TaxTMI 
TaxTMI 
2018 (5) TMI 2165
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....reinafter referred to as 'the Act' for short] was conducted by the INV Wing of the department on 30.07.2009 in the case of Standard Watch Group. Search also included residential premises of the members of the group. During the course of search proceedings, various documents were impounded which included financial statements of the assessee group which were not fully incorporated in the regular books of account of the assessee group. Trading profit and loss account and balance sheet from 1.4.2001 to 30.9.2008 were found and the same are exhibited at pages 201 to 217 of the paper book. These financial statements are consolidated financial statements which contain details of the members of the group including their bank accounts. 4. With the aforesaid factual matrix, we first take up ITA No. 2038/DEL/14 appeal by the assessee. The assessee has raised five substantive grounds of appeal. Ground No. 1, 2 and 3 are taken up together for disposal as the same are covered against the assessee and in favour of the Revenue by the order of the coordinate bench in assessee's own case for assessment years 2006-07 and 2007-08 in ITA Nos. 6764/DEL/2013 and others. 5. In so f....
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.... properties in the names of various group members and companies relating to the present assessees i.e. Shri S.K. Gupta and Shri Y.K. Gupta. We further observe that the debtors, stock, loans, advances and creditors of various group companies belonging to the present assessees and bank borrowings show that the loans have been taken in the names and Smt. Madhu Gupta wife of Shri S.K. Gupta and Smt. Meena Gupta, wife of Shri V.K. Gupta. Therefore, the income arising or, account of these assets cannot be exclusively attributed or held as belonging to late Shri Suraj Bhan Gupta only. The charging section 4 of the Income Tax Act provides that the tax is to be charged on the income of a person to the extent it belongs to him. In the present case, the income belongs to various individuals and group companies from the assets, investments, etc. which cannot be held as exclusively belonging to late Shri Suraj Bhan Gupta and the same belongs to various family members including the present assessees, their wives and children. We may also point out that as the seized documents are cash book, ledger account, consolidated balance sheets and other documents and these have been maintained just to bri....
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....by the AO on the loans of Rs. 8,12,00,000(given to parties at S.No. (ii) to (v) and (vii to ix) on the slips discussed above. Rs. 2,43,60,000 (ii) Interest calculated @ 30% by the AO on the loans of Rs. 5,49,21,110 given outside the books in the assessment year 2006-07 which was added in assessment year 2006-07. Rs. 1,64,76,333 Total Rs. 6,14,57,988 10. The assessee pointed out that there are some clerical mistakes and correct detail of the interest received is as under: Annexure Pages Amount as per Questionnaire Period Page No. Actual Amount as per seized Annexure A-28 96,97,98,100 62,34,649/- Oct-Dec, 07 182 59,40,901/- A-10 106,107,108,110 49,77,704/- Jan-Mar, 08 182 49,41,475/- A-30 103,30,109,111,88 9,92,840/- Apr-Jun, 08 174 - A-13 88,94,100 18,75,000/- Jul-Sep, 08 161 1,60,106/- Interest received - Apr-Sep, 07 - 97,39,279/- 1,40,80,193/- 2,07,81,761/- 11. It was explained that the interest received amounting to Rs. 2,07,81,761/- has already been taken into accoun....
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.... findings of the Assessing Officer and vehemently pointed out that the claim of deduction is not tenable in law. 17. We have given thoughtful consideration to the orders of the authorities below and with the assistance of the ld. Counsel, we have carefully considered the relevant documentary evidences brought on record in the form of paper books in the light of Rule 18(6) of the ITAT Rules. There is no denying that voluminous documents were impounded during the search proceedings. It is equally true that the seized material contained financial statements of the assessee and its group members. As mentioned elsewhere, these financial statements were in the form of consolidated trading profit and loss account and balance sheet of the assessee and its family members. There is no denying that on the basis of notings found in these seized material, the Assessing Officer has made various additions. 18. The Hon'ble Jurisdictional High Court of Delhi in the case of Indigo Airways P. Ltd in Tax Appeal No. 1620 & 1622 of 2010 has held that : "Full effect of the presumption should be given effect to whenever the statute directs a particular non existent state of affairs....
