TaxTMI 
TaxTMI 
2017 (5) TMI 11
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....ls and assessee's Cos, therefore they were heard together and are being disposed of by this common order for the sake of convenience 4. Brief facts of the case are that a search & seizure operation u/s 132 of the Income Tax Act (hereinafter referred to as 'the Act') was conducted on SALTEE Group including the assessee dated 25.02.2009 and on subsequent dates by the Investigation Unit of Income Tax Department. The assessee is one of the directors in the group. The assessee in response to the notice u/s 153A of the Act filed its Income Tax return declaring its total income at Rs. 6,75,110/-. Subsequently notices u/s 143(2) and 142(1) of the Act were issued upon the assessee and accordingly assessment was framed u/s 153A/143(3) of the Act at a total income of Rs. 45,72,410/- after making certain additions / disallowances of the assessee which are discussed herein below in details. ITA No.1221/Kol/2013 assessee's appeal for A.Y. 07.08. 5. First we take up issue raised by the assessee in this appeal in ground No. 4 which is that ld. CIT(A) erred in confirming the order of AO by sustaining the disallowance of Rs. 11,16,323/- on account of peak credit but without giving the effec....
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....een considered and the profit thereon has already been assessed. It was argued that the action of the AO has resulted in double addition. I do not find merit in the contentions of the appellant. The AO has only assessed the profit on the total undisclosed sales as recorded in the impounded documents. But then, there has to be some investment in the unaccounted business of the appellant. I am therefore of the opinion that the AO was justified in adding the peak credit on account of undisclosed investment in the business. However, once the addition of Rs. 11,16,233/- on account of peak credit was made in the assessment year 2007-08, then corresponding set-off has to be allowed while adding the peak credit in the subsequent year. In other words, the addition of peak credit in the assessment year 2008-09 is justified only to the extent of Rs. 2,00,963/- (Rs.19,17,196/- minus Rs. 11,16233/-). In result, the addition of peak credit of Rs. 11,16,233/- in the assessment year 2007-08 is confirmed; and, the addition of peak credit in the assessment year 2008-09 is restricted to Rs. 8,00,963/-" Being aggrieved by the order of ld CIT(A) the assessee is in second appeal before us on the foll....
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....ed business of the assessee was unearthed and the additions were made inter-alia for the profit and undisclosed investment in such business. The AO has made the addition against such undisclosed business in AYs 2007-08, 2008-09 and 2009-10 towards undisclosed profit for Rs. 7,46,285/- Rs. 30,69,434/- and Rs. 32,57,057/- respectively. At the same time, the AO made the addition towards undisclosed investment in such business for the AY 2007-08 only for Rs. 11,16,233/- for the year under consideration. However, the ld CIT(A) has given relief to the assessee in part for the addition based on the profit from undisclosed business. The ld. CIT(A) has confirmed the order of the AO for the year under consideration with regard to the addition of the peak credit with the direction to set off the impugned peak credit while adding the peak credit in the subsequent year. Now the assessee has agitated before us that the addition made in the assessment years 2004-05, 2005-06 and 2006-07 should be set off against the impugned peak credit i.e. Rs. 11,16,323/- pertaining to the year under consideration. In this background of the facts of the case, the question before us for our adjudication arises....
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....of the assessee has given relief to the assessee in part by observing as under:- "The AO has admitted in his remand report that the rotation statement by the appellant in course of the appellate proceedings incorporates all the debit and credit entries recorded in the seized documents SPB/19, SPB/20,SPB/21 and SPB/23. The AO has also admitted that the cash payments recorded in the impounded documents represent personal expenses as well as unaccounted investment. I find from the assessment order that the AO has considered all the receipts as appearing in the impounded documents SPB/19, SPB/20, SPB/21 and SPB/23 while computing the undisclosed sales for the assessment years 2007-08, 2008-09 and 2009-10. It was explained before me that cash payments totalling to Rs. 28,08,425/- as given in the table contained in para 14 above are recorded in the impounded document SPB/19, SPB/20 and SPB/23. I find merit in the argument that when the AO has considered all the receipts recorded in the impounded document while computing the undisclosed sales, then no separate addition can be made on account of payments, recorded in such impounded document as they have come out of the receipts al....
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....,328/- suffers infirmity and in view of the facts and in the circumstances direction may kindly be given for reducing the said amount by the amount already disclosed by the appellant in the assessment proceedings and it may kindly be held accordingly." 13. The ld AR before us the reiterated the same submissions as made before the ld CIT(A) and on the other hand the ld DR vehemently supported the order of authorities below. 14. We have heard the rival contentions and perused the materials available on record. The issue in this ground of appeal relates to the investment made by the assessee out of the books of accounts which was treated by the AO as undisclosed investment and liable to tax. However, the ld CIT(A) has given relief to the assessee in part by observing that double addition cannot be made on the basis of same impounded documents. Thus, it is also pertinent to note that once the addition has been made on the basis of impounded documents towards the profit and undisclosed investment as discussed above, then in our considered view the new addition on the basis of same impounded documents cannot be made. However, it is important to note that the impugned undisclosed....
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....nd in view of the facts and in the circumstances it may kindly be held accordingly." 16. At the outset, it was observed that the ld AR in its appeal has challenged the reassessment proceedings initiated and completed u/s 153A of the Act. Accordingly the ld AR made his arguments in length at the time of hearing but at the conclusion of the hearing on this issue the ld AR agreed to the order of ld CIT(A) and did not challenge the validity of assessment framed u/s 153A of the Act. On the other hand, the ld AR relied on the order of authorities below. 17. In view of above submissions made by both the side, we find no merit in the argument placed of the ld AR before us. Hence, the issue of the legality of the order passed by AO u/s 153A/143(3) of the Act in the aforesaid grounds of appeal are hereby dismissed. Hence, these grounds of assessee's appeal are dismissed. 18. In the result, assessee's appeal is dismissed. Now coming to the appeal filed by Revenue in ITA 1201-1202/Kol/2013 for A.Ys. 07-08 & 08-09. 19. At the outset, we note that tax effect in both the cases filed by the Revenue are below the limit of Rs. 10 lakh fixed by the CBDT vide Circular No. 21 of 2015 dat....
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....on of the Ld. CIT(A) was wholly unreasonable, uncalled for and bad in law. 4. For that in view of the facts and circumstances of the case the Ld. CIT(A) was wholly wrong and unjustified in confirming the addition of peak credit of Rs. 11,16,233/- made in assessment on a/c of alleged undisclosed investment made by the assessee merely relying on certain entries in the diaries SPB-19 & 20 impounded from the premises of a third party without taking into account and considering the rotation statement and the assessee's submission. The action of the Ld. CIT(A) was wholly unreasonable, uncalled for and bad in law. 5. For that in view of the facts and circumstances of the case the Ld. CIT(A) was wholly wrong and unjustified in partially confirming the addition of Rs. 6,57,328/- (out of total addition of Rs. 27,55,198/- made in assessment on a/c of alleged investment made by the assessee in land at Siliguri and Rajarhat merely relying on certain entries in the diaries SPB-6 impounded from the premises of a third party) without considering and further allowing deducting from Rs. 6,57,328/- a sum of Rs. 5,46,726/- representing investment in the said land made during....