TaxTMI 
TaxTMI 
2022 (7) TMI 1204
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....ved for assessment years 2007-08 to 2012-13 were completely lost of sight and the appeals could not be filed in time. It is only when the auditor of the assessee was contemplating to avail the benefit of scheme "Vivad Se Vishwas, 2020", enquired about the status of the appeals with the assessee, it was learnt that appeal orders were already passed and time limit for filing appeal in all these assessment years before the Tribunal which has also been lapsed. Thereafter, the assessee was advised to file appeals against the first appellate orders by assessee's auditors, consequently appeals were filed by delay of 34 days in all these assessment years and prayed to condone the delay. 1.2 We have heard both the parties on the issue of condonation of delay. In our opinion, the reasons explained by the assessee for delay in filing the appeals is found to be good and sufficient and accordingly we condone this short delay of 34 days and admit the appeals for adjudication. 2. The main grounds for all the assessment years from 2007-08 2012-13 are as follows:- 2.1 Main grounds for AY 2007-08 in ITA No.307/Bang/2020:- "1.The learned Commissioner of Income-tax (Appeals) has erre....
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....ed and the disallowance as made/sustained is to be deleted. 7. The learned CIT(A) has erred in confirming the action of the assessing officer in assessing the capital gain earned on sale of property as Income under the head Business holding that the appellant being a real estate businessman has failed to demonstrate that property sold was held as capital asset. On proper appreciation of facts, evidence available and the law applicable, the property sold was held as investment/ Capital Asset and the same is assessable under the head Short Term Capital Gain. 8. The learned CIT(A) has erred in sustaining the addition made by the assessing officer on account of alleged payments made by the appellant on purchase of property amounting to Rs 2,00,00,000/- by relying on agreement to sell dated 18/05/2006. This agreement to sell was not registered and subsequently revised. The action of authorities below in relying upon the document which was never acted upon makes the entire addition totally erroneous and such addition is to be deleted. 9. The appellant denies the liability to pay interest u/s 234A, 234B and 234C of the Act. The interest levied being wholly erron....
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....vances were duly confirmed by the creditors and received through banking channels. The conclusion of authorities below being wholly erroneous both on facts and law is to be rejected and the addition made is to be deleted. 6. The learned CIT(A) has erred in confirming the disallowance made by the Assessing officer to the extent of 50 percent of the expenditure debited to the profit and loss account on the ground that the appellant did not justify the expenditure claimed. The conclusion of authorities below being wholly erroneous, without any basis and purely adhoc is to be rejected and the disallowance as made/sustained is to be deleted. 7.1 The learned CIT(A) has erred in confirming the action of the assessing officer in assessing the capital, gain earned on sale of property as Income under the head Business holding that the appellant being a real estate businessman has failed to demonstrate that property sold was held as capital asset. On proper appreciation of facts, evidence available and the law applicable, the property sold was held as investment/ Capital Asset and the appellant had rightly declared the gain and same is to be accepted without any variation. ....
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....ly in the absence of satisfaction to be recorded before the issue of notice u/s 153A of the Act and such order is liable to be quashed. 3. In any case and without prejudice, the learned Commissioner of Income-tax (Appeals)has erred in confirming various additions made by the Assessing officer. On proper appreciation of facts and the law applicable, the additions made/confirmed are wholly erroneous and are liable to be deleted. 4. The learned CIT(A) has erred in confirming the action of the assessing officer in adding a sum of Rs. 78,97,764/- as unexplained cash credit u/s 68 of the Act on the ground that the appellant has not established the Identity, credit worthiness of the creditors as well as genuineness of the transaction. All the advances were duly confirmed by the creditors and received through banking channels. The conclusion of authorities below being wholly erroneous both on facts and law is to be rejected and the addition made is to be deleted. 5.1 The learned CIT(A) has erred in confirming the disallowance made by the Assessing officer to the extent of 50 percent of the expenditure debited to the profit and loss account amounting to Rs. 4,75,5....
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....st levied is also to be deleted." 2.4 Main grounds for assessment year 2010-11 in ITA No.310/Bang/2020:- 1. "The learned Commissioner of Income-tax (Appeals) has erred in partially confirming the order passed by Assessing Officer. The order passed by learned assessing officer being bad in law against the principles of natural justice and void-abinitio was required to be quashed in toto instead of being confirmed. 2. In any case, the learned Commissioner of Income-tax (Appeals) has erred in rejecting the contention 'of the appellant that the application of section 153A of the Act lacked jurisdiction. The order passed by the Assessing officer is bad in law especially in the absence of satisfaction to be recorded before the issue of notice u/s 153A of the Act and such order is liable to be quashed. 3. In any case and without prejudice, the learned Commissioner of Income-tax (Appeals)has erred in confirming various additions made by the Assessing officer. On proper appreciation of facts and the law applicable, the additions made/confirmed are wholly erroneous and are liable to be deleted. 4 The learned CIT(A) has erred in confirming the action....
