AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (8) TMI 1585
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.... of the business of Rs. 38,06,951/- and Rs.15,22,780/- respectively. The appellant being aggrieved, prays that the addition made on account of estimated turnover and profit to the extent of Rs. 15,22,780/- being unjustified, unwarranted, bad in law and illegal be deleted. GROUND II :- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of unsecured loans as unexplained cash credit for Rs. 4,80,000/- u/s. 68 of the Act. The appellant being aggrieved, prays that the addition made on account Of unexplained cash credit u/s. 68 to the extent of Rs.4,80,000/- being unjustified, unwarranted, bad in law and illegal be deleted. GROUND III :- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of current liabilities as unexplained cash credit for Rs. 61,23,440/- u/s. 68 of the Act. The appellant being aggrieved, prays that the addition made on account of current liabilities as unexplained cash credit u/s. 68 to the extent of Rs. 61,23,440/- being unjustified, unwarranted, bad in law and ill....
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....ned order for which no clarification was alleged to be given at the time of assessment proceedings. It was concluded that these statements did not reflect the true and correct picture of the business and personal transactions of deceased assessee and as such could not be relied upon. Deceased assessee filed his return of income u/s.139 of the Act for the assessment year under consideration on 27.11.2003 declaring total income of Rs.6,53,507/-. The notice u/s.153A of the Act dated 12.10.2009 was issued and served on the deceased assessee asking him to file his return of income. In response, deceased assessee filed his return of income u/s.153A for the assessment year under appeal declaring total income at Rs.6,53,510/-. Assessee was asked to explain the submission of details along with explanation of seized/ impounded materials. Ultimately, assessment order u/s.143(3) r.w.s. 153A was passed by Assessing Officer on 29.12.2011 for the year under consideration determining total income of deceased assessee at Rs.93,71,127/- after making certain additions/disallowances. 3.1 Matter was carried before the First Appellate Authority, wherein first issue was raised with regard to rejection....
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....@35% and after considering the personal clement in various expenses claimed @ 25% as mentioned, the deceased assessee's net profit of the business was estimated at 40% of its turnover which comes to Rs.15,22,780/-. Accordingly, the deceased assessee's net profit was estimated at Rs. 15,22,780/-. In appeal before the First Appellate Authority, various contentions were raised on behalf of deceased assessee and having considered the same, CIT(A) confirmed the order of Assessing Officer who estimated the net profit at Rs.15,22,780/- after rejecting the books of account. 3.2 Same has been opposed before us inter alia submitting that CIT(A) was not justified in confirming the estimation of turnover and profit thereon at Rs.15,22,780/-. Ld. Authorized Representative submitted that addition in question is not justified by way of making estimation of turnover and profit thereon. Assessing Officer has not given actual working as to how the estimated turnover of Rs.38,06,951/- was calculated. The stand of deceased assessee has been that he used to deal in Navi-Mumbai areas. He used to identify those suitable locations of CIDCO plots belonging to different farmers, get them properly allotte....
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....00, Safar Real Estate Rs.2,00,000 and Shubham Estate Consultant Rs.3,00,000). Assessing Officer asked to assessee as to why same should not be added as unexplained cash credit u/s.68 of the Act. Assessee submitted relevant details like; address, PAN, his bank account statement and parties' bank account statements, account confirmation letters, copy of parties' income tax returns etc. But Assessing Officer after rejecting the contention on behalf of deceased assessee made addition in question. 4.1 Matter was carried before the First Appellate Authority, wherein CIT(A) confirmed Rs.4,80,000/- out of Rs.6,80,000/-. There is nothing on record to suggest that Revenue is against partial relief granted by CIT(A). So, narrow issue before us is regarding confirmation of Rs.4,80,000/- made u/s.68 of the Act. The stand of deceased assessee has been that deceased assessee has accepted Rs. 3 lacs and Rs.1,80,000/- from M/s.Shubham Estate Consultants and M/s. Ramesh Homes Building & Developer respectively, Assessing Officer has accepted that though confirmations from the said parties were filed but they did not appear before Assessing Officer. Without prejudice to above, stand of assessee has....
