TaxTMI 
TaxTMI 
2019 (6) TMI 1443
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.... (I) Amount of Rs. 86,44,340/- (1) On the facts and circumstances of the case and as per law, the learned Commissioner of Income tax (Appeals) was not justified confirming of addition of Rs. 86,44,340/- made solely on the basis of computer printout without any evidence and ignoring the statement of Shri Kishan Salia accepting the above transaction. (2) The appellant further submits that the presumption under section 292C of the Act is rebuttable presumption and this having been effectively discharged by the appellant, there was no basis for confirming the above addition. (3) Without prejudice to the above, the appellant submits that the appellant submitted that if addition is made on the basis of computer print-out, then the whose printout should be seen and outgo mentioned therein should also be considered. (II) Loan of Rs. 5,72,000/- (1) On the facts and circumstances of the case and as per law, the learned Commissioner of Income-tax (Appeals) was not justified in making addition of Rs. 5,00,000/- from four persons and interest of Rs. Rs. 72,000 thereof. (2) The appellant further submits that the presumption under secti....
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....Miscellaneous:- On the facts and circumstances of the case and as per law, no interest should be charged, as the Assessing Officer has not specified to which interest is chargeable. 3. Ground No.(I): relates to confirm of addition of Rs. 86,44,340/- allegedly based on computer printout. 4. Briefly stated the facts of the case are that a survey under section 133A was conducted in the case of the assessee on 26.03.2009. During the course of survey proceedings, books of accounts/documents found have been inventoried and impounded. These papers were in the nature of cash memo in which monthly receipts were noted The AO has worked out the monthly cash receipts on the basis of these cash memo impounded during the course of survey proceedings as under:- SN Cash Memo Total Receipts 1 April,2008 1,64,12,500 2 May 3,38,82,000 3 June 2,95,450 4 July 68,21,000 5 August /September Back up 2,63,69,300 6 September 59,95,000 7 October 1,81,59,000 8 December ,2008 1,20,000 9 TOTAL 10,80,54,250 5. Thus, the total of the cash receipts mentioned above is worked out at Rs. 10, 80, 54,....
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....able to the assessee. The assessee has again repeated same submissions as made in appeal and claimed that print out are not cogent evidence as per section 62 of Indian Evidence Act. However, Ld. CIT(A) observed that the definition given in respect of books of accounts as per provisions of section 2(12A) of Income Tax Act,1961 means "books of accounts" includes ledgers, daybooks, cash books, account-books and other books, whether kept in the written form or print- outs of data stored in a floppy, disc, tape or any other form of electro - magnetic data storage device.". Therefore, CIT(A) observed that the contention of the assessee that books of accounts and other impounded material do not belongs to him and does not pertains to relevant assessment year is devoid of facts and merits. The books of accounts were found and impounded during the course of survey proceeding. The deeming provisions of section 292C(1) laid down that during the survey or search, if any books of accounts found in possession or control of any person, is presumed that such books of accounts or documents belongs to such person and the content of such books of accounts and other documents are true and correct. The....
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....uring appellate proceedings before ITAT, the Tribunal held that section 292C provides for a presumption as to the truth of any document found during search for the money recovered from assessee is belonging to the assessee. In view of these facts and discussion, the CIT(A) has held that it is clear and evident that the appellant has failed to produce the primary books of accounts for verification before the assessing officer, in spite of several opportunities. The CIT(A) observed that the appellant has also relied on few case laws which are distinguishable on the facts and circumstances of the case and the ratio of the judgement are not applicable in the instant case. The appellant has failed to discharge the burden of proof regarding the receipts found recorded in the books of accounts. The expression "burden of proof" really means two different things. It means sometimes that the party is required to prove an allegation before judgement can be given in in his favour. It also means that on a contested issue, one of the two contending parties has to introduce evidence. In the first sense, if the burden is not discharged, the party must eventually fail. In the second case, where the....