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....officer in assessing the profit on sale of land amounting to Rs. 30,75,670/- under the head Business without reducing the Long term Capital Gain offered by the appellant. This action of authorities below amounts to double addition and same is to be deleted. 6.4 In any case, the re computation of profit on sale of land as done/confirmed by the authorities below is erroneous and excessive. 7. The learned CIT(A) has erred in confirming the addition .made by the Assessing Officer on account of unexplained cash credit amounting to Rs. 36,00,000/- u/s 68 of the Act On proper appreciation of facts and the law applicable, the addition made is wholly erroneous both on facts and law is to be deleted. 8. The appellant denies the liability to pay interest u/s 234A and 234B of the Act. The interest levied being wholly erroneous is to be deleted. 9. In view of the above and on other grounds to be adduced at the time of hearing it is requested that the impugned orders passed by the CIT(A) and the Assessing Officer be quashed or atleast the various additions made in the hands of the appellant be deleted and the interest levied is also to be deleted." 2.5 Main....
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.... justify the expenditure claimed. The conclusion of authorities below being wholly erroneous, without any basis and purely adhoc is to be rejected and the disallowance as made/sustained is to be deleted. 7.1 The learned CIT(A) has erred in confirming the action of the assessing officer in assessing the capital gain earned on sale of property as Income under the head Business holding that the appellant being a real estate businessman has failed to demonstrate that property sold was held as capital asset. On proper appreciation of facts, evidence available and the law applicable, the property sold was held as investment/ Capital Asset and the appellant had rightly declared the gain under the head Long Term Capital Gain and same is to be accepted without any variation. 7.2 The learned CIT(A) has erred in confirming the recomputation of profit as done by the Assessing officer amounting to Rs. 1,61,82,436/- on account of sale of land as against the Long term Capital Gain offered by the appellant amounting to Rs. 13,68,000/- and assessing the same under the head Business by i) disallowing the entire cost of improvement claimed by the appellant totalling to Rs. ....
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....rroneous both on facts and law is to be rejected and the addition made is to be deleted. 5. The learned CIT(A) has erred in confirming the disallowance made by the Assessing officer to the extent of 50 percent of the expenditure debited to the profit and loss account amounting to Rs.5,55,000/- on the ground that the appellant did not justify the expenditure claimed. The conclusion of authorities below being wholly erroneous, without any basis and purely adhoc in nature is to be rejected and the disallowance as made/sustained is to be deleted. 6. The learned CIT(A) has erred in confirming the action of the assessing officer in adding a sum of Rs. 83,00,000/- as unexplained cash credit u/s 68 of the Act on the ground that the appellant has not proved the cash deposits made in the bank accounts. On proper appreciation of facts and law applicable, the cash deposits are duly explainable. The addition as made/ confirmed is wholly erroneous is to be deleted. 7. Me appellant denies the liability to pay interest u/s 234A and 234B of the Act. The interest Ivied being wholly erroneous is to be deleted. 8. In view of the above and on other grounds to be addu....
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....book for the period 01/04/2007 to 31/03/2008. 102-111 2. Copy of Ledger extracts of relevant expenditure debited to profit and Loss Account for the year 112-124 3. Ledger extract of Vikram Jain along with relevant bank account extract and confirmation letter 125-127 4. Ledger extract of Manchayya V along with relevant bank account extract 128-129 5. Ledger extract of Kumar B M along with relevant bank account extract and confirmation letter 130-137 6. Ledger extract of A N Nanjaiah along with relevant bank account extract and confirmation letter 138-142 7. Ledger extract of N C Mahesh along with confirmation of transactions. 143-147 8. Copy of letter dated 12.01.2015 filed with Assessing officer by N C Mahesh 148 9. Memorandum of understanding dated 18.04.2007 149-152 4.3 Additional evidences for assessment year 2009-10 in ITA No.309/Bang/2020:- SI. No. Particulars Page No. 1. Copy of Cash book for the period 01/04/2008 to 31/03/2009. 415-426 2. Copy of Ledger extracts of relevant expenditure debited to profit and Loss Account for the year 427-443 3. Copy of Journal Vouche....
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....aresh and Bhavana S and relevant bank account extract. 197 - 200 4. Copy of agreement to sell dated 26.03.2012 201 - 207 5. The assessee filed petitions for all these assessment years for admission of additional evidences, which were not filed before the lower authorities. It was submitted that out of these additional evidences certain evidences are not available at the time of assessment or at the time of first appellate authority. In these circumstances, assessee has no remedy except to file these additional evidences before this Tribunal. In our opinion, the action of the assessee is bonafide as the assessee was prevented by sufficient cause in not filing these documents during the course of assessment as well as first appellate stage. Being so, in our considered view, in the given facts and circumstances of the case, it is appropriate to admit these additional evidences for adjudication in the interest of justice. Accordingly, these additional evidences are admitted for the purpose of adjudication. 6. First common ground in this appeal is with regard to assuming jurisdiction u/s 153A of the Income-tax Act,1961 ['the Act' for short] and thereafter frami....
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.... 143(1) of the Act. Thereafter, notice under section 153Aof the Act was issued on 18.06.2014. Since the time for issuing of notice under section 143(2) of the Act against the original return has been expired it is deemed that the assessment was concluded and by issuing notice under section 153A, the Revenue intent to reopen the concluded assessment without having any incriminating material found during the course of search. In the absence of any incriminating material, proceedings under section 153A cannot be initiated and the concluded assessment cannot he reopened. Therefore, we have no hesitation in holding that proceeding initiated under section 153A are not valid and we accordingly find ourselves in agreement with the order of the CIT(A) and rightly knock down the assessment completed under section 153A of the Act. We therefore confirm his order." 2) PCIT Vs. Arvind Joshi & Co., Gujarat High Court in which it was held as under:- "In the opinion of this court considering the fact that it is settled legal position that in case of unabated assessment under section 153A(1)(b) of the Act, unless such assessment is based upon incriminating documents seized/impounde....
