TaxTMI 
TaxTMI 
2025 (5) TMI 2292
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....llowing grounds of appeal; 1. Under the facts and circumstances of the case the Learned CIT(A) has erred in confirming the action of the Learned 1 Assessing Officer in the passing the order u/s 144/153A of the Income Tax Act, 1961 which is void ab-initio deserves to be quashed. 2. Under the facts and circumstances of the case the Learned CIT(A) has erred in confirming the addition of Rs. 94,77,000/- u/s 68 of the Income Tax Act, 1961 on account of alleged explained cash deposits in the bank accounts by not considering the submission of the assessee that the cash was deposited in the bank out of earlier withdrawals and regular source of income. 3. Under the facts and circumstances of the case the Learned CIT(A) has erred in confirming the addition of Rs. 2,00,000/- u/s 68 of the Income Tax Act, 1961 by not accepting the agriculture income shown by the assessee in his return of income. 4. Under the facts and circumstances of the case the Learned CIT(A) has erred in confirming the addition of Rs. 87,84,862/- u/s 69C of the Income Tax Act, 1961 on account of alleged unexplained expenditure of interest paid to Shri Chandra Prakash Agarwal on alleged c....
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....led in response to notice u/s 153A of the Act no undisclosed income pertaining to the relevant year has been declared by the Assessee. For the year under consideration return of income u/s 139(1) of the Act was not filed by the assessee. The Assessee primarily derives its income from House property, Business and Other sources. The proceedings of assessment of income were commenced by issue of notice u/s 143(2) of the Act on 05-11-2018, and notice u/s 142(1) dated 05-11-2018 was also issued to the assessee and information and details pertaining to the case relevant to assessment of his income were called by means of a questionnaire. The Information furnished by the assessee was examined and placed on record by the ld. AO at the same time ld. AO also noted that the assessee remained noncooperative in the assessment proceeding and that is why ld. AO also issued a final opportunity vide notice dated 05.12.2018 asking the assessee as to why the assessment should not be completed as per provision of section 144 of the Act. Ultimately ld. AO proceeded for completing the assessment to the best of his judgement. 4.1 Ld. AO based on the bank statement available on record found that the....
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....- was worked out as interest expenditure and accordingly same was considered as income in accordance with the provision of section 69C of the Act. 4.4 Ld. AO noted that in the case of search conducted at the premises of Shri Chandra Mohan Badaiya at A-178, Surya Nagar, Taroo Ki Koot, Tonk Road, Jaipur mobile data was collected and was seized as Exhibit-4, of Annexure AS. That seized record reveals that an amount of Rs. 3,61,24,000/- was given by Shri Chandra Mohan Badaiya to Shri Kailash Chand Maheshwari from 26.06.2014 to 15.03.2015 and interest of Rs. 1,09,08,055/- was computed as payable. Out of that amount Rs. 2,28,87,000/- was received by back by that Shri Chandra Mohan Badaiya along with the interest of Rs. 51,11,569/-. Therefore, the interest expenditure for an amount of Rs. 51,11,569/- was considered as unexplained expenditure and accordingly same was added as income of the assessee. 4.5 A survey was also conducted u/s. 133A of the Act on 30.07.2016 at the business premises of "Shri Ram Enterprises" images of "Dell Laptop" was taken. From the working copy of Hard disc an excel file in the name of Raju Bhai Shab 13092014.xls file from deleted data base found. In that o....
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.... circumstances of the case the Assessing Officer has erred passing the order u/s 144/153A of the Income Tax Act, 1961. Finding of ld. CIT(A): 4.5 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the order, the report and the rejoinder submitted by the appellant. The contentions/submissions of the appellant are being discussed and decided as under:- In this ground of appeal the appellant has raised the issue that no incriminating material was unearthed during the course of search and seizure action of the appellant and thus no addition could have been made in the assessment order under appeal. In the assessment order for the AY 2015-16, it is mentioned by the learned AO that the assessee failed to furnish return of income u/s 139(1) of the I.T. Act. For the AY 2015-16 the due date to file ITR was in the FY 2015-16. The appellant has submitted that no assessment proceedings were pending on the date of search and the case falls under the 'unabated' category. On the issue, in the remand report, the Id. AO has stated that ".... time for issuing the notic....
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....assessee was issued show cause notice on 20-06-2018 for non filing return as why to prosecution proceedings u/s 276CC of the IT. Act should not be initiated but again the assessee did not complied on the given date i.e. 03-072018. Thereafter the assessee was also issue show cause notice to complete the assessment u/s 144 of the IT. Act on dated 15-10-2018 fixing the dated on 23-102018. But no compliance was made on the date and prosecution u/s 276CC of the Act, was launched against the assessee on 01-10-2018 for not filing return u/s 153A of the Act (AY 2012-13 & 2015-16) and late filing of return u/s 153A (AY 2011-12, 2013-14, 2014-15 & 2016-17). Thereafter, the assessee was again given several opportunities on various dates on which no compliance was done. As also noted by the Id. AO the assessee has never co-operate during the assessment proceedings hence he was given final opportunity on dated 05-122018 in which it was proposed to complete the assessment u/s 144 of the IT. Act. In compliance of the same the assessee submitted only part written submission on dated 06-12-2018 in the office dak. Wherein also no reply in respect of a show caused notice dated 15-10-2018 and....
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.... of the appellant is also found to be factually incorrect as from the perusal of the bank statement of the simple basis (from the statement of April 2014 of the UCO Bank) () it is seen that withdrawals have been done through cheque /RTGS as against the deposit of cash in the bank account. Further it is seen that the cash withdrawn from bank account is not deposited back in the bank account and on future dates very small amounts of cash have been deposited showing that the cash withdrawn had already been spent/utilized. Further, the "self" entries do not appear to be of cash withdrawal as in the bank statement of UCO Bank, on 02-05-14, there is an entry of "TO CASH showing withdrawal of Rs. 10,000. Thus UCO Bank used "TO CASH" to show cash withdrawn. And such entries are very few. Further, not accepting but treating 'self as cash withdrawal for theoretical purposes, "self" (withdrawn / transfer out from bank) of Rs. 2 lakhs is shown on 18 April and Rs. 3 lakhs is shown on 22 April and Rs. 5 lakhs is shown on 01 May and as against these, the cash deposits on subsequent dates are Rs. 46,150 on 2 May. Further Rs. 3000 are shown as withdrawn as "TO CASH on 14.05.14....
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....the taxpayer should be viewed, has, of course, depended on the facts of each case. In those cases in which the assessee proved that he had on the relevant date a large sum of money sufficient to cover the number of notes encashed, this court and the High Courts, in the absence of something which showed that the explanation was inherently improbable, accepted the explanation that the assessee held the amount or part of it in high denomination notes. In other words, in such cases, the assessee was held, prima facie, to have discharged the burden which was upon him. Where the assessee was unable to prove that in his normal business or otherwise, he was possessed of so much cash, it was held that the assessee started under a cloud and must dispel that cloud to the reasonable satisfaction of the assessing authorities, and that if he did not, then, the department was free to reject his explanation and to hold that the amount represented income from some undisclosed source. As per the above observations of the honourable Court in the case of the assessee is to be examined, in light of the probabilities. The further understanding which emanates is that mere recording the entries i....
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....missioner and stated there that the balance was Rs. 1,21,875. Ordinarily, this would have prima facie proved that the assessee might have kept a portion of this balance in high denomination notes. But the assessee failed to prove this balance, as books of the assessee did not contain entries in respect of banks. Though cash used to be received from banks and sent to the various places where works were carried on and vice versa, no central account of such transfers was disclosed. There was also no account of personal expenses of the assessee and he had failed to prove why such large sums were kept on hand in one place when at each of the places where work was carried on, there were banks with which he had accounts. The Appellate Assistant Commissioner also went into the question and found that on the same day when the high denomination notes were encashed, a sum of Rs. 45,000 was drawn by cheque. The next remittance immediately afterwards was of Rs. 16,000 to Bokaro, but Rs. 17,000 were withdrawn a few days before to meet this expense. A withdrawal of Rs. 8,000 was made a day later and Rs. 20,000 were withdrawn ten days later to finance the business. It appears that the money on han....
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....ays be accepted at the face value without application of mind about their reliability. A conscious call is to be taken, in a fair and objective but a realistic, manner about reliability of such evidence. As observed by Hon'ble Supreme Court, in the case of CIT Vs Durga Prasad More ((1971) 82 ITR 540 (SC)]. "Science has not yet invented any instrument to test the reliability of the evidence placed before a court or tribunal. Therefore, the courts and Tribunals have to judge the evidence before them by applying the test of human probabilities". As Hon'ble Supreme Court has observed, in this case, "it is true that an apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real party who relies on a recital in a deed has to establish the truth of those recitals, otherwise it will be very easy to make self-serving statements in documents either executed or taken by a party and rely on those recitals. If all that an assessee who wants to evade tax is to have some recitals made in a document either executed by him or executed in his favour then the door will be left wide open to evade tax. A little probing was sufficient in....
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....raudulent means, it is upon the alleger to prove that it is so, ignores the reality. The transaction about purchase of winning ticket takes place in secret and direct evidence about such purchase would be rarely available. An inference about such a purchase has to be drawn on the basis of the circumstances available on the record. Having regard to the conduct of the appellant as disclosed in her sworn statement as well as other material on the record an inference could reasonably be drawn that the winning tickets were purchased by the appellant after the event. We are, therefore, unable to agree with the view of the Chairman in his dissenting opinion. In our opinion, the majority opinion after considering surrounding circumstances and applying the test of human probabilities has rightly concluded that the appellant's claim about the amount being her winning from races is not genuine. It cannot be said that the explanation offered by the appellant in respect of the said amounts has been rejected unreasonably and that the finding that the said amounts are income of the appellant from other sources is not based on evidence".. In view of the above discussion the claim of t....
