AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (5) TMI 26
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....lant-assessee has claimed the following substantial questions of law for determination by this Court:- (i) Whether in the facts and circumstances of the case the finding of the Tribunal is perverse, holding that Rs. 22,40,000/- is the income of the appellant, without appreciating evidence on record, that the loose paper was not found from the possession of the appellant and Section 292C of the Act is not attracted, the addition of Rs. 22,40,000/- as income in the hands of the assessee? (ii) Whether under the facts and circumstances of the case the Tribunal was correct in holding that document LPS-1 page no.4 as document belonging to the assessee without appreciating the fact that no reasons under Section 153C of the Act were recorded by the Assessing Officer and not spelt out anywhere in the proceedings including the assessment order, the assumption of jurisdiction was correct in law? (iii) Whether in the facts and circumstances of the case the LPS-1 page no.4 being not in the handwriting of assessee not recovered from the premises of the assessee could be treated as belonging to the assessee in spite of assessee's specific denial that such document does not belong to him whe....
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....tner in M/s Regal Samarth Krishna Builders Company. He joined the said Firm on 20.11.2011 and retired from there on 01.04.2012. The assessee's capital of Rs. 30.00 Lac was in Regal Samarth Krishna Builders Company and another Rs. 30.00 Lac was appearing in the Firm M/s Regal Samarth Construction Company, which has also been appreciated by the Tribunal in the impugned order. The appellant has no interest or connection whatsoever with Triveni Project, which name is recorded in such loose paper. Therefore, the finding of the Tribunal that Rs. 22,40,000/- is the income of the appellant is perverse and without appreciating the evidence on record. On the basis of the said contention, learned counsel argued that Section 292C of the Act is not attracted in the present case. It was further submitted that no reason, as required under Section 153C of the Act, has been recorded by the Assessing Officer with regard to document LPS-1 page-4 being of the assessee and, therefore, the assumption of jurisdiction is not correct in law. In this connection, learned counsel has placed heavy reliance upon the judgment of this Court in Commissioner of Income Tax vs. Mechmen, (2015) 280 CTR (MP) 198, Indor....
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....r ji' at page 4 of LPS-I following matter (converted into English version) is appearing:- "Rs. 60,00,000=00 Cash + Ch Rs. 85,00,000=00 To be taken from Chitrakoot Rs. 2,60,000=00 Ch boundary w. Rs. 62,60,000=00 Rs. 85,00,000=00 Rs. 22,40,000=00 balance to be taken" 8. The assessee was partner holding 20% share in partnership Firm M/s Regal Samarth Krishna Builders, which was executing 'Triveni Heights' project. The assessee became partner in the said Firm on 20.10.2011 and retired therefrom on 01.04.2012. The assessee had capital of Rs. 30,00,000/- as on 15.06.2012 in the said Firm which was receivable by him. The assessee was also partner in M/s Regal Samarth Construction Company having 20% share (which stood enhanced to 30% w.e.f. 01.04.2012) also engaged in the business of real estate. The total capital invested by the assessee as on 15.06.2012 was again Rs. 30,00,000/-. Thus, total investment of the assessee in these two Firms as on 15.06.2012 was Rs. 60,00,000/-. Besides, Rs. 2,60,000/- was paid by cheque for the boundary wall. 9. The Assessing Officer while rejecting the submission of the assessee and making addition of Rs. 87,60,000/- in the declared in....
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....ri Rajeev Majumdar. On the right side of page-4, it has been written as 'Rs. 85,00,000/- to be taken from Chitrakoot'. Chitrakoot is the name of the project, run by the Firm M/s Regal Samarth Construction Company in which Shri Rajeev Majumdar is also a partner. vi) The details of Triveni Heights & Chitrakoot cannot be said as rough working as both the projects are run by the firms in which Shri Rajeev Majumdar is a partner. vii) The assessee has submitted that the amount of Rs. 60,00,000/- may be the sum of addition in capital in the firm namely M/s Regal Samarth Krishna Builders & M/s Regal Samarth Construction Company amounting to Rs. 30,00,000/- each. But the same is not acceptable as on the page no.4, it is clearly mentioned that the amount of Rs. 60,00,000/- is related to the project 'Triveni Heights' only which is run by the firm M/s Regal Samarth Krishna Builders. The same is confirmed in page no.3 & 7 of LPS-1 also as mentioned above. 9.7 In the light of facts & discussion above, it is clear that the assessee has made unaccounted investment of Rs. 32,60,000/- (Rs. 62,60,000/- minus Rs. 30,00,000/- which has been paid by cheque) in the firm namely M/s Regal Samarth K....