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....ax decided by Bangalore bench of ITAT in ITA No.592 to 594/Bang/2017 in which it was held as under:- "Assessment framed u/s 153A of the Act in the absence of incriminating material is bad in law in the case of unabated and completed assessments." 6.3 Ld. D.R. submitted that in view of the judgement of Hon'ble Karnataka High Court in the case of Canara Housing Development Company Vs. DCIT (274 CTR 122)(Kar), wherein it was held that once the assessment is validly reopened, AO has to take into account all the 3 types of income to complete the assessment or reassessment, as the case may be. The 3 types of income are: 1) Income disclosed in the return of income 2) Undisclosed income during the search 3) Any other income which is not disclosed in the earlier return and not unearthed during the search. 6.4 According to the Ld. D.R., there is an incriminating material found during the search u/s 153A of the Act and all the 3 types of income has to be assessed by the AO in view of the judgement of Hon'ble Karnataka High Court cited (supra) and the condition precedent for application of section 153A of the Act is completely fulfilled. Accordingly, t....
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.... entered into on 18.5.2006 when Shri R. Sundar Raj was not even owner of the site on this day. In any case, Mrs. Sundar Raj never was owner of the said site No.8. This is the reason as to why the first purported agreement dated 18.5.2006, the history of the acquisition of the property is not mentioned in the preamble to the agreement, whereas mentioning of such history is must in all said agreements of sale. Thus, it was submitted that the transaction with Shri R. Sundar Raj is under any litigation and same has been contested by the assessee in the court of law with regard to title of property and for defrauding the assessee and also paid an amount of Rs.1,50,02,990/- by way of cheque which is evident from the additional evidence filed by the assessee at page 191 of the paper book relating to the assessment year 2007-08. Findings:- Assessment year 2007-08:- 8.3. The scope of provisions of section 153A of the Act could be summarized as follows as per the order of the Mumbai Special Bench in the case of All Cargo Global Logistics Ltd. Vs. Deputy Commissioner of Income-tax (23 taxmann.com 103):- Scenario Scope of Section 153A 1. No return of income is filed by the as....
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.... assessment u/s 153A would be restricted to incriminating material found during the course of search. 7. Proceedings u/s 147 pending where: (a) Assessment originally completed u/s 143(3) OR (b) No assessment earlier completed u/s 143(3) Pending assessment/reassessment proceedings u/s 147 would abate and would converge/merge in proceedings u/s 153A. Accordingly, the powers of the AO, in both the cases, shall extent to: (a) Assess income that would validly be assessed in the pending proceedings u/s 147, and In the light of above, we will examine the facts of present case. In the case in hand, there was seized material found during the course of search action which were marked as A/KGK/1 to 5 and A/KGK- 1/1. Out of this, one sale agreement entered by the assessee with Shri R. Sundar Raj was found. On this basis, an addition of Rs.2 crores has been made. In case of assessment u/s 153A of the Act, the completed assessment can be tinkered if there is incriminating material found during the search. Therefore, in the present assessment year there are incriminating material in the form of above agreement to reopen the concluded assessment u/s 153A of the Act. Therefore,....
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.... 9.3 The contention of the Ld. A.R. is that all the above additions except addition of Rs.3,80,00,250/- is based on no seized material. The addition of Rs.3,80,00,250/- is only based on the seized material which was procured not in the course of search operation of in assessee's case. 9.4 On the other hand, it was the seized material in the form of loose slips procured from the search in the case of assessee's close relative N.C. Mahesh. Further contention of A.R. is that in the case of assessee, there was search u/s 132 of the Act on 5.11.12 relevant to this assessment years 2008-09 no seized material unearthed from the possession of the assessee during the course of search action. As such the assessment in this case cannot be framed u/s 153A of the Act and assessment not to be framed u/s 153C of the Act as the seized material procured is from the search in the case of other person i.e. N.C. Mahesh. According to Ld. A.R., since in the present case the assessment was framed u/s 153A of the Act, which is bad in law, same to be quashed. In this case after search, notice u/s 153A of the Act, was issued and the assessment was framed there under by the AO during the same period. Ther....
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....se. The fetters imposed upon the Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections 147 and 148, have been removed by the non obstante clause with which sub-section (1) of Section 153A opens. The time-limit within which the notice under Section 148 can be issued, as provided in Section 149 has also been made inapplicable by the non obstante clause. Section 151 which requires sanction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered by Section 153A. The time-limit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be. Therefore, it is clear even if an assessment order is passed under Section 143(1) or 143(3) of the Act, the Assessing Officer is empowered to reopen those proceedings and reasse....
