AI Drafter 
TaxTMI 
TaxTMI 
2011 (4) TMI 1451
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....peals) has erred in deleting the additions of Rs. 17,15,000 and Rs. 5,50,000 which represent unsecured loans and advances. 3. The brief facts of the case are that the assessee is an individual. He is director of M/s. Prateek Resort & Builders (P) Ltd. He was also running a proprietorship concern in the name and style of M/s. Sharma Associates. In these assessment years, he derives income from house property and business income from the business of real estates. A search under section 132 of the Income-tax Act, 1961was carried out at his residential premises comprised at 66-Pritam Road, Dehradun on 15.2.2008. A survey under section 133A was carried out simultaneously at his office premises situated at 78-Rajpur Road, Dehradun. During the course of search, a cash of Rs. 1,60,510 was found at the residence out of which a sum of Rs. 1,00,000 was seized. Jewellery having value of Rs. 6,59,900 found at the residence but nothing was seized. A notice under sec. 153A of the Act was issued upon the assessee on 17.8.2009. The assessee has filed his return of income on 5.10.2009 declaring total income at Rs. 3,02,055. Assessing Officer has passed the assessment order on 29.12.2009. He asses....
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.... Total 4,90,000 5. During the course of appellate proceedings, Learned First Appellate Authority has called for a remand report. In the remand report, Assessing Officer has admitted that as far as loan amounts mentioned against the names of Shri SK Sudan, Vijay & Ramesh Goel are concerned, assessee has submitted bank statements, copies of income-tax returns confirmations etc. He also observed that these loans are brought forward from the earlier years as on 31.3.2001. Learned CIT(Appeals) has reproduced the comments of the Assessing Officer in the remand report, in this connection, at page No.8 of the impugned order. Thereafter, Learned CIT(Appeals) has observed that these loans were taken in earlier years. They are brought forward, hence they cannot be admitted to the income of the assessee for current year. Similarly, Learned First Appellate Authority has reproduced the remand report submitted by the Assessing Officer in respect of other loans wherein Assessing Officer was satisfied with regard to the quality of evidence submitted by the assessee in order to discharging the onus. Learned DR submitted before us that Learned CIT(Appeals) ought to have n....
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....this appeal. It is rejected. C.O. No.62/Del/2011: 7. The assessee at the time of hearing, did not press the cro, hence it is also rejected. ITA No. 823/D/2011: A.Y. 2003-04 8. In this appeal also, the grounds taken by the revenue are not in consonance with rule 8 of ITAT Rules. They are descriptive and argumentative in nature. In brief, the first grievance relates to deletion of Rs. 15,60,000/- which was added by the AO on account of un explained unsecured loans available in the books of the assessee. The next grievance relates to deletion of interest amounting to Rs. 34,500/- which paid on the alleged bogus loan. This amount was disallowed by the AO on the ground that loans are held as bogus, therefore, there cannot be any interest expenditure. The next grievance relates to deletion of Rs. 1,79,000/- which was added by the AO on the ground that assessee failed to disclose full sale consideration in respect of Dehradun land. 9. The brief facts, as discussed in asstt. Year 2002-03, are similar in this asstt. year also. Return was filed on 5.10.2009 in response to the notice received u/s 153A. Assessee declared an income of Rs. 3,33,374/-. The asstt. was completed by t....
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....d. CIT(A), it was contended by the assessee that AO did not grant sufficient opportunity for explaining these loans and for collecting the relevant documentary evidence i.e. bank statement, permanent account number, confirmation etc. Ld. CIT(A) allowed the assessee to place on record all these evidences and called for remand report. In the remand proceeding, AO has accepted the genuineness of the claim. Ld. CIT(A) has reproduced the remand report in respect of each credit at page 8,9,10,11,12,13 of the impugned order. After going through the remand report and the relevant evidence, Ld. First Appellate Authority has deleted the addition. 11. With the assistance of Ld. Representative, we have gone through the record carefully. There is no disparity of facts in the present asstt. year viz a viz asstt. year 2002-03. Ld. DR relied upon the asstt. order as well as the grounds raised by the revenue. According to him, Ld. CIT(A) ought to have not put reliance on the remand report rather examine the facts and circumstances of each cash credit. In our opinion, Ld. First Appellate Authority has gone through the evidence as well as the remand report. Considering our finding in asstt. year 2....