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....rmation from both parties, addition of Rs.61,23,440/- was not warranted. Deceased assessee has categorically given the details of parties and transactions therewith. Once transaction was stated to be completed, so, it was no more liability. All details in this regard were filed before Revenue authorities. Assessee has tried to prove the identity by giving details of parties. Agreeing to alternate contention of assessee, we hold that addition in question having no nexus with seized material as discussed above, so in view of the ratio laid down in All Cargo Global Logistic Ltd. (supra), addition u/s.68 of the Act is not justified. Under facts and circumstances, the addition in question is directed to be deleted. 6. Next issue is with regards to addition of Rs.6,65,782/- on account of estimating withdrawal at Rs.4,80,000/- as against Rs.2,34,218/- shown in capital account. Assessing Officer estimated withdrawals at Rs.4,80,000/- as against Rs. 2,34,218/- on account of household expenses. The stand of deceased assessee has been that this addition is on the basis of purely on estimation and having no nexus with the seized material found at the time of search. Agreeing to the contenti....
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....of Rs. 4,27,716/- being unjustified, unwarranted, bad in law and illegal be deleted. GROUND V :- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the disallowance of Rs.51,229/- made on account of personal element in certain expenses. The appellant being aggrieved prays that the addition made on account of estimated personal element in certain expenses to the extent of Rs. 51,229/- being unjustified, unwarranted, bad in law and illegal be deleted." 9. First issue in this appeal is with regard to addition of Rs.1,30,000/- as unexplained expenditure u/s.69C of the Act. Assessing Officer made addition of Rs. 1,30,000/- on account of Deal Wise Excel Sheet. In his answer to Question no. 4, statement record during course of search in his office, deceased assessee categorically stated that while dealing in 12.5% CIDCO Plots, the consideration paid to the farmers/investors was both in cash and by cheques. During course of search, a number of computer generated sheets were found at the business premises of deceased assessee containing various details in respect of each particular land deal. These sheets hereinafter h....
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....e is directed to be deleted. 10. Next issue is with regards to addition made on account of other cash/unaccounted transaction of Rs.1 lac by treating it as unexplained expenditure u/s.69C of the Act. Assessing Officer made addition of Rs.1 lac by treating unexplained cash payment as mentioned on page no.14 of Annexure A-1 impounded from Arneja Office of deceased assessee u/s.69C of the Act. The stand of deceased assessee has been that he was only agent viz. deal maker. So, following reasoning as discussed in para 9.1 of this order, addition in question is directed to be deleted. 11. Next issue is with regard to addition made on account of current liabilities and unsecured loan as cash credit of Rs.51,68,811/- u/s.68 of the Act. Assessee has shown current liabilities of Rs.1,09,68,811/- against various parties' narrations. Since, deceased assessee was not able to give satisfactory answer to the Assessing Officer, so, same was u/s.68 of the Act to the tune of Rs.1,09,68,811/-. 11.1 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee. As stated above, Assessing Officer has stated that current liabilities aggre....
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....prays that the addition made on account of unaccounted bank accounts to the extent of Rs. 63,51,926/- being unjustified, unwarranted, bad in law and illegal be deleted. GROUND II :- On the facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Appeal) - 54, MUMBAI ('hereinafter referred to as 'the CIT(A)') has erred in upholding the addition made on account of Deal Wise Excel Sheet for a sum of Rs.1,71,000/- as unexplained expenditure u/s.69C of the Act. The appellant being aggrieved, prays that the addition made on account of unexplained expenditure to the extent of Rs.1,71,000/- being unjustified, unwarranted, bad in law and illegal be deleted. GROUND III :- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of other cash/unaccounted transaction for Rs.16,77,000/- by treating it as unexplained expenditure u/s.69C of the Act. The appellant being aggrieved, prays that the addition made on account of unexplained expenditure u/s. 69C to the extent of Rs. 16,77,000/- being unjustified, unwarranted, bad in law and illegal....
