TaxTMI 
TaxTMI 
TaxTMI 
2021 (3) TMI 1194
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....se of assessee namely Shri Nitin Agrawal vide IT(SS)A No.182/Ind/2019 for Assessment Year 2014-15 :- (1) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 5,00,00,000/- made by Assessing Officer on account of admission of additional income u/s 132(4) of the Income Tax Act,1961 (2) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 26,42,910/- made by Assessing Officer on account of unexplained cash of the Income Tax Act,1961 (3) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 24,88,216/- made by Assessing Officer on account of unexplained jewellery of the Income Tax Act, 1961 (4) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 50,00,000/- made by Assessing Officer on account of unexplained advances to Shri Lilwani of the Income Tax Act,1961 (5) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 10,00,000/- made by Assessing Officer on account of unexplained investment in watches of the Income Tax Act, I 9....
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....onal income on account of various discrepancies noticed/incriminating material found during the course of search. Detailed submission filed by the assessee were considered. The statement given by the assessee u/s 132(4) of the Act was composite in nature referring to various discrepancies noticed during the course of search. Ld. A.O completed the assessment assessing income at Rs. 8,21,10,518/- after making following additions:- (i) Admission of additional income u/s 132(4) Rs. 5,00,00,000/- (ii) Unexplained cash Rs. 26,42,910/- (iii) Unexplained jewellery Rs. 48,01,948/- (iv) Unexplained advance to Shri Lilwani Rs. 50,00,000/- (v) Unexplained investment in watches Rs. 10,00,000/- (vi) Foreign travel expenses Rs. 2,00,000/- 7. Aggrieved assessee preferred appeal before Ld. CIT(A) and partly succeeded. 8. Now the Revenue is in appeal before the Tribunal. 9. As regards the common Ground No.1 pertaining to the addition made by the Ld. A.O based on the statement given u/s 132(4) of the Act and subsequently deleted by the first appellate authority, Ld. Departmental Representative vehemently argued supporting the order of Ld. A.O and also submitted that the statement....
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....e retracted from the said surrender and filed the returns on the basis of the accounts which are duly audited. 1.In the course of the assessment proceedings all the information as required by the AO from time to time was furnished. The assessee is in the business of real estate, builders and developers. The assessee during the relevant period was developing a residential complex in the individual capacity and also in the firms in which he was a partner. The expense incurred on the purchase of land and construction expenses on the projects were the business expenses of the assessee. The assessee had maintained regular books of account in which all the expenses including the cost of construction were duly recorded. These books were presented before the AO during the course of assessment proceedings and were duly checked by him and no deficiency was found in the books of account or the records maintained. No evidence was found during the course of search or after words during post search enquiry or pre assessment enquiries to suggest that the assessee has received any extra receipts or has incurred any unrecorded expense. Therefore, the assessee retracted from the declaration made f....
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....losed income or having made any unexplained investment which could justify the addition under reference. The sole basis for making the addition is the statement made by one of the partners. The Ld. A.O. has made various additions for the documents found. Thus, all the loose papers and the investments have been considered by the A.O. and accordingly he has made the additions under various heads. After making the additions on the basis of various papers there remains no scope for making any furher addition on the basis of declaration made in the statement. It is humbly submitted that no incriminating material was found during the course of the search to show that the assessee has received any extra payment than mentioned in the books of accounts nor has incurred any extra expenditure on the construction of buildings, nor any paper/proof was found that the assessee has received any extra payment on sale of flats. No undisclosed investment or assets were found during the course of search. The assessee has maintained regular books of accounts which are not found to be incomplete or unreliable. The books of accounts are not rejected. It is further submitted that no addition can be ma....
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.... the Act of Shri Nitin Agrawal was taken wherein he accepted to offer additional income in the name of various business concerns as well as his individual name. In the instant appeal the impugned account of Rs. 5 crores each was surrendered by Nitin Agrawal in his own name as well as M/s S.V. Infra Developers. Ld. A.O thereafter during the course of assessment proceedings called for reply. Detailed submissions with regard to the discrepancies found during the course of search were filed. Ld. A.O concluded the assessment by making various additions under different heads in unexplained cash, unexplained jewellery, unexplained advance, unexplained investment and foreign travel expenses. Ld. A.O separately made addition of Rs. 5 crores for additional income offered in statement u/s 132(4) of the Act but not offered to tax in the return of income. 14. When the matter came before Ld. CIT(A) he deleted the addition of Rs. 5 crores made in the hands of Shri Nitin Agrawal made by the Ld. A.O giving detailed finding on fact and placing reliance on various decisions. Relevant extract is reproduced below:- 4.2 Ground No. 3:- Through this ground of appeal, the appellant has challenged the ad....