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.... under section 69A to assessee's income were justified - Held, yes [Paras 49 to 54] Relevant paras are extracted below:- "49. The statement of Mr. S. Srinivasan claiming that the cash belonged to him does not satisfy the test of preponderance of probability that the cash indeed belongs to him. Mr. S. Srinivasan has not produced any records to substantiate that the cash belonged to him. The show cause notice also indicates that Mr. S. Srinivasan has not filed any income tax returns to justify his version. Mr. Srinivasan has also not given any satisfactory explanation to substantiate his claim. On the other hand, there is a preponderance of probability that the cash belonged to the petitioner, 50. Since preponderance of probability indicate that the seized cash was an undisclosed income of the petitioner and was kept at the residence of Mr. Damodaran and Mrs. Vimala Damodaran by the petitioner. These facts suggest that Mr. S. Srinivasan, Mr. Damodaran and Mrs. Vimala Damodaran are trusted person of the petitioner. 51. Merely, because Mr. S. Srinivasan came forward and gave a sworn statement claiming ownership over seized money does not mean tha....
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.... "8. The learned D.R. in reply submitted that there is preponderance of probability against the assessee as the gifts are not customary. There are no mutual gifts given by the assessee to the foreign persons. The basic responsibility of providing evidences for proving the gift as genuine has not been established....... 12. In order to decide as to whether the impugned gifts in the present case are genuine or not, one has to look not only at the documents produced but also at the surrounding circumstances. In this connection, we may fruitfully notice and reproduce the following observations made by the Hon'ble Supreme Court in CIT v. Durga Prasad More [1971] 82 ITR 540: "It is true that an apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real In a case of the present kind a party who relies on a recital in a deed has to establish the truth of those recitals, otherwise it will be very easy to make self-serving statements in documents either executed or taken by a party and rely on those recitals. If all that an assessee who wants to evade tax is to have some recitals made in a document eit....
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....ence'. 15. Alter considering the explanation of the assessee in the light of the facts and circumstances of the case, we are not inclined to interfere with the order of the learned CIT(A) in this behalf. The so-called gifts credited in assessee's capital account is not acceptable as it is contrary to the preponderance of probabilities and common course of human conduct. In view of this, we confirm the order of the Assessing Officer and the learned CIT(A) in this regard. The ground is rejected." (viii) In the case of Konathala Nooku Naidu v. Income-tax Officer, Ward-1 [2024] 160 taxmann.com 758 (Visakhapatnam Trib)[18-03-2024] [TA No. 269/V2/2023], Hon'ble ITAT upheld the addition and found the explanation as unacceptable when the source of cash deposited in the bank on 13-11-2016 was stated to be the loan which was further withdrawn in cash on 29-09-2016 in view of the fact that the assessee has not properly explained as to why the loan was availed by the assessee and for what purpose he has withdrawn the amount on 2909-2016 and deposited the same after one and half months. "6. Insofar as the loan of Rs. 2,60,000/- is concerned, the contention....
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....strictly branch-specific, so that they could be operated and accessed from any station where the bank has a branch. Now, it is certainly not the case that either Union Bank of India or ICICI Bank has no branch at Ahmedabad, a much bigger place than Ajmer itself. In fact, the funds could also have been deposited in the son's account at Ahmedabad, and transmitted to Ajmer through the banking channel. Finally, needless to add, no evidence in respect of transmission of cash from Ahmedabad to Ajmer or vice versa stands adduced by the assessee before any authority. 5.4 Another equally intriguing aspect of the assessee's case, as made out, is that no 'receipts' were admittedly obtained from the creditors upon repayment of loans. Why? In fact, there is no contemporaneous material to evidence either the receipt of funds from, or their repayment to, the creditors, which is uncomprehensible indeed, given that both the receipt as well as repayment of loans is in cash. Any creditor would insist on being issued a receipt, if not execution of a pronote, witnessed independently and also containing the terms of the loan, including as to repayment. 5.5 The next aspe....
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....or strength. Under the preponderance standard, the burden of proof is met when the party with the burden convinces the fact finder that there is a greater than 50% chance that the claim is true. This preponderance is based on the more convincing evidence and its probable truth or accuracy. (xi) According to section 3 of the Evidence Act, a fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that the prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. Section 114 of the Evidence Act provides that the Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct, and public and private business, in their relation to the facts of the particular case. The aforesaid provisions are nothing but recognition of board principles of common law governing the issue under consideration. (xii) As per the judgement of Hon'ble Supreme Court in the case of Commissioner of Income-tax v. Devi Prasad Vishwanath [1969] 72 ITR 194 (SC)....
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.... direct the Tribunal to state a case on a question which was never raised before or decided by the Tribunal at the hearing of the appeal. The question again assumes that it was for the Income-tax Officer to indicate the source of the income before the income could be held taxable and unless he did so, the assessee was entitled to succeed. That is not, in our judgment, the correct legal position. Where there is an explained cash credit, it is open to the Income-tax Officer to hold that it is income of the assessee and no further burden lies on the Income-tax Officer to show that that income is from any particular source. It is for the assessee to prove that even if the cash credit represents income it is income from a source which has already been taxed". As per the headnotes "Section 145 of the Income-tax Act, 1961 [Corresponding to section 13 of the Indian Income tax Act, 1922) Method of accounting System of accounting Assessment year 1946-47- Whether where there is an unexplained cash credit it is open to ITO to hold that it is income of assessee and no further burden lies on ITO to show that income is from any particular source - Held, yes". As per the above ju....
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.... in the books of account of its business on 30th March, 1948, capital of Rs. 3,33,414 which consisted of gold rawa, gold ornaments, stones and cash. The burden of accounting for the receipt of these assets was clearly on the assessee and if the assessee failed to prove satisfactorily the nature and source of these assets, the revenue. could legitimately hold that these assets represented the undisclosed income of the assessee..." (emphasis supplied) In the case of Kale Khan Mohammad Hanif v. Commissioner of Income-tax [1963] 50 ITR 1 (SC)[08-02-1963] it is held by the Hon'ble Supreme Court as under:- "It seems to us that the answer to this question must be in the affirmative and that is how it was answered by the High Court. It is well established that the onus of proving the source of a sum of money found to have been received by the assessee is on him. If he disputes liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provisions of the Act. In the absence of such proof, the Income-tax Officer is entitled to treat it as taxable income: see A. Govindarajulu Mudaliar v. Comm....
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....id down in CIT v. Daulat Ram Rawatmal [1973] 87 ITR 349 (SC) further throws light on the issue. In the case of a cash entry, it is necessary for the assessee to prove not only the identity of the creditor but also the capacity of the creditor and genuineness of the transactions. The onus lies on the assessee, under the facts available on record. A harmonious construction of section 106 of the evidence Act and section 68 of the Income Tax Act will be that apart from establishing the identity of the creditor, the assessee must establish the genuineness of the transaction as well as the creditworthiness of the creditors. In CIT v. Korlay Trading Co. Ltd. [1998] 232 ITR 820 (Cal.), it was held that mere mention of file number of creditor will not suffice and each entry has to be explained separately by the assessee CIT v. R.S. Rathaore [1995] 212 ITR 390/86 Taxman 20 (Raj.). The Hon'ble Guwahati High Court in Nemi Chandra Kothari v. CIT [2003] 264 ITR 254/[2004] 136 Taxman 213 held that transaction by cheques may not be always sacrosanct.........." (Emphasis Supplied) (xvi) It was held by the Hon'ble Supreme Court in the case of Sumati Dayal v. Commissioner of Incom....
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....idence. In view of the above discussion the explanation of the appellant regarding the source of the cash deposited in the bank account is rejected and the same does not at all explain the source of the cash deposited in the bank account. Since the source of the cash deposited in the bank account is unknown and unexplained, the same is also alternatively taxable under section 69A of the Act. The appellant has also contended that the cash deposited in the bank account is not taxable under section 68 of the Act as no books of accounts were maintained by the appellant and that the bank pass book or bank statement cannot be considered as books of accounts. There are judicial precedents as per which addition under section 68 of the Act can be made w.r.t. cash deposit in bank account. Hon'ble ITAT Delhi Bench in the case of Jagdish Prasad Sharma v. ITO [IT Appeal No. 104 (Delhi) of 2015, dated 13-12020), following the later decision of the Bombay High Court in Arunkumar J. Muchhala v. CIT [2017] 85 taxmann.com 306/250 Taxman 362/399 ITR 256 (Bom.), has held that bank passbook is also the books of the assessee within the meaning of section 2(12A) and, theref....
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....ppeal the appellant has not furnish the documents due to absence of which the learned AO has drawn the adverse inferences. Further the appellant is also not explaining how the agriculture income is exactly same in all the years which is very improbable and beyond the realities. The appellant has contended that once the documents regarding the Girdawari report for Vikram sumvat 2067 to 2071 were produced the learned AO should have allowed the agricultural income. However this claim of the appellant is not allowable as mere possession or mere ownership of the land does not mean that the agricultural income has been earned. The requirement noted in the assessment order are linked to the circumstantial evidences and linked to the preponderance of probabilities however the appellant has failed in both the counts. The exact same amount in each year also shows that this income was shown in the return of income to cover up the unaccounted cash. Such cash is alternatively also taxable under section 69A of the Act. The contention of the appellant that this income is not taxable under section 68 of the Act as no such income was recorded in the books of accounts and ....