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.... are submissions of the assessee dated 26.12.2011 where the assessee has disowned the computer printout. Similarly, the assessee has vide reply dated 05.12.2012 filed explanation with the AO. However, the AO has made addition without making further enquiry. Therefore, addition so made without corroborating evidences is bad in law. The learned counsel for the assessee supported his argument by placing reliance in the case of ACIT v. Styapal Wassan [2007] 295 ITR(AT) 352 (Jab). 9. On the other hand, the Ld. CIT (DR) relying on the orders of lower authorities submitted that the addition has been rightly made by the AO and the Ld. CIT(A) has rightly upheld it. Further, the learned counsel for the assessee is not able to explain the entries appearing in impounded documents during the course of survey. Therefore, the learned counsel for the assessee has claimed set-off of this addition against the addition in subsequent grounds, which means the assessee is accepting that addition has been correctly sustained. 10. We have heard the rival submissions and perused the relevant material on record. We observe that cash memo was a printout taken from computer found lying in the house/ pre....
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....or survey wherein any books of accounts, other documents, money, bullion, jewellery or other valuable article or things is found in the possession or control of any person, then, it would be presumed that such books of accounts, etc. belong to such person and its contents are true and there is presumption of signature and stamping. Therefore, keeping the facts of the present case in min we observed that a presumption has been raised in respect of correctness of the document impounded in the course of survey. We find that that it is establish law as explained by the Honourable Supreme Court in the case of Smt. Tarulata Shyam v. CIT [1977] 108 ITR 345 (SC) /1977 CTR (SC) 275, wherein the Hon`ble Supreme Court observed that there is no scope for importing into the statute the words which are not there. The intention of the legislature primarily is to gather from words used in the statute. Once the assessee comes within the letter of law, he must be taxed. Our view is further supported by the decision of Hon`ble Jurisdictional High Court in the case of Hiren Vasantlal Shah [2012] 19 taxmann.com 241 (Gujarat) of which head note reads as "premises, certain documents were found and one of....
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....n 102 of the Evidence Act provides that the burden of proof lies on that party would fail, if no evidence at all were given on either side. Thus, if an assessee claimed that money or bullion found in his possession at the time of search or survey does not belong to him but someone else, the onus is on him to establish it, because the ordinary presumption is that he is the owner as the money etc. was found in his possession. Similarly, in all cases where a particular receipts is sought be taxed as income, the initial onus is on the Assessing Officer to prove that it is taxable. Where there is statutory rebuttable presumption against the assessee, as in the case of cash credit etc. under section 68 or unexplained investment under section 69, the initial burden of proof is on the assessee to show that the how cash credit is genuine or the investment is not unexplained. The case laws of ACIT v. Stayapal Wassan (supra) of Co-ordinate Bench of Tribunal as relied by the assessee is distinguishable on facts as the assesee has failed to discharged the burden of proof and rebut the presumption of section 292C of the Act. In the light of above facts and circumstances, we note that the assesse....
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....n favour of the ownership of document and not as to year of chargeability. The persons to whom salary has been paid and the loan has been allegedly given were never had been employees of the assessee. The sheet has been prepared to learn the function of the computer and hence any adverse action should not be taken on the basis of that sheet without any other documents impounded during the survey. It was further submitted that the paper contains loan amount of Rs. 1 lakh each to 4 persons, hence the addition at worst should have been made at Rs. 4 lakhs plus interest of Rs. 72,000/- totaling to Rs. 4,72,000/- instead of Rs. 5,72,000/-. Therefore, if any addition is sustained then it has to be restricted to Rs. 4,72,000/-. The ld. Counsel has placed reliance in the case of ACIT vs Shailesh S. Shah [1997] 59 TTJ 574 (Mumbai-Tribunal) in support of his contention that no addition can be made where exact date of receipt is not known. It was further submitted that if addition is sustained, then the assessee is entitled to telescoping out of the addition of Rs. 86.44 lakhs made in respect of Ground No.1 above for Rs. 4 lakhs and only Rs. 72,000/- of interest could be added. In support of ....