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....ng an addition to the returned income. Copy of the relevant pages of the Statement has been reproduced by the AO at Page no. 10 and 11 of the assessment order. The statement recorded does not speak about the quantity of the material found during the course of search. The inventory drawn during the course of search in respect to the material found is also not excessive. During the course of search no exercise has been done to arrive to the book stock value. 4.2.3 It is to be mentioned that Shri Nitin Agrawal had suffered a heart attack in the recent past. He was under medical observation and medication. His health deteriorated during the search operation which continued for three days. Doctor was called and as per Doctor's advice Shri Nitin Agrawal was kept under sedation. Medical certificate has been produced during the course of assessment proceedings. Therefore, such statement cannot be considered as a voluntary statement. A statement taken under such conditions cannot certainly be made the basis of addition in assessment; more so when there are no corroborating facts by way of incriminating documents found or proof of undisclosed income being discovered to support the stat....
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....o buy peace of mind, he accepted and declared Rs. 5 crores during the course of search. It is also stated that the case laws as relied by the A.O. are not applicable on the facts of the present case. The Hon'ble Supreme Court rendered in the case of pullangode Rubber Produce Co. Ltd. 91 ITR 18 (SC), wherein the Hon'ble Court has held that admission cannot be said that it is conclusive. Retraction from admission was permissible in law and it was open to the person who made the admission to show that it was incorrect. However, reliance is placed on the judgement of the Hon'ble Gujarat High Court rendered in the case of CIT Vs. Chandra kumar Jethmal Kochar (2015) 55 Taxmann.com 292 (Gujarat), wherein it has been held that merely on the basis of admission that few benami concerns were being run by assessee, assessee could not be basis for making the assessee liable for tax and the assessee retracted from such admission and revenue could not furnish any corroborative evidence in support of such evidence. It was further urged by the assessee that admission should be based upon certain corroborative evidences. In the absence of corroborative evidences, the admission is merely ....
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....ed/discussed in the preceding paras following two aspects needs to be considered. (1) In the case of Shri Nitin Agrawal surrender of income was made looking to various discrepancies noticed by the search team but at the time of completing the assessment Ld. A.O had made separate additions for all such discrepancies noticed/incriminating material found and addition was further made for the surrender of Rs. 5 crores. So whether such addition not corroborating with any incriminating material found during search and made purely on the basis of statement given u/s 132(4) of the Act was justified. (2) In the case of M/s S.V. Infra Developers also surrender was made for the alleged mistmatch in work in progress at project site vis-à-vis the figures available in financial books. Surrender of Rs. 5 lakhs was made. During the course of assessment proceedings Ld. A.O has not referred the matter to Departmental Valuation Officer and he also could not controvert the fact that the concern M/s S.V. Infra Developers was new and there was no sale since the bunglows were under construction and in short Ld. A.O failed to corroborate the addition of Rs. 5 crores with the excess work in pr....
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.... it was submitted that various loose papers and documents narrated by the Ld. A.O found during the course of search does not pertain to the assessee. Since there was no such incriminating material relating to the assessee found during the course of search relating to the addition in question the alleged addition was made purely on the basis of the statement given u/s 132(4) of the Act. 27. We also observe that in the assessment order as well as order of the first appellate authority there is no mention of any incriminating material having its nexus with the alleged income declared u/s 132(4) of the Act. The Ld. A.O has failed to prove on record any specific instance with support of incriminating material found during the course of search which could show that the assessee has earned the alleged undisclosed income. It is not in dispute that various other additions have been made by the Ld. A.O for the undisclosed investment u/s 69B, undisclosed investment in projects of land and unexplained unsecured loan as well as unexplained cash u/s 69A of the Act. However specifically with regard to the addition of Rs. 25,00,000/- and Rs. 3,00,00,000/- made for the Assessment Years 2013-14 an....
