TaxTMI 
TaxTMI 
TaxTMI 
2024 (11) TMI 1560
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....the AO u/s 143(3) r.w.s 153A of the Act. The AO noticed from the search proceedings conducted in the Rubberwala group that they have sold shops in a commercial complex named "Platinum Mall" developed by them. It was also found that they have accepted cash outside the books from the buyers of the shops. The details thereof were found in possession of one of the staffs named Shri Imam Ansari. It was noticed that the assessee has booked 21 shops and a sum of Rs. 5,21,01,155/- was found accepted in cash in respect of the above said shops. The year wise break-up of the cash payments received outside the books in respect of above said 21 shops by the seller are tabulated as under:- Sr. No. Financial Year Assessment Year Amount of Investment 1 2017-18 2018-19 1,67,25,100 2 2018-19 2019-20 1,87,62,150 3 2019-20 2020-21 89,75,155 4 2020-21 2021-22 76,38,750 TOTAL 5,21,01,155 3. When enquired about the cash payments made outside the books for purchase of shops, the assessee denied the same. The AO, however, did not accept the contentions of the assessee. Accordingly, the AO made addition of the above sai....
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....that the addition for unaccounted cash payments has to be made in the hands of the respective buyers only, since they have actually made the investments. Accordingly, the ld CIT(A) deleted additions in both the years. The revenue is aggrieved. 8. We heard the parties on this issue and perused the record. Under the Income tax Act, income of a particular person has to be assessed in the hands of that person only, unless the Act provides otherwise. In case of unaccounted investment, the same is required to be assessed in the hands of the person who has made that investment. We notice that the Ld CIT(A) has followed the above said principles of taxation and accordingly expressed the view that the income tax has to be levied on right person, i.e, in the hands of the person who had actually made investment. We notice that the above said view taken by Ld CIT(A) would get support from the decision rendered by Hon'ble Supreme Court in the case of ITO vs. Ch. Atchiah (219 ITR 239)(SC), wherein the Hon'ble Apex Court held as under:- "......We are of the opinion that under the present Act, the Income Tax Officer has no option like the one he had under the 1922 Act. He can, and he m....
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.... can be taken by the AO u/s 153C of the Act, by following the procedure prescribed in that section. But the AO has not initiated assessment proceedings u/s 153C of the Act. Accordingly, the Ld A.R submitted that the impugned additions made in both the years are liable to be deleted on this legal ground, as the additions are not based on any incriminating material found during the course of search conducted in the hands of the assessee. 10. We heard Ld D.R and perused the record. Admittedly, the details relating to alleged cash payments were not found during the course of search conducted in the hands of the assessee. There is also no dispute that the assessment years 2018-19 and 2019-20 fall under the category of unabated assessment years. In the instant case, the assessments have been completed by the AO u/s 153A of the Act on the basis of search conducted in the hands of the assessee. Hence the AO could have made these additions in these two years on the basis of incriminating material found from the assessee only and not on the basis of materials found with third parties. For materials found from third parties, the Act has prescribed separate procedures u/s 153C of the Act, w....
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.... issue. 13. In the appeal filed by the assessee, the addition of alleged cash payment of Rs.18,64,200/- in respect of purchase of shop confirmed by Ld CIT(A) is being assailed. 14. We noticed earlier that the assessee had purchased a shop in the commercial premises developed by Rubberwala group. During the course of search conducted in their hands, incriminating documents containing details of cash collected on sale of various shops were found. The employee of Rubberwala group confirmed that the cash has been collected from the buyers of shops. However, the assessee denied payment of cash. However, the AO relied upon the materials found in the case of Rubberwala group and accordingly made addition of Rs.18,64,200/- in AY 2020-21. The Ld CIT(A) also confirmed the same. 15. The ld A.R submitted that the addition was made on the basis of third party statement and documents found from the premises of third party. As per the deposition made by the employee of Rubberwala group, the buyers were given a diary, in which, the details of cash received were acknowledged. The Ld A.R submitted the search officials did not find any such diary with the assessee during the course of search....
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....in accounts regarding payments to assessee were not sufficient to prove that assessee had received money in „black' for which, she did not issue a receipt. The additions were deleted. The Hon'ble High Court held that entries in day-book or ledger would be a corroborative piece of evidence and once direct evidence of persons having made payments in 'black' was disbelieved, no value could be attached to those entries. The Tribunal was, accordingly held justified in deleting the additions. In the present case, apart from the papers seized in the search conducted, not on the assessee, but on the Siddhi Group, and the statement of Shri Patel, who is a key person of the Siddhi Group and has nothing to do with the assessee, there is no evidence to implicate the assessee, so far as regards the alleged payment of Rs.37 lakhs over and above the credited amount. Merely, on this basis, in my considered opinion and in the light of the principle laid down in the case of "Lata Mangeshkar"(supra) the addition is unsustainable in law. 6. In the case of "Jitendrakumar Shantilal Sheth" (2014)(42 CCH0080)(Ahd.), information was received from DCIT, where the search and seizur....
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....n to the contrary has been cited before me on behalf of the department. Therefore, keeping in view the above decisions, in the absence of any incriminating documentary material/ evidence found against the assessee to prove that the alleged investment of Rs.37 lakhs had been made by the assessee as on money, over and above, credited amount for purchase of the shop in question, I find that the addition made by the AO and confirmed by the ld. CIT(A) is unsupported and unsustainable in law. The same is accordingly deleted. 9. In the result, the appeal of the assessee is dismissed." 17. We also notice that the AO did not provide opportunity to cross examine the persons from Rubberwala group, on whose statements the AO had placed reliance upon. The Hon'ble Supreme Court has held in the case of Andaman Timber Industries vs. Commissioner of Central Excise (2015)(62 taxmann.com 3)(SC) that not providing opportunity to cross examine is a serious flaw and it will make the order nullity, as it amounts to violation of principle of natural justice. We are of the view that the above said decision of Hon'ble Supreme Court shall apply to the facts of the present case. 18. The assesse....
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....are being disposed of together. 22. The facts relating to this issue are discussed in brief. During the course of search proceedings conducted on 17-03-2021, physical inventory of stock was taken at the premises of the assessee. The value of physical stock was determined at Rs. 33,83,233/-, while the book stock was taken as Rs.1,05,06,534/-. Thus there was shortage in stock to the tune of Rs. 71,23,301/-. The assessee explained that there was a fire at the commercial complex named "City Centre" in October, 2020, in which stocks of the assessee were destroyed in the fire. It was submitted that the effect of loss of stock was not incorporated in the books pending finalization of audit. It was submitted that the assessee did not make any insurance claim, since the stocks were not insured. Hence, the assessee furnished following reconciliation statement to prove loss of stock in fire. RAJ TELECOM AS ON 16TH MARCH 2021 PARTICULARS QUANTITY (Pcs) Opening Stock 556641 Purchase during the year 134945 Less: Purchase return 400 Less: Sales during the year 493275 Add : Sales return 213 Less: Stock loss by Fire (22nd Oct) 132874 Closing sto....