MRS. SUMEDHA SUDAM KAMTHE,PUNE vs. INCOME-TAX OFFICER,

आदेश / ORDER

PER SUSHMA CHOWLA, JM

The appeal filed by the assessee is against the order of Commissioner of Income Tax (Appeals)-4, Pune dated 01.02.2016 relating to assessment year 2009- 10 passed under section 143(3) of the Income Tax Act, 1961 (in short ‘the Act’).

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“1.The learned CIT(A)-4, Pune erred in law and on facts in sustaining jurisdiction u/s.147 of ITA, 1961 on the basis of documents found in the search action u/s.132 of ITA, 1961 in case of M/s. Pinnacle Group. Appellant contents that the rightful jurisdiction ought to have been assumed u/s.153C and not u/s 147 of ITA, 1961.

affidavit in this regard explaining the reasons for delay. In the entirety of the facts and

circumstances, there is merit in the plea of the assessee and the delay of 98 days is

hereby condoned.

dismissed as “not pressed”.

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Rs.28,80,150/- made u/s. 69C of the Act.

declaring total income of Rs.1,72,800/-. Search action u/s.132 of the Act was

conducted in the case of “Pinnacle Group”, Pune. Shri Gajendra D. Pawar, prop. of

the firm M/s. Pinnacle construction, had constructed the projects known as

“Pinnacle Prestige”, Tilak Road, Pune. On verification of certain loose paper bundles,

it was found that Sudam Kamthe and Smt. Sumedha Kamthe, assessee had

purchased shop No.05 & 10 in the project “Pinnacle Prestige”. In the statement

recorded, Shri Gajendra D. Pawar, had accepted that he had received cash of

Rs.35,00,000/- over and above the agreement value of Rs.46,00,000/- from the

assessee and her husband. In view of above, the Assessing Officer recorded the

reasons for reopening of assessment u/s.147 of the Act and notice u/s.148 of the Act

was issued. The assessee stated that the original return of income filed on

31.12.2012 may be treated as filed in response to the notice u/s.148 of the Act and

requested for copy of the reasons recorded. The Assessing Officer sought

information from the assessee with regard to the transaction of purchase of office

shop premises in the project “Pinnacle Prestige”. The notings on the pages of the

seized documents were confronted to the assessee and the said notings also

contained note of receipts of cash of Rs.35,00,001/-. The assessee was asked to

clarify the total investment in the shop No.5 & 10 and the source of the said

investment. In response thereto, assessee furnished letter dated 27.12.2013 giving

certain information about bank account extract, copy of agreement to purchase the

property and the copy of balance sheet as on 31.03.2008 and 31.03.2009. The

assessee also asked for the copies of incriminating documents seized from

M/s.Pinnacle Construction which revealed the alleged cash payments. Summons

u/s.131 of the Act dated 30.12.2013 were issued to the assessee by the Assessing

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Officer asking the assessee to attend on 06.01.2014 with details of sources of

income. The assessee attended on 07.01.2014 and her statement was recorded. In

the statement no information about the transaction was given. Vide office letter dated

08.01.2014, the Assessing Officer handed over the copies of relevant documents and

copy of the statement of Gajendra D. Pawar recorded u/s. 132(4) of the Act in the

course of search. The documents wherein the name of the assessee was written

were also handed over on 10.01.2014. Thereafter, the assessee vide letter dated

16.01.2014 requested for time to provide information. Then, she filed a letter

withdrawing the letter of authority of Ld. Counsel and finally, the assessee filed a

letter dated 13.03.2014 stating that they had not paid any money for purchasing shop

No.10 at Pinnacle Prestige (project by Pinnacle Construction) in addition to

agreement value.

the ground that the booking of shop No. 5 and 10 has been reflected in the Balance

Sheet as on 31.03.2009. Further, the noting on page seized and marked as 368, part

of annexure 1 of loose paper bundle No.23 clearly shows the transaction in the name

of Kamthe wherein total cost is written as Rs.81,00,000/- and the word (I) is of

Rs.46,00,000/- and word (II) is of Rs.35,00,000/-. The Assessing Officer observed

that the word II means the unaccounted money in the common parlance in the

market. Page No.370 of the seized material was the account statement addressed to