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....otice was issued to the appellant in this regard however the same remained not complied. It is held in the assessment order that the assessee received loan of Rs. 20,00,00,000/-during AY 2015-16 in cash during the year and paid interest thereon to the extent to Rs. 87,84,862/- for AY 2015-16 which is unexplained expenditure u/s 69C of the IT. Act. In the appeal the appellant has inter-alia challenged the addition on the ground that since the addition has been made on the basis of material from the search and seizure action on other person, the addition could have been made only in an assessment order under section 153C of the Act. However this contention of the appellant is not applicable to the facts of the case of the present appeal. Further, по factual statement and affidavit has been made by the appellant that such transaction of taking loan did not take place. It is a case of silent acceptance of the facts. Firstly the section 153C of the Act is with reference to the assumption of jurisdiction for initiation of proceedings when it is in comparison to section 147 of the Act. With reference to section 153A of the Act, it is a settled law that in cas....
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....dence of Chandra Prakash Agarwal were not furnished (ii) Copy of statement recorded u/s 132(4) of the assessee was not furnished (iii) Cross-examination not allowed of Shri Chandra Prakash Agarwal (iv) Cross examination not allowed of the assessee. However the appellant has not placed on record any letter request made to the assessing authority with reference to the above issues during the assessment proceedings. Conversely, as per the facts of the case it is the appellant was not complied with the several statutory notices and the assessment had to be made as per the best judgement. Applying the principles of judgement in the case of GKN Driveshafts (India) Ltd. [2003] 259 ITR 19, the assessee is eligible to raise the request for copy of documents and statements etc. after the compliance of the notices issued by the assessing authority. And also as per the judgement the assessee is required to make a request to the assessing authority to get the document desired. However, in the present case neither the appellant complied with the statutory notices issued by the assessing authority nor the requests have been made to the assessing authority asking for the information and d....
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....the case of Canara Bank v. Debasis Das [2003] 4 SCC 557(hereinafter referred to as Debasis Das] reiterated the accepted basic principle of adherence to principles of natural justice vis-à-vis useless formality theory and held that, on facts, it could be said that assessee was given reasonable opportunity to place its case and therefore, there was sufficient compliance of principles of natural justice and order of transfer could not be said to be arbitrary. Several notices were issued to the appellant during the assessment proceedings however the same were not complied with and even the show cause notices were not replied with during the assessment proceedings and no request for the documents and cross examination etc. were made during the assessment proceedings and this shows that no prejudice was caused to the appellant otherwise the requests would have been made during the assessment stage itself. Further even during the appeal proceedings the appellant has not made such requests and has only raised a technical objection issue against the additions. Importantly, the appellant has not shown factually that the alleged documents and the alleged opportunities....
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....ven case, can be exasperating. We can neither be finical (sic) nor fanatical but should be flexible yet firm in this jurisdiction. No man shall be hit below the belt-that is the conscience of the matter." 11 Calcutta High Court in Hindustan Tobacco Company (supra) in somewhat similar circumstances rejected identical argument in para 34 of the judgment which reads as under: "34. If the assessee felt that cross-examining of any person was necessary for establishing its case it was incumbent upon the assessee to make such prayer before the Assessing Officer during the assessment proceeding. If a party fails to avail of the opportunity to cross-examine a person at the appropriate stage in he proceeding, the said party would be precluded from raising such issue at a latter stage of the proceeding. Therefore the belated claim of the assessee at the appellate stage that it was denied the opportunity of cross-examining witnesses in the assessment proceeding is wholly untenable in law." In view of the above discussion, Natural justice is no unruly horse, no lurking land mine, nor a judicial cure-all. It was incumbent upon the assessee to make such prayer before th....
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....to the facts of the case of the present appeal. Further, no factual statement and affidavit has been made by the appellant that such transaction of taking loan did not take place. It is a case of silent acceptance of the facts. In this ground of appeal the appellant has raised the legal grounds that the procedure of section 153C was not followed and that there is breach of principles of natural justice and these grounds are very similar to the grounds raised and adjudicated above in the ground number 4. of the appeal. The findings and adjudication in this order in ground number 4 of the appeal will squarely applying to the present ground of appeal and the same is not repeated here for the sake of brevity and accordingly this ground of appeal is hereby dismissed." Ground No. 6 Under the facts and circumstances of the case the Assessing Officer has erred in making the addition of Rs. 1,00,00,000/- u/s 68 of the Income Tax Act, 1961 on the basis of post dated cheques found from the third party. Finding of ld. CIT(A): 9.2 I have considered the facts of the case and written submissions of the appellant as against the observations/fin....
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.... not given any clear cut factual statement or affidavit denying the transactions and thus it is a case of silent acceptance. Since the cheque numbers also mentioned and the name of the appellant is also mentioned in the seized material, the appellant could have explain the funds transactions through the cheques which have taken place. However no such submissions have been given by the appellant. The transaction remains unexplained and the appellant has not discharged the onus and the assessment was made as per the best judgement and no additional evidences have been filed in the present appeal. In such a scenario the addition cannot be deleted. Further even though it is the claim of the appellant that the books of accounts were maintained and that the addition cannot be done under section 68 of the Act, however it is a settled law that correct income is to be determined and that the appellate authorities are required to rectify the errors of the lower authorities to arrive at the correct income. In Kapurchand Shrimal v. CIT [1981] 131 ITR 451/7 Taxman 6. the Supreme Court has held as under:- ".......It is, however, difficult to agree with the submission m....
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.... of RRPR Holding (P.) Ltd. v. Deputy Commissioner of Income-tax [2023] 152 taxmann.com 537 (Delhi - Trib.)/[2023] 201 ITD 781 (Delhi Trib.) [22-06-2023] as under:- "19. Before the Tribunal, the Id. counsel has merely reiterated its contentions placed before the lower authorities without showing any nexus between the interest earned and corresponding interest expenditure as observed. The Revenue on the other hand has clearly recorded a finding of fact that the interest expenditure has not given rise to the corresponding interest income. The interest income has arisen independently out of fixed deposits fixed with bank, the source of which in turn is sale of investments. The interest expenditure on the other hand has been incurred on borrowers utilized for investment in acquisition of shares of NDTV Ltd. Thus, apparently the assessee has failed to discharge the onus which lays upon it to show that incurring of expenditure has resulted in corresponding income taxable under the head 'income from other sources. In the absence of any live nexus between the expenditure and the corresponding income, the Revenue Authorities have rightly disallowed the claim of interest expenses....
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....ersons as a office for the business of property dealing under name and style M/s Kubar Properties and Developers. During the survey various documents were found which were impounded and inventorized as Annexure-B, Exhibit-4, page No. 1 to 59. These papers are allotment letters of a residential scheme of Rajhans Co-operative Housing Society Ltd under name and style Shiva Pradise, Nemodia Moad, Tonk Road, Jaipur. During the course of survey statement of Shri Kailash Chand Maheshwari was recorded u/s 133A of the I.T. Act on 30-07-2016 wherein in reply of question No. 13 he admitted that all these deals were completed through him only and he received "on money" on these transactions @ Rs. 250 per sq. yard from the parties which is his undisclosed income. Further, at question No. 10 he admitted that he received brokerage/commission @ 20 per sq. yard on the allotment of land in aforesaid residential scheme. In the appeal the appellant has contended that in his statement, the assessee has not deposed that he was the recipient of the on-money. He has simply stated that deals of sale of plots including boundary wall was made @ Rs. 700 per Sq.yd and the payment was to be made at the....
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....ant is undisputed. However the appellant has not substantiated the working of the brokerage with documents and evidences and as such the appellant has made by the learned AO on the incriminating evidences found during the search and survey action is hereby upheld and accordingly the addition made is hereby upheld. In this ground of appeal is hereby dismissed. Ground No. 9 Under the facts and circumstances of the case the Assessing Officer has erred in making the addition of Rs. 10,00,000/- on account of marriage expenses of his niece Sonam during the year under consideration without any material or evidence found during the course of search. Finding of ld. CIT(A): 12.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- It has been discussed in the adjudication of ground No. 2 of appeal in detail that the appellant did not comply with the statutory notices during the course of search enquiries and during the assessment ....
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.... Act as follows: "Evidence":- "Evidence" means and includes (1) all statements which the Court permits or requires to be made before it by witnesses, in relation to matters of fact under inquiry, such statements are called oral evidence: (2) all documents including electronic records produced for the inspection of the Court, such documents are called documentary evidence." The 'Court' mentioned above in the definition of evidence would include all persons, except arbitrators, legally authorised to take evidence as defined under section 3. In section 3, Court is defined as follows: "Court" - "Court" includes all Judges and Magistrates, and all persons, except arbitrators, legally authorised to take evidence." A reading of section 131 of the Income-tax Act would show that the Assessing Officer is vested with the same powers as are vested in a court under the Code of Civil Procedure, 1908 in respect of (a) discovery and inspection, (b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath and (c) compelling the production of books of account and other documents. It is not disput....
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....ings under the Income-tax Act. Hence, we are of the opinion that the statements so recorded and documents collected by the Assessing Officer cannot be brushed aside as done by the appellate Tribunal stating that it is having only very limited application. We answer the question in favour of the appellant." Pr. CIT v. Shri Roshan Lal Sancheti [IT Appeal No 47 of 2018, dated 30-10-2018]. Hon'ble Rajasthan High Court 'This court in CIT, Bikaner v. Ravi Mathur, supra, which judgment has been relied by the ITAT in the present case, after considering catena of previous decisions, held that the statements recorded under section 132(4) of the IT Act have great evidentiary value and they cannot be discarded summarily and cryptic manner, by simply observing that the assessee retracted from his statement. One has to come to a definite finding as to the manner in which the retraction takes place. Such retraction should be made as soon as possible and immediately after such statement has been recorded by filing a complaint to the higher officials or otherwise brought to the notice of the higher officials by way of duly sworn affidavit or statement supported by convinci....
