TaxTMI 
TaxTMI 
2025 (2) TMI 1736
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....rried out on 11/09/2013 and 17/09/2013 in the case of AKN Group of cases. The Assessee's case was also covered in the said search. During the search, documents and data storage devices etc. belonging to the Assessee were found and seized. The Assessee made a total surrender to Rs. 15 crores during the said search operation. Consequently, the search a notice u/s 153A of the Act was issued to the Assessee to furnish the return of income and in response, the Assessee filed return of income u/s 153A of the Act on 31/03/2014 declaring income of Rs. 7,28,94,070/- which was declared in the original return of income filed u/s 139 of the Act. An Assessment Order came to be passed u/s 153A r.w. Section 143(3) of the Act on 31/03/2016 determining the total income of the Assessee at Rs. 39,51,87,439/- by making addition of Rs. 2,22,93,369/-(Rs. 1,97,93,369/- + Rs. 25,00,000/-) by applying the provisions of Section 2(22)(e) of the Act and Rs. 30,00,00,000/- on account of undisclosed income u/s 68 of the Act. Aggrieved by the assessment order dated 31/03/2016, the Assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 27/06/2017 partly allowed the Appeal of the Asses....
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....1. On the facts of the case and in law, the assessment order dt. 05.12.2019 passed by the learned AO u/s 254/254/250/153A r.w.s. 143(3) is liable to be quashed/annulled because the assessment order for the same assessment year had already been passed on 25.02.2019 u/s 254/250/153A/143(3). 2. On the facts of the case and in law, the assessment order dt. 05.12.2019 passed by the learned AO u/s 254/254/250/153A Γ.я.6. 143(3) is liable to be quashed/annulled because the Document Identification Number (DIN) pertaining to the said order was not mentioned on the said assessment order. 3. On the facts of the case and in law, the assessment order passed by the learned AO u/s 254/254/250/153A r.w.s. 143(3) is liable to be quashed/annulled because on the peculiar facts of the case (the document on the basis of which the addition of Rs. 10 crores was made, had not been seized from the premises of the assessee but had been seized from the premises of third party), the assessment order could have been passed only in terms of the provisions of Section 153C. 4. On the facts of the case and in law, the assessment order dt. 05.12.2019 u/s 254/254/250/153A r.w.s....
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....y which is not recorded in the books of accounts, if explanation offered about the nature and source of acquisition of money by him is not satisfactory in the opinion of the A.O. In the present case, the Assessee received money from M/s Megatech Realities Pvt. Ltd., retained the same for few days and then handed over to Smt. Saroj Sharma and ors. Since the money was received from someone for a limited purpose of transferring it to a third person, the Assessee cannot be considered as owner of such money ultimately the money received was with a pre-condition and pre-determined purpose. The Ld. CIT(A) has appreciated the stand taken by the Assessee that at the best, the Assessee can only treated as custodian of such money for some duration and, therefore, cannot be considered as owner. The Assessee's Representative further submitted that the Assessee being an aggregate/broker/real estate agent for a particular transaction, which has been established based on the documents which are on record, the Ld. Assessee's Representative relying on the findings and the conclusion of the Ld. CIT(A), sought for dismissal of the Appeal of the Revenue. 9. We have heard both the parties and....
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....arriving at the finding of fact in the matter. The assessee further explained that report of the Inspector was not confronted to him, therefore, such evidence cannot be read in evidence against the assessee. No efforts have been made by the AO to verify the facts from the AO of M/s Meghatech Realtors P. Ltd. The AO also ignored balance sheet of this company filed with ROC to verify the amount of advance shown of Rs. 10 crores. These facts clearly show that despite corroborating material available on record, the AO merely made the addition against the assessee because the Directors of M/s Meghatech Realtors P. Ltd. were not produced for examination before the AO. However, the fact remained that sufficient material was available on record that assessee acted on behalf of M/s Meghatech Realtors P. Ltd. and assessee while acting on their behalf executed agreement to sell with Smt. Saroj Sharma and others. However, Smt. Saroj Sharma and others did not complete deal with the assessee, assessee has taken action against her with the police as well as in the court of law with Sh. Devender Kumar. Therefore, facts shall have to be verified from all the concerned parties including Smt. Saroj S....
