TaxTMI 
TaxTMI 
2020 (4) TMI 49
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....of house hold expenses at Rs. 2,50,000.00 against 1,70,000.00 shown by assessee when assessee is residing in village and supplementing his expenses by agriculture and its by product is arbitrary unjust and excessive: The assessee is in appeal against addition sustained at Rs. 80,000/-. 3.1. The facts are that assessee is a senior citizen, retired from army as a Sipahi. Getting pension duly disclosed at 26,793/- in the return and assessed as suchis basically an agriculturist and belongs to agriculturist family. Income from agriculture duly shown at 3,40,000/- and accepted by CIT(A). Supplementing his lodging expenses from agriculture e.g., wheat corn pulses vegetable ghee and oil etc. boarding is also free because he is residing with his wife only. Thus, no expenses on boarding and lodging and leading a simple life in village. Thus the withdrawals for personal expenses including amount given to his sons to meet out the lodging and boarding and other day to day expenses is more than enough. He is not a member of any recreation club etc also. Besides he is teetotaler. Finally, Ld.Counsel for the assessee argued that the addition sustained by CIT (A) at Rs. 80,000/- by esti....
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....as confirmed the addition on the ground that these affidavits cannot be admitted as additional evidence as the condition under Rule 46A has not been satisfied and assessee has failed to establish identity as well as creditworthiness. 4.3. Finally, Ld.Counsel argued that it is settled law as per Hon'ble Allahabad High Court decision that where the CIT(A) has called for the remand report from the AO, the CIT (A) has exercised his powers mentioned in section 250 (4) and there is no violation of Rule 46 A [vide Remand Report Para 3(CIT Lucknow Vs Akash Construction (P) Ltd ITA No. 8 of 2011 dated 23.01.2012) and the ITAT Agra Bench decisions in the case of the DCIT vs. Mukesh kumar Agarwal ITA No.374/Agra/2010 dated 06.03.2012. The Hon'ble Allahabad High Court in the case of L. Sohanlal Gupta vs. CIT reported in 33 ITR 786 has held as under: "after the assessee had filed the affidavit, he was neither cross examine on that point nor was he called upon to produce documentary evidence, consequently the assessee was entitled to assume that the income tax authorities were satisfied with affidavits has sufficient proof on this point". Hon'ble Bombay High Court i....
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....ent that the source of such money comes from the assessee himself or such source could be traced to the assessee itself" Hon'ble Allahabad High Court judgment in the case of Nathu Ram Prem Vs. CIT 49 ITR 561 has held that it is the duty of the Income Tax Officer to enforce theattendance of the witness if his evidence is material in exercise of his powers u/s 37(1) of the ITAct read with Order Xvl, rule IO of the civil Procedure Code. Thus, in view of the submissions made as above and the legal position, Ld.Counsel submitted that the addition sustained by CIT(A) being illegal and arbitrary and the same may kindly be directed to be deleted. 4.4. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee. 4.5. We have heard the rival contentions and perused the material available on record. The assessee in the appellate proceedings had filed the affidavits of the farmers and have given the name and addresses to the Ld.CIT(A) for the purpose of the verification of the amount. The Ld.CIT(A) had sent the document along with submissions to the AO, who had given the remand report and had not mentioned anything about the affidavits and the loans. In....
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....ed a statement behind the back of the assessee, it was his duty to have allowed the assessee to cross examine such a witness. Statement of person cannot be used against the assessee. It was not for the assessee to demand cross examinations but was for the AO to allow cross examinations if the statement of the witness were to be made the basis of addition. Similar is the ratio laid down by the Hon'ble Supreme Court in the case of Shri KishinchandChellaram vs CIT (125 ITR 137) MAD where it has been held that - "Before the IT Authorities could rely upon a piece of evidence, they were bound to produce it before the assessee so that assessee could controvert the statement contained in it. Statement given at the back of the assessee is in admissible evidence. Therefore addition made both being devoid of any merit and against the law laid down by the Hon'ble Supreme Court may kindly be directed to be deleted. As for the case law relied upon by the CIT(A), it is distinguishable in view of factual and legal position made clear by the Hon'ble Supreme Court (AIR 1957(SC) 882 (Supra). Even otherwise the assessee held 1/6 share in shergrah bridge therefore th....
