JOINT COMMISSIONER OF INCOME TAX, AJMER vs. VIJAY GUPTA, AJMER

ITA 373/JPR/2023Status: DisposedITAT Jaipur30 November 2023AY 2020-21Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No.373/JP/2023 fu/kZkj.k o"kZ@Assessment Years : 2020-21 Joint Commissioner of Income Tax, Ajmer cuke Vs. Vijay Gupta 5 Ground Floor, Khailand Market, Ajmer LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.:ABHPG 9894 N vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Sh. C. M. Agarwal (CA) jktLo dh vksj ls@Revenue by: Sh. Ajay Malik(CIT) lquokbZ dh rkjh[k@Date of Hearing : 12/0958 pages

No AI summary yet for this case.

Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR

Before: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No.373/JP/2023

Hearing: 12/09/2023Pronounced: 30/11/2023

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh lanhi xkslkbZ]U;kf;d lnL; ,oaJh jkBkSM+ deys'k t;arHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No.373/JP/2023 fu/kZkj.k o"kZ@Assessment Years : 2020-21 cuke Joint Commissioner of Income Vijay Gupta Vs. Tax, Ajmer 5 Ground Floor, Khailand Market, Ajmer LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.:ABHPG 9894 N vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Sh. C. M. Agarwal (CA) jktLo dh vksj ls@Revenue by: Sh. Ajay Malik(CIT) lquokbZ dh rkjh[k@Date of Hearing : 12/09/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 30/11/2023 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal is filed by revenue and is arising out of the order of the Commissioner of Income Tax, Appeal, Udaipur-2 dated 30/03/2023 [here in after ld. CIT(A) ] for assessment year 2020-21 which in turn arise from the order dated 30.09.2021 passed under section 143(3)of the Income Tax Act, by ACIT, Central Circle, Ajmer.

In this appeal, the revenue has raised following grounds: -

2 JCIT vs. Vijay Gupta “1. The learned CIT Appeal has erred in law and on facts in granting relief to the assessee. 2.Whether on the facts and circumstances of the case for the 1691863 assessment year under consideration, the ld. CIT(A) is justified in Law in deleting the addition of Rs 21,69,057/- made on account of unexplained investment u/s 69 r.w.s. 115BBE of the Act without appreciating the fact that the reply of the assessee is vague and also without proper supporting evidence and the assessee failed to get these transactions verified from his regular books of accounts

3. Whether on the facts and circumstances of the case for the 74755980 assessment year under consideration, the ld. CIT(A) is justified in Law in deleting the addition of Rs.9,58,41,000/- made on account of unexplained investment u/s 69 r.w.s. 115BBE of the Act on the basis of incriminating documents found/seized.

