TaxTMI 
TaxTMI 
2014 (5) TMI 1183
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....earned CIT(A)-I has erred in law and facts in confirming the addition made by learned AO holding the investment in land of Rs. 173,000/- has been made out undisclosed sources of income. 4. Alternatively and without prejudice to the Ground of 1 to 3, the learned CIT(A)-I, Pune has erred in law and facts not appreciating the fact that the AO did not allow the deductions claimed for various expenditures, including land cost, depreciation on cars, while computing the taxable income." 5. Alternatively and without prejudice to the Ground of 1, 2 & 3 the learned CIT(A)-I, Pune has erred in law and facts in not giving effect of telescoping for the income declared during the course of search. 6. The appellant craves leave to add / delete / amend / modify all / any of the grounds. 2.1 In ITA No.2192/PN/2012 for A.Y. 2005-06, the assessee has filed the appeal on the following grounds. 1. The learned CIT (A)-I, Pune has erred in law and on facts in confirming the addition made by learned AO Rs. 4,65,000/- as against returned income of "Nil". 2. The learned CIT(A)-I has erred in law and facts in confirming the addition made by learned AO only on t....
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....preciating fact that the said declaration has been retracted by the appellant. 3. Alternatively and without prejudice to the Ground of 1 & 2, the learned CIT(A)-I, Pune has erred in law and facts in not giving effect of telescoping for the income declared during the course of search. 4. Alternatively and without prejudice to the Ground of 1 to 3, the learned CIT(A)-I, Pune has erred in law and facts not appreciating the fact that the AO did not allow the deductions claimed for various expenditures, including land cost, depreciation on cars, while computing the taxable income." 5. The appellant craves leave to add / delete / amend / modify all / any of the grounds. 2.4 In ITA No.1503/PN/2012 for A.Y. 2008-09, the assessee has filed the appeal on the following grounds. 1. The learned CIT (A)-I, Pune has erred in law and on facts in confirming the addition made by learned AO Rs. 68,95,430/- as against returned income of Rs. 25,88,485/-. 2. The learned CIT(A)-I has erred in law and facts in confirming the addition made by learned AO only on the basis of declaration made during the course of search without appreciating fact that the said d....
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.... by the Mr. Chachalni regarding the same. 7. Alternatively and without prejudice to the Ground of 1 to 6, the learned CIT(A)-I, Pune has erred in law and facts in not giving effect of telescoping for the income declared during the course of search. 8. Alternatively and without prejudice to the Ground of 1 to 7, the learned CIT(A)-I, Pune has erred in law and facts in not appreciating the fact that the AO did not allow the deductions claimed for various expenditures, including land cost, depreciation on cars, while computing the taxable income." 9. Alternatively and without prejudice to the Ground of 1 to 8, the learned CIT(A)-I, Pune has erred in law and facts in not giving effect of relief provided of Rs. 88,000/- while adjudicating in the final order and assessing income Rs. 1,70,96,830/- instead of 1,70,08,830/-. 10. The appellant craves leave to add / delete / amend / modify all / any of the grounds. 3. The assessee is an individual resident of Ravet, Taluka - Haveli, Dist - Pune, engaged in land transactions in Pimpri Chinchwad area of Pune. A search and seizure action was carried out at his premises on 13.08.2008 and numerous incriminati....
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.... assessee has admitted to have undisclosed taxable income of Rs. 2 crores for assessment years as detailed above. As stated above, the assessee has further admitted an undisclosed income of Rs. 6,93,000/- in the statement recorded u/s.132(4) on the next date i.e. 14.08.2008. Thus, total income declared by the assessee was Rs. 2,01,63,808/-. 3.2 In response to notice u/s 143(2), the assessee filed return of income u/s.153A on 12.10.2010 i.e. almost after 8 months of notice issued by the Assessing Officer on 11.02.2010. The Assessing Officer noted from the return filed by the assessee that the assessee has not filed return as admitted u/s.132(4) during search. The income declared by the assessee u/s.153A vis-à-vis the disclosure made, as noted above are as under: Sr. No. Asstt. Year Undisclosed income declared u/s.132(4) Income shown in the return u/s 153A 1 2003-04 --- --- 2 2004-05 --- Rs.Nil 3 2005-06 Rs.4.65 lakhs Rs.Nil 4 2006-07 Rs.4.5 lakhs Rs.Nil 5 2007-08 Rs.63.60 lakhs Rs.5,66,000 6 2008-09 Rs.105 lakh....
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.... basis of third party evidence available on record. However, the Assessing Officer has not allowed any further expenses commission, salary, etc. on assumption basis as the basis of income itself is based on evidences only, including oral and is clearly on net basis. Further, the additions over and above declared income u/s. 132(4) based on materials gathered by him during assessment and other seized materials not considered while giving statements u/s.132(4) for making declaration of undisclosed income of Rs. 2 crores as described above and also the details filed by the assessee while filing returns u/s.153A were made mainly in A.Y. 2009-10. The Assessing Officer has also considered the undisclosed household expenses in the light of the declaration made u/s 132(4) on 13.08.2008 wherein the assessee has admitted household expenses of Rs. 20 lakhs, donations (Denagi) of Rs. 20 lakhs and contributions (Vargani) of Rs. 20,47,000/- to various clubs and Mandals etc. The year wise bifurcations were not given to the Assessing Officer during assessment. They were also not considered in the reconciliation or returns. Instead, the assessee denied to have made any such expenditure during....
