TaxTMI 
TaxTMI 
2025 (6) TMI 558
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.... raised in the cross appeal of the Revenue and assessee are as under :- ITA No. 1149/JP/2024 - A.Y. 2017-18 (Revenue) "1. Whether on the facts and in the circumstances of the case, the Id. CIT(A) has erred in giving a relief of Rs. 1,01,18,885/- in AY 2017-18 by unlawfully and erroneously determining the cost of acquisition in AY 2016-17 and giving its set off of against income of A. Y. 2017-18, when the fact of receiving of on money of Rs. 1,43,40,000/- has not been disputed by the Id. CIT(A)? 2. Whether on the facts and in the circumstances of the case, the Id. CIT(A) has travelled beyond his jurisdiction and erred in holding for A. Y. 2017-18 that "In the assessment order for AY 2016-17, the appellant has disputed the cost and the payment of on money and the appellant has contended that the total payment or the total cost was Rs. 2.5 Crore and has made such statement on oath also in the statement recorded u/s 131 of the Act. The total cost of acquisition is taken at Rs. 2.5 crores in this order subject to any further orders in proceedings in the case of the appellant" when the appeal of AY 2016-17 is still pending with CIT(A)? 3. Whether on the fact....
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....21,115/- as against addition of Rs. 1,43,40,000/- which was made by the learned AO on the ground that the purchaser Shri Chandra Prakash Agarwal admitted of having paid on money in the purchase of Agricultural land from the assessee without allowing cross examination of Shri Chandra Prakash Agarwal. 7. That in the facts and circumstances of the case and in law the learned CIT(A) has erred in restricting and confirming addition of Rs. 42,21,115/- as against addition of Rs. 1,43,40,000/- which was made by the learned AO despite there being contradictory statements of assessee and Shri Chandra Mohan Badaya regarding the sale consideration of land 8. That in the facts and circumstances of the case and in law the learned CIT(A) has erred in not holding that the learned AO was not justified in applying the provisions of section 68 of the income Tax Act. 1961. 9. That in the facts and circumstances of the case and in law the learned CIT(A) has not held that in the case of the assessee section 68 was not at all applicable. 4. Apropos Ground of appeal of the assessee and that of the Department, the brief facts of the case are that the assessee filed a return of....
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.... aforesaid land was purchased by them for total consideration of Rs. 10 crore against the total sale consideration mentioned in the sale registered deed at Rs. 5,14,03,715/- on behalf of their partnership firm / proprietary concern as mentioned in above table. The land was subsequently sold to Shri Chandra Prakash Agarwal on 10-05-2016 through a deal and Shri Chandra Mohan Badaya, one of the purchaser, admitted at Question No. 6 in the statement recorded u/s 132(4) of the Act during the search proceedings u/s 132 of the Act conducted on 29-07-2016 at his residential premises at A-178, Surya Nagar, Taroo Ki Koot, Tonk Road, Jaipur that on 10-05-2016, he made a deal of 10 bigha land bearing khasra No. 379 and 384 situated at Sikar Road, Nindar and adjacent to Green Triveni with Shri Jitendra Kumar Garg at the consideration of Rs. 14.51 Crore in the presence of Shri Kailash Chand Maheshwari. This deal was made through Shri Kailash Chand Maheshwari for which he received Rs. 4.50 crores by Shri Chandra Prakash Agarwal and Rs. 25 lacs as brokerage by Shri Chandra Mohan Badaya. It is noted that in continuation to the answer of Q. No.6 of his statement recorded on 29-07-2016 Shri Chandra M....
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....that he had purchased three bigha land at Nindar in his concern M/s. Eminent Builders Developers from Smt. Prabhati Devi and four other persons and sold it to Shri Chandra Prakash Agarwal. The AO has taken reference to the statement taken in respect of Shri Chandra Prakash Agarwal as mentioned at pages 6 to 9 of the assessment order. The AO on perusal of the statement of Shri Chandra Prakash Badaya felt that Shri Chandra Prakash Badaya not only accepted the receipt of on money from sale of total land situated at Vilage Nindar constituting 10 bighas but also the assessee named Shri Pradeep Dusad has also accepted having been paid on money pertaining to share in land viz. 3 Bighas. He noted that if the cheque portion and on money portion is quantified then it will emerge that the assessee out of total consideration of Rs. 3 crores approx. paid Rs. 1.62 crores through cheque/ banking channel and balance Rs. 1.38 crore thorough cash being on money portion. Thus the AO during assessment proceedings vide questionnaire dated 18-10-2018 asked the assessee to explain the transaction of sale of land situated at Village Nindad and further show cause as to why the on money received in the deal....
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....of Rs. 5.22 crores only was given through cheques and balance payments of Rs. 4.78 crores were received as 'one money' in cash/kind, therefore, value of 'on money paid in cash/kind by the seller for the entire land or 10 bigha which comes to Rs. 4.78 crores and the same has been admitted by Shri Chandra Mohan Badaya and Shri Chandra Prakash Agarwal as well as the assessee in their statement recorded during the search and post search proceedings and there is no ambiguity in respect of payment of on money of Rs. 4.78 crores. It is pertinent to mention that the assessee had accepted that 3 bighas of land (approx) was purchased and sold in his partnership firm M/s. Eminent Builders Developers but the deal had happened through him and the "on money" in the deal was to be received by him only. Hence, the same is undisclosed income in the hands of the assessee. Therefore, the assessee's contention is that he has already declared a gain of Rs. 7,78,885/-, is not accepted as the same has been declared in partnership firm M/s. Eminent Builders Developers. The AO noted that the assessee has put forward argument that the land purchase on 'on money' was subsequently sold....
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....ual capacity. In case it was to be held that the same is assessable in the hands of the partnership firm in that case the case of the partnership firm is to be reopened considering provisions of section 150. However even though the property was registered in the name of the partnership firm of the appellant, and the sale and purchase of the land was done in the name of the partnership firm, however the transaction of giving and taking of the on money was done by the appellant. From the statements of the buyer of the property Shri Chanda Prakash Agarwal during search and seizure and also from the statement on oath of the appellant, the unaccounted money was received by the appellant and there is no reference to any other name or any other party The unaccounted cash is not shown in the books of accounts of the partnership firm. There is no record that the unaccounted cash was firstly received by the partnership firm as a whole and thereafter it was handed over to the appellant Partnership firm is a legal entity and there is no such entry of receipt of cash and giving of cash to the appellant. Appellants also received Rs. 18 lakhs in his bank account which is part of the unaccounted i....
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....ed however is explained in terms of section 69A of the Act. Accordingly, the on money in the hands of the appellant in the year under appeal does not fall under the section and the deduction of the on money paid by the appellant at the time of purchase of the same property is allowable. The appellant has challenged the addition of Rs. 1,43,40,000 in the hands of the appellant on account of alleged on money received on sale of property. The appellant has also referred to the assessment order in the case of the appellant himself for the immediately previous assessment year which is assessment year 2016-17. Appellant has contended that search was also conducted in the case of Shri Chandra Mohan Badaya simultaneously when search was conducted in the case of Shi Chandra Prakash Agarwal It so happened that the firms in which Shri Chandra Mohan Badaya was partner namely AR property & Colonizers and M/s Fortune Real Estate had also purchased agricultural land from the same seller(s) Smt. Prabhat Devi and other(s) on the same date 28.07.2015 Copies of agreements of purchase of land pertaining to the firm where Shri Chandra Mohan Badaya was partner were also found during th....