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....India and Allahabad Bank and the amount of bank debt shown in the consolidated balance sheet. After allowing credit of interest paid and bad debts, the remaining part of interest income should be allocated in the ratio of 60 : 40 between the present assessees, Shri S.K. Gupta and Shri Y.K. G pm Consequently, ground No. 4-of the assessee is partly allowed in the manner as indicated above and ground No. 2 of the revenue is dismissed." 21. Respectfully following the findings of the coordinate bench [supra] we direct the Assessing Officer to allow the expenditure relating to the payment of interest and bad debts, as per Annexure A10 page 93 back [internal pg 180] & Annex A-5 pg 14 [both party X-I]. The AO is further directed to allocate the balance interest income if any in the ratio of 60:40 as done in the earlier year between the assessee and his brother Shri V.K. Gupta. Thus, Ground No. 4 of assessee's appeal is treated as allowed for statistical purposes. 22. On the very same issue, the revenue is aggrieved by the deletion of addition of Rs. 4.08 crores. As mentioned elsewhere, the family group has already shown interest income of Rs. 2.06 crores in a....
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....e Assessing Officer and stated that no proper evidence has been filed by the assessee in support of its claim. It is the say of the ld. DR that since the addition has been made as undisclosed income of the assessee, therefore, special rate of tax applicable to long term capital gain cannot be applied. 27. We have considered the rival submissions and perused the orders of the authorities below. Exhibit 125 to 128, 129 to 132, 133 to 136 and 137 to 140 are sale deed of the impugned property. We find that in each of the sale deed, it has been specifically mentioned that the assessee is having only 1/6th share in the impugned property. Exhibits 141 to 147 is the sale deed wherein 1/6th share of Shri V.K. Gupta is mentioned. There is no denying that the on money has been received on the sale of the impugned property. It is equally true that the undisclosed sale consideration has been treated as undisclosed income of the assessee. Considering the fact that the assessee was only holding 1/6th share in the said property, in our considered opinion, only 1/6th of the undisclosed sale consideration should be added in the hands of the assessee. Exhibit 210 shows that the assessee has incurr....
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....ed from the sale of property R-57, GK-1. In support of his findings, the ld. CIT(A) drew support from the judgment of the Hon'ble jurisdictional High Court of Delhi in the case of Ram Avtar Gupta in Tax Appeal No. 571 of 2012. 36. In so far as the balance addition of Rs. 9.80 crores and Rs. 5.05 crores is concerned, it was pointed out to the ld. CIT(A) that the facts of these two loans given have not been properly appreciated by the Assessing Officer in as much as the slips which were pasted on the ledger of SRS and Realtech first name written is STPL which stands for Standard Times [P] ltd which is the trade name of the assessee group and therefore, the assessee cannot give loan to itself and loans advances given to SRS are given by its friends and relatives The ld. CIT(A) found force in the contention of the assessee and after verifying the seized documents i.e. balance sheet, cash book and ledger account, the ld. CIT(A) found that no reference of any loan given to persons other than SRS and Realtech is there. The ld. CIT(A) accepted that the assessee has not given loans to Deepak, Amit Gupta, Rajesh Gupta, Lalit Gupta and Amit G. Once again the ld. CIT(A) d....
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....operty at Sikandrabad Road for a consideration of Rs. 1.39 crores. On the basis of his belief, the Assessing Officer added the same as unexplained investment. 42. Before the first appellate authority, the assessee strongly contended that in the impugned loose sheets the entries were for a probable future investment which never materialized. The assessee pleaded that the impugned loose sheets are nothing but dumb documents. 43. After considering the facts and submissions and after perusing the loose sheets, the ld. CIT(A) was convinced that these are nothing but dumb documents and deleted the addition of Rs. 1.39 crores. 44. Before us, the ld. DR strongly supporting the findings of the Assessing Officer. It is the say of the ld. DR that the impugned sheets were found from the premises of the assessee and therefore, presumption is against the assessee and addition has been rightly made by the Assessing Officer. 45. We have given thoughtful consideration to the orders of the authorities below vis a vis the impugned loose sheets being Exhibited at pages 218 and 219 of the paper It is true that these sheets were found from the premises of the assessee. It is equall....
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....refore, be necessary for us to first ascertain whether the entries in the documents, with which we are concerned, fulfill the requirements of the above section so as to be admissible in evidence and if this question is answered in the affirmative then only its probative value need be assessed." 48. With respect to evidentiary value of regular account book, the Hon'ble Supreme Court in the case of V.C. Shukla 1998 (3) SCC 410 has laid down:- "37. In Beni v. Bisan Dayal it was observed that entries in books of account are not by themselves sufficient to charge any person with liability, the reason being that a man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of the parties. There must be independent evidence of the transaction to which the entries relate and in absence of such evidence no relief can be given to the party who relies upon such entries to support his claim against another. In Hira Lal v. Ram Rakha the High Court, while negativing a contention that it having been proved that the books of account were regularly kept in the ordinary course of business and that, therefore, all entries therein should ....