TaxTMI 
TaxTMI 
2025 (4) TMI 1202
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....er Chapter-XIV were initiated for AYs 1999-2000 to 2004-05 separately. For the impugned assessment year, i.e. AY 2005-06, the case was taken up for scrutiny assessment by issuing notice u/s 143(2) of the Act, and thereafter assessment was framed making addition on various counts; part of which were deleted by ld. CIT(A). Aggrieved by the order of the ld. CIT(A), both the assessee and Revenue have come up in appeal before us. 3. At the outset itself, it was pointed out that several issues raised in both the assessee's appeal and the Department's appeal stand covered by the order of the ITAT in the case of the assessee itself for AY 2004-05, passed in ITA Nos. 2149 and 2408/Ahd/2008 dated 06.10.2023, and also by the order of the ITAT in the case of the assessee for AYs 2001-02 to 2003-04, passed in ITA Nos. 2406/Ahd/2008 and others vide order dated 09.10.2022. Copies of both the orders were placed before us. Taking cognizance of the same, we shall now proceed to adjudicate the present appeals before us. 4. We shall first deal with the Revenue's appeal in ITA No. 2548/Ahd/2008. 5. Ground No.1 raised by the Revenue reads as under:- "1. The CIT(A) has erred in law and ....
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....to be admitted, in the interest of justice, considering the difficulties faced by the assessee in producing the additional evidences relating to the cash creditors, capital introduced in the various partnership concerns and the period to which they related i.e. 7 assessment years which were very voluminous evidences requiring considerable time for collection. The ITAT also took note of the fact that the ld. CIT(A) has sought report of the Assessing Officer also on the additional evidences; therefore, found no infirmity in the order of the ld. CIT(A) admitting the additional evidences. 5.5 The ld. DR was unable to point out any distinction in facts from the order of the ITAT in Assessment Year 2004-05 .The issue raised in Ground No. 1 of the Revenue therefore stands covered by the order of the ITAT in AY 2004- 05, following which we uphold the order of the ld. CIT(A) admitting the additional evidences . Ground No.1 raised by the Revenue is dismissed. 6. Ground No.2 raised by the Revenue reads as under:- "2 The CIT(A)has erred in law and on facts in deleting the addition of Rs.4,67,78,446/- and Rs.3,28,02,305/- made under Section 68 of the Act on account of unexplained....
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....of both the capital introduced, as also the cash creditors in the various proprietorship concerns of the assessee. The relevant paragraph No.24 of the order containing the findings of the ITAT in this regard are as under:- "24. We have gone through the orders of the authorities below, and we see no reasons to interfere in the order of the ld.CIT(A) deleting the entire addition made on account of capital introduced in various proprietorship concerns of the assessee and other cash credits holding the source of all them to be proved by the assessee. We have noted that the ld.CIT(A) admitted the additional evidences filed by the assessee to prove source of both the capital introduced in various proprietorship concerns of the assessee, as also cash creditors. He noted that the assessee had filed copy of bank statement reflecting introduction of capital in various proprietorship concerns, as coming from the personal accounts of the assessee through bank channels. The AO was unable to refute this fact emerging from the bank statement of the assessee in the remand report. The ld.DR was unable to point out any infirmity in the same, and we have noted that only basis for the AO to m....
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....ingly dismissed. 7. Ground No.3 raised by the Revenue reads as under:- "3. The CIT(A) has erred in law and on facts in deleting the addition made on account of unexplained jewellery at Rs.8,52,355/- and Rs. 2,57,824/- without considering the evidences brought on record by the Assessing Officer that the assessee failed to prove the source of jewellery found at residence as well as in the locker. The Ld.CIT(A) has further erred in accepting the assessee's argument that the jewellery weighing 496 grams was belonging to the maid servants without considering their status and source of acquisition." 7.1 The facts relating to the issue are that, during search, the assessee was found to be in possession of jewellery which was found both at his residence and in the bank locker. 1141.2 gms of jewellery was found at the residence while in the locker 1336.5 gms jewellery was found. While the assessee attributed the jewellery found at residence as belonging to the family, received on various occasions of marriage and other celebrations over a period of time, the wife of the assessee stated 469.6 gms of jewellery to be belonging to 3 maid servants. As for the jewellery found i....
