TaxTMI 
TaxTMI 
2019 (10) TMI 1369
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....the case, the Ld. CIT (Appeals) has erred in confirming addition 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 ....
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....ue of the property as Rs. 2.71 crores. Shri Ashik Sanghvi could not furnish any basis 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 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....
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....ted these receipts only on the basis of issuance of cheques and such receipts cannot be considered only on presumptive basis. (v) 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 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 Jh....
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....750000 9 Mitujbhai 250000 2500000 10 Kiritbhai 250000 250000 11 Hareshbhai 600000 600000 12 Four persons 7000000 5000000 13 Dhaval Sanghvi 2000000 14 Ruchir 6000000 6000000 Pertains to 20 10- 11 15 Pravin Vora & S.K. 7000000 6500000 300000 500000 16 Dhavalbhai 1000000 1000000 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 th....
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....n her Assessment Order. The Assessing Officer has made addition of Rs. 1,00,00,000 on account of the amount received from Rajesh Jhaveri holding that the source of payment is not explained. The Appellant has shown source of such payment primarily out of the amount disclosed from the sale of Mumbai flat. The Appellant has contended that the same is in the nature of current account transaction and this was also stated in the statement recorded before the Departmental Authorities. The extract of the statement is as under:- Statement u/s 131 on oath of Shri Dhirailal V. Sanphvi on 26/05/2011 at 05.00 p.m at Room No. 134, 1st floor Aavkar Bhavan, Ashram road. Ahmedabad. * Rs. 45 Lac received in cash on 18.03.2010 from Rajesh Jhaveri * Rs. 55 Lac received in cash on 19.03.2010 from Rajesh Jhaveri All the above cash received from Shree 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 return....
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....lance to the amount of Rs. 9,50,310 and Rs. 1,70,07,627/- for assessment year 2010-11 and 2011-12. However the assessing officer observed that in assessment year 2010-11, the assessee has not received any cash against the payment to the amount of Rs. 1,70,00,000/- made during the year, therefore the assessing officer has not given telescoping effect of this transaction and consider Rs. 1,70,00,000/- as undisclosed income of the assessee for the year under consideration. However, after considering the fact that assessee has received Rs. 45 lacs in cash on 18th March, 2010 and on 19th March, 2010 respectively from Shri Rajesh Javeri pertaining to sale of Mumbai flat, the ld. CIT(A) has shifted peak balance to the amount for Rs. 1 crore form assessment year 2011-12 to 2010-11 after considering the statement of the assessee recorded u/s. 131 of the act on 26th May, 2011. We consider that it was admitted by the assessee 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 la....
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....the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 5,29,43,000/- made on account of RTGS receipts. 6. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in restricting the addition to Rs. 6,03,00,000/- out of total addition of Rs. 6,11,10,000/- and thereby granted relief of Rs. 8,10,000/- made on account of RTGS cash receipts. 7. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 1,02,33,850/- made on account of income from advices given to investors. 8. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in restricting the addition to Rs. 19,64,598/- out of total addition of Rs. 98,72,060/- and thereby granted relief of Rs. 79,07,462/- made on account of other expenses. 8. The assessee has raised following grounds in cross objection:- CO No. 268/Ahd/2014 "1. In law 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 a....
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.... 15,00,000 as alleged by Assessing Officer and said figure of Rs. 1.5 lacs was already accepted by Authorised Officer while recording statement of Appellant under Section 131 of the Act on 26th May, 2011. 4.2 Without prejudice to para 4.1 Learned CIT (Appeals) ought to have appreciated that entire transaction is tax neutral as loose paper itself states that figure of 15 was returned on very same date and same would have no impact on cash flow statement prepared by Appellant." 9. The basic facts pertaining to the assessment year 2011-12 are similar to the fact as elaborated in this order above for assessment year 2010-11. During the year under consideration, assessment order u/s. 143(3) r.w.s. 153B(1)(b) of the Income Tax Act was completed on 26th Marcy, 2013. A search and seizure operation was carried out in the Sanghvi group of cases on 9th March, 2011. During the search, the assessee has disclosed Rs. 24.6 crore as his unaccounted income as per statement u/s. 132(4) of the act made on 10th March, 2011. The assessee had not disclosed 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 ....