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....d below against each: Name Amount Period Page Awasthi Munim 2000/- 31-05-2003 52/Item No. 9 RaghvendraAjitmal 19,000/- 31-05-2003 52/ItemNo. 16 Mansha Ram BijalPur 2,000/- 31-05-2003 52/Item No. 18 Kamlesh Chobey 12,500/- 15-06-1999 47,46 Item No. 1 GokarnDadi 6,000/- 31-05-2003 42 Item No. 20 Ashutosh 12,000/- 31-05-2003 52/Item No. 23 Guddu 10,000/- 31-05-2003 527 Item No. 24 Raju Plotwale 2,000/- 02.01.2001 43/Item No .2 Mistri 200/- 01.04.2003 447 Item No. 44 Mukhrjee Engineer 1,66,000/- 01.04.2003 52/Item No.25 Rajpur Block Pramuk 50,000/- 24.06.2003 5 I/Item No. 52 Muniman 500/- 01.04.2003 54/ltem No. 57 At the outset it is submitted that none of the entries recorded in seized diary BK-15relates to AY.2005-06. As explained above also no amount of interest was found credited. The Seized BK- 15 contains repetition of entries and relates to period prior to 2005-06. A reply to this effect was also given before the CIT (A) as per written submissions made on 20.03.2012 (Copy placed as per PB -112, PB - 114-116 PB 120-12....
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....year under consideration. Accordingly, the Ground No.4 of the assessee's appeal is allowed. 7. Ground No. 5 is regarding addition of Rs. 17,56,795/- on the basis of annexure BK-15 in addition of Rs. 4,25,272/- for unexplained investment in money landing is illegal. 7.1. Before us, Ld.Counsel submitted that the AO has made the addition of Rs. 44,04,079/- on the ground that assessee has not specified the period to which these entries relate. The AO while doing so has not looked into the period mentioned on relevant pagesand the repetition of entries being brought forward on different pages. The CIT(A) has also ignored this fact. In this connection, he submitted a copy of seized diary BK - 15 before us. It would be appreciated that none of the items of document seized found narration relating to the AY.2005-06. Also no amount of interest was found credited. The diary BK - 15 contains repetition of entries relating to prior of period 2005-06. A reply to this effect was made before the CIT(A) as per written submission made on 20-03-2012 (copy placed as per PB Page 112, PB page 114 - 116, PB Page 120-122 and again mentioned on the annexure Al which has been part of CIT ....
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....nd was kept at home for making deposit in the account of Government of UP under the head 0853 for the contract of Balu being 3 monthly installment. The amount was available as receipt from Mr. Suresh Kumar Pandey and brothers. Thus it was explained that it related to Suresh Kumar Pandey and brothers. The total turnover in the case of Suresh Kumar Pandey and brothers has been accepted to be of Rs. 2,41,30,000/- and the return in the case of Suresh Kumar Pandey and Brother was filed disclosing net profit at Rs. 32,55,204/- on business receipts derived and license fee paid for contract at Rs. 31,35,000/- Therefore the availability of sum of Rs. 8,62,125/- for depositing quarterly installment cannot be doubted when M/s Suresh Kumar pandey and brothers has under taken the contract, the receipts from which at Rs. 2,41,30,000/- have been duly disclosed to the department and have been accepted. No adverse evidence has been found contrary to statement recorded u/s.132(4) of the Act in the course of such that cash available was out of turnover of Rs. 2.48 Crore derived during the normal course of business. Since the availability of cash was duly explained and no contrary evidence has b....
