AI Drafter 
TaxTMI 
TaxTMI 
2022 (10) TMI 224
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....contents of the condonation petition and after hearing the learned DR, the delay in filing of these appeals by the assessee are condoned and the appeals are admitted for adjudication. ITA No.132/Hyd/2018-A.Y 2012-13 (By Assessee) 3. Fact of the case, in brief, are that the assessee is an individual and derives income as an agent of real estate activities. He filed his original return of income on 20.06.2012 declaring total income of Rs.4,29,940/-. A search and seizure operation u/s 132 of the I.T. Act was conducted in the Mansani group of cases on 20.11.2014 and the case of the assessee was also covered during which certain incriminating materials were seized. A survey operation u/s 133A of the I.T. Act, 1961 was also conducted in the business premises of the assessee on 20.11.2014 during which certain documents were also impounded. In response to the notice u/s 153A, dated 22.12.2015, the assessee filed his return of income on 20.11.2016 declaring total income at Rs.3,85,860/-. The Assessing Officer completed the assessment u/s 143(3) r.w.s. 153A of the Act on 29.12.2016 determining the total income at Rs.2,86,82,100/-. 4. In appeal, the learned CIT (A), partly allowed th....
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....ri Pujala Mahesh Babu. Therefore, once the name of the assessee is mentioned in the copy of the search warrant and in the copy of the Panchnama, the argument of the learned Counsel for the assessee that the CIT (A) is not justified in confirming the action of the Assessing Officer in initiating proceedings u/s 153A of the Act is misconceived and therefor, the same is liable to be dismissed. We accordingly dismiss the ground raised by the assessee on this issue. 7. Ground of Appeal No.4 relates to the order of the learned CIT (A) in confirming the addition of Rs.1,07,35,000/- made by the Assessing Officer on account of cash receipts. 7.1 Fact of the case in brief are that the Assessing Officer during the course of assessment proceedings noted that Annexure A/PMB/04 is a blue SBI Life Insurance diary 2009 impounded u/s 133A from the PMB premises of the assessee. As per Written Page No 8 of Annexure A/PMB/04, an amount of Rs.1,07,35,000/- was received by the assessee from Turbo Company towards sale of 5 acres 21 guntas @Rs 34,00,000/- per acre totaling to Rs 1,87,85,000/- out of which Rs.1,07,35,000/- is received by the assessee on 7-9-2011& 9-11-2011. He, therefore, asked the a....
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....h was conducted on 20.11.2014, the return was filed on 21.11.2016 and no proper explanations were made before the Assessing Officer who made the addition on the basis of seized material. Thus, the assessee even after 2 years did not furnish any explanation before the Assessing Officer during the course of assessment proceedings. Further, the amount was also worked out by the assessee himself as his undisclosed income in the written submission filed before the DDIT. In view of the above and relying on various decisions to the proposition that retraction should be within reasonable time, the learned CIT (A) upheld the addition made by the Assessing Officer. 9.1 Aggrieved with such order of the learned CIT (A), the assessee is in appeal before the Tribunal. 10. The learned Counsel for the assessee submitted that the assessee does not maintain any books of account and therefore, provisions of section 68 are not attracted. Referring to the provisions of section 68, he submitted that as per the said provision, the amount credited into the books of account maintained in the previous year are only required to be charged. Referring to the following decisions, he submitted that since t....
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.... assessee from Turbovent Industries Ltd towards sale of 5 acres 24 guntas @ Rs.34,00,000/- per acre totaling to Rs.1,87,85,000/- out of which an amount of Rs.1,07,35,000/- was received by the assessee on 7.9.2011 and 9.11.2011. Since the cash receipts and the area of the land did not match with the seized material and since the assessee during the course of search had declared Rs.15.00 crores as undisclosed income for different A.Ys in the statement recorded u/s 132(4) of the Act, the Assessing Officer made addition of Rs.1,07,35,000/- to the total income of the assessee. We find in appeal, the learned CIT (A) sustained the addition on the ground that despite a period of 2 years from the date of search till the date of completion of assessment proceedings, the assessee could not offer any satisfactory explanation and the assessee during the course of search had himself declared additional income of Rs.15.00 crores. It is the submission of the learned Counsel for the assessee that it is not an un-accounted receipt but the same is on account of sale of land and the assessee has claimed such receipt as exempt income. Further, in absence of maintenance of any books of account by the as....
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....red Rs 15 crores as additional income for different assessment years vide his statement recorded u/s 132(4) on 20-11-2014& resumed on 21- 11-2014. The above additional income of Rs 15,00,00,000/- was once again admitted by the assessee vide his explanation submitted to the DDIT(Inv) Unit l|(1), Hyderabad which is specifically mentioned at para 6.16 of the said explanation. In view of the above, the Assessing Officer made addition of the cash receipts of Rs. 51,80,000/- as his undisclosed income and brought to tax. 16. Before the learned CIT (A), the assessee submitted that no such amount was received at that point of time and further the receipts do not relate the assessee. It was submitted that this seized paper is not in handwriting of the assessee and no signature of the assessee is there on the paper. Since this is a dumb document without any real value, therefore, the Assessing Officer was not justified in making the addition. Without prejudice to the above, it was submitted that if the same is considered as a receipt and a payment, then the amount was received first as per the paper and repaid later. In those circumstances, such an amount cannot form part of the income of ....