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....ibuted as belonging to the maid servants of the assessee and the jewellery attributed as belonging to the family over and above that allowed by the AO. 7.4 The findings of the ld. CIT(A) accepting the explanation of the spouse of the assessee of 496 gms of jewellery belonging to the maids and finding it not unusual for the assessee to have taken contradictory stand is at paragraph No.5.5 of the order as under:- "5.5 The contentions/details on record were carefully considered. It is seen that the quantum of the jewellery found at the residence i.e. 1141.2 gms was more or less in conformity with the judicial decisions/Board's guidelines and considering the status, community, customs of the assessee/family. As for the contradiction in the statement(s) of the wife and husband assessee, it is not unusual that the husband is not usually aware and updated with the everchanging status of the wife's jewellery and her habit of safekeeping jewellery of others is a plausible explanation. Smt. Kanaklata in her initial statement did mention of having kept the jewellery of her maid servants for safety and in fact identified such jewellery in terms of items/weight totaling 469 ....
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....ions to the jewellery found in the locker to the tune of 574.3 gms. The order of the ld. CIT(A), therefore, deleting the addition of unexplained jewellery found in the locker to the tune of Rs.2,52,824/- is, therefore, confirmed. Ground of Appeal No.3 of the Revenue is accordingly dismissed. 8. Ground No.4 raised by the Revenue reads as under:- "4. The CIT(A) has erred in law and on facts in deleting the addition of Rs.4,48,988/- made on account of disallowance of interest for non business use of borrowed funds without considering the fact that borrowed funds were used for non business purposes." 8.1 The issue raised in above ground relates to disallowance of interest expenses of Rs.4,48,988/- which was deleted by ld. CIT(A). 8.2 The facts relating to the issue being that the assessee was found to have claimed interest expenses in its various proprietorship concerns amounting to Rs.4,48,988/- as under:- (i) Umang H. Thakkar (Pers.) Rs. 2,67,849/- (ii) Sahjanand Enterprise Rs. 44,606/- (iii) Dharamdev Housing Corp Rs. 1,36,533/- Rs. 4,48,988/- 8.3 The assessee, at the same time, was also noted to have made int....
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....rietorship concern of the assessee - that it had shown work-in-progress of Rs.3,23,76,176/- against which net profit of only Rs.6,03,289/- was shown. Noting the net profit so disclosed to be abnormally low and also noting the similar issue was involved in AY 2004-05 and the assessee had failed to submit the stock register to verify the genuineness of the net profit reflected on work- in-progress, the Assessing Officer rejected the books of accounts of the assessee pertaining to Sahjanand Enterprise, and adopting the net profit rate of 8% on the work-in-progress, he computed the profits of the assessee in the said enterprise at Rs.25,90,094/- as against Rs.6,03,289/- disclosed by the assessee. The difference, i.e. Rs.19,88,805/- was accordingly added to the income of the assessee on account of undisclosed income from construction activities in the name of Sahjanand Enterprise. 9.2 The ld. CIT(A) held that the AO was not justified in rejecting the audited books of accounts of the assessee since he had failed to point out specific deficiencies which were fatal in deducing the profits correctly. He noted that the assessee was consistently following the same method of accounting and ....
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.... also, the entire exercise of the AO was baseless and has been rightly rejected by the ld.CIT(A). The addition made on account of undervaluation of WIP and by estimating the profits of the assessee in its construction business in M/s Sahajanand Enterprise, to the tune of Rs.55,41,922/-, we hold, has been rightly deleted by the ld.CIT(A)." 9.4 We have gone through the order of the ITAT and we find that the ITAT noted the basis with the ld. CIT(A) for finding anomaly in the books of accounts of the assessee to be entirely baseless and confirmed the order of the ld. CIT(A) noting that not a single anomaly was noted by the Assessing Officer in the financial figures reported. The ld. DR was unable to distinguish the decision of the ITAT in AY 2004-05 - both the facts and on law and, therefore, the issue raised in Ground No. 5 by the Revenue stands covered by the order of the ITAT in AY 2004-05, following which we uphold the order of the ld. CIT(A) deleting the addition of Rs. 19,86,805/- made by the Assessing Officer on account of undisclosed income from construction business of Sahjanand complex. Ground No.5 raised by the Revenue is accordingly dismissed. 10. Ground No.6 raise....
