TaxTMI 
TaxTMI 
2011 (4) TMI 1506
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....ney-lending business and real estate brokerage. The business is carried on under the name and style of "Tex B Securities (P) Ltd." A search u/s 132 was carried out in the residential premises of both the persons on 16-05- 2007. A survey u/s 133A was also carried out in the business premises of M/s. Tex B. Securities (P) Ltd. In the course of search, cash of Rs. 65 lakhs was found and seized from the residence of Shri Duraipandi. Another sum of Rs. 1 crore was found and seized from the bank locker of Punjab National Bank at Anna Nagar held in the name of Shri Duraipandi. 4. Consequent to search operations under section 132, investigations and enquiries were made by the authorities. Shri S. Duraipandi and Shri S. Thalavaipandian explained that the business had been carried on by them jointly in the capacity of AOP. The AOP has the Permanent Account Number. But it was seen that the AOP has not been filing any regular returns of income. The assessing authority processed the seized materials and sought for details from the assessee. The assessee had not maintained regular books of accounts. But statements of accounts were finally prepared using tally software on the basis of details ....
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.... 8. The position of the agricultural income as per the order of the CIT(A) is reproduced below : Asst. Year Agricultural income returned by the assessee & disallowed by the Assessing Officer Agricultural income accepted by the CIT(A). Disallowance of agricultural income confirmed by the CIT(A) 2002-03 Rs. 54,95,000 Rs. 22,00,000 Rs. 32,95,000 2003-04 Rs. 87,15,000 Rs. 22,00,000 Rs. 65,15,000 2004-05 Rs. 36,05,000 Rs. 22,00,000 Rs. 14,05,000 2005-06 Rs. 40,95,000 Rs. 22,00,000 Rs. 18,95,000 2006-07 Rs. 43,05,000 Rs. 22,00,000 Rs. 21,05,000 2007-08 Rs. 47,25,000 Rs. 22,00,000 Rs. 25,25,000 9. The first point of dispute, therefore, in this case is the issue of agricultural income to be determined or not to be determined in the hands of the assessee- AOP. The grounds raised by the Revenue in their appeals are that the CIT(A) has erred in accepting, even though partially, the contention of the assessee that it had earned substantial agricultural income during the period relevant to the assessment years 2002-03 to 2007-08. It is the case of the Revenue that the CIT(A) has grossly erred in treatin....
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....years 2007-08 and 2008-09, but deleted by the CIT(A). These additions had been made by the Assessing Officer in the light of the papers found and seized in the course of search, attributable to Ms. Jayanthi Krishnamurthy. As observed by the assessing authority, the said seized papers reflected a number of transactions totaling to Rs. 10.19 crores having received by Shri S. Duraipandi and Shri S. Thalavaipandian. These receipts were made in the months of March and April, 2007. When this matter was put to Shri S. Duraipandi, it was stated that the amounts were received from one Ms. Jayanthi Krishnamurthy. He also stated that Ms. Jayanthi Krishnamurthy had entrusted the amounts for safe custody. The Assessing Officer further observed that, if so, no proof is available regarding the return of those amounts to Ms. Jayanthi Krishnamurthy. But at the same time Ms. Jayanthi Krishnamurthy stated before the assessing authority that no such amounts were paid by her either to Shri S. Duraipandi or his family members. On the other hand, she stated that she had been receiving payments from Shri S. Duraipandi and others against the sale of her properties including the on-money of Rs. 2.5 crores. ....
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....furnished by the concerned persons, the assessee-AOP has no role in the episode of land transaction involving the sale of land by Ms. Jayanthi Krishnamurthy. The land transaction seems to be entered into between individuals in their individual capacities. When there is no nexus between the assessee-AOP and the land transaction, it is not possible to hold the assessee responsible to account for the income arising out of such property transaction. There is nothing unusual in locating the relevant papers in the business premises of M/s. Tex B. Securities as Shri Duraipandi is also the soul and substance of the said business of the AOP. 18. In the facts and circumstances of the case, we uphold the order of the CIT(A) deleting the additions of Rs. 4.90 crores and Rs. 5.29 crores for the assessment years 2007-08 and 2008-09. 19. The next issue raised by the Revenue in its appeals for the assessment years 2007-08 and 2008-09 is on the question of addition of Rs. 5.50 lakhs and Rs. 50 lakhs on the ground that the amounts had been paid to Ms. Jayanthi Krishnamurthy. The assessee was asked to explain how the payment was made to Ms. Jayanthi Krishnamurthy. According to the Assessing Off....
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....assessee has already offered Rs. 1.4 crores as unexplained cash credit. He found that the amount offered by the assessee at Rs. 1.4 crores has created such source in the hands of the assessee and to that extent the Assessing Officer was not justified in making additions. He found that the total of the additions made by the Assessing Officer was Rs. 1,81,28,500/- and the income offered by the assessee was Rs. 1.4 crores. The CIT(A) held that the differential amount of Rs. 41,28,500/- alone could be added in the hands of the assessee. 23. Accordingly, he modified the addition of Rs. 1,81,28,500/- (being the sum of Rs. 1,63,45,000/- and Rs. 17,83,500/-) to Rs. 41,28,500/- . We are inclined to agree with the finding of the CIT(A) as the relevant arithmetics are very clear as apparent from the records of the case. The assessee has already offered Rs. 1.4 crores as income and in such circumstances the assessing authority was not justified in ignoring such an offer made by the assessee and to go for further independent additions. 24. In such circumstances, the CIT(A) has rightly given credit for the amount of Rs. 1.4 crores and reduced the addition to the extent of Rs.. 41,28,500/-.....
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....pages 27 to 31 of his order. 29. In the income and expenditure statement filed by the assessee along with the return of income it has claimed deduction by way of bad debts to the extent of Rs. 2,01,64,838/-. The bad debts were generated out of the loans advanced by the assessee in its ordinary course of business. When asked for the details, the assessee had furnished the details of the parties whose debts had become bad. But the claim was disallowed by the Assessing Officer on the ground that the details were not furnished by the assessee and no steps were taken by the assessee to recover the debts. In the first appeal the CIT(A) held that the facts of the case are comparable to the facts of the case considered by the Hon'ble Supreme Court in the case of TRF Ltd. v. CIT (323 ITR 397) and therefore the claim made by the assessee towards bad debts should be allowed as a deduction. 30. On a reading of the relevant orders of the lower authorities we find that the assessee has written off the debts treated to be bad in its books of accounts and thus claimed the bad debts as an item of deduction in computing its income. The case of the assessing authority is not on that basic f....