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....ome found during search or and also any other income which is not disclosed in the earlier return or which is not unearthed during the search, in order to find out what is the "total income" of each year and then pass the assessment order. Therefore, the Commissioner by virtue of the power conferred under Section 263 of the Act gets no jurisdiction to initiate proceedings under the said provision because the condition precedent for initiating proceedings under Section 263 is any order passed under the Act by the Assessing officer is erroneous insofar as it is prejudicial to the interest of the revenue. Once the order passed by the Assessing officer gets reopened, there is no order which can be said to be erroneous insofar as it is prejudicial to the-interest of the revenue which confers jurisdiction on the Commissioner to exercise the power of the jurisdiction." 9.6 Further, jurisdictional High Court in the case of Delhi International Airport Pvt. Ltd. In ITA No.322/2018 vide judgement dated 29.9.2021, wherein it was held as under:- "30. Thus, it is clear that the Assessing Office: while passing the order under Section 153A read with Section 143[3] of the Act, ordinaril....
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....urt in case of M/ s. Calcutta Knitwear (supra) and based on the said decision, the CJ3DT has also issued circular dated 31.12.2015 vide No.24/ 2015.The relevant extract of the circular for ready reference can be extracted as under: "......................."" As regards the pending assessments are concerned only one assessment shall be made separately for each assessment year on the basis of the income unearthed during search and any other material existing or brought on the record of the Assessing Officer. Even in the absence of any incriminating material abated 'Assessment or reassessment could be done. The returns filed under Section 139 of the Act gets replaced by the returns filed under Section. 15:3A[I] of the Act. Pending proceedings in appeal, revision/application shall not abate subsequent to initiation of Section 153A proceedings. Further, recording of satisfaction under Section 153A may not be necessary unlike Section 153C of the Act which mandates recording of satisfaction. For the reasons aforesaid, substantial question of law in ITA Ncs.322/2018 to 324/2018, 354/2018 and 355/2018, substantial question of law No.1 in ITA Nos.380/2018, 382/2018....
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....ings were preserved; resulting in multiple assessments. U/s 153A of the Act, however, the AO has been given the power to assess or reassess the total income of the six assessment years in question in separate assessment orders. When, once the proceedings are initiated under the section 153A of the Act, the legal effect is, even in case, where the assessment order is passed, it stands reopened. In the eye of law, there is no order of assessment. Reopen means to deal with or begin with again. It means the assessing officer shall assess or reassess the total income of six assessment years. Once the assessment is reopened, the assessing authority can take note of the income disclosed in the earlier return, any undisclosed income found during the search or/and also any other income which is not disclosed in the earlier return or which is not unearthed during the search, in order to find out what is the "total income" of each year, and then pass the fresh assessment order. Therefore, it cannot be said that, there could be two assessments in case of the same assessee, one u/s 153A of the Act and another u/s 153C of the Act. 9.8 In our opinion, there can be only one assessment order in ....
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....een concluded by operation of law on the date of search action i.e. on 5.11.2012. As held by Special bench in the case of All Cargo Global Logistics Ltd. Vs. DCIT (2012) 18 ITR (Trib) 106 (Mumbai)(SB) that in case of assessments that are abated, the AO retains the original jurisdiction as well as jurisdiction conferred on him u/s 153A of the Act for which assessment shall be made for each of 6 assessment years separately. In other cases, in addition to the income that has already been assessed, the assessment u/s 153A of the Act will be made on the basis of incriminating material, which in the context of relevant provisions means (i) books of accounts, other documents, found in the course of search but not produced in the course of original assessment, and (ii) undisclosed income or property discovered in the course of search. The argument of the Ld. Counsel is that in this assessment year, notice to issue u/s 143(2) was already lapsed as on the date of search, no assessment could be made without basis of incriminating material found during the course of search. We find force in the argument of Ld. Counsel for the assessee in this assessment year 2009-10, the addition made by AO is....
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....g him to file returns for six A Ys immediately preceding the previous year relevant to the A Y in which the search. takes place. ii. Assessments and reassessments pending on the date of the search shall abate The total income for such AYs will have to be computed by the AOs as afresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income of the aforementioned six years In separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs in which both the disclosed and the undisclosed income would be brought to tax". iv. Although. Section. 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information. available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made u....
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....t. It is not the case of AO that the seized material, if any suggested the inflation of expenditure, inflation of agricultural income or change of head of income. Accordingly, we quash the assessment for the assessment year 2009-10. Assessment year 2010-11:- 11. With regard to assessment year 2010-11, the Ld. A.R. submitted that in this assessment year the addition made is as follows:- Sl.No. Details Addition made by AO (in lacs) 1 Disallowance of expenditure debited to P&L account on adhoc basis 8.5 2. Treatment of capital gain as business income 30.75 3. Unexplained cash credit 36 4. Unexplained cash credit 86.64 5. Total 161.91 11.1. The Ld. A.R. submitted that the assessee has filed original return for the assessment year 2010-11 on 1.9.2011 and the notice u/s 143(2) of the Act could have been issued on or before 30.9.2012. The case was not selected for scrutiny and no notice u/s 143(2) of the Act was issued. No assessment was framed. According to her this is a concluded assessment and submitted that concluded assessment cannot be reopened without any seized material since in the assessment year under consideration,....
