TaxTMI 
TaxTMI 
2020 (12) TMI 8
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....CIT(Appeals) is unjust and not in reference to the facts and circumstances of the case. 2. That the addition of Rs. 75,00,000/- as alleged on account of advance given to J. Siva Sai is unjust as there is no such advance. 3. That the addition of Rs. 6,25,000/- as alleged that the appellant has received interest on Supra is unjust because there is no advance hence there is no interest. 4. For that the calculation of interest U/S. 234 A, 234 B & 234 C are not as per the provisions of the I.T. Act 1961. 5. That the order assessment is banned by limitation because the orders were passed on 29/12/2017 and served on the assessee on 15.01.2018. the matter was already decided by the Honourable Bench, ITAT, Cuttack in the matter of Nidan vide ITA No M/S. NID A N., I.T. (SS). Appeal Nos. 32 to 37/CTK/2018. (ANNEXURE-VI.) 6. For these and other reasons to be adduced at the time of hearing the appellant prays your honour to reduce the Income to the returned figures. For which act of kindness the appellant shall ever pray. 4. Further the assessee vide letter dated 16.12.2019 has filed an application for accepting the additional grounds, which reads....
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....stice. And for this Act of kindness, the Appellant/Assessee as in duty bound shall ever pray. 5. Brief facts of the case are that the assessee is an individual deriving an income from interest on capital and remuneration from a partnership firm, namely, M/s. Jagannath Mills, Kothapeta, Rayagada. A search and seizure operation u/s. 132 of the Income Tax Act, 1961 was conducted against the assessee on and from 12.02.2016. In pursuant to the search and seizure operation, the assessee was asked to file return u/s. 153A of the Act. In response to the said notice, the assessee stated that the return filed u/s. 139 of the Act on 31.03.2014 declaring total income of Rs. 2,67,510/- may be treated as return filed. Subsequently, other statutory notices were issued to the assessee. In response to the said notice, ld. AR of the assessee filed detailed written submissions which have been incorporated by the AO in his order. The search u/s. 132 of the Act was conducted in case of Shri N. Trinath Rao, Shri N. Ananda Rao and Shri Jami Ramesh & Group on 12.02.2016. Shri N. Trinath Rao and Shri N. Ananda Rao both are brothers and qualified Chartered Accountants and practicing. The assesse....
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....0/- on hand loan will not treated as undisclosed income and added to your total income during the financial year. For the purpose of making compliance to this questionnaire, a notice u/s. 142(1) of the Act is enclosed." In response to the above questionnaire, the assessee's A.R. Shir N. Ananda Rao, F.C.A. filed his reply on 25/07/2017. The same has been reproduced below; The assessee has filed the Return of Income for the assessment year 2013-14 on 31-03-2014. The copy of the acknowledgement and the calculation sheet enclosed herewith for your kind perusal. There are no investments made during the year. Your Honour has mentioned in the notice that the assessee had given load to Jami Siva Sai as per the noting of Diary, not-book and rough cash book on 26-06-12 and on 06-12-12 of Rs. 50 Lakhs and Rs. 25 lakhs respectively. In this regard I am to say that I have not given any loan to Jami Siva Sai and I am not aware of the same transactions. During the investigation also I have told that same fact. There is no receipt of interest to the extent of Rs. 6,25,000/- on 12-11-2012. No documents were also obtained from our premises during the search op....
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....ade in cashew Home and has been reflected in the books of account. Q. 89 I am showing you Page-88 of seized documents identified as JRR-37. On this page, there are some entries as under:- P.95 Lakhs 12.11.12 6,25,000 OB: 50 21.05.13 5,00,000 6/12/12 25 22.05.13 62,500 23/04/14 20 30.10.13 4,68,750 95 06.02.14 4,68,750 07.07.14 6,37,500 - 9 months pay 30.12.14 4,00,000 Please explain the above. Arts-As explained above, Rs. 50 lakhs was received from DORB customers and Rs. 25 Lakhs received from Sri Gandhi Thakur Das, Surat. Q. 90 I am showing you Pages-89 to 91 of seized documents identified as JRR-37 which clearly show payment of interest made by you as detailed below. 5 X 75 X 1.25 468750 5 months X 75 Lakhs XI. 25% = Rs. 4,68,750/-. That means you have paid interest of Rs. 4,68,750/-@ 1.25% interest on Rs. 75,00,000/- of loan availed. Please offer your comments. Ans. I cannot explain the same." 05. From the above, it is clear that Shri Jami Siva Sai except stating that an a....
