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2013 (7) TMI 730

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....ssessee stated that these assessments are barred by limitation as the assessments were not completed within 21 months from the end of the financial year in which the search was conducted. It was further stated that in these cases, the search was conducted on 29-8-2005, thereafter notice under Section 153A was issued. The assessee filed returns in response to notice under Section 153A. After issuing notice under Section 143(2) and 142(1), the respective assessments were completed on 31-12-2007. On a query from the Bench that the assessments seem to be in time as they are completed within 21 months from the end of the financial year in which the search was conducted. After verifying the facts, learned AR fairly conceded that these assessment s are in time. 5. In view of the above facts and circumstances of the case, we rejected the contention of the learned AR that these assessments are barred by limitation by holding that the assessments were completed by the AO are in time. 6. Learned AR further submitted that since no incriminating material was found during the course of search, therefore, the assessments so completed, are bad in law, which are liable to be quashed. Reliance was....

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....ess the total income of all these six assessment years. Accordingly, the legal ground raised before the Tribunal that without any incriminating material assessment completed was bad in law, was rejected by the Bench. 8.2 We are in agreement with the finding of the Tribunal given in the case of Scope (P) Ltd. (supra) that the AO is bound to issue notice under Section 153A after search conducted under Section 132 of the Act. Once the notice under Section 153A is issued for filing the return, then the AO has to complete the assessment of the years of which the return was required. It is a different matter as to whether the addition is liable to be made or not on the basis of the material found or otherwise, however, the assessment has to be completed. Accordingly, we hold that the AO was right n completing the assessment under Section 153C of the Act. Therefore, we hold that the order passed by the AO are not bad in law. Accordingly, we reject the legal ground for all the three assessment years before us raised by the assessee after admitting the same as the ground raised was purely a legal ground. 9. Now, we will take up the appeals of the assessee for all the three relevant assess....

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..... Sujit Kumar Singh and confirmation of gift was also filed. It was stated that she is not able to produce them as they are out of station and busy in their profession. Regarding loan of Rs.4 lakhs, Mr. T.R.Irani, again confirmation of the party along with bank statement was filed. However, the AO was not satisfied as in his view the assessee failed to prove the genuineness of transaction of gift as well as loan. The AO noticed that there is no proof of any love and affairs between the assessee and the donor. Accordingly, the AO treated the amount of Rs.16 lakhs as professional receipt and added to the income of the assessee. 10.2 The contentions raised before the AO were reiterated before the CIT(A). It was explained that the assessee was not able to produce the aforesaid parties because Shri Sujit Kumar Singh resides in Russia and he visits India only once in a year and in such circumstances he could not be produced before the AO. Regarding Mr. T.R.Irani, it was submitted that he also could not appear because of the fear of adverse publicity and media pressure. However, assessee submitted bank details of these persons and copy of gift deed in case of Mr. Sujit Kumar Singh and Mr....

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....m carefully. After considering the submissions and taking into consideration and other materials on record, we found that the assessee deserve to succeed on these grounds. Firstly, there was no material before the AO to hold that any income has escaped assessment. The return of income was duly filed in time. Copy of computation along with balance sheet was enclosed. From the balance sheet itself the AO noticed that certain gifts has been received by the assessee, therefore, the assessee was required to file necessary details to prove the gifts as well as loan, are genuine. Necessary details were filed, which were not found incorrect. The main reason for making addition is that both the persons i.e. Mr. Sujit Kumar Singh and Mr. T.R.Irani could not be produced for verification, otherwise all details were filed. Capacity of both the persons was not in doubt as they were men of substance. Both the persons were assessed to tax regularly. All these details were filed before the AO and CIT(A). The remand report was also sought. No adverse comment was received by the learned CIT(A) from the AO, except that in spite of opportunity, both the persons could not be produced, hence, the additio....

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....of the considered view that there is no material to hold that income has escaped assessment. Accordingly, we are of the view that the addition made and sustained on account of gifts and loan was not justified. 10.8 After completion of hearing, learned DR has filed a copy of decision in the case of Gopal Laql Bhadruka Vs. DCIT, reported in (2012) 346 ITR 106 (AP), wherein the Hon'ble Andhra Pradesh has held that the AO was bound to complete the assessment under Section 153A/153C of the Act and while completing the assessment the AO can take into consideration the material available during the search and seizure operation for making an assessment of the undisclosed income of the assessee. In fact, in this case, the assessee has accepted is having taken own money and, therefore, the addition was made which was confirmed by the Tribunal and thereafter by the Hon'ble High Court. However, in the present case, there is no such material with the AO to hold that any income has escaped the assessment, neither there was any other material was brought on record nor there was any other information except that the enquiry made on the basis of information and details given at the time of filing ....