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.... burden has to be discharged by an assessee at the earliest point of time and in the instant case we notice that the AO in the Assessment Order observes:- "Regarding the amount of Rs. 44.285 lakhs, it is now contended that the statement u/s 132(4) was not correct and these amounts are in ITA No. 720/JP/2017 M/s Bannalal Jat Construction Pvt. Ltd., Bhilwara v. ACIT, Central Circle-Ajmer thousands, not lakhs i.e. it is now attempted to retract from the statements made at the time of S & S operations." Therefore, what we gather from the Assessment Order and on perusal of the above finding that the retraction was at the stage when the assessment proceedings were being finalized i.e. almost after a gap of more than an year. Such a so-called retraction in our view is no retraction in law and is simply a self-serving statement without any material." CIT, Bikaner vs. Shri Ravi Mathur (D.B. Income-tax Appeal No. 67/2002), Hon'ble Rajasthan High Court "Once a statement is recorded u/s 132(4), such a statement can be used as a strong evidence against the assessee in assessing the income, the burden lies on the assessee to establish that the admission ma....
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....ition of Rs. 2,00,000/- u/s 68 of the Income Tax Act, 1961 by not accepting the agriculture income shown by the assessee in his return of income. (iii) addition of Rs. 87,84,862/- u/s 69C of the Income Tax Act, 1961 on account of alleged unexplained expenditure of interest paid to Shri Chandra Prakash Agarwal on alleged cash loan obtained of Rs. 20,00,00,000/-. (iv) addition of Rs. 51,11,569/- u/s 69C of the Income Tax Act, 1961 on account of alleged unexplained expenditure of interest paid to Shri Chandra Mohan Badaya on alleged cash loan obtained of Rs. 2,28,87,000/-. (v) addition of Rs. 1,00,00,000/- u/s 68 of the Income Tax Act, 1961 on the basis of post dated cheques found from third party. (vi) addition of Rs. 5,47,150/- u/s 57(iii) of the Income Tax Act, 1961 on account of disallowance of interest expenditure. (vii) addition of Rs. 17,02,666/- on account of undisclosed brokerage income and onmoney on sale of plots of Rajhans Cooperative Housing Society. (viii) addition of Rs. 10,00,000/- on account of marriage expenses of his niece Sonam during the year under consideration without any material or evidence found during the....
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....s mentioned that "it is worthwhile to mention here that the assessee failed to furnish return of income u/s 139(1) of the IT Act." These facts establish that as on the date of search on 28/7/2016, no assessment was pending, as such, none abated so far as assessment year 2015-16 is concerned. In view of this, as per settled position of law up to the stage of Apex Court, additions were required only with reference to incriminating material found and seized during the course of search. Since no incriminating material was found and seized during the course of search, hence no additions were warranted in the case of the assessee. The Learned Assessing Officer has erred in making the following additions without reference to any seized material. (i) Addition of Rs. 94,77,000/- u/s 68 of the Income Tax Act, 1961 on account of alleged unexplained cash deposits in the bank accounts. (ii) Addition of Rs. 2,00,000/- u/s 68 of the Income Tax Act, 1961 by not accepting the agriculture income shown by the assessee in his return of income. (iii) Addition of Rs. 87,84,862/- u/s 69C of the Income Tax Act, 1961 on account of alleged unexplained expenditure of interest paid ....
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....nder Section 132A of the Act, 1961." In view of the aforesaid decision, it is clear that in case of unabated assessment, no addition can be made by the Learned Assessing Officer in the absence of any incriminating material found during the course of search. In the case of the assessee, assessment for the ASSESSMENT YEAR 2015-16 was not pending, as such, it was unabated and hence, other additions were possible only if additions were made on the basis of incriminating material found during search. Since no incriminating material was found and none has been referred to in the assessment order, the Learned Assessing Officer was precluded in making any other additions with reference to the deposits in bank and agricultural income etc. The additions made by the Learned Assessing Officer deserve to be deleted. However, the submissions made before the Learned CIT(A) have gone unappreciated. The Learned CIT(A) has on the other hand acted on hypothetical basis. In para 4.5 it has been observed by the Learned CIT(A) that the time to file the return of income was still pending as on the date of search i.e. on 28.07.2016. It is the case of the Learned CIT(A) that in view of th....
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....n the period of six assessment years and for the relevant assessment year or years referred to in this sub-section pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate: Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases 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: Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless- (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to am....
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....ned CIT(A) is therefore most unjustified and unsupported by any judicial decision. In view of this the Hon'ble ITAT is requested to delete all additions not related to search material. 2. It is further submitted that the Learned Assessing Officer has also erred in making addition of Rs. 87,84,862/- on the basis of papers found and seized during the course of search in the case of Shri Chandra Prakash Agarwal. For considering incriminating material found and seized from other person, the assessment was required following the procedure laid down u/s 153C. The material seized from other persons could not have been considered u/s 153A. Therefore, the addition made of Rs. 87,84,862/- on the basis of papers found and seized from the residence of Shri Chandra Prakash Agarwal are most unjustified and deserve to be deleted. Similarly, addition of Rs. 51,11,569/- has been made on the basis of material found and seized during the course of search at the residence of Shri Chandra Mohan Badaya. For considering incriminating material found and seized from other person, the assessment was required to be completed following the procedure laid down u/s 153C. The same could not....
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....g Officer of the other person. On receipt of the seized material from the Assessing Officer of the searched person the Learned Assessing Officer of the other person shall initiate proceedings u/s 153C if he satisfied that the seized material or information therein has a bearing on the determination of income of the other person. The relevant provisions of section 153C are quoted below - Assessment of income of any other person. 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 no....
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....d, or (c) assessment or reassessment, if any, has been made, before 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, 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 153A. (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 following case law is directly applicable to the facts of the case - PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) & ORS. vs. ANAND KUMAR JAIN (HUF) & ORS. HIGH COURT OF DELHI 201 DTR 0200 (Del), (2021) 320 CTR 0656 (Del), (2021) 432 ITR 0384 (Delhi), Date or order : 12/02/2021 "10. Now, coming to the aspect viz the invocation of section 153A on the basis of the statement recorded in search action against a third person. We may note that the AO has used this statement on oath recorded in the course of search conducted in the....
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....dited in the books of accounts. (ii) Such books of accounts should be of the assessee. (iii) Such books of accounts should be maintained by the assessee for the previous year. It is submitted that the assessee vehemently argued before the Learned CIT(A) that in the case of the assessee no books of accounts were maintained as such deposits in the bank accounts could not be treated as having been credited in the books of accounts. In other words addition made of Rs. 94,77,000/- in respect of bank deposits invoking the provisions of section 68 was unlawful and illegal. However, the Learned CIT(A) failed to appreciate this submission of the assessee. The Learned CIT(A) disregarded the various decisions quoted in support of the submission and has relied on unspecific decisions of Sri Jagdish Prasad Sharma (ITAT Delhi Bench in ITA No. 104/Del/2015 dated 13.01.2020 and Arunkumar J. Muchhala Vs. CIT (High Court of Mumbai) 399 ITR 256. However the assessee hereby quotes other decisions which very clearly lay down that bank passbook is not books of accounts. The decision include those of the Supreme Court of India, High Court of Madras, High Court of Mumbai and ITA....
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....AS Tax Case (Appeal) No. 36 of 2004 Apr 2, 2007 (2007) 210 CTR 543, (2007) 291 ITR 0232 Income-Cash credit-Genuineness-Assessee firm did not maintain any books of account-It has shown the capital contributions of the partners in the P&L a/c and balance sheet-P&L a/c and balance sheet are not books of account as contemplated under the provisions of the Act-Further, explanation offered by the assessee firm has not been rejected by the AO-AO cannot ask the assessee to prove the source of a source-If the AO doubted the genuineness of the source of the partners, he could have made additions in the hands of the partners only and not in the hands of the firm-Addition under s. 68 was not therefore sustainable (v) SATISH KUMAR vs. INCOME TAX OFFICER IN THE ITAT JALANDHAR (2019) 175 DTR 0121 (Asr)(Trib), (2019) 198 TTJ 0114 (Asr) A bank statement cannot be considered to be a 'book' maintained by assessee for any PY, as understood for purpose of s. 68. In view of the ratio of the aforesaid decisions it is established beyond doubt that bank pass book is not books of accounts so far as provisions of section 68 are concerned. In view of this addition m....
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.... which were deposited in the same bank account. This submission was not considered by the learned Assessing Officer. The assessee has submitted copy of bank statement which is also available on paper book page No. 6-17. It is clear from the bank statement that the assessee has deposited cash out of earlier withdrawals made from the same account. The bank account was also available with the Learned AO. Before making addition he has not considered the earlier cash withdrawal from the same bank. The Learned Assessing Officer should have given benefit of additions made on the same ground in the earlier years. The case of the assessee is that the bank deposits continued to revolve around and around. The amount was withdrawn in cash and same was re-deposited in the bank account. The cash deposits made in this account were not unexplained but re-deposits out of the previous withdrawals. The A.O. has not considered the fact of withdrawal of cash from the same account and has merely made the addition on the basis of entries of deposit of cash. Further, before making the addition the Learned Assessing Officer has not provided the working of deposits in cash of Rs. 75,84,000/- in UCO Bank and....
