TaxTMI 
TaxTMI 
2021 (11) TMI 504
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....ider the following substantial question of law: - "1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in deleting the addition made by assessing authority with regard to unexplained investments by erroneous holding that the assessing authority has not furnished its report after verifying the recipient even when the onus/burden is on the assessee to prove the veracity of evidence found against him in the course of search as per section 69C of the Act and without considering the contents of seized materials?" 4. However, having heard the learned counsel appearing for the parties and considering the material on record, we re-formulate the substantial questions of law as under: "1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in deleting the addition made by assessing authority with regard to unexplained investments by erroneous holding that there is no evidence brought on record by assessing authority and no opportunity was granted to assessee to cross examine the witnesses without appreciating the contents of sized proved the unexplained investments made by assessee and assessing....
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....ation by referring to the order of the sister concern and also by confronting the same to the assessee with all material in this connection. 7. Pursuant to the said directions issued by the Tribunal, the Assessing Officer has passed the order confirming the addition made in the earlier round, deleting the addition on account of unexplained expenditure with respect two items i.e., unexplained investments land in Bettanahalli of Rs. 82,86,250/- and bogus expenditure on lands at Gooliyanandagunda of Rs. 92,00,200/-, modifying the unexplained expenditure with respect to Janson Mall at Rs. 2,00,000/- instead of Rs. 20,00,000/- i.e., giving relief to the extent of Rs. 18,00,000/-. 8. Being aggrieved, the assessee has preferred appeal before the Commissioner of Income Tax [Appeals] which came to be allowed in part against which the assessee preferred appeal inasmuch as restricting the addition to Rs. 2,00,000/- as regards unexplained income from Jansons Mall. Being aggrieved, this appeal is preferred by the Revenue against the findings of the Tribunal with respect to unexplained investments, land in Buttanahalli of Rs. 82,86,250/- and bogus expenditure on lands at Gooliyanand....
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....d be on actuals. In other words, the assessing officer cannot estimate the undisclosed income. He has to compute the undisclosed income as provided under Section 158BB(1). If it is a case of estimation of income it falls outside the said provision. In Section 158BB the Parliament has consciously used two words, one 'computing' and the other 'assessment'. The word "computation" has not been defined in the Act. The meaning of the word is to be gathered from the scheme of the Act having regard to its ordinary grammatical meaning. In the context of the Act, computation is a calculation, a method of determination by reckoning through calculation. It involves some methodical process with some amount of approximate mathematical precision based on the calculable data available. The word "computation" is completely distinct and different from the word "estimate", which means: the action of valuing or appraising: an approximate calculation based on probabilities. Under the scheme of the Act, the Assessing Officer has to compute the undisclosed income falling within the block period. He does not estimate or appraise the undisclosed income. As opposed to this the word 'assessment' has been def....
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....ression of actual sales, taking into consideration the totality of the circumstances, it is open to the Assessing Authority to estimate the income of the assessee. 12. We have no reasons to differ from this dictum pronounced by the Co-ordinate Bench. The said ruling being squarely applicable to the facts of the present case, we answer the substantial question of law No.1 in favour of the assessee and against the Revenue. Re. Substantial Question of Law No.2: 13. Learned counsel for the Revenue strongly argued that the Tribunal has failed to appreciate the findings of the Assessing Authority as well as the Commissioner of Income Tax [Appeals] inasmuch as the deduction of Rs. 92,00,000/- claimed by the assessee towards bogus expenditures. Inviting the attention of the Court to the assessment order passed pursuant to the order of remand, it was pointed out that the Assessing Officer has categorically recorded a finding that the receipts in the books of the sister concern, Johnson Mall, Bengaluru do not show any amounts received from the assessee-company for the work on Gooliyanandagunda village. Reference was also made to paragraph 6.15 of the Order of the Commissioner of Inc....
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....ade by the Revenue to consider these development charges as bogus expenditure and no development work was done on the land thereby making addition in the block assessment is wholly imaginary. It is further fortified by the order of the Commissioner of Income Tax [Appeals] in paragraph 6.15, wherein it is held thus: "6.15 A perusal of the statement of account in respect of JAIC, transaction with the appellant and Mrs. Pyari Jan maintain separate account. Even account in the name of Mrs. Pyari Jan for different project. Even as per the statement amount paid to JAIC in the name of Mrs. Pyari Jan claimed to be more i.e., Rs. 82,00,200/- whereas profit apportionate only Rs. 1,20,807/-." 17. It is also noticed in paragraph 6.6 that the break up of amount received by JAIC from various persons in respect of development work for the block assessment period would show as under: "6.6 In the written submission dated 07.07.2010 the appellant has given yearwise break-up of amount received by JAIC from various persons in respect of the development work as under: Name of the persons from whom amount received Assessment Year Amount [in Rs. Pyari Jan and Iffat....