AI Drafter 
TaxTMI 
TaxTMI 
2017 (4) TMI 963
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....abad's orders; all dated 28.11.2013 in case nos. CIT(A)-III/195 TO 201/DCIT.CC.2(2)/13-14. The Revenue on the other hand has preferred its cross appeals in assessment years 2008-09 to 2010-11 bearing IT(SS)A Nos. 100 to 102/Ahd/2014. This follows assessee's cross objections in said three appeals C.O. Nos. 113 to 115/Ahd/2014 being preferred in Revenue's cases. 2. We advert to latter assessee M/s. Trivedi Corporation Pvt. Ltd. There are total seven cases with regard to this assessee. It has preferred five appeals IT(SS)A Nos. 66 to 69 & 266/Ahd/2014 in assessment years 2005-06, 2006- 07, 2009-10 to 2011-12 against the CIT(A)-III, Ahmedabad's orders; in case nos. CIT(A)-III/190, 166, 167, 191 & 168/DCIT.CC.2(2)/13-14. The Revenue's sole cross appeal IT(SS)A No. 99/Ahd/2014 has come in assessment year 2010-11 only as followed by the instant assessee's cross objection no.112/Ahd/2014. Relevant proceedings in all cases except in assessment year 2011-12 are u/s. 153A r.w.s. 143(3) of the Income Tax Act, 1961; in short "the Act" whereas the above assessment year involves proceedings u/s.143(3) of the Act. We have heard both the parties. Case file perused. 3. We now advert to rival p....
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....ayment by bank. During Asst. Year 2005-06 the balance remained credit at various points of time. Similar is the situation for Asst. Year 2006-07 an 2007-08. 8. We further observe from the judgment of the Hon. Allahabad High Court in the case of Shyama Charan Gupta vs. CIT 377 ITR 511 (All) wherein it has been held that "advance payment of salary or commission to managing director is a trade advance ordinarily made in the course of business so that such advance is not covered under section 2(22)(e) of the Act." We find that the facts of the present case are quite similar to the facts adjudicated by Hon. Allahabad High Court in the case of Shyama Charan Gupta vs. CIT (supra) so much so that in the case of assessee also the debit balance at certain point of time are in the nature of advance salary. We, therefore, are of the view that the impugned debit balances cannot be termed as advance in the form of deemed dividend u/s 2(22)(e) of the Act as they are trade advance ordinarily made in the regular course of business. We delete the additions for all the three years and allow the appeals of the assessee." 5. The assessee's case therefore is that the debit balances in question sou....
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....ee's appeals IT(SS)A Nos. 61 & 62/Ahd/2014 are partly accepted whereas IT(SS)A Nos. 63, 64, 65 & ITA No. 265/Ahd/2014 are allowed for statistical purposes. 7. We come to Revenue's cross appeals in former assessee's case wherein IT(SS)A Nos. 100 to 102/Ahd/2014 and said assessee's cross objections CO No. 113/Ahd/2014 raising the issue of unexplained investments of Rs. 47,94,018/-, Rs. 30lacs and Rs. 87lacs in assessment years 2008-09 to 2010-11; respectively. The Revenue's obvious case is that the CIT(A) ought not to have reversed Assessing Officer's findings making the abovestated addition of unexplained investment. The assessee's cross objection on the other hand strongly support the lower appellate findings under challenge deleting the said impugned addition. 8. We state the relevant facts at this stage. There is no dispute about the search in question being conducted on 21.04.2010. The said search revealed the assessee to have purchased lands at village Rohika, Taluka Bavla, Dist. Ahmedabad from total eight farmers. The departmental authorities recorded their statements u/s.131 of the Act stating the assessee to have paid on money in question. There is no dispute that the ....
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....is of multiplication formula derived from suppression percentage of a few days. (g) In the case of Rajdeep Builders (52 SOT 62) Hon'ble ITAT Chandigarh Bench held that AO was not justified to make addition on the basis of statement of one of the purchaser who subsequently retracted his statement in cross-examination. (h) In the case of Jawaharbhai Atmaram Hathiwala [128 TTJ 36] addition on account of on money was made for purchase of flat. In this case, during the course of search documents were seized from developer firm which indicated that assessee has made payment of on money for purchase of a flat. It was held by Hon'ble ITAT, Ahmedabad 'C' Bench that no evidence was brought on record by revenue to show that appellant had actually paid the on money. It was further held that assessee's denial cannot be brushed aside without bringing any positive material on record. The addition was held not be justified in such a case. (i) A similar view was held in the case of Bharat A Mehta [86 TTJ 369] by Hon'ble ITAT, 'B' Bench. In this case addition u/s. 69 was made on account of on money paid on purchase of bungalow on the basis of admission made by builde....
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....ded behind the back of the assessee and subsequently during cross examination he retracted from his statement. In such a situation, it was held by Hon. High Court of Delhi that in the absence of recovery of any incriminating material during the search, statement of a third party could not be used against assessee in block assessment proceedings. 9. When the present case is examined in view of this legal position, it is found that the entire addition in three years made by AO is based on statements of eight farmers. However, subsequently, during cross examination, all the farmers retracted from their statements. From the perusal of records it is found that only three farmers out of the seven had bank accounts, but even in the case of these three farmers no cash deposits were found in their bank accounts. 10. None of the farmers (land owners) identified the appellant as purchaser of the land. All of them stated that they do not know to whom they had sold the land. In such a situation, the allegation of AO regarding payment of on money by appellant remains unverifiable. 11. During the course of search no material was seized from the premises of the appellant which indicates p....
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....rt back to the facts of instant case once again to observe that this latter case law also does not apply since there is no substantive evidence which renders this procedural aspect as mere academic. We wish to observe here that the CBDT's circular dated 10.03.2003 already advises the search authorities to collect evidence pointing out any undisclosed income rather than recording admissions of the searched assessees. Hon'ble jurisdictional high court's judgment in Kailashben Manoharlal Choksi vs. CIT (2010) 328 ITR 411 (Gujarat) also adopts the same very view. We therefore do not find any reason to interfere the CIT(A)'s conclusion hereinabove deleting the impugned addition of unexplained investment in all three assessment years in question. The Revenue's sole substantive ground as well as its three appeals IT(SS)A Nos. 100 to 102/Ahd/2014 are declined. The assessee's cross objection C.O. No. 113 to 115/Ahd/2014 supportive of the CIT(A) above extracted findings are rendered academic. 11. We now proceed to deal with latter assessee's M/s. Trivedi Corporation Pvt. Ltd.'s cases. It has filed IT(SS)A Nos. 66 to 69 & ITA No.266/Ahd/2014 in assessment years 2005-06, 2006-07, 2009-10 to....