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.... reason to draw adverse inference in the finding recorded by the lower authorities, accordingly same is confirmed. However, the addition on the basis of seized material is worked out to Rs. 4, 72,000 [being loan amount of Rs. 4 lakhs and interest of Rs. 72,000/-]. Therefore, addition of Rs. 4,72,000 is confirmed and balance addition of Rs. 1, 00, 000 is deleted. However, since the assessee has claimed that telescoping should be allowed with respect to addition sustained in Ground No.1 above Rs. 86.44 lakhs. The assessee is entitled to telescoping of Rs. 4 lakhs. Therefore, same is allowed out of Rs. 86.44 lakhs. Therefore, addition of Rs. 4 lakhs sustained is covered by telescoping and balance addition of Rs. 72,000/- is upheld. Accordingly, this ground of appeal of the assessee is partly allowed. 18. Ground No.(III) of the assessee relates to confirmation of the addition of Rs. 1,34,86,000/- on account of alleged booking receipts and Ground No.5 of the Revenue appeal relates to restricting the addition made on account of unaccounted income of Rs. 34,82,000/-, Rs. 1,42,60,000/- and Rs. 5,43,49,000/- to Rs. 1,34,86,000/- without appreciating the fact that the assessee failed to e....
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.... by the assessee was furnished in respect of above amount totaling to Rs. 23,28,000/- in page 83 and Rs. 96,77,000/- in page 82 and Rs. 23,55,000/- in page 81 aggregating to Rs. 1,43,60,000/- was considered as assessee's unaccounted income in the year under consideration. 22. Similarly, the AO on examination of impounded material BF-3 page no 73 & 74 found that the various noting of transactions. The AO decoded the figures and arrived at a figure of Rs. 1,39,35,000/- in respect notings appearing at page 74 and Rs. 4,04,14,000/- in respect of notings appearing at page 73 of BF-3, which is dated 15.09.2008. The assessee in reply, merely stated that it is a rough loose paper and not this is in his or his family members handwriting. However, this contention of the assessee was not found acceptable. Since, these materials were impounded from the premises of the assessee, accordingly the addition of Rs. 5,43,49,000/- [Rs. 1,39,35,000/- (page74) + Rs. 74,04,14,000/- (page 73) ] was made to the total income of the assessee. 23. Being aggrieved, the assessee carried the matter before the ld. CIT(A). The ld. CIT(A) has examined the detailed submissions made by the assessee and also cal....
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....led discussion of BF- 3 pg. no. 81 to 84 & 73 based on which addition has been made were done in reply to remand report proceedings before the Ld AO. Copy of the same, is attached. Your Honour is- requested to read pg. 8 to pg 19 (A-38 to 50) as a part of this submission. The whole addition revolves around Pg. no. 73 of BF- 3. Hence the total payment made by the appellant if at all paid comes to Rs. 1,23,60,000 which includes interest portion and capital portion of Rs. 74,00,000. The appellant had booked plot with a condition that if the plots does not get legal clearance the amount will be returned with interest. The appellant was unable to clear the plot in legal factum and hence had to return the money and hence this payment. At this juncture it would not be out of place to mention that if at all addition has to be made it can be made only of the interest portion. The advance received for booking of the plots were in fact received from various parties. The advance were returned by the appellant due to legal hindrance in clearing the plots booked by the appellant. Hence addition should be restricted to the interest component which can be presumed unexplained expenditure of the ap....
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.... Ved Road, Surat. But since the land was under reservation the title could not b e . given to the buyers." 6.8.5 The various details regarding the 10 plots have been summarized on page 73 of BF-3. The various impounded material in Annexure BF-3 give details of plot number wise transactions divided into 3 parts. The details of plot no., month, deposit and payable are given in following manner in the impounded documents. No.86 Bharela 1330 Mahina Bharela Aapvana 41 800 1456 14 530 678 1330 2134 Sq yard 140 New rate : 15242 No.86 is the plot number. Mahina means months. (dictionary meaning of the Gujarati word) Bharela means deposited. (dictionary meaning of the Gujarati word) Aapvana means payable. (dictionary meaning of the Gujarati word) Sq.yard is the size of the plot. On the basis of the entries in the impounded document and the submission of the appellant the following picture emerges in respect of the 10 plots.....