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....al found during the course of search. Therefore, the assessment framed for assessment 2010-11 without any incriminating material, the AO was not justified in framing assessment u/s 153A r.w.s. 143(3) of the Act. It is not the case of AO that the seized material, if any suggested the inflation of expenditure, inflation of agricultural income or change of head of income. Accordingly, as discussed in assessment year 2009-10 on this issue, we quash the assessment for the assessment year 2010- 11 on similar lines. Assessment year 2011-12:- 12. With regard to assessment year 2011-12, addition made by the AO is as under: Sl.No. Details Addition made by AO (in lacs) 1 Agricultural income declared by the assessee treated as taxable income 41.23 2. Adhoc disallowance of expenditure debited to the P&L account 5.45 3. Capital gain treated as business income 161.82 4. Unexplained cash credit 5 5. Total 213.5 12.1. The Ld. A.R. submitted that in this assessment year assessee filed original return on 15.12.2011. Time limit of issue of notice u/s 143(2) of the Act was on or before 30.9.2012. The case was not selected for scrutiny. No a....
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.... no incriminating material was found during the course of search and to come to conclusion that the expenses or allowances claimed by the assessee could be disregarded or income disclosed by the assessee could be considered as taxable. In our opinion, completed assessment cannot be tinkered without the support of any incriminating material found during the course of search. Therefore, the assessment framed for assessment 2011-12 without any incriminating material, the AO was not justified in framing assessment u/s 153A r.w.s. 143(3) of the Act. It is not the case of AO that the seized material, if any suggested the inflation of expenditure, inflation of agricultural income or change of head of income. Accordingly, as discussed in assessment year 2009-10 on this issue, we quash the assessment for the assessment year 2011- 12 on similar lines. Assessment year 2012-13:- 13. In the assessment year 2012-13, the Ld. A.R. submitted that in this assessment year the assessee has not filed the original return of income. The assessment is pending which is abated. The AO has not recorded the proper satisfaction before issue of notice u/s 153A of the Act. Being so, the assessment order to....
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....2007-08 not in the assessment year 2007-08. Accordingly, addition made by AO is deleted. 16. Next ground is regarding treatment of agricultural income as taxable income in assessment year 2007-08, 2008-09 & 2011-12. 16.1 In these assessment years, assessee declared agricultural income and AO made addition towards agricultural income in these assessment years as follows:- Assessment year Agricultural income declared by the assessee (in lacs) Agricultural income treated as nonagricultural income by the AO (in lacs) 2007-08 14.60 12.60 2008-09 14.06 12 2009-10 6.21 -- 2010-11 7.74 -- 2011-12 47.23 41.23 2012-13 6.38 -- 16.2. We have heard the rival submissions and perused the materials available on record. In assessment year 2011-12, assessment is already concluded and there is no seized material which shows the agricultural income as non-agricultural income. Being so, addition cannot be made. 16.3 In assessment years 2007-08 & 2008-09 though there was seized material relating to some other particular additions, there is no seized material with regard to showing the agricultural income as non-agricultural incom....
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....ing that assessee has actually incurred this expenditure and the AO have no iota of evidence to disbelieve that the assessee has not incurred any expenditure which are debited to the P&L account. 17.3. We have heard the rival submissions and perused the materials available on record. The assessee claimed the expenditure and disallowed by the AO is as follows:- Assessment Expenditure Adhoc * Ground No. Page Nos. years debited to Profit disallowance of of additional and Loss account 50% (net of evidence net of depreciation) depreciation 2007-08 11,34,062.00 5,67,031.00 6 160 - 167 2008-09 5,48,188.00 - 2,74,094.00 6 112 - 124 2009-10 951,057.00 * 4,75,528.00 5.1 427 - 443 2010-11 17,00,000.00 8,50,000.00 5 430 - 448 2011-12 10,90,000.00 5,45,000.00 6 866 -878 2012-13 11,10,000.00 5,55,000.00 5 181 - 196 17.4. We have carefully gone through the cash book for these assessment years and also ledger extracts filed by the assessee before us. Admittedly, these are the regular books of accounts maintained by asse....
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....enture in the nature of trade, we are of the opinion that the land was held by assessee as capital asset for investment, the income generated from this transaction on entering into a relinquished deed, the income has to be considered as short term capital gain and not as business income. This view of ours is supported by the order of the coordinate bench of Hyderabad in the case of M/s. SSPLL Ltd. Vs. PCIT in ITA No.976/Hyd/2012 dated 5.4.2013, wherein it was held as under and hence, this ground of assessee is allowed:- 32. We have to see the intention of the assessee at the time of acquiring the asset. The intention of he assessee herein is to construct a building for setting up of its corporate office and it was always a fixed asset and not a stock-in-trade. Even if the assessee is in the business of real estate, the property acquired by the assessee for the purpose of setting up of a corporate office cannot be construed as a trading asset. The profit realised by sale of current assets in the line of trading is income from business. On the other hand, if the assessee sells a capital asset as an investor it is income from capital gain. The dominant or even the sole intent....