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....ent to mention here that those transactions of property, wherein the name of the assessee is not appearing in the legal documents and cheque amount is also not paid by the assessee cannot be claimed by the assessee in his cash flow statement just to take benefit of telescoping. The Ld. A/R of the assessee has submitted during the course of the proceedings that the assessee has owned up these transactions in his statements. However, it is to be kept in mind that statement of the assessee can't over-ride the applicability of law, particularly when all the family members are also filing their returns of income and are also having their independent source of income. (ii) Some of such transactions shown by the assessee in his cash flow statement are as under: * It is seen that as per documents seized that Shri Ashik Sanghvi has sold a Flat in Mumbai for Rs. 1.15 crores. As per documents seized, cash payment of Rs. 46 lacs was made on this property. In the return of Income shri Ashik Sanghvi suo-motu declared the value of the property as Rs. 2.71 crores. Shri Ashik Sanghvi could not furnish any basis for considering the value of this property at Rs. 2.51 cr....
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....t, the assessee has shown various amounts as entry reversed under the head 'receipts' between 21/02/2011 to 05/03/2011. When inquired during the course of the assessment proceedings, the assessee contended that he has advanced these amounts earlier and these amounts have been received back by him. When asked to give evidence in support of receipt of these amounts, the assessee submitted that he has issued cheques to various parties on these dates and it should be implied that he has received cash back from these parties, as while advancing money in cash, he is receiving cheques from the parties and while receiving back cash, he is issuing cheques to the parties concerned to square off the transactions. It is to be noted that there is no seized material to support the arguments of the assessee. In the earlier part of the cash flow statement, the assessee has shown receipt/payment of loans/advances on the basis of the seized material. However, in case of "entry reversed", there is no seized paper where such transaction is recorded. The assessee has inserted these receipts only on the basis of issuance of cheques and such receipts cannot be considered only on presumptive basis....
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.... gold jewellery and other valuables found weighing 7,876.92 gms from the residence and bank lockers, the same was out of the disclosure made under the VDIS, 1997. Out of the disclosure of jewellery and other valuables made under the VDIS, the assessee on different social occasions such as marriage and birth of child has remade the jewellery according to the trend and fashion prevailing and after re-making, the same was given to different family members various social occasion. Further relying on Instruction No. 1916, dated 11th May, 1994 issued by the CBDT and reported at 122 Taxman (St.) 98 the assessee claimed further exemption of 1600 gms in respect of his daughter-in-laws, grand-daughter and grandson. Without prejudice to the above contention, the Assessee also contended that the Assessee being the head of the family (as the said jewellery belongs to the Assessee's Group), has made a disclosure in respect of jewellery found during the course of search in the Return of Income for A.Y. 2011-12 which is included in total disclosure of Rs. 10.66 cr." Further vide subsequent submission dated 15th Jan, 2013, the assessee has also furnished c....
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....ing the items disclosed in the VDIS from which new ornaments were being prepared, the Appellant has considered total outflow towards jewellery of Rs. 24,69,275/ and Rs. 71,00,000/- in the cash flow statement. Further, the AR of the Appellant in the course of the hearing has also contended that Rs. 75,00,000/- has also been considered as outflow to cover any other discrepancies. 7.4 In view of the above, since I have already allowed the telescoping of the income against the application, separate addition for jewellery for Rs. 1,65,23,380/- is uncalled for and is hereby deleted. This ground of appeal is allowed. The appellant gets relief." Ground No. 2 (Deleting addition of Rs. 4,31,50,000/- on account of advance made in cash) 12. During the survey action conducted at the group show room at Ashwarya NX at Vadaj, Ahmedabad a diary inventorized as A-30 consisting of 36 pages was impounded. The assessee in his statement u/s. 131 on 26th May, 2011 stated that the entries in the diaries were related to financial transaction and page wise summary of such entries as reported at page 12 of the assessment order is presented as under:- Sr. No. Name of the person to whom ca....