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.... of M/s. Sadguru Arts. In his statement on oath u/s.131 of the Act recorded on 19.02.2009 during the course of survey at his office premises, deceased assessee had stated that he had made a film, namely, "Dhamki" during F.Y. 200203 in his proprietary concern M/s.Sadguru Arts. Deceased assessee stated at relevant point of time that during last three years, there was no business in it. Deceased assessee was asked to furnish details of all these bank accounts found during course of search and explanation about nature and source of deposits therein along with supporting documents. Assessing Officer observed that the above bank account with the Cosmos Co-op. Bank Ltd. was operative from F.Y.2003-04 (A.Y.2004-05). It was claimed by deceased assessee that M/s. Sadguru Arts was a defunct entity since the year 2003. However, from perusal of above bank account statements, it was found that there were substantial transactions in these bank accounts. In view of these facts, deceased assessee was asked to explain these issues. In response to same, deceased assessee vide its letter dated 19.12.2011 stated that these accounts of M/s. Sadguru Arts and certain credit card transactions were not refl....
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....ome tax return of the said HUF for A.Y.2004-05, the substantive addition on account of unexplained deposits of Rs.63,51,926/- therein has to be made not in the hands of deceased assessee but in the hands of his HUF which is a separate taxable entity under the Act. Meanwhile, the Karta of HUF passed away on 07.01.2013 and he was survived by his wife and a minor daughter and son. Thus, deceased assessee's wife is the legal heir even of Late Sunil D. Gulati (HUF). So, same was to be assessed in HUF. There was no clarity with regard to partition of HUF, so, Assessing Officer was directed to intimate his counterpart having jurisdiction over the case of Late Sunil D. Gulati (HUF) to initiate necessary action for assessing the said amount of unexplained bank deposits of Rs.63,51,926/- in the hands of said HUF by resorting to the provisions of Section 148 r.w.s. 150 of the Act. Therefore, the substantive addition on account of unexplained bank deposits of Rs.63,51,926/- made by Assessing Officer in the hands of deceased assessee was deleted. However, in order to safeguard the interest of the Revenue, it was held that protective addition of Rs.63,51,926/- towards unexplained deposits in afo....
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....on account of other cash / unaccounted transaction of Rs.16,77,000/- by treating it as unexplained expenditure u/s.69C of the Act. Assessing Officer made addition of Rs.16,77,000/- on the basis of receipts issued by deceased assessee treating all of them as in cash and unaccounted one. During course of search, a number of cash receipts containing details of cash payments made by deceased assessee aggregating to Rs.l.11 crores in respect of various land deals have been seized/impounded as tabulated in para 8.1 on page 17 of the impugned order. During course of assessment proceedings, Assessing Officer in respect of all receipts mentioned in para 8.1 on page 17 asked deceased assessee to furnish complete details/explanation along with supporting documents and evidences vide show-cause notice dated 15.10.2010. Since, deceased assessee could not give satisfactory explanation in this regard, so, Assessing Officer held that unexplained expenditure of Rs.16,77,000/- would not be allowed as a deduction under any head of income as per proviso to Section 69C of the Act. In appeal, same was confirmed. 18.1 As we have discussed similar matter in A.Y. 2003-04, wherein stand of assessee has b....
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.... of business cannot be made sound basis for addition in question. In view of above discussion, addition is not justified. Same is directed to be deleted. 19. Next issue is with regard to addition of Rs.11 lacs made on account of other cash/unaccounted transaction by treating same as unexplained expenditure. Assessing Officer observed that Page no.14 of Annexure A-l impounded from Arenja office of Deceased assessee showed date-wise details of payments made between 15.02.2004 to 12.09.2007 in cash and cheques to various farmers/brokers in respect of various properties /plots. Deceased assessee was asked to furnish source of these payments along with supporting documents and other relevant details. But Deceased assessee failed to give reasonable explanation in this regard. Assessing Officer observed that these payments were neither reflected in the books of account nor included in the fund/cash flow statements submitted by deceased assessee during the postsearch proceedings. He also noted from the date-wise entries of various payments that unaccounted cash payments of Rs.11,00,000/- pertained to A.Y.2005-06. In view of above, unaccounted cash payments amounting to Rs.11,00,000/- an....
