumar used to send these details through emails to shri Navneet Kumar Sureka & Shri Akhil Kumar Sureka who are the two main persons of the group, on regular intervals. The excel file attached to email dated 12.07.2013 is updated upto 31.03.2012, similar e-mails have been sent by Shri Rohtash Kumar to Shri Navneet Kumar Sureka on 08.02.2011 & 01.01.2013 also. Same excel file which is updated upto 30.01.2011 was also found from search & seizure operation on M/s Amrapali Group. This document was obtained from the hard disc seized from the corporate office of Amrapali Group as Annexure A-14 by search Party X-6. This is very important corroborative evidence in this regard. Therefore, as per presumption u/s 292C of the I.T. Act, 1961 which is very much applicable in the case of the assessee and in absence of' any cogent and reasonable explanation given by the assessee cash received amounting to Rs.3,00,00,000/- has to be treated as the income of the assessee. So far as the decision in the case of M/s Bihariji Ispat Udyog Ltd. is concerned, he submitted that the appeal filed by the Revenue was dismissed by the ITAT due to low tax effect.

The ld. counsel for the assessee, on the other hand, heavily relied on the order of the CIT(A). He submitted that that the cash receipts were actually meant for payment to land owners with whom land deals were to be negotiated by Bihariji Group on behalf of Amrapali Group. However, in cases where deals could not materialize, the cash was returned back to Amrapali Group. Further, in answer to Question No. 23, Rohtash Kumar had specifically replied that the cash payment to Vaibhav Jain was with regard to cash received from Amrapali Group for a land deal which never materialized and hence, the said money was returned back. This fact is further evident from the seized document enclosed at PB 23, wherein on the dates when the cash was received by the assessee, the said cash has been returned back, as the deals for which the cash was received could not materalize. He submitted that the assessee in this regard also requested the AO to issue summons to the parties in order to verify the claim of the assessee. However, the Assessing Officer never summoned or called for any information from Amrapali Group and arbitrarily rejected the explanation of the assessee. Further, before the AO the assessee submitted complete justification with regard to transaction mentioned in the email, which is encloses at PB 78 - 79. He submitted that a perusal of the seized documents at PB 15-23 clearly shows that one document indicates receipt of cash from Amrapali Group and the other seized document indicates return of the same amount of cash on the same dates to Amrapali Group. Documents seized on the basis of which addition has been made were not found from the assessee and were found at the search conducted on Rohtash Kumar at H No. 124, Gali No. 29D Badarpur. Delhi. The documents as per AO’s allegation depicts payment by Amprapali Group to Mauria Udyog Ltd. and Jotindra Steels & Tubes Ltd. The AO admits the fact that from the statement it is clear that payments are vice-versa. These facts corroborated from the seized documents where on the same day cash is received and also paid back. This fact has been explained by Mr. Rohtash Kumar in his statement, quoted by the AO in Question 21 Pg 11 of the assessment order and answer to Question 23 pg 12 of the assessment order, where it is clearly stated that money was returned as deal was not materialized. The assessee’s name and connection nowhere raised in any search or post search investigation. Further the assessee was never questioned and no connection or nature of transaction arising from the assessment order. The AO just issued a show cause notice to the assessee without pointing out any logic. The assessee has categorically denied any connection quoted by the AO in para 5.9 pg 13 of the assessment order.

The ld. counsel for the assessee submitted that the allegation of section 69A quoted by the AO in para 5.10.1 of the order by no stretch is applicable since the assessee has never been found in possession of any cash, money, bullion etc. Section 292C is also not applicable as document was not found from the assessee. He submitted that presumption under section 292C is against the person from whom the document was found. Further searched person has never stated or made any allegation against the assessee. The contents of the documents nowhere shows that this is the income of the assessee. On the contrary the person explained the transactions stated in the documents fully. Such explanation has not been found to be false or untrue. It is not the case of the AO that what Mr. Rohtash Kumar stated is wrong. The AO has shifted the burden on the assessee without discharging the primary onus cast on him that these transactions are of the assessee. He submitted that the law is well settled that nobody can be asked to discharge a negative onus. The CIT(A) has rightly understood the facts and after appreciating the same has deleted the addition. It is also the settled law that a document cannot be utilized selectively against the assessee and portions of the document which are in favour of the assessee cannot be ignored just at the option of the Assessing Officer.

