TaxTMI 
TaxTMI 
2025 (2) TMI 1024
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....7,390/-, by computing the same was under:- "9. After examination of the information and details placed on record and discussion with the A/R of the assessee, the total income of the assessee is computed as under:- Return income Rs. 7,47,670/- Add:- Disallowance of interest payment as discussed in para No. 5 Rs. 29,690/- Add:- Part disallowances of expenses having personal elements as discussed in para No. 6 6,626/- Add:- Disallowance as interest on TDS as discussed in para no. 7 Rs. 73 Add:- Addition as discussed in para no. 8 Rs. 1,18,83,333 Assessed total income Rs. 1,26,67,392 R/o Rs. 1,26,67,390/- On challenge to the said assessment order by the assessee, byway of appeal, Learned CIT(A) upheld the assessment made by the Assessing Officer. 2. ITA No. 572/JPR/2024 has been filed, while challenging order dated 29.02.2024 passed by the Learned CIT(A), Jaipur, whereby penalty order u/s 271AAB of the Act, has been upheld. Vide penalty order, pertaining to the aforesaid assessment year i.e. AY 2013-14, the Assessing Officer levied penalty of Rs. 35,65,000/- ( i.e. @ of 30% of the above mentioned undisclosed income of Rs. 1,18....
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....e reproduced as under:- 500 Ka 7Din 1342 500 Ka 8 Din 1533 500 Ka 1 maha 7 Din 7092 2000 Ka 1 maha 9 Din 29900 1000 Ka 1 maha 11500 1000 Ka 26 Din 9966 5 sunilji 5 Dinshji 25 Sheela Devi 10 Arpitji 10 Ajayji 25 Sanjayji 1/3 25 Satyanarainji 15/3 35 Sureshji 26/3 3,22,000 3,83,333 On perusal of fist half of above table, it seems that these transactions are related to money lending. For example in the first column, principle amount is written with omitting three zeros, in second column period for which amount was given on interest and in third column indicate interest amount interest amount has been calculated @ 1.15% per month For example:- 5,00,000 x 1.15% =5750 (interest of 30 days) (5750/30) x 7 1341.66 r.o. 1342 (interest of 7 days) In the second half of the above entries, it appears that the digits against the names represent amount of loan given by the assessee and are written in doder form. For example figure of ....
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....ndra Agarwal to different parties. These advances have n been recorded in any books of account of Shri Rajendra Agarwal and his firms. 8.8 Therefore these unaccounted advances of Rs. 1.4 crore and interest there are hereby added to the total income of the assessee as his undisclosed advance and interest. This is added to his total income in AY 2013-14 and AY 2014-15 as p the dates mentioned in these papers. Total loan is of Rs. 1,40,00,000/- as per the discussion above and interest is of Rs. 3,83,333. The detail is as under:- 5,00,000 Sunilji 7/3/13 5,00,000 Dineshji 2/3/13 25,00,000 Sheela Devi 1/4/13 10,00,000 Arpitji 16/3/13 10,00,000 Ajayji 20/3/13 25,00,000 Sanjayji 1/3 25,00,000 Satyanarainji 15/3 35,00,000 Sureshji 26/3 1,40,00,000 The amount of Rs. 25,00,000/- advanced to Sheela Devi pertains to AY 2014-15 and the balance amount of Rs. 1,15,00,000/- pertains to AY 2013-14. The interest amount of Rs. 3,83,333/- also pertains to AY 2013-14. Therefore addition of Rs. 1,18,83,333/- is hereby made in the total income of AY 2013-14 and addition of Rs. 25,00,000/- is he....
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....13, a search and seizure operation u/s 132(1) of the Act was carried out at various premises of Mahendra Kumar Agarwal, Katta & Dinesh Agarwal Group. Residential premises of the assessee at No. 137, Radha Damodar Ki Gali, Choura Rasta, Jaipur, and also his business premises i.e. No. 197, Johari Bazaar, Jaipur were also subject to search and seizure operation. Said search and seizure operation also led to proceedings and passing of the assessment order u/s 143(3) r.w.s. 153C(1)(b) of the Act, relating to AY 2014-15. 12. It may be mentioned here that, as regards the assessment year 2014-15, the assessee furnished return of income on 28.10.2015 i.e. after the search and seizure operation, declaring therein total income at Rs. 30,92,250/-. 13. As regards the year under consideration, as noticed above, search and seizure operation had led to the discovery and seizure of the above mentioned two documents i.e. page No. 38 and 39 of the seized papers- the incriminating documents, marked as Annexure-A, Exhibit-1. Having regard to said incriminating material, and after providing opportunity of being heard to the assessee, the Assessing Officer made an addition of Rs. 25 lacs by o....