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....the submissions of the assessee dismissed the legal grounds raised by the assessee and decided the appeal of the assessee on merits. 7. Further aggrieved from the order of CIT(A), the assessee is in appeal before the Income Tax Appellate Tribunal. 8. At the outset, ld. AR filed paper book containing pages 1 to 47 and also filed his written synopsis as under:- That, a search and seizure operation u/s. 132 of the I.T. Act, 1961 was conducted in the Residential premises of the Assessee on 12.02.2016. consequent to search, Assessment proceeding U/S. 153A has been initiated against the Assessee from Assessment years 2010-11 to 2015-16 and regular Assessment u/s. 143(3) of the Act, has been initiated for Assessment year: 2016-17. While completing Assessment, the learned A.O. accepted Returned income of the Appellant/Assessee for Assessment years: 2010-11, 2011-12 and 2012-13, but made additions for Assessment years: 2013-14 to 2016-17. Against the Additions made, for Assessment years: 2013-14 to 2016-17, the Appellant preferred Appeals before CIT(A)-2, Bhubaneswar. While adjudicating appeals of the Appellant, the learned CIT(A) deleted additions for Assessment year: 2014-1....
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....nd statutory requirement has not been followed by the learned Authorities below while granting approval U/S. 153D of the Act. It being mandatory in the eye of law in absence of it, the order of Assessment needs to be quashed in the interest of justice. 2. That, in absence of any incriminating materials, the learned A.O. is not justified under the Law to disturb the completed, Assessment, as such the impugned order of Assessment for Assessment years: 2013-14 to 2015-16 are without jurisdiction and without the Authority of law, hence additions made needs to be deleted in the interest of justice. 3. The impugned orders of Assessments re ante-dated and are barred by limitation as such are not sustainable in the eye of law, hence needs to be quashed in the interest of justice. Legal Ground No. 1. 1A. That, as has been observed by the learned C.I.T (A) in para-7.2 at page 6 of his order that while completing Assessment, the learned A.O. has sent the draft order for approval of the learned Joint Commissioner of Income Tax on 29.12.2017 vide his F. No. ACIT/CC-1/Bhubaneswar/153D/2017-18 and the learned Joint Commissioner of income Tax accorded his approv....
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....is also not sustainable in the eye of law as such are liable to be quashed in the interest of justice. 1D. That law in this issue is well settled by the Hon'ble Bombay High Court in the case of Smt. Shreelekha Damani(Supra) reported in (2019) 307 CTR 218. that while granting approval, if the approving Authority did not have enough time to analyse the issues arising out of the draft Assessment orders, then clearly this was a case in which the Higher Authority had granted the Approval without consideration of relevant issues. Their lordships held that the question of validity of approval goes to the root of the matter and could have been raised at any time and the Tribunal was justified in holding that there was no application of mind on the part of the Authority granting approval and therefore approval was invalid. The Appellant also relies on following judicial pronouncements such as; 1. Dillip Constructions Pvt. Ltd-vs.-ACIT, IT (ss)A Nos. 66 to 71/CTK/2018 2. M3M India Holdings vs. DCIT, in ITA No. 2691/Del/2018 3. Geetarani Panda &ors.-versus-ACIT (2018) 32 TTJ 703(CTK) 1E. That, in view of above judicial pronouncement and settled....
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....led by the Hon'ble ITAT, Delhi Bench in the case of Trilok Chand Chaudhury-vrs-ACIT, Central Circle New Delhi in ITA NO. 5870/DEL/2017 that, even if search happens in the case of the Assessee, A.O. cannot initiate proceeding U/S. 153A, if incriminating material is found during search of other person. Since, facts of the present case is similar to the facts in the case of Trilok Chand Chaudhury. In view of settled principles of law, the Assessment so made U/S. 153A and consequential additions so made therein for Assessment years: 2013-14, 2014-15 and 2015-16 being not sustainable in the eye of law are liable to be quashed in the interest of justice. 2D. That, when the learned A.O. has no incriminating material in his hand for Assessment years: 2013-14 to 2015-16 and no addition has been made on the basis of documents seized, he is not authorised under the law to disturb the completed Assessment. Law on this issue is well settled by the Hon'ble ITAT, Delhi-F bench in the case of Smt. Sunita Bhagchandka vs. ACIT in ITA No. 3447/Del/2016 that, when documents seized during search has no revenue implication and does not indicate any undisclosed income, it cannot be const....
