Abhay Kumar Bharamgouda Patil v. Assistant Commissioner Income Tax, Circle-1, Belagavi

ORDER

B.R. Baskaran, Accountant Member - All the three appeals filed by the assessee are directed against the orders passed by ld CIT(A) and they relate to the assessment years 2009-10 to 2011-12. The assessee has also filed stay applications for the above said three years. Since the issues urged in these appeals are arising out of common set of facts, these appeals were heard together and are being disposed of by this common order, for the sake of convenience.

2. The assessee is aggrieved by the decision of ld CIT(A) in confirming the addition towards undisclosed income relating to alleged deposits made by the AO in all the three years under consideration in a co-operative society.

3. The facts relating to the issue are discussed in brief. The revenue carried out survey operations u/s 133A of the Act in the hands of M/s Arihant Credit Souharda Sahakari Ltd (hereinafter referred as "Society/Bank" or "society") on 05-01-2012. The above said society is carrying on banking operations through its various branches. During the course of survey operation, the revenue impounded a Diary marked as Annexure-G 1/SACSSL/1. The Chairman of the society explained that the Diary has been written by the Asstt. General Manager (Deposits and Loans) named Shri S.K. Terdale. Accordingly a statement was recorded from Shri S.K. Terdale u/s 131 of the Act by ADIT on 06-01-2012. In the statement, he admitted that the diary was maintained by him and entries therein were written by him. From the noting made in the diary, it was noticed that details of receipt of deposits have been recorded against name of certain persons. When questioned about the same, Shri S.K. Terdale submitted that the moneys were received from the persons named therein which, inter alia, included the name of the assessee herein. He further submitted that the money received from those persons was deposited in fictitious names in various branches in order to hide the identity of the real depositors. The amount of deposits alleged to have been received from the assessee was worked out at Rs.885 lakhs in aggregate in the three years under consideration as detailed below:—

Shri S.K. Terdale submitted the name and address of the assessee and also identified him as MLA of Belgaum South. He however submitted that he does not have FD account opening forms of any of the depositors. He confirmed his statement again on 23.1.2012.

4. Thereafter, the ADIT summoned the assessee and confronted the statement so given by Shri S.K. Terdale. The assessee, however, disowned the alleged deposits and stated that none of the transactions are related to him. The assessee further submitted that he does not have any deposits with the above said Society and is not associated with it in any manner. The AO offered the assessee an opportunity of cross-examining Shri S.K. Tardale and the Chairman of Society, but the assessee refused to avail the same.

5. Based on the above said information, the AO reopened the assessments of the years under consideration. During the course of assessment proceedings, the AO also supplied copies of Statement recorded from Shri S.K. Terdale on 23-01-2012 and also the statement recorded from the Chairman of the Society. In reply, the assessee reiterated his stand that he has no dealing with the Society and the amounts written in diary against his name is not his money.

6. In view of the above cited stand of the assessee, the AO summoned Shri S.K.Terdale again and recorded a statement again on 20-02-2014, who again confirmed his statements given earlier. He also admitted that he has done these transactions without the knowledge of the Management of the bank and has done the same to achieve targets. He further submitted that the Society has also given loans to six close relatives of the assessee to the tune of Rs.20.00 lakhs each, which aggregated to Rs.120 lakhs. He submitted that he has given loans to them without obtaining security, as the deposits of the assessee were available with the Society.

7. Based on the information about the loans given to the relatives of the assessee, the AO concluded that the assessee has adopted the above said modus operandi in order to convert his bank money into white. The diary also contained names of certain seven persons from whom amounts were claimed to have been received. Shri S.K. Terdale could produce only two persons and they have also owned up deposits. Four persons could not be traced at all. Based on the statements given by Shri S.K. Terdale and based on the fact that loans given to the relatives of the assessee by the Society, the AO concluded that the impugned deposits aggregating to Rs.885 lakhs was made by the assessee only without accounting the same in his books of account and accordingly assessed the same as undisclosed income of the assessee in the respective years as detailed above.