2. Addition on account of unexplained investment U/s 69 of the IT Act on the basis of incriminating documents found and seized of Rs. 9,58,41,000/- Assessee filed an appeals before the Ld CIT Appeal – 2, Udaipur challenging therein the above referred addition. During appellant proceeding the assessee filed written reply explaining therein each and every paper along with the supporting evidences. On the basis of which remand report was called for by the Ld CIT Appeal – 2, Udaipur vide letter dated 22.04.2022. That Ld AO had called for the details vide letter dated 22.07.2022. In response to this appellant filed complete reply along with the evidences / details / reply. That LD CIT Appeal – 2, Udaipur provided us copy of the remand report and complete rejoinder was filed in response to this remand report. That LD CIT Appeal – 2, Udaipur vide order sheet dated 26.12.2022 asked for certain details / clarification and which were submitted. The Ld CIT Appeal allowed the appeal on the two grounds vide his order dated 30.03.2023 considering the all the reply / evidences / clarification as asked for from time to time. Reply of the remand report and the rejoinder also submitted 21 JCIT vs. Vijay Gupta and which was considered by Ld CIT Appeal -2, Udaipur. Ground NO 2 On the facts and in the circumstances of the case the ld. AO has erred on facts and in law in making addition of Rs.9, 58, 41,000/- u/s 69 r.w.s. 115BBE in the case of the appellant assessee purely on the basis of his presumption, assumption, guess work and suspicion only, simply on the basis of some routine, rough notings/jottings etc. made in a diary on the basis of which no inference relating to any ‘unexplained investment’ made by the appellant assessee can be drawn. Therefore, the addition made by the ld.AO deserves to be deleted being unproved and unsubstantiated based on presumption, assumption, guess work and suspicion of the ld. AO. Ground No 3. (i).On the facts and in the circumstances of the case ld. AO has grossly erred on facts and in law in making the additions of Rs. 21, 69,057/- and Rs.9, 58, 41,000/-, as mentioned above, by invoking provisions of section 69 of the I.T.Act, 1961 treating the said amounts of Rs. 21, 69,057/-and Rs.9, 58, 41,000/- as ‘unexplained investment’ and also erred on facts and in law in invoking the provisions of section 115BBE of the Act and charging tax and surcharge etc. accordingly. (ii).On the facts and in the circumstances of the case neither the provisions of section 69 nor the provisions of section 115BBE are applicable. Therefore, the addition made by the ld. AO is bad in law and deserves to be deleted. Regarding Ground No 2 Ld CIT(A) At Page 18 -19 of the Order of CIT(A) is as under :- “4.2I have considered the submission of Ld. A/R and carefully gone through the material available on record. The argument of the appellant are discussed hereunder. The appellant argued that without corroborative evidences, the addition cannot be made. I have gone through the assessment order and it is noted that the AO has discussed only the photos of some transaction extracted from the phone of the appellant. The AO has not discussed any other corroborative material in the assessment order. Therefore, the argument of the appellant is found to be acceptable that there was no corroborative material with the AO in addition to the whatsapp images extracted from phone of the appellant. The appellant relied upon various judgments in support of his claim. The argument of the appellant is that no addition can be made on the basis of mere surmises and conjectures and the addition is merely based on dump documents found during the search. The argument of the appellant is justified to the extent that no addition can be made on the basis of surmises and conjectures. The veracity of the entries made in 22 JCIT vs. Vijay Gupta images recorded by the AO is discussed while deciding the ground no.