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...., there is no evidence to show that the amount represents the income of the assessee. 18. The learned DR, on the other hand, heavily relied on the order of the learned CIT (A). He submitted that even after a period of 2 years from the date of search, the assessee was unable to submit the explanation before the Assessing Officer. The assessee himself had admitted during the course of search regarding the undisclosed income of Rs.15 crores and he himself has computed the manner of such additional income. Therefore, the order of the learned CIT (A) is fully justified on this issue. 19. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the AO in the instant case made addition of Rs.51,80,000/- on the basis of the seized documents (Page No.7 of the Annexure A/PM/01 (Pages 1 to 58) of the seized material. The reason for making the above addition is that the assessee failed to offer any satisfactory explanation and assessee himself had declared additional income of Rs.15.00 crores in the ....
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....essment proceedings noted that as per the Sale Deed dated 8-12-2011 mentioned at para 8 of his order, the assessee has purchased land situated at Indrakaran Village, Sangareddy Mandal, Medak Distt. vide Reg Doc No 5964/2011 dated 10-6-2011 and Reg Doc No 8097/2011 dated 30-7-2011 at cost of Rs 3.82,500/- & Rs 1,50,000/- respectively Since the source of such investments as per the sale deeds were not explained, the Assessing Officer made addition of the same to the total income of the assessee. 21. So far as the addition of Rs.20,54,000/- is concerned, the Assessing Officer noted that the assessee has purchased land situated at Indrakaran Village, Sangareddy Mandal Medak during the year; the details of which are as under: S.No Date of purchase Acres Regn.No Purchase amount 1 13.12.2011 3.00 12356/11 4,50,000 2 10.06.2011 2.22 5964/11 3,82,500 3 30.07.2011 7.03 8098/11 10,62,000/- (Assessee's share is only Rs.5,31,000/-) 4 5.11.2011 1.29 10442/11 2,59,000 5 17.06.2011 1.35 6267/11 2,82,000 6 30.07.2011 1.00 8097/11 1,50,000 Total 20,54,....
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....ed capital gain of Rs.1,00,23,970/- and claimed the same as exempt. Further, the Assessing Officer noticed the receipts from various persons and therefore, he is not justified in making the addition on account of payments of Rs.25,87,000/-. He accordingly submitted that once the assessee has purchased the land which were sold and the income was also offered as exempt income being sale of agricultural land, no further addition is called for. 26. The learned DR, on the other hand, strongly relied on the order of the learned CIT (A). 27. We have considered the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the AO in the instant case made addition of Rs.5,32,500/- and Rs.20,54,500/- respectively being explained investment in lands at Indrakaran Village on the ground that the assessee was unable to explain the source of the above investments. We find the learned CIT (A) sustained the addition made by the Assessing Officer, the reasons of which have already been reproduced in the preceding paragraph. W....
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....esent unaccounted receipts. 6. The learned Commissioner of Income-Tax (Appeals) erred in making additions of Rs.12 lakhs, Rs.100 lakhs and Rs.49.90 lakhs on the ground that they represent unaccounted expenditure. 7. The learned Commissioner of Income-Tax (Appeals) ought to have considered the fact that the Assessing officer accepted that there were receipts and having accepted that there were receipts, the Assessing officer and the learned Commissioner of Income-Tax (Appeals) ought not to have held that the expenditure is not properly explained. 8. he learned Commissioner of Income-Tax (Appeals) erred in confirming the action of the Assessing officer in making addition of Rs.41,84,550/- without considering the fact that the said amount represents unexplained agricultural income. 9. The learned Commissioner of Income-Tax (Appeals) ought to have directed to delete the entire capital gain addition of Rs.1,52,25,705/-. 10 The learned Commissioner of Income-Tax (Appeals) erred in confirming levy of interest u/s 234A(3) and 234B(3) of the I.T. Act. 11. Any other ground that may be urged at the time of hearing". ITA No.126/Hyd/2019 ....
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....in absence of satisfactory explanation and brought to tax for A.Y.2013-14. While doing so, he noted that the assessee during the course of search action had declared Rs 15 crores as additional income for different assessment years vide his statement recorded u/s 132(4) on 20-11-2014 & resumed on 21- 11-2014. The above additional income was once again admitted by the assessee vide his explanation submitted before the DDIT(Inv) Unit lI(1). Hyderabad specifically mentioned at para 13.14 of the said explanation. 35. Before the learned CIT (A), it was submitted that the assessee did not maintain any books of account and the amounts are not credited in the books of account. Therefore, provisions of section 68 are not applicable and the addition of Rs.21.00 lakhs should be deleted. It was further submitted that the evidence on record clearly indicates that the amount was received from Shri M. Ranga Reddy who has given the above amount to the assessee for acquisition of a suitable property. He had paid certain amount by cheque and certain amount through cash which were returned. It was argued that the amount paid by Shri Ranga Reddy did not represent the income of the assessee and there....
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....ficer during the course of assessment proceedings. The claim made, being unsubstantiated by any evidence, is therefore, found to be unacceptable and the addition made by the Assessing Officer is confirmed. All grounds related to this issue are DISMISSED". 38. Aggrieved with such order of the learned CIT (A), the assessee is in appeal before the Tribunal. 39. The learned Counsel for the assessee submitted that the Assessing Officer made the addition by relying on the entries in the seized material, copy of which is placed at Page 1 of the Paper Book. He submitted that on 27.2.2013 the assessee received Rs.21 lakhs from Shri M. Ranga Reddy out of which an amount of Rs.15 lakhs was received through cheques and Rs.1 lakhs was received from Shri Ranjit. He submitted that Shri M. Ranga Reddy paid the amount for acquisition of a suitable property and as the required plot was not located, the amount was returned back. He submitted that the fact that the amount was received from Shri M. Ranga Reddy through cheque is confirmed by the entries in the seized documents itself. Further, the assessee does not maintain any books of account and the amount of Rs.15.00 lakhs was also not recorde....
