TaxTMI 
TaxTMI 
2020 (12) TMI 297
X X X X Extracts X X X X
X X X X Extracts X X X X
.... circumstances of the appellant's case the learned CIT(A) has erred in confirming addition of Rs. 81,00,000 under section 69A towards alleged on-money receipts when no such addition is warranted. 2.1 In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has erred upholding addition even though above on money receipt was already offered to tax by Dhirajlal V. Sanghvi in his return of income filed in pursuance to notice u/s.153A of the Act. 3. In law and in the facts and circumstances of the appellant's case, even if it is held that alleged on money receipt id required to be taxed in hands of appellant, the Learned CIT(A) ought to have appreciated that such on-money receipt cannot be taxed in the present assessment year which as per settled law is required to be taxed in the year of execution of sale deed. 4. In law and in the facts and circumstances of the appellant's case, the learned Assessing Officer has grossly erred in ordering for the levy of interest u/s.234A, 234B and 234C, of the Act. The appellant accordingly challenges the very levy of interest under the different provisions referred to in the impugned order. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gly, the same was offered to tax in his return of income. 4. However, the AO rejected the contention of the assessee by holding that noting on lose paper read as receipt towards shop. The project on which shops are to be constructed is registered in the name of the assessee. Similarly, the assessee is separate legal entity and therefore such cash receipt represent unaccounted money under section 69A of the Act, in the hand of the assessee. Accordingly, the AO was of the view that approval of the project on the subsequent date has no significance. 4.1 The AO also found that Shri Dhirajlal while recording his statement under section 131(1) has admitted that the impugned receipt represents the amount received against shop to be constructed by the assessee company at Nava Valdaj. Thus the AO in view of the above added the receipt of as unaccounted income of the assessee under 69A of the Act. Aggrieved assessee preferred an appeal before the learned CIT(A). 5. The assessee before the learned CIT (A) besides reiterating the submission made before the AO contended that the loose paper Annexure A-29 was not found from the premises of the assessee. As such the same was found ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that when cheque payment was made by the appellant then obviously cash payment was also made by it only. The record and the return of income of the appellant establish it beyond doubt that the appellant was independent separate legal entity thus the documents showing cash received by it belong to the appellant only. 7.3 During the appellate proceeding the appellant has contended that the documents were not seized from the premises of the appellant company thus do not belong to the appellant. The above contention is not acceptable as the documents were found and seized from the residence of the main person of the group Shri Dhirajlal Sanghvi thus it cannot be said that these documents do not belong to the appellant company. 7.4 The appellant submitted that the cash flow statement was submitted before the AO during the assessment proceeding and Rs. 81 Lacs has already been included In the cash flow statement of Sh, Dhiraj Lal Sanghvi inn AY 2011-12 and offered for tax. Thus addition made by the AO in the case of appellant lead to double addition and same deserves to be Rs,81 lakhs belonged to Shri Dhiraj lal Sanghvi, however the document mention the cheque ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the company for the simple reason that both are separate entities/ assessee in the eyes of law. Accordingly the AO confirmed the addition in the hands of the assessee in its order. On appeal, the learned CIT (A) was pleased to confirm the addition as made by the AO. 9.1 First of all, we note that there was a group known as 'Sanghvi Group' subject to search and seizure operation under section 132 of the Act. The cases of all the parties who were part of Sangvi Group and subject to search and seizure operation were centralized for the purpose of the assessment which can be verified from the finding of the AO as detailed below: 2. This case was centralized with Central Circle-291), Ahmedabad by CIT-IV, Ahmedabad's order No.CIT-IV/HQ/Centra./Sanghvi Group/2011-12 dated 24.01.2012. Thereafter the CIT-(Central)-II, Ahmedabad's vide order No.CIT(c)-II/Cent./Sanghvi Group/2011-12 dated 22.03.2012 centralized the case with undersigned. 9.2 Among other reasons, the cases are centralized in the cases of search and seizure operation for finding out the undisclosed income in the hands of the right persons and in the right assessment years. It is because, in the case of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt is the key person of the Group. The Appellant in the course of Assessment Proceedings submitted cash flow statement to the Assessing Officer incorporating therein all receipts, payments and circulating fund transactions of the Group found as a result of search action, which has been accepted by the Assessing Officer. 5.7 The cash flow statements along with the documentary evidences which were filed before the Assessing Officer were also filed during the course of Appellate Proceedings. A perusal of the cash flow statements and the seized papers show that during the course of search loose papers/noting for the receipts in the nature of income and the payments/outflows in the nature investments/ expenses were found. There were also transactions in the nature of circulation of funds described by the Appellant in the statement as current account transactions. Accordingly, in order to ensure that true and real income be computed, a consolidated cash/fund flow statement was necessary to be prepared and that was done by the Appellant and filed before the Assessing Officer. Precisely, what has been offered by the Appellant is receipts which were in the nature of income and the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... group. 9.5 However, the AO rejected the contention of the assessee and confirmed the addition in its hands which has resulted double addition. Firstly, in the hands of director of the company namely, Shri Dhirajlal Sanghvi has included the impugned amount for working out the undisclosed income based on search documents in his individual capacity. Secondly, the AO has added the sum of Rs.81 lakhs representing the receipt against the sale of shops in the hands of the assessee. Thus, the inference drawn is this that the receipt of Rs.81 lakhs has suffered tax 2 times which is not desirable under the provisions of law until and unless it is specifically provided. In our considered view, once the AO has reached to the conclusion that the impugned income belongs to the assessee than he was under the obligation to reduce the same from the income of the director. But the AO has not done so despite the fact that the receipt of 81 lakhs was included in the cash flow statement of the director was also admitted by him (the AO) in his order. The relevant finding of the order of the AO reads as under: This fact also gains credence as Shri Dhirajlal Sanghvi has admitted the cash r....