TaxTMI 
TaxTMI 
2022 (10) TMI 224
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....r 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 the appeal filed by the assessee. Aggrieved with such....
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....d 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 assessee to show cause as to why the said cash receipts should not be brought to tax in his hand for the A.Y 2012-13. ....
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....ng 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 the assessee does not maintain any books of account, the provisions of section 68 have no application: a) [2011] 12 taxmann.....
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....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 assessee no addition u/s 68 can be made. It is also his submission that although admission is an important piece of evidence but the same is not conclusiv....
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....dditional 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 the assessee. It was accordingly argued that the addition of Rs.51,80,000/-is uncalled for. 16.1 However, the learned CIT (A) was not satisfied with the argume....
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....ed 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 statement recorded u/s 132(4) of the I.T. Act. We find the learned CIT (A) upheld the action of the Assessing Officer. It is the submission of the learned Counsel for the....
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....dy 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 20,54,500/- 22. He noted that the assessee was unable to explain the source of the amount of investments. Hence, he added Rs.20,54,500/- to the total income of the assessee as unexplained investments. 23. In appeal, the learned CIT (A) confirmed both the addit....
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....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. We do not find any infirmity in the order of the learned CIT (A) on this issue. Admittedly, the assessee could not explain the source of such investment. Further, as mentioned earlier, this land was purchased during the year itself and the onus was on the assessee to explain ....
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....ing 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 - A.Y 2013-14 (Revenue) A.Y 2013-14 31. The ground raised by the Revenue are as under: "1. The ld.CIT(A) is not justified in facts and in law in deleting the addition made by the assessing officer U/s. 68 of the IT Act. 2. The ld.CIT(A) is not justified in facts and in law in deleting the addition made on account of cash deposits ignoring the fact that th....
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....mitted 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 therefore, no addition is called for. 36. Referring to the seized material, it was submitted that the contention of the assessee is supported by the entries in the seized material. Referring to the provisions of section 132(4A) it was submitted that the contents of the seized material are to be considered as to be true and affidavit of Shri Ranga Reddy also supports the statement of the assessee. 37. Bas....
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....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 recorded in his books. Under these circumstances, neither the provisions of section 68 nor the provisions of section 69 are applicable. He submitted that the said amount was never received as the income of the assessee and the seized material also does not provide any such information. Therefore, the amount cannot be added and hence should be deleted. 40. The learned DR, on the other hand, heavy relied on the order of the....
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....essee 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 numbered from 01 to 21 which was impounded from the business premises of the assessee. As per Page No.46 of the above impounded Annexure, the assessee has received Rs.81,25, 000/- under the head Tulsi Bhavani Nagar, Chengicherla during the Financial Year 2012-13. When confronted, the assessee had no reply. Hence, the amount of Rs 81,25,000/- was brought to tax in the hands of the assessee as his undisclosed income. 43.1 The ....
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....he 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 concerned, it was submitted that According to the Assessing Officer, page No.41 Annexure A/PMB/06 indicates receipt of Rs.56 lakhs which is from the venture Tulasi Bhavani Nagar. It was argued that Tulasi Bhavani Nagar is the name of the Chengicherla venture. The assessee admitted sale consideration of Rs.1,74,33,695/-in the return of income filed by him. The amount of Rs.77 lakhs is a part of the said amount. Therefore, the Assessing Off....
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....t. 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 learned DR, on the other hand, heavily relied on the order of the Assessing Officer and the learned CIT (A). He submitted that despite sufficient opportunities granted by the Assessing Officer as well as the learned CIT (A), the assessee was not able to substantiate the claim which is now being made before the Tribunal. Therefore, the order of the learned CIT (A) should be upheld and the ground raised by the assessee should be dismissed. 49....
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....ments. 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 challenged the order of the learned CIT (A) in sustaining the addition of Rs.12.00 lakhs, Rs.10.00 lakhs (wrongly typed as Rs.100,00,000) and Rs.49,05,000/- respectively on account of unaccounted expenditure. 51.1 Facts of the case, in brief, are that the Assessing Officer noted that Annexure A/PMB/06 is a Black Diary of SBI General Insurance containing written pages numbered from 01 to 51 which was impounded from the PMB premises of the assessee A....
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....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 the addition by observing as under: "10.5 I have carefully considered the submissions made by the appellant as well as the observations of the AO in the impugned order. The case records and the seized material have also been perused. Here again, it is seen that the amounts in question have been disclosed by the assessee himself in his written submissions made before the DDIT(Inv), and the assessee himself has worked out the undisclosed income and offer....