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....us-ACIT ITAT Cuttack in ITA No. 32 to 37/CTK/2018 3. Pankaj Sharma-versus-DCIT in ITA No. 3556 to 3557/Del/2015 4. Hon'ble Orissa High Court in the case of Delhi Foot wear vs. Sales Tax Officer in W.P.(C) No. 2971 of 2009. Submission on merit of additions made of Rs. 75,00,000.00 and Rs. 6,25,000.00 for Assessment year: 2013-14 For that, while examining documents seized from Shri Siva Sai Jami, the learned A.O. treated as if, the Appellant/Assessee has given Rs. 75,00,000.00 as loan and has earned Rs. 6,25,000.00 as interest income, for which, while completing Assessment U/S. 153A, the learned A.O. made addition of Rs. 75,00,000.00, treating it as undisclosed income on substantive basis and further, calculated interest and made addition of Rs. 6,25,000.00, treating it as undisclosed income from other sources and taxed accordingly U/S. 115BBE of the Act. To make these additions, he took help of documents seized from the premises of Shri Shiva Sai Jami. The learned A.O. referred to page No. 84 of JRR-26. (Reference may be drawn to Page No. 26, Annexure-4 and page No. 42, Annexure-5 of the paper Book.) During course of search, post search inquir....
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....wn to para-55, page 55 ] 2. Addl. CIT-vrs-Lata Mangeskar 97 ITR 696] Bombay High Court. 3. Straptex (India) P. Ltd.-vrs-DCIT 84 ITD 320] Mumbai. 4. CBI vrs. V.C. Shukla 3 SCC 410] SC. 5. Prarthana Construction (P) Ltd.-vrs-DCIT 118 Taxman 112] Ahd. 6. Unique Organisers & Developers (P) Ltd. vs. DCIT [118 Taxman 147] Ahd. In view of the above judicial pronouncements, it is respectfully prayed that, the additions so made being not sustainable in the eye of law needs to be deleted in the interest of justice. In addition to the above written submissions, the ld. AR of the assessee submitted that the AO sent the draft assessment order before the JCIT for taking approval u/s. 153D of the Act of near about 75 cases on 29th December, 2017 and the ld. JCIT approved the draft assessment order on the same date, which is impossible and the same implies that the JCIT has not applied his mind properly before giving approval. He also submitted that there was no any incriminating material found during the course of search. However, the AO has completed the assessment relying on the documents found in the name of Jami Siva Sai, who is other t....
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.... no time to analyse the issues of draft order on order. With these comments, the draft order was approved as it was submitted. Therefore in said context, it was held by the Hon'ble Mumbai ITAT that the Addl. CIT had not applied his mind while granting approval u/s. 153D. Thus there was disagreement between the A.O. and his supervisory officer. However in the present case, no such comments have been mentioned by the Joint CIT, Central Range, Bhuvaneshwar while according approval on 29.12.2017. In the present case, the Joint CIT, Central Range, Bhuvaneshwar has confirmed & consented to the act of the A.O. and sanctioned the same. vi.) The Judgment of the Hon'ble Cuttack Tribunal relied upon by the assessee in the case of Smt. Geetarani Panda vs. ACIT (IT (SS)A No. 01/CTK/2017 dated 05.07.2018 is distinguishable on facts. In para-11 of the decision (on page-13), it has been mentioned that the Addl. CIT, Central Range-1 had given a reminder to the A.O. to submit the draft orders for approval u/s. 153D on or before 23.03.2015. However the draft order was submitted on 26.03.2015 thereby he was left with no time to ensure that all the points in the Appraisal Report, the a....
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....Haryana High Court in the case of Rakesh Mahajan Vs. CIT 214 CTR 218) wherein it was held that "it is a well settled law that admission constitutes best piece of evidence because admission is self-harming statement made by the maker believing it to be based on truth. It is well known that no one will tell a lie especially harming one's own interest unless such a statement is true". ii.) Reliance is placed on the order of Hon'ble Cuttack ITAT in the group case i.e. Smt. N. Roja for AY 2010-11 to AY 2014-15 & AY 2016-17 in IT(SS) A Nos. 101-106/CTK/2018 dated 04.06.2020. On pages 16 & 17 of said order dated 04.06.2020, the Hon'ble Members of ITAT have analyzed clause (vii) of para-37 relating to the decision of Hon'ble Delhi High Court in the case of Kabul Chawla 380 ITR 573). From the same, it is clear that the AO can interfere with the completed assessments if there is either an incriminating material found at the time of search or undisclosed income or property is discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. On going through the records, it is palpable that cash loan....
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....date. (Para 6) This decision was not placed before the Hon'ble Jurisdictional ITAT during the hearing in the case of M/s. Nidan. Therefore as such, the decision in the case of M/s. Nidan is Per incuriam. iii.) The official records do not show that the assessment order was passed by the A.O. beyond the limitation period i.e. 31.12.2017. The legislative intent specified in sections 143(2)/148 and other sections is clear wherein which it is stated that the A.O. should "serve on the assessee" as compared to the language used in section 153(1). The legislature in its wisdom has not used the term "shall be served on the assessee" U/s. 153(1) for any assessment order or demand notice. The decision of the Hon'ble Andhra Pradesh High Court in the case of Kodicasu Appalaswamy & Suryanarayana Vs. Commissioner of income Tax 46 ITR 735) is pertinent in which their lordships held that where an order of assessment had been passed within the period of limitation then the date on which order of assessment and demand notice were served, was not relevant. The Hon'ble Gauhati High Court in the case of Ramanand Agarwalla Vs. Commissioner of income-tax 151 ITR 216) held tha....