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....against sustaining the addition of Rs.2,67,500/- over and above the agreed value of flat purchased at Kamdhenu tower, Lokhandwala. 11.1 During the assessment proceeding, the AO on examining of the balance sheet found that the assessee has purchased two new flats - one at Panorama Towers Co-operative Housing Society Ltd. and another at Kamdhenu Shopping Centre Co-operative Housing Society Ltd.. As per token receipt found in the locker, the flat in Kamdhenu Shopping Centre Co-operative Housing Society Ltd. was purchased at Rs.18,70,000/-. The assessee was required to explain the source of purchase of this flat. In reply, it was stated that the assessee negotiated for two flat adjoining on the same floor at Kamdhenu Building and the amount showed on the paper in seized material amounting to Rs.18.70 lacs is agreed cost for aforesaid two flat, but later on at particular spur of time due to shortage of funds transaction does not materialize so she decided to buy one flat at Kamdhenu building for total consideration of Rs.9,20,000/- and stamp duty of Rs.32,750/- only was paid and the same was disclosed in the balance sheet as on 31-3-2000. The contention of the assessee was found correc....

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.... Authorized Representative, the balance sheet prepared was not prepared properly. After examining the arguments and facts of the case, the AO noticed that the assessee is not able to prove the correctness by filing any documentary evidence. It seems a change of opinion at the time of post search assessment suiting to circumstances. It was noted that there were no entries in the bank of any such deposit received from the tenant or from the said Mr. T.R.Irani from whom the loan was shown in the earlier year. Accordingly, the addition of Rs.3,50,000/- and Rs.3 lacs was made by the AO. 12.2 In appeal, learned CIT(A) has confirmed the action of the AO. 12.3 Learned AR reiterated the arguments taken before the CIT(A). Attention of the Bench was drawn on copy of the written submission placed in the compilation filed before the CIT(A). Further reliance was placed on written submission filed before the Tribunal. 12.4 On the other hand, learned DR strongly placed reliance on the order of learned CIT(A). 12.5 After considering the submission and perusing the material on record, we find that the assessee deserve to succeed on these grounds. It is noted that the original return was filed un....

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....lt at Rs.27 lakhs. The AO referred the matter to DVO under Section 142A of the Act, who valued the property at Rs.33,07,200/-. The assessee has shown investment of Rs.27 lakhs, the difference of Rs.6,07,200/- was added by the AO on account of investment from unexplained sources. 13.2 In appeal, learned CIT(A) has confirmed the same. 13.3 After considering the submission, we find that this addition is also liable to be deleted. Firstly, there was no material during the course of search to hold that the assessee has made unexplained investment of Rs.6,07,200/-. Only on the basis of different in the DVO's report, the addition has been made, which is not permissible in case of search. This is not a case of the department that some evidence has been found suggesting that the assessee has made any investment over and above the disclosed amount. Similar addition of Rs.2 lakhs or odd was made in the immediately preceding year and the same has been deleted by us. Hence, in view of the above facts and circumstances of the case and in view of the reasoning given while disposing the similar issue for assessment year 2000-01, we delete this addition of rs.6,07,200/- for the year under conside....

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.... already shown a sum of Rs.22 lakhs in her return of income filed on 6-9-2007. She has not offered any explanation in respect to remaining amount of Rs.77,100/-. Therefore, the same be added. 15.2 Learned CIT(A) also confirmed the action of the AO. 15.3 After considering the submission and perusing the material on record, we found that the cash in hand available with the assessee was not taken into consideration by the AO or by the CIT(A). The unexplained amount of Rs.22 lakhs was already disclosed in the return. The petty amount of Rs.77,100/- was not considered as available with the assessee. The assessee is filing regular return of income. The cash of Rs.77,100/- out of income of the year as well as from the earlier years is not such an amount which can be said that was not available with the assessee. Therefore, keeping in mind the smallness of the amount and keeping in mind that the assessee has already shown income of Rs.22 lakhs on account of cash, we delete the addition of Rs.77,100/-. 16. The next issue is against confirming the addition of Rs.2,71,915/- on the basis of valuation in respect of jewellery etc. 16.1 The total jewellery of Rs.18,10,627/- was found during t....

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....ot been discussed in right perspective in taking into consideration the submission and other evidences filed. It is also a matter of fact that no incriminating material was found during the course of search as only during the assessment proceeding, these expenses were found made through credit cards. In view of the above facts and circumstances of the case, we delete the addition of Rs.9,057/-. 19. The next issue relates to confirming the addition of Rs.4,36,506/- taken loan from Shri Sujit Kumar Singh, who is an NRI businessmen in Russia. 19.1 On examination of balance sheet, the assessee was required to file details in respect to loans from Shri Sujit Kumar Singh of Rs.4,36,506/-. The loan confirmation and other details were filed, however, Shri Sujit Kumar Singh could not be produced as he was an NRI. The AO did not accept the explanation. Accordingly, he made addition of Rs.4,36,506/-. 19.2 CIT(A) has also confirmed the same. 19.3 After considering the submission and perusing the material on record, we find that this addition is also liable to be deleted. Firstly, no incriminating material was found to hold that any bogus loan has been shown by the assessee. The loan taken ....