4. At the page no. 89 vide para no. 5.9 has discussed the submission made by the appellant and found that With regard to photo no. 8 the appellant stated that there is no finding of the Ld AO in the assessment order except stating that assessee failed to give proper justification without even looking to the nature of noting in the WhatsApp Image. From the WhatsApp Image it can be noted that there is no name /date mentioned except that in the amount of 1,76,625/-, Rs. 17,550/- is added and Rs. 19,417/- is reduced leaving a balance of Rs. 1,74,757.50/-. The paper does not reflect that the amount is paid. In the remand report also Ld AO has not brought on record any corroborative evidence as to how the amount noted on this paper is unexplained investment more particularly when there is no evidence of any payment. Thus, without having any name /date/ evidence of payment on the Image, the addition made by the Ld AO may kindly be deleted. “I find that the AO has added this amount in the hands of the appellant without looking the nature of the entries. The entry is a Mathematical calculation without any name and date as explained by the appellant. It is not clear whether the amount is paid or received. No corroborative evidence is mentioned by the AO in the assessment order. In the absence of these findings of the AO the addition made by the AO is not found to be sustainable.” With regard to photo no. 9 the appellant stated that there is no finding of the AO in the assessment order except stating that assessee failed to give proper justification without even looking to the nature of noting in the WhatsApp Image. From the WhatsApp Image it can be noted that amount of Rs. 1,63,900/- is sum total of 4 figures. There is no date mentioned on the paper. The paper does not reflect that the amount is paid. In the remand report also AO has not brought on 24 JCIT vs. Vijay Gupta record any evidence as to how the amount noted on this paper is unexplained investment more particularly when there is no corroborative evidence of any payment. Thus, without having any name/date/ evidence of payment on the Image, the addition made by the AO may kindly be deleted. “I find that the entry is a mathematical calculation without any name and date as explained by the appellant. It is not clear whether the amount is paid or received. No corroborative evidence is mentioned by the AO in the assessment order.” With regard to photo 20 the AO stated in the remand report that the AO stated that the appellant failed to give proper justification of transaction. The appellant stated as under in the rejoinder_There is no finding of the AO in the assessment order except stating that assessee failed to give proper justification without even looking to the nature of noting in the WhatsApp Image. From the paper it can be noted that the paper relate to expenditure on building of Hotel Grand Xenia against which payment of Rs. 1,00,000/- is made by cheque and Rs. 1,00,000/- by cash. Hotel Grand Xenia is run by Gupta Prime Resorts Pvt. Ltd. where in survey dated 14.09.2016 an amount of Rs. 1,00,04,130 was offered for tax on account of Investment in Building. Tax on the same was paid by filing Form No. 1 under the Income Declaration Scheme, 2016. Thus the cash of Rs. 1,00,000/- noted on this paper is covered by income declared by M/s Gupta Prime Resorts Pvt. Ltd.. The AO neither in assessment proceedings nor in the remand proceedings has made any comment on this fact. Thus, when the paper does not relate to the assessee and the cash noted on this paper is covered by the income declared by M/s Gupta Prime Resorts Pvt. Ltd. under Income declaration Scheme, 2016, addition made is apparently incorrect, unjustified and unlawful and may kindly be deleted. “I find that the cash of Rs. 1,00,000/- noted on this paper is covered by income declared by M/s Gupta Prime Resorts Pvt. Ltd. The AO neither in assessment proceedings nor in the remand proceedings has made any comment on this fact. Thus, when the paper does not relate to the assessee and the cash noted on this paper is covered by the income declared by M/s Gupta Prime Resorts Pvt. Ltd. under Income declaration Scheme, 2016, addition made in the hands of the appellant is not found to be justified.” With regard to photo no. 59 the AO stated in the remand report that the appellant failed to give proper justification of transaction. The appellant stated as under in the rejoinder- There is no finding of the AO in the assessment order except stating that assessee failed to give proper justification without even looking to the nature of noting in the WhatsApp Image. From the paper it cannot be inferred that amount noted has been paid. No date is mentioned on the paper. It has been explained that it relate to estimate for Subhash Udhyan Work which is related to Shri Gupta Electrical Consortium with Pradeep Kumar Jain. Thus, the paper neither relates to the assessee nor indicates any payment of the amount. The AO neither in the assessment proceedings nor in the remand proceedings has brought on record 25 JCIT vs. Vijay Gupta any evidence that the paper is related to the assessee. Hence, addition made is apparently incorrect, unjustified and unlawful and may kindly be deleted. “I find that the it cannot be inferred that amount noted has been paid. No date is mentioned on the paper. It has been explained that it relate to estimate for Subhash Udhyan Work which is related to Shri Gupta Electrical Consortium with Pradeep Kumar Jain. Thus, the paper neither relates to the assessee nor indicates any payment of the amount. The AO neither in assessment proceedings nor in the remand proceedings has made any comment on this fact. Thus, when the paper does not relate to the assessee and it is not established that the amount has been paid, addition made in the hands of the appellant is not found to be justified.” With regard to photo no. 60 and 61 the AO stated in the remand report that the appellant failed to give proper justification of transaction. The appellant stated as under in the rejoinder- There is no finding of the AO in the assessment order except stating that assessee failed to give proper justification without even looking to the nature of noting in the WhatsApp Image. In fact the paper is a quotation taken from Bhadana Engineering Company for 5HP and 7HP Motor for Subhash Udyan Work by Pradeep Kumar Jain which was sent to the assessee for approval. However, no purchase is made from Bhadana Engineering Company rather 5HP Motor was purchased from Nirmal Electrical for Rs. 73,350/- by Pradeep Kumar Jain. All documentary evidence in support of the same was filed. These evidences were not controverted by the AO in the assessment proceedings or remand proceedings. Hence, addition made is apparently incorrect, unjustified and unlawful and may kindly be deleted. “I find that the paper is a quotation taken from Bhadana Engineering Company for 5HP and 7HP Motor for SubhashUdyan Work by Pradeep Kumar Jain which was sent to the assessee for approval. However, no purchase is made from Bhadana Engineering Company rather 5HP Motor was purchased from Nirmal Electrical for Rs. 73,350/- by Pradeep Kumar Jain. These evidences were not controverted by the AO in the assessment proceedings or remand proceedings. Thus, when the transaction was not undertaken by the appellant and the AO could not prove otherwise, addition made in the hands of the appellant is not found to be justified.” With regard to photo no. 62 the AO stated in the remand report that the appellant failed to give proper justification of transaction. The appellant stated as under in the rejoinder- There is no finding of the AO in the assessment order except stating that assessee failed to give proper justification without even looking to the nature of noting in the WhatsApp Image. The paper dated 25.02.2019 is in the name of Dr. Manglaram Choudhary. It is a bill of Jaya Kishori Tent House who has charged hire charges from Dr. Manglaram Choudhary in respect of the function hosted by 26 JCIT vs. Vijay Gupta him at Hotel Grand Xenia (a unit of Gupta Prime Resorts Pvt. Ltd.). Thus this paper is not related to the appellant nor the AO in the assessment proceedings and in remand proceedings found any discrepancy in the explanation of the assessee. Hence, addition made is apparently incorrect, unjustified and unlawful. “I find that this paper is not related to the appellant. The AO in the assessment proceedings and in remand proceedings not recorded any discrepancy in the explanation of the appellant. Thus, when the transaction was not undertaken by the appellant and the AO could not prove otherwise, addition made in the hands of the appellant is not found to be justified.” Hon’ble High Court of Bombay held in the case of Principal Commissioner of Income Tax, Central-2 v. Umesh Ishrani [2019] 108 taxmann.com 437 (Bombay)[30-04-2019] as under – “It can thus be seen that the entire issue is based on appreciation of evidence on record. The Tribunal noted that the loose papers entries were not clear and not corroborated by any independent evidence. No question of law therefore arises. Income Tax Appeal is dismissed.” In this case also the entries on the loose papers are not clear and not corroborated by any independent evidence. The appellant explained that some of the entries are simply mathematical calculations which can be termed as rough noting. The appellant provided explanation with regard to other pages but the AO has not controverted the explanation furnished by the appellant. Therefore, considering the explanation furnished by the appellant, the addition made by AO of Rs. 21,69,057/- is deleted.