8. The ld CIT(A) also confirmed the same in all the three years and hence the assessee has filed these appeals before us.

9. The Learned AR submitted that the Assessing Officer has made impugned additions in all the three years on the basis of diary maintained by Mr. S.K. Terdale and statements given by him. He submitted that Mr. Terdale has stated that the money was given to him by the assessee and he has deposited the same in various fictitious names in various branches. Mr. Terdale has further submitted that the assessee has claimed to have received such kind of moneys from seven persons. However, Mr. Terdale could produce only two parties who have accepted the amounts as their own deposits. Neither the Revenue nor Mr. Terdale could trace four parties at all. The learned AR submitted that the above facts clearly show that the statement of Mr. Terdale could not be relied in toto. The assessee, being a MLA, has duly cooperated with the ADIT/Assessing Officer by appearing before him and responding to his notices. Since the transactions are not related to him, the assessee has totally denied the transactions. The learned AR submitted that the assessee is a popular political figure and it is quite possible that somebody might have instigated Mr. Terdale to write name of the assessee or used the name of the assessee without the knowledge of Mr. Terdale either to hide his identity or to damage the social and political carrier of the assessee. He further submitted that Mr. Terdale has admitted in the statement given by him that he has never met the assessee and money was brought by some other persons and not by the assessee. Mr. Terdale has also admitted that he does not remember the persons who brought the money and also type of denominations under which money was given. Mr. Terdale has also stated that these transactions noted in the diary were not reported to his higher authorities also. All these facts show that Mr. Terdale has really no knowledge of the person who has sent money to him. He submitted that Mr. Terdale could not substantiate his statements with any other corroborative evidences. Accordingly he submitted that the statements given by Shri Terdale are not reliable.

10. The learned AR further submitted that the assessee has categorically denied the statements given by Shri Terdale and also the entries made in the diary. He submitted that the diary was seized from the premises of the society/bank and hence presumption prescribed u/s. 292C of the Act will apply to the society/bank only and not to the assessee. He submitted that the revenue has not brought any material on record to link the assessee with the diary, but has merely placed reliance on the statements given by Mr. Tardale, which have not been corroborated with any other credible materials. Accordingly he submitted that the Assessing Officer could not have made these additions on the basis of Statements of Shri S.K. Terdale, which were self-serving statements.

11. The Learned AR further submitted that the Assessing Officer has held that the loans given by the Society to the close relatives of the assessee would go to show that the assessee has adopted modus operandi of converting black money into white. The Assessing Officer has further observed that the loans given to the relatives of the assessee were unsecured. The learned AR submitted that all these observations are against the facts available on record. He submitted that the impugned loans were in the nature of cash credit loans given for the rice mill run by the relatives of the assessee and hence they are business loans. He further submitted that these loans are secured loans secured against the stock of business and further these parties have given lien certificate also to the Society. He further submitted that all these loans have been duly repaid to the society/bank within short period. He submitted that if it had been a case of converting black money into white, as alleged by the Assessing Officer, the close relatives of the assessee would not have repaid the loans. He further submitted that these loans aggregating to Rs.120 lakhs were availed by the relatives only in financial year 2010-11, where as the assessee was alleged to have been making deposits from financial year 2008-09 onwards. Had it been a case of converting black money into white, the assessee would have taken loans in financial year 2008-09 itself. He submitted that the loan transactions are independent transactions unconnected with the alleged deposits linked to the assessee. Accordingly, he submitted that the loans taken by the relatives cannot be taken as corroborative evidences and hence the very basis on which the Assessing Officer has made impugned additions would fail on account of foregoing discussions on the loans aspect.

