NIMBUS PROJECTS LIMITED,DELHI vs. DCIT, CENTRAL CIRCLE-2, NOIDA

& Ors. Nimbus Projects Ltd.

“ The following grounds of appeal are independent of, and without prejudice to, one another The Assessing Officer erred in issuing notice under section 148 of the Act. The appellants contend that on the facts and in the circumstances of the case and in law, the issue of notice under section 148 is without jurisdiction and hence, the consequent assessment order needs to be quashed. The appellants further, contend that on the facts and in the circumstances of the case and in law, the notice issued under section Ors. Nimbus Projects Ltd. 148 is barred by limitation and hence, the consequent assessment order is bad in law and ought to be quashed. The appellants further, contend that on the facts and in the circumstances of the case and in law, there is no information available with the Assessing Officer arising out of search carried out on Proform Interiors Private Limited which suggests that income chargeable to tax has escaped assessment and therefore, the notice issued under section 148 is bad in law and hence, the consequent assessment order needs to be quashed. The appellants further, contend that on the facts and in the circumstances of the case and in law, the Assessing Officer failed to bring on record as to how is the income, which has allegedly escaped assessment, represented in the form of (i) an asset; or (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, and therefore, the notice issued under section 148 is bad in law and hence, the consequent assessment order needs to be quashed.

1. The specified authority under section 151 erred in not granting an appropriate approval as required under section 151 of the Act. The appellants contend that on the facts and in the circumstances of the case and in law, the approval granted by the authority under section 151 of the Act is mechanical and without application of mind, and therefore, the notice issued under section 148 by the Assessing Officer is bad in law and hence, the consequent assessment order needs to be quashed.

2. The authority under section 148B erred in not granting appropriate approval as required under section 148B of the Act. The appellants contend that on the facts and in the circumstances of the case and in law, the approval granted by the authority under section 148B of the Act is mechanical and without application of mind and hence, the consequent assessment order is bad in law and needs to be quashed.

& Ors. Nimbus Projects Ltd.

3. The CIT(A) erred in upholding the addition made by the Assessing Officer of Rs 20,00,000 under section 69C of the Act, being alleged payment in cash made to Proform Interiors Private Limited. The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the impugned addition of Rs 20,00,000 inasmuch as he has not appreciated the facts of the case in its entirety as the appellants have not made any payment to Proform Interiors Private Limited, whether by cheque or in cash, during the year under reference and hence, the impugned addition of Rs 20,00,000 is not warranted and needs to be deleted. The appellants further, contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the impugned addition inasmuch as no positive evidence is brought on record by the Assessing Officer and the impugned addition is made only on the basis of assumptions and presumptions; hence, the impugned sustenance of Rs 20,00,000 is bad in law and needs to be deleted. The appellants crave leave to add to, alter or amend the aforestated grounds of appeal

.”

12. We have heard the ld. AR for the assessee and the Ld. DR for the revenue.

& Ors. Nimbus Projects Ltd. 13.1 The Ld. DR on the other hand argued that the Revenue has not filed appeal against the restriction of the addition for A.Y. 2017-18 due to low tax effect. With respect to the addition made on account of alleged cash receipt by the searched entity from the assessee, it is argued that the related document is not a dumb document because the entries made in respect of year 2017-18 starting from 01.08.2016 to 26.04.2017 are deemed to be admitted because the said transactions are found recorded in the books/ bank account of the appellant or Nimbus Propmart Ltd. Hence, the cash transactions mentioned on the same document where the cheque transactions are mentioned, has to be considered as correct because the document cannot be read in part and the whole document has to be read and the entries made in cheque as well as in cash, therefore, has to be believed on the basis of preponderance of probabilities. It is further argued that the cheque transactions recorded in the seized document, match with the entries recorded in the books of accounts of the assessee and the onus was shifted to the assessee to explain the source of cash payment which assessee has failed. Hence, the Ld. DR submitted that the addition made by the assessing officer and confirmed by the Ld. CIT(A) for all the concerned assessment years are legally and factually justified, and & Ors. Nimbus Projects Ltd. the appeal is devoid of merit and is liable to be dismissed. It is further argued that the reliance placed by the Ld. AR on the judgement of Supreme Court in Common Cause (A Registered Society) v. Union of India, [2017] 77 taxmann.com 245 (SC), is misplaced because the said case pertains to the registration of FIR. The said judgment was decided on that premises whereas in the present case, the burden of proof is required to be determined on the basis of preponderance of probabilities and the Ld. DR relied upon the case of Sumati Dayal vs Commissioner Of Income-Tax, Bangalore 1995 AIR 2109, 1995 SCC SUPL. (2) 453.

