TaxTMI 
TaxTMI 
TaxTMI 
2019 (10) TMI 1369
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....n of Rs. 1,00,00,000 after computing peak balance for current account transactions in the case of Appellant at Rs. 1,09,50,310 as against peak balance offered to tax for Rs. 9,50,310." 4. A search action u/s. 132 of the act was carried out in the group cases of Sanghvi Group on 9th March, 2011. A notice u/s. 153A of the act was issued on 28th Sep, 2011. In response to notice issued u/s. 153A of the act, the assessee has filed return on 23rd March, 2012 declaring income of Rs. 1,60,060/-. During the course of search, the assessee has disclosed Rs. 24.6 cores as unaccounted income vide statement u/s. 132(4) of the act on 10th March, 2012 and the assessing officer stated that assessee has not disclosed this amount in his return of income filed in respect to notice issued u/s. 153A of the act. The assessee has submitted that he had disclosed most of the items and huge difference in figures was only due to telescoping effect and submitted a cash flow contending that he had included entire unaccounted transaction in the cash flow statement. The assessing officer stated that assessee has divided cash flow statement in four parts (i) Receipt inflow, (ii) Receipt (iii) payment outflow and ....
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....d the cash component of Rs. 1.56 crores is considered in the cash flow of the assessee. * Similarly, it is seen that a flat of Rs. 33 lacs was purchased by Shri Sagar Sanghvi, wherein cash payment of Rs. 25 lacs was made. This amount was considered as payment by the asseessee in the cash flow statement. It is seen that the banakhat is registered in the name of Shri Sagar Sanghvi, further the agreement to sale wherein the amount of Rs. 33 lacs in mentioned against the documented price of Rs. 8 lacs is also in the name of Shri Sagar Sanghvi, hence, the assessee contention that the payment has been made by his is not acceptable as Shri Sagar Sanghiv is the Prop. Of Abberant Style retail state and is also engaged in share trading business. * Similarly it is seen that the assessee's wife smt. Kokilaben Sanghvi, who is the prop of retail Saree shop in the name of Aishwarya NX had paid cash of Rs. 85 lacs to One Shri G.K.Patel, however, the payment has been reflected by the assessee. * Various entries regarding cash loans given and taken were found during the course of search as discussed in the order. The assessee has reversed the entry of cash receipt in cases where the entry ....
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....ons in cash in his cash flow statement on the plea that either these transactions do not pertain to him or these transactions are accounted for. The claim of the assessee in respect of these transactions is considered in subsequent paragraphs." In view of the above observations, the assessing officer has rejected the cash flow statement submitted by the assessee and discussed the issues as under. During the course of assessment proceedings, the assessing officer has asked the assessee to explain the content of a diary A/13 comprising of 36 pages found and impounded during the course of survey carried at the group show room Ashwarya NX, Badaj, Ahmedabad. The assessing officer has produced the page wise summary of diary at para 6.1 of assessment order as under:- Sr. No. Name of the person to whom cash paid Page No. of seized material Amount (Rs.) 1 Pratik Bharwad A - 30, Page no. 2 700000 2 Rajesh Jhaveri A - 30, Page no. 4 17500000 3 Rajesh Jhaveri & Mashukbhai Adani A - 30, Page no. 5 3500000 4 Manish Pakoda A - 30, Page no. 8 300000 5 Vaibhav A -30, Page no. 15 700000 6 Sevan tibhai A - 30, Page no. 16 1500000 7 For purchase of land near Sudama Resor....
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....0 17 Ramesh Hira (Dessa) 2000000 2000000 18 Mohanbhai & Pratik Bharwad 13000000 13000000 The assessing officer has not accepted the above submission of the assessee and stated that assessee has without assigning any reason or evidences considered the amount either payment or receipt and taken benefit of telescoping. The assessing officer has also observed that some of the transactions were pertained to the assessment year 2010-11 and some of the transactions were pertained to assessment year 2011-12. The assessing officer was of the view that assessee has without assigning any reasons or evidence considered the amount as either receipt or payment and taken benefits of telescoping. The assessing officer has taken the view of the transactions as under:- A.Y.2010-11 A.Y.2011-12 Receipt Payment Receipt Payment Pratik Bharwad 700000 Rajesh Jhaveri 10000000 17500000 7500000 Rajesh Jhaveri & Mashukbhai Adani 3500000 Manish Pakoda 300000 Vaibhav 700000 Sevantibhai ....