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....ount 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 material showing that the assessee has actually made the payments and the entire seized material pertains to the projects undertaken by the assessee and as such he cannot categorize these payments as unaccounted expenditure. This is especially, when the assessee has not been maintaining regular books of account, it cannot be said that the said payrments are unaccounted. Further, the seized material should be considered in its entirety and as appearing thereon. The Assessing Officer cannot disbelieve certai....
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....khs 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 Page No.2 of the Paper Book. A perusal of the same shows Rs.49,90,000/- is written under Sai Krishna Envlave, Mar Palley, Ghatkesar. The first three entries of Rs.5 lakhs, Rs.2 lakhs and Rs.10,000/- do not have any dates. Therefore, it cannot be said that the above three entries totaling to Rs.7,10,000/- belong to this year. We, therefore, are of the opinion that out of Rs.49.90 lakhs, an amount of Rs.7,10,000/- cannot be considered as relating to this A.Y. So far as the balance amount of Rs.42,80,000/- is co....
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....rabad 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 of agricultural activity being carried out. Hence it does not satisfy the test laid down by the Supreme Court for treating certain receipts as received from sale of agricultural property and hence exempt. The addition made by the Assessing Officer is therefore sustained and all the grounds related to this issue are DISMISSED". 66. Aggrieved with such order of the learned CIT (A), the assessee is in appeal before the Tribunal. 66.1 The learned Counsel for the assessee submitted that the assessee in the return of income admit....
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....see 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 opinion is fully justified. Accordingly, ground raised by the assessee is dismissed. 69. Ground of appeal No.9 by the assessee and Ground of appeal No.3 by the Revenue relate to the order of the learned CIT (A) in directing the Assessing Officer with certain directions to recompute the capital gain. 69.1 Facts of the case, in brief, are that the Assessing Officer, during the course of assessment proceedings, noted that during the year the assessee has declared short term capital gain of Rs 22,07,990/- from sale of land at Chengicherla A....
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....te 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 learned DR, on the other hand, heavily relied on the order of the Assessing Officer. 73.1 After hearing both sides, we do not find any infirmity in the order of the learned CIT (A) in directing the Assessing Officer to recompute the capital gain after reducing the cost of acquisition from the sale proceeds of Rs.1,74,33,695/-. The learned DR could not point out any error in the order of the learned CIT (A) on this issue. We, therefore, uphold the order of the learned CIT (A) and direct the Assessing Officer to recompute the capital gain after reducin....
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.... 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 Rs.17,77,000/- deposited into the bank account. 77. Based on the arguments advanced by the assessee the learned CIT (A) called for a remand report from the Assessing Officer. The remand report was confronted to the assessee who filed his rejoinder. After considering the remand report of the Assessing Officer and the rejoinder of the assessee, the learned CIT (A) deleted the addition by observing as under: "7.5 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 Assessi....
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....) 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 addition. 4. The learned Commissioner of Income-Tax (Appeals) erred in confirming the additions made by the Assessing officer of Rs.12,50,000; Rs.94,50,000/- and Rs.2,89,38,000/-; Rs.1,55,00,000/- on the ground that they represent unexplained cash receipts. 5. The learned Commissioner of Income-Tax (Appeals) ought to have considered the fact that the said amounts were properly explained and a detailed explanation was filed before the learned Commissioner of Income-Tax (Appeals) explaining the sources for the receipt of the said amounts. 6. The learned Commissioner of Income-Tax (Appeals) erred inn c....
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....xure, 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 per Page No.30 of the above impounded Annexure, the assessee has received cash amounting to Rs. 94,50,000/- towards Ghatkesar Venture during the F.Y.2013-14. When confronted, the assessee did not offer any satisfactory reply. Hence, the receipts of Rs 94,50,000/- was treated as undisclosed income and brought to tax. 88.1 So far as the addition of Rs.1,55,00,000/- is concerned, the Assessing Officer noted that as per Page No.20 of the impounded Annexure, the assessee has received cash amounting to Rs.1,35,00,000/- from Sri. R. Brahmmanna, Badupet during the F.Y.2013-14. The assessee has also received cash of Rs.20,00,000/- towards Chengicherla on 20.....
