TaxTMI 
TaxTMI 
2024 (10) TMI 696
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.... together with the consent of the parties, passing this consolidated order, as the issues involved are interconnected having the same assessment year and of the assessee. 2.1 The grounds of appeal taken by the assessee in ITA No. 205/JP/2024 for A.Y 2015-16 are as under; "1. That the impugned notice issued u/s 153A dated 22.02.2017 is bad in law, void ab intio being without jurisdiction, the same therefore deserves to be quashed. Consequently, the impugned assessment order dated 18.10.2018 passed u/s 153A r.w.s 143(3) also deserves to be quashed. 2. The impugned addition made in the order u/s 153A r.w.s. 143(3) dated 18.12.2018 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be deleted. 3. Rs. 6,55,000/-: The Id. CIT(A) erred in law as well as on the facts of the case in confirming the additions made of Rs. 6,55,000/- being difference between ITR filed u/s 153A and ITR filed u/s 139 of the Act. The addition so made by the Id. AO and so confirmed, is totally contrary to the provisions of law and facts on the record and hence the same kindly be deleted in full. 4. Rs. 1,62,00,0....
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....im of the assessee that copies of agreements related to booking amount were furnished during assessment proceedings without appreciating the facts that assessee has not submitted agreements related to booking amount at the time of assessment proceedings as well as at the time of remand report proceedings. 3. Whether in facts and circumstances of the case, the CIT(A) is justified in applying the profit ratio on undisclosed amount without appreciating the facts that assessee has failed to explain nature and source of above amount with documentary evidences and therefore, whole undisclosed amount is required to be added as undisclosed income in the hands of the assessee. 4. The appellant craves leave to add, amend or withdraw any of the ground of appeal during the course of appellant proceeding." 3. The brief facts as culled out from the records is that a search & seizure operation under section 132(1) of the Income Tax Act, 1961 was carried out on 30.06.2016 at the various premises of Bajaj Group, Kota to which the assessee belongs. Several persons and premises covered u/s 132 of I.T. Act, 1961. Cash, jewellery and other documents were found and seized from so....
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.... B 72 R 72 V 72 In his explanation to the above-mentioned seized documents, Shri Vipin Kumar Lodha submitted that Rs. 4.50 Crore is total profit earned from Bajaj Enclave project. When questioned about the abbreviations used, it is submitted by Shri Surinder Pal Singh Sahni that AD & R is his own Benami shares, whereas B i.e. Bucchi- nick name of Shri Harvider Singh Kohli and V is Vipin Kumar Lodha. These four associates in their respective post search statement(s) have admitted that amount of Rs. 450.00 lacs as unaccounted profit from Bajaj Enclave project and have offered the same for taxation in their respective hands. During post search investigation statement dated 22.09.2016 of Shri Nawal Kishore Khandelwal was recorded. Wherein reply to Q.-8 of his statement dated 22.09.2016, he admitted that profit from Bajaj Enclave is Rs. 1,62,00,000/- which he will offer for taxation. While in assessment proceeding ld. AO noted that the assessee maintained two banks account, wherein a sum of Rs. 2,18,18,114/- were found credited in respect of which assessee could not offer any satisfactory evidence. He claimed in reply to Q.-7 that the booking amounts have been depos....
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..... However, no clarification is provided with reference to the reduction of income in return filed u/s 153A in comparison to the return filed u/s 139 of the Act. The facts of the case are considered. Any new claim in the return filed u/s 153A of the act is not acceptable as the Search Assessments are for the benefit of the revenue rather than assessee. The returns are filed uls 153A of the act are as a consequence of action taken under Section 132 of the Act on a assessee and thus can't be advantageous for the assessee and moreover the proceedings u/s 153A are analogous to proceedings under Section 147 of the Act to the extert that these are proceedings for the benefit of Revenue and not that of the assessee. The assessee cannot be permitted, to convert these reassessment proceedings es his appeal or revision in disguise and seek relief in respect of items earlier not claimed in the original return of income. Reliance is placed on the the judgment rendered by the Hon'ble Bombay High Court in K. Sudhakar S. Shanbhag Vs ITO [2000] 161 CTR (Bom) 391: [2000] 241 1TR 865 (Bom). This decision was rendered by taking notice of the principle laid by the Hon'ble apex Cour....
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...." It has been observed by the Hon'ble Supreme Court in K.P. Varghese v. ITO [1981] 131 ITR 597/7 Taxman 13 as under- "it is well recognized rule of construction that a statutory provision must be so construed, if possible that absurdity and mischief may be avoided." If a assessee is allowed to claim a allowance, deduction etc. u/s 153A not claimed earlier than it would mean that even in cases where the appeal arising out of the completed assessment has been decided by the CIT(A), ITAT and the High Court, on a notice issued under Section 153A of the Act, the AO would have power to undo what has been concluded up to the High Court. Any interpretation which leads to such conclusion has to be repelled and/or avoided as held by the Hon'ble Supreme Court in the case of K.P. Varghese (supra). In the following decisions it was held that the search proceedings under section 153A are for the benefit of the revenue and therefore any fresh claim is not allowable u/s153A of the act:- 1. Jai Steel (India), Vs Jodhpur Assistant Commissioner of Income-tax [2013] 36 taxmann.com 523 (Rajasthan) 2. Charchit Agarwal Vs Assistant Commissione....
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....enditure. It means, he has no objection of addition of Rs. 1,62,00,000/- as undisclosed receipts from "Bajaj Enclave Scheme." The AO further noted that the assessee has not offered above undisclosed income of Rs. 1,62,00,000/- in returned filed u/s 153A of the Act. Shri Naval Kishore Khandelal stated in his statement that he had already disclosed his income for A.Y. 2015-16 at Rs. 7,57,955/- (as per his ITR) whereas he offered for taxation a sum of Rs. 1,54,42,045/- (i.e. 1,62,00,000- 7,57,955/-) only. In this connection it is hereby observed that the returned income of Rs. 7,57,955/- is from his regular business of provisional store and the un-accounted income of Rs. 1,62,00,000/- cannot be reduced by his already disclosed income from other business activity in regular course. As per AO Shri Vipin Kumar Lodha has offered income of Rs. 72,00,000/- before the Hon'ble settlement Commission. Likewise Shri Harvinder Singh has also paid taxes on undisclosed income of Rs. 72,00,000/- in return filed u/s 153A of the Act. Shri Surendra Pal Singh Sahni has also offered undisclosed income of Rs. 1,44,00,000/- in his return filed u/s 153A of the Act. They all were partne....
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....ant was not present at the time of search at his residence. However, the assessee later on voluntarily offered undisclosed income of Rs. 1,62,00,000/- in his statement recorded during the course of post search proceedings considering the incriminating document and statement of other partners of the project. While recording the statement of Shri Nawal Kishore himself admitted vide reply to Q. No. 9 of his statement dated 22.09.2016 that he had surrendered a sum of Rs. 162.00 Lacs as his undisclosed income for the A.Y. 2015-16. In these circumstances, it can be said that there were corroborative evidences in the form of statement of other partners of the project, the incriminating document seized during the search etc. in addition to the statement recorded of the assessee. The issue of retraction of statement is being discussed separately. 6.5.3 Contradictory stand of the Appellant without any cogent evidence The appellant argued that he was under a complete dark as to what sales consideration of a particular plot stood decided and how much amount have been received by them in cash (over and above the declared sales consideration), although the assessee was ensured ....
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....it might have resulted in further addition in the hands of the assessee as the assessee might have earned further income by utilising this money. However, no such issue is raised by the AO. Therefore, the issue raised by the assessee is not relevant for the taxation of profit which is already earned. The appellant argued that human probabilities support the case. Further the human probability and the surrounding circumstances plays an important role in deciding tax matters. The lack of requisite knowledge and experience of the Real Estate Business by the assessee, which in fact is glaringly evident from the plain reading of his statement and not disputed by the AO, not finding any undisclosed asset or undisclosed expenditure only suggests and the probability pre-ponders in his favor of the assessee that he was not given/did not receive the 36% share out of the Rs 4.50 Cr. As discussed above, the assessee accepted earning of profit, the evidence required for making addition is sufficient with the AO. Now, coming to the issue raised by the appellant, it is in the exclusive knowledge of the assessee that how he utilised the profit earned. The assessee has not disclos....
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....idered as real. Apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities. The Chairman of the Settlement Commission, in his dissenting opinion, had laid emphasis on the fact that the appellant had produced evidence in support of the credits in the form of certificates from the racing clubs giving particulars of the crossed cheques for payment of the amounts for winning of jackpots, etc. The Chairman had rejected the contention regarding lack of expertise in respect of the appellant and had observed that the expertise was the last thing that was necessary for a game of chance and anybody had to go and call for five numbers in counter and obtain a jackpot ticket and that books containing information are available which are quite cheap. This was a superficial approach to the problem. The matter had to be considered in the light of human probabilities. The Chairman of the Settlement Commission had emphasised that the appellant did posse....
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....uld gather a direct evidence of actual transaction in cash undertaken by the appellant along with other partners. An inference about cash transaction is to be drawn on the basis of the circumstances available on the record. The AO has clearly brought out these facts in the assessment order. The appellant has failed to prove that the transaction as per the sworn in statement are not true with evidence. In the absence of not furnishing any credible evidence in support of the argument the arguments are not found to be acceptable. In view of the above discussion, the argument of the appellant are not found to be acceptable. 6.5.4 The AO has taxed real income and not hypothetical income It is argued that there was some taxable income in the hands of an assessee, always lay upon the revenue. In the instant case there is absolutely no evidence at all successfully brought on record beyond doubts that income really accrued and the assessee received the alleged profit of Rs. 1.62 crore. The appellant has mixed up two events in this argument, the accrual of Income and receipt of Income. The assessee accepted earning of profit, the evidence required for maki....
