2019 (5) TMI 1000

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....re action under s.132 of the Act in the business and the residential premises of the assessee on 18/03/1997, the assessee was allegedly found to be owner of undisclosed income of Rs. 96,35,468/- by the Assessing Officer. The CIT(A) in the first appeal in quantum proceedings, revised the aforesaid undisclosed income of the assessee to the extent of Rs. 95,97,832/-. The aforesaid quantum order of the CIT(A) was challenged by the assessee before ITAT. The ITAT vide its order dated 20/11/2017 in IT(ss)A No.33/Ahd/2009 for the block period from FY 1987-88 to 18/03/1997 set aside the basis for making the addition towards unaccounted income in a fundamental manner. The ITAT however, retained the addition of Rs. 25 lakhs on pure estimation basis to put an end to the litigation cropped up. It will be apt to reproduce the quantum order for ready reference. 1. With this appeal, the Assessee has challenged the correctness of the order of the ACIT, Anand Circle framed u/s. 158BC r.w.s. 143(3) and 254 of the Act. 2. This is the second round of litigation. In the first round of litigation, the assessment was framed u/s. 158BC r.w.s. 143(3)of the Act for the block period from ....

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..... No. 488/1, Anand 202000 27 Unaccounted Dalali 11000 28 Unaccounted investment in 7.08 guntha of land at R.S. No. 582/4, Navli 3500 29 Unaccounted investment in 16.19 guntha at R.S. No. 1863, Bakrol 25000 30 Unaccounted investment in 71.84 guntha of land at R.S. No. 180 & 183 51000 31 Unaccounted investment in 220.36 guntha of land at R.S. No. 311, 320, 368 5000 32 Unaccounted investment in 78 guntha of land at R.S. No. 1131/12B, Anand 2500 33 Unaccounted investment in 43,03 guntha of land at R.S. No. 1280/1,2,3, 42000 34 Unaccounted investment in 25.29 guntha of land at Revenue Survey No. 161 of Jitodia 25000 35 Unaccounted investment in Share & NSC 19000 36 Unaccounted advances through promissory note 600000 37 Unaccounted business profit as per Annexure A/6 (residence) 4620688 38 Unaccounted gold ornaments 263340 39 Unaccounted investment in KVP / FD and others as per Annexure K, L, M. 250712 40 Unaccounted investment in household valuables 167636 41 Unaccounted deposits in Bank account of the assessee 75000 42 Unaccounted investment in....

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...., it is equally true that there is not even a single evidence which could show that the assessee was the owner of the impugned properties. It appears that the assessee was acting as a conduit between the purchasers and the sellers of the disputed land as a broker. 7. Our view is fortified by the fact that one register A-6 was found at the time of search which contain notings in respect of purchase of land from various parties. The entries on the debit side reflected the payment made to the land owner and the entries on the credit side represented the money received from the purchaser. The total of the receipt side was Rs. 1,46,32,959/- whereas the payments aggregated to Rs. 1,00,18,271/-. The A.O. has added the difference of Rs. 46,20,688/- as unaccounted business profits of the assessee in addition to the amounts found paid as per the Banakhats. 8. The entries in the register appears to be pertaining to the Banakhats found at the time of search on the basis of which the Assessing Officer has made the additions as exhibited in the chart elsewhere. The contention of the assessee was dismissed merely because the amounts did tally but the dates did not. ....

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....rave;-vis the contentions of the assessee and pointing out that further verification would not result into any purposeful and meaningful result after a gap of 20 years, Therefore, to put an end to the litigation an addition of Rs. 25 lakhs should meet the ends of justice on the given peculiar facts of the case in hand. 14. We accordingly direct the A.O. to restrict the additions to Rs. 25 lakhs which will cover all the related unexplained investments as alleged by the A.O. 15. Appeal of the Assessee is partly allowed." 4. From the appellate order of the Co-ordinate Bench in quantum proceedings, it is crystal clear that additions towards undisclosed income has been sustained in the hands of the assessee purely on estimated basis having regard to the peculiar facts and circumstances of the case. A question thus arises as to whether penalty under s.158BFA(2) is justified where alleged undisclosed income was finalized on the basis of estimation alone. A perusal of provisions of section 158BFA demonstrates that legislature has used different phraseology in subsection( 1) and sub-section(2) thereof whereby while the payment of interest under s.158BFA(1) is mandatory,....