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....e facts and circumstances are similar to that of assessment year 2002-03. In response to the notice under sec. 153A, assessee has filed the return on 5th October 2009 declaring an income of Rs. 2,94,230. Assessee framed the assessment in just two and half months on 29.12.2009. He determined the taxable income of the assessee at Rs. 54,99,073. He has made the following additions: i. Addition on a/c of disallowance of commission Rs.35,500 ii. Addition on a/c of basis of receipts not declared by the assessee but evident from affidavits of Sushma Breja & Siddhartha Barejs Rs.9,00,000 iii. Addition under sec.68 on a/c of unexplained loans Rs.37,50,000 iv. Addition under sec. 68 on a/c of unexplained advance credits Rs.5,00,000 v. Addition under sec. 69C on a/c of unexplained explained. Rs. 19,342 Total Rs. 52,04,842 17. On appeal, Learned CIT(Appeals) deleted these additions. 18. The revenue is challenging the deletion of these additions. Learned First Appellate Authority has noticed the unsecured loans while reproducing the findings of the Assessing Officer at page 3 which read as under: "The A.O. has given following reason w....
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....essee. The assessee has shown liability of Rs. 7,50,000 towards Smt. Sushma Breja and Rs. 1,50,000 towards Siddharath Breja. Learned CIT(Appeals) has verified this fact and then arrived at a conclusion that Assessing Officer has erred in accepting the amount of Rs. 5 lacs shown by Smt. Sushma Breja as receivable. In fact, assessee has explained the total amount of Rs. 9 lacs required to be paid to Smt. Sushma Breja and Siddharath Breaj. In this way, Learned CIT(Appeals) has deleted the addition in respect of Rs. 7,50,000 mentioned at Sr. No.2 of the table. As far as the addition of Rs. 12 lacs in respect of the amount shown against the name of Smt. Savita Devi is concerned, we find that Assessing Officer has accepted the claim of assessee to the extent of Rs. 10 lacs. Learned CIT(Appeals) has gone through the evidence submitted by the assessee in respect of Rs. 2 lacs also. We have specifically gone through the findings of the Learned CIT(Appeals) at page No.11 in paragraph 6.3 (v). Taking into consideration this finding of the Learned CIT(Appeals), we do not find any error in it. Taking into consideration the parity of facts in respect of other cash credits and the stand of the As....
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....s also rejected. C.O. No. 64/Del/2011: 23. The assessee did not press the cross-objection, hence it is dismissed. ITA No.825/Del/2011: 24. In this appeal, revenue has taken nine grounds of appeal. Ground Nos. 1 to 6 are inter-connected to each other. In these grounds of appeal, revenue is impugning the deletion of Rs. 45,50,000 and of Rs. 3,66,655. Addition of Rs. 45,50,000 was made by disbelieving the genuineness of unsecured loan taken by the assessee. The addition of Rs. 3,63,655 was made by making a disallowance of interest expenses which were claimed by the assessee as paid to the loaners on such unsecured loans. 25. With the assistance of learned representatives, we have gone through the record carefully. We find that return in response to the notice received under sec. 153A of the Act was filed on 5th October 2009 declaring an income of Rs. 5,39,141. Assessing Officer has completed the assessment on 29.12.2009. He made the following additions: i. Addition on a/c of disallowance of interest Rs.3,63,655 ii. Addition on a/c of disallowance of water tax Rs. 707 iii. Addition on a/c of difference in WIP Rs. 3,36,774 iv. Addition u/s 68 on a/c o....
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....d as genuine, consequent payment of interest on such loans is to be allowed. Learned CIT(Appeals) has rightly allowed the claim to the assessee, hence, ground No.6 is also rejected. 28. In the next substantial ground No.7, the grievance of the revenue is that Learned CIT(Appeals) has erred in deleting the addition of Rs. 3,36,744. The brief facts of the case are that the on scrutiny of the accounts, Assessing Officer has observed that assessee has declared work-in-progress at Rs. 29,16,868 as on 31.3.2004 relevant for assessment year 2004-05. According to the Assessing Officer, the closing WIP would be the opening WIP on Ist April 2004. He further observed that assessee had made an addition of Rs. 5 lacs and Rs. 8,45,250 in the WIP. Thus, according to the Assessing Officer, at the end of the year, WIP should be Rs. 42,62,118. As against this, assessee has shown WIP at Rs. 39,25,344. Assessing Officer made the addition of Rs. 3,36,774 being the difference in the WIP. 29. Before Learned CIT(Appeals), it was submitted by the assessee that Assessing Officer failed to appreciate the accounts of the assessee. The assessee has incurred a sum of Rs. 5 lacs which he has separately cap....