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....ri Gandhi Thakur Das were also not produced before the A.O. As regards the question no. 90 (page 6 of the assessment order) in relation to working of interest @ 1,25% on 75 lakhs for 5 months (pages 89 to 91 of JRR-37), Shri Jami Siva Sai could not furnish any explanation for the same. He expressed his inability to explain the entries relating to interest working which was paid to the assessee. ii.) This issue was discussed by the CIT(A) in paras 5.5 to 5.7 on pages 4 & 5 of the appellate order. It is clear that these documents were bound books in thick cover and could not be regarded as loose sheets of paper. The assessee was regularly advancing cash loans as evidenced by documents seized from his residence. In AY 2016-17, the assessee had advanced cash loans to Shri B. Ram Prasad (Director of Gandhi Institute of Advanced Computer & Research) amounting to Rs. 31 lakhs as per seized cash receipts. Thus denial by Shri Jami Siva Sai was collusive in nature. iii.) The documents seized from the third party can be used against the person to whom these belong as held by Hon'ble Pune ITAT in the case of Dhunjibhoy Stud & Agricultural Farm vs. DCIT 82 ITD 0018) (TM Pu....
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....date of which the cash loan of Rs. 75,00,000/- and of Rs. 25,00,000/- is clearly mentioned. Also interest paid of Rs. 6,25,000/- on 12.11.2012 is also clearly mentioned. The alphabets 'P' & T refer to principal & interest. 5.6 Similarly, JRR-26 is a bound ledger book. Again on page 152 the name of K. Rama Rao is clearly mentioned and also that the loan of Rs. 25,00,000/- on 06.12.2012 is also clearly mentioned. 5.7 Both of the seized documents are bound books in thick cover and cannot be regarded as loose sheets of paper. There is no doubt that K. Rama Rao of Rayagada is the appellant, on whose residence also a search was conducted. In that search, money receipts issued by B. Ram Prasad Rao, Director of M/s. Gandhi Institute of Advanced Computer and Research (GIACR) amounting to Rs. 31,00,000/- were found and seized. This clearly suggests that the appellant is regularly practising in the money lending business and advances cash loans. The material seized during the course of search speaks for itself. Jami Siva Sai has stated that of Rs. 50,00,000/- was received from DORB customers but no such evidence was given either of the time of assessment or at the ap....
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....hubaneswar/153D/CC-l/Bhubaneswar/2017-18/3633, dated 29.12.2017. Thereafter, the Assessing Officer has issued the same order on 29.12.2017. These are undisputed facts, which clearly indicate that the assessment was completed before the time barring date. 7.3 In all the decisions quoted by the appellant, it has been held that the assessment order has to be beyond the power the assessing authority, otherwise, there is likelihood of changes being made is the assessment order. In this case, it is not the contention of the appellant that the order has been changed from the time when it was made to the time when it was served on the appellant. When the Assessing Officer sends the draft order to Jt. Commissioner of Income Tax, for statutory approval u/s. 153D of the Income Tax Act, 1961, the order is beyond his power, as after the approval, the Assessing Officer, has to issue the same order. 7.4 As per the provisions of the section 153B of the Income Tax Act, 1961, the Assessing Officer has to make the order and not serve the order on the appellant, before the time barring date. I am supported in this regard by the decision of Hon'ble High Court at Calcutta in the ca....
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....sment on 16-3-1968--Relevant demand notice dated 20-3-1968 was issued by ito on 30-3-1968 and served on assessee on 13-4-1968--Whether, assessment was completed on 16-3-1968 and as such was not barred by limitation--Held, on fads, yes. c. India Ferro Alloy Industry (P.) Ltd. Vs. Commissioner of Income-tax [1993] 202 ITR 671 (CAL. J What is required for completion of the assessment is the determination of the tax liability and issue of demand notice but certainly not the service of the same on the assessee. Accordingly, it should, therefore, be taken that the assessment was completed on 15-10-1980. d. Commissioner of Income-tax (Central), Cochin Vs. T.O. Abraham & Co. [2011] 12 taxmann.com 433 (Kerala) The requirement of section 158BE is satisfied if the department establishes that the block assessment is completed before the last date provided for completion of assessment under section 158BE which in the instant case was 31-5-1997. It is the settled position particularly through the decision of the Supreme Court in B.J. Shelat v. State of Gujarat AIR 1978 SC1109 that for validity of the assessment there is no need for the department to serve the ....
