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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI R.C.SHARMA, AM & SHRI RAVISH SOOD, JM
P a g e | 2 & 5717/Mum/2011 AYs 2007-08 Mahesh M. Doshi Vs. DCIT, CC-17 & 28 आदेश / O R D E R
PER RAVISH SOOD, JUDICIAL MEMBER:
The present set of cross appeals filed by the assessee and the revenue are directed against the order passed by the CIT(A)-39, Mumbai, dated 12.05.2011, which in turn arises from the order passed by the A.O under Sec.143(3) of the Income Tax Act, 1961 (for short „Act‟) dated 31.12.2008. We shall first take up the appeal of the assessee. The assessee assailing the order of the CIT(A) has raised before us the following grounds of appeal:
1. The learned Commissioner of Income-tax (Appeal)-39 erred in confirming the addition of Rs. 30,00,000/- (Rs. Thirty Lacs)
The learned CIT(A)-39 has erred in confirming the addition of Rs. 30 lacs received from Vijay Grih nirman Pvt. Ltd. towards refund of loan as undisclosed income, ignoring the fact that the same amount used in purchase of diamonds and the sales proceeds of the said diamonds was declared as income u/s. 132(4) by the appellant and paid taxes thereon. The learned CIT(A) unjustifiable upheld the same amount of Rs. 30 lacs taxed twice.
The grounds of appeal
are not prejudicial to one another. Your appellant craves leave to add, amend, alter or delete any of the grounds of appeal on or before final hearing.”
2. Briefly stated, the assessee had filed his return of income for A.Y. 2007-08 on 31.07.2007, declaring total income of Rs.83,17,940/-. The return of income filed by the assessee was processed as such under Sec. 143(1) of the Act. The case of the assessee was thereafter taken up for scrutiny assessment under Sec. 143(2).
3. Search and seizure proceedings were conducted on 03.08.2006 under Sec.132 of the Act in the case of Euro Group of Companies. As the assessee was an associate person of this group, thus his residential premises were also covered under the search proceedings. Assessment under Sec. 143(3) r.w.s.153A for the A.Ys 2001-02 to 2006-07 were framed by the A.O on 31.12.2008. The A.O while framing the assessment in the hands of the P a g e | 3 & 5717/Mum/2011 AYs 2007-08 Mahesh M. Doshi Vs. DCIT, CC-17 & 28 assessee for the year of search viz. A.Y 2007-08 inter alia made the following additions:-
Sr. No. Particulars Amount 1. Income from undisclosed sources as regards Rs.42,21,000/- the cash payment made by the assessee to Shri Vikram Singh Shekhawat. 2. Income from undisclosed sources as regards Rs.30,00,000/- the cash loan advanced by the assessee to M/s Vijay Gruh Nirman Pvt. Ltd.
Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) after deliberating on the contentions advanced by the assessee deleted the addition of Rs.42,21,000/- that was made by the A.O, on the ground that the assessee had from his undisclosed sources made a cash payment of the said amount to Shri Vikram Singh Shekhawat. However, the CIT(A) not being persuaded to subscribe to the claim of the assessee that the cash loan advanced by him to Vijay Gruh Nirman Pvt. Ltd. was received back and utilised by him for purchase of diamonds, thus upheld the addition of Rs.30,00,000/- made by the A.O.
The assessee assailing the addition of Rs.30,00,000/- that was sustained by the CIT(A), has carried the matter in appeal before us. The facts pertaining to the issue under consideration lies in a narrow compass. During the course of the assessment proceedings, it was submitted by the assessee before the A.O that Mr. Nanshi C. Shah, Chairman and Managing Director of the Euro Group of Companies had in his statement recorded under Sec. 132(4) on 30.09.2006 made a disclosure of a sum of Rs.13.50 crore including an amount of Rs.75,00,000/- in the name of the assessee, as regards the latters undisclosed income represented by jewellery, diamonds, amounts receivable, payable etc. On a perusal of the return of income filed by the assessee, it was observed by the A.O that the assessee had declared a sum of Rs.73,79,868/- as his undisclosed income. It was the claim of the assessee before the A.O, that the aforesaid disclosure of Rs.73,79,868/- pertained to the unaccounted diamonds which he had given P a g e | 4 & 5717/Mum/2011 AYs 2007-08 Mahesh M. Doshi Vs. DCIT, CC-17 & 28 for sale on 15.07.2006 on approval basis (Janghad) to two Surat based concerns viz. (i). M/s Arpit Export; and (ii). M/s Rahul Export. It was submitted by the assessee that the value of the unaccounted diamonds realised by him amounted to Rs.73,79,868/-, which was offered to tax in the return of income tax. The assessee further submitted, that though the declaration during the course of the search proceedings was made on the basis of the sale value arrived at by the diamond trader to whom the same were given for sale on approval basis, but as on sale only an amount of Rs.73,79,868/- was realised, therefore, the disclosure offered in the return of income was restricted to the said amount.
