TaxTMI 
TaxTMI 
TaxTMI 
2015 (3) TMI 802
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.... charging of interest under Sections 234A, 234B and 234C of the Act has been questioned. 2. We have heard and considered the arguments advanced by the parties in view of the orders of the authorities below, material available on record and the decisions relied upon. 3. The facts in brief are that the business premises of the assessee group and its director were subjected to search and seizure procedure under Section 132(2) of the Act on 07.02.2007. During the course of search operations, several documents were seized and cash of Rs. 6,84,000/- and jewellery valued at Rs. 23,82,493/- were found at the residential premises of the Director of the D.S. Woodtech Ltd., Sh. Dhan Singh Sharma. Notice under Section 153A of the Act was issued and in response the assessee filed its return of income. The A.O. being not satisfied with the explanation of the assessee made the addition on account of undisclosed investment in construction on the basis of valuation report of the D.V.O. to whom the A.O. had made reference for the same. Before the learned CIT(A), the assessee questioned validity of assessment framed under Section 153A of the Act made in the absence of evidence found during the cour....
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....T, (2010) 328 ITR 513 (SC). He also placed reliance on the following decisions: i. CIT Vs. Chohan Resorts, 359 ITR 394 (P&H); ii. CIT Vs. Raghuraji Agro Industries (P.) Ltd., (2013) 38 taxmann.com 318 (Allahabad) 6. Learned AR submitted further that the building under reference i.e. 11/7, Mathura Road with RCC covered area of 29200 sq. fts. and ACC area of 7664 sq. ft. was very much in existence prior to 01.04.2000 hence, no addition could be made in this regard. In support, he referred contents of para nos. 2 and 5 of the assessment order and page nos. 19 to 93 which are copies of house tax notice dated 05.11.1998 issued by Municipal Corporation, Faridabad for the year 1999-2000 showing valuation of plot at 1000 sq.yds. and constructed covered area in sq. ft. in basement, ground floor, RCC area in Ist floor and ACC area; extract of assessment register, Municipal Corporation, Faridabad for the year ending 31.3.2000 showing assessment of total built up RCC area of 29200 sq. ft. (12700 + 16,500) and ACC area of 7664 sq. ft.; notice of house tax assessment of the business premises of the assessee company for the year 2003- 04 in respect of RCC area of 29200 sq. ft. and ACC area of ....
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....d by the D.V.O. in his report. It is sufficient to establish this contention of the assessee that no incriminating material was found during the course of search to justify the framing of assessment under Section 153A of the Act and undisputedly the return filed for these assessment years were processed under Section 143(1) and no notice under Section 143(2) of the Act was issued within the prescribed time limit and thus those returns have reached its finality. 9. Considering the above submission, the undisputed fact emerging in the assessment for the assessment years 2001-02 to 2006-07 are that no addition other than the addition on account of difference in construction as shown by the assessee in its books of account and as estimated by the D.V.O. in his report has been made which impliedly supports the contention of the assessee that no incriminating material was found during the course of search proceedings at the premises of the assessee. It is also an un-rebutted fact that on the date of search, assessments based on the return of income originally filed for the assessment years under consideration were not pending as the returns of income filed for these assessment years and....
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....thus direct the Assessing Officer to delete the addition in question made during the assessment years under consideration on account of the amount in difference between the value of consideration shown and determined by the DVO. The issues raised in ground nos. 1 to 4 are thus decided and allowed in favour of the assessee. 11. Ground no. 5 has not been pressed hence the same does not need adjudication. 12. In ground no. 6, the charging of interest under sections 234A, 234B and 234C has been questioned, which is consequential in nature, hence does not need adjudication. 13. The appeals of the assessee group for the assessment years 2001-02 to 2006-07 are partly allowed. ITA No. 2053/Del /2011 (A.Y. 2007-08): 1. In ground nos. 1 and 2, the assessee has questioned validity of the assessment framed under Section 153A read with section 143(3). In ground no. 3 the validity of addition of Rs. 24,00,000/- as undisclosed income has been questioned. In ground no. 4, the addition of Rs. 72,00,000/- made on account of undisclosed stock of the assessee has been questioned. In ground no. 5, the action of the A.O. in bringing to tax the assessee's share out of the alleged surrender of Rs. 1....