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....004-05 to 2006-07, the appeals of assessee were dismissed. Before us, the learned Authorized Representative has reiterated the submission made before authorities and submitted that the CIT(A) erred in law in confirming the additions made by the Assessing Officer against the return of income. The CIT(A) erred in confirming addition only on the basis of declaration made during the course of search without appreciating the fact that the said declaration has been retracted by the assessee. A similar ground has been taken by the assessee in all the years and requested to delete the additions in question. On the other hand, the learned Departmental Representative has raised various contentions to support the order of CIT(A) in all the above years. 4. We find that the assessee is an individual resident of Ravet, Taluka - Haveli, Dist - Pune also engaged in land transactions in Pimpri Chinchwad area of Pune. A search u/s. 132 was conducted on assessee's premises on 13.08.2008 and some documents were seized and the statement of assessee u/s.132(4) was recorded. It is undisputed that prior to the search, the assessee had not filed return of income, even the books of accounts were not avai....
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.... in para 3.5 of this order. 4.3 The CIT(A) confirmed all additions made by the Assessing Officer except for cash balance of Rs. 88,000/- in A.Y. 2009-10. While doing so, the CIT(A) has confirmed the stand of the Assessing Officer that the income declared in search should be taxable income of assessee, subjected to further addition / reduction. 4.4 With regard to justification of retraction, the stand of the assessee has been manifold. The learned Authorized Representative has submitted that a mistake in the declaration during search was due to incorrect bank credit summation which is matter of record. According to the learned Authorized Representative in general, books prepared by the assessee have not been rejected by cogent reasoning. The main emphasis of the assessee has been that agricultural activity and related income was bonafide one as a source of initial funds. The source of agricultural income ought to have considered the overall quantification of income. The addition has been made on the basis of search statement alone, which is not justified. According to the Assessing Officer, the disclosure promise during search u/s.132(4) has not been fulfilled. While, ac....
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....Representative before us. 4.6 For A.Y. 2004-05, source of funds for Ghanawat land deal were claimed from agricultural income and gift from relatives. The Assessing Officer in para 7.2 of pages 11 & 12 has observed that the agricultural income was not sufficient considering Ghanawat land deal, hence, the said argument was not accepted. While in appeal, the CIT(A) in para 13, page 22 observed that considering the lavish life style of assessee, the agricultural income of Rs. 1.95 lakhs was not sufficient to explain the source of land payment. In this background, the stand of the assessee has been that the amount payments recorded in books of accounts, agricultural income was bonafide and gifts have not been doubted, so the addition in question was not justified. Thus, the authorities below have taken contradictory stand while rejecting the stand of assessee. In fact, it should be analysed as per fact put forward by the assessee on the point and authorities below should have appreciated the fact before reaching any adverse opinion that too mainly based on admission of assessee. 4.7 For A.Y. 2005-06, the stand of the assessee has been that actual bank summations are Rs. 1.76 lakhs....
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.... was raised for A.Y. 2008-09. Regarding A.Y. 2009- 10, the learned Authorized Representative has submitted that the valid cash source exists for Rs. 15 lakhs paid to Ms. Kavita Kajale on 03.05.2008. The Assessing Officer observed at page 22 of its order that the payment of Rs. 15 lakhs was not reflected in books and the assessee's explanation was not accepted. In appeal, in this regard, the CIT(A) has observed that at this stage, the explanation could not be considered in view of rule 46A since this claim was not made before the Assessing Officer. In this regard, the stand of the assessee has been that the transaction of sale of Lexus car was stated in search statement itself. The telescopic effect on the said receipt ought to have been given. Confirmation of receipt of Rs. 15 lakhs was given by Mr.Chaslani and the same was produced before the CIT(A). In this background, the CIT(A) was not justified in rejecting contentions of assessee while upholding the addition made by the Assessing Officer. This aspect needs deep probe into the matter on the issue. 4.9 With regard to the other addition i.e. Rs. 32.50 lakhs received from Mr. Sonigra, the stand of the assessee has been that....
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.... given by Sonigra. However, the assessee claimed to be not aware of the fact that statement of Sonigra, which has been taken on record. Copies of the statement were not provided and crossexamination opportunity was also not provided. In this background, the argument of the assessee has been that in all the years involved, the Assessing Officer has decided to make taxable income on the basis of declaration made during search. At the time of search, the declaration of income was based on bank statement plus seized papers found during search. Further, the bank transactions summary was prepared by search party only. In the absence of any clarity, the assessee has made declaration of income at relevant point of time. However, once books of accounts were prepared, the mistake was realized by the assessee. Hence, declaration was retracted. The Assessing Officer could have verified the reconciled income prepared by the assessee which was contrary to the income summary prepared at the time of search with books of accounts prepared by search party. Specially so when the Assessing Officer has also accepted the reconciliation of differences as discussed above. As such, the Assessing Officer ma....