12. The learned AR submitted that the entries found in the books of account alone shall not constitute sufficient evidence to implicate a person since the same is only corroborative evidence. He submitted that the above said proposition was laid down by Hon'ble Supreme Court in the case of Common Cause (A Registered Society) v. Union of India [2017] 77 taxmann.com 245/245 Taxman 214/394 ITR 220 . He submitted that the Hon'ble Supreme Court has held in the case of CBI v. V.C. Shukla AIR 1998 SC 1406 that entries in loose papers/sheets are irrelevant and not admissible under sec. 34 of Evidence Act and only where entries are found in books of account regularly kept, those are admissible. He submitted that Hon'ble Supreme Court has also observed that the judiciary ought to be cautious while ordering investigation against any important constitutional functionary/officers in the absence of prima facie reliable/legally cognizable material, which is not supported by other circumstances. He: submitted that the impugned diary is not regular books of account of the Society/Bank. The learned AR also submitted that the assessee is a MLA and hence AO was not justified in making impugned additions on the basis of unreliable diary and statements given by Mr. Terdale without bringing any other credible and corroborating material on record.

13. The learned AR further submitted that the presumption prescribed under 132(4A) of the Act can be used against the person from whom documents were seized as held by Pune Bench of the ITAT in the case of Pradeep Amrutlal Runwal v. Tax Recovery Officer [2014] 47 taxmann.com 293/149 ITD 548 . He further submitted that the statements given during the course of survey have no evidentiary value as held by Hon'ble Madras High Court in the case of Commissioner Of Income-Tax v. S. Khader Khan Son (2008) 300 ITR 157 , which has since been confirmed by Hon'ble Supreme Court in the very same case reported in 352 ITR 480 .

14. The learned AR submitted that an identical issue of making addition on the basis of entries recorded in the diary maintained by a third parry was examined by Hon'ble Bombay High Court in the case of Additional Commissioner Of Income-Tax, Bombay City-I v. Miss Lata Mangeshkar. [1974] 97 ITR 696 and the Hon'ble High Court confirmed the order of Tribunal in deleting the addition by holding that the evidences were not sufficient to implicate the assessee.

15. The learned AR also submitted that though name of the assessee is entered in the diary, but the same name was not entered in the main book of the society/bank. The Regular books of account maintained by the society/bank is reliable piece of evidence and the impugned diary, being a rough record maintained by one of the officers of the society/bank, cannot be considered as regular books of account of the society/bank. In the case of Miss Lata Mangeshkar (supra), diary found in the case of Vasu Films was not considered as regular books of account and in fact M/s. Vasu Films had produced some other books of account for the purpose of assessment. Accordingly, the learned AR submitted that facts available in the present case are identical with the facts available in the case of Miss Lata Mangeshkar (supra). Accordingly he submitted that the entries made in the diary maintained by Mr. Terdale cannot, be relied upon by the Assessing Officer for making the impugned additions. He further submitted that the statement given by Mr. Terdale is self-serving statement and the same could not have been relied upon by the Assessing Officer. Accordingly the learned AR submitted that the additions made in all the three years under consideration are without any credible evidence or basis and hence they are liable to be deleted.

16. The learned DR, on the contrary, submitted that the diary has been found during the course of survey operations conducted in the hands of the society/bank and it contained entries relating to receipts of money from the assessee. The diary has been maintained by Mr. Terdale and he has explained that the moneys were received from the assessee and hence it has been recorded against the name of the assessee. He has further stated that the moneys so received have been used to make deposits under fictitious name in various branches of the society/bank. The ld D.R submitted that the amounts received as deposits from the assessee have been linked with various deposits made in the fictitious names. Accordingly he submitted that the entries found in the diary stand corroborated and hence it cannot be treated as unreliable. The learned DR further submitted that the Mr. Terdale has maintained his stand and reiterated same facts in the statements given by him on various dates and it confirms the fact that the moneys were received from the assessee only. Accordingly, the learned DR submitted that the statements given by Mr. Terdale cannot be rejected as unreliable piece of evidence.