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....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 credited in the books of the appellant. Therefore, the Assessing Officer is not justified in making addition of Rs.12,50,000/. 92. So far as the addition of Rs.94,50,000/- is concerned, it was argued that this payment of Rs.94,50,000/- relates to the previous year. It was submitted that the assessee proposed-to enter into a venture at Ghatkeswar. Sri K.Gopal Goud was interested in joining the said venture. He paid the amount of Rs.94,50,000/- On receipt of the amount, the project was aborted and the entire amount was returned to Sri K.Gopal. The amount was neither recorded in the books of account of the appellant nor related to any venture which was undertaken....
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....nd 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 appearing in the seized paper carries the progressive total showing the receipts at different points of time. Such final progressive total of the said receipts is Rs.1,82,94,000/-i.e. Rs.1,58,44,000 24,50,000. It can be seen from the said seized paper (Page No.10 of the Paper book) that the first total of Rs.59,54,000/- represent receipts up to 11.5.2013; then, the second total of Rs.85,44,000/- includes Rs.59,54,000/; then the third such total of Rs.1,06,44,000/- includes Rs.85,44,000/; and then the total of Rs.1,58,44,000/- includes Rs.1,04,44,000/- and the final total of Rs.1,82,94,000/- includes Rs,1,58,44,000/- Therefore, in total, the seized paper shows the receipts of Rs.1,82,94,....
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....t 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 of account and, therefore, the provisions of Sec.68 have no application. The amount was not invested anywhere and, therefore, the provisions of Sec.69 have no application. Further, the seized material shows about Ghatkesar venture. The venture of 7 acres 20 guntas at Ghatkesar did not take place and the amounts were returned to Sri K.Gopal Goud. Further, the seized material itself is the proof that the amount was received from Sri K.Gopal Goud. Further, the seized material itself is the proof that the amount was received from Sri K.Gopal Goud. The sad evidence is a reliable evidence in view of Sec.132(4A) of the Act. Therefore, the Assessing Officer is not justified in making addition. 14. Cash receipt of Rs....
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....s 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 addition of Rs.2,89,38,000/- therefore, the amount of Rs.1,06,44,000/- is directed to be deleted. 99. So far as the remaining amount of Rs.1,82,94,000/- is concerned, we find merit in the argument of the learned Counsel for the assessee that the same represents the sale consideration received on sale of plots in Sai Krishna Enclave where the assessee's share is only 50% i.e. Rs.91,47,000/-. The assessee in his return of income for the impugned A.Y has adopted sale consideration at Rs.99,42,558/- being 50% share in the project after claiming the purchase cost of Rs.78,11,904/- and admitted capital gain of Rs.21,30,654/-. Since the sale consideration admitted in the return of income is more than the receipt appearing in the seized p....
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.... 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.1,55,00,000/-. 103. In ground of appeal No.6, the assessee has challenged the order of the learned CIT (A) in sustaining the unaccounted expenditure 1,00,00,000/- which consists of various amount made by the Assessing Officer. 104. After hearing both the sides, we find the above addition of Rs.1,00,00,000 consists of Rs.25.00 lakhs each twice and Rs.12,50,000/-(4 times). The above additions are made on the basis of cash receipts and certain working in the seized documents during the course of search. So far as first Rs.25.00 lakhs is concerned, the Assessing Officer noted that Annexure A/PMB/02 containing pages numbered from 01 to 56 was seized from the residence of the assessee As per Page No 29 & 30 of the above Seized Annexure, ....
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.....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 above seized annexure, the assessee has made cash payment of Rs.12,00,000/- towards Balapur venture on 20.07.2013. Since the assessee failed to furnish the source of such expenditure with supporting evidence, the Assessing Officer made the addition of Rs.12,50,000/- as his unaccounted expenditure to the total income of the assessee although the amount as per the seized document is only Rs.12,00,000/-. 110. Before the learned CIT (A) the assessee made elaborate arguments based on which 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 on the ground that the assessee ....
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....ost 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 at the receipt of Rs.2,89,38,000/-. Secondly, the said amount represents the consideration received on sale of plots and the appellant had 50% share which was already admitted in the return of income filed for the assessment year 2014-15. Therefore, the Assessing Officer is not justified in making the addition and the CIT (A) is not justified in confirming the addition. 12 Cash receipt of Rs.12.50,000/-: This was taken by the Assessing Officer from page Annexure APMB/06 and the seized material is at page No.1 of the paper book. The appellant submitted that Sri M.Ranga Reddy paid the amount for acquisition of suitable property. As 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 ....