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....o this A.Y. Out of the above amount of Rs.21.00 lakhs, an amount of Rs.15.00 lakhs has been received in the form of cheque and Rs.1 lakh was received through one Mr. Ranjit and Rs.5 lakhs received in the form of cash. Since the assessee is involved in the real estate business and the entries in the books of account do not indicate whether it is in the nature of money received for purchase of land or loan etc., and the assessee has not declared any income from business, therefore, considering the totality of the facts of the case, we are of the considered opinion that the adoption of profit rate at 10% on the amount of Rs.21.00 lakhs will meet the ends of justice. We hold and direct accordingly. The ground raised by the assessee is accordingly partly allowed. 42. In Ground of appeal No.5, the assessee has challenged the order of the learned CIT (A) in confirming the addition of Rs.81,25,000/- and Rs.56 lakhs respectively on the ground that they represent unaccounted receipts. 43. Fact of the case in brief are that the Assessing Officer during the course of the assessment proceedings noted that Annexure APMB/06 is a Black Diary of SBI General Insurance containing written pages ....
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....g the amount is noted at page No.51. The total amount payable for the land is Rs.2,38,00,000/- and 50% of the assessee's share works out to Rs.1,19,00,000/-. Besides, the amounts paid for conversion charges of Rs.30,000/, media and paper of Rs.3,06,000/-, nala fee of Rs.3,50,000/-, registration charges of Rs.16,00,000/- DLPO of Rs.4,00,000/-, development of Rs.2,50,000/; the aggregate of the amount would be Rs.1,48,36,000/- and the amount mentioned at page No.51 is Rs.1,48,50,000/-. This amount of Rs.1,48,50,000/- tallies with the payments to be made to the owners and the expenditure incurred on the land. The same nature of expenditure is at Page No.46 also. Therefore, the amount of Rs.81,25,000/- is a part of Rs.1,48,50,000/- and cannot be added separately as the amount of Rs.1,48,50,000/- is separately considered. In the statement of short term capital gain the assessee claimed expenditure at Rs.1,52,25,705/-. This almost tallies with the amounts mentioned in page 51 of Rs.1,48,50,000/-, This is also an indicator that the amount of Rs.81,25,000/- is not separate and not in addition to Rs.1,48,50,000/- but it is a part of the said amount. 45. So far as Rs.56.00 lakhs is concern....
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.... above Rs.77.00 lakhs, an amount of Rs.56.00 lakhs relate to A.Y 2013- 14. He accordingly, submitted that the Assessing Officer without appreciating the seized material made an addition of Rs.81,25,000/- as well as Rs.56.00 lakhs i.e. both receipts and payments relating to the same period. He submitted that the learned CIT (A) without considering the seized material sustained the addition made by the Assessing Officer which is not correct. He submitted that the assessee had offered income from Chengicherla at Rs.22,07,990/- in the return of income filed. The assessee has admitted receipt of Rs.1,74,33,695/- and admitted the cost of acquisition at Rs.1,52,25,705/-. The receipts offered to tax at Rs.1,74,33,695/- includes the receipts appearing on the seized material at Page 4 of the Paper Book i.e. Rs.77.00 lakhs. Similarly, the expenditure claimed at Rs.1,52,25,705/- includes the payments appearing on the seized material at Page No.3 of the Paper Book amounting to Rs.81,25,000/-. Therefore, once entire receipts and payments are explained, the Assessing Officer could not have made any addition and the learned CIT (A) is equally not justified in sustaining the addition. 48. The le....
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....f Rs.56.00 lakhs relates to the impugned A.Y. i.e. A.Y 2013-14. A perusal of the computation statement filed along with the return of income shows that the assessee has declared an amount of Rs.22,07,990/- as short term capital gain which has been accepted by the Assessing Officer. We, therefore, find merit in the submission of the learned Counsel for the assessee that the Assessing Officer cannot make the addition of both the receipts and payments. If the amount of Rs.81,25,000/- is considered as expenditure and Rs.56.00 lakhs as receipts, then the difference comes to Rs.25,25,000/-. Since the assessee has already disclosed an amount of Rs.22,07,990/- as profit from the said project, therefore, in our opinion, the addition of the difference amount being Rs.3,17,010/- under the fact and circumstances of the case can only be made which will meet the ends of justice. We, therefore, modify the order of the learned CIT (A) on this issue and direct the Assessing Officer to restrict the addition to Rs.3,17,010/- as against addition of Rs.81,25,000/- plus Rs.56,00,000/-. The ground raised by the assessee is accordingly partly allowed. 51. In ground of appeal No.6, the assessee has chal....
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....to Sri Chary of Rs.8.00,000/- and others of Rs.2,00,000/-represent the expenditure on woodwork. This amount is also from out of the withdrawals made from the Andhra Bank account. It was argued that the assessee was also in receipt of cash from the tenants towards rent. These amounts were available with the appellant to make payment of Rs.10,00,000/-. 54. So far as the addition of Rs.49,00,000/- is concerned, it was submitted that the seized document at page No.48 shows the receipts from sale of plots of Akshaya Phase-ll i.e. on 18.02.2013 and 25.03.2013 of Rs.33,00,000/-. Assessee also filed a copy of the agreement with Mrs. P.Ramanjamma, wife of Sri Sai Reddy. It was argued that the assessee and four others together have acquired the property and the appellant was having 30% share. The said amount was incurred by receiving Rs.33 lakhs from sale of plots of Akshay Phase-II, rents and withdrawals from banks. 55. Based on the arguments advanced by the assessee, the learned CIT (A) called for a remand report from the Assessing Officer. After considering the remand report from the Assessing Officer and rejoinder of the assessee to such remand report, the learned CIT (A) sustained....