Similarly, in his answer to question No.23, he has explained, the amount of Rs.1 crore. The relevant question and answer read as under:- “Q.23 Kindly refer to the documents mentioned in the Q.No.18. Kindly explain the entries on 16.02.2013 mentioned as cash Rs.1 Crore. Vaibhav Jain as per A.K. Sureka. Who is Vaibhav Jain and who is A.K. Sureka?” Ans. I do not know who is Vaibhav Jain but A.K. Sureka stands for Akhil Kumar Sureka. However, this entry can be explained on the same lines i.e. Sh. Vaibhav Jain received Rs.1 crore from Amrapali Group for a land deal which never materialized and hence the same money was returned.”

We find the assessee before the Assessing Officer had categorically submitted that the seized documents on the basis of which addition has been made were not found from the assessee and was found on the search conducted on Mr. Rohtash Kumar and when there were both payments received and cash returned back, the Assessing Officer cannot treat only one part as correct and the other part as incorrect. We find despite request made by the assessee, the Assessing Officer never made any effort to verify the facts from the Amrapali Group. We also found merit in the argument of the ld. counsel that presumption u/s 292C is against the person from whom the document was found. Further, the searched person has never made any allegation against the assessee. The contents of the documents nowhere shows that this is the income of the assessee. Further, the person has explained the transaction stated in the documents and his explanation has not been found to be false or untrue.

We find identical issue had come up before the Tribunal in the case of M/s Navneet Kumar Sureka where, on the basis of the same seized documents, addition was made by the Assessing Officer and, in appeal, the ld.CIT(A) deleted the addition. On further appeal by the Revenue, the Tribunal upheld the order of ld.CIT(A) and dismissed the appeal filed by the Revenue by observing as under:-

A plain reading of the aforesaid section clearly shows that it is applicable in a case where the assessee is found to be owner of any money, bullion, jewellery or other valuable article. The facts of the case in hand show that the assessee was never found to be in possession of any real money. The addition having been made only on the strength of some notings found in some file extracted from the computer of Shri Rohtash, clearly establish that the provisions of section 69A of the Act do not apply. We agree with the contention of the ld. AR that the foundation itself is weak and the addition should not survive. However, the Assessing Officer made the addition on the strength of the statement of Shri Rohtash wherein he has admitted that Rs. 1 crore has been received. Exhibit 85 of the paper books reveals that on the date of receipt of the impugned amount, the same was returned back to Amrapali Group by M/s Bihariji group. The entries of Rs. 50 lakhs each on 11.12.2012 and 01.02.2013 can be seen from the said Exhibit 85 of the paper book. This means that the date on which the alleged Rs. 1 crore was received, on the very same day the same was returned back.

More importantly, there is no mention of the assessee’s name in the impugned document. The Assessing Officer has simply assumed that the reference to the impugned amount is in relation to the assessee. In our understanding , no addition can be made on the basis of presumptions and surmises. Assuming, yet not accepting that the amounts were received by the assessee, the same were returned back on the very same date as per Exhibit 85 of the paper book. Even on this count, addition is uncalled for.

In the result, the appeal filed by the Revenue is dismissed.”

Since the facts of the instant case are identical to the facts of the case decided by the Tribunal, therefore, in view of our discussion in the preceding paras and respectfully following the decision of the Tribunal cited (supra), we uphold the order of the CIT(A) in deleting the addition made by the Assessing Officer. The ground raised by the Revenue is accordingly dismissed.

In the result, the appeal filed by the Revenue is dismissed. The decision was pronounced in the open court on 24.01.2019.