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....by this Tribunal observing as follows:- "9. We have heard rival contentions and perused the records placed before us and carefully gone through the judgments referred to and relied by both the parties. The sole grievance of the assessee raised in Ground No.1 of the instant appeal is against the order of Ld. CIT(A) confirming the addition of Rs. 2,25,00,000/- made by the Ld. A.O on account of undisclosed income surrendered during the course of search by the partner of the assessee firm. 10. At the cost of repetition we would like to recite and recapitulate the facts once more. The assessee is a partnership firm engaged in real estate business. It is the part of Signature Group. Search action was initiated in the Signature Group and its associates on 29.1.2014. The assessee's association with the Signature group is on account of the common partners in various concerns. Assessee is separately assessed to tax. Search u/s 132(4) of the Act was initiated in the case of the assessee on 29.1.2014 and was concluded on 31.1.2014. This fact is proved on the basis of "panchanama" prepared by the officer of the search team which is placed at page 62-64. No surrender was made in the statemen....
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....of the Act so far as relating to the assessee since the search in its case already concluded on 31.1.2014. He further submitted that no incriminating material was found during the course of search and as held by Hon'ble Tribunal in the latest decision in the case of ACIT(1) vs. Sudeep Maheshwari (supra) that "no addition was called for which has been made merely on the basis of the statement without correlating the disclosure made in the statement with the incriminating material gathered during the course of search". 13. So the contention of the Ld. Counsel for the assessee can be summarised that the addition cannot be made merely on the basis of statement which too was taken after conclusion of the search and no correlation has been made with the incriminating material found during the course of search. 14. On the other hand Departmental Representative gave reference to various judgements referred above. She mainly placed emphasis on the judgment of Hon'ble High Court of Madras in the case of Kishore Kumar V/s DCIT (supra) holding that "when there was a clear admission of undisclosed income in the statement sworn in u/s 132(4) of the Act there is no necessity to scrutinise the....
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.... is concerned the search concluded on 31.01.2014 and before the conclusion of the search no surrender of undisclosed income was made in the statement recorded u/s 132(4) of the Act by the persons available at the assessee's business premises. 19. As regards the statement of Mr. Vipin Chouhan given on 02.02.2014 is concerned, we find that this statement contains the surrender for various group concerns and not specifically for the assessee M/s. Ultimate Builders. Reference was also given to other business concerns namely M/s. Virasha Infrastructure, Signature Infrastructure, Signature Builders and Signature Builders and Colonisers. Certainly the search in the case of concerns other than the Ultimate Builders did not conclude on 02.02.2014 but at that point of time on 02.02.2014 the search in the case of Ultimate Builders stood concluded two days before on 31.1.2014. 20. We therefore are of the considered view that the alleged statement given by Mr. Vipin Chouhan on 02.02.2014 may be construed as the Section 132(4) of the Act for all the other concerns named above except for the assessee i.e. M/s. Ultimate Builders. Therefore the statement referred to by the Ld. A.O on the basis ....
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....i concerns were being run by assessee, assessee could not be basis for making the assessee liable for tax and the assessee retracted from such admission and revenue could not furnish any corroborative evidence in support of such evidence. It was further urged by the assessee that admission should be based upon certain corroborative evidences. In the absence of corroborative evidences, the admission is merely a hollow statement. We have given our thoughtful consideration to the rival contentions of the parties. It is undisputed fact that the statement recorded u/s 132(4) of the Act has a better evidentiary value but it is also a settled position of law that the addition cannot be sustained merely on the basis of the statement. There has to be some material corroborating the contents of the statement. In the case in hand, revenue could not point out as what was the material before the A.O., which supported the contents of the statement. In the absence of such material, coupled with the fact that it is recorded by the Ld. CIT(A) that the assessee himself had surrendered a sum of Rs. 69,59,000/- and Rs. 75,00,000/- in A.Y. 2008-09 and 2009-10 respectively. The A.O. failed to co-relate ....
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....pears to be voluntarily given statement disclosing undisclosed income of Rs. 20 lacs. According to the learned counsel for the assessee, Shri Binod Poddar, the Assessing Officer had full jurisdiction to proceed for further enquiry and could have collected evidence in support of alleged admission of undisclosed income of the assessee. 6. We are of the considered opinion that statement recorded under section 132(4) of the Income Tax Act, 1961 is evidence but its reliability depends upon the facts of the case and particularly surrounding circumstances. Drawing inference from the facts is a question of law. Here in this case, all the authorities below have merely reached to the conclusion of one conclusion merely on the basis of assumption resulting into fastening of the liability upon the assessee. The statement on oath of the assessee is a piece of evidence as per section 132(4) of the Income Tax Act and when there is incriminating admission against himself, then it is required to be examined with due care and caution. In the judgment of Kailashben Manharlal Chokshi (supra), the Division Bench of Gujarat High Court has considered the issue in the facts of that case and found the ....
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....wing the judgements and decisions referred above we find that firstly the statement given by Mr. Vipin Chouhan u/s 132(4) of the Act on 02.02.2014 cannot be considered as the statement given u/s 132(4) of the Act in the instant case of the assessee firm since the search action in case of assessee was concluded on 31.1.2014 by the Authorised Officer. Secondly as regards to other business concerns referred by Mr. Vipin Chouhan in his statement given on 02.02.2014 and in case of such business concern wherein search action u/s 132 of the Act was continuing the said statement dated 02.02.2014 will be considered as the statement u/s 132(4) of the Act. Thirdly, no reference has been given by the Revenue Authorities to any incriminating material found during the course of search at the business premises of the assessee, which could be correlated to the alleged surrendered income earned by the assessee from undisclosed sources. 27. We therefore are of the considered view that the finding of Ld. CIT(A) needs to be set aside and the addition of Rs. 2,25,00,000/- deserves to be deleted since it has been made on the basis of a statement not given u/s 132(4) of the Act and without referring to....
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....ined foreign travel expenses Rs. 1,00,000/- 21. For all the above stated grounds Ld. Departmental Representative vehemently argued supporting the order of Ld. A.O and prayed for confirming the additions made by Ld. A.O. 22. Per contra Ld. Counsel for the assessee supported the finding of Ld. CIT(A) and also argued refrring to following written submissions :- Ground No 2: Deletion of addition of Rs. 26,42,910/- on account of alleged unexplained cash During the course of the search, the cash was found at the business premises at Rs. 26,42,910/-. It was submitted that the cash balances as per the books of accounts of various firms was Rs. 87,82,341/-. Out of this cash a sum of Rs. 26,42,910/- was kept with the partner. The balance of the cash was explained as cash in office at Rs. 3,16,630/- ; Rs. 50,00,000/- as pending cash entry being advance to Smt. Big Saree Mall and balance of Rs. 8,22,801/- being expenses incurred for pending vouchers at site. The Id. A.O. did not accept the contention of the assessee and made the addition. The Id. CIT(A) has deleted the same on the ground that the cash balance as per the seized books of accounts is Rs. 87,82,341/- which takes care of the....
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....1 crore is required to be paid. He stated that post dated cheques were issued for renovation of the six duplex flats. Since the renovation was not completed within the time, they stopped the payment. It was submitted before the Id. A.O. that the assessee had entered into an agreement for purchase of a floor in the building of Shri Lalwani and made the payment in cash. There is a substantial cash balance as on 31/03/2013 out of which the payment of Rs. 50,00,000/-- was made (pg.20 of asst. order). However, the transaction was cancelled by the Lalwani group and a cancellation agreement was entered on 07/11/2014 which was notarised (pg. 137 of PB). Lalwani group gave two cheques for the return of the advance for which the payment was stopped. These cheques were substituted by the subsequent cheques. The Id. A.O. did not accept the contention of the assessee and on the ground that the cash was paid is not acceptable and in the absence of satisfactory explanation the addition of Rs. 50,00,000/- is made as unexplained investment. Before the Id. CIT(A), the arguments. were put forward that the cash advances were given for the purchase of the property which was cancelled and on cance....
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.... CIT(A) was justified in deleting the addition. The order of the Id. CIT(A) may upheld. Ground No.5 Deletion of addition of Rs.I0,OO,OOO/- on account of alleged unexplained investment in watches The Id. A.O. has made addition of Rs.I0,00,000/- for the watches found during the course of the search. It was submitted that these are duplicate Chinese watches and would not exceed more than Rs. 25,000/- in value. The Id. A.O. did not accept the contention of the assessee on the ground that the details of purchase and the bills have not been produced. On the basis of internet prices he has made the addition of Rs. 10,00,000/-. The Id. CIT(A) deleted the addition that the same has been made solely on estimate, presumption and assumption the additions cannot be made on guesswork without any evidence. It is humbly submitted that these watches are Chinese duplicate watches and have no value. The assessee has visited Hong Kong and China number of times (pg. 36 of the asst. order). The additions cannot be made on pure guesswork without any evidence. The Id. CIT(A) was right in deleting the additions. Ground No.6 Deletion of addition of Rs.l,OO,OOO/- on foreign travel The ld. A.O. ....
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....iation statement is as under:- Cash balance as per books of accounts as on 28.01.2014 Swadesh Developers and Colonizers Rs. 7,32,575/- Swadesh Developers and Builders Rs. 94,657/- SV Infra Developers Rs. 79,55,109/- Total Rs. 87,82,341/- Cash found physically/accounts pending Cash found at residence Rs. 26,42,910/- Cash at office Rs. 3,16,630/- Cash entry pending * Shreemati Big Saree Mall Rs. 50,00,000/- * Other pending vouchers at site and Rs. 8,22,801/- Office Total Rs. 87,82,341/- Further, on perusal of copies of cash book it was observed that cash balance as on 28.01.2014 in the firm M/ SV Infra Developers was Rs. 79,55,109/-, Rs. 7,32,575 in M/s Swadesh Developers and Colonisers and Rs. 94,657/- in M/s Swadesh Developers and Builders. The AO has alleged that these firms are different entity and books of accounts are maintained separately, therefore, maintenance of cash balance of all these concerns is not correct as per standard practice of accounting. On the contrary, the appellant has strongly contended that there is no principle of law which bounds any firm/individual to keep its cash in separate cash box. The AO further stated that th....
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....g the course of search action. S.No. Address of the premises covered u/s 132 of I.T. Act 1961 Jewellery Found (In Rs.) Seized (In Rs.) 1 Nitin Agrawal R/o H No.1, Mount View Villas, Chuna Bhatti, Bhopal Found-(Gold net weight 2371.070 gm) Seized-(Gold net weight 1475.42 gm) Found (Silver net weight 1927.00 gm) Rs. 90,58,305/- Rs. 56,365/- Rs. 67,82,036 2 Jewellery from Locker No.64 State Bank of India, P.B.B Shahpura, Bhopal (In the name of Shri Nitin Agrawal & Smt. Mamta Agrawal) Found-(Gold net weight 1835.02 gms) Seized (Gold net weight 1467 gms) Rs. 56,87,278/- Rs. 43,85,570/- 27. During the course of assessment proceedings it was submitted by the assessee that he has been a high tax payer since past more than 20 years and enjoys a sound financial status in the society. The wife of the assessee is also from a high status family. They got married in the year 1990 and has received considerable amount of gold jewellery from the family and in-laws. His wife have been filing return of wealth and gold jewellery has been declared. The copy of the wealth tax return was also filed. However Ld. A.O did not consider these submissions and also did not gave an....
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....of wealth and challan of Rs. 330/- of wealth tax payment for A.Y 1991-92 and no copy of return of wealth has been submitted by the assessee. In the computation of wealth for A. Y 1991-92 the net weight of gold ornaments are shown at 625 grams. VII The CBDT Instruction No. 1916 dated 11/05/1994 is meant to be an administrative instruction for the guidance of the Authorized Officer at the time of search and seizure action regarding non-seizure of jewellery upto 500 gms for married woman and 100 gms for male member etc., given their sentimental attachment to it. However, non- seizure of jewellery does not imply that the jewellery is to be treated as explained in the assessment proceedings by the A. 0. 4.4.1 The appellant during the course of appellate proceedings submitted that the entire jewellery has been found from residence and joint bank locker in the name of appellant and his wife. Smt Mamta Agarwal wife of appellant has claimed that the entire jewellery belongs to her and was given by her parents and in laws at her marriage and other occasions. The jewellery was also acquired out of her own funds and funds provided by her husband. Further, Smt Mamta Agarwal has filed Wealth....