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.... 2 Rajesh Jhaveri 17500000 17500000 17500000 During the statement recorded u/s 131 on 26.05.2011 the assessee had contended that the cash given in F.Y. 2009-10 was received back 3 Rajesh Jhaveri & Mashukbhai Adani 3500000 3500000 4 Manish Pakoda 300000 300000 5 Vaibhav 700000 Not admitted 6 Sevantibhai 1500000 1500000 1500000 During the statement recorded u/s 131 the assessee had contended that the cash given was received back 7 For purchase of land near Sudama'Resort 1100000 1100000 8 Chetanbhai (for Dholera land) 750000 750000 9 Mitulbhai 250000 2500000 10 Kiritbhai 250000 250000 11 Hareshbhai 600000 600000 12 Four persons 7000000 5000000 13 Dhaval Sanghvi 2000000 14 Ruchir ....
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....essee and made addition of Rs. 4,31,50,000/- by considering the same as unaccounted income of the assessee for the year under consideration. The ld. CIT(A) has allowed the appeal of the assessee. The relevant part of the decision of ld. CIT(A) is reproduced as under:- "11.3 I have gone through the facts of the case and the observation made by the Assessing Officer in her order. The addition made by the Assessing Officer is not acceptable for the following reasons: (a) The Appellant in his cash flow statement has considered these transactions as current account transactions whereby the funds received from a particular person is given to another and upon receipt of that person is given to another. In between the income earned were also utilized in such recycling of funds. The Appellant has computed the peak of such transactions and offered the same as income. The logic behind the applicability of the peak credit theory is that if the borrowing from various persons is to be treated as non-genuine then systematic\ repayment to such person should also be treated as non-genuine. Such recycling thus- constituted unexplained credits and unexplained debits, thus, according....
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....2 Rs. 45,00,000/- 2 Raju - Vrundavan A-30 page no. 25 to 28 Rs. 50,00,000/- 3 Babulal A-30 page no. 26 Rs. 79,00,000/- 4 Pravin Vora A-30 page no. 27 Rs. 45,00,000/- 5 Pravin Vora A-30 page no. 28 Rs. 1,00,00,000/- Total Rs. 3,19,00,000/- The assessee has explained that he had paid cash to Shri Babubhai Vora and Shri Pravin Vora against which he had obtained cheque entries. The assessee's submission reported at page 16 of the assessment order is reproduced as under:- No. Name Date Amount Represented by 1 Colourful 11-01-11 9,00,000 Babulal Vora 2 Prafulkumar Babulal Vora 11-01-11 9,00,000 Babulal Vora 3 Elegance Exclusive 10-01-11 9,00,000 Babulal Vora 4 Elegance 10-01-11 9,00,000 Babulal Vora 5 Rani Saheba 11-01-11 9,00,000 Babulal Vora 6 Ambition 10-01-11 9,00,000 Babulal Vora Total 54,00,000 Similarly, the following are the amounts received through banking channel from Pravin Vora and his Group which is summarized as under: No. Name Date Amount Represented b....
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....ion of Rs. 2,74,00,000 is concerned the Appellant has considered in the cash flow statement and the same is also accepted by the Assessing Officer. It has been mentioned in the Assessment Order itself that the transactions of Rs. 2,74,00,000 forms part of the cash flow statement submitted on 21.12.2012. The Appellant has computed the peak of such transactions and offered the same as income. Since the sarafi entries as stated by the Assessing Officer herself they are in the nature of recycling funds and under that circumstances the Assessing Officer was not justified in making addition of Rs. 2,74,00,000 as the same is covered by the income offered as peak balance. Accordingly, the addition made by the Assessing Officer of Rs. 2,74,00,000 is deleted. 10.4 The facts of next transaction of Rs. 45,00,000 are that, Appellant has contended that 45,00,000 was given to Babulal Vora and cheque was taken. During the course of search noting of Rs. 45,00,000 given was also found and the extract of the notings has also been reproduced in the Assessment Order by the Assessing Officer. The Appellant contention is that the amount which was given to Babulal is already included in the figur....