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....ee Rajesh Jhaveri were earlier advanced to him by me for short terms which are returned back as above. These cash transactions are not recorded in books of accounts. 7.3 Accordingly, the contention of the appellant that the above amount received from Shree Rajesh Jhaveri were earlier advanced to him which are returned back is being accepted. However, neither in the seized paper nor in the statement recorded of the appellant the dates when such amount has been advanced to Shree Rajesh Jhaveri has been indicated. The Appellant had shown such payment in the consolidated cash flow statement in a manner that would most suitable to him. Such arbitrary manner is not acceptable and hence it is assumed that the same was advanced on first day of the financial year i.e. 1-4-2009. 7.4 The Appellant has offered peak balance of Rs. 1,79,75,937 on the basis of consolidated cash flow statement prepared and filed before the Assessing Officer. The Assessment Year wise disclosure of peak balance as submitted to the Assessing Officer amounts to Rs. 9,50,310 and Rs. 1,70,05,627 in Assessment Year 2010-11 and 2011-12.Hence, for the reasons stated above and because of shifting of transaction to 1-4-2....
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....in his statement recorded u/s. 131 of the act on 26-05-2011 stating that such cash were received on 1803-2010 from Rajesh Jhaveri which were earlier advanced to him for short term purposes. Since , the assessee had received cash to the amount of Rs. 45 lacs and Rs. 55 lacs from Räjesh Jhaveri on 18-03-2010 and 19-03-2010 pertaining to the assessment year 2010-11, therefore, we do not find any infirmity in the action of the ld. CIT(A) in shifting the peak balance from assessment year 2011-12 to assessment year 20-10-2011. Looking to the above facts and circumstances, we do not find any merit in the cross objection filed by the assessee, therefore, the same is dismissed. After consdiring the above facts and material on record we do not find any error in the fingisn of the ld. CIT(A) in deleting the separate addition of Rs., 70,00,000/- which was already covered by the peak balance. As source of such payment was out of sale of Mumbai flat which was already included in the fund flow statement. After considering the above facts, we do not find any substance in the appeal of the revenue as the assessing officer has considered the payment side of transactions and without any relevant....
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....w and in facts and circumstances of the case, the Learned CIT (Appeals) has erred in confirming addition of unexplained cash found during the course of search for Rs. 4,89,863 without appreciating the fact that cash recorded in the books of account Appellant and his Group was in excess of physical cash found during the course of search. 1.1 In law and in the facts and circumstances of the case, the Learned CIT (Appeals) has erred in confirming addition observing that credit for cash recorded in regular books of account of Sagar Sanghvi, son of Appellant, cannot be given as there was difference of cash balance in original Return of Income and return filed under Section 153A for Rs. 1,41,594 in A.Y. 2009-10 without appreciating the fact that cash balance is accepted in Assessment Order passed under Section 153A in the case of Sagar Sanghvi by same Assessing Officer. 2. In law and in the facts and circumstances of the case, the Ld. CIT (Appeals) has erred in confirming addition of Rs. 45,00,000 pertaining to cash advances to Babulal Vora out of total addition of Rs. 3,19,00,000 made by Assessing Officer without appreciating the fact that such amount was already included in separat....
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....osed this amount in this return of income filed in response to notice u/s. 153A of the Act and submitted that he had disclosed most of the items and the reasons for the differences was on account of telescoping effect. The assessee has furnished cash flow statement and contended that he had included entire unaccounted transactions in cash in the said statement. The assessee has disclosed amount in various years as reflected above while adjudicating the appeal of the revenue filed in ITA No. 302/Ahd/2011-12. A search action u/s. 132 of the act was carried out in the group cases of Sanghvi Group on 9th March, 2011. A notice u/s. 153A of the act was issued on 28th Sep, 2011. During the course of search, the assessee has disclosed Rs. 24.6 cores as unaccounted income vide statement u/s. 132(4) of the act on 10th March, 2012 and the assessing officer stated that assessee has not disclosed this amount in his return of income filed in respect to notice issued u/s. 153A of the act. The assessee has submitted that he had disclosed most of the items and huge difference in figures was only due to telescoping effect and submitted a cash flow contending that he had included entire unaccounted t....