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.... addition of Rs. 3,50,000/- resulting in enhancement without providing opportunity/show cause (Rs. 2,00,000/- as per Ground No. 7 page 35 + Rs. 1,90,000/- as per Ground no 10 page 48 of CIT(A) order. (ii) That the CIT (A) has erred on facts and in law in considering the security deposit of Rs. 3,90,000/- a respect of toll bridge contract taken by 6 persons jointly in the hands of appellant alone when on the contrary he had accepted contract receipts @ 1/6 falling to assessee share. 9.1. Ld.Counsel submitted that as discussed in ground No 3 above (AO Page 4 Para 3), The AO made the addition of Rs. 3,50,000.00 reduced by CIT to Rs. 2,00,000/- on the basis of statement dated 02.06.2006 made by Shri Alok Tripathi at the back of assessee when no such statement can be used against the assessee unless the assessee was confronted. No opportunity to cross examine Shri Alok Tripathi was given. The assessee held 1/6 share. Therefore also the addition made was devoid of any merit. The factual position is that seized diary BK-3 BK-4 BK-5, BK-6, BK-7, and BK-8. It relates to the business of toll collection of shergarh and Pudin Bridge maintained in the name of 6 different persons who....
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....on would come to Rs. 45,832/- therefore the share of income of the assessee (appellant) from the above mentioned business would at the most come to Rs. 45,832/- As far as the decision of the AO that Shri Sridhar Pandey has denied any business connection with all the 6 persons mentioned in this diary is concerned just on the basis of his denial, it cannot be considered that the entire transaction recorded in these six note books belong to the assessee, (appellant) when apparently, it is very clear on examination of these six note books that they were being maintained relating to a business of toll tax collection from shergarh bridge and pudin bridge for which even a summary of the surplus income generated from this business in each note book are mere repetition. Therefore on the basis of the seized documents found during search, the transactions recorded in such documents should be considered as correct unless and until it is proved that the transaction recorded in the seized documents are not correct. In fact the AO has also made the addition in the hand of Shri Har Narayan Tripathi on the basis of these seized documents treating that he was also involved in carrying on the toll ta....
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.... + 1,90,000/- = 3,90,000/- @ 1/6 Rs. 65,000/-). This is besides assessee profit worked out by CIT by taking assessee share @ l/6'h at Rs. 45,832.00 as per page 46 of CIT (A) order. Hence the addition of Rs. 2,35,832/- against Ground No.8 and Rs. 2,00,000/- against Ground No.7 totaling to Rs. 4,35,832.00 sustain by CIT (A) against Rs. 45,832/- being 1/6 share in profit and Rs. 65,000/- being 1/6 against security is illegal. The CIT(A) has confirmed the addition of Rs. 2,35,832/- Since the addition sustained on account of security at Rs. 1,90,000/- is illegal because the assessee held only 1/6 share. As submitted against Ground No.7 it would be in the interest of equity and justice that the addition which can be made out of Rs. 2,00,000/- + 1,90,000/- should be limited to l/6thRs. 65,000 /- which is the assessee's share in the toll bridge. 11. Ground No.9 is regarding the addition of Rs. 6,88,876/- sustained in the hands of assessee for the contract income earned by other persons Tahir Ali , Mohd Idris whose addresses and complete identity was provided before the authorities below and the addition made in the hands of assessee for AO failure to invoke provisions of sect....
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.... record. The AO failed to bring any adverse material to support the addition by controverting the submissions made by assessee disowning these papers. The AO did not take pains to make any further inquiry under section 250 (4) though an opportunity was afforded to him to bring on record the material in support to justify the addition made. No addition can be made on the basis of noting made in the name of third party unless relative evidence is brought on record. Hence, Ld.Counsel argued that the addition made by AO and sustained by CIT(A) being arbitrary may kindly be deleted. Assessee cannot be saddled with liability for AO failure to conduct inquiry on the submissions made by assessee. Provision of section 153C of the Act is provided in the act for the purpose. If the AO without assigning any reason has not used them though legally attractive, it would be unjust and unfair and again the principal of justice to make addition in the hands of assessee. In (2010) 322 ITR 191 (Del) in the case of CIT Vs Anil Bhalla, a search and seizure case it was held that where no independent material to show that jottings on paper represented unaccounted transactions of the assessee, the ad....