17. The learned DR further submitted that the assessee was provided with an opportunity to cross-examine Mr. Terdale and also Chairman of the society/bank. However, the assessee did not avail the said opportunity and was unwilling to cross-examine them. The learned DR further submitted that the assessee has merely disowned the transactions and could not disprove the entries made in the diary and also statement given by Mr. Terdale. The learned DR further submitted that Mr. Terdale has meticulously explained as to how the money was received from the assessee and how it was utilised for making deposits under fictitious name in various branches. The learned DR further submitted that it is the responsibility of the society to explain the contents of material found during the course of survey and the society has discharged its burden by submitting that the diary was maintained by Mr. Terdale, AGM of the society. Further, Mr. Terdale has also explained various transactions including modus operandi adopted in receiving money and making deposits. Accordingly the ld D.R submitted that the burden of proof would shift to the assessee. He further submitted that the entries made in the diary, the statements given by Shri Tardale and the loan transactions of close relatives of the assessee clearly support the case of the AO that the assessee has given his unaccounted money to the society as per the entries found in the diary. The very fact that the deposits have been given by the assessee on various dates spreading in three assessment years also prove the reliability of the entries made in the diary. Accordingly, the ld D.R submitted that the Assessing Officer was justified in taking the view that the assessee has adopted the modus operandi of converting his black money into white through banking operations. The learned DR further submitted that the Principles Preponderance of probabilities can be adopted in Income Tax proceedings and it is always not necessary to bring on record foolproof evidences. He submitted that various evidences collected by the Department and circumstances in which entries were found to have been made in the diary would show that the Assessing Officer has correlated the evidences and entries made in the diary and the principles of preponderance of probabilities support the stand taken by the AO. The learned DR further submitted that the entries, which could not be linked with any specific person, have been assessed in the hands of the assessee as unexplained cash credit. Accordingly, learned DR submitted that learned CIT(A) was justified in confirming the additions made by the Assessing Officer in all the three years under consideration.

18. In the rejoinder, the ld A.R submitted that the assessee has refuted the allegations made by Shri S.K. Terdale in his statements and has categorically stated that the impugned transactions are not his transactions and further he does not have any kind of links with the Society. He submitted that the question of availing cross examination shall arise only if a person has given contradictory statement in respect of some evidences, which have been accepted by the assessee. In the Instant case, the stand of the assessee is that his name has been wrongly written in the diary and he does not have any kind of connection with the entries made in the diary and the society. In that situation, there may not be any necessity to cross examine the person who has made wild allegations without bringing any corroborative evidences. He submitted that the assessee has also demonstrated as to how the statements given by Shri S.K. Terdale is unreliable.

19. The ld A.R further submitted that the Society could have reconciled the money received by it from unknown persons with the deposits made under fictitious names, but there is no corroborative or credible material to link the assessee with the entries of receipt of money found recorded in the diary. The ld A.R further submitted that the ld D.R was not correct in law in stating that the burden of proof has been discharged by the Society and the burden has shifted to the shoulders of the assessee. He submitted that the assessee is being compelled to prove a negative fact, which is not permissible under the law. Accordingly he submitted that the impugned additions are liable to be deleted as the AO has claimed to have made the additions in all the three years on the basis of evidences, but they are unsubstantiated ones and hence the impugned additions have been made only on surmises and conjectures.

20. We have heard rival contentions and perused the record. We notice that the revenue has carried out survey operations in the hands of M/s Arihant Credit Souharda Sahakari Ltd and during the course of survey, it has impounded a diary maintained by the AGM of the bank named Shri S.K. Tardale. The entries have been explained as details of rnoney received from certain persons who have been named in the diary. It has been further explained that the moneys so received have been used to make deposits under fictitious names in various branches of the Society by splitting deposits, in order to hide the identity of the real depositors. It was explained that the amounts have been received from seven persons, which included the name of the assessee also. Though Shri S.K.Tardale submitted that he will produce all the seven persons, according to ld A.R, four persons could not be traced at all and only two persons have admitted that they have given money to Shri S.K. Tardale as recorded in the diary. The remaining person was the assessee and he has also appeared before the tax officials and submitted that he does not have any type of connection with the Society/Bank and refuted/disowned the entries recorded in the diary against his name. He also did not accept the statements given by Shri S.K. Tardale and stated that he has not given any money to the society as alleged by Shri S.K. Tardale.

