Shiv Prakash Bajaj Vs DCIT (ITAT Jaipur)
It is not in dispute that the assessee surrendered a sum of Rs. 30.00 lass on account of incriminating material found during the search, therefore, the transaction of loan between two independent parties even if through the service of the assessee being broker cannot be thrust upon the assessee for want of taxing the same in the hands of the actual parties to the transaction.
The reasoning of the A.O. and the Id. CIT(A) for making the addition is that if it is not assessed in the hands of the assessee then it would be a revenue loss as the complete particulars of Shri Naresh Kumar Maheshwari were not furnished by the assessee and therefore, the assessee is responsible for the loss of the revenue and liable to pay tax. There is no provision in the Act to deem such income which is otherwise not an income of the assessee. The documents in question clearly manifest the nature of the transaction and the parties to the transaction. Particulars of one of the parties were already available on the seized material and the revenue has already attempted to tax the said income in the hands of Shri Roshal Lal Sancheti but the Id. CIT(A) has deleted the said addition on the ground that a loan cannot be assessed to tax except it is unexplained credit U/s 68 of the Act. Therefore, the assessee being a broker cannot be held liable to pay tax on an income which does not arise or belong to the assessee. At the most, the income for providing the service as a broker can be taxed in the hands of the assessee for the transaction of loan which the assessee has already offered to tax as part of the surrendered income. Since the revenue failed to assess the said amount in the hands of the parties to the transaction, therefore, it was attempted to tax in the hands of the assessee on the basis of presumptive provisions of Section 292C of the Act. Once the seized documents are free from any ambiguity and the transaction is between the two independent parties then in such a situation, the said document reveals the transaction of loan cannot be presumed to be the document belongs to the assessee for the purpose of assessing the income being unexplained loan. Hence, in the facts and circumstances of the case, the addition made by the A.O. and sustained by the Id. CIT(A) is not justified and the same is deleted.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the assessee is directed against the order dated 12/01/2018 of Id. CIT(A)-2, Udaipur for the A.Y. 2013-14. The assessee has raised following grounds of appeal:
“1. That on the facts and in the circumstances of the case, the Id. Lower authorities grossly erred in making addition of Rs. 20,00,000/ on account of unexplained advance on the basis of page No. 13 and 14 of seized Annexure-A (Exihibit-5).
2. The appellant craves leave to add, alter, modify or amend any ground on or before the dote of hearing.”
2. The assessee is an individual and engaged in the business of finance broker and property broker. The assessee has not filed his return of income for the year under consideration Ws 139(1) of the Income Tax Act, 1961 (in short, the Act). There was a search and seizure action U/s 132 of the Act on 26/09/2012 at the residential premises of the assessee and survey U/s 133A of the Act at the business premises of the assessee. During the course of search and seizure action, cash of Rs. 6.00 lacs as well as other incriminating material were found. Incriminating material found during the search was marked as Annexure-A (Exihibit-1 to 8). In the statement recorded during the post search investigation on 17/10/2012, the assessee surrendered income of Rs. 30.00 lacs for six years from the A.Y. 2007-08 to 2013-14 as under:
