TaxTMI 
TaxTMI 
2021 (8) TMI 364
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.... following grounds:- "1. That on the facts and circumstances of the case the Ld. CIT(A) erred in approving the action of search in the case of the appellant even when the search as executed on the premise was not in consonance with the provision of section 132 of the Income Tax Act. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in restricting the brokerage at 2% of the total receipt as shown in the alleged cash book as maintained by the appellant for his memory even when the appellant has offered the amount of Brokerage on receipt basis in his return of total income. The addition as made by the Assessing Officer and also maintained by the Ld. CIT(A) was therefore wrong and uncalled for. 3. The appellant reserve its right to add, alter or delete any ground of appeal on or before the date of final hearing." 3. Practically the appellant has challenged the addition in respect of brokerage @2% of the total receipts of the appellant as restricted by the Ld. CIT(A). 4. The facts culled out from the records is this that a search and seizure operation under Section 132 of the Act was carried out on business as well as reside....
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.... respective parties and we have also perused the relevant materials available on record. 9. It appears that while restricting the addition of brokerage at 2% of the total receipt the Ld. CIT(A) observed as follows:- "6.2 On the basis of the seized documents on which the names of the brokers of the buyer and seller are mentioned it is reasonable to accept the contentions of the appellant that the brokerage received in a transaction is distributed amongst the brokers involved in executing the said transaction. However, neither any evidence has been found during the search nor has the appellant placed any evidence on record to whow as to how the brokerage received is distributed. As discussed in Para 5.2 above the net amount of brokerage received by the appellant as per the seized documents is Rs. 24,20,28,695/- in A.Y. 2011-12 and Rs. 35,69,80,859/- in A.Y. 2012-13. As discussed in the preceding paragraph the rate of brokerage varies between 1% to 3% and given the totality of the circumstances and the facts of the case I hold that it is reasonable to estimate the income of the appellant @2% of the net receipts. Accordingly, the total brokerage income received by the appel....
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....ssee has further filed its return of income declaring total income at Rs. 6,58,190/- for A.Y. 2011-12. During the course of search various loose papers were found and seized from the residential premises of the appellant. The AO took in to consideration that the documents being LPS A-5, A-10 and A- 12 represent the cash book prepared by the appellant himself in his own handwriting and observed that the assessee never provided working of these cash books neither explained the contents thereof despite repeated opportunities and added the amount of receipts found noted in the cash book as undisclosed income. However, in appeal the Ld. CIT(A) issued several letters explaining the contents of the working of these cash books as was brought to the notice of the Ld. CIT(A) by the appellant. Such finding is available at Page 16 to 18 of the order passed by the First Appellate Authority. 15. In fact, the Ld. AO wanted the assessee to provide the name of the buyers and sellers. The appellant is a broker and had explained that there are three brokers in a transaction, one broker representing the buyer, one was representing the seller and a third one negotiated between the two brokers. Th....
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....pellant in any of the immovable properties. In view of the above facts I am of the view that the Assessing Officer was not justified in adding the entire amount of receipts shown in the cash book as income of the appellant without allowing the credit of the debit side of the cash book." 16. Further that the questionnaire dated 04.08.2014 wherein the AO himself though proposed to added only the brokerage amount in respect of the transactions as recorded in LPS A-5, LPS A-10 and LPS A-12, ultimately at the time of passing of the assessment order the entire amount shown on the credit side in the cash book of the seized document was added to the income of the appellant. This was, however, not found acceptable by the Ld. CIT(A) as it is evident from Paragraph 4.4 and 4.5 of the order passed by him. Finally while deleting the addition made by the Ld. AO, the Ld. CIT(A) observed as follows:- "4.6 The undisputed facts of the case are that the appellant acts as a property broker. No assets were found in possession of the appellant which were not recorded in his books of accounts during the course of search. The seized documents found in possession of the appellant which have bee....
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....ctively is deleted. Ground No. 2.1 is allowed for A.Ys. 2011-12 and 2012-13." From the above it appears that inability on the part of the appellant to provide the names of the actual buyers and sellers as asked for by the Ld. AO was sole basis for adding the entire credit side of the receipts to the income of the appellant which, amounting to us, is not sustainable neither justifiable. It is neither mandatory on the parties of the authorities to presume that whenever books of accounts are seized, the same belongs to the assessee irrespective of any other facts which may dissuade the authorities from doing so. Therefore, preponderance of probability has to be taken into consideration before rejecting the explanation furnished by the appellant. When the appellant has not denied the fact of being a property broker then in the absence of undisclosed investment found during search the AO is not justified in adding the entire receipts shown in the credit side of the seized cash sheet as the income of the appellant as rightly been observed by the Ld. CIT(A) while deleting the addition made by the Ld. AO; the same according to us is just and proper and without any ambiguity so as to war....
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....r re-computation under s. 147 or s. 153A of the Act. In our view, for the purpose of levy of interest under s. 234B(3), it is immaterial whether re-computation or reassessment under s. 147 or under s. 153A is made by accepting the revised return filed and by processing the same under s. 143(1) or whether reassessment is made by rejecting such returns and by determining the income. The fact that the procedure for calling for return and assessment after search or requisition under s. 153A is the same as provided under s. 139 does not mean that a reassessment completed under the said provision is a regular assessment or original assessment. On the other hand, whatever be the procedure adopted for assessing escaped income or undisclosed income pursuant to search or requisition, such assessment will always be a re-assessment or re-computation under s. 153A, and unless it is a first assessment, that could be treated as the regular assessment in terms of Expln. (2) to s. 234B(1), then interest can be charged only under s. 234B(3) of the Act. In this case, the original returns were processed under s. 143(1) of the Act and the proceedings so completed were issued to the assessee. It is only....