TaxTMI 
TaxTMI 
TaxTMI 
2015 (11) TMI 798
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....y the AO u/s 271(1)(c) for assessment years 2005-06 to 2008-09 and u/s 271AAA for the assessment year 2008-09. Since all these appeals arise out of common set of facts, they were heard together and are being disposed of by this common order, for the sake of convenience. 3. The facts relating to the case are set out in brief. The assessee is a dentist and carries on his profession from different places and also through different hospital names. He was subjected to search and seizure operations on 17-01-2008. On the very same day, some of his concerns were also surveyed u/s 133A of the Act. During the course of search operations, cash balance of Rs. 1,13,57,110/- was found as against the book balance of Rs. 9,10,548/-. In the statement recorded from him u/s 132(4) of the Act, he admitted the excess cash balance of Rs. 1,04,68,512/- as his unaccounted income. The assessee agreed to offer a sum of Rs. 1,25,00,000/- (including excess cash balance) as his income for the years stated below:- Assessment year Amount 2005-06 5,00,000 2006-07 5,00,000 2007-08 10,00,000 2008-09 1,05,00,000 Accordingly, the assessee filed returns of income for the above said years offering a....
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....stics Ltd (137 ITD 287) which has since been upheld by the Hon'ble jurisdictional Bombay High Court. 9. The Ld D.R, on the contrary, submitted that the assessee has admitted additional income for various years in the statement recorded from him u/s 132(4) of the Act. Accordingly he submitted that there were incriminating materials available with the AO and hence the impugned additions were made by him. 10. We heard the parties on this issue and perused the record. Admittedly, these are estimated disallowances made out of expenses that were already claimed in the original return of income filed by the assessee. The assessee has submitted that the assessment years up to 2006-07 fall in the category of concluded assessments, i.e., assessments of those years were not pending on the date of initiation of search. Hence, in our view, the assessing officer could not have made these additions for AY 2004-05 to 2006-07 in the absence of any incriminating materials. Alternative contentions of the assessee also merits acceptance, i.e., the assessee has made additional disclosure of about 20.00 lakhs, which is more than enough to cover the above said disallowances. We accept the alternative c....
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....and also investments made out of said source cannot be made and if made, the same would result in double assessment of same item of income. Further, since it is stated that the assessee has not capitalized the above said amount of Rs. 20.00 lakhs, in our view, the telescoping benefit should be given. Hence the net result would be that there is no necessity to make any addition u/s 69C of the Act. Even otherwise, we notice that the assessing officer has made the additions u/s 69C of the Act without examining the claim of availability of sources out of drawings made by the assessee and his wife. Accordingly, we set aside the order of Ld CIT(A) on this issue in all the assessment years referred above and direct the AO to delete the impugned additions. 14. We shall now take up the appeals filed by the revenue. As stated earlier, the assessing officer proceeded to estimate the professional income of the assessee for assessment years 2002-03 to 2007-08. The reasoning given by the AO is explained in brief. The excess cash found at the time of search was declared by the assessee as his income for the AY 2008-09. Accordingly, the assessee included the same in the professional receipts. Acc....
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....O has worked out extra receipts and extra profits. Whatever books of account and loose sheets were found during the course of search are in the possession of the department, the only addition that could be sustained was in respect of unexplained cash found during the course of search at Rs. 1,13,57,110/-(sic). The appellant has already offered Rs. 1,25,00,000/- for tax as additional income. As per provision of section 69A, the cash found and not recorded in books of accounts for which no reasonable explanation is available is to be deemed to be the income of the financial year. This cash cannot be taken as a piece of evidence for estimation of income of the earlier year, in the absence of any documentary evidence. The AO has not given any findings in the assessment order that the receipts recorded on the loose papers found during the course of search were not recorded in the books of account. The finding is about certain expenses which were recorded on the loose papers and were not found to be recorded in the books of accounts. 6.5.5 On the basis of the facts narrated above, it is apparent that the ld. AO does not have, in his possession, any material evidence to suggest that cash....
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....essed corresponding expenses also. Again it is only a guess work only, unsupported by any material. Similarly, the average daily collection estimated by the AO was also mere guess work. In effect, there is no material available with the AO to show that the assessee has suppressed professional receipts as well as expenses in order to substantiate the estimation made by him. During the course of hearing, the Ld D.R placed reliance on the decision rendered by Hon'ble Punjab & Haryana High Court in the case of Ved Prakash Vs. CIT (265 ITR 642) to support the estimation made by the assessing officer. However, we notice that the Hon'ble Punjab & Haryana High Court has considered a case, wherein materials were found during the course of search. However, in the instant case, no material relating to suppression of professional fee receipts was found. Accordingly, we are of the view that the ld CIT(A) was justified in deleting the additions in all the years. 17. Now we shall stake up the penalty appeals filed by the assessee for assessment years 2005-06 to 2008-09 against the penalty levied u/s 271(1)(c) of the Act. The assessing officer levied penalty u/s 271(1)(c) of the Act on the follow....
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....ein did not disclose additional income in the return of income filed by it u/s 158BC of the Act. Further it is stated that the undisclosed income was discernible from the seized materials. Where as in the instant case, the penalty has been levied u/s 271(1)(c) of the Act, the assessee has disclosed additional income in the return of income filed by him and further there was no seized material to support the additional disclosure made by the assessee. Hence, we are of the view that the decision rendered in the case of JRD Stock Brokers (P) Ltd (supra) is not applicable to the instant case. 21. If we analyze the facts behind the additional disclosure of about Rs. 20.00 lakhs made by the assessee, we notice that he has voluntarily offered the same and no material was seized during the course of search warranting the additional disclosure. The assessee has duly disclosed the income voluntarily offered by him in the returns of income filed in response to the notices issued u/s 153A of the Act. During the course of penalty proceedings also, the assessee has offered the explanation to that effect and the said explanation was not found to be false. During the course of search proceedings,....
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....income. The Ld CIT(A) has taken the view that the assessee has not disclosed/substantiated the manner in which undisclosed income was derived. The Ld A.R submitted that the assessee has disclosed the undisclosed income in the return of income as his professional income and hence the disclosure so made satisfied the condition of "manner in which the undisclosed income was derived". In this regard, he placed reliance on the decision rendered by the Cuttack bench of Tribunal in the case of Ashok Kumar Sharma Vs. DCIT (2012)(149 TTJ (Ctk)(UO) 33), wherein it was held as under:- "Undisputedly the assessees have shown the undisclosed income under the head "income from business" in the returns filed by them and that was accepted by the Department by passing the assessment orders accordingly. Therefore, the cases of the assessees fall exactly within the purview of sub-s (2) of s. 271AAA. Therefore the provisions contained in sub.s (1) of s. 271AAA are not applicable..." 26. On the contrary, the Ld D.R contended that the assessee did not specify the manner in which the undisclosed income was derived. 27. We have heard rival contentions on this issue. There is no dispute with regard to th....