TaxTMI 
TaxTMI 
2016 (3) TMI 1022
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.... law and invalid. 2. The learned Commissioner of Income Tax (Appeals) has erred in law and in facts in confirming the additions made by the Assessing Officer on account of the unexplained cash credit in the Mauritius Bank Account amounting to Rs. 14,93,773/-. 3. The appellant craves leave of Your Honour to add, alter, amend and/or delete all or any of the foregoing grounds of appeal. 4. The learned Authorized Representative for the assessee pointed out that the grounds of appeal No.1 raised by the assessee is not pressed, hence, the same is dismissed as not pressed. The issue in ground of appeal No.2 raised by the assessee is against the addition made on account of unexplained cash credit in Mauritius Bank Account amounting to Rs. 14,93,773/-. 5. Briefly, in the facts of the present case, search under section 132 of the Act was conducted at the residential premises of the assessee on 16.02.2010. The Assessing Officer issued notice to the assessee under section 153A of the Act on 18.08.2010 . In response thereto, the assessee filed return of income on 17.01.2011 declaring total income of Rs. 10,09,901/-. During the course of scrutiny assessment, the Counsel f....
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....apers were found during the course of search in the case of assessee as well as in the case of Shri Madhu Koda and others and it was also found that the assessee was close associate of Shri Madhu Koda and others. The Assessing Officer also noted that the assessee has visited Ranchi several times by chartered flights, which were provided through M/s. Shakti Aviations, a Delhi based company. Further, the assessee was instrumental in investing money of Shri Madhu Koda and Binod Sinha at Pune and Bangalore through his friend Anil Bastawade. During the course of search, from the computer of the assessee, information relating to multiple accounts in foreign countries were found. The same had been forwarded to FTD wing of the CBDT, reply of which was awaited. The Assessing Officer was of the view that, therefore, the onus was upon the assessee to prove that the money deposited in the bank accounts as found on his computer does not belong to him. As per the Assessing Officer, the assessee had not been able to explain the same satisfactorily. Therefore, as per the provisions of section 132(4A) of the Act, presumption is that the entries in the papers belonged to the assessee. Further, with ....
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....000 in financial year 2006-07 in the said bank account was by one of the assessee's friend Mr. Hitendranath Beegoo, who was maintaining account with the said bank The said amount was deposited in assessee's account by Mr. Beegoo, by mistake, who in turn, had filed an Affidavit before the Assessing Officer, wherein he clearly mentioned that the said amount of Euro 26000 was wrongly deposited by him in the bank account of the assessee. Mr. Beegoo further stated in the Affidavit that the said amount represented the business funds and in order to establish the identity of the said person, copy of passport was furnished before the Assessing Officer. The grievance of the assessee in this regard was that the Assessing Officer had made the addition by ignoring the above said evidence, by which the assessee had established the identity of the person, who had deposited the funds in assessee's bank account and also his capacity to deposit the said funds and the genuineness of the fact that the funds were deposited by Mr. Beegoo and not by the assessee. The CIT(A) vide para 8.7 while deciding the grounds of appeal relating to assessment year 2004-05 noted that there was deposit of Euro 2000 on....
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....he said credit of Euro 26000. The CIT(A) further observed that the version put forward by the assessee that the amount has been deposited by Shri Beegoo appears quite improbable. Further, the CIT(A) held that It is difficult to see how or why any person, especially a businessman like Mr. Beegoo who would be regularly using his bank accounts for his business transactions, would 'mistakenly' convey another person's bank account instead of his own. Moreover, in order for a wire-transfer to be executed successfully, the account number and the name of the payee have to match. Notwithstanding these facts, and assuming for the sake of argument that the amount was indeed deposited in the appellants account instead of Mr. Beegoo's by mistake, it has not been explained how or why the 'mistake' was not detected either by the appellant or by Mr. Beegoo for so many years, or why the amount was neither voluntarily returned by the appellant nor claimed back by Mr. Beegoo. In fact, it is not even clear from the facts presented by the appellant why he opened the bank account in Mauritius in the first place, and that too, in the branch located in the area where Mr. Beegoo resides. It is quite possib....