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....the substance of the matter is the income. If income does not result at all, there cannot be a tax, even though in book-keeping, an entry is made about a "hypothetical income", which does not materialize. Where income has, in fact, been received and is subsequently given up in such circumstances that it remains the income of the recipient, even though given up, the tax may be payable. Where, however, the income can be said not to have resulted at all, there is obviously neither accrual nor receipt of income, even though an entry to that effect might, in certain circumstances, have been made in the books of account. This was exactly what had happened in instant case. Here the agreements within the previous year replaced the earlier agreements, and altered the rate in such a way as to make the income different from what had been entered in the books of account. A mere book-keeping entry cannot be income, unless income has actually resulted, and in the instant case, by the change of the terms the income which accrued and was received consisted of the lesser amounts and not the larger. This was not a gift by the assessee firm to the managed companies. The reduction was a part of the ag....
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....submitted that the documents found & seized (i.e. paper number 17, 22 & 23 of Exhibit- 41 of Party A-1) from the residence of Sh. Surinder Pal Singh Sahni& Pg. No.62 of Exhibit-3 of Party A-4 from the residence of Shri Vipin Kumar Lodha for which they explained that Rs. 4.50 Cr. was total profit earned from Bajaj Enclave Project. Therefore, the AO presumed that the assessee might have earned un-disclosed income of Rs. 1.62 Cr. The AO also took support of income offered by Shri Vipin Kumar Lodha of Rs. 72 Lakh before Hon'ble Settlement Commission and Income offered of Rs. 72 Lakh by Shri Harvinder Singh and Rs. 1.44 Cr by Shri Surendra Pal Sahni for taxation u/s 153A. It is argued that the impugned seized documents did not belong to the assessee and contained rough jotting of other three associates, even though they admitted, the assessee was neither answerable nor legally expected to explain. However, the AO failed to rebut such contention though raised during the assessment proceedings. He even failed to bring iota of evidence/corroborative documents which suggest that the assessee earned over and above the agreed sale price. It is argued that any entry made/....
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....arch proceedings simultaneously. The other partners place was also his place of business. It is admitted fact that the business was being run jointly. Therefore, the incriminating document found from the possession of other partners place was virtually from the business place of the assessee. If the arguments of the appellant are accepted than partners of business will keep the unaccounted transactions at one place and if caught the other partners will say it is not found from our possession and only the person who has been caught will pay the taxes. This is not an acceptable situation. The partners in business are partners for profit and loss. The tax liability also has to be shared together by all the partners in the ratio which was decided in the beginning of partnership. The appellant accepted the profit so earned in the statement recorded after search. However, the income so admitted was not offered for taxation in the return filed u/s 153A of the Income Tax act. It is important to note that one of the partners has accepted tax liability before the settlement commission. In these circumstances, it is held that there was incriminating material found from the business partner wh....
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....dly, there was no evidence/incriminating material found and seized from the premises (control and possession) of the assessee which could show that the assessee earned undisclosed income /profit from Bajaj Enclave Project It is argued that mere admissions is not conclusive proof unless it is corroborated with tangible material and evidence. No doubt, the assessee in answer to Q-8 & 9 stated the undisclosed income and offered for taxation. As already discussed, it could be said that all the persons who were keeping the details related to the accounted or unaccounted business were virtually having business premises of the assessee jointly. This is not a case, that the appellant was an independent party to other persons involved in the search. Therefore, if the incriminating material was found from one of the partners, the same is incriminating material for all the persons who were involved in the business and also covered during the search proceedings simultaneously. Therefore, the claim of the appellant is incorrect that no incriminating material was found from the premises (control and possession) of the assessee. The other partners' place was also his place o....
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....egra. In the decision of the Supreme Court in the case of Banalal Jat Constructions (P.) Ltd. v. Asstt. CIT [2019] 106 taxmann.com 128/264 Taxman 5, after referring to the judgment of Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 0018, the legal position in relation to a statement under section 132(4) of the Income-tax Act, 1961 was set out as under: a. An admission is an extremely important piece of evidence though it is not conclusive. b. A statement made voluntarily by the appellant could form the basis of assessment. c. The mere fact that the appellant retracted the statement could not make the statement unacceptable. d. The burden lay on the appellant to show that the admission made by him in the statement earlier at the time of survey was wrong. Such retraction, however, should be supported by a strong evidence stating that the earlier statement was recorded under duress and coercion, and this has to have certain definite evidence to come to the conclusion that indicating that there was an element of compulsion for appellant to make such statement. e. However, a bald assertion to this effect at much belated st....
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....appellant has not kept the regular books of accounts as required as per section 44AA of the Income Tax Act as in the return of Income the income was offered u/s 44AD of the Income Tax Act. Therefore on the facts of the appellant the decision relied upon by the appellant is not found to be applicable. 6.5.9 The Reliance Placed by the Appellant on decisions without Explaining Applicability on the facts of the case While going through the reply furnished by the appellant, it is noticed that decisions of various Courts and ITAT have been relied upon without explaining as to how these decisions are applicable on the facts and circumstances of the case. These decisions are ignored while passing the order. On the issue of placing reliance on a particular decision, Hon'ble High Court Of Gujarat in the case of Director of Income-tax (Exemption) V. Shia Dawoodi Bohra Jamat [2012] 25 taxmann.com 90 (Gujarat) observed as under. "11. It is settled legal position, that the decisions of the courts are not to be applied in the abstract, but are to be applied to the facts of the case. Without recording any findings of fact, one fails to understand as to how the Tribun....
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....admission did not act upon it and on the contrary while filling ROI in response u/s 153A on dated 07.04.2017, declared total income at Rs. 85,320/-only not adhering to his confession, the retraction is deemed to be retraction. This is not an acceptable explanation. The statement recorded under oath is an important piece of evidence which is supported by corroborative evidences like seized documents related to unaccounted profit earned from business by the assessee and also duly corroborated by the statement of other partners in the business. In these facts, the argument of the appellant are not found to be acceptable. It is stated that the alleged admission was not made voluntarily in as much as the assessee was highly tensed and remaining under mental trauma developed hyper tension. Not having faced such a situation, he was unable to take any decision, which is a common phenomenon in every survey and search. It has been held that in the cases of survey and search, the possibility of tension and surcharge atmosphere can't be ruled out in ACIT Vs. Jagdish NaraianRatan Kumar 22 Tax World 573 (JP), since approved by Hon'ble Rajasthan High Court. The so called....
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....during search Hon'ble High Court Of Madras in the case of Thiru. A.J. Ramesh Kumar v. Deputy Commissioner of Income-tax [2022] 139 taxmann.com 190 (Madras) noted as under - "8. Pertinently, the Triburial after recording the explanations, affidavit and other documents filed by the appellant in support of his case, found that the same were not acceptable as the retraction was in the form of mere assertion and also belated. It was further pointed out by the Tibunal that there was no material evidence let in by the appellant to retract the statementmade under section 132(4) and the affidavits of itis mother-in-law wers unreliable as they were interested and self-serving testimonies. We are of the view that any retraction by the appellant should be made at the earliest point of time with sufficient, credible and corroborative evidence t support his claim and not by mere assertion as done in this case. Therefore, we do not find any reason to differ with the findings s so rendered by the Tribunal." In this case also, affidavit filled by the appellant in support of his retraction is perused and the same is not found to be acceptable as the retraction was in the form o....
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.... "Section 132, read with section 69, of the Income-tax Act, 1961-Search and seizure-Block periods 1-4-1985 to 31-3-1995 and 1-4-1995 to 12-12-1995- Whether section 132(4) enables an authorized officer to examine a person on oath and such a swom statement made under section 132(4), thus can be used as an evidence under Act-Held, yes - A search operation was carried out at premises of assessee whereby cash, jewellery, books of account and certain documents were found and seized Assessee on same day had given a statement under section 132(4) whereunder admissions with regard to unaccounted income of Rs. 6.20 lakhs were made - Said unaccounted income consisted of marriage expenditure, unexplained household expenditure, etc. Assessing Officer, made additions in respect of unaccounted income of Rs. 6.20 lakhs admitted under section 132(4)- However, after lapse of about nine months from date of admission, assessee through an affidavit sought to retract from statement made under section 132(4) on ground that (a) when there was no evidence or incriminating material discovered at time of search no addition could have been made merely on basis of statement under section 132(4) and (b....
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....ction Hon'ble High Court Of Kerala in the case of Commissioner of Income-tax, Kozhikode v. O. Abdul Razak [2012] 20 taxmann.com 48 (Ker.) held as under - "Section 132 of the Income-tax Act, 1961 Search and seizure Block period 1988-89 to 1998-99 Whether any statement recorded under section 132(4), statutorily deemed to have evidentiary value, cannot be retracted at mere will of party - Held, yes Whether a statement made under oath deemed and permitted to be used in evidence, by express statutory provision, has to be taken as true unless there is contra evidence to dispel such assumption Held, yes Pursuant to a search conducted at residential premises of assessee. Assessing Officer computed undisclosed income on basis of clear admission made by assessee in sworn statement recorded under section 132(4) First addition was with regard to actual money paid by assessee for purchase of four properties Assessee had voluntarily submitted before ITO that amount shown in document with regard to purchase of four properties were not actual amounts and he had paid more than that shown in documents - Second addition was with respect to personal expenses - Last additions was of amount....