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....these payments. In fact, the assessee has sufficient sources for making payments of Rs.49.90 lakh towards expenditure from sale of two properties i.e., sale consideration of Rs.1,74,33,695/- from two sale deeds on which the assessee has already offered capital gains of Rs.22,07,990/- after claiming Rs.1,52,25, 705/-. Therefore, the assessee has fully explained the sources for the payments made by the assessee. Hence, no addition is warranted on this account. (ii) With regard to the amount of Rs.12 lakhs, the Assessing Officer is of the view that in Balapur venture, the appellant incurred an expenditure of Rs.12 lakhs on 20.2.2013 which is at page No.7 of the paper book. It was actually incurred on 20.07.2013 and relates to the next assessment year and it does not relate to the assessment year under consideration. Therefore, no addition can be made for the impugned A.Y.2013-14. (iii) The Assessing Officer made addition of Rs.10 lakhs as unaccounted expenditure based on the entries appearing on the seized material on page 1. It is submitted that the Assessing Officer is not correct to say that these payments as unaccounted expenditure because it is the seized materi....
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.... is concerned, it is his submission that these are not unaccounted expenditure because the seized material shows that the assessee has actually made the payments and the entry in the seized material pertains to the project undertaken by the assessee. According to him, the seized materials are to be considered as a whole and the Assessing Officer cannot pick and choose certain entries that suits him. 61. We find some force in the above argument of the learned Counsel for the assessee. So far as Rs.12.00 lakhs is concerned, the seized document copy of which is placed at Page No.7 of the Paper Book clearly shows that the same is paid on 20.07.2013 and therefore, it does not pertain to this A.Y. The learned CIT (A) without verifying the fact has sustained the addition. Since the entry in the seized document clearly mentions the date as 20.07.2013 which pertains to A.Y 2014-15, therefore, the learned CIT (A) in our opinion, is not justified in sustaining the addition of Rs.12.00 lakhs in the A.Y 2013-14. Accordingly, the same is directed to be deleted. 62. So far as the addition of Rs.49,90,000/- is concerned, we find the same is based on seized document copy of which is placed at....
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.... agricultural income of Rs.41,84,550/- and that he claimed exemption of the said agricultural income. It was argued that facts are that the assessee is the owner of agricultural land admeasuring 10 acres 30 guntas situated at Isnapur village. The said land was sold for a total consideration of Rs.41,84,550/-. The said lands were agricultural in nature. The assessee submitted a copy of the pattadar passbook, Google maps of Indrakaran Village which shows that this is agricultural land, Isnapur is beyond 8 KM from Hyderabad Municipal corporation and, therefore, the income derived on sale of the agricultural land is exempt from tax. 65. Based on the arguments advanced by the assessee, the learned CIT (A) called for a remand report from the Assessing Officer. After considering the remand report from the Assessing Officer and the rejoinder of the assessee to such remand report, the learned CIT (A) sustained the addition by observing as under: "12.4 T have carefully considered the submissions made by the appellant as well as the observations of the AO in the impugned order. It is seen that the assessee purchased and sold the land in less than 13 months. There was no evidence o....
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....fore him sustained the addition made by the Assessing Officer, the reasons of which have already reproduced in the preceding paragraph. We do not find any infirmity in the order of the learned CIT (A) on this issue. Even though the assessee has claimed the income of Rs.41,84,550/- as exempt agricultural income, however, either during appeal proceedings or before us, the assessee could not substantiate with evidence that he was in fact carrying on agricultural activities. The learned CIT (A) while deciding the issue against the assessee has followed the decision of the Hon'ble Supreme Court in the case of Smt. Sarifabibi Mohmed Ibrahim vs. Commissioner Of Income-Tax, reported in 204 ITR 631 according to which mere mention of land as agricultural land in the revenue record is not sufficient for determining the true characteristics of the land i.e. agriculture or otherwise. Since the assessee in the instant case failed to substantiate with evidence to the satisfaction of the revenue authorities and to our satisfaction that the income so derived is on account of the agricultural land which was used for agricultural activity, therefore, the order of the learned CIT (A) in our opinio....
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....the contention of the appellant is that the cost of acquisition of Rs.1,48,00,000/- is mentioned in the seized document at Pg.No.51 of A/PMB/06. The Assessing Officer has stated that the appellant had himself offered the said amount as additional income before the DDIT(Inv). If that be the case, the said amount has already been added by the Assessing Officer by way of a separate addition and making the same addition here would amount to double taxation of the same amount, which is unwarranted. The Assessing Officer is therefore directed to recompute the Capital Gain, after allowing deduction of said amount. The appellant would get relief to that extent. The grounds related to this issue are therefore Partly Allowed". 72. Aggrieved with such order of the learned CIT (A), the assessee as well as the Revenue are in appeal before the Tribunal. 73. The learned Counsel for the assessee submitted that despite direction given by the learned CIT (A) on this issue to recompute the capital gain after considering the cost, the Assessing Officer has not passed any consequential order till now. Therefore, a direction may be given to the Assessing Officer to pass a consequential order. The ....
