TaxTMI 
TaxTMI 
2017 (1) TMI 1250
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....on of Rs. 4,03,72,823/- made by on account of unaccounted receipt from Chit Fund Business. 5. The appellant craves leave to add, amend any/all the grounds of appeal before or during the course of hearing of the appeal." 2. The facts in brief of the case are that a search and seizure action was carried out under section 132 of the Income Tax Act, 1961 (in short "the Act") at the premises of the assessee. Pursuant to the search action, in notice under section 142(1) of the Act dated 9/02/2012 was issued for filing return of income for the year under consideration. The assessee in response submitted that the income declared of Rs. 8,97,830/- in the original return of income filed on 04/01/2012 might be treated as return of income in response to notice under section 142(1) of the Act. During the course of assessment proceeding, the Assessing Officer noticed cash of Rs. 12,16,500/- and jewellery of Rs. 8,55,955/-, which was found during the course of search action. During the course of assessment proceeding, the assessee further declared Rs. 50 Lacs as income on account of undisclosed chit fund business. In the assessment completed under section 143(3) of the Act on 22/03/2013, th....
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....ared by the assessee. He further submitted that cash of Rs. 12,16,500/- and jewellery of Rs. 8,55,955/- duly explained from the aforesaid undisclosed income and accordingly, the order of the learned Commissioner of Income-tax ( Appeals) might be upheld. 5. We have heard the rival submission of the parties and perused the relevant material placed on record including the orders of the authorities below. Since all the three grounds and the appeal are interrelated, therefore these are being disposed of together. The undisputed factual matrix is that as a result of search on the 'Bulland' group of cases documents/registers marked as Annexure A-3 to A-5 were found and seized from the premises at Devli Road, Khanpur, New Delhi. It was found that aforesaid documents established that the assessee and Sh. Ramkesh Basist, both the directors of M/s Bulland Buildtech Private Limited were running a chit fund business. The directors admitted undisclosed income of Rs. 50 Lacs each on account of Chit fund business, which was offered by the assessee in the course of assessment proceeding for the instant assessment year. Based on the seized documents, the Assessing Officer computed the addition of....
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....business. The details of this business are not available. Therefore, another way of looking at these transactions is that these are simply undisclosed cash receipts & payments. On this basis also, the ARs were directed to work out the peak balance. The maximum peak balance by this working comes to Rs. 20,46,784/- This is the maximum undisclosed funds available with the appellant and his partner in the business at any point of time during these transactions. This amount is admittedly and decidedly undisclosed. Further, the turnover of this business would have generated some commission / brokerage income, which fact also stands admitted by the appellant. Since these amounts are higher than Rs. 13,82,838/- worked out on the basis of the formula adopted in the assessment order, the maximum undisclosed fund embedded in these transactions is taken at Rs. 20,46,784/-. Further, a commission / brokerage of 2.0% (common in finance / real estate brokerage business) on the total payments of Rs. 12,64,39,808/- amounts to Rs. 25,28,796/-. Therefore, undisclosed income of the appellant from undisclosed chit-fund business shall be Rs. 22,87,790/- (i.e. @ 50% of Rs. 45,75,580/-). I hold accordingly....
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.... commission / brokerage in chit fund business or past savings. Even if it is assumed that the cash was in addition to the said chit-fund income held to be Rs. 22,87,790/-, still the amount of Rs. 12,16,500/- stands included in the undisclosed income of Rs. 50,00,000/- and, therefore, no separate addition is called for. The addition of Rs. 12,16,500/- on account of cash found / seized during the search is, therefore, deleted. The first ground of appeal is disposed of accordingly. 5.3 Another addition made was of 443.600 gms jewelries found during the search (but not seized) valued at Rs. 8,55,955/-. The said jewelry was claimed to be belonging to the ladies in the family, namely Smt Shakuntala Nagar (mother, 210.2 gms), Smt. Rekha Nagar (wife, 85.6 gms) and Smt. Sangeet Nagar (sister- in-law, 147.87 gms) and stated to be traditional jewelry or stridhan. The only reason the revenue has disallowed the claim is that no documentary evidence was produced. I find that the holding / value of the jewelry is well within the limits reasonably expected in well-todo Hindu family. The quantum is also below the limits permissible in a family by the CBDT - of 500 gms per married lady, 250 gms p....