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....e first copy of the assessment order sent to the assessee did not contain the signature of the Assessing Officer did not give rise to a presumption that the original assessment order was not signed by the Assessing Officer. Admittedly, the assessment was made in several copies and one of the copies was sent to the assessee along with copy of demand notice. It may so happen that the dispatch section without noticing the omission would have sent an extra copy of assessment order which was not signed. However, the same did not mean that the original assessment was not signed by the Assessing Officer with reference to which only he prepared the notice of demand which was admittedly signed and dispatched to the assessee within the period of limitation. The additional feature that supported the case of the department was that the draft assessment prepared and finalized by the Assessing Officer was approved by the Commissioner after giving a hearing to the assessee on 23-5-1997 and, so much so the assessee could not even contend that a draft assessment was not finalized within the period of limitation. Even though records were produced before the Tribunal and verified by the Tribunal, the....
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....he proviso to section 147 of the Act shows that the word used as "no action shall be taken'. Similarly, in the provisions of section 148 of the Act, the words used are 'shall serve on the assessee'. Similarly, in the provisions of section 149 of the Act, the words used are 'issue to the assessee. Thus, each word used in each section has a different purpose and different meaning. 'Made' cannot be treated on the same footing as served. The fact that the word used is 'made' in section 153 shows that the assessment order should be made on or before the said date. It does not mean that it should be served. On this ground itself as we find that the decision of the Coordinate Bench has erroneously laid down the law on this issue if the word 'made' is given the meaning served then the section itself would become unworkable and it would make all assessment orders made on the last day illegal. In the circumstances, respectfully following the principles and the ratio laid down by the Hon'ble Madras High Court in the case of CIT Vs. Hi-Tech Aral Ltd. (2010) 321 ITR 477, we differ from the decision taken by the Coordinate Bench in the case of Durga Co....
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....ble Products Ltd. will not apply, as held by Hon'ble Supreme Court in the case of Bimal Kishore Paliwal Vs. CWT (2017) 87 taxmann.com 40 (SC). The relevant portion of the judgment is reproduced below: "Learned counsel for the appellants has further submitted that in the event there are more than one methods of valuation of an asset of an assessee, the method under which the valuation is in favour of assessee has to be accepted. He has relied on the judgment of this Court in CIT v. Vegetable Products Ltd. 1197 3J 88 ITR 192. This Court in paragraph 6 of the judgment has laid down the following: There is no doubt that the acceptance of one or the other interpretation sought to be placed on Section 271(1)(a)(i) by the parties would lead to some inconvenient result, but the duty of the court is to read the section, understand its language and give effect to the same. If the language is plain, the fact that the consequence of giving effect to it may lead to some absurd result is not a factor to be taken into account in interpreting a provision. It is for the Legislature to step in and remove the absurdity. On the other hand, if two reasonable constructions of a tax....
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.... to make the order up to the midnight of 31.12.2017, in this case. If he is asked to serve or even dispatch the order before 31.12.2017, the provisions of section 153B of the Income Tax Act, 1961 will become unworkable. It is a settled proposition that any interpretation which makes the provision unworkable should not be accepted. 7.10 Considering the above mentioned discussion and decisions in favour of Revenue, it is held that the order of the Assessing Officer is valid. The ground of appeal is dismissed. 8. In the result, the appeal is dismissed. 11. On careful perusal of the above observations of the CIT(A), we do not find any interference is called for on the legal grounds decided by the CIT(A). The provision of Section 153D of the Act states regarding making of the order within the stipulated period. Further from the reading of the provisions of Section 153D of the Act, it is clear that there is no mention about the "service" of the order, however, it is only mentioned that the order shall be "made". With regard to "service" it has clearly been defined in the section 143(2) of the Income Tax Act but in section 153D of the Act nowhere about service of orde....
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....list of the item was seized, which he filed. The Ld. counsel in support of his contention that no addition could have been made under section 153A of the Act in the case of the assessee in respect of incriminating material found from the course of search at the premise of the third parties, relied on following decisions: o?= DCIT Vs. Smt. Shivani Mahajan [ITA No. 5585/Del/2015](pronounced on 19.03.2019) DCIT Vs. Vikas Jain [ITA No. 4075/Del/2014] (pronounced on 19.03.2019) Pavitra Realcon (P) Ltd. Vs. ACIT [2017] 87 taxmann.com 142 (Del.-Trib.) Krishna Kumar Singhania Vs. DCIT [2017] 88 taxmann.com 259 (KolTrib) CIT Vs. Pinaki Misra [2017] 88 taxmann.com 521 (Delhi-HC) 5.3 Before us, the Ld. DR relied on the decision of the Hon'ble Delhi High Court in the case of Sh. Vinod Kumar Gupta in ITA No. 1003/2017, wherein addition on the basis of statement of the third party during the course of such was held as validly made. 5.4 We have heard the rival submissions of the parties and also perused copy of Panchnama through which the document in dispute was seized. On perusal of the Panchnama, we find that the said search war....