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....llowed for statistical purposes." 10. The Ld. A.O. while sustaining the addition of Rs. 10 crore observed that the Assessee even after giving opportunities of being heard could furnish any reply, therefore, the entire amount to Rs. 10 Crore has been treated as unexplained cash in the hands of the Assessee out of his income from undisclosed sources, accordingly, computed the taxable income of the Assessee at Rs. 17,34,72,693/- vide assessment order dated 12/12/2019. During the appeal proceedings the Ld. CIT(A) deleted the addition. 11. The present case being a search and seizure, the addition has been made based on the MOU found and seized during the course of the search. As per the MOU the Assessee received Rs. 10 Crores in cash from M/s Megatech Realities Pvt. Ltd. further the Assessee has paid the said amount to Rs. 10 Crore to Smt. Saroj Sharma and ors. as per the agreement to sell. The correctness of the MOU has neither been disputed by the Assessee nor by the Department at any stage. Sole basis for making the addition by the A.O is also the very same MOU unearthed during the search. The Tribunal in an earlier occasion in ITA No. 5871/Del/2017 also highlighted the presenc....
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....Only) in cash from M/s Megatech Realtors Pvt. Ltd as earnest money, and the balance amount shall be paid by the M/s Megatech Realtors Pvt. Ltd to Sh. Trilok Chand at the same time of possession and at the time of registration of the completion of the said transaction on or before 31.12.2012. 4. That the period for the completion of the said transaction and the registration of the Sale Deed is fixed between the parties up to 31.12.2012 and within the stipulated period, the first party shall be liable to execute and sign proper transfer document, Sale Deed(s) and documents for the transfer of the above mentioned property from the actual owners of the said property in favor of the Second Party or his/her nominee(s) and shall get the same registered in the office of the Sub-Registrar Gurgaon (Haryana) to the entire satisfaction of the Second Party, after the receipt of the balance consideration amount. 5. That all the expenses of the Sale Deed or transfer documents shall be paid and borne by the Second Party. 6. That the First Party shall deliver the actual physical vacant possession of the above- mentioned property of the Second Party at the time of completi....
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....d thereafter handed over to Smt. Saroj Sharma and ors. Considering the above facts, the Ld. CIT(A) observed that since the money was received from someone for transferring it to someone else, the Assessee cannot be considered as owner of such money and the money received was without pre-condition and pre-determined purpose which has been reduced into writing in the MoU. Thus, the Assessee can only be treated as custodian of such money and cannot be considered as owner. The Ld. A.O. has not brought anything on record to prove that the said money is belongs to the Assessee which was received through M/s Megatech Realities Pvt. Ltd. being non existing entity or no evidence brought on record to prove that the Assessee was actual owner of cash amounting to Rs. 10Crore for invoking the provisions of Section 69A of the Act. The deeming effect of the provision will only apply to the Assessee if he is the owner of the impugned money. 16. The Hon'ble Supreme Court in the case of D N Singh (2023) 150 Taxman.com 301 (S.C) dealt with the said issue elaborately and held that for Section 69A to apply, it is indispensable that the Assessing Officer must find that the articles/ goods enumera....
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....statement recorded by the Assessee by the Investigation Wing dated 17/09/2013, explained that the Assessee has received Rs. 10 Crore from M/s Megatech Realities Pvt. Ltd. for purchase of land through Sh. J. K. Jain. The A.O. made no effort to verify the fact from M/s Megatech Realities Pvt. Ltd. on the other hand A.O. sent the notices u/s 133 (6) of the Act to incorrect Addresses and no serious effect has been made to secure the presence or statement of the parties in compliance with the order of the Tribunal. Further the A.O. has not taken cognizance of the balance sheet of Company filed with ROC to verify the amount of advance shown at Rs. 10 Crore. Thus, the Ld. CIT(A) has rightly observed that the A.O. has not conducted proper investigation on the issue and merely made addition for non-production of Directors of the Company. Sufficient material was available on record to infer that the Assessee has acted on behalf of M/s Megatech Realities Pvt. Ltd. and the Assessee while acting on behalf of M/s Megatech Realities Pvt. Ltd., executed agreement to sell with Smt. Saroj Sharma and the said Smt. Saroj Sharma did not complete the deal with the Assessee and the Assessee has taken act....