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....the assessee for the impugned year. 10.2 Before the ld. CIT(A), the assessee contended that, as a matter of fact, all these amounts had been recorded over a period of three years from AYs 2004-05 to 2006-07; details of which were filed to the ld. CIT(A). Confirmation/PAN of 10 members were also enclosed on a sample basis affirming their payments in subsequent years. The assessee, therefore, contended that the Assessing Officer had misjudged the issue and made addition on surmises and conjectures. The ld. CIT(A), on going through the facts as demonstrated by the ld. Counsel for the assessee, was convinced with the explanation of the assessee, noting that overall payment made by each members in respect of their property was much more than the amounts recorded against their name in the loose impounded documents and the amounts noted in the impugned document were not over and above the total payments amounts received from buyers, and the amounts noted as not recorded by the Assessing Officer were in fact recorded in the books of accounts in subsequent assessment years. He accordingly held that the amount of Rs.2.08 cores did not constitute suppressed receipts and deleted the additio....
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....re the ld. CIT(A), the assessee, however, demonstrated that the amounts were received from the members over a period of three years and even filed confirmation from some members with regard to the same. The ld. CIT(A) has gone through all these details and given a finding of fact that the assessee has in fact recorded more receipts as compared to that noted in the documents seized during survey. The ld. DR was unable to refute the factual finding of the ld. CIT(A). We have no hesitation, therefore, in agreeing with the ld. CIT(A) that the Assessing Officer's findings of suppressed sales by the assessee to the tune of Rs.2.08 crores was based on incomplete appreciation of facts. The order of the ld. CIT(A) deleting the addition made of Rs.2.08 crores is, therefore, upheld. Ground of appeal No. 6 of the Revenue is thus dismissed. 11. Ground No. 7 raised by the Revenue reads as under:- "The CIT(A) has erred in law and on facts in deleting the addition of Rs.84.50 lacs made on account of unexplained investment in purchase of land from Shri Vikas Shah and Others without considering the entries recorded on seized document as well as the statement of Shri Vikas A. Shah who ....
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....point out any distinction in facts or even on law on this aspect before us. We, therefore, concur with the ld. Counsel for the assessee that the issue stands squarely covered by the order of the ITAT in the case of the assessee for AY 2004-05, following which we hold that the addition of Rs.84.50 lacs made by the Assessing Officer on account of unexplained investment in purchase of land from Shri Vikas Shah has been rightly deleted by the ld. CIT(A) after appreciating all evidences/submissions filed by the assessee. Ground No.7 raised by the Revenue is, therefore, found to be devoid of any merit and is accordingly dismissed. Ground No. 7 raised by the Revenue is thus dismissed. 12. Ground No. 8 raised by the Revenue reads as under:- "8. The Ld.CIT(A) has erred in law and on facts in restricting the addition of Rs.17,23,126/- to Rs.14,90,312/- and Rs.8,44,032/- to Rs.5,61,655/- in respect of unexplained investment in Swaminarayan Residence and Hotel Nilkanth respectively without considering and appreciating the valuation report of the District Valuation Officer and also without giving him opportunity of being heard." 12.1 This issue relates to deletion of addition ....
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....for the assessee before us was that determination of cost of construction was referred to the DVO by the AO without rejecting the books of accounts of the assessee, which he pointed out has been categorically held by the Hon'ble Apex Court in the case of Sargam Cinema, 328 ITR 513 (SC) to be not in accordance with law. He further pointed out that identical reference made in the case of Sanjay H. Thakkar, brother of the assessee, was deleted by the ITAT, finding the same to be based on an invalid reference to DVO, on the basis of the decision of the Hon'ble Apex Court in the case of Sargam Cinema (supra). This decision of the ITAT he pointed out was confirmed by the Hon'ble jurisdictional High Court also. Our attention was drawn to the order of the ITAT in the case of Sanjay H. Thakkar, in IT(SS)A.No.849/Ahd/2010 dated 18.1.2016 and judgment of the Hon'ble High Court confirming the finding of the ITAT in Tax Appeal No.832 of 2016 dated 22.12.2016.Copies of both the orders were placed before us. 11. The ld.DR, though supported order of the ld.CIT(A) but was unable to controvert either the factual contention of the ld.counsel for the assessee that the reference for determinat....