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....er Sections 234A, 234B and 234C will be charged and no penalty under Section 271(1)(c) of the Act will be levied. The A.O., however, charged the above interest and initiated penalty proceedings. The learned AR submitted that there is no estoppel against the law even if the assessee agrees or consents for an addition contrary to law, the A.O. has to discharge his duties of making fair assessment of income and to compute amount of tax payable as per law. He submitted that even surrender amount can be retracted, if surrender represents no income. In this regard he placed reliance on the following decisions: i. Srikant G. Shah Vs. Income Tax Officer, (2007) 108 ITD 577 (Mum.) ii. Pullangode Rubber Produce Co. Vs. State of Kerala and Another, 91 ITR 18 (SC) iii. S.Arjun Singh Vs. Commissioner of Wealth Tax, 175 ITR 91(Del.) 5. The learned AR submitted further that the assessee has not earned any profit from its undisclosed business rather loss has been incurred by the assessee. This contention was raised before the A.O. as well as before the learned CIT(A) but the same has been rejected without giving any cogent reasons. He referred page no. 23 of the paper book i.e. copy of trading....
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.... 1.6 crores both in the case of D.S. Doors and D.P. Woodtech subject to non-charging of tax under Sections 234A, 234B and 234C and non levy of penalty under Section 271(1)(c) of the Act. He also placed reliance on the decision of Hon'ble High Court of Delhi in the case of Sonia Magu & Ors. vs. CIT (2011) 336 ITR 227 (Del.). The learned AR referred contents of Page Nos. 27-32 of the assessment order with this contention that although the Assessing Officer ha reproduced some replied of the assessee but he has not dealt with all these discrepancies and has not met all the contentions of the assessee property, instead he has made ground remarks, without specifying as to what further evidence was required by him. Besides, queries have been raised at the fag end of the assessment proceedings i.e. on 26.12.2008 whereas Assessing Officer has been passed on 30.12.2008 (wrongly typed in the assessment order as 30.12.2007). Thus hardly four days time was given by the Assessing Officer to complete the reply. The Learned CIT(Appeals) also did not deal with all the above contentions raised by the assessee before the Assessing Officer and reiterated before him and has simply upheld the additi....
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....led. In the letter dated 13.11.2008 to the Assessing Officer, the assessee had requested for computation indicating how the value of stock has been arrived at such a huge figure so that proper reconciliation can be furnished and submitted reply on unaccounted sales also. In the letter dated 05.12.2008 to the Assessing Officer, the assessee had submitted documents wise and year-wise details of undisclosed investment and expenditure. In letter dated 14.12.2008 to the Assessing Officer the assessee had raised objections with regard to the valuation of stock and requested that on the basis of the said objections, valuation of stock shall get reduced to Rs. 3.8 crores approximately. In the letter dated 26.12.2008 to the Assessing Officer the assessee pointed out that the area where the stock was lying, cannot be any means and ways, store such huge piles of stock as alleged. In this letter, the assessee also submitted that profit earned on alleged unaccounted purchases, sales, production was utilized for purchase of stock found at the time search. The Assessing Officer has reproduced the contents of the some of the above stated letter and has rejected the same mainly on the basis that no....
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....ounted accumulated stock as per the books and wrongly calculated at the time of search. 14. Learned DR opposed the above submission. 15. We find that an identical issue raised before the learned CIT(A) vide ground no. 4(h) has remained to be adjudicated upon by the learned CIT(A), we thus, in the interest of justice, remand the matter to the file of 18 learned A.O. to address the issue after affording opportunity of being heard to the assessee. 16. The other grounds i.e. 11 and 12 are general and consequential in nature hence does not need independent adjudication. 17. In the result, the appeal is partly allowed. 18. In summary, the appeals relating to the assessment years 2001-02 to 2006-07 are allowed and that for the assessment year 2007-08 is partly allowed. D.S. Woodtech Pvt. Ltd. ITA Nos. 2273 to 2275& 2052/Del /2011: (A. Yrs: 2004-05 to 2006-07): 19. In these appeals, in ground No.1, the assessee has questioned first appellate order on the validity of assessment framed under sec. 153A read with section 143(3) of the Income-tax Act, 1961 upheld by the Learned CIT(Appeals). The learned AR, however, has not pressed this ground during the course of hearing. The same is....