21. Thus the impugned additions have been made by the AO on the basis of statements given by Shri S.K.Terdale with regard to the entries noted in the diary found during the course of survey operations, referred above. It was also noticed that some close relatives of the assessee have taken loans for an aggregate amount of Rs.120 lakhs from the Society/bank in F.Y 2010-11. The AO has considered the same as an important piece of evidence supporting the statements given by Shri S.K. Terdale and accordingly drawn inference that the entries found recorded in the diary has got links with the loan given to the close relatives of the assessee. Accordingly the AO has held that the assessee has adopted the modus operandi of converting black money into white through banking channels.

22. Now the questions that arise for our consideration, in our view, is whether the evidences found during the course of survey operations and the statements given by Shri S.K. Terdale could establish any link between the assessee and the amounts shown against his name in the diary and they support the case of the Assessing Officer that the money represent undisclosed income of the assessee?

23. We shall now examine the Statements given by Shri S.K. Terdale. He has given explanations on the entries found recorded in the diary in the statements given by him. He has stated that the moneys received from the assessee have been recorded against the name of the assessee in the diary. However, a careful perusal of the statements given by Shri S.K. Terdale would show that he has not ever met the assessee at all. He has only stated that the moneys were sent by the assessee through some persons and he has recorded the same against the name of the assessee. Even he could not identify the persons who brought the money to him or the denominations in which the money were brought. Thus it is seen that Shri S.K. Terdale has received money through some persons and they have stated that the money has been sent by the assessee. Accordingly he has recorded the same against the name of the assessee. If Shri S.K. Terdale could identify the persons who have brought money and if those persons happen to be the employees or any other related persons of the assessee, then it may be possible to state that the statements given by Shri S.K. Terdale stood corroborated. We also notice that Shri S.K.Terdale could not bring any other material on record to substantiate his statements. We have also noticed that the assessee has denied the transactions recorded against his name in the diary and also did not accept the statements given by Shri S.K. Terdale. We have also noticed that Shri S.K. Terdale could not substantiate his statements by bringing any other credible or corroborative evidences. In the absence of any material to substantiate the statements given by Shri S.K. Terdale, in our view, the same cannot be used against the assessee. As rightly pointed out by ld A.R, in our view, the assessee is being asked to prove a negative fact, which is not permissible under the law.

24. Now we shall examine the impugned transactions under the test of human conduct and human probabilities. As noticed earlier, the aggregate, amount recorded against the name of the assessee was Rs.8,85 lakhs in a period of three years though various instalments, In case of money transactions of high magnitude, a prudent person would always insist for some kind of acknowledgment for the payments made, i.e., when the assessee makes payment to Shri S.K. Terdale, the assessee would have got acknowledgment from him and when Shri S.K.Terdale returns back money to the assessee, he would have got acknowledgment from the assessee. If there is no such acknowledgment, then there bound to be some difference with regard to the quantum of money transacted and hence in order to ensure that no such difference should arise, usually, some kind of acknowledgment/record shall be maintained. Under practical circumstances, a person could insist on repayment of money only if some kind of acknowledgment or evidence is available in order to bind the other party. We notice that the Survey operations did not bring on record any such document of acknowledgment/receipts. Hence the absence of any document in the form of receipts issued by the recipient or in the form of acknowledgment for money transactions of high magnitude, in our view, does not satisfy the test of human conduct and human probabilities.

25. If a person is having a de facto control over the affairs of the other person, then it could be possible that the money transactions may be entered without insisting for acknowledgments. The asssessee has submitted that he does not have any type of association with the Society. The Chairman of the society or Shri S.K. Terdale also could not bring any material on record to show that the assessee was having de facto control over the affairs of the Society. We notice that the Assessing Officer has also not brought on record any material to show that there was such kind of relationship between the Society/bank and the assessee. Hence the test of human conduct and human probabilities fails completely in the instant case from this angle also.