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.... they pertained to one Jesubhai Barot of Tapan Tenement who was furnished this estimate by his contractor. That Jesubhai Barot had in turn sought opinion of the assessee on this estimate of the contractor. The assessee had contended that no work was carried out by the assessee in lieu of this document. The Assessing Officer did not find the assessee's explanation convincing and, therefore, he added the amount of Rs.76,139/- to the income of the assessee as earned on account of extra work carried out. 13.2 The ld. CIT(A) noted that while the document specified extra work carried out in Tapan Society, the said society was neither organized/ constructed/developed nor maintained by the assessee. He found nothing in the document to indicate the name or the involvement of the assessee and further the assessee had filed confirmation before him of Jasubhai to the effect that the document pertained to work which he got carried out by his society and which was given to the assessee for his approval as a known person. The ld. CIT(A) had sought the Assessing Officer's report on the confirmation so given by the assessee and noted that the Assessing Officer did not refute the contents of the ....
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....we are of the view that his challenge the deletion of addition made by the ld. CIT(A) is not sustainable. Ground of appeal No.9 raised by the Revenue is, therefore, dismissed. Ground No. 9 of the Revenue's appeal is dismissed. 14. Ground No. 10 raised by the Revenue reads as under:- 10. The CIT(A) has erred in law and on fact in deleting the addition of Rs.4,15,455/- made on the basis of seized document no.99, 232-236 of Annexure A-7 and seized document no.48 and 49 of Annexure A-9 without considering the nature of entries as well as the findings of the Assessing Officer. 14.1 Ground No. 10 raises the issue of deletion of addition of Rs. 4,15,455/- by the ld. CIA(A). The said addition was made on the basis of Annexure-A7, page No. 99, found in the office of the assessee. The reverse side of which showed receipt from members of Block A to F, totaling Rs.11.11 lakhs, of which Rs.6.95 lakhs were expended for registration/stamp paper notary charges and the balance was attributable as net profit of the assessee. The assessee explained the contents of the document to the Assessing Officer as pertaining to members of Neelkanth Park Scheme for expenditure incurred by them....
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....nfirmation of the party to whom he had attributed the notings in Document Annexure A7, page no. 99, i.e. New Neelkanth Non-Trading Association and the Assessing Officer had not refuted the contents of the same in the remand report sought from him. In view of the same, we see no reason to interfere in the order of the ld. CIT(A) deleting the addition of Rs.4,15,455/- made to the income of the assessee. Ground No. 10 of the Revenue's appeal is dismissed. Ground No. 10 raised by the Revenue is dismissed. 15. Ground No.11 raised by the Revenue reads as under:- "11. The CIT(A) has erred in law and on fact in deleting the addition of Rs.1,14,298/- made on the basis of seized document no. 158 of Annexure X-2 without considering the nature of entries as well as the findings of the Assessing Officer." 15.1 Ground No. 11 relates to the deletion of addition of Rs.1,14,298/- made to the income of the assessee on the basis of document Annexure X-2, page no. 158. The said document was found from the office of Ghanshyam Enterprise, Ring Road, Ahmedabad and the entries on the documents revealed that receipts of Rs.1,14,298/- for extra work of Flat No. A-201. The assessee conte....
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.... assessee had already disclosed Rs.13.04 lakhs on account of the same and an addition of Rs.3,54,273/- was also made on the basis document found during search. All these facts are not disputed before us; also not disputed is the fact that the document clearly mentioned all details of the facts to which the extra work pertained, i.e. Flat No.A-201; and despite the assessee explaining that it was only an estimate, the Assessing Officer rejected it merely his own conjectures and surmises, stating that bills are generally written as estimate, when he ought to have made inquiry and then arrived at this finding. We, therefore, agree with the ld. CIT(A) that the addition in the impugned case has been made by the Assessing Officer merely on suspicion and therefore we concur with the ld. CIT(A) that the same is not tenable in law. The order of the ld. CIT(A) deleting the addition of Rs.1,14,298/- is, therefore, confirmed. Ground of appeal No. 11 raised by the Revenue is dismissed. 16. Ground No. 12 raised by the Revenue is as follows:- "12. The CIT(A) has erred in law and on fact in deleting the addition of Rs.50,000/- out of Rs. 1,50,000/-made on the basis of seized document....