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.... Considering the cost at Rs. 2.5 Cr., the appellant paid on money of Rs. 95,78,885 at the time of purchase and on sale received unaccounted money of Rs 1,38,00,000 as the payment of Rs. 1,62,00,000 is apparently recorded in books of firm through banking channel Accordingly, the addition made in the assessment order is restricted hereby to the difference of on money transaction (including cheque receipt) in hands of appellant which is Rs. 42,21,115 and the remaining addition is directed to be deleted Accordingly, this ground of appeal is partly allowed." 6. While hearing of the appeal, the ld. AR of the assessee has filed the detailed written submission praying that the addition so sustained amounting to Rs. 42,21,115/- by the ld. CIT(A) needs to be deleted and further submitted that the Revenue has wrongly stated that the ld. CIT(A) has not disputed the receipt of on money of Rs. 1,43,40,000/- on sale of land whereas the ld. CIT(A) in fact in the appellate order has taken the on money which is on sale of land at Rs. 1,38,00,000/- and thus the issue raised by the Revenue has no relevance which needs to be disallowed. The written submissions as advanced by the ld. AR of t....
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....ur 28.07.2015 23028865 Party No. 1 Annexure-A Exhibit-24 Page No.7 to 11 TOTAL 51403715 2. The above table indicates that 10 bighas of Agricultural land was sold by Smt. Prabhati Devi and others to persons as under for a total consideration of Rs. 5,14,03,715/- as per sales deeds 2.1 3 bigha to M/s Eminent Build Developers through partner shri Pradeep kumar Dusad (assessee), wherein shri Pradeep kumar Dusad acted as partner of firm M/s Eminent Build developers 2.2 3 bigha to A R Properties and colonizers through proprietor shri Chandra Mohan Badaya 2.3 4 bigha to M/s Fortune Real Estate through partner Shri Chandra Mohan Badaya, where shri Chandra Mohan Badaya acted as partner of firm M/s Fortune Real Estate 3. These deeds of sale were found with Shri Chandra Prakash Agarwal as later-on the entire 10 bighas land was purchased by him from M/s Eminent Build developers through Shri Pradeep Kumar Dusad (ii) M/s A R Properties and colonizers (iii) M/s Fortune Real Estate through partner Shri Chandra Mohan Badaya. These were part of chain document of these Agricultural land. 4. The Purchase of 3 bighas land by....
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....s land was purchased by the firm M/s Eminent Build Developers on 28.07.2015 for Rs. 3.00 crs. as against Rs. 1,54,21,115/- shown in the registered sale deed. He further deposed that the land was sold on 31.05.2016 to Shri Chandra Prakash Agarwal for Rs. 3.00 Crs. as against Rs. 1,62,00,000/- shown in the sale deed. Thus there was payment of on money of Rs. 1,48,20,000/- in the purchase of 3 bighas of land and also receipt of on money in the sale of 3 bigha land of Rs. 1,48,20,000/- as per statement only and the statements was without any supporting documents. 9. Satisfaction note is faulty and is irrelevant In view of the aforesaid statements recorded under section 132(4) of Shri Chandra Prakash Agarwal on 28.07.2016 and of Shri Chandra Mohan Badaya on 29.07.2016 and under section 131 of assessee shri Pradeep Kumar Dusad on 10.11.2016, the learned AO drew a satisfaction note for taking action in the hands of the assessee under section 153C. The satisfaction note is reproduced here under Satisfaction Note as required u/s 153C of the I.T. Act, 1961 In the caese of Shri Pradeep Dusad (PAN: ABLPD4678H) AY 2011-12 & 2017-18 A search action u/s 132(1) ....
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..... Chandra Mohan Badaya it is evident that the registries of these lands were made at the sale consideration of Rs. 5,14,03,715/- which were paid to the sellers through cheques and balance payment of Rs. 4,85,96,285/- out of total sale consideration of Rs. 10 crores was made in cash to the sellers in the form of on money. i. First Para of the satisfaction Note On perusal of the first para of the satisfaction note, it is revealed that the learned AO is discussing the issue relating to purchase of Agricultural land on 28.07.2015 from Smt. Prabhati Devi and other by three parties i.e. M/s Eminent build developers through partner Shri Pradeep Kumar Dusad for Rs. 1,54,21,115/-, M/s A R properties and Containers through proprietor Shri Chandra Mohan Badaya and M/s Fortune Real Estate through partner Shri Chandra Mohan Badaya. It is submitted that the amount mentioned in this para is duly accounted for in the regular books of accounts of M/s Eminent Build Developers where the assesseeshri Pradeep kumarDusad is partner. Further there is no murmur of his satisfaction that these have a bearing on the determination of the income of the assessee. a. The satisfaction n....
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....rs were made in cash and payment balance amount of Rs. 1.82 was pending. The question No. 9 of statements of shri Chandra mohan Badaya is reproduced hereunder " The perusal of second para of the satisfaction note reveals the following 1. It is in respect of statement of Shri Chandra Mohan Badaya the statements recorded under section 132(4) on 29.07.2016 is scanned below The perusal of the above statement reveals that the answer is different than the question asked for. The simple question put to Shri Chandra mohan badaya was when did he purchases 10 bighas land and from whom. he was not asked about the consideration paid for the debt. The reply appears to be extracted under pressure suiting to the Revenue. The reply is not relevant to the seized material which are purchased deeds found during the course of search. The purchase deeds of Agricultural land have been registered with the Registration Authorities and nothing was found during search controverting the contents of these deeds. The statement is an aberration and has no live relationship with the seized material. Therefore it is not part of the seized material and cannot be considered as in....
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....are not incriminating material. These have not been adversely commented upon by the learned AO. Further these purchases deed apparently have no bearing on the determination of income of M/s Eminent Build Developers and of assessee. IN the facts and circumstances there was absolutely no case for issuing notice under section 153C for A Y 2016-2017. b. It is submitted that the sale transaction of land pertains and falls in A Y 2017- 2018 as it was sold on 31.05.2016 ( as per statement of Shri Pradeep Kumar Dusad) on the basis of statement of Shri Pradeep Kumar Dusad. It may be noted that no document was found regarding the sale of land by eminent build developers through partner. The fact of sale has emanated by answer to question No. 8 in the statement of Shri Pradeep Kumar Dusad recorded on 10.11.2016. Position of law with respect to drawing satisfaction note by the learned AO of the other person. It is submitted that the provisions of section 153C(1) very clearly stipulate that with effect from 01.10.2014 the learned AO of the other person is required to issue notice under section 153C only after satisfying that the seized material has a bearing on the de....
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....years referred to in sub-section (1) of section-153A : Provided that in case of such other person, the reference to the date of initiation of the search under section-132 or making of requisition under section-132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person : Provided further that the Central Government may by rules13 made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years as referred to in sub-section (1) of section-153A except in cases where any assessment or reassessment has abated. (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-sect....
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....bout transaction of on money of Rs. 4.78 cr. on sale. It is submitted that the sale of Agricultural land by M/s Eminent Build Developers to Shri Chandra Prakash Agarwal has taken place on 31.05.2016 relevant to assessment year 2017-2018. Thus the satisfaction note does not contain anything relating to A Y 2016-2017. In view of the provisions of section 153C the learned AO of other person could initiate proceedings under section 153C for the A Y 2017-2018 only w r to this satisfaction note. It is submitted that since there is nothing in satisfaction note of the learned AO for the assessment year 2016-2017, therefore the learned AO was precluded to initiate any proceedings under section 153C of the income Tax Act 1961 for A Y 2016-2017 in the case of the assessee. In view of the above facts it is submitted that the proceeding initiated under section 153C by the learned AO for the assessment year 2016-2017 is unlawful, illegal and unjust. The Hon'ble CIT (A) is therefore requested that the unlawful, illegal, and unjustified proceeding initiated by the learned AO may kindly be quashed. The assessment completed under section 153C in pursuance of such unlawful proceedings should also....