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.... 1300000 26 28.01.2015 1280000 27 26.03.2015 2500000 28 26.03.2014 2500000 The above table disclosed that there is quick turnover of the cash. This establishes that the money did not belong to the assesse. In the account the same remained hardly for a day. The quick receipt and transfer of money establishes that the money was received from the buyers of the property and transferred to the sellers. The assessee earned only commission which is maximum 2% of the transaction. The assessee has already disclosed income from brokerage in the partnership firm Brandavan Colonizers where the assessee has 10% share. From this firm assessee has earned remuneration of Rs. 4,00,000/- and interest income of Rs. 4,43,206/- and also exempt income as profit from firm of Rs. 42,662/-. However, assessee offers 2% of Rs. 94,77,000/- (bank deposits) as brokerage from sale and purchase and property. This results in income of Rs. 1,89,540/-. The assessee is surrendering this income as a matter of purchase of peace and to avoid costly litigation with the mighty department. The Hon'ble Tribunal is requested to kindly accept t....
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....2024] [I.T.A. No. 269/Viz/2023], It is a case where redeposit on cash was rejected. 8 Kailash Swaroop Agarwal vs Commissioner of Income Tax, Ajmer in D.B. Income Tax Appeal No. 175 / 2012 in order dated 03/10/2017 It relates to deposits in bank in a distant place and hence these were rejected. 9 Commissioner of Income-tax v. Devi Prasad Vishwanath [1969] 72 ITR 194 (SC)[01-081968 It does not relates to deposits in cash in bank. 10 Roshan Di Hatti v. Commissioner of Income-tax [1977] 107 ITR 938 (SC)[0803- 1977] It does not relates to deposits in cash in bank. 11 Commissioner of Income-tax v. Devi Prasad Vishwanath [1969] 72 ITR 194 (SC)[01-08-1968] It does not relates to deposits in cash in bank. 12 Navin Shantilal Mehta v. Income-tax Officer, Ward-32 (2) (4), Mumbai [2018] 90 taxmann.com 16 (Mumbai - Trib.) It does not relates to deposits in cash in bank. 13 Sumati Dayal v. Commissioner of Income-tax [1995] 80 Taxman 89 (SC)/[1995] 214 ITR 801 (SC)/[1995] 125 CTR 124 (SC)[28-03- 1995] a It is in respect of settlement commission which was seized with the issue of winning of lottery. It does not relates to deposits in cash in ....
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.... The books of account have to be of the previous year ; (iii) No explanation is submitted or explanation furnished is not found satisfactory. In the case of the assessee, the provisions of Sec. 68 are not applicable because for the relevant assessment year, no books of account were maintained by the assessee. In view of this, there were no credit entries in the books of accounts which could have been considered by the Learned Assessing Officer. It is also relevant to add that in the para 7.3 of the assessment order, which is related to addition u/s 68 in respect of agricultural income, the Learned Assessing Officer has also not referred that the credit entries in the books of accounts of the assessee were unexplained. The Learned Assessing Officer is directly referring to the return of income of the assessee. In view of the aforesaid submissions, the Learned Assessing Officer erred in making the addition invoking the provisions of Section 68. The same deserves to be deleted. Agricultural income is fully justified The assessee is owner of 60 bigha irrigated land. The assessee has shown agriculture income of Rs. 2,00,000/- for the year und....
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.... addition of Rs. 87,84,862/- u/s 69C of the Income Tax Act, 1961 on account of alleged unexplained expenditure of interest paid to Shri Chandra Prakash Agarwal on alleged cash loan obtained of Rs. 20,00,00,000/-. In the above regard it is submitted that during the course of appellate proceedings the assessee has made the detailed submission, copy of which is available on paper book page cited surpa. The major issues raised before the Learned CIT(A) in respect of the above addition are briefly mentioned as under - (i) The addition has been made with reference to documents and papers found and seized as per Annexure-A exhibit-12 from the residence of Shri Chandra Prakash Agarwal where a search had taken place on 28.07.2016. The addition is not based on any incriminating material or paper found and seized from the possession of the assessee. Obviously the incriminating material seized from Shri Chandra Prakash Agarwal required to be considered u/s 153C. The same could not have been considered u/s 153A. In support of this citations were also quoted. The Learned CIT(A) has just brushed aside the submission of the assessee without controverting the same. (ii) I....
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.... natural justice always do not require affording opportunity to the assessee. The case laws quoted by him are totally not applicable to the facts of the case. It is a case of proven facts where great prejudice has been caused on account of violation of principles of natural justice. The assessee has quoted a number of decisions which the Learned CIT(A) has not appreciated. It is submitted that the Learned CIT(A) failed to be pragmatic and real. His order is most formal rather than practical. He has avoided the crucial issues and the order passed by him smacks prejudice. The assessee further quotes latest decisions in favor of the assessee regarding principles of natural justice - (i) PRINCIPAL COMMISSIONER OF INCOME TAX & ORS. vs. DSG PAPERS PVT. LTD. & ORS. HIGH COURT OF PUNJAB & HARYANA ITA-38-2023 (O&M), ITA-1-2023 (O&M), ITA-8-2023 (O&M), ITA-11-2023 (O&M), ITA-281-2022 (O&M) Nov 9, 2023 (2024) 461 ITR 0004 (P&H), 10. The Apex Court in the said case while allowing the appeal had noticed that the Tribunal had rejected the plea of cross-examination that the statement of the dealer would not bring out any material which would not be in possession of the assessee.....
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....isions of 1961 Act wherein the statements of one Maheshwari had been recorded wherein he had denied that he had nothing to do with the bank account from which the cheques were issued to the assessee. Resultantly, the order of the Tribunal had been upheld on the ground that the said person had not been cross-examined and no opportunity was granted by the Assessing Officer and there was violation of principles of natural justice. 12. Facts herein are similar as noticed above. A perusal of the order of Commissioner of Income Tax would go on to show the Commissioner had noticed that the Assessing Officer without bringing any record or evidence had made the addition on the basis of the statement of the third party which could not be considered as conclusive evidence. It is in such circumstances, we are of the considered opinion that the Tribunal has rightly interfered in the orders passed by the authorities below. Therefore, no question of law arises. Needless to say that the tax effect is also below the requisite limit, as per the circular of the Revenue. (ii) T. Takano vs. Securities and Exchange Board of India & Anr (Civil Appeal Nos. 487-488 of 2022) Judgment dated....
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....wal required to be considered as per provisions of Sec. 153C. The provisions of Sec. 153C are quoted below :- 153C. (1) ^19[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] ^20[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 account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the rele....
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.... of the searched person is a statutory obligation and not a paper formality. In the absence of recording of satisfaction of the Assessing Officer of the searched person, the information could not have been handed over to the Assessing Officer of the such other person. The following case laws are quoted in support:- (i) PR. COMMISSIONER OF INCOME TAX & ORS. vs. NIKKI DRUGS & HEMICALS PVT. LTD. & ORS. HIGH COURT OF DELHI 386 ITR 0680 (Delhi), (2016) 236 TAXMAN 0305 (Delhi) The Hon'ble Court held that the first step for initiation of proceedings under Section 153C of the Act is for the assessing officer of the searched person to be satisfied that the assets or documents seized do not belong to the searched person but to the assessee sought to be assessed under Section 153C of the Act. Once the assessing officer of the searched person is so satisfied, he is required to transfer the assets or documents, which he believes belongs to the assessee, to the assessing officer having jurisdiction over that assessee. The assessing officer of the assessee on receipt of such asset or document seized would have jurisdiction to commence proceedings under Section 153C of the Ac....
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.... Officer of the searched person must be "satisfied" that inter alia any document seized or requisitioned "belongs to" a person other than the searched person. It is only then that the Assessing Officer of the searched person can handover such document to the Assessing Officer having jurisdiction over such other person (other than the searched person). Further more, it is only after such handing over that the Assessing Officer of such other person can issue a notice to that person and assess or re-assess his income in accordance with the provisions of Section 153A. Therefore, before a notice under Section 153C can be issued two steps have to be taken. The first step is that the Assessing Officer of the person who is searched must arrive at a clear satisfaction that a document seized from him does not belong to him but to some other person. The second step is - after such satisfaction is arrived at - that the document is handed over to the Assessing Officer of the person to whom the said document "belongs". In the present cases it has been urged on behalf of the petitioner that the first step itself has not been fulfilled. Section 132(4A)(i) clearly stipulates that when inte....
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....d the proceedings under Section 153C of the Act, for the reason that there was no satisfaction at any stage. (II) The provisions further stipulate that the Assessing Officer of the such other person shall proceed on receipt of incriminating material/information from the Assessing Officer of the searched person in accordance with the provisions of Sec. 153C only if the Assessing Officer of the such other person is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person. In this case, the other person is the assessee. Therefore, the Assessing Officer of the assessee was required to record a finding that the material and information received from the Assessing Officer of the searched person has a bearing on the determination of the income of the assessee. Recording of such satisfaction is not available in the case of the assessee. In view of this, the entire proceedings of considering the seized material found and seized in the case of search of Shri Chandra Prakash Agarwal in the case of the assessee is unlawful, illegal and unjustified. The case laws cited above are appli....
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....ection 153C of the Act for bringing the material found from the premise of Sh. Ashok Chaudhri to tax in the hands of the assessee." (i) Lalit Mahajan, Shivali Mahajan Vs. DCIT ITA No. 5585 & 5586/Del/2015 ITAT Bench C, New Delhi Date of order : 19/03/2019 "From a reading of the above decisions of Hon'ble Jurisdictional High Court, it is evident that completed assessment can be interfered with by the Assessing Officer on the basis of any incriminating material unearthed during the course of search. If in relation to any assessment year no incriminating material is found, no addition or disallowance can be made in relation to that year in exercise of power under Section 153 of the Act. Obviously, the reference to the incriminating material in the above decisions of Hon'ble Jurisdictional High Court is in regard to incriminating material found as a result of search of the assessee's premises and not of any other assessee. The legislature has provided Section 153C by invoking the same the Revenue can utilize the incriminating material found in the case of search of any other person to the different assessee. Section 153C is reproduced below for ready refer....