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....dition of Rs.25,75,000/-, basis Annexure A-9, page No.60. The said document was found from the 3rd floor office, Paldi of the assessee and pertained to payment to six different persons - totaling Rs.25.75 lakhs. The assessee explained to the Assessing Officer that these entries were of business expenditure explained duly reflected in the books of accounts of M/s. Saminarayan Enterprises, Sahjanand Enterprise and Neelkanth Enterprises. Copies of the accounts of all the different persons noted in the document were furnished. The Assessing Officer was not convinced with the explanation of the assessee since he found that the copies of the accounts of the parties were not reconciled with the entries in the seized document. Accordingly, he made addition of Rs.25.75 lakhs to the income of the assessee. 17.2 Before the ld. CIT(A), the assessee furnished explanation clarifying the doubts expressed by the Assessing Officer while holding that the figures mentioned in the document did not match with that mentioned in the accounts of the parties. The ld. CIT(A) took note of the explanation of the assessee and found that all entries were duly reconciled by the assessee. He further noted that....
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....t known. Such theories so propounded by him can only be explained by him. These are the personal whims and fancies of the A.O. and not supported by any evidence or material on record. If the A.O. had slightest of doubts or suspicion he could have made direct enquiries with the parties concerned. It was not that the appellant had no co-operated with the A.O. during the assessment proceedings or refused to furnish their detailed address. The onus to establish that the payments so noted in the loose paper are other than those recorded in the books of accounts is on the A.O, which he has miserably failed to discharge. Merely, rejecting the explanation and without bringing any material on record to rebut the explanation furnished by the appellant cannot be the ground for making additions. In view of the above fact the addition made by the appellant deserves to be deleted." On a holistic consideration of the contentions/details on record, it is apparent that the conclusion drawn by the A. O. was hurried and more on a surmise and misinterpretation of the facts. The addition made by him is therefore no sustainable and is deleted." 17.3 The ld. DR, before us, was unable to contr....
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....Thus Rs. 60 lakhs was held as undisclosed and added to the income of the assessee. 18.2 Before the ld. CIT(A), the assessee reiterated his contention that the notings in these documents were forecast of money to be received in future which amounts had actually been received in most of the cases by way of cheques and duly accounted for in the books of the assessee. This fact was verified by the ld. CIT(A) and found to be correct. The AO's report was also sought on this submission made by the assessee who, the ld. CIT(A) noted, had no adverse comments to make on the same. The assessee further contended that the amount of Rs.25 lakhs noted in the document had no notings against it and therefore was a dumb figure, probably noted to anticipate the receipt in future. This fact that there were no notings against Rs. 25 lakhs figure noted in the document is also not disputed. Considering the fact that the assessee's explanation that all amounts noted in the documents except that Rs.25 lakhs were duly recorded in the books of the assessee as received primarily by way of cheque was verified by the Assessing Officer and no adverse comments were made by him and further the fact that the fig....
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....osed in the books of accounts. This was the paper on which forecasts were made of the money to be received in near future from the members and which has in fact been received. 3 Gitaben Prajpati Neelkanth Enterprise 300000 An amount of Rs. 595000 (250000+245000 + 100000) has been received on 19.02.05, 21.02.05 & 23.02.05 and duly disclosed in the books of accounts. This was the paper on which forecasts were made of the money to be received in near future from the members. In fact higher amount has been credited in the books of account. 4 Bhajansingh Gandhi (Sardarji) Sahjanand Enterprise 900000 Firstly, the amount in question is Rs.4.00 lacs and not 9.00 lacs as interpreted by the AO. The said fact can also be verified from the loose paper annexed. The total amount which has been received from him during the year under consideration is Rs.5.12 (0.80 + 3.30 + 1.00) lacs which is higher than Rs 4.00 lacs noted in the loose paper. 5 Pradeep Sanghvi Swaminarayan Enterprise 650000 An amount of Rs. 650000 has been received on 14.02.05 by cheque and duly disclosed in the books of accounts. As stated on this paper forecasts were made of the mone....
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....orded in the books of the assessee as received primarily by way of cheques which fact was examined by the Assessing Officer also in remand proceedings and no adverse comments were made by him. Therefore, with regard to amounts so found recorded in the books of the assessee, the Revenue, we find, has no case with the Assessing Officer having accepted the fact that the same were duly recorded in the books of assessee by way of banking entries. With respect to the amount of Rs.25 lakhs, it is not disputed that there was no description or narration of any sort against this figure while against the rest of the figures, there were name mentioned of different enterprises of the assessee and name of persons to whom the amounts were attributed. Therefore, the contention of the assessee was that this was a dumb figure accepted by the ld. CIT(A), we hold, is correct and his explanation thereof that the figure may have been noted in anticipation of receipts in future appears to be plausible. The order of the ld. CIT(A), therefore, deleting the entire addition made of Rs.60 lakhs on account of notings in document page 36 of Annexure-A1 is upheld. Ground of appeal No.14 of the Revenue is dism....