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....bsp;x. Addition on account of investment for purchase of land Rs. 4,80,000/- xi. Addition on account of investment for purchase of land from Prbhat Pandey and Jaideep Rs. 4,10,000/- xii. Addition on account of investment u/s 69 for purchase of stamp paper Rs. 6,60,000/- Total Rs. 2,32,27,000/- 33. On appeal Ld. CIT(A) deleted all the additions. 34. In ground No. 1, revenue is impugning the deletion of Rs. 1,50,25,000/-. This amount has been added by the AO on account of failure of assessee to prove genuineness of unsecured loans. The AO has noticed the details of parties from whom unsecured loans have been received by the assessee. These details have been reproduced by the Ld. CIT(A) also while taking note of the AO's finding. They read as under :- "The details of parties from whom unsecured loans have been claimed by the assessee to have been received during the year, where only confirmations have been filed and no other supporting documentary evidences like bank statements have been filed to prove the creditworthiness of the claimed loan creditors are as under :- S.No. Name Amount of loan claimed to have bee....
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.... with regard to this ground of appeal are similar to that of asstt. Year 2002-2003. In view of our finding in asstt. Year 2002-03, we do not find any merit in this ground of appeal . It is rejected. 36. The next substantial ground is ground No. 6, wherein revenue is impugning the grant of interest expenses amounting to Rs. 3,65,309/- on the unsecured loans. This amount was disallowed by the AO on the ground that assessee failed to establish genuineness of the unsecured loans. Ld. CIT(A) has accepted the genuineness of loan consequently interest expenses incurred towards payment of interest on the loans have also been allowed. We have already upheld the finding of Ld. CIT(A) with regard to the genuineness of the loans and consequently interest expenses has to be allowed. Therefore, this ground is devoid of any merit. Hence rejected. 37. In Ground No. 7, Revenue is impugning the deletion of Rs. 4,80,000/- and Rs. 4,10,000/-. The brief facts in respect of the addition of Rs. 4,80,000/- are that according to the AO, assessee has purchased properties from Shri Anuj & Tanuj Kumar and Shri Sunil Kumar Nagpal for a sum of `1,40,000/- and Rs. 3,40,000/-. He did not disclosed purchase ....
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....e findings are factually incorrect. Once it is held that in the books both these properties have been noted by the assessee then how additions can be made on the ground that these properties have not been accounted by the assessee. The assessee has filed the sale deeds before the Ld. CIT(A). In view of the above discussion, ground No. 7 is rejected. 39. In ground No. 8, grievance of the revenue is that Ld. CIT(A) has erred in deleting the addition of Rs. 6,60,000/-. This addition was made by the AO on the ground that assessee failed to account purchase of stamp papers. Ld. CIT(A) has deleted the addition on the ground that for purchase of any property, the buyer has to produce the stamp paper according to the stamp duty fee fixed by the State Government. This is an unavoidable cost and is bound to be incurred whenever any immovable property is purchased. The assessee is involved in the business of sale and purchase of property. In any purchase of property, incurrence of any expense in the shape of stamp duty would be a direct expenditure. Ld. CIT(A) further observed that purchase of stamp duty has been accounted for and recorded in the books of accounts of assessee. He has verif....
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....00/-, Rs. 3,80,00/- and Rs. 5,00,00/- The addition was made by AO on the ground that the sale deeds of aforesaid amount were not declared as sales in profit and loss account of assessee. On the other hand, the assessee has stated that it was only the net profit arising to the tune of Rs. 2,18,000/- that was declared by the assessee in his return of income as instead of showing the sales, on the receipts side of profit & loss account and corresponding purchases on the payment side of profit & loss account, the assessee declared net profit after reducing purchases from sales of the properties. I have considered assessment order, books of accounts of assessee and also the submissions of assessee. It is concluded that as per accounting principles, the assessee should have declared sales as receipt and corresponding purchases as payment in profit & loss account. But, it is also important to consider that the assessment procedure is a methodology to arrive at the net income of the assessee. In this case though the assessee has not declared the sales as receipts and purchases as payment, yet the net profit arising out of the sale of the properties has been declared. The books of accoun....