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....al payment of Rs. 5,02,01,000/- was made prior to the incorporation of the company, therefore, the payment of Rs. 5,84,71,400/- was considered in the hands of the assessee from unaccounted sources. Accordingly, the assessing officer has made addition of Rs. 5,84,71,400/- as cash payment unaccounted sources. In respect of addition of Rs. 5,84,71,400/- made on account of own money payment, the ld. CIT(A) has deleted the said addition. Relevant part of decision of ld. CIT(A) is as under:- "9.3 I have considered the submissions made by the Appellant and the Assessing Officer's observations and I find that the total on-money payment made for the land at Vadaj was to the tune of Rs. 5,84,71,400/. Out of the same and as per the material found during the course of search /survey, the payment made in A.Y. 2010-11 was Rs. 75,51,000/ and the balance in A.Y. 2011-12. The same is evidenced by the seized material and accepted by the Appellant. As I have already allowed the telescoping of the income against the application and this payment being covered in the cash flow statement as outflow as land payment, no separate addition is called for. The addition made by the Assessing ....
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....ad acted as facilitators in providing funds to the investors and for this purpose he had made nothings of funds which were remitted by third party and received by another third party. The assessee has also submitted that all the relevant details from the remitters and the receivers of the RTGS such as name, address, PAN, bank account nos. of remitters and receivers and the copies of the same were submitted at the time of assessment proceedings. The assessing officer has not accepted the explanation of the assessee stating that merely confirming bank transaction does not prove the genuineness of the transaction and the share transaction on the seized documents have in fact taken place which was evident from the entries in the books of the assessee and the admission of the cash received. The assessing officer has also stated that none of the beneficiaries have replied to letters issued u/s. 133(6) of the Act. Therefore, the assessing officer has treated RTGS entries amounting to Rs. 5,29,43,000/- as belonging to the assessee which was not recorded in the books of account as unaccounted income of the assessee. The ld. CIT(A) has deleted this addition. Relevant part of decision of ld. ....
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.... Officer that the Appellant role was to receive commission @1.5% and that income has not been disclosed by ihe Appellant and accordingly the same is an afterthought, is also not justified for the reason even if the same income is taken to the cash flow statement the same would be of no use since the it would be telescoped against the negative balance which is separately offered by the Appellant as peak balance. 13.4 In view of above, (i) the identity of the Remitter and Beneficiary are proved as banks have confirmed. (ii) the capacity of the payer stands proved since the payment has been received by means of a cheque drawn in the bank account of the payer, by virtue of the fact of the existence of adequate bank balance in his bank account- (Rohini builders - SLP dismissed and binding on department) (iii) It is submitted that name and addresses of Remitter and Beneficiary along with PAN & Bank Account number hence initial burden are fulfilled. Accordingly, the addition made by the Assessing Officer of Rs. 5,29,43,000 is deleted and the Appellant's ground of appeal is allowed." Ground No. 6 (Restricting addition of Rs. 6,03,00,000/- on accou....
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.... which has resulted in substantial unaccounted receipt and further observed that assessee was also receiving funds by way of advice given to investors. The assessing officer has noticed that on reverse of page no. 9 of loose paper as per annexure A-10 there was hand written entry wherein a calculation was made as per which 70% of Rs. 1,02,33,850/- had been worked out at Rs. 71,63,695. Shri Sajjankumar Nanwal one of the key person of the group has stated in the statement recorded u/s. 131 of the act that calculation on this page pertained to one Shri Rameshbhai of Sabarmati and the calculation show profit of Rs. 1,02,33,850/- which was distributed in the ratio of 70% to Shri Rameshbhai and balance 30% to Shri Deerajlal Sanghvi i.e. 30,70,155/-. During the course of assessment, the assessee was asked to submit the details of the transaction along with the complete address of Shri Rameshbhai. The assesseee failed to furnish the details and submitted that he has considered the entire amount of Rs. 1,02,33,850/- in disclosure reflected in the cash flow statement. The assessing officer was of the view that the assessee accepted the entire transaction in the cash flow statement therefore ....