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..../Kol ITAT, C Bench, Kolkata Date of order : 06/12/2017 "Para 10. We have heard the rival submissions. We find that it is not in dispute that there were no documents that were seized from the premises of the assessee except loose sheets vide seized document reference KKS /1 comprising of 8 pages, for which satisfactory explanation has been given by the assessee and no addition was made by the ld AO on this seized document. The seized document used by the ld AO for making the addition in section 153A assessment is CG/1 to 11 and CG/HD/1 which were seized only from the office premises of Cygnus group of companies in which assessee is a director. In this regard, it would be pertinent to note that as per section 292C of the Act, there is a presumption that the documents, assets, books of accounts etc found at the time of search in the premises of a person is always presumed to be belonging to him / them unless proved otherwise. This goes to prove that the presumption derived is a rebuttable presumption. Then in such a scenario, the person on whom presumption is drawn, has got every right to state that the said documents does not belong to him / them . The ld AO if he is satisfi....
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....ral justice violated It is further submitted that the Learned Assessing Officer has made the addition of Rs. 87,84,862/- in violation of the principles of equity and justice inasmuch as (i) Copy of papers seized from the residence of Chandra Prakash Agarwal were not furnished (ii) Copy of statement recorded u/s 132(4) of the assessee was not furnished (iii) Cross-examination not allowed of Shri Chandra Prakash Agarwal (iv) Cross examination not allowed of the assessee The above violations of the principles of natural justice vitiate the assessment proceedings. It is settled principle of law that material/statement gathered by the Learned Assessing Officer have to be disclosed to the assessee before the same are put to use in the assessment proceedings. In this case, the Learned Assessing Officer did not provide copies of the seized papers from the residence of Shri Chandra Prakash Agarwal. The assessee was also not allowed cross-examination of Shri Chandra Prakash Agarwal. In view of this, it is submitted that the addition deserves to be deleted. The assessee reiterates that the main plea of the assessee is that the material fou....
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....ourt and Tribunal and remanded the case to the Assessing Officer for fresh consideration after giving reasonable opportunity to the assessee. (7) Andman Timber Ind Vs. Commissioner of Central Excise (2015) 281 CTR 211 (SC) The Apex Court has observed that not allowing cross examination is a serious flaw and makes the order nullity. The Hon'ble Court held that "not allowing the assessee to cross examine the witness by the adjudicating authority though the statements of those witnesses were made the basis of the impugned order, is a serious flaw which makes the order nullity in as much as it amounted to violation of principle of natural justice because of which the assessee was adversely affected. (8) COMMISSIONER OF INCOME TAX vs. BIJU PATNAIK HIGH COURT OF ORISSA 190 ITR 0396 Although answers can be recorded either in favour of the Department or against it, ultimately each answer would again become inconclusive on account of the final findings of fact of the Tribunal that ITO has not given reasonable opportunity to the assessee to rebut the statements recorded ex parte under s. 131 of the Act and to furnish explanation to some of the material....
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....me, it was obligatory on the part of the AO to allow the prayer of assessee for cross-examination of M-AO having not summoned M under s. 131 in spite of the request of the assessee, evidence of M could not have been used against the assessee-Therefore, the assessment order is vitiated (10) HEIRS AND LRS OF LATE LAXMANBHAI S. PATEL vs. COMMISSIONER OF INCOME TAX (HIGH COURT OF GUJARAT ) (2010) 327 ITR 0290 Opportunity of being heard-During search of one R, key of bank locker along with two packets containing six promissory notes were recovered-Out of those six promissory notes, one was in the sum of Rs. 8,78,358 executed by one K in the capacity of partner of firm DCI-In his statement recorded during search, R stated that the key of locker and the two envelopes were handed over to him by the assessee-K also admitted in his statement recorded on the same day at 2.00 AM midnight that he had executed the pronote and signed it on behalf of DCI after obtaining a sum of Rs. 8,78,358-Later, K filed an affidavit that his statement was recorded at late hours in the night under coercion and pressure-Subsequently, K along with two other partners of DCI, made a voluntary discl....
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....Under the facts and circumstances of the case the Learned CIT(A) has erred in confirming the addition of Rs. 51,22,569/- u/s 69C of the Income Tax Act, 1961 on account of alleged unexplained expenditure of interest paid to Shri Chandra Mohan Badaya on alleged cash loan obtained of Rs. 2,28,87,000/-. In the above regard it is submitted that during the course of appellate proceedings the assessee has made the detailed submission, copy of which is available on paper book page cited surpa. The major issues raised before the Learned CIT(A) in respect of the above addition are briefly mentioned as under - (i) The addition has been made with reference to documents and papers found and seized as per Annexure-AS exhibit-4 from the residence of Shri Chandra Mohan Badaya where a search had taken place on 29.07.2016 at his residence 178, Surya Nagar, Taron ki Koot, Tonk Road, Jaipur. The addition is not based on any incriminating material or paper found and seized from the possession of the assessee. Obviously, the incriminating material seized from Shri Chandra Mohan Badaya required to be considered u/s 153C. The same could not have been considered u/s 153A. In support of th....
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....oss examination of Shri Chandra Mohan Badaya being not allowed. The Learned CIT(A) has simply stated that principles of natural justice always do not require affording opportunity to the assessee. The case laws quoted by him are totally not applicable to the facts of the case. It is a case of proven facts where great prejudice has been caused on account of violation of principles of natural justice. The assessee has quoted a number of decisions which the Learned CIT(A) has not appreciated. It is submitted that the Learned CIT(A) failed to be pragmatic and real. His order is most formal rather than practical. He has avoided the crucial issues and the order passed by him smacks prejudice. The assessee further quotes latest decisions in favor of the assessee regarding principles of natural justice - (i) PRINCIPAL COMMISSIONER OF INCOME TAX & ORS. vs. DSG PAPERS PVT. LTD. & ORS.HIGH COURT OF PUNJAB & HARYANA ITA-38-2023 (O&M), ITA-1-2023 (O&M), ITA-8-2023 (O&M), ITA-11-2023 (O&M), ITA-281-2022 (O&M) Nov 9, 2023 (2024) 461 ITR 0004 (P&H), 10. The Apex Court in the said case while allowing the appeal had noticed that the Tribunal had rejected the plea of cross-examinati....
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....ivision Bench of the Delhi High Court in the case of Rajesh Kumar (supra) also has taken a similar view under the provisions of 1961 Act wherein the statements of one Maheshwari had been recorded wherein he had denied that he had nothing to do with the bank account from which the cheques were issued to the assessee. Resultantly, the order of the Tribunal had been upheld on the ground that the said person had not been cross-examined and no opportunity was granted by the Assessing Officer and there was violation of principles of natural justice. 12. Facts herein are similar as noticed above. A perusal of the order of Commissioner of Income Tax would go on to show the Commissioner had noticed that the Assessing Officer without bringing any record or evidence had made the addition on the basis of the statement of the third party which could not be considered as conclusive evidence. It is in such circumstances, we are of the considered opinion that the Tribunal has rightly interfered in the orders passed by the authorities below. Therefore, no question of law arises. Needless to say that the tax effect is also below the requisite limit, as per the circular of the Revenue. ....
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.... 153C. (1) ^19[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] ^20[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 account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A] : Provided that in case of....
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....ssessing Officer of the searched person, the information could not have been handed over to the Assessing Officer of the such other person. The following case laws are quoted in support :- (i) PR. COMMISSIONER OF INCOME TAX & ORS. vs. NIKKI DRUGS & CHEMICALS PVT. LTD. & ORS. HIGH COURT OF DELHI 386 ITR 0680 (Delhi), (2016) 236 TAXMAN 0305 (Delhi) The Hon'ble Court held that the first step for initiation of proceedings under Section 153C of the Act is for the assessing officer of the searched person to be satisfied that the assets or documents seized do not belong to the searched person but to the assessee sought to be assessed under Section 153C of the Act. Once the assessing officer of the searched person is so satisfied, he is required to transfer the assets or documents, which he believes belongs to the assessee, to the assessing officer having jurisdiction over that assessee. The assessing officer of the assessee on receipt of such asset or document seized would have jurisdiction to commence proceedings under Section 153C of the Act. The assessing officer has, thereafter, to apply his mind as to whether the assets and documents received have a bearing on t....
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.... other than the searched person. It is only then that the Assessing Officer of the searched person can handover such document to the Assessing Officer having jurisdiction over such other person (other than the searched person). Furthermore, it is only after such handing over that the Assessing Officer of such other person can issue a notice to that person and assess or re-assess his income in accordance with the provisions of Section 153A. Therefore, before a notice under Section 153C can be issued two steps have to be taken. The first step is that the Assessing Officer of the person who is searched must arrive at a clear satisfaction that a document seized from him does not belong to him but to some other person. The second step is - after such satisfaction is arrived at - that the document is handed over to the Assessing Officer of the person to whom the said document "belongs". In the present cases it has been urged on behalf of the petitioner that the first step itself has not been fulfilled. Section 132(4A)(i) clearly stipulates that when inter alia any document is found in the possession or control of any person in the course of a search it may be presumed that such ....