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....o the extent of the jewellery stated in the circular stands explained" . *In the case Commissioner of Income Tax vs M.S Agrawal (HUF) {(2008) 76 CCH 0802 MPHC: (2008) 11 DTR 0169 (MP)] it has been held that: "In the absence of any material found during search having nexus with undisclosed income, no addition could be made in block assessment under chapter XIV-B; further Tribunal was justified in deleting addition on account of jewellery having regard to CBDT Instruction No. 1916 dt. 11 may 1994". *In the case Ashok Chaddhavs ITO (2011) 202 Taxman 395 it has been held that: "Section 69A of the Income-tax Act, 1961 - Unexplained moneys - Assessment year 2006- 07 _ During a search at assessee's residential premises, 906.900 gms jewellery was found from assessee _ Assessee explained that he was married 25 years back and jewellery was received by his wife in form of 'streedhan' or on other occasions such as birth of a child, ete. _ Assessing Officer accepted only 400 gms of jewellery as explained and treated 506.900 gms of jewellery as unexplained and, accordingly, made addition under section 69A - Whether collecting jewellery of 906.900 gms by a woman in a married l....
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....onus being on the assessee to prove the genuineness of the source of acquisition of jewellery. But, the A.O has not been able to establish any nexus with any document or evidence collected during the search. v). Appellant has also filed copies of Wealth Tax Returns m year 1991- 92 and 1992-93 showing jewellery of735 gms. Merely, if an affidavit! Evidences or bills is not filled regarding receiving of jewellery at the time of marriage, it cannot be presumed that it has been acquired out of undisclosed sources. In the case of Commissioner of Income Tax vs Ratanlal Vyaparilal Jain [(2010) 235 CTR 0568: (2010) 45 DTR 0290 : ( 2011) 339 1TR 0351J. where it has been held; "The Tribunal found that the jewellery held by the assessee and his family members was well within the limit laid down under the CBDT circular and accordingly, deleted the whole addition on the ground that the jewellery held by each of the family members was below the limits specified in the said circular. Though it is true that the CBDT Instruction No. 1916, dt. 11 th May, 1994 lays down guidelines for seizure of jewellery and ornaments in the course of search, the same takes into account the quantity of jeweller....
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....e conclusion arrived at by the Tribunal to the effect that the proceedings could not have been initiated under Chapter XIV-B is erroneous or perverse. The CBOT instruction which relate to guidelines for seizure of jewellery and ornaments in the course of search provides that in the case of a wealth-tax-assessee, gold jewellery and ornaments found in excess of the gross weight declared in the WT returns only need be seized, the officer having regard to the status of the family and the custom and practices of the community to which the family belongs and other circumstances of the case." In the case Ashok kumar Jain vs DCIT- ITA No. 21/Ind/2003 reported in (2004) 32 ITC 527 (Ind) where it has been held; " .... the CBDT instruction be taken as yard stick to arrive at reasonableness of holding of gold ornaments in a middle class Hindu family, prevailing customs also to give gifts to minor children IS on festive occasions". 4.4.5 The appellant's wife Smt Mamta Agarwal has filed Wealth Tax Return in year 1991-92 and 1992-93 shown gold jewelley of 735 grams. Thus, looking into the income and status of the appellant assessee and in view of the decisions cited above, the gold je....
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....in the possession of Shri Nitin Agrawal were with regard to the remaining amount of consideration to be paid for completion of flats purchased from real estate group run by the assessee but stopped for payment as work was not completed. However the Ld. A.O came to the conclusion that assessee had given unaccounted cash of Rs. 50 lakhs to M/s Shrimati Big Saree Mall owned by Shri Dinesh Lilwani. The relevant finding of Ld. A.O is extracted below:- The submission of the assessee is considered carefully. It is an admitted fact that the assessee has paid Rs. 50 lakhs in cash to Shri Dinesh Lilwani, partner of Shrimati Big Saree Mall. This cash transaction of Rs. 50 lakh are not found to be recorded in the books of accounts of the assessee and his concerns at the time of search action. The assessee's contention that due to repeated promise of repayment of the advance in cash, the said amount was not entered in his books of account is not acceptable as the amount has been paid almost before six months. Further, the amount is quite big amount which should have been recorded in the books of accounts at the time of payment itself. Therefore, the assessee's contention in this regard is not....