26. We shall now examine as to whether the presumption prescribed under the Act supports the case of the AO. We have noticed that the presumption in respect of survey operation is prescribed in sec. 292C of the Act, as per which the books of account and other evidences found during the course of survey shall be presumed to belong to the person who has been surveyed and the contents are true. Hence it is the responsibility of that person to prove the entries recorded therein are true. As contended by ld A.R, the said presumption may be used against the person who has been subjected to survey and not against others. Hence it is the primary responsibility of the Society/bank to explain the nature of documents/books of account and the entries recorded therein. The presumption prescribed in sec, 292C is rebuttable presumption. The question that arises is whether the society/bank has discharged its responsibility to prove that the transactions are true?. As noticed earlier, the Chairman of the society/bank has expressed his ignorance about the diary and he has stated that the diary has been maintained by Shri S.K. Tardale. Hence Shri S.K. Tardale was questioned with regard to the diary and he has simply stated that the money was received from the persons named in the diary, but could not furnish any other corroborative material to support his statement. Shri S.K. Tardale, however, could produce two persons and they have also owned up the transactions, meaning thereby, the society/bank can be said to have proved its stand with regard to those two persons. We have noticed that the assessee has denied/disowned the transactions and has also not accepted the statements given by Shri S.K.Terdale, In this kind of situation, it is the responsibility of the Society/S.K. Terdale to show that the assessee was wrong and the society was right. We have noticed earlier that the society/S.K. Tardele could not substantiate the statements given by him and also could not prove that the assessee was wrong. Hence, in our view, the society/bank or Shri S.K.Tardale could not be said to have substantiated or proved its stand in respect of the assessee. As observed earlier, it may not be fair to compel the assessee to prove a negative fact. The ld D.R, during the course of his argument, also submitted that the unexplained deposits have been assessed in the hands of society/bank as unexplained cash credits u/s 68 of the Act, meaning thereby, the society/bank has also failed to discharge the initial onus of proof placed upon its shoulders u/s 68 of the Act. Applying the same analogy, it can also be said that the society/bank has failed to discharge the initial burden of proof in respect of money recorded against the name of the assessee, since the assessee has not accepted the statements so given by Shri S.K. Terdale. Further, we have noticed that Shri S.K. Terdale has not met the assessee and also could not link the assessee with the persons who brought money. Hence we arc of the view that the AO cannot take the support of the statements given by Shri S.K. Terdale, since the same has not been substantiated.

27. We notice that the Assessing Officer has attempted to corroborate the deposits claimed to have been received from the assessee with the loans taken by the close relatives of the assessee. In his statement, Shri S.K. Tardale has also stated that he has given loans to the close relatives of the assessee on the basis of deposits of the assessee available with the society. It was also stated by him that the loans were unsecured. However, the loan documents produced by the assessee would show that the society has granted "Cash Credit loans" to the close relatives of the assessee. The cash credit loans are given to the business concerns against the primary security of the Stock available with the business concern. Hence it cannot be said that the loans were unsecured loans and accordingly we are of the view that the said statement of Shri S.K. Tardale is not correct. The ld A.R also submitted that the borrowers have given lien letters to the society so that the society shall get security from other assets also.

28. The Assessing Officer has made impugned additions in Ays. 2009-10 to 2011-12, i.e., it has been claimed that the deposits have been received from the assessee from the financial year 2008-09 relevant to AY 2009-10 onwards. From the copy of loan statements furnished in the paper book filed by the assessee, we notice that the impugned loans have been sanctioned on 23.9.2010 and 01-01-2011. All the loan accounts have been closed by making repayment in May, 2011 and September 2011. The alleged deposit transactions have been made for a period of almost three years, but the loan transactions have taken place for a period of about nine months only, that too in the third year only. If the theory of the Assessing Officer that the assessee bias given money in black and obtained loan in white is accepted, then the assessee should have taken loans through his relatives in FY 2008-09 itself. If the above said theory of the Assessing Officer is accepted as correct for a moment, then the assessee would not have repaid the loans so long as the deposits were available with the society. It was not shown that the entire money claimed to have been received from the assessee has been repaid to the assessee. The manner of repayment of money, if any, has also not been examined. Since the deposits do not stand in the name of the assessee, effectively the assessee will not have control over the deposits. However, in respect of loan taken, the borrowers would be liable to repay the loans, since the society/bank can always initiate legal action against the borrowers for recovery of loans. A prudent man cannot be expected to enter into such kind of deals. The loans taken through accounting channels can be repaid only through accounting channels only. We have noticed that the loans taken by the relatives have been repaid by them. We notice that neither Shri S.K. Tardale nor the Assessing Officer has brought on record any material to show that the loan amounts have been repaid out of the deposits alleged to have been received from the assessee. Hence the presumption drawn by the AO that the assessee has indulged in the practice of converting the black money into white may not be correct in the facts and circumstances of the case.