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....h law of estoppels applies in this case. It is not the case that the admission made by assessee was incorrect or there is mistake or the admission was made on wrong facts. In fact, when there is a clear admission, voluntarily made, by the assessee, that would constitute a good piece of evidence. The appellant has relied upon the decision in case of (2013) Bharat Kumar Azad 50Tax World 33 (JP) to argue that a statement recorded under this section is not conclusive proof. In this regard it is noted that in that case, it is recorded that no incriminating evidence found during search. However, in this case, there is incriminating material found and there are corroborative material in the form of seized documents and also the statement of other partners where such unaccounted profit is admitted. Therefore, the decision is not found to be applicable on the facts of the case. In view of the above discussion, the argument of the appellant are found to be without any merit and the decision of the AO is found to be justified. The addition made by the AO is upheld. This ground of appeal is treated as dismissed. Addition of Rs. 3,06,00,000/- claim o....
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....f bogus development expenses. Hence, unaccounted income of Rs. 3,06,00,000/- is added in total income of the assessee. On going through the assessment order, it appears that the intention of the AO was to treat this amount of Rs. 8.50 Cr. as additional income in addition to what have been surrendered during the search or after search proceedings. Per contra the appellant argued that he never incurred any expenditure on account of Development Expenses. The assessee only purchased the land and associated with these three people for developing, plotting and marketing the land. All the development expenditure was born by Sh. Surinder Pal Singh Sahni, Shri Vipin Kumar Lodha and Shri Harvinder Singh. The appellant claimed that no such expenditure was incurred. The claim of the AO is same that in fact no such expenditure was incurred. The appellant as well as other partners have accepted the gross receipts from the project on the basis of seized document during search and post search enquiry. Therefore, the appellant has accepted the gross receipts from the project in the statement under oath which is supported by corroborative evidences. In these circumstances,....
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.... posts search statements and their replies have been admitted to incurred of Rs. 850.00 lakhs as development expenses", but at the same time, he doesn't believe the quantum of the expenditure incurred for the suspicion he entertained. Whereas, he could comfortably make addition Rs. 1.62 crore (out of the profit of Rs. 4.50 crore) merely on the basis of the admission made by the other 3 persons and the appellant but at the same time, here when the other 3 parties have again admitted to have incurred AO comfortably ignored the same because it suited him best. The statement recorded is based based on the interpretation made by the partners at the time of search and post search enquiries. However, the interpretation is required to be corrected considering the facts of the case that one of the partner Shri Vipin Kumar Lodha has admitted in settlement petition that no such expenditure of Rs. 850 Lacs is incurred and therefore, the corresponding share of the applicant of this amount i.e. Rs. 136 Lakhs (850 *16%) is offered as additional income in AY 2015-16. Therefore, the addition of Rs. 1.62 Crores is made on the basis of admission made by the partners and this addition is ....
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....ed credit of Rs. 2,18,18,114/- is added in total income of the assessee under section 68 of the Act. The appellant argued that source of Bank Deposits fully explained. The subjected deposits were sourced from various cash receipts on account of sale proceeds of various plots situated at Bajaj Enclave and were duly shown in the regularly maintained day to day cash book and also from the receipts in the bank accounts on different occasions during the course the business. These facts are also clearly evident from the copies of the Cash Book and the copies of the bank statements and bank ledger accounts as also from the block wise list of sales proceeds and the respective sales ledger accounts It is argued that all such agreements were already produced vide letter dated 05.11.2018 to the AO It is argued that the AO on one hand added Rs 1.62 Cr. as un-disclosed 36% and has made another addition on account of unexplained credit in the two bank accounts when the assessee explained that the same were deposited out of sale proceeds, which are part of the same transaction. Thus, the addition made by the AO tantamount to be a double addition of same income in the ha....
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....found in the search proceedings are not disclosed even after search. The transactions which have been credited in bank account are only entered in the cash book prepared after search. Therefore, the claim of the appellant that these amounts are part of Rs. 1.62 Cr. Added by the AO is not found to be acceptable in the absence of supporting documents. It is held that the appellant has only recorded the transactions in the cash book and revised computation which are credited in the bank account. The transactions which are not routed through bank account are not included in the cash book or revised computation. Therefore, argument of the appellant are not found to be acceptable in this regard. The appellant furnished a calculation of profit from the receipts which are shown in cash book. The profit computed by the appellant was Rs. 28,39,000/- in his revised computation filed during assessment proceedings. The AO did not consider the calculation because the agreements were not furnished. However, the appellant furnished documentary evidence that the copy of the agreements were furnished. The AO has not considered the computation made by the appellant. The appellant stated that....
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....ee in ITA no. 205/JPR/2024. Ld. AR of the assessee appearing on behalf of the assessee in support of the grounds so raised filed a detailed written submission which reads as follows: "Facts: In this case, despite admitted and undisputed facts that some material was found and seized during the course of the searches carried out at Shri Surender Pal Singh Sahni, Shri Harvinder Singh Kohli and Shri Vipin Kumar Lodha and based on the information emanating their firm, the additions have been. Hence, specific grounds were taken before the CIT(A), but did not find his favor, hence, this ground. There apart, this ground also includes the illegality committed by the authorities below while making the additions (e.g. making addition in absence of incriminating material during the course of search at the place of the assessee- following Abhisar Builders (Infra), recording of statement u/s131(1A) etc.), which has rendered the entire proceedings a nullity being without jurisdiction. Hence this Ground. Submissions A. Proceedings u/s 153A without jurisdiction (maybe u/s 153C): 1. The following submission were made before the CIT(A) on this aspect: ....
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....(A) proceeded on the height of imagination without any evidence and even without any support of the law. Firstly, bare reading of S.153C which is quite plain and unambiguous, doesn't admit of any other interpretation and do not contemplate any such situation. The books of accounts/any other documents at the place of finding searched person (SP) (irrespective that he may be a partner or a director),If the information contained therein related to or such document pertained to assessee then S. 153C alone which being a specific and special provision of law to meet with such situation, could be invoked but it is not any or every provision. The Lawmakers have purportedly enacted different provisions of law to meet with different situations like normal assessment u/s 143, reassessment u/s 147 and search assessment u/s 153A to 153D and such provision cannot be used interchangeably to suit one's own requirement. Any interpretation contrary to this, shall result in chaos and undesired anarchy in the working of the department. Further, there is no evidence of there been a partnership between the assessee and other three persons based on some return agreement/ partnership deed. There was no sp....
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....rse of search relates to other person than the searched person, can be considered or not while making assessment under s. 153A of the Act. Like in the present appeals, simultaneous searches were carried out at the premises of the other three persons, Sahini, Kohli and Lodha, however the Tribunal has specifically held that the material recovered from the premises of other persons cannot be used in the hands of the searched person (here the assessee) and for that purpose assessment could be made only under s. 153C or 147. It held as under: "15. Thus, when during the course of search of an assessee any books, document or money, bullion, jewellery etc. is found which relates to a person other than the person searched, then the AO of the person searched shall hand over such books of account, documents, or valuables to the AO of such other person and thereafter, the AO of such other person can proceed against such other person. However, in the case under appeal before us, admittedly, s. 153C is not invoked in the case of the assessee and the assessment is framed under s. 153A. We, respectfully following the above decisions of Hon'ble jurisdictional High Court, hold that duri....
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....ar as the case of SM Ltd. is concerned, the additions are based on the basis of certain information gathered during the investigation carried out by Investigation Wing in the case of an unconnected third person. These materials could not be considered in the assessment proceedings under s. 153A. They ought to be considered under some other provisions viz. s. 153C or some other sections; but not under this section. (Paras 37 & 38) Additions made by the AO in the case of R in different assessment years are not sustainable because they are not based on the seized material found during the course of search carried out at his premises. Similarly, the additions made in the case of SM Ltd. are also not sustainable. As far as addition in the case of D in the asst. yr. 2015-16, amounting to Rs. 44,48,456 is concerned, it deserves to be confirmed because the material to this effect was found during the course of search carried out at the premises of the assessee. (Para 39)" Accordingly, the initiation of the proceedings and the issuance of notice based thereon u/s 153A is complete nullity, void ab initio and being without jurisdiction and therefore deserves to be quashed. C....
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....IT(A) on this legal issue." 3.6 In the case of Tirupati Construction Company Vs ITO DB CWP No. 17651/2022, it has been held: "The Rajasthan High Court quashed the reassessment orders issued under Section 148A(d), underscoring the importance of adhering to the appropriate procedural routes as stipulated in the Income Tax Act, 1961. The judgment reinforces that the reopening of assessments based on search materials must follow the provisions of Section 153C, ensuring that procedural safeguards and statutory limitations are respected." 3.7 In the case of Shyam Sunder Khandelwal & Ors. Vs. Assistant Commissioner of Income Tax (2024) 338 CTR (Raj) 129, it has been held that: "Reassessment-Validity-Applicability of ss. 147 and 148 vis-a-vis ss. 153A and 153C-Special procedure is prescribed under s. 153A to s. 153D for assessment in cases of search and requisition-Provisions of s. 153A to s. 153D have prevalence over the regular provisions for assessment or reassessment under ss. 143 and 147/148-Language of Expln. 2 to new s. 148 is akin to s. 153A and s. 153C-Corollary being that after seizing of operational period of s. 153A to 153D, the cases being d....