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....nducted search and seizure operations at the premises of the appellant. The material available with the appellant were seized. The amounts received from various persons are noted in a Dairy. They are separately explained. The Assessing Officer, however, added all such receipts as the income of the appellant. There are certain expenditure items in the Dairy. These expenditure items also were added. The appellant is a co-owner or co-partner with various persons in various ventures. The amounts received from the partners by the appellant are noted in the Dairy. Such amounts received are treated as the income of the appellant inspite of the fact that the amount was paid as the share of the partner. The Assessing Officer accepted the fact that several receipts were there in the seized material. Those receipts were available with the appellant till such time that they were returned to the partners. The Assessing Officer added those items as the income of the appellant and the appellant has submitted detailed explanation in respect of each of the receipt, The receipts added by the Assessing Officer aggregated to Rs.17,77,000/ -The Assessing Officer without considering such receipts added ....
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....the addition in absence of any contrary material brought to our notice. Accordingly, the order of the learned CIT (A) is upheld and the ground raised by the revenue is dismissed. 80. Ground of appeal No.2 raised by the Revenue being general in nature and dismissed. 81. In the result, appeal filed by the assessee is partly allowed for statistical purposes and the appeal; filed by the Revenue is dismissed. ITA No.134/Hyd/2019 - A.Y 2014-15 82. The grounds raised by the assessee for A.Y 2014-15 read as under: "1. The order of the learned Commissioner of Income-Tax (Appeals) is erroneous to the extent it is prejudicial to the appellant. 2. The learned Commissioner of Income-Tax (Appeals) erred in confirming the action of the Assessing officer in initiating the proceedings u/s 153A of the I.T. Act inspite of the fact that search was not contemplated in the case of the appellant. 3. The learned Commissioner of Income-Tax (Appeals) ought to have considered the fact that the retraction was made on good and sufficient grounds and each addition ought to have been considered by the learned Commissioner of Income-Tax (Appeals) based on the facts of each a....
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....rse of assessment proceedings noted that Annexure A/PMB/01 containing pages numbered from 01 to 58 was seized from the residence of the assessee. As per Page No.10 dated 11.05.2013 of Annexure A/PMB/01 the assessee has received cash amounting to Rs.2,89,38,000/- (Rs.1,06,44,000/- Rs.1,82,94,000/-) from different persons during the F. Y.2013-14. When confronted, the assessee could not give any satisfactory reply. Hence, the cash receipts of Rs.2,89,38,000/- were treated as undisclosed income and brought to tax. 87. So far as the addition of Rs.12,50,000/- is concerned, the Assessing Officer noted that As per Page No.49 of the above impounded Annexure, the assessee has received Rs.33,50,000/- from Sri.M.Ranga Reddy on different dates Rs 28,50,000/- by cash & Rs 5 lakhs by cheque When confronted, the assessee had no reply. Out of the total Receipts of Rs.33,50,000/-, an amount of Rs.21,00,000/- relates to F. Y.2012-13 and the balance of Rs.12,50,000/- relates to Y.2013-14. Hence, the cash receipts of Rs.12,50,000/- was treated as undisclosed income and brought to tax for A. Y.2014-15. 88. So far as the addition of Rs.94,50,000/- is concerned, the Assessing Officer noted that as ....
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....8,000/- as taken by the Assessing Officer. The Assessing Officer has wrongly added Rs.1,06,44,000/- to the final total of Rs.1,82,94,000/- and arrived at the figure of Rs.2,89,38,000/- which is wrong. The figure of Rs.2,89,38,000/- taken by the Assessing Officer included Rs.1,06,44,000/- twice. Therefore, the correct receipts in the seized paper are Rs.1,82,94,000/- only. 90. It was submitted that the said receipts of Rs.1,82,94,000/- represents the sale consideration received on sale of plots and the share of the assessee is 50%. Therefore, such share comes to Rs.91,47,000/-. It was argued that the assessee in the return of income for the impugned A.Y.2014-15 has adopted sale consideration at Rs.99,42,558/- being 50% share in the project and after claiming the purchase cost of Rs.78,11,904/-, admitted capital gain of Rs.21,30,654/- since the income is more than the share of the appellant in the receipts appearing in the seized paper, therefore, no addition is warranted on this account. 91. So far as the addition of Rs.12,50,000/- is concerned, it was argued that the evidence in the seized documents show that amounts were received from Sri Ranga Reddy. The amounts are not cre....
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....ed out the undisclosed income and had offered an amount of Rs.15.00 crores as additional income for various years in the statement recorded u/s 132(4) of the Act. Therefore, retraction made by the assessee after two years being general and vague and not supported by any evidence is merely an afterthought and therefore, the Assessing Officer was justified in making the addition. 95. Aggrieved with such order of the learned CIT (A), the assessee is in appeal before the Tribunal. 96. The learned Counsel for the assessee while explaining the above additions filed the following written submissions to explaining the entries recorded in the seized documents: "8. Ground Nos. 4 & 5. This is with regard to additions made of Rs.2,89,38,000/-, Rs.12,50,000/ 8. Rs. 94,50,00- and Rs.1,55,0,000/- on the ground that they represent 8. Ground Nos.4 & 5 This is with regard to additions made of Rs.2,89,38,000/ unexplained cash receipts. The Assessing Officer made addition of Rs.2,89,38,000/- on the ground that page 10 of Annexure A/PMB/01 shows receipts of Rs.2,89,38,000/-. 9. Firstly, the appellant submits that the total does not work out to Rs.2,89,38,000/-. The amounts appea....