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..... The right of the assessee over the landed property which was part and parcel of the business undertaking of the assessee is a capital asset. The moment assessee losses the right attached to a part of the business undertaking of the assessee there is relinquishment of right over the said property. The relinquishment of assets or extinguishment of any right in it which may not amount to a sale can also be considered as a transfer. Therefore, on this we do not agree with the findings of the CIT(A) that there is no transfer u/s. 45 of the Act and the assessee has done only business transaction. Accordingly, we reverse the findings of the CIT(A) on this issue and hold that the income accrued to the assessee out of relinquishment of right over the property is to be chargeable u/s. 45 of the Act and computation of capital gain has to be done in accordance with section 48 of the IT Act. Accordingly, we direct the Assessing Officer to compute the income under the head capital gain on relinquishment of right over the impugned landed property." 19.2 Accordingly, this issue remitted to AO to decide the same in the light of above observation after going through the additional evidence file....
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....he ledger account of development expenses and copy of vouchers and prayed that the issue may be remitted. Without prejudice to our finding on legal issue for the purpose of completion of the proceedings, we remit this issue to the file of AO for fresh consideration relating to both transactions as discussed in earlier para in this order in earlier assessment years under consideration. For the assessment year 2010-11:- 22. The assessee purchased 445 sites vide sale deed dated 6.6.2006 from Shiva Shree Shelters and Shiva Shree Investments. Out of these sites, 10 sites were sold during the year under consideration for a total consideration of Rs.31.20 lakhs. The assessee filed copies of sale deed, which is filed at regular paper book page Nos.233 to 251 for assessment year 2010-11. The contention of the Ld. A.R. is that this property held by the assessee as capital asset and the gain arising out of these transactions to be considered as long term capital gain and prayed that the issue may be remitted to the AO to consider this fact from the evidence produced before him. On the basis of evidence, the expenditure incurred for the purpose of improvement of the property to be allowe....
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....ssee stated that the above agreement was not put into action and this was revised vide fresh agreement dated 6.6.2006, as per which a sum of Rs.1,50,02,990/- was paid by assessee through banking channel to Sbri R. Sundar Raj and his nominees. This agreement was also placed by assessee in assessee's paper book pages 121 to 128. The assessee categorically denied the sale deed dated 18.5.2006. However, the AO made an addition of Rs.2 crores on invoking provisions of section 292C of the Act by observing that whatever documents/books of accounts/money/bullion found in the course of search shall be belonging to the assessee and contains all those evidences can be used for the purpose of assessment. According to the AO, there is a seized document showing the payment of Rs.2 crores by cash. Accordingly, he made addition of Rs.2 crores representing the undisclosed income of the assessee. Against this assessee is in appeal before us. 25.1. We have heard the rival submissions and perused the materials available on record. As per the seized material, there was an agreement dated 18.5.2006 wherein assessee alleged to be purchased a property bearing survey No.8, Khatriguppe village measuring ....
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.... through the same and explain. Ans.I would like to ment ion that I was promised a land by Shri.K GKrishna through Al/s.Bhavani Housing Co-operative Society ltd. , at Khatriguppe Village. But till date I have got no land from the said society. However, once again Shri.K G Krishna has created this document. I have not received any amount either by way of cash or cheque from Shri.K G Krishna except for the loan amount of Rs. 50.00 lakhs as mentioned above. Though it is alleged that the above document was a forged document the intention behind creation of such documents is not explained. However, the agreement was duly signed by both the parties and it was mentioned that the cash portion of Rs.2.00 crores had been paid at the time of entering into the agreement. Therefore, both Shri.K G Krishna and Shri. R. Sunderaj have indulged in this unaccounted cash transaction and therefore the cash portion of Rs.2.00 crores should be taxed in the form of unexplained investment in the hands Sri K.G. Krishna. It is to be mentioned here that Sri. K G Krishna has replied that a sum of Rs.1.50 crore was paid through cheque and it was given by M/s. KCS Investment Consultancy Pvt. Ltd....
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....e deed and there was a litigation between assessee and R. Sundar Raj and same has been pending before the court. Further, assessee filed a FIR against R. Sundar Raj which is placed in paper book at page 192 to 203 relating to this assessment year. Accordingly, he submitted that any stretch of imagination the agreement dated 18.5.2006 found during the course of search cannot be considered as a valid agreement. Admittedly, during the course of search action the searched team unearthed the agreement dated 18.5.2006 entered by the assessee with Smt. R. Sundar Raj, S/o Late Ramaswamy, aged about 51 years residing at 1228, 4th Main, 5th Cross, Chandra Layout, Bengaluru 560040 for sale of property bearing no.8 situated at 17/12, 17/4 & 17/14 and other survey numbers in the layout formed by Bhavani Housing Cooperative Society Ltd., Khatriguppe village, Banashankari, 3rd Stage, Bangalore North Taluk, Bangalore, East to West 80 Ft., North to South 129 Ft. As per this, total consideration was Rs.2,29,62,000/-. Out of this, assessee said to be paid Rs.2 crores by way of cash and balance to be paid at Rs.29.62 lakhs, which is mentioned in the clause (3) of this agreement. However, clause (4) sh....