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....criminating materials whatsoever have been found during search. It does not matter that the original assessment was not completed under s. 143(3) for that purpose. In the present cases, with there being absolutely no incriminating materials found or seized at the time of search, there was no justification for the initiation of assessment proceedings under s. 153A. On this ground therefore the writ petitions ought to succeed.- CIT vs. Kabul Chawla (2015) 281 CTR (Del) 45 : (2015) 126 DTR (Del) 130 : (2016) 380 ITR 573 (Del), CIT vs. Chetan Das Lachman Das (2012) 254 CTR (Del) 392 : (2012) 77 DTR (Del) 25 and Jai Steel (India) vs. Asstt. CIT (2013) 259 CTR (Raj) 281 : (2013) 88 DTR (Raj) 1 concurred with." C. Proceedings and notice u/s 153A without jurisdiction being issued to a legally wrong person: 1. A bare perusal u/s 153A provide that in a case where search is initiated u/s 132, the AO shall issue notice to such person requiring to file a ROI and then he will complete the assessment accordingly. In the present case no doubt, search was initiated in the case of assessee as also in the case of other three persons. However, the lower authorities, particularly the ....
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....(i) to (v) of that subsection, has reason to suspect that any income has been concealed, or is likely to be concealed, by any person or class of persons, within his jurisdiction, then, for the purposes of making any enquiry or investigation relating thereto, it shall be competent for him to exercise the powers conferred under sub-section (1) on the income-tax authorities referred to in that sub-section, notwithstanding that no proceedings with respect to such person or class of persons are pending before him or any other income-tax authority." From the above, three important phrases emerges, as under: a) Before he takes action under clauses (i) to (v) of S.132; b) Has reason to suspect that income has been concealed; and c) Notwithstanding that no proceedings with respect to such person or class of persons are pending. From a plain reading of the provision and the explanatory memorandum, the legislative intent and the purpose is to enables the investigation wing to exercise the powers before search and seizure. However, in this case even after conclusion of the search on dated 01.07.2016, the authorized officer recorded the statement of ....
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....because the very purpose of S.131(1A) stands lost. A- GOA-3: Impugned addition of Rs. 6,55,000/- being difference between ITR filed u/s 153A and ITR filed u/s 139 of the Act: [(AO Pg-2 ,Pr-3)/(CIT(A) Pg. 9-11 Pr. 5.8)] Facts: During the assessment proceedings u/s 153A, the AO noted that the assessee filed his return of income on 07.04.2017, declaring total income of Rs. 85,320/- in response to notice u/s 153A (PB 3-5). Whereas the assessee declared total income of Rs. 7,40,320/- in the ROI filed earlier u/s 139 of the Act on 31.03.2016 (PB 1-2). Thus, there is a difference of income of Rs. 6,55,000/- between the both ROI`s i.e. ROI filed u/s 153A and 139 of the Act. The AO stated that S.153A is not for reducing income already declared therefore, he added Rs. 6,55,000/- being difference between ITR filed u/s 153A and ITR filed u/s 139 of the Act to the total income of the assessee. In the first appeal, the ld. CIT(A) also confirmed the addition, holding as under: "5.8....The facts of the case are considered. Any new claim in the return filed u/s 153A of the act is not acceptable as the Search Assessments are for the benefit of the revenue....
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....t which apply to ROI filed in regular course u/s 139(1), would also continue to apply in case of ROI filed u/s153A. Therefore, the AO is not justified in making addition of difference of Rs. 6,55,000/- between the both ROI`s i.e. ROI filed u/s 153A and 139 of the I.T. Act, 1961. 3. Otherwise, the AO failed to bring any evidence showing undisclosed income of Rs. 6.55 Lacs. Therefore, the impugned addition of difference so made, kindly be deleted in full." 2. Further in response to Remand Report of AO following Additional Submission-I / Rejoinder was submitted on 23.01.2024 during the appellate proceedings vide his letter dated 20.01.2024 and same is reproduced at CIT(A) order, at Pg.8 Pr.5.6, the same are reproduced hereunder: "The ld. AO erred in law as well as on the facts of the case in making additions of Rs. 6,55,000/- being difference between ITR filed u/s 153A and ITR filed u/s 139 of the Act. The addition so made by the ld. AO, is totally contrary to the provisions of law and facts on the record and hence the same kindly be deleted in full." 3. Supporting Case laws: 3.1 CIT vs Ms Jagriti Aggarwal (2011) 339 ITR 610 (Punja....
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.... in full. A-GOA-4: Impugned addition of Rs. 1,62,00,000/- on account of the alleged undisclosed income from Bajaj Enclave Scheme. [AO Pg 2-17 Pr 5-7 (Finding at Pg-17)/ CIT(A) Pg. 29 Pr. 6.5] Facts: During the assessment proceedings, the assessee was show caused vide notice dated 05.10.2018 as to why the amount of Rs. 1.62 Cr. should not be added as his un-disclosed income. As per various documents found and seized during the course of search conducted on 30.06.2016 at the premises of different persons which also included the seized documents at Pg-17,22 & 23 of Exhibit-41 of Party A-1 (PB 8-10) from the residence of one Sh. Surinder Pal Singh Sahni & Pg. No. 62 of Exhibit-3 of party A-4 (PB 11-23) from the residence of Sh. Vipin Kumar Lodha allegedly showing that Rs. 4.50 Cr. were earned by launching Bajaj Enclave Scheme by four persons with their specific sharing as follows: S N. Name of associates Share Holding Share of Unaccounted profit (Rs.) 1. Surinder Pal Singh Sahni 32% 1.44 Crore 2. Nawal Kishore Khandelwal (assessee) 36% 1.62 Crore 3. Harvinder Singh Kohli 16% 0.72 Crore 4. Vipin Kumar Lodha....
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....es during the search. In fact, these amounts were also appearing in the documents found and seized from the third party premises. The AO however, was not convinced with the explanation given by the assessee. He observed that the assessee has not included undisclosed income of Rs. 1.62 Crore in return filed u/s 153A, which was appearing in seized paper number 17, 22 & 23 of Exhibit- 41 of Party A-1 from the residence of Sh. Surinder Pal Singh Sahni. He further alleged that the assessee himself voluntarily offered undisclosed income of Rs. 1.62 cr. Further, same facts were confirmed in his submission dated 24.10.2018. Finally, he added Rs. 1.62 Cr. as undisclosed receipts from "Bajaj Enclave Scheme". In the first appeal, the ld. CIT(A) also confirmed the addition, holding as under: "6.5 The AO further noted that the assessee has not offered above undisclosed income of Rs. 1,62,00,000/- in returned filed u/s 153A of the Act. Shri Naval Kishore Khandelal stated in his statement that he had already disclosed his income for A.Y. 2015-16 at Rs. 7,57,955/- (as per his ITR) whereas he offered for taxation a sum of Rs. 1,54,42,045/- (i.e. 1,62,00,000- 7,57,955/-) o....
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.... Under this background only, at the time of recording statement, the assessee was strongly advised by these people to admit such a huge amount in his statement though the assessee never earned over and above the agreed sale proceeds as per sale agreements. The share of actual profit earned by the assessee from real estate activity, is only Rs. 28,39,000/- [i.e. Sale Proceeds Rs. 2,06,40,000/- Less Purchase/Registry/Misc Expenses of Rs. 1,78,01,000/-]. 2.2 It is not the case of the AO that these 3 persons in their respective statements asserted that the so called 36% share of profit was duly paid by them in cash or otherwise to the assessee. Interestingly, even the concerned officer did not raise a question, which had a direct bearing over the controversy. Once the other 3 persons do not claim having actually shared the profit part with the assessee, no income could have been taxed in the hands of the assessee. Even assuming they transferred the profit even then, there is absolutely no evidence brought in record as to when and in what manner such profit was paid to the assessee. Since the onus is on the Revenue, hence it is bound to prove the receipt of income. ....
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.... the arrangement in as much as the further profit, if earned by their efforts, as they themselves agreed, he was also going to gain out of that and if not, the assessee was already doing his business and honestly recording all the transactions of incomings and outgoings." 2.4 Human probabilities support the case: Further the human probability and the surrounding circumstances plays an important role in deciding tax matters. The lack of requisite knowledge and experience of the Real Estate Business by the assessee, which in fact is glaringly evident from the plain reading of his statement and not disputed by the AO, not finding any undisclosed asset or undisclosed expenditure only suggests and the probability preponders in his favor of the assessee that he was not given/did not receive the 36% share out of the Rs 4.50 Cr. In the case of Sumati Dayal vs CIT [1995] 214 ITR 801 (SC), it was held " Assessee had shown certain amounts in capital accounts in books claiming same to be winnings from horse races - She filed sworn statement to effect that she started going for races only towards end of year 1969 and had no experience in races but she purchased jackpot tickets on combi....
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....l document, equally enforceable in the eyes of law), has established that what was apparent was not real and onus was thus, discharged. But the AO, in turn, failed to prove the onus shifted to him (except taking shelter of statement of other partners which firstly, were never confronted to the assessee nor an opportunity for cross examination was ever given to him). Moreover, the court also held that the taxing authorities, were entitled to look into the surrounding circumstances to find out the reality and that would hold good when it comes to his duties and responsibilities. Once they can look into the surrounding circumstances to find the case to their favour, they must investigate to bring the truth to the surface whatever way it goes. The various factual assertions being the lack of requisite knowledge and expertise of the assessee in the real estate business, the fact of finding no evidence of the assessee earning any profit nor getting any single penny on account of the said profit (if assuming it was so), and the fact of finding no asset at all, nor any unexplained expenditure, despite there being search, were the surrounding circumstances which the ld. CIT (A) con....