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....sis for considering the value of this property at Rs. 2.51 crores and the cash component of Rs. 1.56 crores is considered in the cash flow of the assessee. * Similarly, it is seen that a flat of Rs. 33 lacs was purchased by Shri ' Sagar Sanghvi, wherein cash payment of Rs. 25 lacs was made. This amount was considered as payment by the asseessee in the cash flow statement. It is seen that the banakhat is registered in the name of Shri Sagar Sanghvi. Further the agreement to sale wherein the amount of Rs. 33 lacs is mentioned against the documented price of Rs. 8 lacs is also in the name of Shri Sagar Sanghvi, hence, the assessee's contention that the payment has been made by him is not acceptable as Shri Sagar Sanghvi is the Proprietor of "Abberant Style" a retail shop and is also engaged in share trading business. * Similarly it is seen that the assessee's wife smt. Kokilaben Sanghvi, who is the prop of a retail Saree shop in the name of Aishwarya NX had paid cash of Rs. 85 lacs to one Shri G.K.Patel, however, the payment has been reflected by the assessee. * Various entries regarding cash loans given and taken were found during the course of search as discussed i....
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....n presumptive basis. (vi) The assessee has not shown many inward and outward transactions in cash in his cash flow statement on the plea that either these transactions do not pertain to him or these transactions are accounted for. The claim of the assessee in respect of these transactions is considered in subsequent paragraphs." In view of the observations, the assessing officer has rejected the cash flow statement submitted by the assessee and made various additions on the basis of issues emerged from the assessment proceedings contested in the instant appeal by the Revenue and Cross Objection filed by the assessee. Further facts are briefly disclosed as under while adjudicating the grounds of appeal filed by the Revenue and Cross objections of the assessee. Ground No. 1 (Deleting addition of Rs. 1,65,23,380/- on account of unexplained jewelry) 10. During the course of search total jewelry weighing 7876.92 grams, 106.73 diamonds and 33650 grams of silver worth Rs. 2,15,25730/- was found belonging to the Sanghvi Group. In his statement recorded u/s. 131 of the act on 26th May, 2011 Shri Dhirajlal V. Sanghvi stated that he had disclosed jewelry weighing 6202.56 grams and diamo....
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.... voluntary disclosure income scheme. The assessing officer has not accepted the explanation of the assessee stating that assessee has not given any detail regarding filing of wealth tax return and also the jewelry was not reflected in the balance sheet of any member of the assessee. The assessing officer has also stated that assessee has not proved that the jewelry was remade from the jewelry declared under VDIS. The assessing officer has also observed that the assessee has only disclosed jewelry of Rs. 71 lacs in the cash flow statement apart from the undisclosed expenditure of Rs. 25,00,510/- as per bills found during search/survey. After rejecting the claim of the assessee, the assessing officer has treated the jewelry of Rs. 1,65,23,380/- as unaccounted and added to the total income of the assessee as unexplained investment u/s. 69 of the act. 11. Aggrieved assessee has filed appeal before the ld. CIT(A) against sustaining the various additions made by the assessing officer. In respect of ground no. 1, addition of Rs. 1,65,23,380/- made on account of unexplained jewelry. The ld. CIT(A) has deleted the said addition. The relevant part of the decision of ld. CIT(A) is reproduced....