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....n note. In other words for each assessment year the learned Ao has to record in writing that the material in his possession has a bearing on the determination of the income of the asseseee for the relevant assessment year 10. This confessional statement are violative of board circulars IT is submitted that the confessional statements recorded during search and afterwards being of confessional nature are violative of CBDT circulars. The confessional statements of Shri Chandra Parakash Agarwal/ Chanra Mohan Badaya and assesee shri Pradeep Kumar Dusad have been obtained by the revenue authorities in violation of CBDT circular No F.No. 286/2/2003 - IT (Inv.) dated March 23, 2003 . Quoted below and F.No. 286/98/2013-IT (Inv.II) dated 18.12.2014. CBDT Instruction dated March 23, 2003: In the light of the statements recorded followed by retractions on the ground of coercion and threat in the course of Search and Survey operations, the Board issued the Instructions F.No. 286/2/2003 - IT (Inv.) dated March 23, 2003 stating as follows: "Instances have come to the notice of the Board where assessees have claimed that they have been forced to con....
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....oercion in the recording of the statement during Search/Survey/Other proceeding under the I.T.Act, 1961 and/or recording a disclosure of undisclosed income under undue pressure/ coercion shall be viewed by the Board adversely. 4. These guidelines may be brought to the notice of all concerned in your Region for strict compliance. 5. I have been further directed to request you to closely observe/oversee the actions of the officers functioning under you in this regard. 6. This issues with approval of the Chairperson, CBDT 11. Statement being without supporting documents, no action was warranted. Although no action was warranted in the case of the assessee Shri Pradeep Kumar Dusad, firstly because there was nothing untowards or incriminating in the sale deeds of 3 bighas land purchased on 28.07.2016, secondly the deal of land was for and by the firm M/s Eminent Build Developers. Despite this the case of the assessee was taken for scrutiny and the learned AO made addition of receipt of on money of Rs. 1,48,20,000/- purely on the basis of confessional statement of Shri Pradeep Kumar Dusad. The learned CIT(A) has reduced the same to Rs. 42,21,1....
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....Agarwal (70 Taxmann.com 95) held thus: A statement of a M/S Maverick Commodity Brokers Pvt. Ltd.& others person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger a block assessment. The undisclosed income of an Assessee has to be computed on the basis of evidence and material found during search. The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the extent it is relatable to the incriminating evidence/material unearthed or found during search. In other words, there must be a nexus between the statement recorded and the evidence/material found during search in order to for an assessment to be based on the statement recorded."Smt. S.Jayalakshmi Ammal [2016] 74 taxmann.com 35 (Madras)" . While adverting to the above, we are of the considered view that, for deciding any issue, against the assessee, the Authorities under the Income Tax Act, 1961 have to consider,. as to whether there is any corroborative material evidence. If there is no corroborating documentary evidence, then statement recorded under Section 132(4) of the Income Tax....
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....mann.com 355 (Gujarat), Hon'ble Gujarat High Court held that. It is required to be borne in mind that the revenue ought to have collected enough evidence during the search in support of the disclosure statement. It is a settled position of law that if an assessee, under a mistake, misconception or on not being properly instructed, is over assessed, the authorities are required to assist him and ensure that only legitimate taxes are collected. The Assessing Officer cannot proceed on presumption u/s 134(2) of the Act and there must be something more than bare suspicion to support the assessment or addition. In the present case, though the revenue's case is based on disclosure of the assessee stated to have been made during the search u/s 132(4) of the Act, there is no reference to any undisclosed cash, jewellery, bullion, valuable article or documents containing any undisclosed income having been found during the search " v. Pullanguegode Rubber & Produce Co. Ltd. Vs. State of Kerala 91 ITR 18 (SC) An admission is extremely an important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show t....
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....dence was not conclusive and it was open to the assessee to show that it was not correct. xi. CIT Vs Ashok kumar Jain (2014) 111 DTR 291 (Raj) 369 ITR 145 It was held that if the assessee does not adhere to the surrender made than it is for the learned AO to bring on record cogent material and other evidences to support the addition rather than rely on the statements xii. CIT Vs. Bhaskar Mittal 73 Taxman 437 (Cal) The Law empowers the ITO to assess the income of an assessee according to law and determine the tax payable thereon. In doing so he cannot assess an assessee on an amount, which is not taxable in law, even if the same is shown by an assessee. There is no estoppels by conduct against law nor is there any waiver of the legal right as much as the legal liability to be assessed otherwise than according to the mandate of the law (sic) . It is always open to an assessee to take the plea that the figure, though shown in his return of total income, is not taxable in law xiii. Ajit Chintaman Karve V/s I.T.O. (2009) 311 ITR (AT) 66 (Puna) That merely because an offer was made having no cogent basis or approval of law that should....
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....ome/return of income of firm M/s Eminent Build Developers disclosing capital gain are available on paper book page No. 2 to 36. In these circumstances the assessment completed in the hands of the assessee deserves to be quashed. The issue of capital gain exclusively pertains to the firm M/s Eminent Build developers which the learned CIT (A) has accepted it indirectly. Hon'ble Supreme Court Decision not followed 12.2 It was submitted by the assessee during the course of appellate proceedings that the Hon'ble Supreme Court in the case of Commissioner of Income Tax -14 versus Jasjit Singh (SC) (Civil appeal No. of 2023 @ SLP(C) No. 6644 of 2016) has held that in the case of other persons action under section 153C for earlier six year shall be counted from the year of receipt of information /documents and not from the date of search in the case of searched person. The relevant part of the decision in quoted below. Apex Court in the case of CIVIL APPEAL NO .... OF 2023 (@ S.L.P.(C) No. 6644 of 2016) COMMISSIONER OF INCOME TAX 14 versus JASJIT SINGH (SC) cited at (2023) 334 CTR 00937 (sc) also cited on (2023) 458 ITR 0437 (SC) held that "Search....
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....ra of the Appellate order is quoted below. "The issue of incriminating material is irrelevant of the year as the proceedings were initiated as per section 143(2) of the Act and not by issuing notice under section 153C of the Act. Reference to section 153C of the Act at few places by the Id AO is inadvertent mistake and the same is hereby rectified." The position being so the assessment has been completed in the case of the assesssee without issuance of notice under section 153C which has been mandated by the Hon'ble Supreme Court. It is submitted that by not following the decision of Hon'ble Supreme Court, the learned CIT (A) is guilty of judicial indiscipline. The issue has been discussed by the learned CIT (A) on page No 32 of his order without there being any decision on the issue. The Hon'ble ITAT is humbly requested to quash the assessment order having been framed without issuance of notice under section 153C. The assessee reiterates that no action was warranted in the hands of the assessee as the dealing in land were of the firm M/s Eminent Build developeRs. even further than action taken is against the decision of the Hon'ble Suprem....
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....en relied upon, there is no other material either in the form of cash, bullion, jewellery or document in any other form which can come to the conclusion that the statement made was supported by some documentary evidence. We have gone through the record and find that the CIT(A) has rightly observed as stated hereinabove, which was confirmed by the Tribunal. It would not be out of place to mention that this order of Hon'ble Rajasthan High Court has been confirmed by Hon'ble Supreme Court also. (ii). Hon'ble Delhi High Court in case of Harjeev Agarwal (70 Taxmann.com 95) held thus: A statement of a M/S Maverick Commodity Brokers Pvt. Ltd.& others person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger a block assessment. The undisclosed income of an Assessee has to be computed on the basis of evidence and material found during search. The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the extent it is relatable to the incriminating evidence/material unearthed or found during search. In other words, ther....