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....me declared in assessment years 2004-05 to 2007-08. 10. The learned Departmental Representative for the Revenue in reply, pointed out that the bank statement of The Mauritius Bank was found from the possession of the assessee and in the absence of any explanation vis-à-vis deposits in the said account, additions were made in the hands of assessee. With regard to alternate plea of the assessee, the learned Departmental Representative for the Revenue pointed out that the same is not to be allowed as the amount deposited in the said bank account was different and no such declaration of deposit in the said account was made by the assessee. The learned Departmental Representative for the Revenue fairly admitted that no appeal has been filed against the relief granted by the CIT(A) vide para 8.7 at page 8, under which the addition made on account of deposit of Euro 2000 has been deleted by the CIT(A). 11. The learned Authorized Representative for the assessee further pointed out that in addition to the deposit of Euro 26000, there was interest accruing to the assessee of Euro 268.43 equivalent to Rs. 15,413/-. 12. We have heard the rival contentions and perused the record....
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....made an alternate plea that the said addition be adjusted against the additional income of Rs. 10 lakhs offered by the assessee in order to by peace of mind and cover up any discrepancy in the papers found during the course of search. Though the learned Departmental Representative for the Revenue has strongly objected to the said plea of the assessee, but we find merit in the aforesaid plea of assessee that where additional income is being added to the income of assessee, then credit for the amount offered by way of additional income, while recording the statement under section 132(4) of the Act should be allowed to the assessee. Another aspect to be noted in this regard is that the CIT(A) vide para 8.7 at page 8 has also allowed the said addition of Euro 2000 equivalent to Rs. 1,03,560/- to be adjusted out of additional income offered of Rs. 10 lakhs. The Revenue is not in appeal against the said finding of CIT(A). In the entirety of the above said facts and circumstances, we direct the Assessing Officer to allow the credit of the balance of Rs. 10 lakhs against the addition made on account of Euro 26000 i.e. Rs. 14,78,360/- and balance amount is to be added in the hands of assess....
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.... the Central Bureau of Investigation (CBI) to conduct an enquiry against accumulation of disproportionate assets by number of persons, who were Ministers in the erstwhile State Government under the Chief Ministership of Shri Madhu Koda. It was alleged that Shri Binod Sinha and Shri Sanjay Choudhary connived with Shri Koda and acquired huge properties in India and abroad by misusing the official position of Shri Koda. Along with the PIL petition, account of receipts and payments was attached as annexure. One such entry as per the Assessing Officer belonged to Shri Ajay Bafna. The said entry is reproduced under para 8 of the assessment order, which talks of entries of 'Bandra Home and the name of Ajay' on the said document. The Assessing Officer was of the view that the assessee had received sum of Rs. 88 lakhs and the assessee was asked to explain the nature of entry. In reply, the assessee pointed out that this paper was with the Assessing Officer from PIL made at Ranchi. The assessee vehemently stated that he had no connection with this Bandra Flat and further it was not known the basis, the Department drawn presumption that the name of Ajay refers to the assessee and no other per....
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....d in the said page and if he was so aware, then the name on paper automatically tallies with the name of assessee and under such circumstances, clear-cut inference could be drawn as the assessee was hiding the details. 19. The CIT(A) vide para 41 at pages 41 onwards considered the said issue i.e. the observations of Assessing Officer and explanation of the assessee and claim of the assessee that contents of the said document did not pertain to him and that the said document has no evidentiary value in the eyes of law. It was stressed by the assessee that merely because on the document name of Ajay was mentioned, does not lead to the conclusion that the document refers to the assessee. He stressed that there was no connection of the assessee with the impugned transaction. He further pointed out that the said document was found attached to PIL filed before the Hon'ble High Court of Jharkhand at Ranchi, and was not found from the possession of the assessee and the entire addition made on estimate basis and on the presumption that the document relates to the assessee, merits to be deleted. The assessee also stressed that there is no evidence of receipt of Rs. 20 lakhs as commission.....