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....khs on the analogy for April and May 2004, and made a net addition of the balance i.e. Rs.46,89,254/- . 19.2 Before the ld. CIT(A), the assessee reiterated the contention made before the Assessing Officer that the Assessing Officer had incorrectly taken the figures disclosed in the documents at Rs.7.59 lakhs and Rs.1.05 lakhs for the month of April and May 2004 when the actual figures were Rs.1.87 lakhs and Rs.1.16 lakhs respectively. He further contended that since the Assessing Officer had proceeded on an incorrect presumption, his rejection of books of accounts and accordingly the estimation of receipts from the hotel business for the entire year was entirely off the mark and needed to be deleted. The Assessing Officer found the contentions of the ld. Counsel for the assessee to be true as far as the fact of incorrect total taken by the Assessing Officer from the document before him pertaining to the month of April and May, 2004. He found the totals pointed out by the assessee to be correct. Finding so, he held that the entire premise with the Assessing Officer for rejecting the books of the assessee and estimating the receipts for the year no longer survive and accordingly d....
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....0. Ground No.16 raised by the Revenue reads as under:- "16. The CIT(A) has erred in law and on fact in deleting the addition of Rs.99,94,203/- made on the basis of seized document of Annexure A-26 of 28 without considering the nature of entries as well as the findings of the Assessing Officer." 20.1 The issue raised in the above ground relates to the addition made on the basis of certain books of accounts and loose papers inventorized as Annexure-A26, A27 & A28 found during the course of survey u/s 133A of the Act at the site of Neelkanth-II, Ahmedabad. The assessee contended that the contents of the documents impounded pertained to Neelkanth-II Project which was not the project carried out by the assessee, but by one Shri Rajubhai Vaghela who was the proprietor of Shree Hari Builders in which the said project was being carried out. The Assessing Officer, however, rejected the contention of the assessee and held Shree Hari Builders/Shri Rajubhai Vaghela to be a dummy or benamidar of the assessee for the reason that though the assessee had full information about Shri Rajubhai Vaghela, but he did not furnish information establishing that the document impounded belong to h....
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....he entries to this impugned documents were apparently incorporated in the relevant returns of income filed by that concern. As such, the addition could not have been made in the hands of the appellant. It is, therefore, deleted and the related ground of appeal, allowed." 20.3 Before us, the ld. DR was unable to refute or controvert the factual findings of the ld. CIT(A) that the additional evidences filed by the assessee demonstrating the fact that the receipts revealed in the document seized from the site of Neelkanth-II were all accounted for in the books of Shree Hari Builders and profits thereon disclosed in the return of income filed for the said year and the fact that the assessee was not the proprietor of the said concern was not refuted by the Assessing Officer in his remand report. In view of this fact alone, we hold that the Assessing Officer is precluded from now challenging the deletion of addition made by the ld. CIT(A) after considering the remand report of the Assessing Officer on the additional evidences filed by the assessee. In view of the above, ground of appeal No. 16 raised by the Revenue is also dismissed. Ground of appeal No.16 is thus dismissed. 21.....
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.... this findings while making addition of Rs.25 lakhs on account of the same to the income of the assessee. 21.2 The ld. CIT(A), however, allowed the assessee the benefit of this finding by the Assessing Officer and it is aggrieved by this benefit of telescoping given by the ld. CIT(A) that the Revenue is in appeal before us in the above ground. 21.3 We have heard both the parties. We find no infirmity in the order of the ld. CIT(A) giving the benefit of telescoping of Rs.9.33 lakhs to the addition made on account of unexplained expenditure in the luxuries and furniture amounting to Rs.25 lakhs. It is not disputed and in fact it has been clearly recorded in the order of the Assessing Officer at paragraph no.2 while dealing with the issue of jewellery found in the locker of the assessee that the assessee's explanation of the same having been sourced from withdrawals made from his capital account was incorrect and the Assessing Officer had clearly noted that these withdrawals in fact had been used towards personal expenditure and other luxuries which were not disclosed in the books of the assessee. 21.4 The ld. DR was unable to controvert this fact on record. In the light of t....