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....the Assessing Officer and arguments put forwarded by the AR. The Assessing Officer has observed that there are certain expenses to the tune of Rs. 98,72,060 which are not recorded and accordingly has made addition to the assessed income. The action of the Assessing Officer in making such addition is incorrect since that out of the expenses of Rs. 9872060 expenses to the tune of JRs. 70,49^,962 has been considered4n-the-cash 41ow~statement. As I have already allowed the telescoping of the income against the application and this payment being covered in the cash flow statement as outflow as expenses/outflow, no separate addition is called for. The addition made by the Assessing Officer of Rs. 70,49,962 has also resulted in double addition as the income and application both getting taxed. Accordingly, the addition made by the Assessing Officer for Rs. 70,49,962 / is deleted. For balance of the amount of Rs. 28,22,098/, the Appellant has contended that (a) Outflow on account of Honda Jaz pertains to A.Y. 2010-11 and therefore the same is without jurisdiction - x (b) Expenses on Renovation of Rs. 72,500 is already included in overall renovation expenses and th....
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....exure A-28. Further cash of Rs. 6,480 found from the premises of Kunal was considered as accounted after considering statement of the manager of the proprietary concern on the date of survey that cash was re-conciled as per cash book. The ld. CIT(A) has sustained this addition. Relevant part of decision of ld. CIT(A) is as under:- "8.2 I have gone through the submission made by the Appellant and the observation of the Assessing Officer. The Assessing Officer has made an addition of Rs. 4,89,863/ on comparison with the physical cash found during the course of search with that of the books of account. The Assessing Officer has not accepted the balance of the cash book pertaining to the M/S Aberrant Style, proprietorship concern of Sagar Sanghvi, on the ground that the cash balance as per the return of income filed for A.Y. 2009-10 did not match with the return of income filed under Section 153A of the Act. Since that would have the cascading effect in subsequent years, the balance as stated by the Appellant cannot be accepted. I agree with the contention of the Assessing Officer about the genuineness of the cash balance claimed by the Appellant more so since the Appell....
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.... in holding that the assessee the onus is on the assesse to provide the name and address of the other beneficiary of the transaction. Since the Appellant has himself offered Rs. 52,31,112/- as part of the Additional Income the balance amount of Rs. 40,66,860/ is confirmed. Accordingly total addition made by the Assessing Officer of Rs. 93,87,972/- is confirmed. However the additional income of Rs. 40,66,860/ would be available for telescoping against the payment/outflow. The ground of appeal is dismissed." Findings:- 21. During the course of appellate proceedings before us, ld. departmental representative has contended that assessing officer has rightly made the various additions as elaborated above in the grounds of appeal of the revenue after considering the various seized documents found during the course of survey and search taken place in the group cases of the assessee. On the other hand, ld. counsel has submitted various paper book comprising details of submissions and copies of documents furnished before the assessing officer and ld. CIT(A) during the course of hearing. In respect of appeal of revenue, the ld. counsel contended that ld. CIT(A) has correctly deleted th....
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....s trade/business/occupation and financial activities? . A.4 In answer to the above question I state that being the eldest person in the family, I support/ undertake in all the types of trade/business/occupation and financial activities carried on by my sons, son's wives and my wife. I along with my family live together in HUF. I carry out financial activities and business/occupation by myself. b] In the declaration executed by the Appellant he has stated the following: (Free English Translation) (2) I, in the name of Aishwarya Sarees carry out the business of selling sarees, dress material and readymade garments. I also undertake business in real estate and also share market transactions. All these businesses are being carried out by my family members and associates under my direct control and supervision. I owe and undertake the responsibility for all the financial transactions. C] The Appellant during the assessment proceedings had stated the following to the Assessing Officer vide different communications made from time to time as under: "...........6. The Assessee submits that all the business operations and financial decisions are being ....