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.... So the income of Rs. 89,975/- is added in the name of assessee. The addition made on this vague ground is not sustainable. No reason has been given by the AO to not consider the written submission dated 06.12.2006 made by assessee before him The CIT(A) has in para 17.03 stated that no comments has been offered in the remand report by AO. Shri Sridhar Pandey has vide reply dated 06.12.2006 has stated that a statement on the issue was recorded by the AO on 14.11.2006 and it was made clear that Shri Pradeep Singh Chauhan held 1/6 share in shergarh and Pudding toll Bridge. The CIT(A) has given as specific finding that "I have gone through the seized documents and I find that share of his income has been recorded. With regard to the business I have already given my finding in para 14.03 based on the seized documents BK-3 to BK-8 that the business of collection of toll tax was being carried on by 6 persons jointly and assess is one of them. The CIT(A) has also held that this note book is in the name of Pradeep Singh Chauhan who is also one of six persons jointly carrying on this business. The CIT has confirm the addition of Rs, 89,975/- in the hands of assessee though seized docum....
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....8 of the Act being the income from unexplained source. The addition of Rs. 1,15000/- is covered by the aforesaid additions. Since no bills or voucher or cash memo for the purchase of the aforesaid items in AY.2005-06 have been found in the course of search the addition made on mere presumption ignoring the status of assessee is illegal. The assessee during the year as disclosed his income in the return at Rs. 3,40,000/- from agriculture besides business and pension income at Rs. 1,09,737/- and the income in the vicinity has been disclosed right from AY.2001-02 on ward. The AO even in the remand report as has been admitted by CIT(A) that the AO has brought no material on record except a reference made in the assessment. The Addition sustained by CIT (A) being arbitrary and illegal may kindly be directed to be deleted. 13.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee. 13.3. We have heard the rival contentions and perused the material available on record. We have already mentioned about the status of the assessee while dealing with Ground No.1 of the assessee's appeal and concluded that the assessee is a man of sufficient means therefore....
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....d has been sold. Further Rs. 15,82,470/- as mentioned by the CIT (A) on Page 66 item No. 2 from below does not bear any date or description. Therefore. this is deaf and dumb entry on which basis no addition can be made legally. Therefore the addition of Rs. 24,98,886/- sustained by CIT(A) is illegal without any basis. In support that the business of extraction and sale of sand is be done by M/s.Suresh Kumar Pandey and brothers, the copy of the balance sheet of M/s Suresh Kumar Pandey and Brothers is enclosed. The addition sustained by CIT(A) in absence of any corroborative material found in the course of search or even in remand proceedings as per page 1 to 25 Para 9 where the AO has except relying on the AOs vague order has brought no adverse material to support. Thereforealso the addition sustained by CIT (A) may kindly be directed to be deleted. 14.2. Ld.DR for the Revenue, opposed the contentions raised by Ld.Counsel for the assessee. 14.3. We have heard the rival contentions and perused the material available on record. So far as the amount of Rs. 5,00,000/-, Rs. 2,08,750/-, Rs. 16,666/- and Rs. 1,00,000/- totaling to Rs. 8,25,416/- are the payments relating to the ea....
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....at the AO has made the addition of Rs. 50,000/- on the ground that the source of investment in purchase of plot with stand in the name of Shakuntla Devi has not been explained. This finding of the AO is vague for the very reason that' assessee vide his reply reproduced by CIT(A) at page 67 it was submitted that appellant had no concern with the purchase of plot land by Shankuntla W/o Shri Vikarm Singh Bijalpur because these were sold by some Shiv Kumar S/o Iswarsahai resident of 26 Tilak Nagar Auriya. The identity and full address of the purchase and seller were available on the sale deed. It was also submitted that it cannot be considered in the hands of appellant. No enquiry has been carried out by the AO even in the remand proceedings to bring the truth and to controvert the submission made by the assessee on the issue. Since the provision of section 153C are distinct which the AO has not applied for the reasons best known to him and the assessee cannot be saddled with the liability on account on failure on the part of AO, the addition without bringing any supporting material on record the addition sustain by taking shelter of section 132 (4A) is illegal. Similarly the ad....