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....of CIT(A), the learned Authorized Representative for the assessee pointed out that the CIT(A) had gone on preponderance of probability, wherein the page did not belong to the assessee nor was the same in the handwriting of the assessee, nor was found from the possession of assessee and further, no evidence was found from his possession, with whom the transaction was made. The Assessing Officer had presumed the transactional value of Rs. 68 lakhs of rent and assessee was held to have earned brokerage of Rs. 20 lakhs. He stressed that where the document does not belong to the assessee and where only protective addition was made by the Assessing Officer, where the substantive addition was not made and the CIT(A) makes part of it substantive and the balance as protective and issues directions to the Assessing Officer, which have not been complied with till date. 22. The learned Departmental Representative for the Revenue placed reliance on the orders of Assessing Officer and CIT(A). 23. We have heard the rival contentions and perused the record. Search and seizure operations were carried out at the premises of the assessee on 16.02.2010. The assessee was a real estate agent and v....
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....nt belonged to the assessee. Further, it was pointed out by the assessee himself that there was no connection whatsoever with Bandra Flat, except for an enquiry made in respect of the said property at Bandra. The assessee provided the information with regard to said property to the Assessing Officer that it was owned by a builder M/s. Lalani Group and was being used by them as guest house and further, the current owner of the property was Mr. Suvamar, who is Judge in Mumbai. He also attached the photos of the building of said Bandra Flat. In view of various submissions made by the assessee, the Assessing Officer and the CIT(A) questioned as to how the assessee was aware of the exact address of Bandra home. The presumption in this regard by both the authorities was since the assessee was aware of said Bandra Flat, the entries on the said document related to the assessee. Further, presumption was that out of Rs. 88 lakhs, rent for the said building was Rs. 68 lakhs and commission earned by the assessee was Rs. 20 lakhs. Consequently, addition of Rs. 20 lakhs was made on substantive basis and addition of Rs. 68 lakhs was made on protective basis. 25. The substantive addition in the....
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....said flat was being used as guest house and there was no question of earning rental income. Consequently, the objections and assumption raised by both the authorities that the assessee is aware of such flat in Bandra and hence, the name of Ajay relates to the assessee is baseless. First of all, before making any addition in the case of any of assessee, complete details should be available. It is not even clear as to which Bandra flat, the said paper relates and it is also not clear what are the entries made on that document whether relating to sale of the property or giving the same on rent. In the absence of any clarity, the said document at best is a dumb document and entries in the said document are not relatable to the assessee. Both the authorities below have failed to establish connection of the assessee with the said document, which is annexed to PIL and have also failed to establish that the said entries relate to the assessee himself. In the absence of the same, we find no merit in the aforesaid additions either on protective and / or substantive basis and we delete the same. Another point to be noted is that once if commission income was added in the hands of assessee, th....
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....also did not explain the connection with Kranti group. The CIT(A) was of the view that the presumption under section 132(4A) of the Act applies equally to the impugned document found on the computer which was kept at the premises of the assessee and upheld the addition. 29. The assessee is in appeal against the order of CIT(A). 30. The learned Authorized Representative for the assessee stressed upon the submissions made before authorities below and pointed out that File 16 talks of telephone details and File 20 talks of other aspects and on the basis of this, addition of Rs. 47 lakhs was made in the hands of assessee. He further submitted that in order to cover up the discrepancy, he had offered Rs. 40 lakhs up to 31.03.2007 and Rs. 10 lakhs in assessment year 2008-09, but no period was mentioned anywhere. 31. The learned Departmental Representative for the Revenue placed reliance on earlier submissions made in this regard. 32. We have heard the rival contentions and perused the record. The addition of Rs. 47 lakhs, against which the present ground of appeal has been raised by the assessee relates to an entry which is amount due from account extract found on the compute....