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....ed. 43. In the result, appeal of the revenue is dismissed. 44. Cross objection No. 66 assessee did not press the cross objection hence rejected. ITA No. 827/D/2011 A.Y. 2007-08 45. The grounds of appeal taken by the revenue are not in consonance with Rule 8 of ITAT Rules . They are descriptive and argumentative in nature. The assessee has filed his return of income on 5th October, 2009 in response to the notice received u/s 153A of the Act. He has declared an income of Rs. 10,53,865/-. The AO has passed the asstt. order on 29.12.2009. He determined the taxable income of the assessee at Rs. 3,58,60,763/- after making the following additions :- S.No. Particulars Amount 1. Disallowance of interest 3,65,300/- 2. Disallowance of expenses claimed for development of land 88,82,390/- 3. Disallowance of expenses claimed for Sahastradhara Project 39,45,000/- 4. Addition u/s 68 on account of unexplained loans/advances as discussed above 1,79,95,000/- 5. Unexplained investment for capital introduction in firm 5,50,000/- 6. Unexplained cash payment made to Mr. Pintoo (Rs. 8 lacs + Rs. 1.32 lacs + Rs. 1,08,200) a....
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.... Pradeep Singh 9,00,000/- Bank statement and copy of Negi return not filed Total 1,25,20,000/- Further, in the affidavit filed, Sh. Manoj Suri has certified that amount of loan of Rs. 36,00,000/- was given by him to the assessee in the earlier years and amount has been brought forward from earlier years and no loan was given by him during the year under consideration. However, from the earlier year records, it is noticed that no such loan in the name of Sh. Manoj Suri was shown by the assessee and hence, it is clear that this claimed loan has been shown only in the year under consideration. Further, the detailsof parties from whom unsecured loans/advances have been claimed by the assessee to have been received during the year but where even the confirmations have not been filed are as under :- S. No. Name Amount of loan/advances claimed to have been taken during the year Details of Evidences/Documents not filed 1. Laxman Singh 4,00,000/- Confirmation, Bank statement and copy of return not filed 2. Pankaj Chetri 4,00,000/- Confirmation, Bank statement and copy of return not filed ....
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....his project. Rest of the amount was incurred for development of Sahastradhara land which was retained as stock in trade. Ld. CIT(A) verified these aspects and then deleted the addition. 51. On due consideration of the facts and circumstances and the order of Ld. CIT(A), we do not find any reason to interfere in it. Ld. AO has made the disallowance by misconstruing the facts. He failed to appreciate the true facts and circumstances. He took the total sale consideration at Rs. 66.68 lacs. On this land only a sum of Rs. 49,27,390/- was incurred by the assessee. Rest of the expenses was incurred on other land which was held as stock in trade. The revenue failed to bring any evidence to our notice which can persuade us to take different opinion than the one taken by the Ld. CIT(A) on this issue. 52. In this ground of appeal, grievance of revenue is that Ld. CIT(A) has erred in deleting the addition of Rs. 5,50,000/-. The brief facts of the case are that assessee is a partner in the firm M/s Pratyush and Associates. He has introduced cash capital of Rs. 5,50,000/- on three occasions namely, `1,70,000/- on 29.8.2006, `1,50,000/- on 2nd September 2006 and Rs. 2,30,000/- on 3rd Octobe....
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....Pintoo and accounted it in the books. Meaning thereby the entries to the extent of Rs. 8 lac has been squared up Ld. CIT(A) has rightly deleted the addition. 55. In the next ground of appeal, grievance of the revenue is that Ld. CIT(A) has erred in deleting the addition of Rs. 18 lac. The brief facts of the case are that diary inventoried as annexure D 3 was found from the residence of assessee. At page No. 1 of the diary, an entry was noticed by the AO whereby it is disclosed that assessee has purchased the property at GMS road for which he paid Rs. 37 lacs through cheque and Rs. 18 lacs was cash. The AO has made the addition of Rs. 18 lacs on the ground that this much amount was paid out of books. The AO has observed in the asstt. order that initially assessee has took the plea that deal was made to purchase the property at Rs. 55 lacs but later on the actual purchase was made for Rs. 44 lacs. Before Ld. CIT(A), it was contended by the assessee that there is no evidence on the record which can suggest that a sum of Rs. 18 lac was paid in cash. Ld. CIT(A) has deleted the addition by observing as under :- "I have considered the AO's order, books of accounts of asses....