The A.O observed, that during the course of the search proceedings at the residential premises of the assessee certain loose papers were found, which were seized and marked as “Annexure-A” containing Page No.1 to 44 of the panchnama, dated 03.08.2006. The A.O noticed that the assessee on being called upon to explain the contents of the aforesaid seized documents viz. Annexure-A Page 1 to 44, had claimed in his statement recorded under Sec.132(4) on 03.08.2006 that Page Nos. 30 to 31 were the cash payments of Rs.21,00,000/- and Rs.21,21,000/- made by the assessee on 04.05.2006 and 07.05.2006, respectively, to Shri Vikram Singh Shekhawat of Jaipur. The assessee further explaining the contents of Page No.30 to 36 had stated that the same was a cash loan aggregating to Rs.30,00,000/- that was advanced by him to M/s Vijay Gruh Nirman Pvt. Ltd. of Thane. On being confronted with the fact as to why the aforementioned amounts were not offered by him for tax, it was submitted by the assessee as under: “During the course of assessment proceedings, your honour has raised query regarding the declaration of income u/s. 132(4) of the I.T. Act and its break up, in this regard, we have to state that during the course of search proceedings, our above client has given the confirmation regarding the declaration, a letter was furnished to your honour that the undisclosed income represents jewellery, diamonds, amount receivable, etc. This declaration was on the basis of the sale value arrived at by the diamond trader to who same were given on Janghad, but on sale our client realized only Rs.73,79,868/- the copies of the bills were filed along with the break up of the disclosure amount. Due to the market difference there is a difference of Rs.1,20,132/-.
P a g e | 5 & 5717/Mum/2011 AYs 2007-08 Mahesh M. Doshi Vs. DCIT, CC-17 & 28 The source of the acquisition of these diamonds- (a) As per the seized pages No. 33 to 36 of Annexure-A 11, it indicate payment made to Vijay Gruh Nirman amounting to Rs. 6,00,000/- in multiple of 5, this Rs. 30,00,000/- and said money received back as it is mentioned on the reverse side of these receipts. Hence Rs. 30,00,000/- is the source of the acquisition the diamond. (b) Page No. 31 of the annexure-A 11, which indicate payment of Rs.21,21,000/- to one Mr. Vikram Singh on 4/5/2006 this payment is towards the purchase of the diamond.” The A.O after deliberating on the aforesaid explanation of the assessee, wherein he had tried to impress upon him that the amount of Rs.30,00,000/- advanced as a cash loan to M/s Vijay Gruh Nirman Pvt. Ltd., as was discernible from a perusal of the contents of the five promissory notes at Page 33 to 36 of the seized Annexure-A-11, was received back from the said party and was invested by him for purchase of diamonds, declined to accept the same. As regards the contents of Annexure-A-11-Page No.30- 31, it was the claim of the assessee that the same were two receipts for an amount of Rs. 21,00,000/- and Rs.21,21,000/-, respectively, that were paid in cash by the assessee to Shri Vikram Singh Shekhawat on 04.05.2006 for purchase of diamonds. However, the A.O not finding favour with the aforesaid claim of the assessee declined to accept the same by observing as under:
“8. I have carefully considered the above submissions of the assessee, the same is not acceptable for the following reasons – (i) As regards the cash payment of Rs. 42,21,000/- to Shri Vikram Singh for purchase of diamonds, it is noticed that in the receipts at seized page No.30 dated 4/5/2006 and page No. 31 dated 7/7/2006 nowhere it is mentioned that the amounts were received towards purchase of diamonds by Shri Vikram Singh. (ii) During the course of search proceedings, assessee has never stated that these payments were made towards purchase of diamonds. (iii) The only answer given by the assessee during the course of search proceedings is that these are the cash receipts from the assessee to Shri Vikram Singh.