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....AR submitted that so far as page No. 13 is concerned, it contains transaction with Mr. K.P. Das who is brother of Mr. S.K. Dass and all transactions with them have been counted for in the name of Mr. S.K. Dass and duly reflected in the books of account. On page no.12, amount of Rs. 9,873.05 is some estimate as written on the page and amount of Rs. 1500, Rs. 2,000, Rs. 2,000 and Rs. 2,000 may be some cash received but there is no mention of date with amount so all the amounts would have been received on the same date. So it can be assumed that total amount of Rs. 7,500 is included in the entries of cash received of any dues as mentioned in the ledger account. He submitted that the copy of said ledger account has been made available at page Nos. 1 and 2 of the paper book. He submitted further that there is one more transaction of Rs. 10,000 on page Nos. 13 relating to Mr. R.P. Jain. All transactions with Mr. R.P. Jain have duly been accounted for in the books of account, a copy of ledger account has been made available at page No. 3 of the paper book. Regarding page No.14, the learned AR submitted that it contains transaction of Mr. R.P. Singhla as mentioned in the books of account b....
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....07.02.2007, search was also conducted at the residential premises of Shri Dharam Pal Sharma, director of the assessee company and various documents as noted in the assessment order were seized from the premises of the assessee. For the assessment year 2004-05, the Assessing Officer observed entries on page No. 15 of the Annexure A-8 containing amount of Shri Parveen Jain. He noted that assessee has not shown the cash receipts of Rs. 1,05,000 in its books of account. The Assessing Officer observed that the cash payments totaling to Rs. 25,000 should be read as Rs. 2,50,000, have not been reflected in the books. The assessee opposed the addition of Rs. 1,05,000 by the Assessing Officer on the basis that it has been made on whims and his assumption by the Assessing Officer who had decoded the alleged coded form used by the assessee without any supporting evidence. The Learned CIT(Appeals) did not agree and upheld the addition of Rs. 1,05,000. 26. In the assessment year 2005-06, the Assessing Officer with similar observations of decoding of figure contain in page Nos. 11, 14 and 15 of Annexure A-8 regarding entries relating to Shri R..P. Singhla, Shri Ramesh Bansal and Shri Praveen Ja....
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....ritten as Rs. 1000.0, the Assessing Officer had decoded the figure as Rs. 10,000. Learned CIT(Appeals) upheld this action of the Assessing Officer. But he did not agree with the Assessing Officer for adopting similar decoding of figure where Rs. 1,000 was written and thereafter no decimal with zero was put. We, however, find substance in the contentions of the learned AR that there was no concrete basis for doing so by the authorities below for the decoding of the figure. The additions in question are thus not sustainable in absence of any basis particularly in a search proceedings under sec. 153A of the Act. These additions are accordingly deleted. The ground Nos. 2 to 4 are accordingly allowed. 29. Ground No.5 is general in nature and in ground No.6, charging of interest under sec. 234A, 234B and 234C of the Income-tax Act, 1961 has been questioned, which is consequential in nature and does not need an independent adjudication. 30. In result, the appeals are allowed. ITA No. 2052/Del/2011 (A.Y. 2007-08): 31. In ground No.1, the assessee has questioned validity of assessment framed under sec. 153A read with se. 143(3) of the Income-tax Act, 1961 without assuming jurisdiction a....
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....accepted the disclosure of the assessee because there was nothing on record so quoting the undisclosed expenditure/income/investment etc. as the department failed to bring forth any material in support. Nothing is left thereafter to support the allegations and subsequent additions made to the tune of Rs. 64 lacs (Rs.48 lacs plus Rs. 16 lacs). In support of the contentions that the Assessing Officer has recorded incorrect facts and have not considered the submissions of the assessee pointing out the correct facts relating to the addition, the learned AR has adopted the same arguments as advanced by him in the case of D.S. Doors Pvt. Ltd. for the assessment year 2007-08 adjudicated hereinabove. The learned AR pointed out further that following his action in the case of D.S. Doors Pvt. Ltd. for the assessment year 2007-08 on identical issues, the Learned CIT(Appeals) has upheld the action of the Assessing Officer and sustained the above additions. 40. The Learned DR on the other hand tried to justify the orders of the authorities below on the issues. 41. After having gone through the orders of the authorities below, we find that the Learned CIT(Appeals) has decided the issue raised ....