Kamathe wherein agreement cost of Rs.46,00,000/- less cheque received

Rs.36,00,000/- and balance as on 31.06.2010 amount Rs.10,00,000/-. The noting at

right hand corner shows the cash received Rs.35,00,001/-. The date of agreement

was on 10.10.2018. Further, statement of Gajendra D. Pawar was recorded wherein

information was given regarding the summery of cash received over and above

agreement value. The Assessing Officer, thus, observed that in respect of payment of

‘on money’ there was documentary evidence on record recovered by the department

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during the search and the same was admitted by the person receiving the money, as

against which the assessee simply made the statement that she had not paid any

amount which is oral statement and did not support the claim of the assessee. The

Assessing Officer vide para 6 took note of the exact area of the shop No. 5 and 10,

assessee’s share regarding on money payment and unaccounted portion of the cash

and worked out the aggregate amount of on money to Rs.28,80,150/- and added the

same in the hands of the assessee u/s.69 of the Act.

as Pages 368 and page 370 of Annexure A-1, Bundle 23 seized from the possession

of Mr. Pawar at page 10 and 11 of the appellate order and verified the entries in the

account statement from the bank account of the assessee and observed that the

payment made by the assessee through her bank account were ample corroborative

evidence about the genuineness of incriminating documents found and seized from

Third party. Reference was made to the statement recorded of Gajendra D. Pawar.

The CIT(A) concluded his findings by observing as under:

“Thus, from the incriminating document and statement, the following points average emerge they are: 1. The veracity and authenticity of the document found and seized from the possession of Shri Pawar are proved by the Bank Statement of the appellant and Registered deeds of the properties. 2. The appellant never questioned the contents of the seized materials and above not refuted the entries recorded on them are "dumb documents", 3. The cheques entered on those two referred documents, as can be seen at the scanned page, are from the Bank of Baroda, Shivaji Nagar and Central Bank India, Shivaji Nagar and the appellant has never refuted that the cheque, dates and amounts are not in the existence. Rather, the entries stand corroborated with the transactions entered by the appellant.(emphasis added). 4. Page 370 of the referred document is an Account Statement of the appellant's transaction with the Builder Shri Pawar and except cash transaction of Rs.35,00,011/- everything else, stand corroborated. 5. Ld AR for the appellant has also never refuted the entries except pointing out the provisions of Sec.132(4A) of the Act. Be that as it may, Ld AR is right that there is presumption u/s.132(4A) of the Act if the document is seized from the possession of the third party that they do not belong to the appellant unless corroborated by other evidence ( emphasis added). In the instant case

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all the entries recorded in the referred documents stand corroborated from the Bank statements and Registered Agreement of the appellant and the same could not be refuted by the appellant, so where is the question of rebuttable presumption u/s.132(4A) of the Act, shifting the onus to the A.O. The case laws relied upon by the Ld. A.R. point out the same thing that presumption u/s.132(4A) is rebuttable and not conclusive in the absence of corroborative evidence. In my considered view, there has been corroborative evidence, brought out by the A.O and the same has not been reported by the appellant. In view of the above, I have no hesitation in upholding the addition of Rs.28,80,150/- made by the AO u/s.69 of the I.T. Act and dismissing the appeal filed by the appellant. With these grounds, 1 to 4 stand adjudicated against the appellant.”

after filing return of income had sought copies of the documents and copy of

statement recorded of Shri Gajendra D. Pawar and also sought cross examination.

Copies of the said documents are placed at page 124 to 125 of the paper book. He

then referred to the statement of assessee recorded on 07.01.2014, copy of which is

placed at page 141 to 143 of the paper book and English translation of the said

documents are placed at page 144 to 146 of the paper book. He further referred to

the question No.4 wherein information was sought about investment made in the

shop and reply of the assessee was that he purchased two shops from Pinnace

Prestige and the possession was received 5 years back. He, then, took me to the

assessment order and stressed that where the assessee had sought cross

examination of the witness and no cross examination was provided then the

assessment suffers from irregularities. It was put to the Ld. AR for the assessee, the