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....25% applied by the assessee treating it as plant and machinery was contrary to law. The issue, we agree with the ld. Counsel for the assessee, is squarely covered in favour of the assessee by the decision of the Hon'ble Jurisdictional High Court in the case of CIT Vs. Express Resorts & Hotels Ltd (supra). In view of the same, the disallowance made of depreciation amounting to Rs.5,835/- is directed to be deleted. Ground No. 1 raised by the assessee is accordingly allowed. 25. Ground No. 2 raised by the assessee reads as under:- "2. The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of Rs.22,837/- made by the A.O. @ 20% of the expenses on telephone/ mobile." 25.1 Ground No. 2 was stated to be not pressed before us. Accordingly, ground No.2 is dismissed as not pressed. 26. Ground No. 3 raised by the assessee reads as under:- "3. The learned Commissioner of Income Tax (Appeals) has erred in partly confirming the addition made by the Assessing Officer u/s.69B of the Act for the alleged unexplained investments i.e. to the extent of Rs. 14,90,312/- for construction of Swaminarayan Farm residence and to the extent of Rs.....
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.... ii. Hotel Neelkanth 4,82,349/- 28,49,084 Difference of Rs.23,66,735/- added to the income of the assessee under Section 69B of the Act. He pointed out that the Ld.CIT(A) restricted the amount of undisclosed investment to Rs.2,00,599/- in respect of Swaminarayan residence, and Rs.18,25,521/- in respect of Hotel Neelkanth. 8. With respect to the residential house, it was pointed out that the DVO had determined the total value of the property at Rs.1,73,12,146/-, while the assessee had declared total investment in the same upto 31.3.2004 at Rs.77,02,238-. The AO took the cost of construction, as determined by the DVO and taking this as the basis for 31.3.2004, he determined the cost of construction as at the end of each preceding year, and in the same ratio. Accordingly, the cost of construction as per the valuation report as on 31.3.2004 for the impugned year i.e. Asst.Year 2004-05 was taken at Rs.4,17,830/-, and noting the cost of construction disclosed by the assessee for the year at Rs.1,85,894/-; the difference of Rs.2,31,936/- was added to the income of the assessee as unexplained investment in the residential house during the year. Similarly, in ....
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....on'ble Apex Court in the case of Sargam Cinema (supra) laying down the proposition of law that no reference to the DVO could be made without rejecting the books of accounts of the assessee. In view of the same, the decision rendered by the ITAT in the case of brother of the assessee, Shri Sanjay H. Thakkar which was confirmed by the Hon'ble jurisdictional High Court also, applies to the facts of the present case, following which, we hold that the addition made on account of unexplained investment in two properties of the assessee amounting to Rs.20,26,120/-, was not sustainable in law, since it was based on reference made to the DVO, which was illegal and not in accordance with law." 26.3 We have noted from the above that the ITAT deleted the addition made noting that the reference made to the DVO for valuation of the property was not in accordance with the law having been made without rejecting the books of accounts of the assessee. Reliance was placed on the decision of the Hon'ble Apex Court in this regard in the case of Sargam Cinema Vs. CIT, reported in [2011] 197 Taxman 203 (SC). The ITAT noted that identical reference made in the case of Shri Sanjay H. Th....
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....d in the locker as unexplained and confirmed addition to the tune of Rs.5,99,531/- against which the assessee has come up in appeal before us. 27.3 The explanation of the assessee with regard to this jewellery which was found in the locker of the assessee was that it was purchased from one Mahendra & Co., sourced out of withdrawals reflected in the books of accounts. The Assessing Officer, on inquiry made in this regard, found that the said person was not in existence on the date of the supposed sale. The ld. CIT(A), based on this finding of the Assessing Officer which remained uncontroverted, confirmed the addition to the extent of Rs.5.99 lakhs. The assessee was unable to convince us in any manner about the genuineness of the alleged purchases made of the jewellery from Mahendra & Co. He was unable to controvert the findings of the inquiry of the Assessing Officer that the said party was not in existence when the sale of the jewellery purportedly was made. In view of the same, we see no reason to interfere in the order of the ld. CIT(A) confirming the addition of unexplained investment in jewellery to the tune of Rs.5,99,531/-. Ground of appeal No. 4 of the assessee is dism....