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....n in the aforesaid addition, which was without any basis. Admittedly, in case any document is found from the possession and control of the assessee within meaning of section 132(4A) of the Act, the presumption is that the document belonged to assessee, but the contents of the document have to be seen whether the same has any connection with the assessee. In case the contents of the document are not complete to establish the link with the assessee, merely because it is found in the computer of assessee, the presumption cannot be drawn against the assessee, especially in the circumstances, where the assessee claims that the same belongs to third party. Further, the said third party confirmed by way of Affidavit filed before the Assessing Officer that the said Excel files related to him and he also confirmed all these facts by way of e-mail to the e-mail ID of Assessing Officer and also filed the requisite passport details in this regard that he was in Pune during the period and those documents were prepared by him and they belonged to him. The onus in this regard was upon the Assessing Officer to verify the claim of assessee and not to merely reject the same. The assessee was engaged....
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.... Rs. 3,78,500/-. 36. The Assessing Officer made an addition on account of cash seized during the course of search as the assessee was unable to explain the source of cash. Before the CIT(A), the claim of the assessee was that the cash amounting to Rs. 42,31,973/- was the cash balance as per books of account and as such, the assessee had sufficient cash balance to justify the cash found. The explanation of the assessee was rejected by the CIT(A) since the residential and business premises of the assessee were covered and remaining amount of cash was not found at the time of search. Further, the CIT(A) noted that the fact of non-maintenance of cash book in regular course was sufficient to reject the explanation of the assessee. 37. The assessee is in appeal against the order of CIT(A) and pointed out that all documents were found during the course of search and on the basis of the same, entries were made in the books of account and on the date of search cash in hand was Rs. 42 lakhs, which was not accepted by the CIT(A) since the balance cash was not found. 38. The learned Departmental Representative for the Revenue placed reliance on the orders of authorities below. 39. ....
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....e considered as his income. The assessee in reply stated that this is found from computer and in the books of somebody. It did not relate to him and he did not carry assessees' name and did not carry any date on it and hence, no addition was called for on this count. The Assessing Officer rejecting the explanation of the assessee, added the same as income of the assessee. Further, during the course of search, Bundle No.1 containing pages 1 to 10 were also found. The pages 2 to 10 of said Bundle contained datewise payment account for the period from 27.11.2009 to 13.02.2010 and the assessee was asked to explain entries therein. The assessee submitted that it had made declaration of Rs. 70 lakhs and Rs. 60 lakhs was disclosed as additional income for assessment year 2010-11 in order to buy peace of mind and to cover up any transactions arising out of seized documents representing undisclosed activity. He asked for the same. The assessee also produced the cash book. However, certain information was asked for by the Assessing Officer and the assessee expressed his inability to produce the same. The Assessing Officer thus, held that the evidence brought on record was not verifiable, whe....
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.... income. The Assessing Officer in the remand report dated 16.09.2013 had reiterated that there was no objection for relief of Rs. 70 lakhs as admitted by the Assessing Officer in the assessment order. Hence, the ground of appeal raised by the assessee in this regard, was dismissed. 44. The assessee is in appeal against the observations of CIT(A) and has stressed that while computing addition in the hands of assessee to the extent of Rs. 1.18 crores, the Assessing Officer has only considered credit side of the entries, but not debit side entries. The assessee fairly admitted that the Assessing Officer may verify the claim of the assessee and allow the benefit of debit side entries. With regard to the addition of Rs. 13,62,000/-, the learned Authorized Representative for the assessee admitted that the same was considered in its accounts, however, no separate addition should be made in this regard. 45. The learned Departmental Representative for the Revenue placed reliance on the orders of authorities below. 46. We have heard the rival contentions and perused the record. The first addition in the hands of assessee is on account of entries under the head 'Sai Account' totaling....