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....opy of ledger extract, which is placed at page 170 of the paper book related to this assessment year. The contention of the Ld. A.R. is that when it is reflected in the books of accounts of the assessee, it cannot be made addition in the hands of the assessee. 26.1. We have heard the rival submissions and perused the materials available on record. The assessee has taken this plea before lower authorities that the payment is accounted in his books of accounts. However, Ld. CIT(A) sustained the addition. In our opinion, there is no necessity of making such addition when the transaction is duly reflected in the books of accounts as shown in the ledger extract in page no.170 of the paper book. Accordingly, we delete this addition. 27. Cash credit in the assessment year 2008-09 in ITA No.308/Bang/2020: 27.1 In this assessment year assessee challenged the addition of Rs.2,36,34,000/- made u/s 68 of the Act as unexplained credit. The AO made addition u/s 68 of the Act in respect of following credits:- Vikram Jain 1,03,50,000/- Manchaiah 50,00,000/- B.M. Kumar 25,00,000/- A.N. Nanjaiah 57,84,000/- Total 2,36,34,000/- 27.2. According to the above, c....
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.... to explain the nature of sources of these advances. The assessee explained the receipt of money from Shri Baldev and repaid him on 2.4.2011. In case of Chandra Sekhar, confirmation was submitted. However, in the remaining cases, no details were given. Being so, the AO considered the following credits as unexplained credits u/s 68 of the Act. 1. Narasimha Murthy 75,00,000/- 2. Shanta Sridhar 3,97,764/- Total 78,97,764/- 28.4. On appeal, assessee explained that a sum of Rs.75 lakhs from Narasimha Murthy is received through banking channel and in case of Smt. Shanta Sridhar a sum of Rs.3,97,764/- which was received through bank account and repaid the entire amount in subsequent assessment years. He also submitted before Ld. CIT(A) that total amount of advance received from Smt. Shanta Sridhar was Rs.20,64,768/- and the same was repaid on 29.3.2012 for which cheque No.6544 drawn on Vysya Co-operative Bank, APMC yard branch, Bengaluru, which was paid by K.M. Jayalakshmi on behalf of the present assessee. However, Ld. CIT(A) not agreed with the submission of the assessee and sustained addition of Rs.78,97,764/-. Against this assessee is in appeal bef....
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.... assessee deposited cash to the extent of Rs.36 lakhs to the bank account, which was not satisfactorily explained before the lower authorities. Hence, it was treated as unexplained credits. Without prejudice annulling of assessment of legal issue in the assessment year 2010-11, we are inclined to remit this issue to the file of AO for fresh consideration since there is no much discussion in the order of the lower authorities on this issue and there was no proper enquiry by the AO on this issue. Similar is with regard to addition of Rs.5 lakhs in assessment year 2011-12. 32. In ITA No.312/Bang/2020 in assessment year 2012-13, addition of unexplained credit of Rs. 83 lakhs was made. 32.1. The assessee deposited Rs.83 lakhs into his bank account for which no satisfactory explanation is given. Hence, it is treated as unexplained income of the assessee. After hearing both the parties, we are of the opinion that this issue was not properly examined of the addition and proper enquiry has not been made. Hence, the issue may be remitted to the file of AO. We accede to the request of the assessee's counsel. Accordingly, this issue remitted to the AO to decide afresh after making proper....
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....son to hide as implications/consequences would be more than what the material reveals. Be it as it may, one has to confine oneself to the seized material and not speculate on aspect not known. Accordingly, he observed that the assessee has disclosed Rs.125 lakhs out of the payment shown in the seized material at Rs.4,80,00,250/-. Accordingly, he deleted another Rs.25 lakhs out of addition made by AO at Rs.3,80,00,250/- and sustained addition of Rs.3,55,00,250/-. Against this assessee is in appeal before us. 33.4. The Ld. A.R. submitted that on close perusal of noting/loose slips seized from Shri N.C. Mahesh as recorded at internal page No.7 of the assessment order shows the top lines as below:- "Land registration to Krishnappa" It is therefore, a noting from same transaction with the same Krishnappa and not with the present assessee whose name is K.G. Krishna. In the order at page No.9 of the assessment order, it was stated that before the investigation authority, Shri N.C. Mahesh supposed to have been stated that the name Krishnappa refers to K.G. Krishna. However, no extracts of any such statement is recorded in the assessment order nor any copy of such statement is give....
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....ngs in diary. The suspicion in the minds of the revenue authorities that the assessee made certain payments as per the loose slips cannot be reason to make an addition. In the absence of concrete evidence brought on record by the authorities concerned, the addition cannot be made. The suspicion cannot replace the material evidence brought on record. It is also be noted that authorities have to follow the principles of natural justice and the discovery of the documents in the form of loose slips not enough to make an addition without giving an opportunity of cross examination of the concerned parties. The lose slips having certain jottings are not speaking one and it cannot be basis for any inference to make an addition. Accordingly, this issue remitted to the AO for fresh consideration to decide in the light of above observations. 33.7 For brevity, we enclose herewith the ground-wise chart with result of each appeal as Annexure -1. 34. In the result, ITA Nos.307/Bang/2020, ITA No.308/Bang/2020 & 312/Bang/2020 are partly allowed for statistical purposes. ITA Nos.309/Bang/2020, 310/Bang/2020 & 311/Bang/2020 are allowed. Order pronounced in the open court on 24th June, 2022 ....