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....bmitted 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 payments made by Sri Brahmanna by cheques and to consider the cash payments made by him as if they belonged to the assessee Therefore, the Assessing Officer has wrongly made the addition of Rs.1,55,00,000 Rs.1,35,00,000 of Boduppal venture and Rs.20,00,000 of Chengicherla venture] and the Ld. CA) has wrongly confirmed the said addition without properly appreciating the entries appearing in the seized material. In view of the above, the addition of Rs.1,55,00,000/- need to be deleted". 113. The learned DR, on the other hand, heavily relied on the order of the Assessing Officer and the learned CIT (A). He submitted that when the assessee, during the course of search proceedings had himself made the calculation and offered the income before the DDIT (Inv.) and further the assessee himself has admitted addition....
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.... 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 Page No.21 shows that the said amount was paid by one Mr. Narasimha for development of the Bodupal venture where his share is 10%. We, therefore, find merit in the submission of the learned Counsel for the assessee that it was not the payment made by the assessee but payment made by Shri Narasimha whose share in the Bhodupal project is 10%. Accordingly, the order of the learned CIT (A) is set aside and the Assessing Officer is directed to delete the addition of Rs.12,50,000/- being related to Shri Narasimha. 117. So far as the 2nd addition of 2nd Rs.12.50 lakhs is concerned, we find the Assessing Officer made the addition on the ground that cash payment of Rs.10.00 and Rs.12.50 lakhs were made for the Bhodupal venture. However, a perusal of the seized document copy of which is placed at Page 21 of the Paper ....
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....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 assessee has challenged the order of the learned CIT (A) in confirming the addition of Rs.21.00 lakhs as undisclosed receipts. 120.1 Facts of the case, in brief, are that Annexure A/PMB/06 is a Black Diary of SBI General Insurance containing written pages from 01 to 21 which was impounded from the business premises of the assessee. As per Page No.41 of the above impounded Annexure, the assessee has received Rs.77,00,000/- under the head Tulsi Bhavani Nagar during the FY 2012-13(Rs 56 lakhs) & FY 2013-14 (Rs 21,00,000/-). When confronted, the assessee had no reply. Hence, the Assessing Officer made addition of the amount of Rs 21,00,000/- pertaining to FY 2013-14 as his undisclosed income. 121. Before the learned CIT (A), it was submitted that as per the seized documents, the amounts were received under the head Tuls....
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....zed 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 admitted 1/5th of the sale consideration of land at Tulsi Bhavani Nagar for an amount of Rs.99,42,558/- and has admitted the capital gain of Rs.21,30,654/-. It is his submission that despite the same being offered in the return of income, the Assessing Officer again made the addition which is not justified. We find some force in the above argument of the learned Counsel for the assessee. A perusal of the copy of the return of income filed by the assessee shows that the assessee has declared sale consideration of Rs.94,42,558/-being 1/5th in the sale of land at Marepally, Ghatkesar Mandal, Hyderabad. After deducting the purchase cost of Rs.75.00 lakhs, the assessee has declared profit of Rs.21,30,654/- which is not disputed by the Assessing Officer in the assessment order. Since the Assessing Officer himself has accepted capital gain ....
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....re, 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 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.78,11,904/- as income from undisclosed sources on the ground that the assessee failed to substantiate the purchase cost of the land which it has reduced from the sale consideration while computing capital gain. We find the learned CIT (A) sustained the order of the Assessing Officer the reasons of which are already reproduced in the preceding paragraph. It is the submission of the learned Counsel for the assessee that it has reduced the cost price of Rs.78,11,904/- from the sale consideration of Rs.99,42,558/- for computing the short term capital gain. Since according to the Assessing Officer, the assessee could not substantiate the purchase cost of Rs.78,11,904/-, therefore, considering the totality....
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....lenged 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 dismissed. Following similar reasoning, this ground raised by the assessee is dismissed. 135. Ground of Appeal No.3 relates to the order of the learned CIT (A) in confirming the addition of Rs.25.00 lakhs made by the Assessing Officer on account of unaccounted receipts. 136. Facts of the case, in brief are that Annexure A/PMB/01 is a loose sheet of paper containing pages numbered from 01 to 58 which was seized from the residence of the assessee. Page no.6 of the seized Annexure is a cash receipt, dated 31.10.2014 wherein an amount of Rs.25 lakhs is seen to have been received by the assessee in cash from Smt.Nagineny Pradamda during the financial year 2014-15, towards sale of Open Plot at Sy.No.351 & 354, Area 1625 Sq.Yds, Uppal, R,R. Dist. i.e. @ Rs.22,000/ per Sq.Yds. The Assessing Officer asked the assessee to confirm whether the said receipt of Rs.25,00,000/- was offered to tax. The assessee ....