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....ide its order dated 14.07.2016, in the case of CHETNABEN J SHAH LEGAL HEIR OFJAGDISHCHANDRA K. SHAH, in TAX APPEAL NO. 1437 of 2007, laid down the ratio that no additions can be made In the hands of the assessee merely on the basis of statements recorded, during the course of search, under section 132(4). Hon'ble High Court in the above mentioned case relied on its earlier order in the case of Kailashben Manharlal Chokshi [2008] 174 Taxman 466 (Guj.), wherein a similar ratio was laid down. Further, in the case of Narendra Garg & Ashok Garg (AOP) [2016] 72 taxmann.com 355 (Gujarat), Hon'ble Gujarat High Court held that " It is required to be borne in mind that the revenue ought to have collected enough evidence during the search in support of the disclosure statement. It is a settled position of law that if an assessee, under a mistake, misconception or on not being properly instructed, is over assessed, the authorities are required to assist him and ensure that only legitimate taxes are collected. The Assessing Officer cannot proceed on presumption u/s 134(2) of the Act and there must be something more than bare suspicion to support the assessment or addition. In t....
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....nts 14. Violation of principles of Natural justice Before the learned CIT0(A), the assessee also pleaded that the additions were made by the learned AO in violation of principles of natural justice. The additions have been made on the basis of statement of Shri Chandra Prakash Agarwal and Shri Chandra Mohan Badaya but in-spite of specific written request no cross examination of these people was allowed. But the learned CIT(A) has not considered these submission, Therefore the assessment deserves to be quashed. 15. Before the learned CIT (A) the assessee also pleaded that the learned AO has made the addition under section 68 of the income Tax Act, which is wrong . It was pleaded before the learned CIT (A) that the provisions of section 68 are not applicable in the case of the assessee even distantly, 16. Provisions of section 153C(2) The learned CIT(A) has wrongly observed as quoted above that the assessment in this case was required to be completed under section 143(2) and not by issuing notice under section 153C it is submitted that the assessment year 2017-2018 being relevant to the search period was required to be completed in the man....
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.... of 2016) COMMISSIONER OF INCOME TAX 14 versus JASJIT SINGH (SC) cited at (2023) 334 CTR 00937 (sc) also cited on (2023) 458 ITR 0437 (SC) held that "Search and Seizure- Date from which six year period was to reckoned for issuance of notice- Search and seizure proceedings were conducted in premises of one M/s K-A.O was opinion that some documents and material belonging to respondent(s) assessee. were involved - Notice was issued by concerned jurisdiction AOs, to assessee's who contended that period for which they were required to file returns, commenced only from date materials were forwarded to their A.Os. Held it is evident on a plain interpretation of section 153(1) that parliamentary intent to enact proviso was to cater no merely to question the abatement but also with regard to date from which six year period was to be reckoned. In respect of which returns were to be filed by third party (whose premises are not searched and in respect of whom specific provisions under section 153C was enacted-Revenue argued that proviso (to section 153(c)(1) is confined in its application to question of abatement- Revenue's argument is Insubstantial and without merit -- It is ....
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.... Current year when information has been received from the AO of the searched person 2 2018-2019 1^st year 3 2017-2018 2^nd year 4 2016-2017 3^rd year 5 2015-2016 4^th year 6 2014-2015 5^th year 7 2013-2014 6^th year Thus in the case of other person action u/s 153C shall be considered on receipt of seized material from the AO the searched persons, if the same has found to have a bearing on the determination of the income of the other person. The Hon'ble Supreme Court has held that the date of receipt of seized material shall not be and cannot be considered as date of conducting of search. The Hon'ble Supreme Court has very categorically stated that this sort of provisions is not workable specifically in a case where seized material is handed over after a long period of 4 years or so to the AO of the other person. And if the AO is expected to take action in such cases in respect of earlier six years it will require the asseseee to keep the books of account for ten years which is not the intention of law and hence not workable. In view of this the Hon'ble Supreme Court has held that the learned AO of the other....
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....oome (1972) AC 1027 (HL), we hop it will never be necessary for us to say so again that " in the hierarchical system of Courts" which exists in our country, "it is necessary for lower tier". Including the High Court. "to accept loyalty the decisions of the higher tiers". "IT is inevitable in a hierarchical system of Courts that there are decisions of the supreme appellate tribunal which do not attract the unamimous approval of all members of the judiciary . But the judicial system only works if someone is allowed to have the las word and that last word, once spoke, is loyally accepted" (See observation of Lord Hailsham and Lord Diplock in Broome Vs Cassell). The better wisdom of the Court below must yield to the higher wisdom of the Court above. That is the strength of the hierarchical judicial system. In Cassell Vs Broome (Supra). Commenting on the Court of Appeals comments that Rookes Vs Barnard (1964) AC 1129, was rendered per incuriam, Lord Diplock observed. The court of Appeal fouond themselves able to disregard the decision of this House at Rookes Vs Barnard (1964) SC 1129 by applying to it the label per incuriam. That lavel is relevant only to the right of an appell....
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....sions of different High Court favouring the assessee would be of no benefit of assessee at this stage as the said I.T.A. No.63/Ran/2022 Assessment Year: 2018-19 Nepal Chandra Dey decisions of the High Courts are treated to be never existed or to say are wiped out by the aforesaid decision of the Hon'ble Supreme Court. Ground NO. 3, 4 5 & 7 3. That in the facts and circumstance of the case and in law the learned CIT(A) has erred in not deleting the addition made by the learned AO in violation of principles of natural justice. 4. That in the facts and circumstances of the case and in law the learned CIT(A) has erred in confirming the action of the learned AO in considering the sale deeds found during search belonging to firm M/s Eminent Build Developers in the hands of the assessee. Action in the hands of the assessee deserves to be quashed. 5. That in the facts and circumstances of the case and in law the learned CIT(A) has erred in restricting and confirming additions of Rs. 42,21,115/- as against addition of Rs. 1,43,40,000/- which was made by the learned AO solely on the basis of statements without there being any substantive evidence. 6. T....
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....an Badaya was partner were also found during the course of search in the case of shri Chandra prakash Agarwal where documents of agreement of eminent Build developers was also found. (Copy of these agreement is available on paper book page NO . 37 to 47.) Accordingly Shri Chandra Mohan Badaya was examined during the course of search under section 132. It was in his statement that Shri Chandra Mohan Badaya stated that the cost land (3 bighas) purchased by M/s Eminent Build Developers included on money payment in cash of Rs. 1,46,00,000/-. It was on the basis of this statement that the learned AO made addition in assessment year 2016-2017 of Rs. 1,45,78,885/- being payment in cash over and above the apparent consideration shown in the purchases agreement at Rs. 1,54,21,115/-. In other words the cost of land taken by the learned AO in the case of the assessee as per AO works out as under a. Payment made by firm Eminent Build developers by cheques as per agreement and as per bank account of M/s Eminent Build Developers Rs. 1,54,21,115/- b. Alleged Cash payment on account which addition have been made by the learned AO in the hands of the assessee In A Y 2016-2017 trea....