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.... for the Assessee. Since, the transaction is not metalized and there is no evidence of receipt to any brokerage income or commission income earned by the Assessee and the Assessee's income can only be a profit earned on his property transaction, thus Section 69A of the Act is not applicable in the present case. 21. The Ld. A.O. made addition only on the basis of MOU seized during the search and the contents of the MOU or the genuineness of the MOU has not been disputed by either the Assessee or the Department. The seized documents is required to be considered in its entirety and, therefore, the cash advance which was received from M/s Megatech Realities Pvt. Ltd. for a particular purpose of purchasing the land owned by Smt. Saroj Sharma and ors cannot be disputed. The law requires determination of 'real income' on the basis of ordinary commercial principles of accountancy. Only real income, if any accrued in the hands of the Assessee is required to be taxed in the hands of the Assessee. The Hon'ble Supreme Court in the case of C. H. Atchaiah (1996) 84 Taxman held that 'A.O. can and must tax that person alone who is liable to be taxed according to law with respect to particul....
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....ose documents, deleted the additions without calling for the Remand Report from the A.O which is shear violation of Rule 46A of I.T. Rules, thus sought for setting aside the order of the Ld. CIT(A). 25. The Ld. Assessee's Representative on the other hand, submitted that at no point of time the Assessee field any application underRule 46A of I.T. Rules, on the other hand, it is the Ld. CIT(A) during the appellate proceedings, directed the Assessee to produce certain documents which have been promptly produced to avoid any adverse inference might have drawn against the Assessee, in such event, the Rule 46A of IT Rules, will not come to play. Further submitted that, the Assessee has only produced the copies of the Panchnama and the Ld. CIT(A) has relied on the MOU and agreement and pre-recorded statements and the orders pertaining to the first round which were forming part of the record, therefore, the Ld. Assessee's Representative sought for dismissal of Ground No. 2 of the Revenue. 26. We have heard both the parties and perused the material available on record. It is fact on record that the Ld. CIT(A) during the first appellate proceedings, directed the Assessee to pro....
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....he appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant. (4) Nothing contained in this rule shall affect the power of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the Assessing Officer) under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271." 27. On a plain reading of Rule 46A, it is clear that this Rule is intended to put fetters on the right of the appellant to produce before the Appellate Assistant Commissioner any evidence, whether oral or documentary, other than the evidence produced by him during the course of the proceedings before the Income-tax Officer, except in the circumstances set out therein. It does not deal with the powers of the Appellate Assistant Commissioner to make further enquiry or to direct the Income-tax Officer to make furth....
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....ation or material that was not produced before or considered by the assessing officer. The purpose of rule 46A is to place fetters on the rights of an appellant to produce additional evidence before the first appellate authority and not the rights of the first appellate authority to call for production of any fresh evidence or information. This aspect of the provisions of rule 46A is clear from the provisions of Sub-rule (4) of rule 46A itself that nothing contained in rule 46A shall affect the power of first appellate authority to direct the production of any document or examination of any witness to enable him to dispose of the appeal or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the assessing officer). 32. In the present case, the MOU dated 14/12/2011 agreement dated 17/12/2011 and pre-recorded statements and other documents which are part of first round of litigation and also forming part of the assessment records. Further it is also noted that as per the direction of the Ld. CIT(A) issued under Sub-rule (4) of rule 46A of the Rules, the Assessee has produced Panchnamasand other docum....
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.... is condoned. 37. Brief facts of the case are that, the Assessee filed return of income for Assessment Year 2017-18 by declaring total income at Rs. 6,61,620/-. The return of the Assessee was processed u/s 143(1) of the Act. The case of the Assessee was selected for scrutiny under CASS and an assessment order came to be passed on 22/12/2019 by making an addition of Rs. 1,71,64,5- 00/- u/s 68 of the Act being cash deposit before demonization and Rs. 1,32,83,000/- u/s 68 of the Act on account of cash deposits made by the Assessee during the demonetization period, in total made addition u/s 68 of the Act to the tune of Rs. 3,04,47,500/-. Further also made addition of Rs. 6,90,000/- by disallowing the claim of the Assessee that the said amount is an agriculture income. Aggrieved by the assessment order dated 22/12/2019, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 06/12/2023, deleted the addition of Rs. 6,90,000/- by treating the same as an agriculture income. Further deleted the addition of Rs. 3,04,47,500/- made by the A.O. u/s 68 & 69 of the Act. Aggrieved by the order of the Ld. CIT(A) dated 06/12/2023, the Department of Revenue, prefer....