5. At page no. 94 vide para no. 5.9.2 the Ld CIT Appeal has discussed about the addition made by the Ld AO of Rs. 9,58,41,000/- on the basis of 13 written pages seized as Exhibit 7 The AO held that these amounts are loans advanced to various persons and therefore, these were treated as unexplained investment as the appellant could not explain that these are recorded in the books of accounts. The reasons given by the AO and the reply of the appellant are summarized as under_ i. The Ld. AO considered the word used as “Tube light/Bulb/Chok” as per 100 unit equals to Rs. 1 Cr. without any corroborative evidences. This fact is accepted in the remand report in Para 3.6(b) where it is admitted that the very basis of treating 100 units as equal to Rs. one Cr is not explained in the order. ii. It is observed that at Para 3.6(c) of remand report Ld. AO has concluded that the entries in the paper are in code form since “Tube light/Bulb/Chok” cannot be given in fraction and even interest has been written as charged in these entries. At the same time on page no. 11 of the remand report it is stated that fraction 27 JCIT vs. Vijay Gupta are related to page no 2, 6, 7, 8, 10 but no addition is made in the assessment order in respect of these fraction entries. This fact in itself proves that “Tube light/Bulb/Chok” noted on these pages are actually the units given on hire and wherever there is delay in payment of hire charges, interest has been charged for such delay as noted on the paper itself. Thus, it is admitted fact that there is no basis for the Ld. AO to treat the noting on these pages as in code without any corroborative evidences. The arguments raised by the appellant with regard to decoding are found to be valid as no basis is explained by the AO for decoding of figures by adding five Zeros. In the absence of any supporting material brought on record, the decoding of figures by adding five zeroes is found to be unjustified. With regard to fraction of units, the AO accepted in the remand report that no addition is made with regard to fraction of entries. Therefore, no adverse inference can be drawn with regard to fraction of entries. With regard to interest charged for delay in payment of hire charges, the AO has not controverted the reply of the appellant. Therefore, the explanation of the appellant is found to be acceptable. After arriving these broad conclusions the page wise explanation given by the appellant are considered as under: With regard to page no. 1 the AO stated the amount is in coded form. The appellant accepted that there is no dispute that 11.00 represent 11,000/-. However, this amount was only payable. It was not actually paid and in search no evidence found that it is actually paid. No comment is given by the AO on the explanation of the appellant and therefore the addition of Rs. 11,000/- is deleted. With regard to page no. 2 the AO stated the amount is in coded form and contains various financial transactions. The appellant explained that the firm Shri Gupta Electricals is an Electrical Contractor. During F.Y. 2018-19 & 2019-20 the firm has received light maintenance contract from Ajmer Development Authority, Ajmer. As per this contract particular area has been specified in the work order where all the road lights maintenance Work is to be done by the firm Shri Gupta Electricals. As per the process involved in the contract, on intimation of any complaint from ADA, the firm has to do the replacement of lights. The firm issues lights, Chowk and other electrical items in lump sum quantity to their staff member so that they don’t have to come again & again and also to avoid any damages while doing the replacement. In this particular case employee Hamendra was the site in charge and he was being employed by us on guarantee of Manoj Jain a known person to the firm. We use to regularly issue him the lights, Chowk and other electrical item and also received back the lights, Chowk and other electrical items which required some repair and which are totally useless. The appellant enclosed copy of ADA Work order, their stock movement sheet maintained in respect of employee Hamendra, Copy of Challan, copy of complaint intimation received from ADA. The staff usually gives the 28 JCIT vs. Vijay Gupta account but in this case particularly account of 100 tubes was not given by the staff. The same has been written in diary with name Manoj Jain so as to help remembrance of the fact that in case of any default by the staff the charges of 100 tubes could be recovered from Manoj Jain. In the statement u/s 132(4) of the Income Tax Act in reply to question no.34 on page no.39 of statement dt.14.02.2020, while clarifying the Exhibit no. AS 7 Page 2, the appellant have stated this fact. In this particular case employee Monu Alies Manoj Tiwari was the site in charge and he was being employed by us on guarantee of MammuJi a known person to the firm. The appellant claimed that he use to regularly issue him the lights, Chowk and other electrical item and also received back the lights, Chowk and other electrical items which required some repair and which are totally useless. The appellant enclosed copy of ADA Work order, their stock movement sheet maintained in respect of