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.... the income. If income does not result at all, there cannot be a tax, even though in book-keeping, an entry is made about a "hypothetical income", which does not materialize. Where income has, in fact, been received and is subsequently given up in such circumstances that it remains the income of the recipient, even though given up, the tax may be payable. Where, however, the income can be said not to have resulted at all, there is obviously neither accrual nor receipt of income, even though an entry to that effect might, in certain circumstances, have been made in the books of account. This was exactly what had happened in instant case. Here the agreements within the previous year replaced the earlier agreements, and altered the rate in such a way as to make the income different from what had been entered in the books of account. A mere book-keeping entry cannot be income, unless income has actually resulted, and in the instant case, by the change of the terms the income which accrued and was received consisted of the lesser amounts and not the larger. This was not a gift by the assessee firm to the managed companies. The reduction was a part of the agreement entered into by the as....
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....stead he was assured of being given share in their profit. Therefore, it was a win-win situation for him. Later on, he came to know that for this reason or the reasons best known to them, they kept me completely out of their affairs. Further, neither they charged nor they paid me anything. v) As a matter of fact, during the course of search, there was no iota of evidence showing even remotely that assessee has earned such a huge undisclosed income running into crores (what to talk of establishing the same). No undisclosed asset, undisclosed investment or undisclosed expenditure is/are alleged to have been found or noticed during the course of search at assessee's place. There is no document found in assessee's handwriting or showing his involvement or any connection, even directly or remotely. No doubt there is a mention of assessee's name on some seized documents however, again it is in the handwriting of one of those three persons. Even the statement given by them cannot bind the assessee. Even assuming that all or any one of the three persons agreed earning undisclosed income, it is in their wisdom to suit their own purposes, but the assessee cannot be legal....
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....er to a matter into which the Court has to inquire but may even bind the parties as per the S. 34 of the Indian Evidence Act, 1872. In the instant case the assessee has been maintaining regular books of accounts. Copies of the cashbook and the relevant ledger account are available in the Paper Book. Mere fact that applicant opted for S. 44AD does not reduces the evidentiary value. The actual profit earned by the assessee from real estate activity, based on the regularly maintained books of accounts, was/is only Rs. 28,39,000/- and must have been accepted. The CIT(A) though rejected vide para 6.5.5.pg 36 but did not appreciate that even after opting for S. 44AD, the accounts when undisputedly maintained, couldn't be ignored. 3.4 The CIT(A) did not properly appreciate the contention raised that there was neither any accrual nor any receipt of rupees 1.62 crore, by the assessee taking help of Shoorji Vallabhdas & Co. (supra). Undisputedly, this fact of non-receipt of this profit could not be established by the A.O. beyond reasonable doubt. In that sense, it was nothing but a hypothetical income merely based on the admissions made by other three persons (to suit their own moti....
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.... In Satinder Kumar (HUF) v. CIT [1977] 106 ITR 64 (SC) It was held that it is true that an admission made by an assessee constitutes a relevant piece of evidence but if the assessee contends that in making the admission he had proceeded on a mistaken understanding or on misconception of facts or on untrue facts, such an admission cannot be relied upon without first considering the aforesaid contention. 4.2 Admission retracted/ Not acted upon: 4.2.1 The very statement of the assessee so heavily relied upon by the AO, was otherwise not a good and reliable evidence, the moment it stood retracted. Undisputedly, the assessee after making admission did not act upon it and on the contrary while filling ROI in response u/s 153A on dated 07.04.2017, declared total income at Rs. 85,320/-only (PB 3-5), not adhering to his confession and thus, duly retracted the surrendered already made. Admittedly, there is no mode prescribed for retraction and even non-inclusion of the income in ROI with or without suitable note also amounts to a valid retraction. 4.2.2 In case of (2013) Bharat Kumar Azad 50 Tax World 33 (JP), it was held: "15).......After treadin....
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....ing search. Moreover, we would like to discuss that the admission/surrender has to be treated as retracted through Note appended with computation of return of income filed on 31.07.2008 itself which reveals the intention of the assessee. To be abundantly cautious, the assessee has appended this Note that income disclosed in the statements recorded during search conducted on 16th and 17th July 2008 at the residence and office premises of the assessee and family members which is further subject to the obtaining of copies of statements recorded during search and the same were not available on that date when the assessee filed his regular return u/s 139 of the Act, the assessee has offered lumpsum income for taxation out of the total disclosure made in the statements as a whole during search. This disclosure has been further subjected to revision after obtaining copies of the statements and other relevant documents. After obtaining copies of all the relevant documents, the assessee prepared formal affidavit which was filed before the A.O. So, the date of retraction can be safely taken as 31.7.2008 which is after few days of search. Thus the retraction. of the admission was made at the ....
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....oborative evidence so as to substantiate the allegation of undisclosed income, manifestly, the view taken by the I.T.A.T. in the impugned judgment that the department failed to provide cogent, tangible and satisfactory evidence regarding the additional undisclosed income of the assessee, is absolutely justified and the impugned judgment cannot be termed to be illegal or perverse by any stretch of imagination warranting interference therein in exercise of the appellate jurisdiction of this Court. We are duly satisfied that no substantial question of law is involved in the matter so as to question the legality or validity of the impugned judgment. Hence, the appeal being devoid of merit is hereby dismissed." 4.2.3 In Commissioner of Income Tax v. Naresh Kumar Aggarwal: (2014) 3699 ITR 171 (T & AP), a Division Bench of Telangana and Andhra Pradesh High Court held that a statement recorded under Section 132(4) of the Act which is retracted cannot constitute a basis for an order under Section 158BC of the Act. The relevant extract from the said judgement is quoted below: "17. The circumstances under which a statement is recorded from an assessee, in the course of searc....
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....statements were recorded much earlier on 5.09.16 ,7.09.16 and 9.09.16 admitting their respective share of profits. He made the admission only on the suggestion of his other associates, who might earn the excess money and thus, admission was not voluntary. Moreover, statement were recorded on 22.09.2016 and such retraction was made on 07.04.2017. 4.4 There is yet another reason not to blindly believe the so called admission because it is matter of common knowledge that during the course of survey the Revenue Authorities normally do exert unwanted pressure and influence over the assessee's to get something surrendered to make their survey a success. To expect the assessee to furnish an infallible evidence of concrete nature in such a situation is totally beyond comprehension. This is something against common sense and human probabilities. Pertinently, the Kelkar Committee has also taken note of this prevailing attitude of the search parties and consequently remarked very adversely. Consequentially, the CBDT issued a Circular No.286/ 2/2003 dated 10.03.2003 and clearly instructed not to make the additions in survey / search cases merely on the basis of surrenders until & unle....
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.... and not by the assessee. The assessee received the amount only as agreed in the sale agreement. The papers seized from the premises of others associates could not be used against assessee and were completely irrelevant & immaterial in so far as the assessee was concerned. Admittedly, no undisclosed asset, investment, expenses directly or indirectly were found or noted. 5.2 Otherwise also seized documents do not show undisclosed income- mere rough jotting earned by the assessee if any and therefore, no addition can be made on the basis of the same even if the said papers are presumed to be relevant for the purpose of assessment of the assessee. A bare reading of a table stated to be prepared as per seized Pg. 17,22,23 of Exhibit- 41 of Party A1 reveals that the working done is merely an imaginary exercise based on mere estimates. The seized paper do not show any receipt/payment of debit or credit and no sensible inference could be drawn there from. 5.3 Pertinently, it is not the case of AO that he made inquiries from the buyers who alleged having paid some consideration amount in cash directly to the assessee. 5.4 The law is well settled that the assessme....
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....earch or requisition, in other words, the assessment should (be) connected with something found during the search or requisition viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153 A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition' or disallowance can be made only on the basis of material collected during the search or requisition, in case no incriminating material is found." 5.4.4. In the case of Gurinder Singh Bawa [2016] 386 ITR 483 (Bom), the Bombay High court held that: "6...once an assessment has attained finality for a particular year, i.e., it is not pending then the same cannot be subject to tax in proceedings under section 153A of the Act. This of course would not apply if incriminating materials are gathered in the course of search or during proceedings under section 153A of the Act which are contrary to and/or not d....
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....no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under S. 132 or requisition under S. 132A, the AO assumes the jurisdiction for block assessment under S. 153A; (ii) all pending assessments/reassessments shall stand abated; (iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and (iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under S. 132 or requ....
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....belong to the assessee company. In this regard, there were no incriminating material against OP was found in the search. Further, section 153C emphasize that there should be material or document seized which belong to the OP. As such statement recorded during search is not a material or document found and seized. Therefore, the statement recorded under section 132(4) cannot be construed as material/document for invoking proceeding under section 153C specially, in the circumstances where no material of incriminating in nature found belonging to OP. [Para 8.4] The documents/any fact/evidence which could suggest that the documents/transactions claimed or submitted in any earlier proceedings were not genuine, being only a device/make belief based on non-existent facts or suppressed/misrepresented facts, fulfilling the ingredients of undisclosed income, would constitute the documents sufficient to make assessment for the purposes of the Act. The courts have referred such documents as an 'incriminating material'. While going through a large number of the decision rendered in the context of search assessment, it was observed that the word 'incriminating material' ....
