TaxTMI 
TaxTMI 
2019 (3) TMI 1774
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.... and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 35,00,918/- on account of unexplained investment u/s 69 of the I.T. Act, 1961, whereas the assessee during assessment as well as Remand proceedings had failed to furnish complete documentary evidence in support of his claims. (iii) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 17,265/- interest paid on bank borrowings which were not used for the purpose of business as the assessee had made interest free advances which were not for the purpose of business activity. (iv) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 77,830/- on account of expenses being personal in nature ignoring the fact the there is a possibility of personal use of telephone and vehicles which cannot be ruled out. (v) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 90,02,000/- on account of Long Term Capital Gain overlooking the. fact the assessee had failed to discharge his onus in respect of claim as ....
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....0,02,000/-. (e ) Unexplained investment in purchase of the Land Rs. 35,00,918/- 2.1 Before the Ld. CIT(A), the assessee challenged merit of additions as well as legal grounds. The legality of the reassessment proceedings under section 153C of the Act, was challenged on two grounds. Firstly, on the ground of no satisfaction recorded by the Assessing Officer for initiating proceedings under section 153C of the Act; secondly, on the ground that no incriminating material was found during the search. The Ld. CIT(A) dismissed the legal grounds raised by the assessee, however on merit of addition, he allowed the appeal of the assessee. Aggrieved, the Revenue is in appeal before the Tribunal raising the grounds is reproduced above. As per record, no appeal or cross objection has been filed by the assessee. 3. Before us, the Ld. counsel of the assessee referred to Rule 27 of the ITAT Rules and raised additional ground submitting that no incriminating document was found except one MOU and that too was not signed by the assessee, thus, in absence of any incriminating material qua the assessment year under consideration, the proceedings under section 153C of the Act are invalid. The Ld. c....
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..... Thereafter, the parties were requested to address on the grounds raised in the appeal before us. Since, we have not admitted additional ground raised by the assessee, we are not adjudicating the issue raised in those additional grounds. 7. The ground No. 1 of the appeal relates to addition of Rs. 11,26,672/-. This amount was found credited in the capital account of the proprietary concern of the assessee, namely, M/s Sanjay Plastic Industries. The contention of the Assessing Officer is that the assessee failed to explain source of the credit of this amount in his books of accounts. Before the Ld. CIT(A), the assessee contended that credit of the said amount in bank account of the proprietary concern was by way of transfer of equal amount from the saving bank account of the assessee. The source of such sum in the saving account was explained by the assessee as by way of sale of agricultural land and other office premises amounting to Rs. 1,15,27,000/- and Rs. 36,00,000/- respectively. The Ld. CIT(A) was of the view that this amount was sufficient to finance the complete addition of Rs. 11,26,672/- in the capital account of M/s Sanjay plastic industries. The Ld. CIT(A) held that n....
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....claim of the assessee were forwarded to the Assessing Officer and any comment was provided by the Assessing Officer. In view of the aforesaid facts and circumstances, we feel it appropriate to restore this issue for verification by the Assessing Officer and decide in accordance with law. The assessee is directed to produce all relevant documentary evidence in support of its claim before the Assessing Officer. If on verification of the saving bank account of the assessee, the contention of transfer of money of Rs. 11,26,672/- from saving account to the current account of proprietary concern is verified, then no addition is required on this account . The ground of the appeal is accordingly allowed for statistical purposes. 8. The ground No. 2 relate to addition of Rs. 35,00,918/-. During assessment proceeding, the Assessing Officer observed income of Rs. 99,082/- on sale of the property by the assessee in the year under consideration. This property was shown to have been purchased for Rs. 35,00,918/-. The Assessing Officer asked about the date of the purchase of said property and source of investment. According to the Assessing Officer, the assessee failed to explain the source of i....
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....s totally baseless and without appreciation of the facts available before him. According to her, it is the Ld. CIT(A) who has violated the principle of natural Justice as despite objection of the Assessing Officer in remand proceeding that no documents were made available to him for his comment, he allowed the appeal in violation of the provisions of Rule 46A of Income Tax Rules. The Ld. DR submitted that the decision in the case of Commissioner of Customs Vs. Tayo Engineering India Ltd. (supra) relied upon by the assessee, there was requirement of issue of show cause notice specifically, which is not so in assessment proceeding, thus, the said decision cannot be relied in the instant case. On the issue of whether addition could be made under section 69 of the Act, the learned DR submitted that the assessee had not discharged burden as regard to the source from which the investment has been made and therefore the Assessing Officer was justified in treating the investment in property as unexplained investment under section 69 of the Act. In support of the contention, the Ld. DR relied on number of decisions cited in the written submission filed including decision of the Hon'ble Supr....
