TaxTMI 
TaxTMI 
2014 (9) TMI 354
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....re operation was conducted in the premises of the assessee on 26.07.1999 under Section 132 of the I.T. Act. A warrant of authorization was issued in the name of the assessee and the premises covered were at 28, Barakhamba Road, New Delhi. This premises was owned by a company by name M/s. Gopal Das Estates & Housing Pvt. Ltd. There was no seizure during the search. On 24.11.1999, there was another search under Section 132 of the IT Act in the name of assessee and this search was conducted this time on the premises of the Bank of Tokyo and the balance of amount of Rs. 58,49,595/-, lying in the assessee Bank account was seized. It is the case of the Assessing Officer that from the search operation and the statement of the assessee, it had come to their notice, that the assessee had sold her property No. 25-A, Akbar Road, New Delhi against the consideration of 3400 sq. ft. of space in Gopal Dass Bhawan, which was to be developed by M/s Gopal Das Estates and Housing Pvt. Ltd. at 28 Barakhamba Road, New Delhi. Before we proceed further we record the sequence of date and events. 4. The sequence of dates and events: (i) On 30.6.1982, the assessee entered into a collaboration agreemen....
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....liability was declared at Rs. 65,12,136/- and the assessee claimed the adjustment of Rs. 56.00 lakhs seized on 24.11.1999 against the tax liability. 8. The Assessing Officer passed an order under Section 158BC on 26.11.2001 making the following additions:- "(a) Rs. 2.80 Cr. being the consideration for surrender of 1400 sq.ft. area was treated as undisclosed income for the reason that capital gain was not declared in the return filed for assessment year 1997-98. (b) Amount of Rs. 2.90 Cr. due from Gopal Das Estate & Housing Pvt. Ltd. was added for the reason that in the books of Gopal Das Estate & Housing 'Pvt. Ltd. the amount is credited to the account of the assessee and that the assessee was not following cash system of accounting. The amount was due but was not recovered. (c) Addition of Rs. 7,84,519/- was made as undisclosed income for the period 1.04.1999 to 24.11.1999, however, the same was deleted by CIT(A) and the same was accepted. (d) Additions of Rs. 43,04,710 on Rs. 2.90 Cr. and Rs. 4,32,000 on account of interest IDBI bonds were also made. The deletion of addition of Rs. 4,32,000/- has been accepted and is not in dispute." 9. On appeal, Commission....
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....h, therefore, the additions of Rs. 2.80 Cr., Rs. 2.90 Cr and Rs. 43,04,710/- were beyond section 158BC. 2. Search was conducted at the premises of Gopal Dass Estate & Housing Pvt. Ltd. allegedly belonging to the Appellant. However, except for agreement, Gopal Dass Estate & Housing Pvt. Ltd. had no allotment of any premises, therefore, actually no search was carried out at the premises of the Appellant. 3. Even prior to search the Revenue was aware of receipt of Rs. 2.80 Cr, inasmuch as, notice to Bank of Tokyo giving the details of cheque No. aggregating to Rs. 2.80 Cr. was issued on 10.5.1999. Therefore, it cannot be said that fact of receipt of Rs. 2.80 Cr. came to light as a result of search. 4. Addition of Rs. 2.90 Cr. was made on the premise that the Appellant was following mercantile system, however, actually the Appellant was following cash system of accounting. Therefore, amount of Rs. 2.90 Cr. was taxable only on its receipt. ITAT in paragraph 21 of its order of September 2005 has recorded that: "the books of account was produced before us at our instance, from which were found that the assessee was making entries therein on cash basis". From the computation....
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....ee did not declare any capital gains in respect of the amount of Rs. 2.80 Crores. d) The above amount was received by the assessee on 04-07-1996 i.e. during the accounting year relevant to the assessment year 1997-98. The assessee did not pay advance tax on this amount, which she ought to have, in the first instalment of advance tax payable in the month of September, 1996. e) The statement made before the income-tax authorities u/s 131(1A) before the DDI, shows- i) that the assessee was of the view that the receipt was taxable to capital gains and ii) that she was not aware that the return of income for the assessment year 1997-98 had already been filed. She has stated towards the end of the statement that the amount received in 1996 has not been disclosed yet, due to delay in filing of the return. This is incorrect, because the return had already been filed on 12-01-1999 and no capital gains had been declared therein. f) Disclosure before the ADI/DDI cannot amount to disclosure "for the purposes of this Act". A disclosure for the purposes of the Income-tax Act can said to have been made only if the assessee had filed a return of income including therein the disputed....
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....(Madras). (b) Any statement made orally or in writing before the Income Tax Authorities, prior to the date of search, in which there is either direct or/reference to the nature and circumstances under which the amount in question was received cannot amount disclosure "for the purpose of the Act" the disclosure should invite an assessment and consequent payment of tax and only return of income can satisfy this requirement. (c) The Revenue was in possession of material that the assessee has surrendered rights to 1400 sq.ft. of area for consideration an agreement was found during the course of search. When an agreement is found and the income arising out of that agreement was not offered to tax by the assessee by way of filing of a return of income, then the agreement becomes an incriminating material based on which income can be brought to tax with in the Ken of Chapter-XIV-B of the Act. 15. In any event, the assessee has disclosed this amount in its block return of income. Though the assessee is not estoppal from taking a legal stands, the facts remains that the Assessing Officer cannot be found fault with for accepting the return of income of the assessee on this issue. Th....
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.... the assessee's submissions are recorded by the Assessing Officer in the assessment order as follows:- "Vide letter dated 16.11.2001 the Assessee has submitted once again that "since the assessee is maintaining her accounts and file an income tax return on cash basis, if the amount could have been received, it would have been in the nature of capital receipt, not the income". The Assessee was asked to file the statement of Affairs for the entire block period but however the same have not be filed. It is clear that the Assessee is not maintaining the book of accounts as submitted by him in the letter." 19. The First Appellate Authority at page 8 records the term of the argument as follows:- Quote "1. That in accordance with the said letter dated 05.01.1986 the Second party has agreed to pay a sum of Rs. 2,90,00,000/- (Rs.Two crores ninety lakhs only) as compensation for the loss of income that the First party has suffered for delay in handing over possession from 31st of March, 1990 till date. 2. This compensation of Rs. 2.90 crores will be paid in installments. However, the whole amount is to be paid within a period of 5 years from now. Interest will accrue at simple....