TaxTMI 
TaxTMI 
2016 (7) TMI 336
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....case are that a search and seizure operation was carried out at the residential premises of the assessee at 156, Sunrise Park, Drive-in-Road, Ahmedabad 1.11.2006. In order to give logical end to the proceedings, notice under section 153A of the Act was issued to the assessee, which was duly served upon him. In response to the notice, the assessee has filed his return of income on 21.2.2008 declaring loss at (-) Rs. 14,551/-. The ld.AO has issued notice under section 143(2) on 10.9.2008 which was duly served upon the assessee. During the course of search, loose papers were found which were inventorised as Annexure-A/1. Page no.129 of Annexure A/1, exhibits that assessee Shri Champaklal S. Kasat and his brother Shri Ramesh S. Kasat had a division of family business. As per this paper a sum of Rs. 1.05 crores was to be paid by Shri Ramesh S. Kasat to the assessee. During the course of search, when this document was confronted to the son of assessee, Shri Jagat Champaklal, while recording his statement under section 132(4) of the Act, he admitted Rs. 75 lakhs as undisclosed income. Similarly, the statement of the assessee was recorded under section 131(1A) of the Income Tax Act, subseq....
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....tributed among the two families in the ratio of 50-50 on 22/3/2000. : d. Due to the dispute between Shri Champaklal S Kasat and Ramesh Kasat, the liabilities was not distributed in the ratio of 50- 50 but the liability of the respective concerns was retained by the respective group, e. The 50% stock at Gunano was not received by Shri Champaklal S Kasat but the whole stock was retained by Shri Ramesh Kasat. f. Similarly due to the dispute, the interest and rent was also riot distributed 50-50. The agreement was signed by Shri Champaklal S Kasat and Shri Ramesh . Kasat. After the transfer of shares no further distribution or transfer was effected between the two groups. The transfer of shares of companies was the last such transfer. 7. As per the loose paper, total amount of Rs. 1.05 crores was to be paid by Shri Ramesh Kasat to Shri Champaklal S Kasat. Out of this , cheques of Rs. 56 Lacs was given. The cheque of Rs. 10 lakh was taken back by Shri Ramesh Kasat and. the cheque of Rs. 16 lakh was dishonoured. In other words, only Rs. 30 Lacs was received by Shri Champaklal S Kasat in the name of his family members in the form of gift from Shri Ramesh Kasat. The AO has made....
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....panies were transferred by the opposite groups. The contention of the appellant that since the AO has not taxed the amount of Rs. 75 Lacs in the hands of Shri Ranaesh Kasat, therefore, the same amount cannot be taxed as undisclosed income of the appellant, cannot be accepted by me. A mistake by the AO in the case of Shri Ramesh Kasat by not taxing the income in his hands, cannot be a legitimate ground for not taxing that amount in the hands of the recipient particularly when there is enough evidence of receiving the amount by the appellant. The' AO is free to take necessary step to tax the amount of Rs. 75 Lacs in the hands of Shri Ramesh Kasat. As can be seen from the terms of the MOU that each'and every term of it has been acted upon by both the parties to the MOU. Therefore, in view of the decision of honourable Supreme Court in the case of Sumati Dayal reported at 214 ITR 801, the preponderance of probability clearly shows that the amount of Rs. 1.05 crores was also received by the appellant when the full and final distribution of the business has taken place in the year under consideration. The addition of Rs. 75 Lacs, is, confirmed. In other words, out of the addition....
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....rised as page no.129 of Annexure A/1. This paper has been reproduced by the ld.CIT(A) on page no.9 of the impugned order. The English translation of this paper is reproduced by the ld.CIT(A) at page no.9 of the impugned order. It reads as under: "ENGLISH TRANSLATION OF STATEMENT DATED 04-02-2000 SIGNED BY SHRI C S KASAT AND SHRI RAMESHBHAI KASAT Rs. 1.05 crores to be paid Jagat Food And MSC and C G road office to be given to Rameshbhai Jagat iron and Jagat Industries to be given to Champaktal Dhana , dhana dal and kotri stock to be distributed half half- ' Liabilities half half And alt rest half half Accounts to be finalized before 10-02-2000 Chandubhai's stock at gunano to be distributed half half Chandubhai's interest and rent to be paid half half Sd/ Sd/ (Champaklal S Kasat) ( Ramesh Kasat)" 8. Veracity of this order has not been doubted/disputed by the assessee, because by execution of this page, the assessee and his brother has made division of their family business. This fact is discernible from the reply of the assessee given to question no.7 on 29.3.2007. The question and reply reads as under: "Q.7 As per you answer to Q.No. 6, t....
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....of the Income Tax. We are of the view that even if this piece of evidence is excluded, then also, there is overwhelming evidence on the record. The document was found exhibiting transactions in respect of division of asset. The onus was upon the assessee to explain the position of this document. The assessee did not deny the document. His bald statement was that Rs. 75 lakhs was not received by him or the family members. Now this statement is to be tested in the light of other circumstantial evidences, which suggested the execution of this document, and fulfillment of the obligations for the purpose of this document, then, how the weight can be given to a simple denial of the assessee vis-à-vis the evidence suggesting that transactions performed in compliance of the documents. The next reason given by the ld.counsel for the assessee is that no inquiry was made in the case of Shri Ramesh S. Kasat. The assessment has been framed under section 153A r.w.s. 143(3) of the Act. It is pertinent to note that there is no negative equity in law. It cannot be the case that if one person could not be caught while infringing the law then, other one has also right to infringe or to break t....
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.... before the Tribunal viz. addition on account of low withdrawals towards household expenses and addition on account of unexplained investment which was worked out on the basis of DVO's report. The Tribunal while dealing with this issue has observed that during the course of search no incriminating material was found which can help the AO to make additions. The finding recorded by the tribunal from para-3 to 5, in this case, read as under: "3. A warrant of authorization u/s. 132(1) of the Act was issued and executed at the residences of the assessee's under appeal. Accordingly proceedings u/s. 153A were initiated and the assessments have been made u/s. 143(3) of the Act read with Section 153A of the Act. Additions on account of household expenses have been made only on the assumption that the Assessee has not shown sufficient withdrawals for household expenses and addition for unexplained investment havebeen made on the basis of valuation made by the DVO on the instructions of the Assessing Officer. 4. It would be pertinent to mention here that both these additions have been made without there being any incriminating material found at the time of search. It is now well settled ....