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.... as under :- 1. Sheela Devi 2500 1/4/13 2. Ajayji Agarwal 1000 20/03/13 3. Arpit Ji 1000 16/03/13 4. Sunilji Jain 500 7/3/13 5. Dinesh Ji Matani 500 2/3/13 On perusal of this page, it appears that the digits against the names represent amount of loan given by the assessee and are written in coded form. For example figure of 2500/- represents amount of Rs. 25 lacs and figure of 1000/- represents amount of Rs. 10 lacs. The total of these figures comes to Rs. 55 lacs which is the total loan given by the assessee to the parties mentioned therein. All these names and figures are repetition of entries mentioned at page no. 38. 7.7. However, in his statement, the assessee disowned the transactions mentioned in these pages and stated that these were not related to his business. This claim of the assessee cannot be accepted. It can be seen that this paper has been recovered from the premises of Shri Rajendra Agarwal. The entries in this page are very clear and their nature gets clarified by the calculations of interest made on page no. 38 which have been discussed above. Partially, the dates are also mentioned whi....
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.... account of M/s D.K. & Company. The Assessing Officer also found that on said payment, the assessee had not deducted TDS. Said payments were found to have been made to Non Banking Finance Company (NBFC), as described here under:- S. No. Name of the NBFC Interest paid 1. Magma Ginance Corp 10305 Total 10305 In the assessment order, the Assessing Officer observed that despite opportunity, the assessee had failed to furnish any reply. Hence, disallowance of payment of interest, u/s 40A(ia) of the Act. As regards the second issue, in the course of assessment proceedings, the Assessing Officer found that the assessee had debited following expenses in the Profit and loss account :- Telephone expenses Rs. 74,791/- Petrol & conveyance Exp. Rs. 10,200/- Repaid & Maintenance Rs. 5,084/- Total Rs. 90,075/- Query letter dated 26.11.2015 was issued to the assessee, whereupon he submitted his reply thereto. The Assessing Officer did not find any merit in the said response by the assessee and accordingly, disallowed in lump sum a sum of Rs. 9,007/- i.e. 10% of the expenses claimed by the assessee, and which related to telephone....
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....ssment Year 2013-14) AND due to undisclosed income of Rs. 25,00,000/- (as regards the Assessment Year 2014-15). 17. As noticed above, search and seizure operation was carried out on 03.04.2013 at the residential premises. Business premises of the assessee was also subjected to search and seizure operation. Above said 2 additions, as regards two assessment years mentioned above, were made by the Assessing Officer vide separate assessment orders, having regard to the two incriminating papers by way of identification, said two documents/papers were given page 38 & 39, Annexure-A and Exhibit-1. 18. Assessing Officer, after providing opportunity of being heard to the assessee, in view of the entire material available on record arrived at conclusion that the assessee had failed to explain undisclosed income of Rs. 1,18,83,333/- (as regards the Assessment Year 2013-14) and income of Rs. 25,00,000/- as regards the Assessment Year 2014-15. 19. It may be mentioned here that in the written submissions, ld. Counsel for the appellant submitted that ground No. 1 challenged the dismissal of the appeal in limine by ld. CIT(A). However, in the course of arguments before us, ....
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....rs passed by ld. CIT(A). Ld. DR has also referred to specific questions, with answers thereto, as available in the statement made by the assessee during the proceedings, and submitted that when the assessee failed to explain the incriminating material as available in the two incriminating documents, the authorities below have rightly arrived at the conclusion that the said transactions were of income of the assessee, which he failed to explain, and as such, said additions deserve to be upheld. 22. Admittedly, search and seizure operation was carried out by the team Income tax department at the residential premises of the assessee, business premises of the assessee; that two incriminating documents i.e. page 38 & 39 marked as Annexure-A, Exhibit-1 were seized from the residential premises of the assessee. The assessee does not dispute that he had not filed any return of income for the said two assessment years. Statements of the assessee were recorded u/s 132(4) i.e. during search & seizure, and 131 of the Act i.e. post search. 23. Even though, it has been submitted by ld. Counsel for the appellant, in the course of arguments that the assessee had retracted the statements s....