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....he course of search at the premises of the third party. The Assessing Officer is required to follow the procedure laid down in the Act for making the assessment and he cannot devise his own procedure for shortcut methods. In our considered opinion, when the case of the assessee is covered under the provision of section 153 of the Act and if reliance is placed on the incriminating material found during the course of search of third-party, then provision of section 153C of the Act would be applicable and have to be adhered to. Thus, in the instant case, the Assessing Officer was required to first complete the proceedings under section 153A in hand, which were initiated by way of notice dated 30/06/2014 and thereafter, he was at liberty to take action under section 153C of the Act for bringing the material found from the premise of Sh. Ashok Chaudhri to tax in the hands of the assessee. 5.7 In the case of Shivani Mahajan(supra), identical question was raised before the Tribunal as under: "9. We have carefully considered the arguments of both the sides and perused the material placed before us. After considering the facts of the case and the rival submissions, we find....
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....ment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and] for the relevant assessment year or years referred to in subsection (1) of section 153A]:]. 15. Thus, when during the course of search of an assessee any books, document or money, bullion, jewellery etc. is found which relates to a person other than the person searched, then the Assessing Officer of the person searched shall hand over such books of account, documents, or valuables to the Assessing Officer of such other person and thereafter, the Assessing Officer of such other person can proceed against such other person. However, in the case under appeal before us, admittedly, Section 153C is not invoked in the case of the assessee and the assessment is framed under Section 153A. We, respectfully following the above decisions of Hon'ble Jurisdictional High Court, hold that during the course of assessment under Section 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person." 5.9 The facts of the case of Vi....
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.... a. Bombay H.C. Lata Mangeshkar 97 ITR 696] b. Straptex (India) P. Ltd. v. DCIT 84 ITD 320 (Mum)] c. CBI v. V.C. Shukla 3 SCC 410 (SC)] d. Prarthana Construction P. Ltd. v. DCIT 118 Taxman 112 (Ahd.)] e. Unique Organizers & Developers P. Ltd. v. DCIT 118 Taxman 147 (Ahd.)] * * * * * * * 55. Since in the instant case the assessee from the very beginning has denied to have received any such payment from M/s. Dhariwal group through Mr. Sohan Raj Mehta and since no incriminating material was found from the residence of the assessee during the course of search and since the assessee is not dealing with M/s. Dhariwal group in his individual capacity, therefore, respectfully following the decisions cited above and in view of our reasonings given earlier, we are of the considered opinion no addition in the hands of the assessee can be made. Since it is held that the assessee has not received any amount, therefore, the question of taxing the same u/s. 56(2)(vi) as held by CIT(A) does not arise. In this view of the matter, we set aside the order of the CIT(A) and direct the Assessing Officer to delete the addition of Rs. 1 crore for A.Y.....
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.... the impugned order of Assessment is not sustainable in the eye of law in view of the fact that due procedure of law and statutory requirement has not been followed by the learned Authorities below while granting approval U/S. 153D of the Act. It being mandatory in the eye of law in absence of it, the order of Assessment needs to be quashed in the interest of justice. 2. For that, in absence of any incriminating material, the completed Assessment cannot be disturbed, as such, the consequential additions so made, being without jurisdiction and without the authority of law is liable to be quashed in the interest of justice. 3. That, it may be respectfully submitted here that, it being jurisdictional ground and goes to the root of the case, it needs to be admitted for hearing in the interest of justice. If this legal ground is not admitted and not adjudicated, the Appellant/Assessee will suffer from irreparable loss and injury, Hence the; PRAYER Under the facts and in the circumstances stated above, it is therefore respectfully prayed that, this Hon'ble Tribunal shall be graciously pleased to consider the genuine difficulties faced by the Assessee and....
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....t is banned by limitation because the orders were passed on 29/12/2017 and served on the assessee on 15.01.2.018. the matter was already decided by the Honourable Bench, ITAT, Cuttack in the matter of Nidan vide ITA No M/S. NIDAN, I.T. (SS). Appeal Nos. 32 to 37/CTK/2018. (ANNEXURE-VI.) 8. All the evidence were filed during the assessment proceedings and appeal proceedings which were not at all seen which is unjust. 9. For that the calculation of interest U/S. 234 A, 234 B & 234 C are not as per the provisions of the I.T. Act 1961. 10. For these and other reasons to be adduced at the time of hearing the appellant prays your honour to reduce the Income to the returned figures. For which act of kindness the appellant shall ever pray. 20. First, we shall consider the legal grounds raised by the assessee which read as under:- 1. That, for Assessment year 2016-17, Assessment was completed by the learned A.O. U/s. 143(3) of the I.T. Act, 1961 by making additions of undisclosed income. Being aggrieved with these additions, the Assessee preferred appeal before the learned C.I.T.(A) and the same was already adjudicated upon. Since, the learned C.I.T.(A....