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.... 30, Page no. 2 700000 2 Rajesh Jhaveri A - 30, Page no. 4 17500000 3 Rajesh Jhaveri & Mashukbhai Adani A - 30, Page no. 5 3500000 4 Manish Pakoda A - 30, Page no. 8 300000 5 Vaibhav A - 30, Page no. 15 700000 6 Sevantibhai A - 30, Page no. 16 1500000 7 For purchase, of land near Sudama Resort A - 30, Page no. 17 1100000 8 Chetanbhai (for Dholera land) A - 30, Page no. 18 750000 9 Mitulbhai A -30, Page no. 19 250000 10 Kiritbhai A - 30, Page no. 20 250000 11 Hareshbhai A -30, Page no. 21 600000 12 Four persons A - 30, Page no. 23 7000000 13 Dhaval Sanghvi A - 30, Page no. 29 2000000 14 Ruchir A - 30, Page no. 30 6000000 15 Pravin Vora 85 S.K. A - 30, Page no. 32 7000000 16 Dhavalbhai A - 30, Page no. 33 1000000 17 Ramesh Hira (Dessa) A - 30, Page no. 34 2000000 18 Mohanbhai 85 Pratik Bharwad A - 30, Page no. 35 13000000 Total 6,51,50,000 The assessing officer has stated that during the course of search proceedings Shri Dhirajlal Sanghvi in his statement recorded u/s. 131 admitted that he had made cash advances which were not recorded in the books of accounts. On perusal of the aforesaid p....
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....ssion of the assessee and stated that assessee has without assigning any reason or evidence considered the amount as either payment or receipt and taken benefit of telescoping. The assessing officer has made his own analysis of transaction in the diary as under:- A.Y.201011 A.Y.2011-12 Receipt Payment Receipt Payment Pratik Bharwad 700000 Rajesh Jhaveri 1000OOOO 17500000 7500000 Rajesh Jhaveri & Mashukbhai Adani 3500000 Manish Pakoda 300000 Vaibhav 700000 Sevantibhai 1500000 For purchase of land near Sudama Resort 1100000 Chetanbhai (for Dholera land) 750000 Mitulbhai 250000 Kiritbhai 250000 Hareshbhai 600000 Four persons 5000000 2000000 Dhaval Sanghvi 2000000 Ruchir 6000000 Pravin Vora & S.K. 3000000 6500000 500000 Dhavalbhai 1000000 1000000 Ramesh Hira (Dessa) 20000....
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....e Assessing Officer in her Assessment Order in the chart reproduced mentioned that certain amount was received and paid which itself proves the recycling of the funds and accordingly, the Assessing Officer was not justified in making the addition of Rs. 4,31,50,000. (d) The Assessing Officer's observation that the benefit of telescoping also cannot be given since the direct nexus for the payment and receipt is not found is also not acceptable for the reason that the Assessing Officer has not been able to bring out any corroborative evidence to support that the payment has been made by the Appellant were not out of the income declared by the Appellant and his group and once the peak is offered by the Appellant as additional income, the addition the made by the Assessing Officer is uncalled for and accordingly the same is deleted. Thisjgound of \' appeal is allowed. The appellant gets relief Ground No. 3 (Addition as unaccounted cash and cash advances of Rs. 4,33,140/-) and Ground No. 2 of Cross Objection of the assessee 13. During the course of survey at the office premises of Sanghvi Fincap Pvt. Ltd. a diary as per Annexure A-30 was seized which contained various entri....
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....h given of Rs. 3.19 crore entries of Rs. 2.15 crore has been taken. The assessee has also explained that the amount of Rs. 45 lacs given to Shri Babubhaai Vora and Pravin Vora were the same and they belonged to the same family. The assessing officer was of the view that the cash given to Shri Babubulal Vora was a separate transaction and cannot be linked with the loan entry provided by the Shri Pravin Vora. The assessing officer had not accepted the explanation of the assessee and considered that entire cash loan of Rs. 2.74 crore + Rs. 45 lacs cash loan given to Shri Babulal Vora were unaccounted cash transactions. Accordingly, the assessing officer has made an addition of Rs. 3,19,0000/- as unaccounted cash of the assessee. The addition of Rs. 3.19 crore made by the assessing officer on account of unexplained cash credit and cash advance which was restricted to Rs. 4,33,140/- by the ld. CIT(A). Relevant part of the decision of ld. CIT(A) is as under:- "10.3 I have gone through the facts of the case, observation made by the Assessing Officer and arguments put forwarded by the AR. The addition made by the Assessing Officer of Rs. 3,19,00,000 is comprising of current account....