cross examination was sought on 26.12.13 after which copies of the seized

documents and statements were given to the assessee. The statement of the

assessee was also recorded but at no stage, after receiving statement, cross

examination was asked for. It was put to the Ld. AR for the assessee as to

proceedings after receipts of the copies of the seized documents and statements,

wherein the assessee had only sought adjournment as apparent from the letter

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placed at page 126 to 128 of the paper book. The Ld. AR stressed that because of

the circumstances; the assessee became sick and nervous and did not file any

explanation before the Assessing Officer. The Ld. AR for the assessee, however,

pointed out that there is no merit in the aforesaid addition in the hands of the

assessee on the basis of said documents. The Ld. AR for the assessee stressed that

the entries in some of the pages lead to the conclusion that the entries belongs to the

assessee but no cash consideration was paid especially when no evidence of cash

transaction was found. He stressed that the CIT(A) had asked assessee to prove the

negative and assessee cannot prove the same. He has placed reliance on the

following decisions:

i) CIT Vs. Salek Chand Aggarwal, reported as 300 ITR 426 (Allahabad)

ii) Pradeep Amrutlal Runwal Vs.Tax Recovery Officer, in ITA No.334/PUN/2013, A.Y.2004-05 decided on 30th May, 2014.

iii) Straptex (India) (P.) Ltd. Vs. Deputy Commissioner of Income tax, reported as 84 ITD 320 (Mum.)

iv) Additional Commissioner of Income Tax Vs. Miss Lata Mangeshkar, reported as 97 ITR 696 (Bombay).

appeal No. 5 and 6 are on without prejudice basis and he fairly admitted that it was

new plea being raised before the Tribunal and also admitted no agricultural income

was shown in the hands of the assessee.

the investment in the property nor sought any cross examination of the witness

before the Authorities below. He referred to the order of CIT(A) at page 12 and 13

and pointed out that in statement recorded of Shri Gajendra D. Pawar, he fairly admitted to have received on money on sale of his units in Pinnacle Prestige. The

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Ld. DR for the Revenue also pointed out that the case laws relied upon by the

assessee does not support the case of the assessee.

representatives, the issue raised in ground of appeal No. 2 to 4 is against addition of

Rs.28,80,150/- u/s.69 of the Act. The assessee was individual and had made

investment in purchase of shop No.05 and 10 in the project “Pinnacle Prestige”

situated at Tilak Road, Pune. The said project was constructed by M/s. Pinnacle

Construction which was solely conducted by Prop. Gajendra D.Pawar. Search action

u/s.132 of the Act was conducted on the Pinnacle Group, Pune. Certain loose

papers were found during the course of search and the same were seized. It

transpires that assessee and her husband had purchased two shops No. 05 and 10

in the project of “Pinnacle Prestige”. The seized document reveals the cash payment

of Rs.35,00,000/- by the assessee and her husband to M/s. Pinnacle Construction

which was mentioned in the documents seized during search and even, account

statement was also found and seized. The statement of Shri Gajendra D. Pawar was

recorded u/s.132(4) of the Act and he admitted to have received money in cash which

was mentioned on the said documents. The Assessing Officer after receiving

information reopened the assessment u/s.147 of the Act on the basis of the aforesaid

documents and statement recorded and issued notice u/s.148 of the Act. The

assessee, thereafter, sought reasons for reopening of assessment. The Assessing

Officer supplied the information to the assessee and also issued questionnaire vide

letter dated 13.12.2013 seeking information from the assessee on the basis of the

documents seized and asked the assessee to clarify the total investment in the shop

No. 5 and 10 at Prestige Site and also source of the said amount. Clarification was

also sought in respect of the cheque payment of Rs.46,00,000/- and cash payment of

Rs.35,00,000/-. In response to the query raised, the assessee gave information vide

letter dated 27.12.2013 about bank account extract, copy of agreement to purchase

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the property and copies of Balance Sheet as on 31.03.2008 and 31.03.2009. The

assessee sought information about documents seized from M/s. Pinnacle

Construction. The copy of the said letter is placed at 124 & 125 of the paper book.

