DY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(1), NAGPUR, NAGPUR vs. MS AVC HOMES, NAGPUR

PER K.M. ROY, ACCOUNTANT MEMBER

Passed ITA No. & A.Y. Order No. under Dated section (A.Y. 2018-19) CIT(A)-3, Nagpur,/10737/2017-18 U/s. 271D 28.09.2023 Revenue has raised following grounds of appeal in its appeal: - 3.

“1. The Ld. CIT(A) has erred in deleting the addition of Rs.64,82,600 /- on account of undisclosed income u/s 69A of the Act made by the AO which was based on the seized Document No. B/6 seized from residential premises of Shri Vyankatesh Kunawar (Party A-2) who is a partner in the assessee firm and the said documents have the evidentiary value.

2. The Ld. CIT(A) has failed to appreciate the facts that the addition of Rs.64,82,600/-was made on account of undisclosed income u/s 69A of the Act based on the seized Document No. B/6 seized from residential premises of Shri Vyankatesh Kunawar (Party A-2) who is a partner in the assessee firm, and the same was offered by the assessee for taxation during the course of assessment as mentioned in Para-3 of the assessment order.

3. The Ld. CIT(A) has failed to appreciate the facts that that during the course of search/survey, loose paper or any incriminating documents hold the high value and the same would be treated as base for making any addition and is sufficient to take it as evidence against the assessee.

4. The Ld. CIT(A) has failed to appreciate the facts that there are noting on the loose papers and the onus to explain the noting on the loose paper lies on the assessee. 5 Any other ground that may be raised during the course of appellate proceedings.”

& 384/NAG/2023 M/s. AVC Homes

Being aggrieved, Assessee preferred an appeal before Ld.CIT(A). After 5. considering the submissions of the Assessee, Ld.CIT(A) allowed the appeal of the Assessee by deleting made by the Assessing Officer under section 69A of the Act.

Being aggrieved, Revenue is in appeal before us by raising the above 6. grounds.

At the outset, the learned Authorized Representative (in short “Ld.AR”) 7. appearing for the assessee submitted that the tax effect on the amount disputed by the Revenue is below the revised monetary limit of Rs.60 lakhs applicable to & 384/NAG/2023 M/s. AVC Homes appeal before the Tribunal, as per CBDT Circular No.09 of 2024, dated 17/09/2024. Thus, the learned AR submitted that the Revenue’s appeal being covered under the aforesaid Circular is not maintainable.

The learned Departmental Representative agreed that the tax effect on the 8. amount disputed by the Revenue is below the monetary limit of Rs.60 lakhs for the appeal under consideration.

Having heard the arguments of rival parties, perused the material available 9. on record and gone through the orders of the authorities below, we are of the view that the tax effect on the amount disputed by the Revenue in the present appeal is below the revised monetary limit of Rs.60 lakhs as per CBDT Circular cited supra. The tax demand involved in the appeal is Rs.50,07,8096/- as per Form 36. It also stands clarified by the CBDT that the revised monetary limit of Rs.60 lakh, as per the aforesaid CBDT Circulars, would also apply to all pending appeals. In view of the aforesaid, Revenue’s appeal deserves to be dismissed. However, the Revenue is given liberty to seek recall of this order if, at a later point of time, it is found that the appeal falls under any of the exceptions provided in the CBDT Circular referred supra.

In the result, appeal filed by the Revenue is dismissed. 10. (A.Y. 2018-19) Revenue has raised following grounds of appeal in its appeal: - 11.

& 384/NAG/2023 M/s. AVC Homes “1. On the fact and in the circumstances of the case, the Ld. CIT(A) erred in deleting the penalty of Rs.1,34,20,434/- levied by the Addl.CIT which was based on the seized document No. B/6 of party A-2 from Shri Vyankatesh Kunawar and the said document have the evidentiary value.

4. Any other ground that may be raised during the course of appellate.”

The solitary issue raised by the Revenue is relating to deletion of penalty of 12. Rs.1,34,20,434/- under section 271D levied by the Addl. CIT, Central Range-2, Nagpur based on the seized document No. B/6 of party A-2 from Shri Vyankatesh Kunawar considering that the document has an evidentiary value and receipt in cash over Rs.20,000/- towards sale of plots is clearly explicit ex-facie on such document.