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....uments belong to the appellant. In case the appellant desires to prove that the document does not belong to him, the same is required to be done with positive material evidences and not by making only the self-serving statements. In case it was the bone fide claim of the appellant that these documents do not belong to the appellant the natural implication and natural corollary, specifically in view of the presumption in the law, was that the appellant would have found out and placed on record facts and evidences to show that who created these documents and how these documents came to be in the possession of the appellant. The document was found with the appellant and it is only the appellant who can explain the document and in case the document does not belong to him only the appellant can find out the reality if it is different than what has been found in the assessment order. However no such exercise has been done. Further the presumption in law cannot be rebutted by just making simple plea denying the same in the self-serving manner. In view of the facts and circumstances the rebuttal of the appellant is found to be devoid of any basis in any merits and is hereby rejected and it....
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....vances have not been recorded in any books of account of Shri Rajendra Agarwal and his firms. Further as per the presumption in section 132(4A) and 292C, the contents of the seized documents are to be treated as true." 27. The assessing authority analysed the contents of the two documents i.e page 38 & 39 as under:- "8.6 The analysis of these papers is done as under:- Page No. 38:- This paper contains details of calculation of interest for the various period on different amount the same are reproduced as under:- 500 Ka 7 Din 1342 500 Ka 8 Din 1533 500 Ka 1 maha 7 Din 7092 2000 Ka 1 maha 9 Din 2990 1000 Ka 1 maha 11500 1000 Ka 26 Din 9966 61333 5 Sunilji 5 Dineshji 25 Sheela Devi 10 Arpitiji 10 Ajayji 25 Sanjayji 25 Sanjayji 1/3 25 Santyanarainji 15/3 35 Sureshji 26/3 3,22,000 3,83,333 On perusal of first half of above table, it seems that these transactions are related to money le....
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....ich show that these are related to the month of March. The search was conducted on 03.04.13 and hence these entries appear to be related to March/April, 2013. The dates are further confirmed by the clear dates which have been mentioned on page no. 39 discussed above wherein some of these entries are appearing with the same amounts. The names of the parties are given and amount are mentioned against them. The assessee is not prepared to give any explanation about these entries. However a wholistic construction of the entries on page no.: and 39 suggests that these entries are related to the money which has been advanced by Shri Rajendra Agarwal to different parties. These advances have n been recorded in any books of account of Shri Rajendra Agarwal and his firms. 8.8 Therefore these unaccounted advances of Rs. 1.4 crore and interest therefore are hereby added to the total income of the assessee as his undisclosed advance and interest. This is added to his total income in AY 2013-14 and AY 2014-15 as p the dates mentioned in these papers. Total loan is of Rs. 1,40,00,000/- as per th discussion above and interest is of Rs. 3,83,333. The detail is as under:- 5,00,000 Su....
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....see was under the impression that NBFC is also a Bank, and as such he was under bona fide belief that no TDS for said payments was required to be deducted. At the same time, learned counsel has submitted that matter be remanded to Assessing Officer for fresh decision on this issue taking into consideration details available in Form 26 A. 32. On the other hand, learned DR for the Revenue has reclined against the observations and findings recorded by CIT(A) in upholding the additions, and submitted that there is no merit in the contentions raised on behalf of the appellant, particularly, when there was no justification for non deduction of TDS on the said payments. 33. In the course of arguments, Learned counsel for the appellant has not disputed that NBFCs are not banks. Ignorance of law is no excuse. It is not case of the appellant that he had no assistance of any Chartered Accountant. When enquired in the course of hearing, Learned counsel admits that the assessee did not furnish any information by way of Form No. 27BA i.e. certificate by the Accountant regarding said payments and deductions required by law. 34. Having regard to the provisions of section 40(a)(ia) of t....