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.... --- --- --- --- --- --- Page No.84--- --- --- --- 133 0595 --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- 2134 1098 --- --- --- --- 6.8.6 The above illustration based on the entries pertaining to each plot recorded in the impounded document show that the appellant had sold 10 plots of various sizes to 10 buyers and had received Rs. 74,66,000/- as advance towards the sale of plot. The appellant paid interest @ simple interest of 2% per month on the amount deposited by the buyers. The total amount of payment returned back to the various buyers is of Rs. 1,34,86,000/- which includes the interest as well as the capital amount. The appellant was not able to furnish any details regarding the source of this payment of Rs. 1,34,86,000/- during the appellate proceedings. The appellant submitted that the amount advanced from the 10 purchasers had been given to the original owner of the plot. But since the title of the property was in dispute the actual transfer did not take p....
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....from prospective buyer at the time of booking is available with the assessee at the time of repayment. The ld. Counsel further supported his view by placing reliance in the case of ACIT vs. Shailesh .S. Shah [1997] 63 ITD 153 (Mumbai- Trib.) and ACIT vs. Styapal Wassan [2007] 295 ITR (AT) 3525 (JAB). With regard to deletion of addition, the learned counsel for the assessee has supported the order of Ld. CIT(A). 26. On the contrary, the ld. CIT-DR supported the AO. The Ld.CIT(DR) submitted the Assessing Officer has made an addition in absence of any amount shown in the books of accounts of the assessee. Therefore, the ld. CIT(A) should have sustained the addition made by the AO. With regard to sustaining the addition of Rs. 1,34,86,000/-, the Ld.CIT (DR) relied on the order of Ld. CIT(A). It was further submitted that the ld. CIT(A) should have given direction the AO for making protective addition. 27. We have heard the rival submissions and perused the material available on record. We find that the entries appearing in impounded material being Anx-BF-3, Page No. 86 and 92 and other loose papers contained details of receipts of booking money in respect of various plots the tot....
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.... in para 6.8.4 at Page No.29 of the appellate order as reproduced above. Therefore, we are of the considered opinion that the ld.CIT(A) has analyzed all the entries appearing in the impounded material and also have obtained the remand report from the AO. Therefore, since the factual aspects has been examined by the ld.CIT(A), hence we do not find any infirmity in the order of ld.CIT(A), accordingly restriction the addition of unaccounted income of Rs. 34,82,000/-, 1,42,60,000/- and Rs. 5,43,49,000/- to Rs. 1,34,86,000/- is correctly found to be correct. In view of this matter, we do not find any infirmity in the order of ld.CIT(A), accordingly Ground No.5 of the Revenue appeal is therefore dismissed. With regard to claim of benefit of telescoping out of remaining addition of Rs. 74,66,000/-. We are of the view that the same is required to be co-related with the amount of received from the prospective buyers at the time of booking. This aspect has not been examined by the lower authorities. Accordingly, set-aside for limited purpose to the file of the Assessing Officer, for examination if there is any co-relation between income of Rs. 74.66 lakhs generated and said amount was availa....
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....ance in the case of CIT v. Ranchhod Jivabhai Nakhava [2012] 81 CCH 193 Guj-HC / 21 taxmann.com 159 (Gujarat) [2012] 208 taxman 35 (Gujarat) and CIT vs. Shailesh Kumar Rasiklal Mehta [2014] 224 taxman 212 Guj wherein it was held that all the transactions routed through bank channel and the assessee has duly explained source of income then the AO was not justified in treating the same as undisclosed income and making addition u/s.68 of the Act. Further, as an alternative submission, the ld.Counsel submitted that if the addition is sustained then the set-off out of Rs. 10 lakhs received on part of sale consideration of Rs. 1,90,00,000/- should be allowed. 31. Per contra, the ld. CIT-DR submitted that the assessee has not been able to explain the source of the amount received by producing necessary evidence in respect of his wife Smt. Rasilaben, therefore the assessee failed to discharge the onus cast upon him, hence the case laws reliance placed by ld.Counsel are not applicable. 32. We have heard the rival submissions and perused the material available on record. We find that the amount of Rs. 14,85,000/- has been transferred from the bank account of Smt. Rasila Ben, (wife of th....