P a g e | 6 & 5717/Mum/2011 AYs 2007-08 Mahesh M. Doshi Vs. DCIT, CC-17 & 28 (iv) The extract of the said receipts are as under:- R E C E I P T Received with thanks from Mahesh M. Doshi a sum of Rs.21,00,000/- (Rupees twenty one lacs only by cash). Rs. 21,00,000/- I say received, Dt. 4.5.2006 (Vikram Singh) R E C E I P T Received with thanks from Mahesh M. Doshi a sum of Rs.21,21,000/- (Rupees twenty one lacs twenty one thousand only by cash. Rs. 21,21,000/- I say received, Dt. 7.7.2006. (Vikram Singh) (v) As per page No. 40, the said Shri Vikram Singh Shekhawat has issued another receipts stating that he has received a sum of Rs. 20,00,000/- by DD No. 57838, 57839, 57 ( Totalling to Rs. 40,00,000/- vide DD Nos. 57837, 57838, 57839, 578340 ( each five lakhs) dated 27/6/2005 being part payment against sale of plot No.1,2 & 3 in Indra Gruh Nirman Sahakari Samiti Ltd, Jaipur at Shri Kushal Nagar, Sanganer, Jaipur, all the vouchers issued before by against this payment is cancelled and new receipt is now given to you. (vi) As per page No. 41, the said Shri Vikram Singh Shekhawat has issued another receipt stating that received with thanks from M/s. Euro Developers Ltd., a sum of Rs.20,00,000/- (Rupees Twenty lacs only ) by cheque No. 033165, 033166 ( each ten lacs) dated 25/4/2006 as part payment against sale of plot No.01 to 06 ( one to six ) in Indra Gruh Nirman Sahakari Samiti Ltd., Jaipur at Shri Kusal Nagar, Sanganer, Jaipur , all the vouchers issued before by against this payment is cancelled and new receipt is now given to you. (vii) It is pertinent to mentioned here that all the above papers i.e. 30, 31, 40 and 41 were seized during the course of search proceedings at the residence of the assessee. On perusal of these papers reveals that the assessee being the Director of Euro Developers Ltd has made the payments of Rs. 40,00,000/- (Rs. 20,00,000/- each) by paying the D.D. and cheque and over and above the assessee has also paid a SUM of Rs.42,21,000/- in cash towards the purchase of the plot No. 01 to 06 (one to six) in Indra Gruh Nirman Sahakari Samiti Ltd., Jaipur at Shri Kusal Nagar, Sanganer, Jaipur.
P a g e | 7 & 5717/Mum/2011 AYs 2007-08 Mahesh M. Doshi Vs. DCIT, CC-17 & 28 Therefore It cannot be said that the amount of Rs.42,21,000/- was paid towards purchase of diamonds. Accordingly, the cash amount of Rs. 42,21,000/- paid to Shri Vikram Singh Shekhawat is treated as income from undisclosed sources and added to the total income of the assessee. 8.2. As regards the cash payment to Vijay Gruh Nirman Pvt. Ltd. assessee has not produced any documentary evidence in respect of his claim that the amount of cash loan advanced by him to the said company has been returned and the same has been utilised for purchasing the diamonds. In case the cash amounting to Rs. 30,00,000/-- advanced by the assessee to Vijay Gruh Nirman Pvt. Ltd. Who has issued the 5 (five) promissory note multiple of Rs.6,00,000/- each has been received back by the assessee then under that circumstances who issues the original promissory note will definitely take the originals promissory notes having acknowledgement of repaid the cash loan. Since the original promissory notes are available with the assessee, therefore it cannot be said that the assessee has received back the cash of Rs. 30,00,000/- which he has utilised for purchasing the diamonds. Assessee has not produced any evidence in respect of the date on which the said amount has been received back from M/s. Vijay Gruh Nirman Pvt. Ltd. Assessee's claim that the amount has been received as mentioned on the reverse side of the receipts of the promissory note is not satisfactory as on the reverse side of the promissory note it is written only “Recd. Back/Dt.6/7”. This has not been signed by any of the person or the year in which the same has been received back has also not been mentioned. Further, if the amount has been received back on 6/7/2006 what prevented the assessee to explain the same in the statement u/s. 132(4) of the I.T. Act recorded on 3/8/2006 is best known to the assessee. Thus assessee's claim that the amount received from Vijay Gruh Nirman Pvt. Ltd. has been utilised for purchasing the diamonds cannot be accepted. Therefore, the cash loan advanced by the assessee amounting to Rs.30,00,000/- by way of promissory notes are treated as assessee's income from undisclosed sources and added to the total income of the assessee. 