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....ased assessee's consistent stand has been accepted by us that he was only a Real Estate agent or broker or deal maker and hence he used to block the plots by giving some advances to the plot owners-cum-farmers on behalf of investors only. Revenue authorities had not brought anything on record to suggest that assessee himself purchased property in question from the farmers. In such a situation, assessee was entitled for brokerage only. In view of above, addition in question is not justified. Same is directed to be deleted. 20. Next issue is with regard to addition to the extent of Rs.81,88,760/-. Assessing Officer made addition of unexplained cash credit of Rs.2,00,95,760/- treating all current liabilities and unsecured loan as cash credit. It consists of unsecured loan of Rs.72,28,760/- and current liabilities of Rs.1,28,67,000/- against various parties/ narrations. 20.1 Matter was carried before the First Appellate Authority, wherein out of Rs.72,28,760/-, addition to the extent of Rs. 44,21,760/- and out of Rs.1,28,67,000/-, addition to the extent of Rs.37,67,000/- sustained by CIT(A) which comes to Rs.81,88,760/-. Revenue is not in appeal against this relief granted to ass....
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.... during the period. In view of above facts on record, the addition in question is not justified. Same cannot be sustained. Without prejudice to the above, it was stand of assessee that loan taken from Shubham Estate Consultant was genuine as per the confirmation letter filed in earlier years as well as in the assessment year under consideration. Taking all these facts and circumstances into consideration, additions in question are not justified. Same are directed to be deleted. 21. Next ground is with regard to addition of Rs.4,72,443/- on account of difference in estimated higher withdrawals of Rs.11,00,000/- than shown in capital account at Rs.6,27,557/-. During course of assessment proceedings, Assessing Officer observed that as per deceased assessee's capital account, an amount of Rs.6,27,557/- was debited on account of household expenses and he had claimed that it was more than sufficient. In this regard, queries were made from assessee and living standard of assessee's household withdrawal was found sufficient. So, Assessing Officer added Rs.4,72,443/- which has been restricted to Rs.92,443/- by CIT(A). There is nothing on record to suggest that this addition on the basis ....
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....justified, unwarranted, bad in law and illegal be deleted. GROUND IV :- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of other cash/unaccounted transaction for Rs.43,14,000/- by treating it as unexplained expenditure u/s.69C of the Act. The appellant being aggrieved, prays that the addition made on account of unexplained expenditure u/s. 69C to the extent of Rs. 43,14,000/- being unjustified, unwarranted, bad in law and illegal be deleted. GROUND V :- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of other cash/unaccounted transaction for Rs.4,00,000/- by treating it as unexplained expenditure u/s.69C of the Act. The appellant being aggrieved, prays that the addition made on account of unexplained expenditure u/s. 69C to the extent of Rs. 4,00,000/- being unjustified, unwarranted, bad in law and illegal be deleted. GROUND VI :- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of current l....
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.... viz., Current Account No.117150050800336 and Account No.117700480100052 which were operative since F.Y.2005-06 relevant to A.Y.2006-07. In his statement on oath u/s.131 of the Act recorded on 19.02.2009 during course of survey at his office premises, deceased assessee had stated that he had made a film, namely, "Dhamki" during F.Y. 2002-03 in his proprietary concern M/s. Sadguru Arts. Deceased assessee had also stated that during last three years, there was no business in it. The deceased assessee vide notice u/s.l42(l) of the Act was specifically asked to furnish details of all these bank accounts found during course of search and explanation about nature and source of deposits therein along with supporting documents. It was observed that the above bank account with the Cosmos Co-op. Bank Ltd. was operative from F.Y.2003-04 (A.Y.2004-05). In view of these facts, deceased assessee vide show-cause notice dated 07.12.2011 was specifically asked about these issues. In reply, deceased assessee vide its letter received by Assessing Officer on 19.12.2011 claimed that these accounts of M/s. Sadguru Arts and certain credit card transactions were not reflected in his balance sheet because ....