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....f the paper book. The appellant Submitted that Sri M.Ranga Reddy paid the amount for acquisition of suitable property. As u required plot was not located, the amount was returned. The fact that the amount was received from Sri M.Ranga Reddy through cheque is confirmed by the entry in the seized document itself. (Kindly refer to Sec.132 (4A) of the Act). It is also submitted that the appellant id maintain b00ks of account. He did not record the receipt in his books. In the circumstances, neither the provisions of Sec.68 nor the provisions of Sec.69 are applicable. The said amount was never received as the income of the appellant and the seized material does not provide any such information. Therefore, it cannot be added. The same may please be deleted. 13. Cash receipt of Rs.94,50.000/: The relevant Seized material is at page No.5 of the paper book. The heading in the seized document shows as Ghatkesar Venture and share shows as 40%. The total area is mentioned at 7 acres 20 guntas. The appellant submitted that the said venture was proposed to be entered into with one Sri K.Gopal Goud who paid the amount of Rs.94,50,000/-. In fact, the appellant did not maintain any books o....
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....R, on the other hand, heavily relied on the order of the learned CIT (A). He submitted that when the assessee has himself worked out the details and has offered Rs.15.00 crores as additional income in the statement recorded u/s 132(4) of the Act, therefore, the learned CIT (A) is fully justified in sustaining the addition made by the Assessing Officer, since the assessee has retracted from his declaration after a period of two years and no documentary evidence has been filed to substantiate the same. 98. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. So far as the addition of Rs.2,89,38,000 is concerned, a perusal of the seized document, copy of which is placed at page 10 of the Paper Book, shows that an amount of Rs.1,06,44,000/- has been added twice. On being confronted to the learned DR, he also fairly conceded that the same is cumulative totaling and the amount of Rs.1,06,44,000/- appears to be made twice. Since the amount of Rs.1,06,44,000/- has been added twice while making the addit....
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....e submission of the learned Counsel for the assessee that Sri Brahmanna is a shareholder in Bodupal venture along with 9 others and he had paid his share in the venture and not to the assessee. A perusal of the seized document shows that out of the total amount of Rs.2,25,00,000 mentioned therein on different dates, the Assessing Officer has not made any addition in respect of cheque amount of Rs.15.00 lakhs, Rs.20.00 lakhs and Rs.55.00 lakhs totaling to Rs.90.00 lakhs but has made the addition of Rs.1,55,00,000/- being the cash entries. In our opinion, the seized documents are to be accepted as a whole and it cannot be accepted in part and rejected in part. Since the Assessing Officer has accepted the cheque amount received from Shri Brahmanna for the Bodupal venture, where his share is mentioned at 20% in the seized documents itself, therefore we find force in the argument of the learned Counsel for the assessee that the balance amount of Rs.1,55,00,000/- also received in cash from Shri Brahmanna towards his 20% share could not be added as income of the assessee. We therefore, set aside the order of the learned CIT (A) and direct the Assessing Officer to delete the addition of Rs....
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....xpenditure and brought to tax. 107. So far as the 2nd Rs.12.50 lakhs is concerned, we find the Assessing Officer made the addition on the ground that as per Page No.17 of the above Seized Annexure, the assessee has made cash payment of Rs.10,00,000/- to Sri.Thotkura Ravi Yadav and Rs.2,50,000/- towards Development Cost. When the assessee was asked to furnish the sources of the said expenditure with supporting evidence, the assessee failed to furnish any. Hence, the entire amount of Rs.12,50,000/- was treated as his unaccounted expenditure and brought to tax. 108. So far as 3rd Rs.12.50 lakhs is concerned, the Assessing Officer noted that as per page No.18 of the Annexure A/PMB/6 according to which the assessee has made cash payment of Rs.10.00 lakhs to Shri K. Gopal Goud on 9.9.2013 and Rs.2,50,000/- towards development cost on 9.9.2013. Since the assessee failed to furnish the source of the above expenditure with supporting evidence, the Assessing Officer added the entire amount of Rs.25,00,000/- to the total income of the assessee as his unaccounted expenditure. 109. So far as the 4th Rs.12.50 lakhs is concerned, the Assessing Officer noted that as per page 19 of the abo....
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....000/- only and not Rs.2,89,38,000/- as taken by the Assessing Officer. The Assessing Officer has wrongly added Rs.1,06,44,000/- to the final total of Rs.1,82,94,000/- and arrived the figure of Rs.2,89,38,000/- which is wrong, figure of Rs.2,89,38,000/- taken by the Assessing Officer included Rs.1,06,44,000/- twice. Therefore, the correct receipts in the seized paper are Rs.1,82,94,000/- only. 10. Secondly, the said receipts of Rs.1,82,94,000/- represents the sale consideration received on sale of plots in Sai Krishna Enclave wherein the assessee's share is 50% only i.e., Rs.91,47,000/-. The appellant, in his return of income for the impugned A.Y.2014-15, adopted sale consideration at Rs.99,42,558/- being 50% share in the project and after claiming the purchase cost of Rs.78,11,904/, admitted capital gain of Rs.21,30,654/- The sale consideration admitted in the return of income is more than the share of the appellant in the receipts appearing in the seized paper and therefore, no addition is warranted on this account. 11. In view of the above factual position, the amount of Rs.2,89,38,000/- cannot be added. Firstly, there is an error in the working in arriving ....