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....r 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, financial transactions, etc. You are also requested to explain the sources and also whether they are reflected in the books of account in respect of expenses and financial transactions appearing in the seized and impounded material. A-19: Party No. Annexure Page No. Explanation S-2 A/12 69 to 73 Copy of Banakhat agreement of property TP Scheme No. 3/5, final Plot No. 682, Devarshi Co-Op. Housing Society Limited, Flat No. G-1, total area 90 Sq. Yard. As per Banakhat was purchased by Sagar D. Sanghvi m Rajesh Balwantbhai Gohil for Rs. 33 lacs. However, in the registered purchase deed the price has been shown as Rs. 8 lac. I, therefore, admit Rs. 25 lac as unaccounted investment on behalf of Sagar D. Sanghvi. S-13 A bungalow was purchased on 14-09-2010, plot No. 302, Vasanmhar Co-op Housing Society tenement No. 15B, 414.72 sq.mtr. This property was purchased by my wife Kpkilaben D. Sanghvl from Gunvantbhai Kantilal Patel for Rs. 1,15,00,000.(....
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....ore 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 & Kokilaben Sanghvi is contradictory to the stand taken by the Assessing Officer herself. (iv) Lastly the observation of the Assessing Officer that many entries have not been shown in the cash flow statement is only to make a high pitched assessment and without considering the facts of the case. The Appellant had submitted exhaustive details were provided in the assessment proceedings and the explanation regarding each of the observation made by the Assessing Officer about the non-inclusion in the cash flow statement is dealt with in subsequent paras. 8. Thus the rejection the entire cash flow statement thereby making additions of receipts and payments both without bringing a single corroborative evidence to support the fact that the payments have been made by the Appellant were NOT out of the income declared bv the Appellant and its Group and once the income and shortfall were declared as addi....
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....at 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 room at Aishwarya NX at Vadaj Ahmedabad, a diary marked as A/30 consisting of 36 pages was impounded. The pages of this diary were hand written in respect of financial transactions as explained by the assessee Shri Dhirajlal V. Sanghvi. The page wise summary of such pages containing financial transactions was aggregating to Rs. 6,51,50,000/-. 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. The assessee has contended that all the entries have nexus with the additional income declared by him as per the cash flow submitted in his submission. The assessing officer has stated that benefit of telescoping cannot be given as no direct nexus regarding the payment and receipt was found in the seized documents. The assessing officer has made addition of Rs. 4,31,50,000/- after taking into consideration onl....
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....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 cash flow statement and the aforesaid transaction of Rs. 45 lacs aggregating to Rs. 3.19 crore as the unaccounted cash of the assessee. The ld. CIT(A) has deleted the addition of Rs. 2.74 crore on the ground that the assessee had considered the same in the cash flow statement which was also accepted by the assessing officer. The ld. CIT(A) has confirmed he addition of Rs. 45 lacs considering that same as different transaction which was not included in the cash flow statement. However, the ld. CIT(A) has given telescoping effect of the aforesaid payment of Rs. 45 against the addition Rs. 40,66,860/- as income from investor made as per income from investor for telescoping of such payment to the extent in para 15.3 in order of the ld. CIT(A), therefore, the ld. CIT(A) has restricted the addition to the amount of Rs. 4,33,140/-. In the light of the above facts and circumstances, we observe tha....
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....d. 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 Infracon Pvt. Ltd was engaged in the business of the construction. During the assessment year 2011-12, it had purchased a plot of land at Nava Vadaj in Ahmedabad owned by Sanjoy Dharmsibhai Patel and Shri Jayesh Dharmsibhai Patel. During the course of search evidence of cash payment to Shri Dharamsibhai amounting to Rs. 5,52,01,000/- was found. Further, the documents found from the residence of the assessee revealed that the final value of the land was @ 35000/- per sq. yard as against the documented price of Rs. 9000/- per sq. meter for purchase of the said land. Accordingly, cash payment of Rs. 5,84,71,400/- was paid as on money for the purchase of the land. The assessing officer was of the view that the land was purchased in the name of Sanghvi Infracon, however, the company was incorporated in 19th June, 2010 whereas substantial payment of Rs. 5,02,01,000/- out of Rs. 5,84,71,400....