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....ordingly the balance of Rs. 4,33,140 is confirmed. The ground of appeal is partly allowed." Ground-4 (Deleting addition of Rs. 5,84,71,400/- on account of own money payment) 14. During the course of search, it was noticed that one of the entity of Sanghvi Group M/s. Sanghvi Infracon Pvt. Ltd. was engaged in the business of construction during assessment year 2011-12. It had purchased a plot of land at Nava Vadaj in Ahmedabad from Dharmabhai Patel Family. During the course of search as per page no. 10 to 14 of annexure A-30 evidence of cash payment to Shri Dharamsibhai Patel to the amount of Rs. 5, 5201,000/- was found. Further, as per page no. 93 to 95 of annexure A-1 seized from the residence of assessee, it was noticed that value of land was finalized @ 35000/- per sq. During the course of post search proceedings assessee had admitted that he had paid Rs. 35,000/- per sq. mt. as against documented price of Rs. 9000 per sq. mt. for purchase of this land and assessee had also admitted that the total purchase price of the land was Rs. 7,47,16,250/- as against the documented price of Rs. 1,62,44,850/-. The assessing officer was of the view that the company Sanghvi Infracon in the ....
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....edings, Shri Dhirajlal Sanghvi admitted that the cash of Rs. 6, 11,010,000/- was belonged to him and he would pay tax on the same. However, during the course of assessment proceedings when the assessee was asked to explain the content of these pages, the assessee has stated that additional income has been considered in the computation of the cash flow statement provided during the course of assessment proceedings and the noting of Rs. 6.11 crores have ben explained and disclosed in the return of income filed with the department. During the course of assessment, the assessee explained vide reply dated 10th Jan, 2013 that the RTGS as per the notings have been directly received by the group of investors as loan and the assesseee has provided the relevant detail such as name, address, PAN, bank account no. of remitter etc. The relevant part of the details is reproduced as under:- The assessee has submitted that these were third parties transactions which were remitted by a third party and received by another third party. It was also explained that the noting found was in respect of purchase of shares made by group of investors and there was movements of funds through banking channels ....
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....itter nor beneficiary in the said transactions. (e) Accordingly the primary onus on the Appellant to prove that the transactions do not belong to him was discharged. Further the Assessing Officer has not pointed out single transaction to prove that they do not belong to the remitter and the beneficiary for which details were provided. (f) Further, the very requirement for the assessee to have to prove the capacity of the payer is also proved because where the payment has been received by means of a cheque drawn in the bank account of the payer, the capacity of the payer stands established by virtue of the fact of the existence of adequate bank balance in his bank account (Identity of the payer and genuineness of the transaction also stand established in the case of payments by cheque). (g)With regards to observation of AO that during the course of assessment proceedings that beneficiary/remitter did not reply in the matter , it is submitted that Appellant has submitted all the details to prove genuineness of transactions. It is further submitted that name and addresses along with PAN and Bank Account number were provided and hence initial burden to prove whereabouts are fulfill....
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.... observation made by the Assessing Officer in her order. The Assessing Officer has made the addition of Rs. 6,11,10,000/. The contention of the Appellant that out of the said sum Rs. 8,10,000/ has been disclosed in the books of account of Asiq, Sanghvi is found to be correct. In the cash flow statement filed, the Appellant had provided documentary evidence of this sum being accounted for. More importantly the present Assessing Officer has also passed Assessment Order in the case of Ashiq Sanghvi and accepted the returned income. In view of the same, I am of considered view that the Assessing Officer was not justified in making addition of Rs. 8,10,000/ in the hands of the Appellant. The same is hereby deleted. Regarding the balance sum of Rs. 6,03,00,000/ the same forms part of the additional income. The addition to the extent of Rs. 6,03,00,000 is confirmed. Thus this ground of appeal is partly allowed. The appellant gets part relief" Ground No. 7 ( Deleting addition for Rs. 1,02,33,850/- on account of income from advices given to investors) 17. During the course of assessment, the assessing officer noticed that assessee and his group was trading in shares in huge quantity whic....