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....the facts and circumstances, we do not have any reason to deviate from the findings of Ld. CIT(A). In view of this, the addition of Rs. 38,98,500/- made on account of enhancement of income by the Ld. CIT(A) is upheld. Consequently, this ground of appeal of the assessee is accordingly, dismissed. 33. Ground No.(V.) relates to adjustment of unaccounted receipts / unaccounted expenditure. 34. The learned counsel for the assessee submitted that the assessee be allowed telescoping and adjustment of loans of Rs. 4 Lakh in respect of Ground No. (II) and Rs. 1,34,86,000/- in Ground No. (III) if sustained as against unaccounted income of Rs. 86,44,340/- if sustained in respect of Ground No. 1 above , which is claimed to have been received during the period April 2008 to December 2008 that amount should be considered as available to the appellant for repayment to the buyers aggregating to Rs. 1,34,86,000/-. It was further submitted that the assessee has paid interest of Rs. 60,20,000 /- as compensation to buyers of plot on return of money because the appellant could not get clearance and in this business ventures. Therefore, the interest being a business loss would be deductible for th....
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.... contended that the column 6 & 7 of chart having title of payable date of interest and payable interest, which is blank. Hence, the assessee has neither received loan nor paid any interest thereon. It was further submitted that Page-II of A-1 to A-13 are confirmation of all such parties, who have denied having any financial transaction with the appellant. The assessee has also filed confirmation from 6 parties in respect of above 14 persons mentioned in the chart. One person have expired of which death certificate was produced. Thus, it was contended that it was a probable receipts and not actual receipt. The Ld.AO has not found any single evidence to prove that such amount has been actually taken by the assessee. A remand report was obtained from the AO in this regard in which the AO has not brought on record any such fact to contradict the submissions made by the Appellant. In view of these facts, the CIT(A) observed that payable date of interest and the amount of interest payable is blank in the impounded papers and denial of the persons whose names are appearing on the sheet indicates that the submissions made by the appellant regarding probable loans is correct. In view ....
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.... 1,50,00,000. In absence of any explanation from the assessee, the AO made addition of the said amount as unaccounted income. 47. Being aggrieved, the assessee filed an appeal before the ld.CIT(A). The ld.CIT(A) observed that during the course of remand proceedings, the appellant was again shown computer printout of impounded BF-2 Page No. 40 and asked to go through the said impounded computer printout. In reply to Question no. 19, the appellant has stated that the computer printout does not belong to him. He also stated that he had never entered in to any transaction with them. He also stated that he or his family members are not having bank account with Bhavnagar District Cooperative Bank Ltd. The AO had examined the bank account statement of Surat Peoples Co-operative Bank Ltd. during the course of remand proceedings and found that no cheque amounting to Rs. 1,50,00,000 was deposited / withdrawn from the appellant`s bank account. Therefore, CIT(A) held that in absence of any corroborating evidences in support of the entries in impounded documents, no addition could be made. Accordingly, this ground of appeal was allowed. 48. Being aggrieved, the Revenue has filed this appe....