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.... under: "20. In our view, a plain reading of Section 158BB(1) of the Act does not contemplate computing of undisclosed income solely on the basis of a statement recorded during the search. The words "evidence found as a result of search" would not take within its sweep statements recorded during search and seizure operations. However, the statements recorded would certainly constitute information and if such information is relatable to the evidence or material found during search, the same could certainly be used in evidence in any proceedings under the Act as expressly mandated by virtue of the explanation to Section 132(4) of the Act. However, such statements on a standalone basis without reference to any other material discovered during search and seizure operations would not empower the AO to make a block assessment merely because any admission was made by the Assessee during search operation." 5.8 In CIT v. Sri Ramdas Motor Transport Ltd.: (1999) 238 ITR 177 (AP), a Division Bench of Andhra Pradesh High Court, reading the provision of Section 132(4) of the Act in the context of discovering undisclosed income, explained that in cases where no unaccounted docum....
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....-4 from the residence of Shri Vipin Kumar Lodha for which they explained that Rs. 4.50 Cr. was total profit earned from Bajaj Enclave Project. Therefore, the AO presumed that the assessee might have earned un-disclosed income of Rs. 1.62 Cr. The AO also took support of income offered by Shri Vipin Kumar Lodha of Rs. 72 Lakh before Hon`ble Settlement Commission and Income offered of Rs. 72 Lakh by Shri Harvinder Singh and Rs. 1.44 Cr by Shri Surendra Pal Sahni for taxation u/s 153A. 6.2 Admittedly, the impugned seized documents did not belong to the assessee and contained rough jotting of other three associates, even though they admitted, the assessee was neither answerable nor legally expected to explain. However, the AO failed to rebut such contention though raised during the assessment proceedings. He even failed to bring iota of evidence/ corroborative documents which suggest that the assessee earned over and above the agreed sale price. 6.3 Notings/record maintained by a third party cannot bind the assessee. The law is well settled that any entry made/record kept by third party in his own handwriting even though sharing the name of the assessee cannot bind the....
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....2 to 40 shows the details of receipt of the allotment of plots in the Bajaj Nagar Colony. (Internal page 2, PB109) d. Statement of Harvinder Singh Kohli dt 09.09.2016 ( PB 114 and 115): Seized Page 73 and 74 shows the details of the instalment received on account of sale of plots in Bajaj Enclave. Seized Page 75 shows estimated profit from Bajaj Enclave. Seized Page 76 shows account settlement between partners relating to Bajaj Enclave. Seized Page 77 shows final profit of Bajaj Enclaves. 6.5 Supporting case laws: For this proposition we place strong reliance on the case of : 6.5.1. CBI VS VC Shukla 1998 Supreme Court Cases (Cri) 761, wherein it was held as under, "Keeping in view the above principles, even if we proceed on the assumption that the entries made in MR 71/91 are correct and the entries in the other books and loose sheets (which we have already found to be not admissible in evidence under Section 34) are admissible under Section 9 of the Act to support an inference about the former's correctness still those entries would not be sufficient to charge Shri Advani and Shri Shukla with the accusations levelled against them fo....
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....daman Timber Industries Vs. Commissioner of Central Excise (2015) 281 CTR 0241 (SC) /127 DTR 0241 (SC). In the recent case of CIT vs Sunita Dhadda [2018] 100 taxmann.com 525 (Rajasthan), the Hon'ble Rajasthan High Court has taken similar view, which has now been affirmed by Hon'ble Apex Court also in the case of CIT vs. Sunita Dhadda and SLP no. 9432/2018. of the revenue was rejected vide order dated 28.03.2018. In this case the Hon'ble Rajasthan High Court has considered several decisions on this aspect. 8.1 The CIT(A) contended that the other 3 persons were the business partners and, any incriminating material found even at the business premises of the other business partners, will be a case of finding incriminating material at the place of the assessee However, it is sufficient to say that the ld. CIT (A) proceeded on the height of imagination without any evidence and even without any support of the law. Firstly, a bare reading of S.153C which is quite plain and unambiguous, doesn't admit of any other interpretation. The ld. CIT (A) harped upon presumptions and assumptions which appeared to be preconceived in this mind. Alternatively, rather implication of this contenti....
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....is against the express legislative intention. 8.5. As per the mandate of S.153A, in the case of completed/unabated assessment, (or otherwise also) no addition is legally possible unless an incriminating material is found during search from the control possession of the searched person (assessee) only without considering the seized material found (if any) from the control and possession of a third party/s. The later situation of fact may hold good for invoking S. 153C but not for valid initiation of proceedings under S. 153A, (which aspect has been dealt with separately in this w/s in a detail with the support of judicial pronouncements). Kindly refer Hitesh Ashok (Supra) (headnote reproduced at page 19 of CIT(A) order) following the decision of Gujarat High Court in Saumya construction. 8.6. The CIT(A) instead of judiciously appreciating this contention that there is no evidence of the assessee getting a single penny on account of the share, he wanted the assessee to prove the negative, which was not possible. In other words, if the assessee contended that he did not get any share (if assumed), it was humanly impossible for him to prove such a fact. Therefore, say....
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..... Further, the AO was of the view that the assessee failed to submit the information/details/ documents in respect of incurring of expenditure for plotting on plain land. Finally, he made the addition of assessee`s share of Rs. 3.06 Cr. (36% of Rs. 8.50 Cr.) on account of bogus expenditure incurred. In the first appeal, the ld. CIT(A) also confirmed the addition, holding as under: "7.7....As discussed, this amount is additional income which is not offered in the statement but claimed as expenditure which is not real. Therefore, the real income includes this amount also in addition to the amount of Rs. 1.62 Crore already surrendered. Considering facts and circumstances of the case, this amount is treated as additional income which is not surrendered but claimed as expenditure in the statements. The claim of expenditure is not found to be genuine and one of the partners also accepted that no such expenditure was done actually. Therefore, the addition made by the AO is confirmed as per above discussion. This amount is to be treated as additional profit earned which is distributed by the partners earlier." Hence this ground. Submiss....
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.... Rs. 8.05 Crores, based on which the A.O. alleged sale of proceeds and undisclosed income therefrom. Since both the entries of receipt and payment, were made on the seized document, the A.O. could not read a part of it and ignored the other. Law is well settled that an evidence has to read in its entirety, one cannot read the part which suits him best and to ignore the other which does not. Otherwise, following the principal of tax in real income only, the A.O. is bound to reduce the expenditure. 4. Statement supports: Interestingly, in Q-8 (heavily relied upon by the AO), the assessee confirmed the fact of purchasing land as also that he associated with these three persons for doing the development and marketing. However, the AO while making addition ignored the correct fact and made the addition arbitrarily. The extract of answer to Q-8 reads as under: "...... हमने कुल चार लोगों ने मिलकर इस Scheme कि Planning की थी। यह स्कीम मे....
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..... 1.62 crore (out of the profit of Rs. 4.50 crore) merely on the basis of the admission made by the other 3 persons and the assessee but at the same time, here when the other 3 parties have again admitted to have incurred Rs. 8.50 Crores, the AO comfortably ignored the same because it suited him best. Thus, there is a clear contradiction and double standard adopted by the AO, which is not permeable in law. Such an inconsistent approach cannot be approved. Therefore, the entire addition deserves to be deleted in full. 6. Alternatively, if the addition of the share of profit Rs. 1.62 Cr is sustained, the share of development expenses of Rs. 3.06 Cr must also be allowed following the concept of real income. Additional Submission: At the outset it is submitted that in the remand report the on all the grounds, the ld.AO has repeated and rather reproduced the findings recorded by the AO in the impugned assessment order only. There is absolutely no rebuttal or disproval of the factual contentions and the evidences submitted. No contrary facts has been brought on the record then what has been stated by assessee or assessee. No new contentions have been raised. We....
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.... that these three persons were involved in the plotting and marketing, negotiating with the customers and even in receiving the agreed sale proceeds from them and even the assessee submitted in so, in response to Q. No. 8 (stated above) vide letter dated 05.11.2018, stated that whether these persons had incurred some expenditure or not, the assessee was not at all concerned with this aspect. If as per the statement of these three persons and the seized document, it is held that some expenditure was incurred, then the net profit being Rs. 4.50 crore only be considered and consequently it is only Rs. 1.62 crore could be considered at the best or at the worst in the hands of the assessee (if assuming so, though not admitting). However, even then it is held, based on the statement of Shir Lodha that no such expenditure was incurred at all and therefore, the net profit of Rs. 4.50 crore has to be increased by the amount of Rs. 8.50 crore, then those three persons must have incurred the extra expenditure on development of Rs. 8.50 crore and the assessee was in no way connected with this aspect as against the so called admission w.r.t Rs. 1.62 crore, the assessee never admitted incurring ....
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....d presumptions, and ignoring that there was no iota of evidence found referring to the assessee in the case of any of the searches nor the assessee admitted of such additional income. A-GOA-6 Impugned addition of Rs. 46,94,853/- u/s 68 of I.T. Act on account of the alleged unexplained credit in the Bank Account: Department's Ground of Appeal (in short "D-GOA") -1-3: Deletion of double addition of Rs. 38,06,922/- (out of total cash deposits Rs. 2,18,18,114/-) wrongly allowed by ld. CIT(A): [(AO Pg. 23-24 Pr 9)/CIT(A) Pg. 66 Pr.8.8] Facts: During the assessment proceedings u/s153A, the AO noted that the assessee deposited Rs. 2,18,18,114/- in two bank accounts (Rs.41,06,922/- in Bank A/c No. 612400009561 and Rs. 1,77,11,192/- in Bank A/c No. 61241432737). When asked to explain the source of the same, the assessee vide letter dated 24.10.2018 submitted that the amount of Rs. 2,18,18,114/- were deposited out of sale proceeds of various plots situated at Bajaj Enclave. In support of the same plot wise sale details (PB 26-71) was submitted. However, AO alleged that the assessee submitted ledger accounts only to explain the source of cash deposit, howev....