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....n confronted with this issue he stated that the amount was against the deal for purchase of property from firm Shrimati Big Saree Mall and in support he filed a copy of agreement dated 07.11.2013, wherein Shri Lilwani agreed for repayment of Rs. 1 crores in lieu of cancellation of an earlier proposal. Therefore, the AO required the assessee to show cause as to why an amount of Rs. 1.50 crores should not be added to his income. The assessee in reply submitted as under:- Transactions with Mr Dinesh Lalwani: The copy of the statements relied upon by your good self in the matter may please be provided to the assessee and in case reliance is placed solely on the said statements, purportedly recorded u/s 131 of the Income Tax Act, 1961, an opportunity to cross examine the said persons may also be afforded to the assessee. Without prejudice to the foregoing, the assessee encloses herewith copies of the documents relating to the housing transactions entered into with the Lalwani Family which are self explanatory. There is yet one more transaction relating to the purchase of floor area belonging to the Lilwani family adjacent to the assessee's office at E5116, Arera Colony. The docu....
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..../10603/2017 dated 27.07.2017 and the same is pending in Court. Similar facts were narrated by Shri P Raju in his statement recorded on oath during the course of post search enquiries. Shri P Raju has also submitted a copy of agreement dated 07.11.2013, wherein Shri Lilwani has agreed for repayment of loan of Rs. 1 crores in lieu of cancellation of property deal under consideration. The AO in order to ascertain true and correct facts of the case issued summons to Shri Dinesh Lilwani and statement of Shri Dinesh Lilwani was recorded on oath on 27.05.2014 and 22.07.2014, wherein he stated that he along with his family has purchased 6 duplexes from firm of the appellant for Rs. 6 crores and payment of Rs. 1 crore is still pending to be paid. Shri Dinesh Lilwani has also stated that the two cheques were issued for renovation work of two duplexes and when the work was not completed in time the same were stopped for payment. 4.6.3 The appellant by taking an alternate plea stated that the AO has used statement of Shri Dinesh Lilwani against him without providing sufficient opportunity of cross examination. After considering the entire facts in totality I have reached to final conclusion ....
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....Shri Nitin Agrawal and gave only credit to the statement of Shri Dinesh Lilwani and fourthly the Ld.A.O failed to consider the fact that the case of the appellant for advance of loan to Shri Dinesh Lilwani is still pending in the court. Under these given facts, in our considered view Ld. A.O was not justified in making addition for unexplained advances at Rs. 50 lakhs. Thus no interference is called for in the finding of Ld. CIT(A) thus Ground No.4 of the Revenue's Appeal IT(SS)A No.182/Ind/2019 is dismissed. 32. As regards Ground No.5 for the deletion of addition of Rs. 10 lakhs by Ld. CIT(A) we observe that during the course of search 17 watches were seized from the assessee's residence. No purchase bills of these watches were found. Ld. A.O claimed them to be branded watches valued at Rs. 10 lakhs. Before the Ld. A.O assessee submitted that these watches are duplicate Chinese made watches. Ld. A.O was not satisfied and he made addition for Rs. 10 lakhs . When the matter came before Ld. CIT(A) the addition were deleted since there was no evidence to support the valuation of Rs. 10 lakhs brought by the Ld. A.O. Ld. CIT(A) deleted the addition of Rs. 10 lakhs for unexplained inve....
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.... Apex court in the case of Dhiraj Lal Girdharilal v/s CIT (1954) 26 ITR 736 (SC). 4.7.3 In view of the above judicial pronouncement, the AO was not justified in making addition on estimate basis and also when no corroborative evidence was found suggesting unaccounted investment in purchase of watches. Thus" the addition made by the AO amounting to Rs. 10,00,000/- is Deleted. Therefore, appeal on this ground is Allowed. 33. We therefore in the given facts and circumstances of the case and the uncontroverted fact that Ld. A.O has not taken any step to bring on record the valuation of the watches found during the course of search which thus makes the addition merely on the estimated basis and same therefore have been rightly deleted by Ld. CIT(A) relying on settled judicial precedents. Ground No.5 of the Revenue's appeal in IT(SS)A No.182/Ind/2019 stands dismissed. 34. Now we take up Ground No.6 is regarding deletion of addition on account of foreign travel expenses at Rs. 1 lakh. Brief facts relating to this issue are that during the search proceedings various documents were found about the foreign travel carried out by the assessee and his wife. The assessee claimed them to be d....