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....entries in these papers are related to land purchased where the appellant is one of the partner. The page 4 of loose paper is ledger account of appellant whereas it has been written as "Rs. 85,00,000/- to be taken from Chitrakoot". Chitrakoot is the name of the project, run by the firm M/s Regal Samarth Construction Company in which appellant is a partner. The details of project Triveni heights and project Chitrakoot cannot be considered as rough working because in the firms appellant is one of the partner. Therefore, the AO correctly held in para 9.6 of the assessment order that the loose paper cannot be said to be a rough working paper because in both the projects i.e. Triveni heights and Chitrakoot appellant is a working partner. Thus in absence of any conclusive documentary proof, the addition made by the AO amounting to Rs. 87,60,000/- is confirmed. Therefore, the appeal on this ground is Dismissed." 11. The learned Tribunal after marshalling through the record found that the loose papers bearing LPS-1 page 1 to 8, seized during the course of survey at the office of M/s Envo Promoters Developers Pvt. Ltd. among the accounts of various group concerns and partners, also conta....
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....ame balance which would remain when the explained addition of Rs. 62,60,000/- is deleted out of Rs. 85,00,000/-. However, the contention as sought to be raised in these questions that no presumption against the appellant under Section 292C of the Act could be raised, is noted to be rejected. The Authorities below have not placed reliance or drawn support of Section 292C of the Act. Instead, on appreciation of the material and keeping in view the entire facts and circumstances, concluded that there existed nexus between the appellant and the seized material (i.e. LPS-I page 4). Therefore, since the appellant has failed to give any account for the said unaccounted investment of Rs. 22,40,000/-, we do not find any illegality or perversity in the findings recorded by the Tribunal in that behalf. The view taken by the Tribunal on appreciation of material is plausible one. Thus, the reliance of the assessee on Shri Pukhraj Soni's case (supra) is of no assistance to his case. The relevant extract of the findings recorded by the Tribunal reads, thus:- "9. We have heard rival contentions and perused the records placed before us. The assessee's sole grievance is on account of addition for ....
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....es of capital account of the assessee in the above stated partnership firms are placed. On perusal of the same we find that in the firm Regal Samarth Construction Company the assessee has introduced capital of Rs. 30,00,000/- through cheque during financial year 2012-13 and similarly in Regal Samarth Construction Company also assessee being 30% partner has introduced capital by cheque/cash of Rs. 30,00,000/-. So there remains no dispute that the amount of Rs. 60,00,000/- which is appearing in the seized material, stands duly explained with the capital accounts of the partnership firms and supports the contention of Ld. Counsel for the assessee that Rs. 60,00,000/- is duly accounted for in the books of accounts. Remaining amount of Rs. 2,60,000/- have also been paid by cheque as appearing in the seized document, thus the figure of Rs. 2,60,000/- also stands duly explained by the assessee. 13. Now as far as amount of Rs. 85,00,000/- appearing on the right hand side of the account appearing in seized document with the particular "to be taken from Chitrakoot", we observe that Chitrakoot is the project of construction of flats executed by partnership firm Regal Samarth Construction Com....
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....therefore the addition for unaccounted investment in our view cannot be more than Rs. 22,40,000/-. We therefore in the given facts and in view of our discussions herein above are of the considered view that the alleged addition of unaccounted investment needs to be sustained only to the extent of Rs. 22,40,000/- and thus the finding of Ld. CIT(A) is set aside and the assessee gets relief of Rs. 65,20,000/-. Ground No.1 of the assessee is partly allowed." 13. Thus, the question No.(i) and (iii) as claimed, cannot be held to be substantial questions of law and are not based on any incorrect and improper reading of evidence on record. 14. Taking up the question No.(ii), as claimed by the assessee that no reason has been recorded by the Assessing Officer with regard to the loose papers (LPS-1 page-4) being of the assessee and therefore, the Assessing Officer could not have assumed the jurisdiction in terms of Section 153C of the Act, it is seen that it is for the first time this contention has been raised before this Court. It may be noted that the premises of Regal Homes Group was subjected to search under Section 132 of the Act on 12.08.2014. The residential premises of the assess....