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....see, some loose sheets containing 81 written pages identified as KRR-01 were seized. Out of which page Nos. 29 to 32 are original cash receipts letter heads for cash transaction made between Sri K. Rama Rao and Gandhi Institute of Advanced Computer & Research (GIACR) under the original signature of the Chairman of said institution Sri B Ram Prasad Rao. The details of such transactions are as under:- Identification No. of seized documents Date of transactions Amount in Rs. Rate of interest Cash received by KKR-01, Page No.29 22.06.2015 15,00,000 4.5% per month Sri B Ram Prasad Rao, Chairman of GIACR KKR-01, Page No. 30 23.07.2015 5,00,000 KKR-01, Page No. 31 25.07.2015 5,00,000 KKR-01, Page No.32 31,08.2015 6,00,000 TOTAL 31,00,000 22. The above facts were asked to the assessee for explanation by issuing questionnaire u/s. 142(1). The assessee replied that there was no any investments made on the said institutions and he stated that he is a partner of Jagannath Mills and the remuneration and interest on capital is shown in the return of income. The assessee also stated that the said trans....
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....g the return of income for Assessment year 2016-17. However, made addition in the hand of the Appellant, treating it as undisclosed income. On being appeal, the learned C.I.T.(A) confirmed the said addition. (Reference may be drawn to Page 72 to 78 of paper Book.) 2.2 That, when both Appellant and the Director of GIACR have denied of having any actual Financial transaction and there is no proof of either payment or receipt of money is found either from the Appellant or from the said Institute, both the Authorities below have committed gross error of law by treating it as undisclosed income in the hand of the Appellant on the basis of loose sheets found during search. Further, impugned addition is made without making any further enquiry and without having any corroborative evidence to justify that the Assessee has actually paid. 2.3 That, it may be submitted here that, it is not the case of the Department that, the Assessee had received any money from GIACR, so that, it can be construed as income in the hand of the Assessee, rather from the loose sheets, the learned A.O. presumed that, the Assessee might have paid it. Further, both Authorities below never ....
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.... Assessee that, out of total cash found Rs. 24.75 lakhs belong to HUF and Rs. 2,61,300.00 belong to him. It was also explained during post search inquiry, detail capital Account and balance sheet were filed while explaining the cash availability. However the learned A.O. made addition treating it as unexplained money by holding that since said capital accounts and balance sheets were not filed along with the return of income filed, therefore not acceptable. On appeal, the learned CIT(A) confirmed the addition by holding that capital account and balance sheet were prepared to justify the availability of cash hence not acceptable. 2.7. That finding of learned CIT(A) in para-7.5 of his order that, if the Appellant had filed consolidated balance sheet for 8 years before the DDIT(Inv.), Bhubaneswar, why there were not filed before the Assessing Officer is not known is completely wrong and contrary to the facts on record. The Appellant/Assessee had filed it before the DDIT(Inv.) during post search enquiry as well as before the learned A.O. during course of Assessment also 2.8. That, further the learned CIT(A) observed that the drawings are very low and so far as agricul....
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....d without uttering a single word and without examining the return of HUF, the Authorities below cannot treat it as unexplained income of the Appellant. The Appellant wants to draw kind attention of this Hon'ble Tribunal to Annexure-7 and 8 from page No. III to 129 of the paper Book. These evidences clearly justifies availability of cash. In view of the above facts, it is most respectfully submitted here that, the impugned addition of Rs. 27,36,300.00 being not sustainable in the eye of law is liable to be deleted in the interest of justice. Unexplained Investment: 2.11. That the family of the Assessee consists of the following persons, such as; 1. Kothakota Rama Rao Assessee 2. K.Damayanti Wife 3. K. Sridhar Son 4. K. Chandrika Daughter in law - having one daughter 5. G. Leela Rani Married daughter-having son and daughter 6. G. Satyanarayan Son in law 2.12. That, during course of search gold and jewellery were found from room of the following persons such as; 1. K.Ram Rao 1,003.58 grams 2. K. Chandrika 272.87 grams 3. K. Damayanti 1,632.19 grams 4. G. Leelarani 1,581.34 grams ....