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.... of assessment proceedings, assessee vide letter dated 19.12.2011 claimed that the aforesaid bank account was not reflected in his balance sheet because the same related to his HUF. To support his claim, assessee placed on record copy of income tax return of Late Sunil D. Gulati HUF (PAN: AAJHS5553H) showing total income of Rs.6,11,326/- for A.Y.2004-05. The aforesaid bank account held with the Cosmos Co-op. Bank Ltd. was incorporated in income tax return of the assessee's HUF. There was another bank account, viz., No. 117150050800335 with Tamilnadu Mercantile Bank Limited claimed to be in the name of HUF and not that of assessee. CIT(A) found that no return of Late Sunil D. Gulati (HUF) has been filed for the year under consideration despite the fact that there were total deposits of Rs.1,56,33,474/- in the aforesaid two accounts of the HUF. Since the said bank accounts claimed to be pertaining to assessee's HUF, it was held that substantive addition on account of unexplained deposits of Rs. 1,56,33,474/- contained in the bank account Nos. 117150050800335 and 029204301220192 with Tamilnadu Mercantile Bank Limited and the Cosmos Co-op. Bank Ltd. respectively has to be made not ....
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....d with Tamilnadu Mercantile Bank Ltd. in the personal name of deceased assessee was concerned, according to Revenue, these were found to be not disclosed in the balance sheet/books of account of assessee. Since assessee has failed to substantiate the claim in remand proceedings as well as during appellate proceedings, the addition to the tune of Rs.45,13,442/- in respect of said two bank accounts was sustained. Ld. Authorized Representative submitted that amount also belongs to HUF and not to deceased assessee. Moreover, as stated above, assessee was not engaged in land transaction itself but doing the same on behalf of investors. He was only liable for commission thereon. Taking all facts and circumstances into consideration, this addition in question is not sustainable. So, same is directed to be deleted. 26. Next issue is with regard to addition of 'Deal Wise Excel Sheets' (DWES) for Rs.1,47,000/-. According to Assessing Officer, in answer to Question no.4, in his statement record u/s.132(4) in course of search at his office, deceased assessee has stated that while dealing in 12.5% CIDCO plots, the consideration paid to the farmers/investors was both in cash and by cheques. D....
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....hat the amount of Rs.1,47,000/- could not be allowed to the deceased assessee as per provisions of Section 40A(3) of the Act and same was added to the total income of deceased assessee. 26.1 Similar issue arose in A.Y.2003-04 where assessee has been granted relief vide para 3 of this order. Facts being similar, so, following same reasoning, addition of Rs. 1,47,000/- is directed to be deleted. 27. Next issue before us is with regard to addition made on account of cash/unaccounted transaction of Rs.43,14,000/- by treating it as unexplained expenditure u/s.69C of the Act. During course of the search, a number of cash receipts containing details of cash payments made by deceased assessee aggregating to Rs.1.11 crores in respect of various land deals have been seized/impounded as tabulated in para 8.1 on page 17 of the impugned order. During course of assessment proceedings, Assessing Officer in respect of all the receipts mentioned in para 8.1 on page 17 asked the deceased assessee to furnish complete details/explanation along with supporting documents and evidences vide show cause notice dated 15.10.2010. In response to same, the deceased assessee could not submit any detail. U....
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....9C of the Act under any head of income. 28.1 We find that similar issue arose in A.Y. 2005-06 which was decided in favour of assessee vide para 19 of this order. Facts being similar, so following same reasoning, addition in question is directed to be deleted. 29. Next issue is with regard to addition on account of current liabilities and unsecured loan as cash credit of Rs.43,32,400/- u/s.68 of the Act. Assessing Officer noticed that deceased assessee had not filed his complete tax audit report along with its annexures. This was pointed out to deceased assessee vide show cause notice, but deceased assessee failed to make any submission in this regard. As per balance sheet of F.Y. 200506, it was observed that deceased assessee had shown unsecured loans of Rs.16,06,610/- in name of various parties. Assessee vide notice u/s.142(1) of the Act dated 03.08.2010 was asked to furnish various details in respect of such loans. But even after lapse of more than one and half years, the deceased assessee had failed to submit those details. The deceased assessee also ailed to submit the relevant details like address, PAN, his bank account statement and parties' bank account statements,....