employee Monu Alies Manoj Tiwari, Copy of Challan, copy of complaint intimation received from ADA. The staff usually gives the account but in this case particularly account of 45 tubes and 28 Chowk was not given by the staff. The same has been written in dairy with name MammuJi so as to help remembrance of the fact that in case of any default by the staff the charges of 45 Tubes and 28 Chowk could be recovered from MammuJi. In my statement u/s 132(4) of the Income Tax Act in reply to question no.34 on page no.39 of statement dt.14.02.2020, while clarifying the Exhibit no. AS 7 Page 2, the appellant have stated this fact. “As discussed above, the decoding of amounts made by the AO are found to be without basis. The facts explained by the appellant are found to be as per his business activity of maintenance work done by the appellant. The AO has not controverted the reply of the appellant. Therefore, the addition made of Rs. 2,13,00,000/- is deleted.” With regard to page no. 3 the AO stated the amount is in coded form and contains various financial transactions. At this page there are two entries one as tube 100 in the name of one Siddharth and other as 40 tube interest paid in the name of Arvind. In his statement appellant mentioned that this is account of tube light. During assessment proceedings, appellant claimed that tube 100 shows neon tube supplied on hire charge and tube 40 also shows neon tube supplied on hire charge and interest charged for delay in payment of hiring charge. In assessment order AO made addition of Rs.1,40,00,000/- on the basis of amounts dues from the persons whose names are appearing. “As discussed above, the decoding of amounts made by the AO are found to be without basis. The facts explained by the appellant are found to be as per his business activity of maintenance work done by the appellant. The AO has not controverted the reply of the appellant. Therefore, the addition made of Rs. 2,13,00,000/- is deleted.” With regard to page no. 4 the AO stated the amount is in coded form and contains various financial transactions. At this page there are two entries one as tube light 40 interest paid in the name of one Chhablaniji and other as 30 tube 29 JCIT vs. Vijay Gupta light interest paid in the name of Deepak. In his statement appellant mentioned that this is account of tube light. During assessment proceedings, appellant claimed that tube 40 shows tube light supplied on higher charge, interest charged for delayed hire charge and tube light 30 also shows tube light supplied on hire charge, interest charged for delayed higher charge. In assessment order AO made addition of Rs.70,00,000/- on the basis of amounts dues from the persons whose names are appearing. “As discussed above, the decoding of amounts made by the AO are found to be without basis. The facts explained by the appellant are found to be as per his business activity of maintenance work done by the appellant. The AO has not controverted the reply of the appellant. Therefore, the addition made of Rs. 70,00,000/- is deleted.” With regard to page no. 5 the AO stated the amount is in coded form and contains various financial transactions. At this page there are three entries out of which two are crossed and one as tube light 5 interest paid in the name of one Vermaji. In his statement appellant mentioned that this is account of tube light. During assessment proceedings, appellant claimed that tube 5 shows tube light supplied on hire charge and interest charged for delayed hire charge. In assessment order AO made addition of Rs.5,00,000/- on the basis of amounts dues from the person whose names is appearing. “As discussed above, the decoding of amounts made by the AO are found to be without basis. The facts explained by the appellant are found to be as per his business activity of maintenance work done by the appellant. The AO has not controverted the reply of the appellant. Therefore, the addition made of Rs. 5,00,000/- is deleted.” With regard to page no. 6 the AO stated the amount is in coded form and contains various financial transactions. At this page on the top written as Jakhar tube light 10 no. -1.5/VLMG. At bottom in the name of one Khurana entries of tube 195, chok 13, various interest paid entries and two cheque entries in fraction etc. are seen. In his statement appellant mentioned that this is account of tube light and chok. During assessment proceedings, appellant claimed that tube 5 shows tube light supplied on higher charge in VLMG and in reference to Khurana entries are related to some tubes and chok for replacement to Delhi and cheque entries in fraction explained by him for payments made through cheques. In assessment order AO made addition of Rs.2,05,00,000/- on the basis of amounts dues from Mr. Jhakar of Rs.10,00,000/- & Khurana of Rs.1,95,00,000/- and mentioned of Rs.1.5 lacs adjusted towards VLMG in respect of entry of Jhakar. For cheque entries etc. No addition was made. In the appellate proceedings the appellant claimed that entries related to Jhakar pertains to neon tubes given on hire charge which was charged as Rs.1500/- and entries related to Khurana related to items for replacement which were purchased to Khurana for which some challans enclosed.