The assessee, undisputedly, asked for copies of relevant alleged incriminating

documents seized from M/s. Pinnacle Construction and also opportunity to cross

examine Shri Gajendra D. Pawar. The Assessing Officer, thus, handed over the

copies of seized documents and copy of statement recorded. All these documents

are placed at page 111 to 119 of the paper book and copy of statement of Shri

Gajendra D. Pawar is placed at page 120 to 122 of the paper book.

a Party No. PO-I, Annex-A, Loose paper bundle No. 23 wherein at the top of the

page, it is written Kamthe = 35.00 Lac, Cheque = 15.00 Lac and agreement = 46.00

Lac. The details of the cheques are also provided and area of two shops and

bifurcation of consideration are also mentioned. The said document is scanned and

available at page 10 of the appellate order. The next page i.e. page No. 118, i.e.

party No. PO-I, Annexure A, Loose paper bundle No. 23 which talks about the total

costs of 81,00,000/- with bifurcation (I) =46,00,000/- & (II) =35,00,000/-. The

Assessing Officer has referred to the said documents and had come to the

conclusion that the word (II) means the unaccounted money in the common parlance

in the market. There were also other details of cheque payments of Rs.30,00,000/-

for shop No. 5 and Rs.16,00,000/- for shop No. 10 on the said document. The next

page i.e. page No. 119 of the paper book reveals it to be a Party No. I, Annexure A,

Loose paper Bundle No. 23 which talks about the account statement of Kamthe,

Shop No.5, 10, Prestige site. The said document is scanned and reproduced by the

CIT(A) at page 11 of the appellate order. The first entry is in respect of cost of shop

No. 5 which reveals the consideration of Rs.30,00,000/-as per agreement and then it

talks of cost of shop No.10 wherein consideration as per agreement is

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Rs.16,00,000/-. It also reveals the bifurcation of amount and details of cheque

payments totaling Rs.36,00,000/-. The said document then talks about the agreement

cost of Rs.46,00,000/- and cheque received amount of Rs.36,00,000/- as on

31.08.2010 and the balance amount of Rs.10,00,000/-.On the right side, there are

entries on various dates and cash received of Rs.35,00,001/-. In the said document,

there are two types of entries i.e. cheque amount and cash amount. The CIT(A)

during appellate proceedings has made bifurcation of the amount paid in cheque of

Rs.36,00,000/- which was made through the bank account of the assessee. The

details are tabulated at page 12 of the appellate order. In view of the payments made

by the assessee through her bank account are ample corroborative evidence about

the genuineness of incriminating documents found and seized from the third party. It

is not disputed and not being challenged that the assessee has not made aforesaid

investment in shop No.5 and 10 along with her husband. The assessee herself has

admitted to the cheque payments reflected in those documents. However, the

assessee challenges the cash payment of Rs.35,00,000/- Where in the documents

seized and found, part of the entries relates to the assessee i.e. entries of the cheque

payments then presumption is to be drawn that the entries about the cash payments

also relates to the assessee. The seized document is to be read as whole and it

cannot be presumed or accepted that only cheque entries relates to the assessee

and not the cash entries.

Gajendra D. Pawar. He was confronted with the statement of the account and he

confirmed that he had received on money from certain buyers in the projects namely

Pinnacle Prestige, Pinnacle Kalpataru and Pinnacle Brookside. He admitted that the

on money received for the current financial year in the case of M/s. Pinnacle

Construction amounting to Rs.3,17,95,000/- and in the case of M/s. Pinnacle

Constro and Ecohomes Pvt. Ltd. amounting to Rs.3,52,48,500/-. The veracity and

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authenticity of the seized documents stands proved in view of the assessee’s having

shown investment in the said project through cheques. It cannot be said that no

evidence had been found against assessee especially in a case where evidence of

cheque payments and cash payment were available on some of the documents

which were seized from the person from whom the assessee had purchased the

property, whose statement was recorded and when confronted, he admitted to have

received on money. The onus is upon the assessee to prove its case. The Assessee

has failed to discharge the onus. Admittedly, the assessee cannot prove the negative

but in the case of assessee evidence had been found wherein both, the cheque

payments and cash payment are reflected. In view of the said evidence being

available, the onus was upon the assessee to prove its case but the assessee has

failed to discharge her onus.

documents seized and copy of statement recorded, the assessee had not furnished

any explanation or evidence to show that they did not invest in the said property. The

statement of the assessee was also recorded and assessee was being confronted

with all the information/documents. However, the assessee failed to respond or

answer any queries. The plea of the Ld. AR for the assessee is that there was no

cross examination allowed and the same fatalled the assessment proceedings. There

is no merit in the plea of the assessee since the cross examination was sought before

the copies of statements were supplied to the assessee or incriminating documents

were handed over. After supplying the same to the assessee, she never sought for

cross examination; hence, assessee had failed to discharge her onus. In such

circumstances, it cannot be held that non-providing of cross examination had fatalled

the assessment proceedings.