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....osed in the statement as under regarding the sale consideration :- Total sales consideration Rs. 3,00,00,000/- Apparent consideration received through cheques Received from Chandra mohan Badaya by cheque 18,00,000/- Plots from Shri Chandra Prakash Agarwal 56,00,000/- Rs. 1,62,00,000/- Cash received/receivable 64,00,000/- Total 3,00,00,000/- Thus as per the statements of the assessee the sale consideration works out to Rs. 3,00,00,000- whereas the learned AO has works out the sale consideration to Rs. 3,05,40,000/- (Rs. 1,62,00,000/- + Rs. 1,43,40,000/-). These are uncontroverted facts regarding sale consideration of agricultural land of M/s Eminent Build Developers. It is submitted that the learned AO has already made additions of Rs. 1,45,78,885/- in the assessment order for the assessment year 2016-2017, on account of alleged payment made by the assessee at the time of purchase of Agricultural land for an apparent consideration of Rs. 1,54,21,115/-. In other words the cost of land has been taken at Rs. 3,00,00,000/- (154,21,115/- + 1,45,78,885/-) These facts are crystal clear and establish beyond doubt that as per the AO himself the cost ....
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....Y 2016- 2017 and 2017-20078 stands accepted by the department. Till date no action has been considered in the hands of the firm M/s Eminent Build developeRs. which shows that the entire transactions of purchases and sales of the agricultural land in the hands of the firm is in order. In the face of these documentary evidences which establish beyond doubt that the transaction of purchases and sales belonged to firm M/s Eminent Build developers and also deserved to be considered in the hands of the firm M/s Eminent build developers. Absolutely there is no case for considering the purchase and sale of land in the hands of the assessee. The entire approach of the learned AO was misdirected and was unlawful. On this account alone the assessment order deserves to be quashed. The addition made on the basis of statement is further assailed as under a. No addition was called on the basis of statement of shri Chanra Mohan Badaya It is submitted that the sale of land by m/s Eminent build developers is an independent transaction. This is established by the fact of independent registration of the sale transaction before the sub registrar jaipur. Copy of which is avail....
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....kar) Where no material belonging to a third party is found during a search, but only as inference of an undisclosed income is drawn during course of enquiry, or during search or during post-search enquiry, section 153C would have no application. Thus the detection of incriminating material leading to an inference of undisclosed income is a sine qua non for invocation of section 153C. Said detection can be at three stages (a) when re assessment is initiated (b) during course of reassessment and (c) where re assessment is altered by a difference assessment in respect of searched person or in respect of third party, further such incriminating material must relate to undisclosed income which would empower the assessing officer or upset or disturb a concluded assessment of the other person. Otherwise a concluded assessment would be disturbed without there being any basis for doing so which is impermissible in law. b. Statement of shri Chandra Mohan Badaya has not been accepted by the learned AO in total (partial acceptance is not in accordance with law) It is further submitted that in the statements of Shri Chandra Mohan Badaya reproduced by the learn....
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....g 3 bighas land was stated to be Rs. 3.00 Cr. and on this basis the learned AO as per para 6.10 of the assessment order appearing on page No. 10 of the assessment order has accepted the total deal of Sale of 10 bighas of land at Rs. 10.00 Cr. A vital question arises that on what account an on what ground the statement of one i.e. Shri Chandran Mohan badaya has been rejected and that of the assessee has been accepted. The submission of the assessee is plain and strong that the statement of shri Chand mohan badya and that of the assessee himself being contradictory both deserved to be ignored. The Statement of both shri Chandra mohan badaya and that of the assessee have no documentary evidence to support. The learned AO has also not bring any ground for believing upon the statement of assessee and disbelieving the statement of the shri Chandra Mohan badaya. In the circumstances the additions made on the basis of contradictory statements deserves to be deleted. ` Before making addtionss the learned AO was required to reconcile both the statements. d. Cross examination of Shri Chandra Mohan Badaya and Shri Chandra Prakash Agrawal not allowed. The learned AO has initia....
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....onable opportunity is given to the assessee as found by the Tribunal. No answer should be given in advisory jurisdiction which would not finally decide the issue since final finding can be arrived at only after giving reasonable opportunity to the assessee and explanation given by the assessee would have material bearing on the finding. It is necessary that the Assessing Officer gives opportunity to the assessee. Tribunal has not considered the evidence in its proper perspective while rendering the decision in appeal and accordingly, the findings of the Tribunal are vitiated in law. As the final fact-finding forum, the Tribunal has to consider the same again. Since Tribunal has recorded a finding that reasonable opportunity has not been given to the assessee to give rebuttal evidence and explanation, this can effectively be done by the Assessing Officer. The reference applications are disposed of as above leaving it to the Tribunal to pass consequential orders. iii. PRAKASH CHAND NAHTA vs. COMMISSIONER OF INCOME TAX (HIGH COURT OF MADHYA PRADESH) (2008) 301 ITR 0134 : Assessment- Validity-Opportunity of being heard I statements of third party- Unaccounted silver o....
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....tunity of cross-examining the said R-Authorities could not be absolved from doing so on the ground that the facts stated by R were admitted by the assessee-K had not only retracted his earlier statement but also made a voluntary disclosure, along with two other partners of DCI, in the sum of Rs. 11 lacs which included the amount of pronote of Rs. 8,78,358-Legal effect of the statement recorded behind the back of the assessee and without furnishing the copy thereof to the assessee or without giving an opportunity of cross-examination, is that if the addition is made, the same is required to be deleted on the ground of violation of the principles of natural justice- Orders of all the three authorities set aside and addition deleted. v. COMMISSIONER OF INCOME TAX vs. EASTERN COMMERCIAL ENTERPRISES (HIGH COURT OF CALCUTTA) 210 ITR 0103 Assessee showing a gross profit rate of 5.2%-Revenue being of the opinion that assessee inflated purchases, called in evidence one S from whom assessee made purchases and applied G.P. rate of 30%- S denied having made any sales to assessee in the face of earlier affidavits confirming such sales-Statement of S not furnished to assessee n....
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....nita Dhadda (Supreme Court) Addition on the basis of statements never confronted to assessee: Susee Auto Plaza (P.) Ltd.vs.Addl. CIT [2010] 3 ITR(TRIB.) 166(CHENNAI) Where, admittedly, no incriminating evidence was either found or seized, which could be said to be directly related to assessee company, but whatever evidence was found was related to group companies, simply on basis of analogy that assessee must be collecting amount from customers like group concerns, addition could not be made to assessee's income. Any addition which was based on statements which were never confronted to the assessee could not be sustained in the eyes of the law. IN view of the afore said case laws, the ratio of which is fully applicable to the case of the facts of the case of the assessee, the additions made deserves to be deleted. It is submitted that the above submission has not been considered by the learned CIT(A) in proper perspective. For the shake brevity the Gist of the above submission is as under Assessment passed not on the basis of seized material but only on statements a. The entire assessment order is based and....
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....oncerned assessees while filing return of income. In these circumstances, confession during the search and seizure and survey operation do not serve any useful purpose. It is, therefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income-tax department. Similarly, while recording statement during the course of search and seizure operation, no attempt should be made to obtain confession as to the undisclosed income." CBDT Instruction dated December 18, 2014: F.No. 286/98/2013-IT (Inv.II) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes Dated- 18th December, 2014 Income Subject: Admissions of Undisclosed Income under coercion/pressure during Search/Survey - reg. Ref: 1) CBDT letter F.No. 286/57/2002-IT(Inv.II) dt. 03-07-2002 2) CBDT letter F.No. 286/2/2003-IT(Inv.11) dt. 10-03-2003 3) CBDT letter F.No. 286/98/2013-IT(Inv.11) dt. 09-01-2014 Sir/Madam, Instances/complaints of undue influence/coercion have come to notice of the C....