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....addition. 14 Cash receipt of Rs.1,55,00,000- The Assessing Officer has considered the seized material on page 6 of the paper book for making this addition. One Sri R.Brahmanna, is a shareholder in Boduppal venture along with 9 others. He paid towards his share in the venture and not to the appellant. It is the amount of Sri Brahmanna in respect of Boduppal and Chengicherla ventures and has nothing to do with the appellant. The amounts were not received by the appellant. They were not recorded in the books of the appellant. They were not utilized by the appellant. In the circumstances, it cannot be said that the said amount represents the income of the appellant. In such circumstances, it is not correct for the Assessing Officer to make addition of Rs.1,55,00,000/- 15. It is further submitted that the seized material shows the total payments by Sri R Brahmanna - Rs.2,25,00,000 in respect of Boduppal venture and Rs.20,00,000 in respect of Chengicherla Venture. Further, the payments of Rs.2,25,000/- includes Rs.90,00,000/- paid by Sri Brhammana by cheques and the balance of Rs.1,35,00,000/- by cash. Therefore, the Assessing Officer is not correct to ignore the paymen....
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....he learned CIT (A) sustaining this addition is accordingly upheld. 115 So far as the 2nd addition of Rs.25.00 lakhs is concerned, we find the Assessing Officer made the addition on the ground that as per page 7 of the impugned annexure, the assessee has paid an amount of Rs.25.00 lakhs to Sri Sudhakar. Since the assessee could not explain satisfactorily, the Assessing Officer made the addition which has been upheld by the learned CIT (A). It is the submission of the learned Counsel for the assessee that it represents only the working and no information is available that the assessee has received the amount of Rs.25.00 lakhs from Sri Sudhakar or from anyone. However, we do not find any merit in the above argument of the learned Counsel for the assessee in absence of any satisfactory explanation. Therefore, the order of the CIT (A) sustaining the addition made by him so is upheld. 116. So far as the 1st addition of Rs.12,50,000/- is concerned, we find the Assessing Officer made the addition on the ground that cash payment of Rs.10.00 lakhs and Rs.2,50,000/- were made for the Bodupal Venture. However, a perusal of the seized document, copy of which is placed in the paper book at....
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.... the assessee that the Balapur venture was undertaken by Shri K. Gopal Goud and Sri Brahamanna and the assessee is not a partner in the said venture. It is his submission that after incurring some expenditure, the venture was aborted. However, we find no merit in the argument of the learned Counsel. Merely, because the assessee has not claimed the expenditure, the same cannot be a ground to delete the addition especially when the seized document was found from the premises of the assessee and there is no proper explanation. However, since the above amount is an expenditure incurred by the assessee, the assessee is entitled to claim set off for additions made in the preceding year or in the current year. We, therefore, direct the Assessing Officer to give the benefit of set off for the addition, if any, made in this year or in the preceding year after ascertaining the availability of funds. Needless to say the Assessing Officer shall give due opportunity of being heard to the assessee while deciding the issue. explaining the source of expenditure. The ground relating to addition of Rs.12.00 lakhs is accordingly allowed for statistical purposes. 120. In Ground of appeal No.7, the ....
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.... the learned CIT (A). He submitted that the assessee himself has declared Rs.15.00 crores as additional income during the course of search in the statement recorded u/s 132(4) of the Act, therefore, retracting the same after a period of 2 years without any valid reason or documentary evidence is not justified. He accordingly submitted that the order of the learned CIT (A) be upheld and the ground raised by the assessee on this issue be dismissed. 125. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the Assessing Officer in the instant case made addition of Rs.21.00 lakhs as undisclosed receipt on the ground that page 41 of the seized annexure mentioned that there was a receipt of Rs.77.00 lakhs on various dates out of which an amount of Rs.21.00 lakhs relates to this year. We find the learned CIT (A) sustained the addition. It is the submission of the learned Counsel for the assessee that the amounts were received towards Tulsi Bhavani Nagar venture and the assessee has already admi....
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....added in A.Y 2013-14. Notwithstanding that, the appellant has not given any proof of the development expenses claimed. The Assessing Officer has also stated that the appellant had himself offered the said amount as additional income before the DDIT (Inv.). In view thereof, the addition made is confirmed and all grounds related to this issue are DISMISSED". 128. Aggrieved with such order of the learned CIT (A), the assessee is in appeal before the Tribunal. 128.1 The learned Counsel for the assessee submitted that the assessee has purchased the property on 1.4.2013 along with 4 others for a consideration of Rs.78,11,904/-. Accordingly, the purchase cost was reduced from the sale consideration. Since no capital gain was offered to tax and the Assessing Officer refused to allow the cost of purchase of the property sold by the assessee, therefore, the cost of acquisition has to be allowed while working out the capital gain. 129. The learned DR, on the other hand, heavily relied on the order of the learned CIT (A). 130. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the asse....
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....come-Tax (Appeals) erred in confirming the action of the Assessing officer in making addition on account of unexplained expenditure of Rs.55.60 lakhs; Rs.197.90 lakhs; Rs.1.0 lakh; and Rs.43.32 lakhs without properly considering the explanation offered by the appellant. The learned Commissioner of Income-Tax (Appeals) ought to have seen that the appellant properly explained the source for each expenditure incurred by the appellant and the learned Commissioner of Income-Tax (Appeals) ought to have held that the Assessing Officer is not justified in making such additions. 5. The learned Commissioner of Income-Tax (Appeals) erred in confirming levy of interest u/s 234A(3) and 234B(3) of the I.T. Act. 6. Any other ground that may be urged at the time of hearing". 133. Ground of appeal No.1 & 6 being general in nature are dismissed. 134. In Ground of appeal No.2, the assessee has challenged the validity of the initiation of proceedings u/s 153A of the Act. After hearing both sides, we find this ground is identical to the ground of appeal in ITA No.132/Hyd/2018 for the A.Y 2012-13. We have already decided the issue and the ground raised by the assessee on this has been dis....