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....idering it as profit from the transactions credited in the bank accounts. It does not include transactions which are not routed from the bank accounts and the addition made of Rs. 1.62 Crore profit is out of sales completely unrecorded and not routed through bank accounts. In other words, the cash amount which is received as sale consideration but not deposited in bank accounts are not included in this amount of addition. Hence, the amount of addition of Rs. 1.62 Crore upheld while deciding ground no. 1 is completely earned from different transactions which are not done through banking channel. The transactions as reflected in the bank account are considered for confirming addition which is being discussed in this ground of appeal. Accordingly, addition of Rs. 2,18,18,114/- made by the AO is reduced to Rs. 46,94,853/-. The appellant gets a relief of Rs. 1,71,23,261/-. Accordingly, addition made by the AO is confirmed to the extent of Rs. 46,94,853/- out of addition made by the AO of Rs. 2,18,18,114/- . This ground of appeal is treated as partly allowed." Hence this ground. Since the grounds taken by the assessee and department are being interconn....
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....-desire, we may submit the copies of all the sale agreement before your good self." Otherwise merely because of non-production of the agreements, such a huge addition could not be made. The assessee is having copies of agreements in each and every case, which were offered to the AO also. Some exemplary agreements are available in the paper book (PB 123-140) and the rest can be submitted if so desired. 1.3. In this regard, the assessee filed a detailed written reply on 24.10.2018 (PB 24-25). The extract of the submission is as under: "As regards explanation of sum of Rs. 2,18,18,114/- credited in two bank account (Rs.41,06,922 in bank account no. 61240009561 & Rs. 1,77,11,192 in bank account no. 61241432737). In this respect we submit that during above year assessee has received Rs. 2,06,40,200/- in cash/cheque towards sale of various plots situated at Bajaj Enclave and deposit/credited the same in his bank account. Copy of bank statement, bank Ledger account and detail of plot wise sale enclosed herewith. (Page no.1 to 46) (PB 26-71) Against this the assessee has incurred cost of Rs. 1,75,50,000/- towards purchase of Land and other expenses also.....
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....natively, and without prejudice, further submitted that the impugned addition has been made u/s 68 on account of the deposits made in the two bank accounts of the assessee. Without prejudice to our other submissions explaining the source of the subjected amount, otherwise the subjected amount has been wrongly considered at Rs. 2,18,18,114 as against the correct amount Rs 1,75,31,192, which was the total deposits made in the current account with SBI. It is clearly evident that Rs. 38,06,922 deposited in the SBI-SB account were transferred during the same previous year itself on 15/10/2014 through banking channel to the current account, which fact is clearly evident from the bank statements [PB (SB 26-28) and (CA 29-36)] as from also from the copies of the bank ledger accounts in the assessee books (PB 44 A Current account ledger) and (PB 37-38 SB account ledger). Thus, to the extent of the Rs 38,06,922 the deposits have been wrongly considered twice in the total of Rs 2,18,18,114 stated by the AO. Therefore, the entire addition kindly be deleted in full." 1.2 Further in response to Remand Report of AO following Additional Submission-I / Rejoinder was submitted and same is r....
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.... have also been considered unexplained, which clearly shows non-application by the ld. AO. Hence, alternatively, to the extent of Rs. 41,06,922-/ there was nothing, even remotely, to be considered as unexplained. 2. Complete copy of the Cash Book starting from the very opening day i.e. 01.10.2014 which was the first day of the commencement of the business by the assessee till 31.03.2015 showing opening & closing balances as also day to day closing balances of cash in hand is also being submitted (PB 144-148). Pertinently, the entire cash receipts, particularly the entire amount of cash deposited in the aforesaid two bank accounts, under consideration, duly reconciled with the said cash book. ----xxx--------xxx--------xxx--------xxx--------xxx--------xxx---- 4. As told to us, statement of the assessee were not recorded u/s 132(4) but there is no reference to any such statement in the impugned assessment order." 2. Part sustenance of the addition to Profit of Rs. 46,94,853/- completely legally unjustified: 2.1 Firstly, the ld. CIT(A), after due verification of the entire record placed before him, after obtaining the remand report and in the ligh....
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....sing cash-in-hand was also submitted vide letter dt.07.02.2022 (APB 180-181). (his comments on the claim of the assessee of regular maintenance of the accounts vide pg. 36 pr 6.5.5 is being separately commented). The ld. CIT(A) did not find any fault in the cash book, copies of ledger accounts, the sale agreements and the details showing the receipt of the sale proceeds of different schemes in Bajaj Enclave and the specific submission made before the AO for working of the profit of Rs. 28.39 lakh at page 23 Pr. 9 of the AO (and available at APB 15) which shows that the assessee incurred cost of Rs. 1,75,50,000/- towards cost of land along with other ancillary exp. Further, the fact of purchasing the plot by the assessee can't be disputed, which was based on the registered purchase agreement. 2.4 The CIT(A) not having rejected any of the supporting documents which clearly depicted the actual profit earned by the assessee Rs 28.39 lakh out of the declared sale consideration and was also declared in the Revised Computation as admitted by the CIT(A) himself and even by the AO at page 23, there was no reason for the CIT(A) to have applied now higher GP rate of 26.7....
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....o with that. On the contrary the assessee feeling aggrieved is in appeal against such application of profit rate while sustaining the addition of Rs. 46,94,853/-. Thus, it can be said that the Revenue is also in agreement (in their D-GOA 2) with the ground A-GOA 6 taken by the assessee. 3.4 However, the allegation that agreements were not submitted is factually incorrect in as much as every time and opportunity, the assessee produced these registered documents before the A.O. and CIT(A) both as is evident from the written submission dated 17.01.2022 para 1.2 (APB 169) also reproduced herein above. Otherwise also, these were the registered agreements and were available in the public domain. Since there were voluminous records hence, they were only produced and if any of the authority so wanted, copies of the selected one or all of them could have been filed before the authorities below. But otherwise also such an allegation is completely irrelevant in the context of the ground taken by the Revenue. 3.5 While explaining the cash deposits of Rs 2,18,18,114/-, the assessee, before the law authorities specifically submitted that AO wrongly considered Rs 2,18,18,114/- a....
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....CIT vs. Saumya Construction (2017) 297CTR (Guj.)387 1-16 2. CIT vs. Smt. Shivali Mahajan & ors. (ITA No.5585/Del./2015 39-52 3. ACIT vs. Atual Kumar Gupta (2023) 152 taxman.com 99 53-64 4. DCIT vs. BSR Builders Engineers & Contractors [ITA No. 732 to 734/CHNY/2023 17-38 5. Tirupati Construction Company vs. ITO DB CWP No. 17651/2022 65-74 6. Shyam Sunder Khandelwal & ors. vs. ACIT (2024) 236 DTR (Raj) 328 75-83 7. Smt. Smrutishuda Nayak vs. UOI (2021) 323CTR 617 84-97 8. Mrs. Anita Sahai vs. DIT (2024) 136 Taxman 247 98-103 9. Bharat Kumar Azad (2013) 50 Tax World 33 (JP) 104-108 10. CIT vs. Naresh Kumar Jain (2014) 3699 ITR 171 109-114 11. CBDT Circular No. 286/2/2003 dated 10.03.2003 115 12. PCIT vs. Abhisar Builders (2023) 332 CTR (SC) 385 116-129 13. PCIT vs. Best Infrastructure Pvt. Ltd. 397 ITR 82 (Del.) 130-145 8. The ld. AR of the assessee drawing our attention to page 12 & 13 of his paper book wherein the panchanama of the search conducted in the case of the assessee is placed on record from where he draw our attention to date and time of starting of search and ....
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....he decision of ACIT vs. Atul Kumar Gupta (2023) 152 taxmann.com 99 (Delhi-Trib.) & Tirupati Construction Company vs. ITO DB CWP No. 17651/2022. The ld. AR of the assessee thus relying on the decision of the PCIT vs. Abhisar Buildwell Pvt. Ltd. [2023] 149 taxmann.com 399 (SC) submitted that in the absence of incriminating document no addition can be made in the hands of the assessee. 10. As regards the ground No. 3 raised by the assessee, the ld. AR of the assessee submitted that no addition can be made if there is no incriminating document found no addition can be made. To drive home to this contention he relied upon the decision in the case of Kabul Chawla case [2015] 61 taxmann.com 412/234 Taxman 300/380 ITR 573 (Delhi) and PCIT vs. Abhisar Buildwell Pvt. Ltd. [2023] 149 taxmann.com 399 (SC). 11. As regards ground No. 4, the addition of Rs. 1,62,00,000/- being alleged undisclosed profit and Bajaj Enclave. The assessee submitted detailed submissions before lower authorities as to why the said income cannot be added in the hands of the assessee. The assessee is merely landowner had discussion with the other person who are responsible to develop the property and market the ....