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....ll, the purchase deed or agreement is required to ensure what amount has been mentioned in that purchase deed or agreement. Once, the amount and mode of payment mentioned in the purchase deed is ascertained, then the source of payment explained by the assessee as above can only be verified. In the affidavit filed by the assessee, which is available on page 27 of the paperbook, regarding the source and mode of the payment, the assessee submitted as under: "That I had sold out the property for Rs. 3600000.00 of Preal Infrastructure which cost tome Rs. 3500918.00. The sales consideration has been recd. vide cheque No.446204 of Rs. 1600000 & Ch. 446203 of Rs. 20000000/-, whereas the payment has been made through the M/s Sanjay Plastic Inds. Vide Cheque No.948131, 948130, 948129, 948128 of Rs. 465725, 465725, 400000 & 400000 respectively & the balance payment of Rs. 1731450/- was made by the Katyani Construction on our behalf in the inter party adjustment account. The relevant documents for sales & purchase has been not traceable by me despite of my best efforts. (Emphasis supplied externally by us) 8.5 On perusal of the above submission, it is clear that the assessee did not provid....
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.... the Commissioner (Appeals)] shall not take into account any evidence produced under sub-rule (1) unless the [Assessing Officer] has been allowed a reasonable opportunity- (a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant." 8.7 The Hon'ble Delhi High Court in the case of CIT Vs Manish Buildwell Private Limited (245 CTR 397) (Delhi) has also held that after admitting the additional evidences by the Ld. CIT(A), the Assessing Officer should be provided opportunity to rebut those additional evidences. 8.8 In view of the above, we are of the opinion that the Ld. CIT(A) has allowed the issue in dispute without following the provisions of Rule 46A of the Rule and, therefore, we feel it appropriate to restore the "issue-in-dispute" to the file of the Assessing Officer for deciding the issue afresh, with the direction to the assessee to produce all the documentary evidence relied in support of its claim, before the Assessing Officer. Though the issue of dealing with Rule 46A should have been in normal course restore....
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....or the purpose of the business. If the same is utilized for the purpose of the business, then the interest against the said borrowing is allowed and, if the said funds have been utilized for purposes other than business, then interest on such borrowed fund cannot be allowed against business income. On page 35 of the paper-book, the list of sundry debtors amounting to Rs. 39,61,009/- is appearing. The said list include Reliance LIC Ltd. and Katyani Construction Company. The Assessing Officer has questioned particularly the amount of Rs. 31,00,000/- advanced to Reliance LIC Company Limited and Rs. 10,19,468/- advanced to Katyani Construction. Despite the specific queries raised, the assessee has not submitted as for what purposes these advances were made, whether it was advanced for purchase or whether any sales were made to these parties and payment from them was due. During the first appellate proceeding also, no such details ware provided. Even before us, also except the claim that borrowed funds were utilized for the purpose of the business, no detail about the money advanced to Reliance LIC Company Limited and M/s Katyani Construction company were provided. On the perusal of the....
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....ess purpose. Similarly, the assessee has not produced any logbook of the car to demonstrate that it was used wholly and exclusively for the purpose of the business and no personal use was taken. In case of such disallowance on account of personal use, the onus is on the assessee to produce the desired documents of details of use of the vehicles or telephone, maintained in day-to-day course, otherwise only course left would be to estimate the disallowance on the basis of a small sample for a week or a month and then extrapolate the same for the entire year. Since we have already restored other grounds of the appeal to the Assessing Officer for deciding a fresh, we feel it appropriate to restore this issue also to the file of the Assessing Officer for ascertaining non-business purposes use of the telephone or car or conveyance on the basis of documentary evidences. The ground of the appeal is accordingly allowed for statistical purposes. 10. The next ground relate to addition of Rs. 90,02,000/-made by the Assessing Officer treating the sale of agricultural land resulting into long-term capital gain. The Assessing Officer observed sale of property of Rs. 1,15,27,000/- which was acqui....
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....ing. According to the Ld. DR, as there being violation of provisions of Rule 46A of Income Tax Rules, the issue also needs to be restored to the file of the Assessing Officer for deciding afresh. 10.2 On the contrary, the learned counsel relied on the finding of the Ld. CIT(A) and submitted that all the documents were duly filed before the Assessing Officer in assessment proceeding as well as remand proceeding and therefore the Ld. CIT(A) is justified in deleting the addition. 10.3 We have heard the rival submissions and perused the relevant material on record. The issue in dispute in the ground raised is whether the land which was sold by the assessee, was agricultural land in terms of the provisions of the Act. The assessee was required to prove that land was situated beyond 8 kms. from the municipal limit and agricultural activity was carried out by the assessee on the said land. Before us, the assessee has referred pages 43 to 45 of the paperbook, which are handwritten certificate issued by the Patwari (Land Revenue Authority). We agree with the observation of the learned DR that the handwritten certificate is not bearing any seal or name of the Patwari or the person who has ....