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....t all applicable. It is submitted that a detailed submission was made before the learned CIT (A) regarding the issue that leaned AO was not justifying in making the addition invoking the provisions of section 68. Vide letter dated 18.06.2024. copy of the letter dated 18.06.2024 is available on paper book page No . cited supra . The same is quoted below. "Section 68 wrongly applied by the learned AO. It is submitted that the learned AO at top para of page No 12 of the assessment order has made addition of Rs. 1,43,40,000/- on account of on money receipt on sale of land. He has treated the receipt of on money on sale of land as undisclosed income of the assessee and the same has been added under section 68 of the income Tax Act 1961. It is submitted that the learned AO has erred in considering on money of Rs. 1,43,40,000/- (being 30% of Rs 4,78,00,000/-) on sale of land as unexplained income of the assessee. . The land was purchased for Rs. 2.50 Cr. which includes registered value of Rs. 1.54 Crs. as such the working of income by the leaned AO is incorrect. Further the learned AO has also acted unlawfully in treating this income arising on sale of ....
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....try appears in such books of account : and iv. The assessing officer enquiring into the matter comes to the conclusion that the undisclosed income of the assessee. The perusal of the aforesaid decision of the Hon'ble Supreme Court mandates that section 68 is applicable only when there is a credit entry in the books of account maintained by the assessee. In this case of the assessee the learned AO has not discussed any credit entry in any name appearing in the Books of accounts of the assessee. The additions has been made on account of on money received on sale of land on which provisions of section 68 are not applicable, hence the provisions of section 68 are not applicable. Since in this case there are no credits in the books of account maintained by the assessee which can be treated as unexplained, therefore section 68 was wrongly applied. In view of the above Hon'ble CIT (A) is requested to decide the appeal considering the above said submission and grant relief to the asseesese." The learned CIT(A) although have quoted that above submission of the assessee on page No. 36 to 38 in the Appellate order but has refrained from giv....
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....T(A) in respect of cost of land as well as sale consideration of land is based on the statement of the assessee recorded lateron under section 131. It is relevant to mention that search was not conducted in the case of the asseseee. Search(es) was conducted in the case of Shri Chandra Prakash Agarwal and Shri Chandra Mohan Badaya,. But in the searches of above both the persons namely Shri Chandra Prakash Agarwal and Shri Chandra Mohan Badaya no incriminating material relating to assessee was found at all. In the assessment year for A Y 2016-2017 and 2017-2018 the learned AO has not referred to any incriminating material found and seized in the cases of searches conducted in the cases of Shri Chandra Prakash Agarwal and Shri Chandra Nonth Badaya. Only registered sale deeds of land which were sold to Shri Chandra Prakash Agarwal by the asseseee and Chandra mohan Badaya were found and seized from the possession of shri Chandra prakash Agarwal. These sales deeds are not incriminating material at all, as the sales consideration mentioned in these deeds is fully accounted for in the books of shri Chandra prakash Agarwal and other related parties and assessee as well. The submission of th....
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....o. 1 Annexure-A Exhibit-28 Page No.13 to 17 -do- M/s A R. Properties & Colonizers through Proprietor Shri Chandra Mohan Badaya Agriculture land at ArajiKhasra No. 384 area 2.99 hectare at Village-Nindar, Tehsil-Amer, Jaipur 28.07.2015 12953735 Party No. 1 Annexure-A Exhibit-28 Page No.44 to 48 -do- M/s Fortune Real Estate through Partner Shri Chandra Mohan Badaya Agriculture land at Arajikhasra No. 379 area 1.12 hectare at Village- Nindar, Tehsil-Amer, Jaipur 28.07.2015 23028865 Party No. 1 Annexure-A Exhibit-24 Page No.7 to 11 TOTAL 51403715 Simultaneously, the search proceedings u/s 132 of the I. T. Act, 1961 was also conducted on 29.07.2016 at residential premises of Sh. Chandra Mohan Badaya at A-178, Surya Nagar, Taroo Ki Koot, Tonk Road, Jaipur and his statement was recorded u/s 132 (4) of the I. T. Act, 1961 on 29.07.2016 wherein vide Question No. 9 he was asked to give details of purchase of 10bigha land at village Nindar and reply of the same he admitted that he had purchased 10 bigha lands at Nindar from the five persons mentioned above at total consideration of Rs. 10 crores. In the statement he also f....
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....s purchased by the firm M/s Eminent Build Developers and not by Shri Pradeep Kumar Dusad in his individual capacity b. The information in so far as is in respect of purchase of agricultural land from Smt. Prabhati Devi and others by M/s Eminent building developers through partner Shri Pradeep Kumar Dusad for Rs. 1,54,21,115/- is concerned the learned AO has not observed that this information/material/ documents have any bearing on the determination of income of the assessee (Pradeed Kumar Dusad and M/s Eminent Build developeRs. Partnership firm) in so far as it relates to A Y 2016-2017. In other words the satisfaction note is not asking for any action for any action in any hands of either Pradeep Kumar Dusad or Partnership M/s Eminent Build Developers for the A Y 2016-2017. Therefore the proceedings taken under section 153C happen to be without there being any satisfaction note for the A Y 2016-2017. (ii) Second para of the satisfaction note In the second para of the satisfaction note the learned AO has discussed as under "vide question No. 9 the Chandra mohan badaya was asked to give details of purchases of 10 bighas land at village Nindar and r....
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....ad purchased 3 bigha land from Smt. Prabhatidevi and four other persons and sold it to shri Chandra Prakash Agarwa. He also admitted to have taken on money to the extent to Rs. 4.78 on this land deal from Shri Chanra Prakash Agarwal. From the above discussion of the learned AO it is crystal clear that in this para the learned AO is discussing the selling part of the Agriculrual land which has taken place on 31.05.2016, which falls in the A Y 2017-2018. Hence in this para also there is no satisfaction of the learned AO relating to A Y 2016-2017. The Contents of this do not relates to A Y 2016-2017. These can not form part of satisfaction note for A Y 2016-2017. The transaction of sale of land pertains to assessment year 2017-2018 and not to assessment year 2016-2017 c. It is submitted that M/s Eminent Build Developers sold land to Shri Chandra Prakash Agarwal on 31.05.2016. Thus the sale falls in assessment year 2017- 2018. Thus the only material on the basis of which action under section 153C could be taken was pertains to AY 2017-2018 and that too in the case of M/s Eminent Build Developers. The satisfaction note does not disclose any content and any material for....
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.... is purchased deed has not been adversely commented upon by the learned AO hence no action could have been contemplated on the basis of purchased deed which alone are the seized material. The provision of section 153C(1) are quoted below for ready reference. "153C. (1) Notwithstanding anything contained in section-139, section- 147, section-148, section-149, section-151 and section-153, where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section-153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section-153A, if, that Assessing Officer is satisfied that the books of ac....
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....oned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section-153.A. ^14[(3) Nothing contained in this section shall apply in relation to a search initiated under section-132 or books of account, other documents or any assets requisitioned under section-132A on or after the 1st day of April, 2021.]" The perusal of the above reveals that as per the provisions of section 153C before initiating proceeding under section 153C in the case of other person there must be separate satisfaction note of each year(s) of the learned AO of other person, where the proceeding under section 153C is to be initiated, meaning thereby that before initiating proceedings under section 153C in the case of other person there must is year specific satisfaction note for each year of the AO of the other person. In the case of the assessee it happens to that AO of the searched person and AO of the other person is one and the same, therefore there is only one satisfaction note. However in the satisfaction the learned AO does....