5. It is no doubt true that in all cases in which a receipt is sought to be taxed as income, the burden lies on the Department to prove that it is within the taxing provi- sion and if a receipt is in the nature of income, the burden of proving that it is not taxable because it falls within exemption provided by the Act lies upon the assessee. [See :Parimisetti Seetharamamma (supra) at P. 5361. But, in view of Section 68 of the Act, where any sum is found credited in the books of the assessee for any previous year the same may be charged to income tax as the income of the assessee of that previous year if the explanation offered by the assessee about the nature and source thereof & Ors. Nimbus Projects Ltd. is, in the opinion of the Assessing Officer, not satisfactory. In such case there is, prima facie, evidence against the assessee, viz., the receipt of money, and if he fails to rebut, the said evidence being unrebutted, can be used against him by holding that it was a receipt of an income nature. While considering the explanation of the assessee the Department cannot, however, act unreasonably. (See : Sreelekha Banerjee (supra) at p. 120).

& Ors. Nimbus Projects Ltd. 18. We now proceed to examine the assessment order as well as impugned order to consider the above submissions and the reliability of the seized document. We are extracting para 5, 5.1 and 5.2 as under:

As per the assessee’s submission, it has been explicitly stated that no transactions were conducted with Proform Interiors during the year under consideration. However, a document seized during the search operation serves as concrete evidence that the assessee made cash payments to this entity during the relevant financial year. 5.1 This contradiction suggests that the assessee is deliberately concealing the cash transactions. The reasoning behind this assertion appears to be that, apart from Assessment Years 2015-16 and 2016-17, all other payments to Proform Interiors were made through cheques. By claiming that no transactions occurred in the year under review, the assessee is seemingly attempting to distance themselves from the cash transactions specifically. 5.2 This deliberate non-disclosure indicates an intentional effort to suppress the fact that payments were indeed made in cash. Such an omission raises serious doubts about the genuineness of the assessee’s claims and suggests that they are unwilling to acknowledge these cash payments, possibly to avoid tax implications or scrutiny under the provisions of the Income-tax Act. In view of the above and as per the findings of search, it is established that the assessee has made payment to the said entity amounting to Rs. 20,00,000/- and therefore an amount of Rs. 20,00,000/- is hereby added to the total income of the assessee u/s 69C of the Act. [Add: Addition of Rs. 20,00,000/- u/s 69C of the Act] Penalty proceedings u/s 271(1)(c) of the Act are being initiated separately.

& Ors. Nimbus Projects Ltd. 19. We have also examined the impugned order passed by Ld. CIT(A) and to arrive the decision on the question before us, we deem it necessary to extract page 11 to 14 of the CIT(A) order as under:

“It shall be important to analyze the transactions as mentioned in the seized documents viz a viz the transactions in the books of accounts of the assessee concern and the information received in response to enquiry from Nimbus Propmart Limited. The details of transactions as provided by the AR in the reply filed are tabulated below for easy understanding:

From the perusal of the above table, it is made out that majority of the transactions are recorded in the books of accounts of either the assessee or another entity by the name of M/s. Nimbus Propmart Limited. The recording of the cheque entries in the seized document is mostly 1 to 3 days earlier than the actual transaction recorded in the books/bank account of appellant or Nimbus Propmart Limited. The reason for the said difference appears to be the time taken by the banking authorities for clearance of the cheques. The cheque amounts under question are exactly matching as per the seized document and as per the bank account of the appellant and reply of Nimbus Propmart Limited. Apart from the cheque transactions, there is cash payment of Rs. 40 lacs during AY 2015-16, Rs. 20 lacs during AY 2016-17 and Rs. 2 lacs during AY Ors. Nimbus Projects Ltd. 2017-18. The assessee has denied the payment of cash. It is important to emphasize here that the cash transactions are also mentioned on the same document where the cheque transactions are mentioned. It cannot be a case where the part of the document can be considered as true and other part false as per the convenience of the assessee. Once, the cheque transactions recorded in the seized document match with the entries recorded in the books of accounts of the assessee, the onus shifts to the assessee to explain the source of cash payments as well. The AO has relied upon the seized material wherein, the payment of cash totaling to Rs. 62 lacs made by the assessee spread over three assessment years i.e. AY 2015-16 to AY 2017-18 has been referred to. The AO treated the cash payment as unexplained cash and added the same to the total income of the assessee, Though the Alt has been denying the payment of cash, but the same seized document carries confirmed payments of cheque made by the assessee. The AO apart from the addition with respect to the cheque payments has also made addition with respect to the unexplained cash payments made by the assessee. The cash payments of Rs. 62 lacsare part of record as per the seized document. Subsequent denial of a transaction which is clearly made out from the seized document cannot be taken as ground for providing any relief to the assessee. Judicial Pronouncements The Hon'ble Supreme Court in the case of CIT vs. Smt. P. K. Noorjahan reported at [1999] 237 ITR 570 has held that if, the assessee's explanation regarding the source of investment is not found to be satisfactory, the AO has the discretion to treat such investment as assessee's income. Further, the Hon'ble High Court of Madras in the case of Thiru S. Shyam Kumar vs. ACIT reported at [2018] 99 taxmann.com 39 has held as under: Unexplained investment (On-money payment) A search was conducted in business premises of assessee wherein certain loose slips were recovered, which showed several entries pertaining to cash and cheque transactions in respect of purchase of a property-Assessee accepted in his statement that slip represented on-money payment made for purchase of property in question Later on, assessee retracted from his statement and Ors. Nimbus Projects Ltd. claimed that loose slips were only dumb slips Tribunal however, rejected claim of assessee and confirmed addition-Whether since notings in loose slips were clear, retraction made by assessee after period of two years was rightly rejected as an afterthought-Held, yes Whether thus, impugned order could not be interfered-Held, yes" The Hon'ble Karnataka High Court in the case of C. Ramakrishna vs. Deputy Commissioner of Income-tax reported in [2023] 154 taxmann.com 40 (Karnataka), held as under: Section 69A of the Income-tax Act, 1961 Unexplained money (Illustrations) Assessment year 2009-10-Assessing Officer made additions in hands of assessee on basis of seized loose papers which revealed money transaction between assessee and others relating to a property It was noted that transaction of payment with respect to relevant assessment year was confirmed Whether since lower authorities had concurrently recorded findings of fact against assessee, appeal was to be dismissed-Held, yes [Para 5] [In favour of revenue] The Hon'ble High Court of Jharkhand in the case of Mahabir Prasad Rungta vs. Commissioner of Income-tax (Appeals), Ranchi reported at [2014] 43 taxmann.com 328 (Jharkhand), held as under: Pursuant to a search of assessee's premises, Assessing Officer made an addition on ground of undisclosed Income on basis of loose sheets seized during search Whether loose sheets seized during search sometimes contain valuable information and thus those are to be regarded as ' documents' within meaning of section 1588(b)-Held, yes Whether there is presumption raised under section 132(4A) regarding documents seized and in light of such presumption, assessee ought to have produced other documents to disprove entries made in loose sheets Held, yes Whether since assessee had not adduced any rebuttal evidence to show that entries made in diary/loose sheets were not income in hands of assessee, addition upheld by Commissioner (Appeals) and Tribunal were justified-Held, yes" From the above judgments, it is clear that once there is adequate documentary proof available showing the payment of cash, the said Ors. Nimbus Projects Ltd. unaccounted cash needs to be brought to tax. From the above discussion, it is apparent that the transactions recorded by the assessee in the books of accounts and the transactions recorded in the books of accounts of Nimbus Propmart Limited cannot be added to income of the assessee. The transactions made in cash for which the assessee has not been able to explain the source have been rightly added by the AO to the income of the assessee. Accordingly, addition is sustained to the extent of Rs. 40 lacs being paid in cash by the assessee during AY 2015-16, Rs. 20 lacs being paid in cash by the assessee during AY 2016-17 and Rs. 2 lacs being paid in cash by the assessee during AY 2017-18. Accordingly, this ground for AY 2015-16 & 2017-18 is partly allowed, for AY 2016-17 is dismissed and for AY 2018-19 is allowed. 4.6 Ground of Appeal

No. 6 is regarding charging of interest u/s 2348 and 234C of the Income Tax Act, 1961 which is consequential in nature. The AO shall charge the interest as per law.

5. In the result, the Appeal for AY 2015-16 & 2017-18 is partly allowed, Appeal for AY 2016-17 is dismissed and the Appeal for AY 2018-19 is allowed.”

20. On perusal of the impugned order as well as the assessment order, it become evident that the material as discussed by the Ld. Lower Authority and the reasoning given therein are such which is based on correct appreciation of facts while following the settled legal precedents. It is an undisputed fact that the seized document is containing entries of cash payment as well as payment through cheques. Payment through cheques which are relevant to the assessment year 2017-18 are found recorded in the books of account of either assessee or concern (Nimbus Propmart Ltd.). Therefore, we agree with the argument of the ld. DR for revenue that the seized document is to be read as a whole and not in parts and the assessee cannot be allowed to & Ors. Nimbus Projects Ltd. blow hot and cold in the same breadth. Hence, the entries in cash as well as in cheques in the seized document are to be considered correct and the burden of proof in the Income Tax cases as held in Sumati Dayal (supra) and Swati Bajaj (supra) would be what inferential process a reasonable/ prudent man would apply to arrive at a conclusion on a prima facie appreciation of the material. Hence, the seized document relied by revenue is held not to be a dumb document but a piece of admissible evidence. The question posed by us in para 14 (supra) is decided accordingly in favour of revenue. Therefore, we find no legal or factual infirmity in the conclusion arrived by the Ld. Lower Authorities including the Ld. CIT(A) in the impugned order. Hence, we confirm the impugned order and the addition made therein in all the concerned assessment years.

21. Since, the appellant has argued its case with respect to the addition, on merit only, the other grounds raised in the appeal are disposed of as not pressed. The appeal of the assessee is accordingly dismissed.

, A.Y. 2015-16 & A.Y. 2017- Ors. Nimbus Projects Ltd. 22. In view of the finding returned in & 5015/Del/2025 since, the facts and issues are identical and the notices is issued on same date, the findings returned in ITA No. 5014/Del./2025, (A.Y. 2016-17) shall mutatis mutandis apply to these appeals also. The appeals of the assessee are dismissed in above terms.

Order pronounced in open Court on 09 January, 2026