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....provisions further stipulate that the Assessing Officer of the such other person shall proceed on receipt of incriminating material/information from the Assessing Officer of the searched person in accordance with the provisions of Sec. 153C only if the Assessing Officer of the such other person is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person. In this case, the other person is the assessee. Therefore, the Assessing Officer of the assessee was required to record a finding that the material and information received from the Assessing Officer of the searched person has a bearing on the determination of the income of the assessee. Recording of such satisfaction is not available in the case of the assessee. In view of this, the entire proceedings of considering the seized material found and seized in the case of search of Shri Chandra Mohan Badaya in the case of the assessee is unlawful, illegal and unjustified. The case laws cited above are applicable on this issue also. The aforesaid provisions of Sec. 153C very clearly stipulate that in the case of search if incr....
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....) Lalit Mahajan, Shivali Mahajan Vs. DCIT ITA No. 5585 & 5586/Del/2015 ITAT Bench C, New Delhi Date of order : 19/03/2019 "From a reading of the above decisions of Hon'ble Jurisdictional High Court, it is evident that completed assessment can be interfered with by the Assessing Officer on the basis of any incriminating material unearthed during the course of search. If in relation to any assessment year no incriminating material is found, no addition or disallowance can be made in relation to that year in exercise of power under Section 153 of the Act. Obviously, the reference to the incriminating material in the above decisions of Hon'ble Jurisdictional High Court is in regard to incriminating material found as a result of search of the assessee's premises and not of any other assessee. The legislature has provided Section 153C by invoking the same the Revenue can utilize the incriminating material found in the case of search of any other person to the different assessee. Section 153C is reproduced below for ready reference :- "Assessment of income of any other person. 153C. [(1)] [Notwithstanding anything contained in section 139, section 14....
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....e that there were no documents that were seized from the premises of the assessee except loose sheets vide seized document reference KKS /1 comprising of 8 pages, for which satisfactory explanation has been given by the assessee and no addition was made by the ld AO on this seized document. The seized document used by the ld AO for making the addition in section 153A assessment is CG/1 to 11 and CG/HD/1 which were seized only from the office premises of Cygnus group of companies in which assessee is a director. In this regard, it would be pertinent to note that as per section 292C of the Act, there is a presumption that the documents, assets, books of accounts etc found at the time of search in the premises of a person is always presumed to be belonging to him / them unless proved otherwise. This goes to prove that the presumption derived is a rebuttable presumption. Then in such a scenario, the person on whom presumption is drawn, has got every right to state that the said documents does not belong to him / them . The ld AO if he is satisfied with such explanation, has got recourse to proceed on such other person (i.e the person to whom the said documents actually belong to) in te....
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....of the principles of equity and justice inasmuch as the assessee was not provided print-outs and working alleged to have been taken from the mobile phone of Shri Chandra Mohan Badaya. No details were furnished as how and on what basis alleged loan of Rs. 3,61,24,000/- was worked out. Similarly, the assessee was also not provided the working of alleged payment of interest of Rs. 51,11,569/-. In view of this the Learned Assessing Officer has violated the principles of equity and justice and, therefore, the assessment proceedings stand vitiated. The additions deserve to be deleted. It is settled principle of law that the material gathered at the back of the assessee could not be used against him unless the same was provided to him for defence. The case laws quoted in support of ground No. 4 are equally applicable to this ground also." Ground No. 6 - Under the facts and circumstances of the case the Learned CIT(A) has erred in confirming the addition of Rs. 1,00,00,000/- u/s 68 of the Income Tax Act, 1961 on the basis of post dated cheques found from the third party. In the above regard it is submitted that the addition has been made purely on assumption and ....
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....y when amount is found credited in the books of accounts of the assessee. Here the assessee has not maintained any books of accounts, as such the question of above cheques being credited in the books of accounts does not arise. Therefore, the addition deserved to be deleted on this ground also. However, the Learned CIT(A) has not appreciated the submissions of the assessee and has sustained the addition made by the Learned Assessing Officer. The Learned CIT(A) has wrongly treated the post dated cheques as transactions. The Learned CIT(A) has alternately held that the amount mentioned in the post dated cheques unexplained u/s 69A. The moot point is that the assessee has not received any amount of these cheques, therefore, the post dated cheques did not deserve to be considered in the hands of the assessee. On top of all the revenue has failed to bring on record the name of the person who had issued the cheques and what had ultimately happened to these post dated cheques. The addition has been made and sustained purely on suspicion. It is settled principle of law that suspicion however strong cannot take place of evidence. In view of the aforesaid facts the Hon'ble ITAT is humbly....
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.... material, then no other additions would be possible u/s 153A in cases of unabated/completed assessments. In view of this, the additions made in the case of the assessee deserve to be deleted. (ii) No conclusive evidence of receipt of cheque amount It is submitted that the addition has been made by the Learned Assessing Officer on the basis of the aforesaid cheques. The Learned Assessing Officer has not conducted any inquiry as in whose favour the cheques were issued. It is also not known as who had issued the cheques. The Learned Assessing Officer has also not ascertained the fate of these cheques whether these were presented for encashment and if so in whose account the money went. In absence of all these details, the Learned Assessing Officer was not competent to make the addition presuming that the amount of cheques of Rs. 1,00,00,000/- was a receipt in the hands of the assessee. The addition has been made totally under confusion. The same, therefore, deserves to be deleted. (iii) Provisions of Sec. 68 not applicable It is submitted that the Learned Assessing Officer has made the addition of Rs. 1,0,00,000/- holding that the receipt was undis....
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....isallowance of interest was not justified. It was submitted that during the course of search nothing was found and seized from the possession of the assessee. No additions have been made with reference to any incriminating material. In view of this and as held by the Hon'ble Supreme Court in case of Abhisar Builders as quoted above, other additions are not warranted in a case where additions are not made on the basis of incriminating material found during search. Alternately, it was argued that assessee had disclosed income from interest under the head income from other sources from parties of Rs. 7,31,195/- besides this interest income was also disclosed from firm Vrandavan Colonizers of Rs. 4,43,206/-. Assessee had obtained loans for making investment in firm for making investment in firm as well for business purposes. Hence the claim of interest of Rs. 4,57,150/- was well in order and deserved to be allowed. The Learned CIT(A) has not appreciated the submissions of the assessee and simply upheld the addition made by the Learned Assessing Officer. For the sake of convenience the submissions made before Learned CIT(A) are quoted below:- "The Learned Assessing....
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....letter were found belonging to Rajhans Cooperative Housing Society in respect of residential scheme "Shiva Paradise", Nimodia Mod, Tonk Road, Jaipur. Statement of the assessee was recorded with reference to these papers. The statement of the assessee has been reproduced on page 17 & 18 of the assessment order. The assessee deposed that the scheme of "Shiva Paradise", Nimodia Mod, Tonk Road, Jaipur was developed by Rajhans Cooperative Housing Society. The allotment letters found were unsigned and were to be delivered to the society. It was further stated by the assessee that the sale of plots pertaining to these allotments letters was conducted by him and he received brokerage @ 20/- per yard. During the course of statements the assessee further revealed that in the sale of plots the society received 70% of sale proceeds by cheques and remaining was received in cash. However the Learned Assessing Officer has treated the complete sale of plots holding the assessee as owner and the 30% of cash which was received by the society has been added in the income of the assessee in addition to brokerage @ 20 per yard. Common sense would dictate that if the plots were owned by the assessee the....
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....er, assessee was not concerned with the consideration of sale as he was getting a fixed brokerage of Rs. 20/- per yard. His brokerage was not related with the quantum of amount of sale, but it was related with the quantum of yards. However, the Learned Assessing Officer has considered the 30% of consideration in the hands of the assessee and has made addition of Rs. 15,76,542/- on sale of 6306.17 yards comprising 53 plots. The Learned Assessing Officer has wrongly assessed the quantum of alleged "onmoney" of Rs. 15,76,542/- in the hands of the assessee. In his statement, the assessee has not deposed that he was the recipient of the on-money. He has simply stated that deals of sale of plots including boundary wall was made @ Rs. 700 per Sq.yd and the payment was to be made at the ration 70 : 30, i.e. 70% of the amount was to be paid by cheque and 30% was to be paid in cash. In his reply to question No. 10, the assessee further stated that he was to get only Rs. 20 per Sq.yd as brokerage. The reply of the assessee is categorical and very specific. In his statement, he has nowhere stated that he got the on-money amount. In view of this, the addition of Rs. 15,76,542/- is totally uncal....
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....i) It is further submitted that it is a case where additions have not been made with reference to any incriminating material as such the Learned Assessing Officer was precluded in making any other addition. In view of these submission the Hon'ble ITAT is requested to delete the additions. For the sake of convenience the submission made before the Learned CIT(A) is quoted below - "It is submitted that the addition has been discussed by the Learned Assessing Officer in para 7.8 appearing on page 19 and 20 of the assessment order. The addition has been made on the ground that the assessee incurred expenditure of Rs. 10 lacs in the marriage of Sonam, who was his niece. The addition has been made with reference to the statement recorded of the assessee under section 132(4). The addition is totally uncalled for and misplaced. The same is assailed as under :- (a) No incriminating material found during search in respect of the expenditure on marriage. It is submitted that in this case no assessment was pending and none abated. Hence additions were strictly required to be made on the basis of search material only. While completing assessment under sec....
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....) 290 CTR 0263 (Del), (2016) 241 TAXMAN 0199 (Delhi) The Hon'ble Court held that if the provisions of Section 132(4) of the Act are read in the context of Section 158BB(1) read with Section 158B(b) of the Act, it is at once clear that a statement recorded under Section 132(4) of the Act can be used in evidence for making a block assessment only if the said statement is made in the context of other evidence or material discovered during the search. A statement of a 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. (3) PRINCIPAL COMMISSIONER OF INCOM....