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....er expanses) and Ground No. 4 of Cross Objection of the assessee 18. During the course of search/survey from various premises of the assessee group loose paper were seized and impounded. On perusal of these loose papers, the assessing officer observed that there were various expenses which were not reflected in the books of accounts. The details of such expenses aggregating to Rs. 98,72,060/- on various pages of loose paper seized were reported at page no. 34 of the assessment order. The assessee has contended that some of the expenses i.e. noting of the AMC Payment were considered in the cash flow and some of the expenses were received back and was tax neutral. The assessing officer has not accepted the explanation of the assessee and treated the total amount of Rs. 98,72,060/- as unaccounted expenditure and added to the total income of the assessee. In respect of addition of Rs. 98,72,060/- made by the assessing officer on account of other expenses, the ld. CIT(A) has restricted the addition to the extent of Rs. 19,64,594/-. Relevant part of the decision of ld. CIT(A) is as under:- "16.3 I have gone through the facts of the case, the observation made by the Assessing Officer ....
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..... During the course of search and survey action conducted at the residence and business premises of Sanghvi Group total cash to the amount of Rs. 11,59,487/- was found from 10 different premises as reported at page no. 10 of the assessment order. During the course of assessment proceedings, the assessee was asked to submit the source of cash found along with evidences. The assessee has stated that the cash balance as per books of account as on 9th March, 2011 was to the amount of Rs. 14,85,178/- and it was the practice of the assessee and his family members to take away the physical cash from business premises to the residence. It was further explained that because of this practice the cash totaling of Rs. 10,52,500/- was found in the residential premises of the assessee. During the course of assessment proceedings, the detail furnished by the assessee has been verified by the assessing officer. On verification, it is noticed that asssessee could not explain the source of the cash amounting to Rs. 4,89,863/- after considering the cash balance of Rs. 5,65,686/- in respect of Ashwarya NX as per trial balance seized vide annexure A-28. Further cash of Rs. 6,480 found from the premises....
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....mitted part of the transaction amounting to Rs. 52,41,112/-, however, the remaining 50% of profit assessee stated that it was not belonged to him. Since the assessee has failed to provide the name and address of the beneficiaries of the transaction, therefore, the total profit from the transaction to the amount of Rs. 93,87,972/- was considered as undisclosed income and added to the total income of the assessee. The ld. CIT(A) has party allowed the appeal of the assessee and sustained the addition to the extent of Rs. 40,66,860/-. Relevant part of the decision of ld. CIT(A) is as under:- "15.3 I have gone through the facts of the case and the observation made by the Assessing Officer in her order. The Assessing Officer has proceeded to make the addition since the Appellant has failed to provide details as to with whom the share of 50% was made. Further the contention of the Appellant that the same is rough in nature is incorrect, since the Appellant himself has taken Rs. 52,31,112 to the cash flow statement and telescoped against the payment/outflows. Accordingly the Assessing Officer was correct in holding that the assessee the onus is on the assesse to provide the name an....
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.... assessee has calculated his undisclosed income as total of receipt inflow and difference of total payment and total receipt i.e. peak of cash flow statement. The assessee has demonstrated after referring the material on record that he was the key person of the group who has undertaken all the financial transactions particularly the cash transactions for or on behalf of the group. This fact is also demonstrated from the preliminary statement recorded on 10th March, 2011 u/s. 132(4) wherein the assessee has stated that he undertakes all type of financial transactions in respect of his sons and his wife. Relevant part of these statements is reproduced as under:- "a] The relevant extract from preliminary statement u/s 132(4) of the Act recorded on 10.03.2011 is reproduced here under: Statement u/s 132(4)/131/133A Statement on oath of Shri/Smt/Ku. Dhirajlal V. Sanghvi son/daughter/wife of Vaghjibhai Shivjibhai Sanghvi on 10/03/2011 at 11.00 a.m/ p.m at A-14, Tirthbhuni Appartment, Law Garden, A'bad Q.4 What is your role/contribution in your and your family member's trade/business/occupation and financial activities? . A.4 In answer to the above question I state that b....