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.... money. This transaction has taken place on 31.05.2016 relevant to assessment year 2017-2018. The observation of on money of Rs. 4.78 cr. alleged to have been taken from Shri Chandra Prakash Agarwal is not on the basis of any seized material but it is on the basis of statement of assesseeshri Pradeep Kumar Dusad. There is no seized material pertaining to A Y 2016-2017. In these circumstance the entire satisfaction note is confusion worst confounded. Absolutely ni action for any year could have been taken under section 153C in so far as the assessee is concerned in his individual capacity. (iv) Fourth para of the satisfaction note In this para the leaned AO has stated that seized document which in this case are purchases deeds belong to the assessee have a bearing on the determination of his income. The observations of the leaner AO lacks substance. The sale deed although pertains to the asseseee but do not have any bearing on the income of the assessee. The learned AO has not stipulated, in the satisfaction note, in what manner these sale deeds have a bearing on the determination of income of the assessee. The amount disclosed in the sale deed is fully accounted f....
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....elatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger a block assessment. The undisclosed income of an Assessee has to be computed on the basis of evidence and material found during search. The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the extent it is relatable to the incriminating evidence/material unearthed or found during search. In other words, there must be a nexus between the statement recorded and the evidence/material found during search in order to for an assessment to be based on the statement recorded. " Smt. S.Jayalakshmi Ammal [2016] 74 taxmann.com 35 (Madras) " . While adverting to the above, we are of the considered view that, for deciding any issue, against the assessee, the Authorities under the Income Tax Act, 1961 have to consider,. as to whether there is any corroborative material evidence. If there is no corroborating documentary evidence, then statement recorded under Section 132(4) of the Income Tax Act, 1961, alone should not be the basis, for arriving at any adverse decision against the assessee. If the authorities under the In....
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....ve collected enough evidence during the search in support of the disclosure statement. It is a settled position of law that if an assessee, under a mistake, misconception or on not being properly instructed, is over assessed, the authorities are required to assist him and ensure that only legitimate taxes are collected. The Assessing Officer cannot proceed on presumption u/s 134(2) of the Act and there must be something more than bare suspicion to support the assessment or addition. In the present case, though the revenue's case is based on disclosure of the assessee stated to have been made during the search u/s 132(4) of the Act, there is no reference to any undisclosed cash, jewellery, bullion, valuable article or documents containing any undisclosed income having been found during the search " v. Pullanguegode Rubber & Produce Co. Ltd. Vs. State of Kerala 91 ITR 18 (SC) An admission is extremely an important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect. vi. Satinder Kumar (HUF) v. CIT [1977] 106 ITR 64 (SC): It was held that it is true that a....
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....014) 111 DTR 291 (Raj) 369 ITR 145 It was held that if the assessee does not adhere to the surrender made than it is for the learned AO to bring on record cogent material and other evidences to support the addition rather than rely on the statements xii. CIT Vs. Bhaskar Mittal 73 Taxman 437 (Cal) The Law empowers the ITO to assess the income of an assessee according to law and determine the tax payable thereon. In doing so he cannot assess an assessee on an amount, which is not taxable in law, even if the same is shown by an assessee. There is no estoppels by conduct against law nor is there any waiver of the legal right as much as the legal liability to be assessed otherwise than according to the mandate of the law (sic) . It is always open to an assessee to take the plea that the figure, though shown in his return of total income, is not taxable in law xiii. Ajit Chintaman Karve V/s I.T.O. (2009) 311 ITR (AT) 66 (Puna) That merely because an offer was made having no cogent basis or approval of law that should not stop a taxpayer from correcting his mistake. It was the duly of the A.O. to tax only the legitimate amount from a taxpayer ....
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....serve any useful purpose. It is, therefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income-tax department. Similarly, while recording statement during the course of search and seizure operation, no attempt should be made to obtain confession as to the undisclosed income." CBDT Instruction dated December 18, 2014: F.No. 286/98/2013-IT (Inv.II) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes Dated- 18th December, 2014 "Subject: Admissions of Undisclosed Income under coercion/pressure during Search/Survey - reg. Ref: 1) CBDT letter F.No. 286/57/2002-IT(Inv.II) dt. 03-07-2002 2) CBDT letter F.No. 286/2/2003-IT(Inv.11) dt. 10-03-2003 3) CBDT letter F.No. 286/98/2013-IT(Inv.11) dt. 09-01-2014 Sir/Madam, Instances/complaints of undue influence/coercion have come to notice of the CBDT that some assessees were coerced to admit undisclosed income during Searches/Surveys conducted by the Department. It is also seen that many such ....
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.... i. Hukum Chand Jain Vs. Income Tax Officer (2011) 334 ITR 197 (Raj) Hon,ble jurisdiction High Court has held that : Admission despite being an important piece of evidence was not conclusive and it was open to the assessee to show that it was not correct. ii. CIT Vs Ashok kumar Jain (2014) 111 DTR 291 (Raj) 369 ITR 145 It was held that if the assessee does not adhere to the surrender made than it is for the learned AO to bring on record cogent material and other evidences to support the addition rather than rely on the statements Conclusion In view of this the learned AO first erred in making addition solely on statement. it is submitted that addition could not have been made by the learned AO exclusively on the basis of statements. The additions besides being based on statements should have been substantiated with reference to other material and evidences, which in this case are lacking. D In view this it is submitted that there is gross violation of principles of nature justice. If the statement of Shri Chandra Prakash Agarwal, Shri Chandra Mohan Badaya and of the assessee is taken away there is no material for making the ....
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....ble opportunity to the assessee and explanation given by the assessee would have material bearing on the finding. It is necessary that the Assessing Officer gives opportunity to the assessee. Tribunal has not considered the evidence in its proper perspective while rendering the decision in appeal and accordingly, the findings of the Tribunal are vitiated in law. As the final fact-finding forum, the Tribunal has to consider the same again. Since Tribunal has recorded a finding that reasonable opportunity has not been given to the assessee to give rebuttal evidence and explanation, this can effectively be done by the Assessing Officer. The reference applications are disposed of as above leaving it to the Tribunal to pass consequential orders. iii. CIT Vs Sunita Dhadda (Supreme Court) Cross-examination is one part of the principles of natural justice: A Constitution Bench of this Court in State of M.P. v. Chintaman Sadashiva Vaishampayan AIR 1961 SC 1623, held that the rules of natural justice, require that a party must be given the opportunity to adduce all relevant evidence iv. The legal effect of the statement recorded behind the back of the assessee and ....
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....tement was recorded at late hours in the night under coercion and pressure-Subsequently, K along with two other partners of DCI, made a voluntary disclosure of a sum of Rs. 11 lacs including the amount of Rs. 8,78,358 and same was assessed in the hands of the three partners-Relying on the statement of R and the retracted statement of K, AO made addition of Rs. 8,78,358 under s. 68 in the hands of assessee also and the same was confirmed by CIT(A) and Tribunal-Not justified-Apparently, there was a violation of principles of natural justice as the statement of one of the important witnesses, namely, R on which heavy reliance was placed by the AO is neither referred to in the assessment order nor copy thereof was given to the assessee nor the assessee was given an opportunity of cross- examining the said R-Authorities could not be absolved from doing so on the ground that the facts stated by R were admitted by the assessee-K had not only retracted his earlier statement but also made a voluntary disclosure, along with two other partners of DCI, in the sum of Rs. 11 lacs which included the amount of pronote of Rs. 8,78,358-Legal effect of the statement recorded behind the back of the as....