12 ITA No.2172/PUN/2016 A.Y.2009-10

of the Gajendra D. Pawar as well as the assessee itself and assessee having not

discharged her onus, there is no merit in the claim of the assessee and hence,

addition of Rs.28,80,150/- merits to be upheld in the hands of the assessee.

the assessee. In the case of CIT Vs. Salek Chand Agarwal (supra.), wherein the

entry was made in books of account of third party searched; there was no material

which could link said advance/deposit to assessee, addition on account of such credit

entries was held to be not justified. However, in the facts of the present case, the

entry was made in the seized document in which both, cash amount and cheque

amount were written and it cannot said that there was no other material found which

could not link it with the entry of the assessee. Hence, the ratio laid down in the case

of CIT Vs. Salek Chand Agarwal (supra.), is not applicable.

wherein some loose papers were seized, wherein certain amounts were written

against the name of assessee. The Tribunal held that since no evidence was found

relating to existence of any transaction between the assessee and third party, no

corroborative evidence was found to suggest that the assessee had actually received

the said amount; no addition could be made merely on basis of noting in loose papers

found during search action.

between the assessee and the person/ builder from whom incriminating documents

were found. The said evidences are correlative as cheque payments which the

assessee admitted to have paid and along with cheque payment entries, there were

also cash entries which relates to the assessee. Thus, addition was made in the

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hands of the assessee. Hence, the decision of the Tribunal in the case of Pradeep

Amrutlal Runwal Vs. Tax Recovery Officer (supra.), is not applicable.

presumption under section 132(4A) is only against person in whose possession

document is found and not against any other person, is correct. It has been further

held presumption u/s.132(4A) is a rebuttable presumption and not conclusive and

cannot be applied in absence of corroborative evidence. In the case of the assessee,

corroborative evidence was found; hence, decision of Mumbai Bench of the Tribunal

(supra.) is not relatable to the facts of the present case.

High Court in the case of Addl. CIT Vs. Miss Lata Mangeshkar (supra.) wherein

statements of two persons were recorded that they have paid money in ‘black’ to

assessee, as well as entries in books belongs to them regarding alleged payments. It

was held that mere entries in accounts regarding payments to assessee were not

sufficient to prove that the assessee had received money in ‘black’, for which she did

not issue a receipt. However, in the facts of the present case, the entry was made in

the seized document in which both, cash amount and cheque amounts were written

and cheque amounts were not disputed by the assessee. It is an established rule that

seized document is to be read as a whole. In such circumstances, there is no merit in

the claim of the assessee and the same is rejected. Thus, upholding the order of

CIT(A), ground of appeal No. 2, 3 and 4 raised by assessee are dismissed.

and 6 are without prejudice basis, which relates to the investment and the assessee

explained the source of investment. No such plea was raised before the Assessing

Officer and CIT(A) and assessee now raises such new plea before the Tribunal. In

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the present case, assessee claims to have made investment out of her withdrawals and out of her agricultural income. However, the assessee has not declared any agricultural income in her return of income nor has shown the source of cash withdrawals, hence, the plea of the assessee on merit does not stand and, hence, the ground of appeal No. 5 and 6 are dismissed.

Order pronounced on 26th day of October, 2018.

Sd/- (SUSHMA CHOWLA) �या�यक सद�य/JUDICIAL MEMBER

पुणे / Pune; �दनांक / Dated : 26th October, 2018. SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :

अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals)-4, Pune. 4. The Pr. CIT-3, Pune. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, 5. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 6.

// True Copy // आदेशानुसार / BY ORDER,

�नजी स�चव /Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.