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....etail calculation for better appreciation of fact. Such as; 1. Gold jewellery available with Assessee 1,473.580 grams 2. Gold bar purchased in A.Y:2015-16 616.400 grams 3. As per CBDT Circular entitlement of Family members including Appellant 2,400.000 grams Total Gold found 4,489.980 grams 2.15. That since, gold and jewellery possessed by the Assessee are out of valid sources, the authorities below should not have ignored evidences produced before them and should not have made addition of 2089.980 grams valued at Rs. 58,16,414.00 treating as unexplained investment. In view of this, it may be respectfully submitted here that, impugned addition of Rs. 58,16,414.00 sustained by the learned C.I.T.(A) being not justified is liable to be deleted in the interest of justice. 2.16. That without prejudice to the above submission, it may be further submitted that, during search, jewelleries were fund from different rooms of the family members and all are added in the hand of the Assessee. When, Gold and jewellery were found from room of four adult members, certainly total jewelleries were not in possession of the Appellant, therefo....
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....natory of Institute of Advance Computer and Research (ICAR) and on further perusal of page No. 76, 77 & 78, it is clearly stated that the GIACR is managed by Rabindranath Education Trust, Rayagada. The case of Rabindranath Education Trust has been scrutinized u/s. 143(3) of the Act in which there is no any addition made by the AO in this regard which shows that there was no any transaction occurred between the parties. Merely found the documents and if there is no transaction it cannot be said that the assessee has done the transactions outside his books of accounts or merely found the documents in the name of anybody cannot be said that the transactions have been occurred unless and until it is not established by confirmation from both the parties. Therefore, this addition made by the AO is deleted and this ground of appeal of the assessee is allowed. 26. Ground Nos. 3 & 4 are relating to addition of Rs. 27,36,300/- made by the AO u/s. 69 of the Act as unexplained money. 27. During the course of search operation, there was a total amount of Rs. 27,36,300/- found from the bedroom of Shri Kothakota Rama Rao and Rs. 37,590/- was found from the room occupied by Smt. G. Leela Ran....
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....03.12 31.03.13 31.03.14 31.03.15 12.02.2016 31.03.2016 1st Year 2nd year 3rd Year 4th Year 5th Year 6th Year 7th Year 8th Year 9th Year LIABILITIES Capital Opening Balance 2.00 5.00 8.10 11.30 14.50 18.25 24.05 30.15 30.15 Add Income 2.00 2.10 1.90 1.90 2.05 2.10 2.60 2.60 2.70 Business Income Agriculture Income 2.00 2.00 2.50 2.50 3.00 5.00 5.00 5.00 5.00 6.00 9.10 12.50 15.70 19.55 25.35 31.65 37.75 37.85 Less: Drawings 1.00 1.00 1.20 1.20 1.30 1.30 1.50 2.50 2.50 5.00 5.00 TOTAL 5.00 8.10 11.30 14.50 18.25 24.05 30.15 40.25 40.35 House 3.50 ....
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....as purchased and rest gold were received from inherited or received from relatives on ceremonial occasions. During the course of assessment, the AO asked to justify the above gold found during the course of search and seizure proceedings. In this regard, the assessee could not substantiate with supporting documents but the AO considered the status of the assessee and hailing from trading community and being a senior citizen and married during the year 1963 and the special function ceremonies inheritance and custom of Indian traditions. The AO allowed the following gold jewellery which was total 2050 grams which reads as under:- Sl.No. Name of the Person Description Quantity of Gold Jewellery allowed 1 Sri K Rama Rao Since, he has claimed that out of 616 gms acquired during the F.Y.2014-15 out of which100 gms is attributable to him and 500 gms belongs to her daughter-in-law. 100 grams 2 Smt. Chandrika As claimed by the assessee to be attributable to the daughter-in-law 500 gms was allowed. 500 gms 3 Smt. K Damayanti Wife of the assessee which he has claimed that he has married in 1963 and she was processing 1632.190 gms but no evidence....
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....produced as above. He further submitted that the documents submitted by way of Paper Book in paper book No. 2 page Nos. 13 to 17 cannot be relied because it was not produced before the authorities below. The assessee was unable to produce the copy of purchase bills of 616.400 grams of gold. The CIT(A) after considering all the detailed submissions, he has rightly partly allowed the appeal of the assessee. Therefore, the order of the CIT(A) should be restored. 36. After hearing both the sides and perusing the entire material available on record and the orders of authorities below we find that the CIT(A) has allowed 350 grams of gold ornaments. During the course of search proceedings, total gold were found at 4489.980 grams out of which the authorities below have allowed 2400 grams and remaining gold 1473.580+616.400 = 2089.980 were disallowed. After going through the records of the authorities below, we noted from the para 9 of the assessment order, that the assessee had filed confirmation letter of the persons whose name as stated above but these confirmations have not been disregarded by the AO as well as it has not been considered by the CIT(A). Further, we noticed from the AO....