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....rification of BF-2, Page No. 1 to 39, the AO noted that it is the receipts from sale made in "Sarjan" against Plot Nos. 1 to 60 ( 1St , 2nd & 3rd gate) totaling to Rs. 5,07,49,209/- and Plot Nos. 1 to 101A ( 4th gate) totaling to Rs. 7,56,46,923/- plus on-money receipts of Rs. 40,27,600/- on sale of 28029.76 sq. yds., involving gross total sum of Rs. 12,63,96,132/- and on-money of Rs. 40,27,600/-. In absence of any explanation filed by the assessee, the AO added the same as unaccounted income of the assessee. 53. Being aggrieved, the assessee filed an appeal before the ld. CIT(A). Before whom the assessee has taken the plea that the impounded BF-2 Page No. 1 to 39 does not related to the appellant. These papers are reflecting name of 170 persons against whom details are mentioned. The AO, during remand report proceedings had made enquiries on the basis of address available on record, details were called for under section 133(6) of the Act from Smt. Kirtiben Vishrambhai Moradia, Shri Vishrambhai Kanjibhai Moradia, Smt. Jagrutiben Jitendra Navadiya , Shri Ramesbhai Diyabhai Goyani, whose names were reflecting in Sarajn and asked to furnish details of address of Sarjan, copy of sal....
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....DR) therefore, placed reliance on the order of the AO. 55. On the other hand, the learned counsel for the assessee submitted that the assessee has no relation with Sarjan society, which is also found to be correct by the CIT(A). Further, Shri Paresh Patel, President of Society, has denied having any relation with the assessee by giving statement to the Department. It was further stated that various members of society have also confirmed that they do not know the appellant and the appellant do not have any relation with the society. All the documents are on record and no documents suggests any interest of the assessee in any manner. The learned counsel for the assessee therefore, supported the order of the Ld. CIT(A). 56. We have heard the rival submissions and perused the relevant material on record. We find that the AO has made addition based on impounded Anx-BF-2 Page No. 1 to 39 which reflected the payments of and on-money in respect of 170 persons against whom details are mentioned. However, during the remand report proceedings, the AO had made enquiries on the basis of address available on record, details were called for under section 133(6) of the Act from Smt. Kirtiben....
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....ea of shops was reduced by the Municipal Authorities on account of alignment and payments was to be made within 30 days for 50% and balance 50% in 60 days in respect of these shops. Accordingly, the assessee was asked to show cause as to why the amount mentioned at Page No.118 to 112 and Page No.106, 104, 103 , 96 to 93 on which details and rates are given, which amounts Rs. 97,24,958/- should not be added as unexplained expenditure. It was explained that the name of the assessee is there as organizer and there is no financial implication that can be derived from these pages. However, the AO viewed that in absence of any details of shops not being furnished by the assessee. The amount mentioned thin at Rs. 97,24,958 was added to total income. 59. Being aggrieved, the assessee filed an appeal before the ld. CIT(A). The CIT(A) has called for a remand report from the AO. The AO in his remand report stated in reply to question no.8 and 9, that the appellant has stated that these papers are related to Laxmi Darshan Complex, which was constructed by Madhav Darshan Co-op Housing Society Ltd. only. Some shops were demolished by the SMC and a dispute arose among the society members and t....
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....nd during the appellate proceedings. During the assessment proceeding, the appellant has admitted to be the organizer of the Madhav Darshan Co-Operative Housing Society Ltd. whereas during the appellate proceedings and in his statement he has stated that he was present as Panch. In view of this that issue may be decide on merits." In view of these facts, the CIT(A) viewed that the appellant is having no financial dealings in the shopping Centre of Laxmi Darshan Complex. The office bearer of the Madhav Darshan Co-Operative Housing Society , Shri Lavjibhai Haribhai Patel has also confirmed in his statement on oath recorded by the AO during inquiries pertaining to remand report that the the appellant has no financial dealing with the aforesaid Shopping Complex. His presence was only as a Panch in the dispute resolution. The assessee has brought no evidence of any financial dealings of the appellant with the Madhav Darshan Co- Operative Housing Society. The addition made by the AO in the hands of the appellant cannot be sustained in view of above findings. In view of above facts, the addition of Rs. 97,24,958 made by the AO was deleted. 60. Being aggrieved, the Revenue has filed thi....