2018 (6) TMI 546

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....of the Commissioner of Income Tax (Appeals)-3, Madurai, dated 17.04.2017 for the assessment year 2012-13. The first two assessees filed cross-objections in support of the orders of the CIT(Appeals). Since common issue arises for consideration in all the appeals and cross-objections, we heard all these together and disposing of the same by this common order. 2. Shri V. Nandakumar, the Ld. Departmental Representative, submitted that the only issue arises for consideration is with regard to a sum of Rs. 5 Crores towards construction of hotel known as "Hotel Apple Tree" in the hands of the assessees. According to the Ld. D.R., there was a survey in the premises of the assessees on 18.02.2013. Some of the account books were found and impounde....

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..... According to the Ld. representative, on the basis of the balance sheet, the Assessing Officer found that there was investment of Rs. 9 Crores in the hotel M/s Ramyaas Inn (Hotel Apple Tree). According to the Ld. representative, the investment in the hotel to the extent of Rs. 9 Crores is not in dispute. The dispute is only with regard to Rs. 5 Crores accepted by one of the partners Shri Jayaprakash Narayanan while recording a statement during the course of survey operation. The Ld. representative further submitted that the hotel M/s Ramyaas Inn is also an independent assessee. The investment of Rs. 9 Crores was disclosed in the balance sheet of M/s Ramyaas Inn as on 31.03.2013. According to the Ld. representative, this was brought to the ....

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....CIT v. S. Khader Khan Son (2008) 300 ITR 157. 4. Referring to the circulars issued by the CBDT in F.No.286/2/03 IT (INV) dated 10.03.2003 and 18.12.2014, the Ld. representative for the assessees submitted that the CBDT, being the apex administrative body to administer the direct taxes in the country, instructed its officers, including the Assessing Officers, to search for material evidences during the course of survey operation and not to extract disclosure statement from the taxpayers while recording statement under Section 133A / 132 of the Act. According to the Ld. representative, the judgment of Madras High Court in S. Khader Khan Son (supra) and the CBDT circulars were brought to the notice of the CIT(Appeals). The CIT(Appeals), aft....

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....which is also known as Hotel Apple Tree. The assessees explained before the Assessing Officer that out of Rs. 9 Crores invested in the construction of hotel, Rs. 4 Crores was from the loan borrowed. Therefore, the Assessing Officer accepted the source for investment of Rs. 4 Crores. The assessees further explained before the Assessing Officer that the balance amount of Rs. 5 Crores was from the withdrawals from the accounts of the partners from various concerns. The Assessing Officer rejected the explanation of the assessees on the ground that there was no evidence to show that the partners withdrew the money from other concerns as claimed. The assessees also filed a reconciliation statement before the CIT(Appeals) which was made as Annexur....