AI Drafter 
TaxTMI 
TaxTMI 
2010 (6) TMI 798
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....r passed by the A.O is bad in law liable to be dismissed. 1.2 The ld ACIT erred in making the addition of Rs. 1.50 crores undisclosed income of the assessee without providing the copy of the statement recorded u/s 132(4) dated 14.7.1996 and copies of papers/document/statements seized from the assessee, in spite of request made in writing in the assessment proceedings. 2. Retraction of statements: 2.1 The ld ACIT erred in making the addition of Rs. 1.50 crores merely based on statement recorded u/s 132(4) dated 14.7.1996 which was subsequent retracted and clarified on 17.7.1996 by the assessee. 2.2 The ld ACIT action is contrary to the CBDT instruction no.286/2/2003 IT(Inv.) dt 10.3.2003. 3. Addition of Rs. 1.50 crores: 3.1 The ld ACIT erred in estimating undisclosed income of Rs. 1.50 crores ignoring the details and explanation filed by the assessee in respect of bank credit entries and confirmation of loans of various parties. 4. Treating Smt Sushila Malge(wife) as benamidar. 4.1 The ld ACIT erred in treating the assessee's wife Smt Sushila Malge as benamidar and assessing the income shown in the hand of wife as income f the assessee. 4....
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....u/s 132(4) of the Act, has offered Rs. 50 lacs for himself and Rs. 1 crore on behalf of his wife Smt Sushila Suresh Malge as their undisclosed income. The A.O has reproduced the question no.20 and its answer given by Shri Suresh Babu G Malge which is as under: "Question no.20 reads as under: In view of the facts and circumstances of the basis of documents do you want to admit a concealment of income and evasion of tax for the period relevant to the current assessment year and last few years by you and your wife. Do you want to offer any additional income in respect of yourself and your wife voluntarily and prepared to pay the taxes accordingly in due course. The reply of the assessee was as under: I do not know exact position. I admit that there is concealment of income by myself and my wife of evasion of taxes. I do not know exact amount; however, considering all the facts and circumstances of the case, I am offering Rs. 50 lakhs for myself and Rs. 1 crore in my wife's case without coercion, without torture, we will pay the taxes in due course and we shall not retract the offer under any condition. I keep my option open if anything on higher side, I shall offer my addi....
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....per the above discussion is taken at Rs. 1.50 crore. This unaccounted income includes the undisclosed income of Rs. 9,32,240/- shown by Shri Suresh Malge in his block return as well as the undisclosed income of Rs. 5,54,380 shown by Smt Sushila Malge in her block return, which has already discussed above is stated to be a benami of Shri Suresh Malge. The total undisclosed income as discussed above is Rs. 1,50,00,000/-" 4 In sum and substance, final determination of the undisclosed income by the A.O was based on the income allegedly offered by the assessee on 14.7.96 in the statement recorded u/s 132(4) of the Act. 4.1 Both these assessees had challenged the said assessment orders before the Tribunal by way of appeals being IT(SS)A No.170 and 171/Mum/1997. The main grievance of the assessees before the Tribunal was that the statement recorded by the search party was not supplied to the assessee despite their repeated requests and the A.O made the addition relying on the said statement. The Tribunal set aside the orders of the A.O in both these cases and restored the matter to his file with the direction to re-frame assessment de-novo after supplying the copy of the statement a....
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....ss and volume of turnover, in the construction activity, land development, film production, film distribution etc., the amount surrendered by the assessee of Rs. 1.50 crore appears to be a very fair estimate of his own unaccounted income, which he has arrived after considering all the facts and circumstances of his business. 37. Hence, the undisclosed income of the assessee as per the above discussion is taken at Rs. 1.50 crore. This unaccounted income includes the undisclosed income of Rs. 9,32,740/- shown by Shri Suresh Malge in his block return as well as the undisclosed income of Rs. 5,54,880/- shown by Smt Sushila Malge in her block return which has already discussed above is stated to be a benami of Shri Suresh Malge." 6 Being aggrieved by the assessment orders passed by the A.O on 26.12.2008, both these assessees are in appeal before us. 7 We have heard the rival submissions of the parties and also perused the records available before us. The ld counsel of the assessee vehemently argued that the second round assessment order passed by the A.O is nothing but it is reprint of the first assessment order dated 31.7.1997. The ld counsel of the assessee vehemently a....
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....it is seen that in the first round of appeal, the Tribunal has given specific directions to the A.O while setting aside the assessment orders for supplying the copies of the statements and evidences on which the A.O intended to rely for making the additions. The A.O did not give full effect to the order of the Tribunal and passed the fresh assessment order dated 26.12.2008 and again determined the undisclosed income of the asseseees at Rs. 1.50 crores. 9 Admittedly, the determination of the undisclosed income is not based on the analysis of the evidence seized, in the form of documents and other things/records, during the course of search operations; though lengthy discussion has been made by the A.O in respect of the business affairs and their investments of both these assessees. 9.1 In para 31, the A.O has referred to the statement of Shri Suresh Babu G Malge recorded u/s 132(4) of the Act on 14.7.96 in which Shri Suresh Babu G Malge allegedly agreed to surrender Rs. 1.50 crores as undisclosed income/concealed income. The A.O has further discussed the assessee's letter dated 17.7.96, which was addressed to DDIT (Inv) Head qtrs., Mumbai and also letter dated 30.7.96, which w....