TaxTMI 
TaxTMI 
2017 (9) TMI 1864
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....appeal before the stipulated time. Therefore, we condone the delay and admit the appeal. 3. Let's first take I.T.A. No.216/Mds/2013. 4. Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee is engaged in the business of trading in PVC pipes & fittings and G.I. pipes & fittings in the name and style of Pavender Agency at Erode. According to the Ld. counsel, there was survey operation in the premises of the assessee under Section 133A of the Income-tax Act, 1961 (in short 'the Act') on 17.11.2009. Consequent to the survey operation, a notice under Section 148 of the Act was issued on 31.01.2011 for reopening the assessment under Section 147 of the Act. During the course of survey operation, according to the Ld. counsel, the Revenue authorities claimed to have found two receipts with regard to purchase of land from one Shri S.I. Basheer Ahmed. As per the sale agreement, the assessee agreed to purchase 57.38 acres of land at Senkulam Village, K. Abisekapuram, Trichy. According to the Ld. counsel, Shri Basheer Ahmed was also examined by the Revenue authorities during the course of survey operation. The Revenue authorities found that there was a differ....
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....d during the course of survey operation. The sale agreements were for Rs. 2 Crores and Rs. 11 Crores for an area of 7.38 acres and 50 acres of land respectively situated at Senkulam Village, K. Abisekapuram, Trichy. The cash receipt impound discloses the receipt of all the money by Shri Basheer Ahmed apart from balance of Rs. 10,62,00,000/- for the extent of 57.38 acres. According to the Ld. D.R., Shri Basheer Ahmed was also examined. He admitted the correctness of receipts found during the course of survey operation. The assessee admitted a sum of Rs. 1 Crore during the course of survey operation. Therefore, according to the Ld. D.R., there was a difference of Rs. 1.38 Crores. 7. The Ld. Departmental Representative further submitted that in the statement given by the assessee, he admitted that Rs. 50 lakhs was paid as per agreement dated 27.04.2005 and another Rs. 25 lakhs was paid as per agreement dated 11.06.2005. The assessee has also agreed that a sum of Rs. 25 lakhs was paid during the financial year 2005-06. According to the Ld. D.R., since the assessee is no more, the assessee's one Shri R. Ravanan appeared before the Assessing Officer on 16.12.2011. Shri Basheer Ahmed ....
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....has not received any money as per original agreement impounded during survey operation on 17.11.2009. In fact, the CIT(Appeals) has observed as follows:- "As seen from the receipt impounded as No.3, there is no date mentioned regarding the amounts received by Shri S.I. Basheer Ahmed. The receipt is nil dated. Even during the course of interrogation by the Assistant Director of Investigation, Trichy, Shri S.I. Basheer Ahmed stated that he has not received any money as per the original agreement impounded during the survey conducted on 17.11.2009." 10. In view of above observation of the CIT(Appeals), it cannot be said that the assessee has paid Rs. 2.38 Crores to Shri Basheer Ahmed. When Shri Basheer Ahmed denied the fact of receipt of money, it cannot be concluded that the assessee has paid Rs. 2.38 Crores to Shri Basheer Ahmed. As per the observation made by the lower authorities, agreement for sale was for sale of property after disposal of cases pending before Principal Sub-Judge at Trichy. When the matter was pending before the Principal SubJudge for adjudication and the power of attorney, who entered into the agreement, claimed that he has not received any money, th....
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....h the authorities below are quashed and the appeal of the assessee in I.T.A. No.217/Mds/2013 stands allowed. 14. Now coming to I.T.A. No.1315/Mds/2016. This appeal relates to assessment year 2006-07. 15. Shri S. Sridhar, the Ld.counsel for the assessee, submitted that admittedly there was search operation in the case of M/s Bharani Pipes & Tubes (P) Ltd. on 18.11.2011. A simultaneous search was also conducted in the premises of the Managing Director of the company Shri R. Ravanan and other Directors. According to the Ld. counsel, on the date of search, i.e. on 18.11.2011, the assessment proceeding on the basis of notice issued by the Assessing Officer under Section 148 of the Act was pending, therefore, the pending assessment proceeding after reopening would abate and the Assessing Officer has to complete the assessment under Section 153C of the Act. Referring to the allegation made by the Assessing Officer, the Ld.counsel submitted that the power of attorney agent of the purchaser Shri Basheer Ahmed admitted that he has not received any money as stated in the agreement. According to the Ld. counsel, the assessee himself disclosed a sum of Rs. 1 Crore, therefore, in the absen....