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....is adjudicated accordingly." 28.3 The ld. Counsel for the assessee before us relied on the decision of the ITAT, Chandigarh Bench in the case of ITO Vs. Balbir Singh Sekhon, reported in [2012] 24 taxmann.com 84 (Chandigarh-Trib.) for the proposition that where the Assessing Officer had estimated household expenses of the assessee at a higher sum without assigning any reason, the addition could not be sustained. 28.4 We have heard both the parties. We do not find any infirmity in the order of the ld. CIT(A). On the contrary, we find that ld. CIT(A) has taken a holistic view of the matter and given due benefit to the assessee as required. The addition made by the Assessing Officer on account of unexplained investment in luxuries and furniture to the tune of Rs.25 lakhs. The ld. CIT(A) has given the benefit of telescoping from the withdrawals reflected in the books of accounts to the tune of Rs.9.33 lakhs attributed by the Assessing Officer himself for the purposes of purchasing luxurious items outside the books. Further, the ld. CIT(A) has estimated the value of items so found with the assessee at Rs.30 lakhs as opposed to Rs.38,02,054/- valued by the Assessing Officer. On peru....
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....sis of notings contained in page No.41 of Annexure-A9 attributed as being payments made by the assessee to one Rasikbhai Patel, out of the books. The ld. CIT(A) interpreted the findings as reflecting 3 amounts of Rs.50,000/- each paid to one Shri Rasikbhai Patel whose name also found mention in the document and also held two of the payments to be made in cash and one in cheque noting the code "C" and "CHQ" written against them. The fact of cheque payment was also corroborated by the ld. CIT(A) from the books of the assessee. He accordingly deleted the addition made of Rs.50,000/- relating to cheque payment made to Shri Rasikbhai Patel disclosed in the books of the assessee while the remaining Rs. 1 lakh was confirmed by him. The contention of the ld. Counsel for the assessee before us was a reiteration of that made to the authorities below that this document page No.41 of Annexure A9 was a dumb paper since it neither contained name of the person nor its associates, and the same was unsigned and undated. That it only contained the figure '50' and it was not sure whether it represented income, receipt, expenditure or investment. That the paper was not in his handwriting, and it had n....
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....ount of Dharmadev Housing Corporation, proprietary concern of the appellant." 30.1 The issue relates to addition made to the income of the assessee on account of godown sales not disclosed in the books of the assessee. The basis for the disallowance was the information emanating from page No.28 of the Annexure-18 seized during search from the assessee. The said document contained entries reflecting booking of godown and the booking amounts received towards the building of the assessee namely Sahjanand Estate, Sarkhej constructed by Dharamdev Housing Corporation. The Assessing Officer found the payment received from the purchaser were shown to be much lesser extent in the regular books of accounts of the assessee. The Assessing Officer tabulated the party-wise date in his assessment order which totalled to Rs.66,42,935/- and added it to the income of the assessee. 30.2 Before the ld. CIT(A), the assessee stated that the document had been impounded from the office of 3rd party and the assessee had nothing to do with the said concern nor any control of the concerned premises. He, therefore, stated that the addition was unwarranted. The ld. CIT(A), however, noted that the details....
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....arly established and, as rightly pointed out by the ld. CIT(A), in the absence of any credible explanation given by the assessee for the said document there is no other recourse left but to confirm the addition of Rs.66,42,935/- made on account of the difference in the receipts as per the seized document and that reflected in the books of the assessee on account of sale of godowns. Ground of appeal No. 7 of the assessee is dismissed. 31. Ground No. 8 raised by the assessee is as follows:- "8. The learned Commissioner of Income Tax (Appeals) has erred in confirming an addition of Rs.3,54,273/- made by the A.O. for the alleged extra work receipts for the extra work carried out in different flats from the notings on seized Pg. Nos. 92, 94 & 95 of Ann X-1 ie. Rs.1,63,770/- (92) Rs. 75,138/- (94), and Rs.1,15,385/- (95) (as per Para 16 of the A.O.)." 31.1 The issue relates to addition made of Rs.3,54,273/- on the basis of seized document No.92, 94 and 95 of Annexure X-1. The contention was that the said document disclosed receipts of Rs. 3.54 lakhs for extra work done in the impugned year while the assessee had disclosed far more amount in his books amounting to Rs.13.....