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....rned CIT (A), the assessee is in appeal before the Tribunal. 140. The learned Counsel for the assessee strongly challenged the order of the learned CIT (A) in sustaining the addition made by the Assessing Officer. He submitted that the Assessing Officer made the addition on the basis of the seized document page No.6 of Annexure A/PMB/01 containing 58 pages. As per the cash receipt, the assessee has received advance against purchase of plot. He submitted that the Assessing Officer should have considered all the facts contained in the seized material. Since the plot was never sold during the year, therefore, no addition is called for. Further, the assessee does not maintain any books of account and the said amount was also not recorded in the books of account nor used as a source. Therefore, provisions of section 68 & 69A are not applicable. 141. The learned DR, on the other hand, heavily relied on the order of the Assessing Officer and the learned CIT (A). He submitted that the seized document shows that it is a cash receipt dated 31.01.2014 where an amount of Rs.25.00 lakhs is shown to have been received by the assessee in cash from one Smt. Nagini Pramada towards sale of an ....
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....e of the assessee as unexplained cash receipt. However, since the seized document clearly shows that the amount of Rs.25.00 lakhs is received as an advance towards sale of open plot bearing survey numbers 351 & 354 having 1625 sq. yard and the assessee has not given any such details before the lower authorities therefore, considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to decide the issue as per fact and law afresh after giving due opportunity of being heard to the assessee. The ground raised by the assessee is accordingly allowed for statistical purposes. 143. In ground of appeal No.4, the grievance of the assessee is regarding the order of the learned CIT (A) in confirming the addition of Rs.55.60 lakhs; Rs.197.90 lakhs; Rs.1.0 lakh; and Rs.43.32 lakhs respectively on account of unexplained expenditure. 144. Fact of the case, in brief, are that the Assessing Officer on the basis of the seized document A/PMB/06 which contains written pages 1 to 21 noted that page No.7 of the impugned annexure shows that the assessee has incurred expenditure of Rs.55,....
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....e considered as a retraction within the reasonable time. He accordingly sustained the addition made by the Assessing Officer. 146.1 Aggrieved with such order of the learned CIT (A), the assessee is in appeal before the Tribunal. 147. The learned Counsel for the assessee drew the attention of the Bench to the following written submission filed for explaining the 4 additions above: "6. Ground No.4: This ground is with regard to four different additions of Rs.55 60 lakhs Rs.197.90 lakhs, Rs.1.0 lakh and Rs 43.32 lakhs on account of unexplained expenditure. 7. The amount of Rs.55.60 lakhs represent payment (Sri Sudhakar) The Assessing Officer is of the view that the said amount represents expenditure by the appellant. The heading is noted as "owner payments Sudhakar". The Assessing Officer is of the view that the appellant paid Rs.55.60 lakh to Sri Sudhakar who is the owner of the plot. During the course of hearing, the appellant explained that this account was prepared by Sri Sudhakar in respect of the owners' payments. In this regard, it is submitted that the appellant entered into a Memorandum of Agreement with Sri K.Gopal Goud and 7 others for developmen....
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....ant but not recorded in the books of account. It is also submitted that the appellant has not maintained any books of account. He offered the capital gains by considering the sale price and the cost of acquisition The appellant submits that the Assessing Officer added both the receipts and expenditure. When the appellant has not maintained the books of account, the Assessing Officer cannot make any such addition, partially when explanation was submitted. 12. Unaccounted expenditure: According to the Assessing Officer an amount of Rs.1 lakh was incurred as an expenditure by the appellant. It is submitted that for the year under consideration, the appellant filed the return of income admitting an income of Rs.8,56,180/-, In the immediately preceding year also the appellant admitted substantial income. several advances have been received by the appellant. Therefore, the amount of Rs.1 lakh should not have been added by the Assessing Officer, partially in view of the fact that the appellant did not maintain any books of account. 13. Addition of Rs.43,32,000: According to the Assessing Officer, during the course of 13. search and seizure operations, the appellant offer....
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....43.32 lakhs being the difference between the additional income declared at Rs.15.00 crores and the additional income computed for all the years at Rs.14,56,68,000/- was offered to cover the discrepancy, if any and honor the commitment. 150. So far as the addition of Rs.55.60 lakhs is concerned, a perusal of the seized document shows that the same is mentioned as "owner payment".. Sudhakar" wherein certain amounts are mentioned totaling of which comes to Rs.55,06,000/-. So far as the amount of Rs.25.00 lakhs is concerned, it is seen that against the said payment of Rs.25.00 lakhs, the narration given is "paid from first Kishore Payment (8 MOU)". Similarly, against other payments, the plot Nos. etc., are written. The assessee clearly is not in a position to substantiate the nature of these entries and therefore, the assessee is liable to explain the source of the same. However, the alternate contention of the learned Counsel for the assessee that if the said amount is considered as expenditure, then if the receipts earlier added by the Assessing Officer are confirmed by the Tribunal, then the same should be available to the assessee to explain the source of such expenditure. We th....