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....e treated as his unexplained investment. The assessee in response to this query submitted that initially the deal was made to purchase the property for Rs. 55 lacs. But later on, the actual purchase was made for Rs. 44 lacs. There was a fall in the price in that area and therefore, purchase price was reduced. The AO has not mentioned any other circumstance in his finding. He observed that assessee failed to prove that above cash payment of Rs. 18 lac was not made by him outside books of accounts. To our mind, it is the AO, first who has to prove that `18 lac was paid in cash by the assessee over and above. The purchase price mentioned in the register deed. The assessee is not supposed to prove negative that no cash was paid. He has been alleging from the very beginning that no cash was paid by him. The AO could have recorded the statement of vendor . He should have verified from Shri Kailash Gulati i.e. any cash was paid, or not, if paid, it was solely paid by the assessee etc. The assessee has explained the position about the entry at the time of search itself. He has explained about the certain other entries in the diary and submitted that there were rough calculations also. The ....
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....the appeal. He has deleted almost all the additions except an addition of Rs. 8 lacs which is mentioned at Sr. No.8. As far as Ground Nos. 1 to 6 are concerned, the details of unsecured loans have been noticed by the Learned CIT(Appeals) from the findings of the Assessing Officer on pages 4 and 5 of the impugned order which read as under: "The details of parties from whom unsecured loans have been claimed by the assessee to have been received during the year, where only confirmations have been filed and no other supporting documentary evidences like bank statements have been filed to prove the creditworthiness of the claimed loan creditors are as under: S. No. Name Amt of loan claimed to have been taken during the year Details of Evidences/Documents not filed. 1 Vishal Aggarwal 49,52,000 Bank statement and copy of return not filed. 2 N.D. Bareja 2,50,000 Bank statement and copy of return not filed. 3 V.P. Monga 2,50,000 Bank statement and copy of return not filed. 4 S.K. Sudan 13,50,000 Bank statement not filed. 5 D.K. Aggarwal 10,00,000 Bank statement and copy of return not filed. &....
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....l time gap between the withdrawals and the availability of the cash. Learned CIT(Appeals) has rightly accepted the explanation of the assessee and deleted the addition. The reasons assigned by the Assessing Officer are based on probability but conclusively it cannot be ascertained that cash withdrawals by the assessee and his wife in the month of January was spent on household or acquisition of any assets. In view of the above discussion, this ground of appeal is rejected. 63. In ground No.8, grievance of the revenue is that Learned CIT(Appeals) has erred in deleting the addition of Rs. 6,59,900. The brief facts of the case are that during the course of search, jewellery having value of Rs. 6,59,900 was found. The explanation of the assessee is that this jewellery belongs to his wife. Part of the jewellery was received at the time of their marriage and the part was acquired by her from her savings. Assessing Officer was not satisfied with the explanation of the assessee. He made the addition. On appeal, Learned CIT(Appeals) deleted the addition on the ground that similar query was asked from the wife of assessee in her regular proceedings. The department was satisfied by her exp....
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....true facts and submitted the documentary evidence, a reconciliation has been established and Learned CIT(Appeals) arrived at a conclusion that addition was made on misinterpretation of the documents. Considering the details noticed by the Learned CIT(Appeals) on pages 24 to 26, we do not see any reason to interfere in this order. This ground of appeal is rejected. 67. In ground No.10, the grievance of the revenue is that Learned CIT(Appeals) has erred in allowing the set off of Rs. 8 lacs from the surrendered amount. With the assistance of learned representatives, we have gone through the record carefully. Learned CIT(Appeals) has confirmed the addition of Rs. 8 lacs. However, he granted a tele-scoping against the surrendered amount of Rs. 1 crore. We do not see any merit in this ground of appeal raised by the revenue. The assessee has made a declaration of Rs. 1 crore in order to explain all unaccounted money. Learned CIT(Appeals) has observed that out of the total amount, a sum of Rs. 14,30,520 remained unutilized hence telescoping against this amount can be granted. Considering the findings of the Learned CIT(Appeals), this ground of appeal is rejected. 68. In ground No.11....