TaxTMI 
TaxTMI 
2012 (2) TMI 686
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....rcumstances of the case, the learned CIT(Appeals) erred in deleting the disallowance of Rs. 24,15,160/- made u/s. 40A(3) of the I.T. Act 1961 by the Assessing officer. 4) That, the learned CIT (Appeals) erred in law in holding that disallowance cannot be constituted as undisclosed income within the definition of Sec. 158B of the I.T. Act. 5) That, the learned CIT(Appeals) erred in law in holding that disallowance of u/s. 40A(3) in block assessment was outside the ambit of chapter XIV -B of the I.T. Act ignoring provision of Sec. 158BH of Chapter XIV-B 6) That, on the facts and in the circumstances of the case, the learned CIT(Appeals) erred in deleting the addition of Rs. 3,99,763/- made by the Assessing Officer in sale of Flat No. 10 of "Pratisha Apartment" and Flat No. 10 of "Pranav Apartment". ". 2. We have heard and considered the arguments advanced by the parties and have gone through the orders of the authorities below, material available on record and the decisions relied upon. Ground Nos. 1 & 2 3. The relevant facts are that the assessee firm engaged in the business of builders was subjected to search operation u/s. 132 of the Act on 25th....
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....onveyance deed dt. 10-11-1998 in respect of plot No. 33 were not signed by Shri Jitendra M. Thakkar as he had no concern or right or interest in respect of plot No. 33. 3.1. The seized document marked No. A-2 showed that the assessee firm had made cash payments in respect of several plots taken up by the assessee firm for development and construction and such cash payments were found to be over and above the consideration recorded in the agreement in respect of those plots. Against the entries for such cash payments the name of Shri Narendra M. Thakkar, the brother of Shri Jitendra M. Thakkar, was written. The assessee firm had filed affidavits during the course of assessment proceedings stating that since Shri Jitendra M. Thakkar was hlding the power of attorney in respect of the land bearing survey No. 705/2/1 owned by Maharashtra Prabhodhan Seva Mandal, the negotiations for the plots of the said land were made with Shri Narendra M. Thakkar and the cash payments were made to him as on money consideration for the said plots. Hence the assessee had argued that such cash payments appearing in the seized documents should be allowed as expenditure in the computation of undisclosed ....
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....ra M. Thhakkar. This argument was relied by CIT(A) without they being any confirmation of Shri Paraji Abaji Karanjkar in the seized document or without any confirmation of Shri Paraji Abaji Karanjkar in the seized document or without any confirmation of Shri Paraji Abaji Karanjkar filed by the assessee. 4. In support of the grounds, the ld. D.R. has basically placed reliance on the assessment order. The Ld. D.R. on the other hand tried to justify the first appellate order. The ld. A.R. reiterated the submissions made before the authroties below. 5. Considering the submissions, we found that the issue involved is as to whether these specific payments made towards plot No. 33 as evident from Annexure A2 seized during the course of search should not be allowed to be set off all against "on-money" receipt on sale of flat in respect of "Pratikshah project" on plot No. 33 as evident on page Nos. 79 & 83 of Annexure A2. The A.O has taken cognizance of the "on-money" receipts and the corresponding entry of "on-money" payment has been ignored by him on the excuse that the name of the seller does not appear on it. The contention of the assessee remained that Shri. Jitendra M. Thakker, ....
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....t is an established proposition of law that cognizance to be given to the contents of all the seized documents to determine undisclosed income. The existence of cash payments of Rs. 26,09,350/- in respect of "Pratikshah project" on plot No. 33 is clearly evident from the sized document Annexure A2 and A9 which has not been doubted by the A.O. Under these circumstances, we are of the view that Ld CIT(A) has rightly come to the conclusion that the said expenses pertaining to the plot No. 33 have to be necessarily allowed against the total "on-money" receipts for "Pratikshah project" on plot No. 33. We thus uphold the action of the Ld CIT(A) in directing the A.O to allow the deduction of Rs. 26,09,350/- against the "on-money" receipts declared on "Pratikshah project" on plot No. 33 at Nashik. The Grounds 1 & 2 involving the issue are thus rejected. Ground No. 3 to 5 6. The relevant facts are that there were unrecorded cash expenses of Rs. 1,63,40,920/- and un-recorded cash receipts of Rs. 2,33,51,150/- as per seized records and after setting off other miscellaneous expenses, the balance amount of Rs. 50 lakh was offered as undisclosed income in the block return. The A.O., out of....
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....relied upon by the Ld. D.R all ingenuine payments were made whereas in the present case, the A.O has accepted cash receipt and cash expenses as genuine transactions which the assessee had actually entered during the block period in question. He submitted further that there is no binding decision of the Hon'ble jurisdictional High Court on the issue and in case different views have been expressed by different High Courts on an issue, that fabourable to the assessee will be followed. In this regard, he placed reliance on the decisions of Hon'ble Supreme Court in the cases of CIT Vs. Vegetable Products (1973) 88 ITR 192 (SC), and CIT Vs. Podar Cement Pvt. Ltd. (1997) 226 ITR 625 (SC). 9. Considering the above submissions, we find that the ld CIT(A) have decided the issue in favour of the assessee following the decision of Nagpur Bench of the Tribunal in the case of Sadhuram Wadhwani (Supra) holding that the disallowance u/s. 40A(3) in the block assessment was outside the ambit of chapter XIV B of the I.T. Act. The Ld CIT(A) has discussed several decisions relied upon before him including the decisions of Pune Bench of the Tribunal in the case of Janata Tiles, 66 TTJ 695 (Pune) and ....
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....lian was a regular supplier of bricks, sand, cement etc., and thus with him there was business relation and thus the flat was sold at the agreement value itself. Similarly in respect of flat sold to Shri. Yogesh Dharaskar, it was explained that he was painting contractor and with him also business relations were there and the flat was sold to him at the agreement value itself. After discussing the issue in detail, the Ld CIT(A) has deleted the addition merely on the basis that in block assessment, no addition can be made on estimation and without support of any seized material in corroboration. 11. In support of the ground, the ld. D.R. has basically placed reliance on the assessment order whereas the ld. A.R. has relied upon the first appellate order on the issue. 12. Having gone through the orders of the authorities below on the issue, we fully concur with the finding of the Ld CIT(A) supported by the decisions relied upon before him that addiion made by the A.O based on presumption and surmises despite non-existence of any incriminating seized documents is not in conformity with the provisions of Sec. 158BB of the Act. We find that in the present case, it is an admitted fa....