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....7749), Yes Bank (A/c No.0084840000000423) and Syndicate Bank (A/c No.901610100002450). You are requested to furnish complete details of all debit/ credit entries showing complete names, addresses, PAN of the parties, nature of transactions made viz. loans/ advance/ sale/ purchase/ investment etc. and tax implication on such transactions. ii. You have shown agricultural income of Rs. 6,90,000/-. You are requested to furnish complete details of agricultural activities done, type of crops produced, name and address of persons engaged in agricultural activities, purchase of agricultural items necessary for production/ cultivation, mode of transaction of produce from the field to the Mandi, Receipts/ Form-J against the sale of produce and gross receipts from sale of crops/ produce." 41. Vide reply dated 20/12/2019, the Assessee filed reply to the notice issued by the A.O., wherein the Assessee produced the cash book for the Assessment Year 2016-17 which has been annexed at page No. 1 to 3 of the said reply. The Assessment Order came to be passed on 22/12/2019 by making the addition on account of cash deposits, finding that the reply of the Assessee is very vague, without any....
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.... correctness of the opening balance. The Ld. CIT(A) after perusing the cash book, observed that the Assessee had taken into account the income surrendered amounting to Rs. 2,26,06,477/- as on 17/09/2016. Therefore, observed that the income surrendered during the course of search, was correctly made a part of cash in hand on the date of search. As observed earlier, the A.O. neither disputed the correctness of opening cash as on 01/04/2016 nor highlighted any anomaly in the cash book filed by the Assessee. Thus, there was no justification on the part of the A.O. to doubt the correctness of the opening balance in the cash book as on 01/04/2016 and make the addition. 44. The Ld. CIT(A) while deciding the Appeal, made one more effort to find out taxable income by analyzing the availability of cash during the assessment year in consideration. The Ld. CIT(A) considering that, assuming there is no cash in hand except surrendered cash, available with the Assessee as on the date of the search i.e. 17/09/2013, keeping Rs. 2,26,06,477/- as opening cash in hand as on 17/09/2023 and incorporating cash deposits and cash withdrawal figured in all the bank accounts of the Assessee, found that th....
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.... Syndicate Bank 700000 13812477 15.03.2016 Syndicate Bank 400000 14212477 23.03.2016 Syndicate Bank 5000000 19212477 02.04.2016 Syndicate Bank 50000 19162477 02.04.2016 Yes Bank 950000 20112477 13.04.2016 Syndicate Bank 400000 20512477 13.04.2016 Syndicate Bank 300000 20812477 16.04.2016 Syndicate Bank 100000 20912477 18.04.2016 Syndicate Bank 1000000 19912477 19.04.2016 Syndicate Bank 100000 20012477 19.04.2016 Syndicate Bank 1000000 21012477 28.04.2016 Syndicate Bank 3000000 18012477 10.05.2016 Syndicate Bank 300000 18312477 03.06.2016 Syndicate Bank 200000 18512477 10.06.2016 Syndicate Bank 500000 19012477 10.06.2016 Syndicate Bank 500000 19512477 1406.2916 Syndicate Bank 300000 19812477 15.06.2816 Syndicate Bank 300000 20112477 20.06.2016 Syndicate Bank 1500 20110977 23.....
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....om bank a sum of Rs. 2 lakhs on 4-12-2000 and there was no material with the Department that this money was not available with the assessee. It has been held by the Tribunal that in the instant case, the withdrawals shown by the assessee are far in excess of the cash found during the course of search proceedings. No material has been relied upon by the Assessing Officer or Commissioner of Income-tax (Appeals) to support their view that the entire cash withdrawals must have been spent by the assessee and accordingly, the Tribunal rightly held that the assessment of Rs. 2.5 lakhs is legally not sustainable under section 158BC of the Act and the same was rightly ordered to be deleted." 47. In the present case, the Assessee had sufficient cash to deposit during the Assessment Year 2017-18 considering the surrender made by the Assessee during the search carried out on 17/09/2013. Apart from the same, the cash book produced by the Assessee has not been rejected by the Assessee has not been rejected or doubted by the A.O. Further the Department has not brought on record any material to prove that the cash withdrawn/available in the hands of the Assessee has been put to use for any othe....