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....ce, It has to be quashed as b being bad in law and void or a nullity. xi. Kellogg India P Limited & Madhukar Patil Vs, UOI (2006)(193) E L T. 385 (Bombay High court) = 2007 (8) S,T. T 84 (Bom). Wherein it has been held Adjudication - Natural justice- Affected persons must be given fair opportunity not only to answer case against him but to adduce positive evidence in support of his own case together with right to contradict all adverse allegations, if necessary, by permitting him to cross -examine witnesses of opponent. (para 46) The ground of the revenue, that the learned CIT(A) has erred in taking the cost of land of the asseseee at Rs 2.50 crores is without any basis. It is submitted that the issue of purchase of land by the asseseee falls in A Y 2016-2017 which is pending before the learned CIT(A). In view of this the revenue has taken objection that when the appeal is pending for 2016-17 and the issue of cost of land pertains to A Y 2016-2017, hence learned CIT(A) was not justified to determine the cost of land at Rs. 2.50 Cr, and finalize the appeal for A Y 2017- 2018. In this regard it is submitted that at the first, the assessee ....
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.... Hence the ground has been carelessly taken by the revenue. 7. To support his case, the ld.AR of the assessee has filed the index paper book containing 188 pages. Index paper Book S No Particulars Paper book page No(s) 1 Copy of purchase deed, relevant account of land in the books of firm M/s Eminent Build Developers, Bank account, Balance sheet 1 to 15 2 Copies of computation of income/return of income of firm disclosing income on sale of land 2 to 36 3 copy of the submission dated 18.06.2024 furnished on 25.06.2024 submitted before the learned CIT( A) 37 to 50 4 copy of the submission made before the learned CIT(A) dated 10.04.2023 51 to 170 5 Copy of purchase and sale deed of 3 bighas of Agricultural land in the name of firm M/s Eminent Build Developers 171 to 188 8. The ld. AR of the assessee vehemently argued that the assessment year in the year under consideration is 7th year and the same cannot be subjected to the assessment year and for that he relied upon the written submission. Whereas on the merits of the case he stated that when the ld.CIT(A) appreciated that the land is related to the firm and has also allo....
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....n is directed to be deleted Accordingly this ground of appeal is partly allowed." The Bench considered the submissions of the assessee and the ld. DR. It is noticed from the records that while proceeding before the ld. CIT(A) as well as now the assessee has successfully made out a case that the land in question was purchased and sold by the firm M/s Eminent Build Developers, a sperate entity having three partners including assessee Shri Pradeep Kuamr Dusad. The entire amount of purchases of Rs. 1,54,21,115/- was paid by firm M/s Eminent Build Developers from bank account of the firm with ICICI Bank. Copy of the bank account has been placed on record (Paper book page No. 13). Further the purchase of land on 28.07.2015 is duly reflected in the Balance Sheet of the firm M/s Eminent Build Developers as on 31.03.2016. Copy of Audited Balance Sheet as on 31.03.2016 of firm M/s Eminent Build Developers is available on record (paper book page No. 15). The Sale deed is registered on 31.05.2016 in the name of the firm M/s Eminent Build developers wherein the assessee through partner Shri Pradeep Kumar Dusad who has acted in representative capacity. The entire amount of Sales Cons....
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....is statements given before the Assessing Officer. Even otherwise, an admission by the assessee cannot be said to be a conclusive piece of evidence. The admission of the assessee in absence of any corroborative evidence to strengthen the case of the Revenue cannot be made the basis for any addition. Therefore, the substantial questions of law framed by the appellant pertained to an open issue which stands concluded by the decision of the Hon'ble Supreme Court; one such decision was rendered in "M/s Pullangode Rubber Produce Co. Ltd. v. State of Kerala And Another" (1973) 19ITR18. 12. Therefore, we hold that no substantial question of law arises between the parties and while so, the present Income Tax Appeal is not maintainable. 13. For the foregoing reasons, D.B. Income Tax Appeal No.25/2024 is dismissed. Based on these observations, Ground no. 3 to 9 are allowed. The above finding is given based on the specific fact that the property in dispute is of firm and not of the assessee and ld. CIT(A) has already considered the set off of that property and allowed the benefit to the assessee and therefore, based on that specific fact the assessee gets relief.....
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....earlier six yea s from the date of receipt of seized material and the date of search shall be irrelevant. Since the bench has allowed the appeal of the assessee on its merits the technical ground raised by the assessee become academic and left open. 12. In the result, the appeal of the assessee is allowed. 13. Now coming to the appeal of the revenue the bench noted that in the first ground the revenue has challenged the finding of the ld. CIT(A) while deleting the part on money allowing the set of on money in purchase and sale and thereby sustained the balance amount only and thereby submit that the ld. CIT(A) should not have considered that plea of the assessee and should have confirmed the whole amount added by the ld. AO. The bench noted that since we have while dealing with the ground no. 3 to 9 of the assessee directed to delete the addition and therefore, on that ground we hold that ground no. 1 raised by the revenue has no merits and thereby required to be dismissed. 14. Ground no. 2 raised by the revenue challenges the finding of the ld. CIT(A) in holding in the assessment order for AY 2016-17, the appellant has disputed the cost and the payment of on money and the....
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.... both the documents the sale agreement of the land and the statement of Sh. Chandra Mohan Badaya it is evident that the registries of these lands were made at the sale consideration of Es. 5.14.03.715/ which were_paid_to_the_sellers Document 2 Later on, the statement of Sh. Pradeep kumarDusad was recorded on oath on 10.11.2016 wherein he admitted in reply to Questions No. 5 to 8 of the statement that he had purchased 3bigha land from Smt. Prabhati Devi and four other persons and sold it to Shri Chandra Prakash Agarwal. He also admitted to have taken 'on money' to the extent to Rs. 4.78 cr. on this land deal from Shri Chandra Prakash Agarwal. AY 2017-18 I am therefore, satisfied that the document seized belong to Shri Pradeep Dusad (PAN: ABLPD4678H) other than the search person and have bearing on the determination of his total income. Hence notice u/s 153C Is to be Issued for the AYs 2011-12 to 2016-17 and notice u/s 142(1) and thereafter 143(2) for AY 2017-18 is to be issued for the purpose of assessment and reassessment of income of Shri Pradeep Dusad in accordance with provision of Section 153A.Y Jagdish) Dy. Commissioner of income Tax Central Circle-2, Jaipur. ....
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....Circle: Jaipur Document 7 Shri Pradeep Kumar Dusad AY 2016-17 31 to (i) 70,708 7078885 (BFac ETTER 3125TTC CUTE - 37. எனà¯- படை வீர கா ச ரின௠கணி 3 . ET Fe GTAT 99+15 31/5/2016 ET €. 10/11/16 2 1 1 Page 30 of 36 DCIT, Central Circle-2, Jaipur Document 8 Shri Pradeep Kumar Dusad AY 2016-17 ANST TENT, GHYL IT out of , fast The . 3. நியா சி பா தி அபà¯à®ªà¯à®¤à®²à¯ வராதத௠ஈ+ரியகள௠எளி விதிவரà¯à®³à¯ˆ ரை? -- RIGS # (*) ணà¯à®Ÿà®Ÿà¯ எனà¯à®© 5 -ger என great faut (ii) par ater amit 31 56 enter (44) 914 ) 14 PASTE IT EST & 4 (OR) TATE = + 10/11/16 6 - age L Page 31 ul 36 DCIT, Central Cirele-2, Jaipur Document 9 Shri Pradeep Kumar Dusad AY 2016-17 (6) 3 $ 25 let est 0.75 CO TAT SA Hellat GTre zy7 At &t, in her High etter I....