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....rder 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 open plot in survey numbers 351 & 354, area 1625 sq.yards at Uppal in R.R. District. Therefore, the learned CIT (A) was fully justified in sustaining the addition made by the Assessing Officer. 142. 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.25.00 lakhs on the ground that the assessee has received an amount of Rs.25.00 lakhs in cash from one Smt. Nagini Pramada towards sale of one plot in Survey No.351 & 354. Area 1625 sq. yards and the assessee has not disclosed the same, therefore, it is an unaccounted receipt. We find the learned CIT (A) upheld the action of the Assessing Officer on the ground that despite ample opportunity given by the searc....
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....xplained 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.55,60,000/- under the head "Owner Payment (Sudhakar)". In absence of any satisfactory explanation regarding the source of the said expenditure, the Assessing Officer made the addition of the same. Similarly, as per the said written pages 1 to 21, the Assessing Officer noted that the assessee has incurred an expenditure of Rs.1,97,90,000/- during the financial year 2014- 15 and the assessee failed to furnish any explanation to explain the source of the said expenditure. Therefore, the Assessing Officer made addition of the same. 145. Similarly, as per page No.58 of the said annexure, he noted that the assessee has incurred an expenditure of Rs.1.00 lakhs on 6.6.2014. In absence of any satisfactory explanation by the assessee to explain the source of such expenditure, the Assessing Officer made addition of Rs.1.00 lakh. The Assessing Officer further noted that the assessee has made declaration of additional income of ....
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.... 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 development of 10 acres 20 guntas of land in Sy.Nos.215 situated at Boduppal village. The appellant was the owner of the property and the developers are Sri K.Gopal and 7 others. The appellant is entitled for 15% of the amount and the developer is entitled for 85%. The amount of 15% was paid by the developers to the appellant and is noted in the said paper. 8. Plotwise payments were effected and the receipts against the development agreement entered into in respect of the property. Therefore, it is not an expenditure incurred and the Assessing Officer is not justified in making the addition. 9. Without prejudice, the appellant submits that the said amount even if it were to be an expenditure should not have been added as there were number of receipts earlier and the expenditure incurred needs to be given set off. 10. Addition of Rs 197.90 lakh: According to the Assessing Officer, the expenditure incurred as per the annexure A/PMB/6 amounte....
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....he 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 offered an additional income of Rs.15 crores before the DDIT (Inv.), Unit-1(1), Hyderabad. The appellant submits that the said admission was retracted later by the appellant. However, the Assessing Officer is of the view that the said amount of Rs.15 crores should be added for all the years together. According to the Assessing Officer, the additions made by him for all the years together works out to Rs.14,56,68,000/- as against the alleged declaration made. Therefore, the Assessing Officer added Rs.43,32,000/- This is not legally valid. When the Assessing Officer is treating certain sum of money as the income there should be a basis for him either from the seized material or from any source. Without any such basis, without any information and simply based on a retracted declaration made, he cannot add the said amount to the income admitted". 148 The learned DR, on the other hand, heavily relied on the order of the Assessing Officer and the CIT (A). He submitted that the learned C....
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.... 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 therefore, deem it proper to restore the issue to the file of the Assessing Officer with a direction to compute the final addition that has been sustained on account of unaccounted receipts and allow set off of the same to explain the unexplained expenditure of Rs.55.60 lakhs. The first issue raised by the assessee in the ground of appeal is accordingly allowed for statistical purposes. 151. So far as the 2nd addition of Rs.197.90 lakhs is concerned, we find the Assessing Officer made the addition on the basis of seized document page No.1 to 21 annexure A/PMB/01 wherein certain amounts are mentioned as expenditure as "miscellaneous", the total of which comes to Rs.1,97,90,000/-. It is the submission of the learned Counsel for the assessee that the same relates to the expenditure towards Boduppal venture where the assessee is the owner of the land and not the developer and the developer is Shri K. Gopal Goud & 7 others who in turn entrusted the venture to Mansani Constructions and Sri....