TaxTMI 
TaxTMI 
2020 (4) TMI 825
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....stified in law in upholding the decision of the Ld. CIT(A) in deleting the addition of Rs. 3,82,24,844/- made by the Assessing Officer on the basis of impounded loose papers, holding it as double addition without appreciating the fact that papers relating to A.Y. 2010-11 were taken into consideration by the Assessing Officer along with papers where no date was mentioned and the onus was on the assessee to explain each and every paper found in the possession of the assessee? 2. Whether on the facts and circumstances and in law, ITAT was justified in not considering the decision of Hon'ble Apex Court in the case of Chuharmal vs. CIT (1988) 172 ITR 250/38 Taxmann 190 wherein the Hon'ble Apex Court held that Section 110 of the Evidence Act stipulates that when the question is whether any person is owner of anything of which he is shown to be in possession, the onus of proving that he is not the owner is on the person who affirms that he is not the owner? 3. Whether on the facts and in the circumstances of the case, the ITAT was justified in law in upholding the decision of the Ld. CIT(A) in deleting the addition of Rs. 3,82,24,844/- made by the Assessing Officer on the basis of imp....
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....Assessing Officer made addition of Rs. 3,82,24,854/-. For the same reasons, an addition of Rs. 3,13,168/- was made in respect of the expenses incurred and further addition of Rs. 10,81,612/- was made on account of difference in sales. Being aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the CIT(A). The CIT(A) vide order dated 13.02.2015 (Annexure A-2) deleted the addition of Rs. 3,82,24,844/- on the ground that the addition made was double addition on same impounded papers for two assessment years i.e. 2009-10 and 2010-11 for a single project. The addition of Rs. 3,13,166/- made on the basis that the expenditure was incurred outside the books of accounts also stood deleted by the CIT(A) by accepting that the seized papers on the basis of which this was sought to be added pertained to sub-contractors etc. in which case, copy of written explanation dated 26.12.2011 for financial year 2008-09 was submitted. The ITRs of sub-contractors showing 8% N.P. was also referred. Further, in relation to addition of Rs. 10,81,612/-, the CIT(A) accepted the explanation of the assessee that the addition was sought to be made on the basis of estimate and it ....
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....s. 3,82,24,844/-. This fact has not been appreciated by the learned Tribunal. Similarly, with regard to deletion of the additions of Rs. 3,13,166/- and Rs. 10,81,612/-, learned counsel argued that the Tribunal has not properly appreciated that these additions were made on the basis of the unrecorded transactions which were apparent from the impounded material and books of accounts of the assessee. 5. We have heard learned counsel for the appellant and perused the impugned orders. 6. The question Nos.1 to 4 relate to deletion of addition of Rs. 3,82,24,844/- by the CIT(A) and upheld by the learned Tribunal. 7. The question that the onus was on the assessee to explain each and every paper found in his possession does not arise in the present case. In the present case, the assessee had filed its return of income for the assessment year 2010-11 declaring total income of Rs. 27,53,030/- on 09.10.2010. Thereafter, the case was selected for scrutiny. During the course of survey some loose papers and registers are said to have been impounded from the premises of the assessee. The papers relating to F.Y. 2009-10 were taken into consideration by the Assessing Officer along with the paper....
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....ple projects running, is the chart showing six different entries, five of which actually pertain only to receipts from sale. It is factually verified from the final accounts submitted by the assessee that there was no additional cost incurred in course of the year and the cost was shown only on opening balance. Only the realization of receipts from sale of plots, shops etc., is shown, all of which have been offer to tax and have been added in addition to the GP rate addition by the AO and further enhancement by the CIT(A) in A. Yr. 2009-10. 3.2 I find force in the contention of the AR that once the entire project is covered, it is immaterial whether expenses, pertained to A.yr. 2009-10 or 2010-11 because once income is estimated by application of either GP or NP rate then all the expenses and receipts are deemed to have been taken care of. It is also a fact that the seized papers do not prove that multiple projects were run. The AO has also not been able to deny that the seizure was on the site of Shanti Residency project/HO and not on any other site. In fact, it could have been easy to gather physical evidence of running of sites by way of spot investigation which was not done, ....
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....is not established and on facts on record, the addition made is indeed double addition. Accordingly, addition made is directed to be deleted." 8. In Chuharmal's case (supra), which has been relied upon by the appellant, the assessee therein did not adduce any evidence and also did not prove that the wrist-watches which were seized from his possession did not belong to him. It was in such circumstances, the Supreme Court held that a legitimate inference could be drawn that the assessee was the owner of the wrist-watches and had income which was invested in purchasing the wrist-watches and the value thereof must be deemed to be the income of the assessee. However, in the case in hand, once it was found that there was double addition on same papers for two assessment years for a single project, it cannot be said that the assessee had failed to explain the loose papers despite the onus was placed upon him to prove the loose papers. In this view of the matter, no benefit can be derived by the Revenue from the judgment in Chuharmal's case (supra), which is distinguishable on facts and is not applicable in the present case. 9. Further, we do not find any force in the submission advanced....
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....ment order AO has mentioned that assessee FAILED to prove any explanation in respect of these papers. I find this factually incorrect. The AR has submitted copy of written explanation dated 26/12/2011 for F. Yr. 2008-09 in which this explanation was given. Also fact of sub-contractors filing ITRs showing 8% NP was also referred. This is also covered by judgment in the case of Bansal Strips (supra). This addition is accordingly directed to be deleted. (Relief Rs. 3,13,166/-) GOA 4: This ground is regarding addition of Rs. 10,81,612/- on loose papers serial no.1 to 5 which are clearly labelled as estimate. The relevant discussion appears in the order of the AO on page 16 and the same is reproduced as under:- *** *** *** The assessee has strongly assailed this addition by reproducing the seized documents in written submission dated 13/08/2014 and has contended that once the profit is calculated by applying NP/GP rate then expenses are deemed to be taken care of. Further, the assessee has strongly relied on the nature of the papers stating that it can be clearly seen that the seized papers are clearly captioned as estimate. Along with this fact, there being only one proj....