30 JCIT vs. Vijay Gupta “As discussed above, the decoding of amounts made by the AO are found to be without basis. The facts explained by the appellant are found to be as per his business activity of maintenance work done by the appellant. The AO has not controverted the reply of the appellant. Therefore, the addition made of Rs. 2,05,00,000/- is deleted. With regard to page no. 7 the AO stated the amount is in coded form and contains various financial transactions. At this page on top entries are made in the name of A.K Jain PD Bulb 200 interest paid. In middle there are entries in fraction on various dates in the name of Meenaji etc. In bottom there is entries as 30 in the name of Jinesh. During statement appellant mentioned that this is account of bulb. During the assessment proceeding, appellant claimed that top part entry in reference to A K. Jain PD relates to bulb supplies on hire charges, middle part entries amounts given out of personal savings on interest and lower part amount of Rs.30,000/- due for payment against purchase of Supari etc. AO in assessment order made addition of Rs.2,00,30,000/- (Rs.2 Crores outstanding from A.K. Jain Paradizzo Resorts by adding 5 zeros in 200 and Rs.30,000/- due from Jinesh by adding 3 zeros in 30 as tube etc was not mentioned here). The appellant stated that the income of hire charges are duly recorded in the books of account of the appellant. “As discussed above, the decoding of amounts made by the AO are found to be without basis. The facts explained by the appellant are found to be as per his business activity of maintenance work done by the appellant. The AO has not controverted the reply of the appellant. Therefore, the addition made of Rs. 2,00,30,000/- is deleted.” With regard to page no. 8 the AO stated the amount is in coded form and contains various financial transactions. At this page multiple entries including entries in fraction, entries for interest etc. seen. In statement appellant mentioned that this is account of tube light and washing machine. During assessment appellant claimed that on top part in reference to Vijay Kothi shows meta bulb supplied on hire charge, other entries are related to house hold repairs i.e. washing machine etc., payment to security guard, purchase of washing machine and some other higher charge and house hold expenses etc. In assessment order AO made additions of Rs.20,00,000/- for outstanding due from Vijay Kothi (entry on the top of page). “As discussed above, the decoding of amounts made by the AO are found to be without basis. The facts explained by the appellant are found to be as per his business activity of maintenance work done by the appellant. The AO has not controverted the reply of the appellant. Therefore, the addition made of Rs. 20,00,000/- is deleted.” With regard to page no. 9 the AO stated the amount is in coded form and contains various financial transactions. At this page entries of 40 + 40 (some unclear noting) +10+5(some unclear noting)+10 of cheque is seen in the name of CS or GS (it is not clear whether it is CS or GS). In statement appellant 31 JCIT vs. Vijay Gupta mentioned that it is related to cheque given to GS Dream Home. During assessment proceeding appellant mentioned that these are rough jottings. AO made addition of Rs.1,05,00,000/- on account of Chandra Kant Saini through cheque. During the appellate proceedings the appellant stated that here it is GS with represent his firm G.S. Dream Home LLP and particulars pertains to the Capital account of partners/initial formation expenses of firm. Here it is to noted that the reply of appellant given is different from reply given during assessment but similar to his statement during search. However, in his reply submitted in response to the office letter of the AO dated 27.07.22 appellant submitted copy of partnership deed dated 25.12.2017 in which claimed capital entries are reflecting. Same are also seen reflecting in the copy of balance sheet given by during the course of assessment proceedings in the case of G.S. Dream Home LLP which is again enclosed in his reply submitted in response to this office letter dated 27.07.22. The AO has verified these entries during the remand proceedings. “As discussed above, the decoding of amounts made by the AO in the assessment order are found to be without basis. The facts explained by the appellant are found to be correct by the AO in the remand report. The AO has not controverted the reply of the appellant. Therefore, the addition made of Rs. 1,05,00,000/- is deleted. Page no 10 to 13: No addition is made by AO in assessment order for entries appearing in these pages. In view of the above discussion, it can be concluded that appellant is claiming that most of these entries pertain to the electric items given by him on hire charge or to his employees or for replacement etc. and interest pertains to interest on hire charge due to delayed payment etc. The appellant has also provided name of the persons from whom hire charges were received. The AO has not given any findings in this regard. The AO has added five zeroes without any basis. No corroborative evidence brought on record to prove that the transactions are such that five zeroes can be added. The AO has not tried to controvert the explanation furnished by the appellant. In the absence of the explanation of the appellant could not be controverted by bringing any positive material on record the addition made by the AO of Rs. 9,58,41,000/- is not found to be sustainable and deleted.”