29. Apart from the loan transactions, the AO has relied upon the statements given by Shri S.K. Terdale. We have noticed earlier that the statements given by him were not substantiated and hence not reliable. We have also noticed that the assessee cannot be expected to prove a negative fact. Accordingly we are of the view that the statements given by Shri S.K. Terdale cannot be taken support by the Assessing Officer.

30. Before us, the ld A.R placed his reliance on the decision rendered by Hon'ble Bombay High Court in the case of Miss. Lata Mangeshkar (supra). In the said case, the ITO came across a sort of a ledger maintained by the firm known as Vasu Films of Madras containing certain entries, which had been seized by the Income Tax authority from the premises of the above said firm. In the diary, some amount was written as "W" and some amount was written as "B" against the name of the assessee. In the statement recorded from Mr. Vasudev Menon, Managing partner of Vasu Films and from Mr. C.S. Kumar, Firm's Bombay manager, the above said entries were explained by them as the letter "W" would mean "white" and the letter "B" would mean "Black". The assessee given an opportunity to cross-examine these persons. Thereafter, the Assessing Officer accepted the entries recorded in the diary and came to the conclusion that the assessee has concealed income. Accordingly, he made additions. Before the Tribunal, it was contended on behalf of the assessee that entire evidences on which lower authorities had relied, merely created suspicion that the assessee might have accepted payments in black but it did not take place of proof. The Tribunal, after appreciating piece of evidence, came to the conclusion that the evidences were not sufficient to prove even a single evidence, where the assessee could be said to have received money in black for which she did not pass a receipt. Accordingly the Tribunal deleted the addition made by the AO. The Hon'ble Bombay High Court has upheld the view taken by the Tribunal. In our view, this decision supports the case of the assessee also. The entries recorded in the diary were different from the entries found recorded in the regular books of account of the Society, i.e., the names of depositors noted in diary were not found in the regular books of account of the Society. Before income tax authorities, the society could have furnished only its regular books of accounts and it could not have relied upon the diary. Even though Shri S.K. Terdale has explained the entries recorded in the diary, he could not bring any material to substantiate his statements. The Chairman of the Society or any other higher authorities does not have any knowledge about the entries made in the diary. The assessee has not accepted the statements of Shri S.K. Terdale. The ld D.R mentioned about the failure of the assessee to avail cross-examination. We agree with the contentions of the ld A.R that there was no requirement to make any cross examination, since the assessee was not required to prove any negative fact. Henee, for the detailed reasons, discussed in the preceding paragraphs, we are of the view that none of the evidences support the case of the Assessing Officer.

31. Accordingly we set aside the orders passed by ld CIT(A) on this issue in all the three years under consideration and direct the AO to delete the impugned additions made in all the three years under consideration.

32. The assessee has also raised grounds relating to validity of reopening of assessments. Since the grounds urged on merits have been decided in favour of the assessee and since the ld A.R did not advance his arguments on the legal ground, we do not find it necessary to adjudicate those grounds.

33. Since we have disposed of the appeals itself, the stay applications filed by the assessee shall become infructuous.

34. In the result, the appeals of the assessee are treated as allowed and the stay applications of the assessee are dismissed.

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