ASSISTANT COMMISSIONER OF INCOME TAX Vs. SHARAD CHAUDHARY
INCOME TAX APPELLATE TRIBUNAL
ASSISTANT COMMISSIONER OF INCOME TAX
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Chandra Mohan Garg, Member (J) -
(1.) THIS appeal has been preferred by the Revenue against the order of the CIT -III, Delhi dt. 1st Dec., 2011 in Appeal No. 715/2010 -11 for asst. yr. 2006 -07. The sole ground raised by the Revenue in this case reads as under:
"On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of Rs. 4,47,00,000 made by the AO on account of undisclosed income by holding that the seized documents were dumb in nature."
(2.) BRIEFLY stated the facts giving rise to this appeal are that a search and seizure operation under s. 132 of the IT Act, 1961 (for short the Act) was carried out at the residential premises of the appellant (sic - -respondent) on 15th Jan., 2009. Consequent upon the search and seizure operation, a notice under s. 153A of the Act was issued on 30th July, 2009 to file return and in response, the appellant (sic - -respondent) filed a return on 26th March, 2010 declaring income of Rs. 16,01,567. The AO completed the assessment under s. 153A r/w s. 143(3) of the Act at an income of Rs. 4,63,01,570 vide order dt. 27th Dec, 2010, thereby making an addition of Rs. 4,47,00,000 on account of undisclosed income under s. 69 of the Act on the basis of certain written pages containing rough noting found during the course of search and seizure from the residence of the assessee appellant (sic - -respondent). Admittedly, the assessee is a partner of various partnership firms and sources of income consist of income from salary, profit from various partnership firms, and income from capital gain and interest during the year under consideration. The assessee appellant (sic - - respondent) also made investment in immovable properties and earned short -term/long -term capital gains which were also duly considered in the return of income. During the search and seizure operation, certain loose papers and documents were found and seized from the residential premises of the assessee appellant (sic - -respondent) which were named as Annexure A -1 to A -7 and which include certain pages related to transaction of immovable properties which were duly considered and incorporated in the original return of income of the assessee. As per submissions of the assessee, the said loose papers also contain rough notings of various proposals/offers in respect of immovable properties, which were never executed or materialized. During the course of search and seizure operation, page No. 1 of Annex. 1 was also found and seized which contains certain rough notings. The AO (sic - -assessee) was asked to explain the contents of Annexure A -l as the same was found in the possession of the assessee. The assessee appellant (sic - - respondent) submitted that the said loose papers of Annexure A -1 contains certain rough notings in respect of proposal/offer of land which were never executed/materialized and the assessee appellant has not made any investment in such land. The assessee also submitted that Annexure A -1 also contained details of day -to -day household expenses incurred on particular dates aggregating to Rs. 32,450 which were met out of drawings made from partnership firms and cash withdrawal from bank.
(3.) THE AO rejected the submissions and explanation offered by the assessee with regard to Annexure A -1 and made an addition of Rs. 4,47,00,000 under s. 69 of the Act with following observations and findings:
"4.1. I have considered the submission of the assessee. The paper cannot be termed as a dumb paper as it clearly reflects the narration of event beginning from area of land, rate of land, payment details as well as consideration. A copy of the document is annexed as Annexure A -1 with the order. The assessee for apparent reasons is trying to term the document as a dumb document. The document contains chronological details of event and reflects period of payments in respect of the property referred to in the document. The fact emerging out of the documents clearly demonstrate that this paper is not a dumb paper and has been maintained to keep an account of date -wise details of receipt/payments. The onus lies on the assessee to refute the facts emerging from the document as the same has been found from the possession of the assessee. In spite of being allowed specific opportunity to explain the paper vide order sheet entry dt. 30th Nov., 2010, the assessee has merely termed the same as rough notings. From upper part of the document amount of transaction noted as 2.25 c (75 bigha X 30 L), and then second plot of 11.5 bigha at the rate of Rs. 17.50 lacs/22.50 lacs per bigha clearly established that the investment amount is in crores and paper is clearly containing detail of unaccounted transaction of the assessee. Under the circumstances the investment along with income reflected in this document is treated to be made outside the books of account and peak balance of Rs. 4,47,00,000 is added to the income being investment as well as undisclosed profit on the deal. I am satisfied that the assessee has concealed particulars of income and penalty proceedings under s. 271(1)(c) of the IT Act are being initiated separately.";
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