8.3. In view of the above, the cash paid to Shri Vikram Singh Shekhawat of Rs.42,21,000/- and the cash loans advanced to Vijay Grih Nirman Pvt. Ltd of Rs.30,00,000/- are added to the total income of the assessee as undisclosed income of the assessee. The total addition on account of these works out to Rs.72,21,000/-.” We find, that as observed by us hereinabove, the CIT(A) though accepted the explanation of the assessee as regards the cash payment of Rs.42,21,000/- made to Shri Vikram Singh Shekhawat and deleted the same, but not being inclined to accept his claim that the cash loan of Rs.30,00,000/- advanced to M/s Vijay Gruh Nirman Pvt. Ltd. was received back and invested towards purchase of diamonds, upheld the addition made by the A.O to the said extent.
P a g e | 8 & 5717/Mum/2011 AYs 2007-08 Mahesh M. Doshi Vs. DCIT, CC-17 & 28 7. The ld. Authorized Representative (for short „A.R‟) for the assessee took us through the facts of the case and submitted, that the assessee while filing his return of income had made a disclosure of an amount of Rs.73,79,868/- as regards the sale value of the undisclosed diamonds, and as such had offered the same for tax. It was submitted by the ld. A.R that during the course of the search proceedings 5 promissory notes of Rs.6,00,000/- each were seized by the department, and thereafter marked as Annexure-A-11-Page 32 to 36. It was the claim of the ld. A.R, that the assessee had advanced a cash loan of Rs.30,00,000/- to M/s Vijay Gruh Nirman Pvt. Ltd. on 02.07.2006, which was received back from the said party on 06.07.2006. The ld. A.R in order to fortify his aforesaid claim submitted, that on the reverse side of the promissory notes which were seized during the course of the search proceedings, there was a clear mention viz. “Recd Back/ Dt./6/7”. The ld. A.R taking support of his aforesaid claim submitted, that the aforesaid amount of Rs.30,00,000/- which was received back from M/s Vijay Gruh Nirman Pvt. Ltd. was invested by the assessee for purchase of diamonds. The ld. A.R rebutting the observations of the lower authorities averred that the latter had erred in not reading the seized documents in totality, and a bare perusal of the reverse side of the same clearly revealed that the amount of Rs.30,00,000/- was received back by the assessee from the aforementioned concern. It was submitted by the ld. A.R, that as the amount had already been received back by the assessee from M/s Vijay Gruh Nirman Pvt. Ltd., hence for the said reason, nothing as regards the same was stated by the assessee in his statement which was recorded under Sec. 132(4) during the course of the search proceedings. Further, it was submitted by the ld. A.R, that as Mr. Vrajlal T. Gala Director of M/s Vijay Gruh Nirman had in his statement recorded under Sec. 131 stated that the amount of Rs.30,00,000/- had not been repaid to the assessee till date, then under such circumstances he may be directed to pay the said amount. Per contra, the ld. D.R relied on the orders of the lower authorities. It was submitted by him that in case the assessee would have received the amount of Rs.30,00,000/- from the P a g e | 9 ITA Nos. 5917 & 5717/Mum/2011 AYs 2007-08 Mahesh M. Doshi Vs. DCIT, CC-17 & 28 aforementioned concern viz. M/s Vijay Gruh Nirman Pvt. Ltd, then he would not had been in possession of the promissory notes.
We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. We find, that it was the claim of the assessee that the amount of Rs.30,00,000/-which was advanced by him to M/s Vijay Gruh Nirman Pvt. Ltd., was returned by the said concern and utilized by him for making investment in purchase of diamonds. Further, it is the contention of the ld. A.R that Vijay Gruh Nirman Pvt. Ltd. on receipt of cash loan of Rs.30,00,000/- on 02.07.2006 had issued 5 promissory notes (in multiple of Rs.6,00,000/- each), dated 02.07.2006. The assessee had submitted before the lower authorities that the amount which was given to M/s Vijay Gruh Nirman Pvt. Ltd. was received back by him on 06.07.2006. In order to buttress his aforesaid claim, the assessee had taken support of the notings on the reverse side of the aforesaid promissory notes. It is observed by the lower authorities, that a perusal of the promissory notes revealed that there was a noting on the reverse side of the same viz. “Recd. Back/Dt.6/7”. It is on the basis of the mention of the aforesaid noting, that it was claimed by the assessee that the cash loan of Rs.30,00,000/- which was advanced to M/s Vijay Gruh Nirman Pvt. Ltd. was received back by him on 06.07.2006. We find from a perusal of the orders of the lower authorities, that the assessee had tried to relate the amount so received with the source of investment made towards purchase of diamonds. On the basis of his aforesaid claim, the assessee had submitted before the lower authorities that now when the sale value of the diamonds under consideration was disclosed by him in the return of income, hence no adverse inference as regards the source of purchase of the same, as was found mentioned in the aforesaid seized document viz. Annexure A-11 - Page 33 to 36 could be drawn.
We have deliberated at length on the issue under consideration, and are unable to persuade ourselves to subscribe to the aforesaid claim of the P a g e | 10 ITA Nos. 5917 & 5717/Mum/2011 AYs 2007-08 Mahesh M. Doshi Vs. DCIT, CC-17 & 28 assessee. We find, that though it is a fact borne from the records that on the reverse side of the promissory notes issued by M/s Vijay Gruh Nirman Pvt. Ltd. there is a mention viz. “Recd Back/Dt. 6/7”, however, the same would not suffice to arrive at a conclusion that the amount of Rs.30,00,000/- which was advanced by the assessee to the aforementioned party viz. M/s Vijay Gruh Nirman Pvt. Ltd. was received back by him. We find three peculiar aspects as regards the promissory notes seized during the course of the search proceedings which clearly militates against the explanation of the assessee that the amount of Rs.30,00,000/- was received back by him on 06.07.2006 from M/s Vijay Gruh Nirman Pvt. Ltd. viz. (i) the noting “Recd Back/Dt. 6/7” on the reverse side of the promissory note is found to be unsigned; (ii) that it is beyond comprehension that M/s Vijay Gruh Nirman Pvt. Ltd. despite having repaid the amount of Rs.30,00,000/- in cash to the assessee, would have allowed the said promissory notes to remain with him; and (iii). that if this was the factual position, then why it was not so stated by the assessee in his statement recorded under Sec. 132(4) on 03.08.2006. We find that the assessee had neither before the lower authorities, nor before us had furnished any evidence or plausible explanation which could persuade us to subscribe to his aforesaid claim. Rather, we find that the A.O had during the course of the assessment proceedings on 24.12.2009 recorded the statement of Mr. Vrajlal T. Gala, director of M/s Vijay Grah Nirman Pvt. Ltd under Sec. 131 of the Act. On a perusal of the statement of Mr. Vrajlal T. Gala, it emerges that he had clearly stated that the amount of cash loan of Rs.30,00,000/- which was received by M/s Vijay Gruh Nirman Pvt. Ltd. on 03.07.2006, was not returned by him till date viz. 24.12.2009 (i.e the date of recording of the statement). The relevant extracts of his statement is as under:- “Q-6. When were the above cash loan repaid ? Ans. The above cash loan have not been repaid by me till date.” We thus, are of a strong conviction that the assessee had merely in the guise of the disclosure made as regards the unaccounted sale value of the P a g e | 11 ITA Nos. 5917 & 5717/Mum/2011 AYs 2007-08 Mahesh M. Doshi Vs. DCIT, CC-17 & 28 diamonds tried to wriggle out of the incriminating notings appearing on the seized document viz. Annexure A-11 - Page 33 to 36. We are of the considered view that in the backdrop of the aforesaid facts, it can safely be concluded that the cash loan of Rs.30,00,000/- advanced by the assessee to M/s Vijay Gruh Nirman Pvt. Ltd. was not returned by the said party. We thus, finding ourselves to be in agreement with the view taken by the CIT(A), uphold his order and sustain the addition of Rs.30,00,000/- in the hands of the assessee. The Ground of appeal
No. 1 and 2 are dismissed.