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....have asked them to show the documents pertaining to the offered site properties, I was told that only the members are entitled for site property. They even confirmed that, they are the members of this Bhavani Housing Co-operative Society and they can obtain required site by purchasing the same from the said society and in turn sell in favour of my company. In furtherance said persons, fold me that they don't have required finance to purchase the site property and if your company requires the site property, the company have to pay required amount to the persons named by them as and when asked to pay. And, they even assured to get the sale deed registered in the name of the company or any persons nominated by me, since I am frequently En abroad. They further advised me that they are ready to get PAN F Scop BANGALORE the sale e executed amounte ous perso deed expences In further the said Jely asked a directed b now to ins they macs an agreemand G.P.A. in favour of Sri. K. Ginna. H After, that the said three persons, assured that after purchase of the site properly from society, they will obtain katha in thei....
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....nanda, has registered the below described schedule property in favour of Sundar Raj. All that piece and parcel of the property bearing Site No.8 (Eight), carved out of the land bearing Survey No.17. 17/12. 17/4, 17/15, 17/16, 17/17, 17/20, 125 126/1, 126/2, 132 and 133 (Parts of Old Survey No.17) formed by Bhavani Housing Co-Operative Society. situated at Kathriguppa Village. Banashankari 3rd Stage, Bengaluru. measuring East to West: 80 Feel and North to South. 129 Feet, in folar measuring 10,320 Square feet and bounded on the :- East by Site No.7, vani HBCS Pro West by North by d South by Sile no.1. Then, on 06/06/2006, R. Sundar Raj, executed Sale agre METROR our of Sri, K. G. Krishna Then Sundarraj agreed to THE CHIE COURT OF AN MAG MAGISTRATE TES ORE change katha in his favour and i execute reg As per aangetre tour of K. G. K repeatedly asked the Sundar Raj txecute the val However, said Sundarraj started givi evasive pie that there is a problem in the Society and he hasn requires some more time to execute the sale deed. 195 ed sate ed in o speated me nov I was getting anxiou....
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....w regarding the criminal background of the accused persons and found that, there are number of fraud cases against them in and around Bangalore and in the State. In Bangalore. Chikkajala Police Station Crime No. 57/12, IPC Sections 447, 406, 468, 420, 470, 471, 120B, 506, r/w 149 and Crime No.20/13, IPC Sections 419. 420, 464 465, 471, 406, r/w 34 of IPC and also in Gowribidnur Police Station Crime No.24/2013, Sections 423, 506, 504, 70B, 406, 419, 420, 465, 468, 471. 323, 354, 464 r/w. 34 of IPC, cases are registered against them and a complaint lodged in Devanahalli Police Station on 21.03.2013, and in Channammanakere Police Station Crime No.337/13 for offence u/s 404 417 418, 419, 420, 120B r/w 34 of 1.P.C., and another criminal Helamangala Police Station Cr.No.375/2013, for the offence u/s 406 41 420, 468, 471, 12CB. 506 of IPC, likewise several serious criminal cases is registered against them and they are various stages. These above said persons made fraud and cheating as their profession and these persoon. made systematic cheating racket by creating fake documents pertaining to the non-existing site properties and also creating....
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....6, N. MADISTRAT 17. Bes JURT 198 Sule agreement feed doled AGPA. copy dated 06.06.200 5), Bounced cheque copies The endorsement given by 7. FIR. Copies of Chikkajala pe i 2006 A through Ri station. 8). F.IR. copies of Gowribidanur Police Stationi. 9). Case registered in Devanahalli Police Station. 10). F.IR. copies of Chennammanakere Police Station 11). F.IR. copies of Nelamangala Police Station 12). Copy of RTE clarification from BDA for site No.8 With kind regards for necessary action, en 15/06/14 registard a Recurves the complaint. at of so has and Corsi Wae Staton Cr. No 132/14 бут фов 420 Ñто загре 12(3), 418,417, 419, ಪೊಲೀಸೠಸಬà³-ಇನà³à²¸à³â€Œà²ªà²•à³à²Ÿà²°à³â€ ಹಲಸೂರà³à²—ೇಟೠಶೂಸೠಠಾಣೆ ಬೆಂಗಳೂರೠನಗರ. Yours faithfully. Kanta Join (Smt. Kanta Jain.) 1th ACMM Court METROPOLIT orts MA....
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.... 50.00000 44 3500 80951250 2000000 Bal 18951250131 27/8/007 2-03-2528.50.000- 3931250-30 - 號 Payment = 30.00000 Bal 931250 ® Agriment Adv 50.00000 clique. 2 5/6/007 Recrid 5000000 DD Balcana foune Jerishmapa 18951250 Balance Jurut + 9931250. But for p 19882.500. Aggiunt Adv -5000000 (he) 1.9882500. 5/6/67 Cash 50,000 00 DD 1,0000000 Balone ment 9882.500 *सरà¥à¤•à¤²-3 17. Вещ 8 Document 4 Shri. N.C.Mahesh was asked to explain the transactions. In his sworn statement he has replied that the name Krishnappa referred to Shri K.G.Krishna. Accordingly Shri.KG Krishna was requested to explain the investment of Rs.4,80.00,250/- However the assessee has furnished his written submission on 17-3-2015 wherein he has denied the cash payment. The reply is scanned and reproduced below: K.G.KRISHNA Stage, Jayakrishna Nilaya, No.1680/55, 5 A Cross 10th Main, 2nd Block, BSK 1 Bangalore 560 050 ======= March 17, 2015 To. The Dy. Commissioner of Income Tax. Central Circle - 1 (4) Bangalore Sir. Sub: Submission of details sought U/....