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....ss and the time given by the A.O. was very short. In view of the submissions of the appellant, the said additional evidence filed by the appellant was admitted and sent to the A.O. calling for remand report after verification of the said evidence. The A.O. forwarded his remand report vide letter dated 19.12.2014 copy of which was provided to the appellant for submitting his rejoinder, if any. Since no rejoinder was furnished by the appellant, the matter is disposed of in light of the additional evidences placed on record and the findings contained in the remand report. 9.3.2 A perusal of the remand report reveals that out of unsecured loans of Rs.16,06,610/-, it is stated that unsecured loans amounting to Rs.5,00,000/- and Rs.38,000/- taken from M/s.Sangram Patil and M/s.Shubham Estate Consultant very short. In view of the submissions of the appellant, the said additional evidence filed by the appellant was admitted and sent to the A.O. calling for remand report after verification of the said evidence. The A.O. forwarded his remand report vide letter dated 19.12.2014 copy of which was provided to the appellant for submitting his rejoinder, if any. Since no rejoinder was fu....
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....ame of M/s.Haware Engineering and Builders Pvt. Ltd. was made by the A.O. in A.Y.2005-06 itself and there being no fresh receipt of loan or advance from the said party but only repayment of Rs.31,75,000/- to the said party during the year, the A.O. was not justified in making addition of Rs.33,00,000/- again in the A.Y. under consideration. In view of the above discussion, additions aggregating to Rs.36,00,000/- (Rs.3,00,000 + Rs.33,00,000) towards unexplained credits/current liabilities made by the A.O. are directed to be deleted. However, the balance addition of Rs.38,22,400/(Rs.27,22,400 + Rs.11,00,000) made by the A.O. on account of unexplained current liabilities/creditors u/s.68 is found to be justified as the appellant has failed to establish the identity and creditworthiness of the concerned parties and genuineness of the transactions even at the appellate stage. Therefore, the said addition of Rs.38,22,400/- out of current liabilities is sustained. Ground No.6 of the present appeal is allowed to the extent indicated above." 29.3 Similar issue arose in A.Y.2005-06, which was decided in favour of assessee vide para 20 of this order. Facts being similar, so following same ....
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....he facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Appeal) - 54, MUMBAI ('hereinafter referred to as 'the CIT(A)') has erred in making protective assessment of Rs.21,60,000/-. The appellant being aggrieved, prays that the addition made on account of unaccounted bank accounts to the extent of Rs.21,60,000/- being unjustified, unwarranted, bad in law and illegal be deleted. GROUND II :- On the facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Appeal) - 54, MUMBAI ('hereinafter referred to as 'the CIT(A)') has erred in confirming an addition of Rs.1,04,000/- as unexplained deposits u/s.68 in respect of the two savings bank account alleged as undisclosed in the Balance Sheet/books of accounts. The appellant being aggrieved, prays that the addition made on account of unexplained deposits/ unaccounted bank accounts to the extent of Rs.1,04,000/- being unjustified, unwarranted, bad in law and illegal be deleted. GROUND III :- On the facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Appeal) - 54, MUMBAI ('h....
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....llegal be deleted. GROUND VIII :- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the disallowance of Rs.36,208/- made on account of personal element in certain expenses. The appellant being aggrieved prays that the addition made on account of estimated personal element in certain expenses to the extent of Rs. 36,208/- being unjustified, unwarranted, bad in law and illegal be deleted. GROUND IX :- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of disallowance of interest u/s.36(1)(iii) to the extent of Rs.4,93,674/- alleging it being not for the business purpose. The appellant being aggrieved prays that the addition made on account of disallowance of interest u/s.36(1)(iii) to the extent of Rs.4,93,674/- being unjustified, unwarranted, bad in law and illegal be deleted." 35. First issue is with regard to protective assessment of Rs.21,60,000/-. Similar issue arose in A.Y. 2005-06 vide para 16 of this order wherein we have deleted the protective addition. Facts being similar, so following same reasoning, pr....