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.... regarding statement during the course of search and seizure income admitted should be made to confess as to the income. Therefore, merely the estimated income cannot be made in the hands of the assessee. 12. As regards ground No. 5 for an addition of Rs. 3,06,00,000/- being undisclosed development expenses added in the hands of the assessee. The ld. AR of the assessee submitted that the assessee never incurred any expenditure on account of development expenditure. The assessee only purchased the land and associated and those three persons were to develop, plot and market the land. All the expenditure to be borne by those three persons and the assessee has no role to play. Ignoring that factual aspect of the matter, the AO added a sum of Rs. 3,06,00,000/- (36.5% of 8.5 crores) on account of bogus expenditure incurred. The assessee stands were consistently clear that he is the only landowner partner, he is not involved or acknowledged incurring expenditure in respect of alleged land. The ld. AR of the assessee also submitted that seized document be read as a whole and not in part as it is evidently clear that both the entries of receipt of payments were made recorded in the alleg....
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.... that the assessee neither claimed nor be allowed a deduction that was not claimed in the original return of income. The finding of the ld. CIT(A) is based on decision of Hon'ble Supreme Court in K.P. Varghese v. ITO [1981] 131 ITR 597/7 taxman 13. As regards the addition made in the hands of the assessee on account of unaccounted income from Bajaj Enclave, unexplained development expenditure and unexplained deposit made in the bank account. The ld. CIT(A) has, based on written submissions already granted substantial relief to the assessee. So far as to the receipt of sales considerations recorded in the bank account of the assessee and as regards the profit of the project and unexplained expenditure incurred by the assessee on the Bajaj Enclave project the ld. DR relied upon the detailed finding recorded in the order of ld. CIT(A). He also submitted that nowhere assessee dispute the fact that there were four partners in the project and therefore, ld. DR on that aspect of the matter relied upon the order of the ld. CIT(A). Ld. DR thus concluded that when based on the same documents other partners have already adhered to the disclosure made why not in the hands of the assessee....
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....tice issued u/s 153A, the assessee furnished his return of income on 07.04.2017, declaring total income of Rs. 85,320/-, which is for a less amount of Rs. 6,55,000/- with the earlier return filed as per provision of section 139 of the Act. In the Bajaj group search incriminating documents were seized but in the case of assessee search was carried out for five minutes and no incriminating material was found. The document found at the Bajaj Group relates to Bajaj Enclave Project wherein the assessee is the owner of the land where that "Bajaj Enclave" Project being developed. The ld. AO noted that as per seized document vide page no. 17, 22 & 23 of Exhibit- 41 of party A-1 found from the residence of Shri Surinder Pal Singh Sahni & page no. 62 of Exhibit-3 of party A-4 from the resident of Shri Vipin Kumar Lodha. On conjoint reading ld. AO found that a sum of Rs. 4,50,00,000/- was earned by the persons named herein below which remained unaccounted, as detailed below : Bajaj Enclave Particulars Amount Rs. Total Sales Realization (472x356) 1680 Less Road + Payment (30 + 1200) 1230 Total Un-disclosed profit 450 4....
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....ground no. 1 & 2 raised challenges the assessment order on account of the jurisdiction for making the assessment in the case of the assessee. Since this issue is going to the route of the proceeding before us, we considered it to decide it first to decide. As is evident that a search & seizure operation u/s. 132(1) of the Act was carried out on 30.06.2016 at the various premises of Bajaj Group, kota. Whereas in the case of the assessee, a search was conducted at the resident of the assessee on 01.07.2016. As is evident from the record that the alleged search in the case of the assessee was carried out only for five minutes starting at 2.55 and ended at 3.00. The ld. AO through ld. DR did not place on record the nature of document found at the premises of the assessee which are incriminating in nature. With this basic fact now, to decide the technical ground raised by the assessee and before going further on the issue we would like to go through the relevant provisions of section 132 and 153A of the act along with Rule 112 of the Income-tax Rules' 1962, which are reproduced herein under:- Relevant part of section 153A of the act Assessment in case of search or ....
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....cuments as required by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), then,- (A) the Principal Director General or Director General or Principal Director or Director or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, may authorise any Additional Director or Additional Commissioner or Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissione....
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....in accordance with sub-rules (2) to 56[(14)]. [(2) (a) The authorisation under sub-section (1) of section 132 (other than an authorisation under the proviso thereto) by the ^58[Director-General or Director] or the ^59[Chief Commissioner or Commissioner] or any such ^60[Deputy Director] or ^61[Deputy Commissioner] as is empowered by the Board in this behalf shall be in Form No. 45; (b) the authorisation under the proviso to sub-section (1) of section 132 by a ^59[Chief Commissioner or Commissioner] shall be in Form No. 45A; (c) the authorisation under sub-section (1A) of section 132 by a ^59[Chief Commissioner or Commissioner] shall be in Form No. 45B. (2A) Every authorisation referred to in sub-rule (2) shall be in writing under the signature of the officer issuing the authorisation and shall bear his seal. xxx xxx xxx If we peruse all these provisions together i.e. provisions of section 132 and 153A of the act along with Rule 112 of the Income-tax Rules' 1962 activate the applicability of provision of Section 153A of the Act will arise. As it evident that the search is initiated on the strength of warrant of authorization issued ....
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....'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated, and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original a....
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....s under: 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment under section 153A; (ii) all pending assessments/reassessments shall stand abated; (iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and (iv) in case no incriminating material is unearthed during the search, the ....
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....rt this factual aspect, therefore, ground no. 3 raised by the assessee is allowed. 20. Ground no. 4 relates to the addition of Rs. 1,62,00,000/- on account of the alleged undisclosed income from Bajaj Enclave Scheme. On this issue we note that when the assessee was asked to explain the undisclosed income based on the material found in the case of Bajaj Group, assessee vide letter dated 24.10.2018 (PB 24) and 05.11.2018 (PB 14), assessee submitted that the actual profit earned by the assessee from real estate activity is only Rs. 28,39,000/- [i.e. Sale Proceeds Rs. 2,06,40,000/- Less Purchase/Registry/Misc Expenses of Rs. 1,78,01,000/-]. He further stated that due to lack of knowledge of real estate, the assessee entered into an oral agreement with the above three persons i.e. Shri Surinder Pal Sahni, Shri Harvinder Singh Kohli and Shri Vipin Kumar Lodha. According to the oral agreement the assessee has to make investment in the purchase of land and these persons will develop the land and also deal with the customers. These persons having made negotiations with the customers, were having direct contact with / approach to the customers. The assessee only received the amount from t....
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....enditure. Based on these observation ground no. 5 raised by the assessee is allowed. 22. Ground no. 6 raised by the assessee relates to the addition of Rs. 46,94,853/- made under section 68 of the Act considering it as unexplained credit in the bank account of the assessee. In the assessment proceeding ld. AO noted that the assessee deposited a sum of Rs. 2,18,18,114/- in two bank accounts (Rs.41,06,922/- in Bank A/c No. 612400009561 and Rs. 1,77,11,192/- in Bank A/c No. 61241432737). When asked to explain the source of the same, the assessee vide letter dated 24.10.2018 submitted that the amount of Rs. 2,18,18,114/- were deposited out of sale proceeds of various plots situated at Bajaj Enclave. In support of the same plot wise sale details (PB 26-71) was submitted. However, AO alleged that the assessee submitted ledger accounts only to explain the source of cash deposit, however, he failed to file copy of agreements to Sale. Finally, he made the addition of Rs. 2,18,18,114/- on account of unexplained credit u/s 68. Before the ld. CIT(A) the assessee filed various details in support of the credit made in the bank account. We note that ld. CIT(A) not having rejected any of the su....
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.... assessee. Based on these observations ground no. 1 raised by revenue stands dismissed. Ground no. 2 & 3 raised by the revenue challenge the estimate of profit by the ld. CIT(A) and adding only profit instead of whole credit in the case of the assessee as the assessee failed to explain the nature and source of the credit with documentary evidence and therefore, the whole credit is required to be added. On this aspect of the matter we note that the assessee has explained by filling the representative documents (APB123-140) before the ld CIT(A) about the nature and source of credit in the bank account. The assessee also submitted a detailed cash book. The remand report on the documents filed were called for from the ld. AO. The relevant part of the remand report on this aspect of the matter is as under: The submission made by the assessee before your good office is not acceptable. During the course of assessment proceedings, it is noticed that in two bank account of the assessee a sum of Rs. 2,18,18,114/- were found credited in respect of which he could not offer any satisfactory evidence during post search enquiry. He only claimed in reply to Q. No. 7 that the booking am....
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.... ld. CIT(A) and in this appeal no contrary material is brough on record and therefore, ground no. 2 raised by the revenue also stands dismissed. Based on the discussion so recorded the appeal of the revenue in ITA No. 456/JP/2024 stands dismissed. In the result appeal filed by the assessee stands allowed and that of the revenue stands dismissed. Order pronounced in the open court on 27/09/2024. ============= Document 1 S. No. Particulars 1. 2. PAPER BOOK INDEX FIXED ON: 9.05.2024 Page No. Copy of ROI e-filed on 31.03.2016 along with ITR Form and 1-2 receipt for F.Y. 2014-15 (A.Y. 2015-16) u/s 139. Copy of ROI e-filed on 07.04.2017 along with ITR Form and 3-5 receipt for F.Y. 2014-15 (A.Y. 2015-16) u/s 153A. 3. Copy of Revised Computation filled on 28.11.2018 for F.Y. 6-7 2014-15 (A.Y. 2015-16) u/s 153A. 4. 5. ம௠6. 7. Copies of documents found and seized during the course of 8-10 search conducted on 30.06.2016 at Pg-17, 22, 23 of Exhibit-41 of Party A-1 from the residence of Sh. Surinder Pal Singh Sahni. Copies of documents found and seized during the course of 11 search conducted on 30.06.....