TaxTMI 
TaxTMI 
2018 (7) TMI 657
X X X X Extracts X X X X
X X X X Extracts X X X X
...., relating to the Assessment Year 2008-09. 2. Heard Mr. K.Vasanthkumar, learned counsel appearing for the appellant and Smt. M.Kiranmayee, learned Senior Standing Counsel appearing for the Department. 3. The substantial questions of law with which the appellant came up before this Court, were later sought to be reframed. We permitted the questions to be reframed. The reframed substantial questions of law are as follows: 1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is legally correct in confirming the addition of Rs. 23,35,000/- being cash found during the course of search on the basis of statement at the time of search holding subsequent explanation as afterthought without appreciating ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sment, the focus of attention was on three items. One was unexplained cash of Rs. 23,35,000/- found in the residential premises in the course of search and seizure operation. Out of the said amount, Rs. 22,50,000/- was seized as unexplained. The Assessing Officer rejected the explanation offered by the assessee and made an addition of Rs. 23,35,000/- to the income returned by the assessee. 8. The second item which became the focus of attention in the order of assessment was an interest income to the tune of Rs. 38,74,350/-. The Assessing Officer added this amount to the income returned by the assessee on the ground that this represented interest on the unsecured loans advanced to Dakshin Shelters Private Limited and that as per the TDS Cer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d substantial questions of law is concerned, it is admitted by the learned Senior Standing Counsel for the Department that the same is covered by the decision of this Court in I.T.T.A.Nos.701 and 702 of 2016, dated 23-02-2018. Reframed substantial question No.7 in I.T.T.A.No.701 of 2016, as recorded in the judgment of this Court, dated 23-02-2018, reads as follows: "7. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal while confirming the addition of Rs. 3,05,713/- as interest income on mere ground of claiming credit for TDS on entire amount in utter disregard to the provisions of Sec.145 of the Act and method of accounting followed by the assessee?" 13. The answer to the above question is foun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the unexplained cash was recovered at the time of search. When the cash was seized during search, the assessee was questioned about its source. The questions put to him and the answers given by the assessee at that time are reproduced in the order of assessment. They read as follows: "Q.16 An amount of Rs. 22.50 lakhs was found in your bank locker which was brought in the house. Explain the sources of the said amount? Ans. The amount was given partly by my partner Sri K.Srinivasarao, partly by brother Mr. Chandramohan and partly belongs to my mother who sold her house property at Gollapudi Village, Vijayawada, about a year back. Q.17 Can you prove the receipt of the above amount as replied by you? Ans. My brother and my partner....
X X X X Extracts X X X X
X X X X Extracts X X X X
....time of a raid, when he will be in a state of shock, cannot be held against him especially when his subsequent claim was evidenced by documents; (ii) that at the time when the search was conducted, Section 269SS had not been amended, but was applicable only to loans and advances and not sales; (iii) that when admittedly the assessee had no source of income, the explanation offered by him had to be accepted; (iv) that in support of the explanation offered by the assessee later, he had not only produced the sale agreement with Anantha Lakshmi, but the Assessing Officer also got a letter of confirmation from Anantha Lakshmi and that therefore the Tribunal committed a serious error in law in confirming the addition. 19. We have carefully....
X X X X Extracts X X X X
X X X X Extracts X X X X
....agreement of sale, the signature of the agreement vendor viz., the assessee alone is found. It is only in the last page that the signature of Anantha Lakshmi, the vendee, is found. (iii) The agreement was purportedly for the sale of half undivided share that the assessee had in an agricultural land. The property sought to be sold under the said agreement is described throughout as agricultural land. But in the last clause in the agreement of sale, it is stated that if the vendor failed to obtain clearance from Urban Land Ceiling authorities, the agreement would stand cancelled. 21. Therefore, if the authorities failed to take note of such an agreement of sale, they cannot be found fault with. We have now taken into account the agreement ....