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....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 Amount Name and Address of Remitter 1 114 High Growth Vin Trade Pvt. Ltd 08/09/2010 4500000 Caspican Project Pvt. Ltd Plot No 159 A, first Floor, MLA colony, Road No, 12 Banjara Hills Hyderabad-34 2 110 Harish Bohra 5/10/2010 5550000 Raja Reddy Nandygadada Vilage Srinivas Sandra Post Banarpet Taluka Kolar Dist Karnataka 3 110 Gromax Corporate services Pvt. Ltd. 409 Triputi Towers Nr. Telephone Exchange Street GIDC Crossing Road GIDC Vapi 7/7/2010 8443000 M.N. Pratima House No. 106/21, First Floor, Nr. Old Diyjyajyoti Scl Akri Village E.G. Road 4 109 Joshi Bullion Gems & Jewellery Pvt. Ltd 412, Laxmi Mall Building No. 5 Laxmi Industrial Estate, New Link Road Andheri West Mumbai-400 053 27-07-2010 18000000 Raja Reddy Nandygadada Vilage Srinivas Sandra Post Banarpet Taluka K....
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....oks 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 Revenue in deleting addition of Rs. 1,02,33,850/- The assessing officer has made addition of Rs. 1,02,33,850/- towards income from advice to investors on the basis of page no. 1 of the loose paper file as per annexure A-10 wherein hand written calculation has been made in respect of purchase and sale of shares. The assessing officer noticed on reverse of page no. 9 of this loose paper file A-10 that there was a hand written entry wherein a calculation was made as per which 70% of Rs. 1,02,33,850/- has been worked out at Rs. 71,63,695. This profit was distributed in the ratio of 70% to Rameshbhai and balance 30% was paid to Shri Dhreerajlal Sanghvi Rs. 30,70,155/-. The assessee explained that he has considered the entire amount of Rs. 1,02,....
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....e 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 renovation expenses therefore we observe that the lower authority had failed to disprove the contention of the assessee that not any expenses of Rs. 6,14,589/- was incurred on BMW car. Therefore, addition to the extent of Rs. 6,14,598/- is deleted. Considering the finding of ld. CIT(A) that out of the expenses of Rs. 98,72,060/- expenses to the tune of Rs. 70,49,962/- has been considered in the cash flow statement, we do not find any force in the appeal of the Revenue on this issue. Accordingly, the appeal of the Revenue is dismissed and cross objection no. 4 of the assessee is partly allowed. Cross objection no. 1 of the assessee in confirming unexplained cash found of Rs. 4,89,863/-:-Regarding cross objection filed....
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.... Gromax Corporate services 7/7/2010 8443000 M.N. Pratima Pvt. Ltd. Document 2 409 Triputi Towers Nr. Telephone Exchange Street GIDC Crossing Road GIDC Vapi House No. 106/21, First Floor, Nr. Old Divjyajyoti Sel Aki Village E.G. Road Joshi Bullion Gems & 109 Jewellery Pvt. Ltd 412, LaxmiMgll 27-07-2010 18000000 Raja Reddy Building No. 5 Laxmi 5 107 Industrial Estate, New Link Road Andheri West Mumbai-400 053 Gromax Corporate services 21-07-2010 Pvt. Ltd. 409 Triputi Towers Nr. Telephone Exchange Street GIDC Crossing Road GIDC Vapi Nandygadada Vilage Srinivas Sandra Post Banarpet Taluka Kolar Dist Karnataka 6000000 M.M. Ganesh 215, 5th Cross Road Left side Road Ilyashnagar Banglore (South) 3 Gromax Corporate services 3/11/2010 4000000 Karusala Srinivasrao Pvt. Ltd. 409 Triputi Towers Nr. Telephone Exchange Street GIDC Crossing Road GIDC Vapi Lowyerpeth Prakasham Hyderabad 7 3 Gromax Corporate services 8/11/2010 2500000 Karusala Srinivasrao Pvt. Ltd. 409 Triputi Towers Nr. Telephone Exchange Street GIDC Cr....