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....ri Basheer Ahmed. The assessment proceeding being a judicial proceeding, this Tribunal is of the considered opinion that addition has to be made only on the basis of concrete evidence. Presumption and surmise have no role to play in judicial proceeding. Therefore, the addition of Rs. 2.38 Crores made by the Assessing Officer as confirmed by the CIT(Appeals) cannot stand before the scrutiny of law. Accordingly, the orders of both the authorities below are set aside and the addition of Rs. 2.38 Crores is deleted." 18. In view of the above, there cannot be any addition on the basis of surmise and presumption. In the absence of concrete evidence for payment of Rs. 2.38 Crores, the addition made by the Assessing Officer as confirmed by the CIT(Appeals) cannot stand in the eye of law. Accordingly, the orders of both the authorities below are set aside and the addition of Rs. 2.38 Crores is deleted. 19. Now coming to I.T.A. No.1316/Mds/2016, the first issue arises for consideration is addition of Rs. 27,40,939/- in respect of sundry creditors balances. 20. Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee claimed trade creditors to the extent of Rs. 2,0....
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....herefore, it cannot be sustained. According to the Ld. counsel, the assessee claimed before the Assessing Officer that the loans were borrowed from close relatives. Since the relationship was not good, they could not furnish the details before the Assessing Officer. Therefore, according to the Ld. counsel, the addition made by the Assessing Officer cannot stand in the eye of law. 25. On the contrary, Smt. Ruby George, the Ld. Departmental Representative, submitted that the assessee disclosed Rs. 11,89,000/- as loan creditors in the statement of accounts. However, the assessee could not prove the loan creditors. Even the details of loan creditors were not furnished before the Assessing Officer and the CIT(Appeals). Even before this Tribunal, according to the Ld. D.R., no materials were produced to indicate that the loans were borrowed from close relatives. 26. We have considered the rival submissions on either side and perused the relevant material available on record. It is not in dispute that the statement reflected loan creditors to the extent of Rs. 11,89,000/-. The details of creditors were not furnished before the Assessing Officer and the CIT(Appeals). Moreover, such de....
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....s of the considered opinion that there cannot be any addition. Moreover, when the assessee is found to be in joint family, the drawing of the other members of the family is also to be taken into consideration. In the absence of any material found during search, the addition of Rs. 3 lakhs cannot stand in the eye of law. 30. Now coming to assessee's appeal in I.T.A. No.591/Mds/2016. 31. The first issue arises for consideration is with regard to unexplained payment of Rs. 90 lakhs. 32. Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the Assessing Officer found that the assessee has paid a sum of Rs. 30 lakhs to each of his three sisters, namely, Smt. Tamilarasi, Smt. Tamilselvi and Smt. Tamilkodi, for relinquishment of their right over the common family property. According to the Ld. counsel, in fact, only Rs. 10,50,000/- was paid to three sisters and the assessee's mother, which was reflected in the cash flow statement for the assessment year 2011-12. The seized receipt is undated and unsigned. Therefore, according to the Ld. counsel, it cannot be relied upon for the payment said to be made to the assessee's sisters. In fact, the payment was made as per the re....
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....payment of Rs. 10 lakhs and another payment of Rs. 50,000/- totalling to Rs. 10,50,000/-, this Tribunal is of the considered opinion that there cannot be any dispute about the receipt of money. The execution of release deed is also not in dispute. Therefore, it is not permissible for the parties to lead evidence, disputing the contents of the registered release deed. In other words, the contents of the release deed cannot be controverted on any oral evidence. 35. The question now arises for consideration is when there is oral evidence for payment of Rs. 30 lakhs to each of the sisters and the registered release deed discloses payment of Rs. 10,50,000/-, which one would prevail? This Tribunal is of the considered opinion that the oral statement or evidence cannot override the registered release deed. The registered release deed would prevail over all the oral evidence available on record. Moreover, the sisters, who were said to be examined under Section 131 of the Act, have also filed affidavit denying they have not received Rs. 30 lakhs. This affidavit is in conformity with the registered release deed. Therefore, this Tribunal is of the considered opinion that the oral statement ....