We have heard both the sides and perused the material available on record.

& 384/NAG/2023 M/s. AVC Homes

During the course of Arguments, the Ld. AR. Pointed out various defects in the documents and stated that there have been no corroborative evidences brought forth by the AO in support of additions made by him. The Ld. AR stated that the document recovered from the search premises are non- speaking and dumb documents. I have gone through the relevant document, Assessment Order and submission of the Ld. AR. Upon careful examination of the mentioned documents, it becomes evident that certain pages appear to be rough calculation workings. Notably, the documents lack explicit mention or evidence indicating that the appellant received any cash amount. There are no signatures from customers confirming cash payments to the appellant, no revenue stamps on any page, and a significant portion of the columns remain unfilled. Significantly, the said documents were received from the residential premises of Mr. Vyankatesh Kunnawar. More importantly, the presumption of Section 132 (4A) goes against the person from whose possession documents are seized or impounded. In the present case, the documents were seized from some third party residence, which cannot be at all presumed that the particular documents found at the third party residence are the documents of the appellant, and it will be illegal to raise a demand on appellant with this presumption. Therefore, there is no question of addition on basis of said documents in the hands of appellant where the document seized from third person without any corroborative evidence. The appellant has cited various case laws on loose sheets while arguing the case orally. It is settled law that Loose Sheets without corroborative evidence have no evidentiary value. In the case of CIT vs. Anil Bhalla [2010] 322 ITR 191 (Delhi), the Hon'ble Tribunal held that until independent evidences exist, the addition on the basis of notings and jottings cannot be upheld. Reliance can be placed on- 1. CENTRAL BUREAU OF INVESTIGATION CBI VERSUS Vs. SHUKLA & ORS [1998] 1998 taxmann.com 2155 (SC) 2. COMMON CAUSE (A REGISTERED SOCIETY) AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2017] 77 taxmann.com 245 (SC) 3. PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-2 VERSUS UMESH ISHRANI [2019 (4) TMI 1947 - BOMBAY HIGH COURTI 4. THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-21, MUMBAI VERSUS M/S. LAYER EXPORTS PVT. LTD. [2016 (10) TMI 1024 - ITAT MUMBAI] 5. S.P. GOYAL VERSUS DEPUTY COMMISSIONER OF INCOME- TAX [2002 (4) TMI 952 - ITAT MUMBAI] & 384/NAG/2023 M/s. AVC Homes

by the Ld. AR is whether the Assessing Officer erred in law and on facts by levying the penalty u/s 271D in absence of Concrete Evidence on record. I have already discussed in the preceding paragraphs that there was no corroborative evidence on record. There is no clear evidence of accepting or taking loans or specified sum. No such definite evidence is available in this case to show that the appellant contravened provisions of Section 269SS to justify the penalty under Section 271D of the Income Tax Act. In the case of ITAT in Navin Kumar v/s JCIT (2006)

99. TTJ 267

98. ITD 242 (TM) (ITAT Amritsar), it is held that unless the fact of breach of provision is proved beyond doubt and the act or omission falls within four corners of the provision of law, penalty should not be levied. I agree with the contention of Ld. AR that the presumption can only arise on the basis of 'books of account' or 'documents' or 'assets' found during search only against the person from whom it is seized. In the present case, the documents were seized from some third party residence, which cannot be at all presumed that the particular documents found at the third party residence are the documents of the appellant, and it will be not legal to raise a demand on appellant with this presumption. In my considered opinion, the AO erred in law and on facts by levying the penalty u/s 271D in absence of Concrete Evidence on record. Therefore, I adjudicate the Second ground in favour of appellant and is therefore "allowed".

& 384/NAG/2023 M/s. AVC Homes

In the result, appeal of the revenue is dismissed. 15. To sum-up, both the appeals filed by the revenue are dismissed. 16. Order pronounced in the open Court on 09/06/2025