12.

In ground no. 3, the Revenue disputed the action of the ld. CIT(A) in deleting the addition for an amount of Rs. 9,58,41,000/- made in the assessment order. The addition was based on 13 written pages, as seized and inventoried as exhibit 7 of Annexure AS. In the assessment proceedings, the ld. AO held that these amounts are loans / advances to various parties. Therefore, the same was considered as unexplained investment which the assessee in the opinion of the Ld. AO failed to explain these transactions showing the same are recorded in the regular books of accounts of the assessee in the assessment proceedings. The ld. 42 JCIT vs. Vijay Gupta AO considered the word used as “Tube light/Bulb/Chowk” as per 100 unit equals to Rs. 1,00,00,000/-. The ld. Assessing Officer has applied these coded formulae without any basis as it is written and confirmed in the remand proceedings. He has categorically stated that decoding of the Tube Light/ Bulb/Chock applied has no basis or reasoning. The ld. AO concluded that these entries are an unexplained investment of the assessee. The ld. AR of the assessee on this issue submitted that the addition has been made by the ld. AO only for certain entries appearing in page no. 1 to 9 and no addition was made for entries appearing in page no. 10 to 13. In the assessment proceeding after considering the reply of the assessee and the relevant verification, the ld. AO while working out the addition on account of the entries as unexplained investment of the assessee which was alleged as written in coded form. Because the assessee has recorded the interest amount charged on these entries and therefore, these entries were not considered as Tube light, Bulb, Chowk etc. Thus ignoring the explanation of the assessee the ld. AO taken a view that the assessee has advanced this money and recorded it in coded form “Tube light/Bulb/Chok”. The ld. AO rejected the explanation of the assessee that the assessee as equally given these “Tube light/Bulb/Chowk” to their employees for maintenance work or they have been given on rent/ hire charges. Wherever this has 43 JCIT vs. Vijay Gupta been delivered with delay along with payment of hire charges the assessee has charged interest thereupon. Thus the assessee explained that the figures are recorded in fractions too for those items given on rent/hire. The ld. AR of the assessee contended before us that confirmation of the parties (who paid interest on hire charges) has also been submitted by the assessee related to page No. 2, 6,7,8 & 10 etc. and no addition in the assessment order made with respect to this fraction entries by the ld. AO there is no addition for entries between 10 to 13. For page No. 8 the addition is made for the first entry on side of page and for fraction entry appearing at lower side of page no addition is made on same page. Similarly the case of page No. 7, 2 and 6 for page no. 6 no addition for fraction entries for 1.5 also not made. Thus, the ld. AR of the assessee had contended that the ld. AO has no direction/ basis of making the addition in the assessment order. The Bench noted at para 3.6(c) of remand report that the ld. AO made statement that the entries in the paper are in coded form, but there is no corroborative evidence of making this statement. As regards the interest charged for delay in the payment of hire charges, the AO has not controverted the reply of the assessee in the remand proceeding where in the assessee has submitted all the required details to the assessing officer. The ld. AR of the assessee filed comparative chart 12.1 From the explanation furnished by the ld. AR of the assessee, finding recorded in the order of the ld. CIT(A) and after considering the remand report of the ld. AO. The Bench observed that as regards page No. 1 the assessee has not disputed that 11.00 represents 11,000/-. But this amount was only payable and actually not paid in search proceedings, no evidence found that it is actually paid. In the remand proceedings, no comment has been given by the ld. AO upon the explanation of the assessee. Therefore, we are of the view that the addition Rs. 11,000/- cannot be sustained and thus, there is no infirmity in the finding of the ld. CIT(A) while deleting the said addition.