10. The Grounds of appeal No. 3 and 4 being general in nature are dismissed as not pressed.
The appeal filed by the assessee is dismissed.
We shall now take up the appeal filed by the revenue. The revenue has assailed the order of the CIT(A) by raising before us the following grounds of appeal : “1. On the facts and in the circumstances, Ld. CIT(A) erred in not considering the observations and findings of the A.O drawn out from the seized documents that Shri Vikram Singh Shekhawat has received an amo u n t of Rs. 42, 2 1, 00 0/ - f or pu r ch ase of plo t in In d r a Grahnirman Sahakar Samiti Ltd., Jaipur at Shri Kushal Nagar, Sanganer, Jaipur.
2. The Appellant craves to leave to add, to amend and/or to alter any of the grounds of appeal, if need be.
3. The appellant, therefore, prays that on the grounds stated above, the order of the CIT(A)-39, Mumbai may be set aside and that of the Assessing Officer restored.”
13. As observed by us hereinabove, the seized Annexure A-11 – Page 30-31 were certain „receipts‟ which revealed that a cash payment aggregating to Rs. 42,21,000/- was made by the assessee to Shri Vikram Singh Shekhawat. On a perusal of the said seized documents, it emerged that the „receipts‟ at Page 30 & Page 31 referred to cash payments of Rs. 21,00,000/- and Rs. P a g e | 12 & 5717/Mum/2011 AYs 2007-08 Mahesh M. Doshi Vs. DCIT, CC-17 & 28 21,20,000/- made by the assessee on 04.05.2006 and 07.07.2006,respectively, to Shri Vikram Singh Shekhawat. During the course of the assessment proceedings, the assessee had submitted before the A.O that the said payments were made to Sh. Vikram Singh Shekhawat for purchase of diamonds. On the basis of the said claim, it was the case of the assessee that as the entire sale value of the diamonds of Rs. 73,79,868/-was disclosed as income by the assessee in his return of income, thus no adverse inference as regards the notings on the seized documents viz. Annexure A-11 – Page 30-31 pertaining to the investment made by the assessee for the purchase of said diamonds could be drawn. However, the A.O observing that the assessee as a director of M/s Euro Developers Ltd. had also made certain other payments to Shri Vikram Singh Shekhawat for purchase of plot Nos. 1 to 6 in Indra Gruh Nirman Shahkari Samiti Ltd., Jaipur, thus related the said notings to the “on money” that would have been paid by the assessee for purchase of the aforesaid property. On the basis of his aforesaid deliberations, the A.O added the amount of Rs. 42,21,000/- as the payment made by the assessee from his undisclosed sources.
14. We find, that on appeal the CIT(A) being persuaded to subscribe to the claim of the assessee in context of the issue under consideration deleted the addition of Rs. 42,21,000/-, observing as under: “20.1 As far as the cash of 42,20,000/- paid to Mr. Vikram Singh is concerned, the appellant from the beginning has contended that it is paid for purchase of diamonds. The contention was raised before the DDIT and this fact is reflected in page 37 of the appraisal report. The explanations offered by the appellant as mentioned in page 37 of the appraisal report is extracted below; Page 30 This page is Katchha receipt for payment for Rs.21,00,000/- in cash to Vikram singh for purchase of diamonds on 4/5/2006. This income is form part of declaration u/s. 132(4) of the Income Tax Act 1961 as stated by Shri Nenshi shah while declaring the P a g e | 13 & 5717/Mum/2011 AYs 2007-08 Mahesh M. Doshi Vs. DCIT, CC-17 & 28 income of the group aid associated persons on 30/09/2006 in pursuance of search conducted on 2/3rd August. 2006. page 31 This page is Katchha receipt for payment of Rs. 21,21,000/- in cash to Vikram Singh for purchase of diamonds on 41512006. This income is form part of declaration u/s. 132(4) of the Income Tax Act 1961 as stated by Shri Nenshi shah while declaring the income of the group and associated persons on 3010912006 in pursuance of search conducted on 2/3rd august, 2006. This page indicates payment. 20.2 Further the appellant has also filed the confirmation from Mr. Vikram Singh Shekawat that the amount of Rs.42.21 lakhs was received towards the Purchase of diamonds and he has purchased the diamonds and handed over the diamonds to the appellant. 2 0. 3 F ro m th e abo ve f acts , I a m in clin e d to acce pt th a t th e cas h of Rs. 42,21,000/- as used for purchase of the unaccounted diamonds. Hence no separate addition of Rs.42,21,000/- needs to be made.”