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.... allowed in the absence of any evidence. Therefore, the CIT(Appeals) has rightly confirmed the addition made by the Assessing Officer. This Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. 40. Now coming to assessee's appeal in I.T.A. No.590/Mds/2016, the only issue arises for consideration is addition of Rs. 13,67,995/-. 41. Shri S. Sridhar, the Ld.counsel for the assessee, submitted that during the course of search operation, gold jewellery weighing about 1710.370 gms was found. The value of the gold jewellery was estimated by the valuer at Rs. 45,99,185/-. According to the Ld. counsel, the assessee explained before the Assessing Officer that about 100 sovereigns of gold jewellery belonging to his wife which was received by her as Sridhan property at the time of marriage. The assessee further explained that the value of gold jewellery for the assessment year 2011-12 was Rs. 70,900/- and for assessment year 2012-13, it was Rs. 94,480/-. According to the Ld. counsel, the Assessing Officer, however, estimated the unexplained gold jewellery at Rs. 28,38,965/-. After taking into consideration the declaration ....
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....hat the assessee admitted before the Assessing Officer during examination under Section 134 of the Act that his undisclosed income for purchase of gold jewellery was to the extent of Rs. 28,38,965/-. 44. The exemption claimed by the assessee under CBDT circular is only for seizure of gold jewellery during the course of search operation. As rightly submitted by the Ld. Departmental Representative, it does not absolve the assessee from explaining the source for acquisition of such jewellery. Therefore, the CBDT circular would not come to the rescue of the assessee. The assessee is expected to explain the source for acquisition of jewellery found during the course of search operation. Since proper explanation was not offered, this Tribunal is of the considered opinion that the Assessing Officer has rightly treated Rs. 13,67,995/- as unexplained investment of the assessee in gold jewellery, under Section 69A of the Act. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. 45. Now coming to Revenue's appeal in I.T.A. No.568/Mds/2016. 46. The only issue arises for consideration is addition of....
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....unted purchases, therefore, the income has to be estimated. According to the Ld. counsel, the assessee is doing business on credit basis and the payments for purchases were made on realising the sale consideration, therefore, the profit on unaccounted sale of Rs. 35,15,071/- has to be estimated at 10%. 49. We have considered the rival submissions on either side and perused the relevant material available on record. The Assessing Officer claimed that there were unaccounted purchases to the extent of Rs. 35,15,071/- made outside the books. This fact is also admitted by the assessee. The assessee claims that unaccounted sales to the extent of Rs. 69,42,895/- was disclosed in the balance sheet. The CIT(Appeals) found that even though the assessee has not fully disclosed the purchases in the books of account, the addition of an amount equivalent to 10% representing the gross profit has to be made and addition of Rs. 35,15,071/- tantamount to double addition. The CIT(Appeals) has also found that the assessee himself has taken into account the profit on unaccounted sales while calculating the gross profit, therefore, even the 10% need not be added. This factual aspect is not in dispute.....
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....l do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. 54. Now coming to Revenue's appeal in I.T.A. No.1443/Mds/2016. 55. In this appeal, the Revenue challenges the order of the CIT(Appeals) wherein relief was given to the extent of Rs. 32,40,977/-. 56. Smt. Ruby George, the Ld. Departmental Representative, submitted that the Assessing Officer made addition of Rs. 32,40,977/- under the head "Income from business". However, the CIT(Appeals) directed the Assessing Officer to give telescoping to the extent of Rs. 32,40,977/- towards addition made under the head "Business income" in respect of income under the head "Other Sources". According to the Ld. D.R., the income under the head "Profits and Gains of Business or Profession" admitted by the assessee, including the income from KAS Nagar project, is different and distinct from the income under the head "Income from Other Sources" admitted separately by the assessee in the return of income. Therefore, according to the Ld. D.R., it cannot be set off or telescoped against the income from business. In the cash flow statement filed by the assessee for the period from 01.04.....