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....ement:- "7. The action of the Assessing Officer in rejection the cash flow statement and not telescoping the payments or the outflows against the income offered void and bad in law for the following reasons: (i) At the outset It is submitted that the Assessing Officer is wholly unjustified and unjust in rejecting the entire cash flow statement primarily because that the Appellant had owned up the cash payments made in respect of purchase of property made by his wife and son, which was done consequent to the statement recorded of the Appellant before the Departmental Authorities as under: In the case of Sagar D. Sanghvi and Kokilaben D. Sanghvi: During the course of recording of the statement under Section 131 on oath on 26 May, 2011 admitted Rs. 25 Lacs as unaccounted investment on behalf of the assessee. The extract from the relevant question/answer is reproduced hereunder: Q-19: I am showing you materials comprising papers, diaries, loose paper file, etc., seized and impounded from your residence and business places. Please explain the contents of the pages of the seized material. It is also seen that some pages pertain to expenses made on jewellery purchase, vehicles, ....
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....on of the Assessing Officer in taxing the same as income from undisclosed source is only to protect the purchaser of the said flat so that no adverse action can be taken in his case; (d) The Assessing Officer has rejected that the Appellant could not have received such higher amount of on-money on the basis of human probabilities, since it cannot be expected that 100% on-money payment could have been received, which is self-contradictory to the stand taken by the Assessing Officer who has accepted more than 100% on-money payment in the case of Appellant itself flat. Accordingly, the action of the Assessing Officer is based purely on assumptions, surmises and conjectures. (iii) The Assessing Officer made the addition in respect of on money payments for land registered in the name of Sanghvi Infracon P. Ltd in the hands of the Appellant on the ground the company had no source of making the payment, & therefore held that the addition is to be made in the case of Appellant. Similar is the situation in the case of Sagar and Kokilaben Sanghvi as they also do not have any source of making the on money payment and thus the rejection of cash flow statement owing to payments made for Sagar....
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....e assessee has claimed that out of gold jewelry and other valuable found jewelry to the extent of 7876.92 grams was out of the disclosure made under the VDIS scheme and stated that disclosure in respect of jewelry found was also included in the total disclosure of Rs. 10.66 crores. The assessee has also furnished the certificate issued u/s. 68(2) of the VDIS, 1997 along with challan of payment of taxes filed by the assessee. These facts were also reported by the assessee in his statement recorded u/s. 132(4) of the act at the time of search action. During the course of assessment, the assessee has also furnished remaking bill of jewelry to substantiate his claim that jewelry was remade out of the jewelry declared under VDIS. The assessee has also furnished the confirmation of the jeweller confirming the remaking of the jewelry. In the light of the above facts and circumstances, we consider that ld. CIT(A) has rightly allowed the telescoping of the income against separate addition, therefore, we do not find any substance in this ground of appeal of the Revenue and the same is dismissed. Ground No. 2 (Advance made on account of cash):-During the survey action at the group's show roo....
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....ssing officer has made addition of Rs. 3.19 crores towards cash advances to Pravin Vora and others on the basis of diary as per annexure A-3 seized during the course of survey at the office premises of Fincap Pvt. Ltd. which contained various entries regarding cash payment. The assessee has explained that he had paid cash to Shri Babubhai Vora and Shri Pravinbhai Vora against which he had received cheque entries. The relevant part of the submission of the assessee has been produced at page no.37 and 38 of the assessment order. The assessee has explained that he has considered an amount of Rs. 2.74 crores out of the amount of Rs. 3.19 crores in the cash flow statement and the peak credit arising from such short term transactions have been offered to tax. However, the assessing officer has observed that the transaction of Rs. 45 lacs which was included in the cash flow statement pertaining to Babulal Vora was a separate transaction and cannot be linked with the loan entry provided by Shri Pravin Vora which was considered as unaccounted income of the assessee. The assessing officer has made addition of Rs. 3.19 crores comprising of Rs. 2.74 crores accepted by the assessee as per the c....