12.2 As regards to the page No. 2, the ld. AO stated the amount is in coded form and contains various financial transactions. The assessee explained that the firm Shri Gupta Electricals is an Electrical Contractor. In the financial years 2018-19 and 2019-20 as the firm has received light maintenance contract from Ajmer Development Authority, Ajmer. As per 45 JCIT vs. Vijay Gupta terms of the contract particular area has been specified in the work order where all the road lights maintenance work is to be undertaken by the said Shri Gupta Electricals. As per the terms of the contract upon intimation of any complaint from the Ajmer Development Authority the said firm must replace the lights. Thus, the said firm issues lights. Thus, the said firm issues lights, chowk and other electrical items in lump sum quantity to their staff of the said firm so that they do not have to approach again and again and also to avoid any damages charges of replacement as per contract. In this work employee Shri Hamendra was the site in charge. Who has to undertake the replacement work of the Ajmer Development Authorities. The assessee submitted that the copy of work order, the stock movement sheet maintained by that employee Shri Hamendra while undertaking this work. The copy of sheet maintained, copy of challan, copy of complaint were also submitted in support of the contention so raised. In the said firm employee Hamendra was the site in charge and he was being employed upon the guarantee of Shri Manoj Jain as known person to the firm the same has been written in diary with name of Manoj Jain, so as to remember the fact that in case of any default by the staff the money can be recovered from the reference of Shri Manoj Jain. During the search in statement recorded u/s 132(4) of the Act while replying to question No. 34 on page 39 recorded 46 JCIT vs. Vijay Gupta on 14.02.2020 while giving clarification for 6 pages have been made. Wherein the assessee explained that Mammu alies Manoj Tiwari was the site in charge was being employed by the firm on guarantee of Mammuji a known person to the firm. The assessee submitted that he use to regularly issue him the lights, chowk and other electrical items which required some repair and which are totally useless. The assessee submitted copy of work order issued by Ajmer Development Authority, their stock movement sheet maintained, copy of challan, copy of complaint received. All these evidences along with contention of the ld. AR of the assessee was submitted to the ld. AO in the remand proceedings. The ld. AO in his report in the remand proceeding submitted that the addition to the extent of Rs. 9.58 Crores is made as against the proposed addition of Rs. 24.95 crores recommended in appraisal report. Thus, considering / examining the submission of the assessee and material made available on record that he reiterated the contention that there cannot be fraction of tube light, bulbs and chowk. Therefore, he contended that it is impossible to belief the explanation furnished by the assessee. He also submitted that, the assessee has charged interest against the various entries mentioned in the said diary where the assessee recorded the amount 100 units equals to Rs. 1 crores and 1 unit equals to 1000. Basis of decoding has not been 47 ITA No. 373/JP/2023 JCIT vs. Vijay Gupta explained in the assessment order is categorically mentioned at page 4 in the remand report. But considering the same formula as referred for the other explanation given of the amount recorded in the diary based on the submissions of the assessee and report of the ld. AO in remand proceedings. the ld. CIT(A) hold a view that decoding of amounts made by the ld. AO are found without any basis and ignoring the supporting evidence brought on record, and the same is considered based on the recommendation made in the appraisal report. The assessee has explained that the transactions are found to be in accordance with the maintenance work of Ajmer Development Authority and this fact has not been controverted or disputed by disproving the evidence placed on record. Therefore, based on the submission along with the supported evidences, ld. CIT(A) ordered for deleting the addition of Rs. 2.13 crores recorded on this page. The bench upon careful perusal of the submission made the assessee, contention recorded in the remand report and finding recorded in the order of the ld. CIT(A), we do not find any infirmity in the finding of the ld. CIT(A). Therefore, we confirm the finding of the ld. CIT(A).