The ld. A.R adverting to the addition of Rs.41,20,000/- made by the A.O as regards the payments made by the assessee to Shri Vikram Singh Shekhawat, submitted that the said payments were made for purchase of diamonds and had wrongly been held by the A.O as payment towards “on money” for purchase of property. It was submitted by the ld. A.R, that the view taken by the A.O was divorced from any supporting evidence which could substantiate the same. The ld. A.R relied on the order of the CIT(A), and submitted that he had after rightly appreciating the facts of the case in the right perspective deleted the addition. The ld. A.R in order to fortify his aforesaid claim took us through the affidavit of Shri Vikram Sigh Shekhwat (Page 52 of „APB‟), wherein the latter had clearly deposed that no cash payment was received by him from M/s Euro Developers Pvt. Ltd. in respect of the sale of plots to the said company. The ld. A.R further drew our attention to the confirmation of Shri Vikram Singh Shekhawat, wherein the latter had clearly confirmed that the amount of Rs.42,21,000/- was received by him from the assessee by way of consideration for purchase of diamonds. Per contra, the ld. D.R relied on the orders of the lower authorities. 16. We have deliberated at length on the issue under consideration, and find ourselves to be in agreement with the view taken by the CIT(A). We are of the considered view, that not P a g e | 14 ITA Nos. 5917 & 5717/Mum/2011 AYs 2007-08 Mahesh M. Doshi Vs. DCIT, CC-17 & 28 only the revenue has failed to place on record any documentary evidence which could irrefutably prove to the hilt that the amount of Rs. 42,21,000/- was paid by the assessee to Shri. Vikram Singh Shekhawat by way of “on money” for purchase of property, but rather, we find that the assessee as observed by the CIT(A), from the very beginning had been claiming that the said amount was paid for purchase of diamonds. We are of the considered view, that the A.O had erred by whimsically assuming san any material/evidence that the „receipts‟ viz. Annexure-11 – Page 30-31 was the “on money” paid by the assessee for purchase of property. Rather, the fact that the „receipts‟ clearly made a mention that the amount was received from the assessee, unlike the „receipts‟ which were issued by Shri. Vikram Singh Shekhawat in respect of the amounts received from the assessee in his capacity as a director of M/s Euro Developers Ltd, which clearly made a mention of the name of the company, thus, fortifies the claim of the assessee that the „receipts‟ under consideration viz. Annexure A-11 – Page 30-31 were not in context of payments made for purchase of property. We though are in agreement with the A.O that the „receipts‟ under consideration viz. Annexure A-11 – Page 30-31 did not make any mention that the amounts were paid by the assessee for purchase of diamonds, but then, we cannot also remain oblivious of the fact that the said „receipts‟ also did not make any such mention from which it could be safely concluded that the amount was paid by the assessee for purchase of property. We may further observe, that the „Affidavit‟ and the confirmation filed by Sh. Vikram Singh Shekhawat also substantiates the fact that the amount was paid by the assessee for purchase of diamonds. We thus, not being able to persuade ourselves to subscribe to the view arrived at by the A.O on the basis of the seized documents viz. Annexure A-11 – Page 30-31,thus uphold the order of the P a g e | 15 ITA Nos. 5917 & 5717/Mum/2011 AYs 2007-08 Mahesh M. Doshi Vs. DCIT, CC-17 & 28 CIT(A) and confirm the deletion of the addition of Rs. 42,21,000/- made by the A.O.
The appeal filed by the revenue is dismissed.
That the appeal filed by the assessee i.e and by the revenue i.e , are dismissed.