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....n 82 of the Annexure A-9 was the same as Shri Babubhai Vora and Shri Pravind Vora belong to the same family. After perusal of the findings of the ld. CIT(A), it is clear that these two entries are pertained to two individual recorded on the two different pages and material. As per page no. 82 of the Annexure A, the assessee has paid cash of Rs. 45 lac to the Babubhai Rikhavchand Shah and as per page of Annexure A-30 the asessee had made cash payment of Rs. 45 lac to Shri Pravin Vora. The assesse could not substantiate with relevant evidences that cash loan given to the Babulal Vora was separate transaction. However, the ld. CIT(A) has already provided telescoping effect to the cash loan of Rs. 45 lacs against the income of Rs. 40,66,860/- and ultimately the ld. CIT(A) has confirmed the balance amount to the extent of Rs. 4,33,140/-. The assessee failed to controvert the finding of the ld. CIT(A) with any relevant supporting material therefore the cross objection filed by the assessee is dismissed. Ground No. 4 of the Revenue deleting addition of Rs. 5,84,71,400/- made on account of no-money payment:- During the course of assessment, the assessing officer observed that M/s. Sanghvi....
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.... the assessee, therefore, the same was added as unaccounted income of the assessee. In this regard, the assessee has explained to the assessing officer that RTGS transactions were not pertaining to the assessee or its group and actually these transactions were belonged to the third party. The assessee has furnished the complete details of the parties to whom these RTGS transactions were belonged. The assessee has furnished the name and addresses of the parties, detail of bank account, PAN No, date of transaction, amount of transaction, name and addresses of the remitter, Pan detail of bank from where the RTGS was sent. However, the assessing officer has treated the aforesaid RTGS as unaccounted transaction of the assessee without considering and disproving the supporting evidences furnished by the assessee that these transactions were belonged to the third parties. The assessee has also furnished before the lower authorities the proforma copy of RTGS form wherein the detail of both the parties i.e. remitter and the beneficiary were given by the issuing authority which is reproduced as under:- Sl. No Page No. of Anx 9 Name and Address of Party Received RTGS Date of Transactions ....
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....the assessee or his group. Therefore, this ground of appeal of the Revenue is dismissed. Ground No. 6 of the Revenue in restricting addition to Rs. 6,03,00,000/Regarding addition of Rs. 6.3 crore during the course of assessment, the assessing officer noticed that on different pages of Annexure A-9 there were cash entries to the amount of Rs. 6.11 crore and the assessee had admitted that the aforesaid cash belonged to him and he would pay tax on the same, therefore, the assessing officer has added the aforesaid amount as unaccounted income of the assessee. The ld. CIT(A) has restricted the said addition to the extent of Rs. 6,03,00,000/- on the ground that act out of Rs. 6.11 crore an amount of Rs. 8,10,000/- has been disclosed in the books of Ashok D. Sanghvi. In this connection, the assessee has submitted that out of Rs. 6.11 crore an amount of Rs. 8.10 lacs has been accounted in the books of account of Ashok D. Sanghvi which has been accepted by the assessing officer, therefore, in the light of the above facts, we consider that we do not find any infirmity in the decision of ld. CIT(A) in providing relief to the assessee to the extent of Rs. 8,10,000/-. Ground No. 7 of the Reve....
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....64,594/-, the assessee has included the remaining expenses in the cash flow statement. The ld. CIT(A) has sustained the following expenses:- AMC Fees 13,50,000/- BMW Car 6,14,598/- ------------- 19,64,598/- After perusal of the material on record, we observe that the assesse could not contradict the contents of loose paper as reproduced by the assessing officer at page no. 35 of the assessment order in respect of noting of AMC payment made to Shri Mohankaka on 08-04-2010. However, regarding expenses of Rs. 7,95,598/- the ld. CIT(A) has accepted that an amount of Rs. 1,81,000/- out of this expenses was included in the renovation expenses as mentioned in the loose paper. Regarding balance of Rs. 6,14,598/- treated as BMW expenses, the assessee has explained that here was no such expenses on BMW car. It is also not demonstrated from the loose paper A-1/100 placed at page no. 390 of the paper book part -2 that the assessee had specifically incurred such expenses on BMW car. The lower authority had also not verified that assessee was having any BMW car. The ld. CIT(A) has accepted that out of such expenses on amount for Rs. 1,81,000/- was pertained to renova....