TaxTMI 
TaxTMI 
2016 (1) TMI 1374
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....year assessee and his family withdraw Rs. 31,85,751/- to meet the household expenses and marriage expenses alongwith the expenditure. We have purchased machinery of Rs. 25,500/- towards household expenses of Rs. 31,85,751/-. But the AO did not understand the facts and circumstances of the case. Hence addition of Rs. 25,500/- is deserved to be deleted. (iii) Under the facts and circumstances of the case order passed u/s 143(3) of IT Act, 1961 is illegal & bad in law as it is charged interest u/s 234B & 234C n disclosed income Rs. 19,00,000/- seized during the course of search. ITA No. 72/JP/13 (i) That the ld. AO is seriously erred by making an addition of Rs. 97,794/- on account of undisclosed income in 3, Moti Dungri Alwar. The AO has failed to understand the provisions of section 55A alongwith rule 111AA. Hence, addition made on account of undisclosed investments of Rs. 97,794/- is deserved to be deleted. (ii) Under the facts and circumstances of the case order passed u/s 143(3) of the Income Tax Act, 1961 is illegal & bad in law s it is charged the interest u/s 234B & 234C on disclosed income Rs. 19,00,000/- seized during the course of search. ITA N....
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....ost bonafide, the estimate of the value of the house is bound to vary. Difference between cost of construction shown by the assessee and as determined by VO, being less than 15% the same is to be ignored for the purposes of the addition, more so when the construction was spread over a period of 7 years. The ratio of this decision is fully applicable in the present case and therefore, the addition confirmed by CIT(A) be deleted. Further, it was submitted that the DVO has ascertained the cost of construction by application of CPWD rates instead of local PWD rates. The Rajasthan High Court in case of CIT vs. Prem Kumar Murdia 296 ITR and 303 ITR 128 has held that where CIT(A) allow the deduction of 20% from the cost of construction estimated by DVO on account of difference in the cost on account of CPWD rates instead of local PWD rates which is confirmed by Tribunal, such finding of fact cannot be disturbed by the court. The CIT(A) has also observed that there is variation in the estimate of DVO due to adoption of CPWD rates instead of PWD rated but he has confirmed the addition only because assessee has not taken this argument. It is submitted that once the fact of variation in th....
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....valuer's report is so meager that one can assume it to be bonafide difference fit to be ignored." 2.4 In the instant case, it is not in dispute that the assessees have jointly purchased the land alongwith the building for Rs. 30 lacs and thereafter the construction was carried on over a period of 3 years. Further, it is correct that provisions of section 55A read with rule 111AA are not applicable in the instant case but at the same time, we agree with the ld AR that similar factual matter was under consideration before the Hon'ble Patna High Court in case of Bimla Singh (Supra) wherein the High court has allowed relief to the assessee in the matter of valuation of property. In the instant case, the difference in the cost of construction as determined by the assessee and as determined by the DVO is only 9.14% and the construction has spread over a period of 3 years. Further, given that the assessee has purchased the land alongwith building, the explanation of the assessee that they had used some of the building material recovered from the old building while constructing the new building appears to be bonafide. In light of this facts and following the decision of the Hon'ble Patn....
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....ering the adjustment of cash of Rs. 19 lacs seized in course of search and deposited in the PD a/c. 4.1 Briefly the facts are that a search was conducted on the assessee on 08.10.2009 and cash of Rs. 19 lacs was seized. At the time of filing of the return on 21.09.2010, the assessee shown said cash deposit as part of advance tax in the return of income and in the computation of income. However, AO didn't consider the said seized cash towards advance tax and the assessment order was passed on 27.12.2011 where interest u/s 234B and 234C was charged. In course of assessment proceedings, assessee again requested the AO vide letter dated 30.03.2011 to adjust the cash lying in the PD a/c against the advance tax liability. Subsequent to passing of assessment order and in response to application filed by assessee under section 154 of the Act, the AO finally adjusted this amount against the outstanding demand raised by him. Being aggrieved, the assessee raised additional ground before ld CIT(A) against charging of interest u/s 234B & 234C. The CIT(A) admitted the additional ground but referring to section 132B and the CBDT instruction dated 13.07.2006 held that seized cash can be a....
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....annot be adjusted against the advance tax liability. Further, ld DR drawn our reference to the decision of Hon'ble Madhya Pradesh High Court in case of Ramjilal Jagannath and others 241 ITR 758. 4.4 We have heard the rival contentions and pursued the material on record. The undisputed facts are that a search was conducted on 08.10.2009 at the premises of the assessee and cash amounting to Rs. 19 lacs was seized. The assessee while filing his return of income on 21.09.2010 considered Rs. 19 lacs towards advance tax payment. Subsequently the assessee vide letter dated 30.03.2011 requested for adjustment of cash against advance tax liability. The assessment was completed on 27.12.01 wherein the AO did not give credit for Rs. 19 lacs of seized cash against the advance tax liability and also levied interest u/s 234B & 234C of the Act. Subsequently, pursuant to rectification application u/s 154 of the I.T. Act, the AO accepted the adjustment of Rs. 19 lacs from PD account towards the tax liability but rejected the claim of the appellant for non-charging of interest u/s 234B and 234C of the Act. The ld. CIT(A) confirmed the levy of interest u/s 234B & 234 C of the Act and held that the....
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.... a specific authorization from the assessee. In the decided cases as referred above, it has been held that the assessee is entitled to the benefit of seized cash from the date of application made to the AO. In other words, a specific authorization is thus required to enable the AO to make such an adjustment. Further, reference can be drawn to provisions of section 245 of the Act which empowers the AO to adjust the refund against the sum remaining payable under this Act only after giving an intimation in writing to such person of the action proposed to be taken under that section and where such person can object to such adjustment. In other words, the AO is seeking the necessary authorization from the person to adjust the refunds against any other liability. Following the same principle, it would be essential that in respect of the cash seized, which belongs to the assessee, though lying with the department, the assessee authorizes the department to adjust the same against the advance tax liability. In the instant case the assessee has submitted that he has shown the cash seized amounting to Rs. 19 lacs towards advance tax payment in his return of income. Further the assessee has....