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....nd oblige. 6. To support the contention so raised in the written submission reliance was placed on the following evidence / records: Sr.No. Particulars Page No. 1. Copy of acknowledgement of return filed u/s 153A on 02/08/2018. 1-5 2. Copy of bank statement 6-17 3. Copy of written submission made before the Learned CIT(A) 18-124 7. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the assessee in the case of the assessee for A. Y. 2011-12 to 2014-15 the appeal was decided in favour and the revenue has not preferred the appeal against those orders. Now the issue of addition made in the case of the assessee for the A. Y. 2015-16 to 2017-18 were based on the information collected in the search / survey carried out at the third party's case. The assessee deals as broker in real estate and his income consists of income of brokerage and other income. The first issue relates to the addition of cash deposited into the bank account which is explained as out of the earlier withdrawal. Alternatively, ld. AR of the assessee stated that assessee has not kept the money and he being the broker the incom....
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....be in the name of the assessee there cannot be any addition of interest in the hands of the assessee. As regards those alleged loan no enquiries were conducted no statement of the person were expressly brought before the assessee to make the addition. As regards the addition based on the post dated cheque since the same of future date no addition can be made in the hands of the assessee. As regards the disallowance of interest paid all the payment of loan and interest are by an account payee cheque and when the loan is not in dispute the interest payment cannot be disallowed. 10. We have heard the rival contentions and perused the material placed on record. Vide ground No. 2 the assessee challenges the addition of Rs. 94,77,000/- on account of alleged cash deposits in the bank account. The lower authority did not considered the plea of the assessee that the assessee has first withdrawn the money and then deposited. As the assessee has not properly placed on record the date wise details of withdrawal and deposit and the working showing that the assessee was holding sufficient balance to deposit the cash out of the withdrawal. Even the assessee has not submitted that vital informa....
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....ention of the assessee. If we consider the holding of 60 bigha holding the net income of Rs. 3333 for bigha cannot be disbelieved and it cannot be termed as unexplained money or unexplained credit and therefore, the we direct the ld. AO to delete that addition. Based on that observation ground No. 3 raised by the assessee is allowed. 13. Vide ground No. 4 the assessee challenges addition of Rs. 87,84,862/- in the hands of the assessee being the amount of alleged unexplained expenditure in the form of interest expenditure to Shri Chandra Prakash Agarwal on the alleged loan of Rs. 20 cr. The brief facts related to the dispute are that in the search operation at residential cum business premises of Shri Chandra Prakash Agarwal,[third party] at 1756, Telipada, SMS Highway, Choura Rasta, Jaipur wherein various incriminating documents found and seized wherein some pages were found and seized as Annexure-A, Exhibit 12, Page No. 1, 2, 4 & 6 and 10. These Papers contain details of work out of interest received against cash loan given by Shri Chandra Prakash Agarwal to K.B i.e. Shri Kailash Chand Maheshwari. It is worthwhile to mention here that Shri Kailash Chand Maheshwari also known....
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....rnatively, even if these loans were routed with the assessee there is no finding that the loans and interest there upon were re-paid by the assessee from his undisclosed source. Thus, when there is no evidence as to where this investment was made and how that was repaid merely making the addition of interest there is merely a guess work and any addition cannot be made merely on the guess work. While making the assessment of income of the assessee there must be something more than bare suspicion to support the assessment which is clearly missing at the stage of the ld. AO and that of with the ld. CIT(A). While dealing with the appeal against the written submission so filed by the assessee, ld. AO through ld. DR did not controvert the facts placed on record. Based on these observations we see no reason to sustain the addition of Rs. 87,84,862/- in the hands of the assessee. Thus, ground No. 4 raised by the assessee is allowed. 14. Vide ground No. 5 the assessee challenges addition of Rs. 51,22,569/- in the hands of the assessee being the amount of alleged unexplained expenditure of interest paid to Shri Chandra Mohan Baday on alleged cash loan obtained for Rs. 2,28,87,000/-. The f....
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.... the correctness of the returns and accounts filed by the Assessee. Essentially the assessment would evidently mean determination of the quantum of taxable turnover and the quantum of taxable amount payable by the taxpayer. This assessment is based on returns and accounts furnished by an Assessee in support thereof but on an estimate made by the assessing authority which may, of course, be based inter alia on the accounts and documents furnished by the Assessee. The expression of assessment has a wide scope within the purposes of the Act whether the said assessment made are correct or not. Therefore, any assessment made would not essentially mean an assessment correctly or properly but would signify all assessments made or purported to have been made under the Act. Basically, assessment is an estimation for an amount assessed while paying Income Tax. It is a compulsory contribution that is required for the support of a civilized society enjoyed by a citizen. In a best judgment assessment, the assessing officer should really make the assessment on his best judgement i.e. he must not act dishonestly or vindictively or capriciously while performing even for best judgement. Here in thi....
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....ee contended that no additions have been made with reference to any incriminating material. Alternately, it was argued that assessee had disclosed income from interest under the head income from other sources from parties of Rs. 7,31,195/- besides this interest income was also disclosed from firm Vrandavan Colonizers of Rs. 4,43,206/-. Assessee had obtained loans for making investment in firm for making investment in firm as well for business purposes. Hence the claim of interest of Rs. 4,57,150/- was well in order and deserved to be allowed. The Learned CIT(A) has not appreciated the submissions of the assessee and simply upheld the addition made by the Learned Assessing Officer. We found force in the argument and therefore, allow the alternative plea of the assessee that the interest income from the firm Vrandavan Colonizers income of Rs. 4,43,206/- is required to be adjusted against the disallowance of Rs. 4,57,150/- and thereby since that income short by Rs. 13,944/- is sustained in the hands of the assessee in the absence of any details and therefore, ground No. 7 raised by the assessee is partly allowed. 17. Now the eight-ground raised by the assessee challenges the add....
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....posed that he was the recipient of the on-money. He has simply stated that deals of sale of plots including boundary wall was made @ Rs. 700 per Sq.yd and the payment was to be made at the ration 70 : 30, i.e. 70% of the amount was to be paid by cheque and 30% was to be paid in cash. In his reply to question No. 10, the assessee further stated that he was to get only Rs. 20 per Sq.yd as brokerage. The reply of the assessee is categorical and very specific. In his statement, he has nowhere stated that he got the on-money amount. In view of this, the addition of Rs. 15,76,542/- is totally uncalled for. In fact otherwise also the on-money was a part of the sale amount and would naturally go to the seller and not to be broker. The assessee was only a broker and he was entitled only for brokerage. In these facts and circumstances, the addition of Rs. 15,76,542/- deserves to be deleted. In the result ground No. 8 is partly allowed. 18. Vide ground No. 9 the assessee challenges the addition of Rs. 10,00,000/- on account of marriage expenses of his niece Sonam during the year under consideration stating that the said addition was made without any material or evidence found during the co....
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.... addition is merely based on the surmises and conjecture and merely a guess work no addition is required to be sustained. Addition is possible only when such statement recorded u/s 132(4) is substantiated by other incriminating material or documents found during search. In the case of the assessee, no document, no incriminating material was found relating to the expenditure on marriage of Sonam. Therefore, the Learned Assessing Officer was precluded in making such an addition and that too without bringing any cogent material for making the addition, merely the guess work cannot be used to make the addition. As serviced before us the judicial precedent on the issue which are; (1) PRINCIPAL COMMISSIONER OF INCOME TAX & ORS. vs. BEST INFRASTRUCTURE (INDIA) PVT. LTD. & ORS. HIGH COURT OF DELHI (2017) 159 DTR 0257 (Del), (2017) 397 ITR 0082 (Delhi) The Hon'ble Court held that statements recorded under Section 132 (4) of the Act of the Act do not by themselves constitute incriminating material as has been explained by this Court in Commissioner of Income Tax v. Harjeev Aggarwal. (2) COMMISSIONER OF INCOME TAX vs. HARJEEV AGGARWAL High Court of Delhi (2016) ....
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....given by the assessee should be taken into consideration, before making the assessment. The legal position with regard to the undisclosed income from the diaries, does not need any elaboration, however, if the material found during the search, does not tally with the statement records, and that the statement is made subject to the material, which has been seized, a conscious effort should be made to consider the effect of the statement and to make an appropriate assessment by correlating the statements with due material. Thus, it is matter of fact except the statemen no other material advanced to support the addition and therefore, respectfully following the above cited binding precedent we direct the ld. AO to delete that addition of Rs. 10,00,000/- and thereby the ground No. 9 raised by the assessee is allowed. 19. Since we have decided the various grounds of the assessee on its merits, ground No. 1 challenging the impugned order on technical aspects of the matter becomes academic. Ground No. 10 being general does not require any finding. 20. Resultantly the appeal filed by the assessee in ITA No. 1463/JP/2024 stands partly allowed. 21. Vide ITA No. 1464/JP/2024....
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....s of appeal before or at the time of hearing." 22. The bench noted that the ground of appeal raised by the assessee and facts of the case in ITA No. 1464/JP/2024 for A.Ys. 2016-17 are similar with that of the grounds of appeal raised by the assessee in ITA No. 1463/JP/2024 for assessment year 2015-16. Therefore, it is not imperative to repeat all the facts and finding given by us again in the appeal of the assessee in ITA No. 1464/JP/2024 for A.Ys. 2016-17 and the decision taken by us in ITA No. 1463/JP/2024 for assessment year 2015-16 while dealing with ground No. 2 to 6 shall apply mutatis mutandis to this appeal of the assessee vide ground No. 2 to 6 of this appeal whereas decision while dealing with ground No. 9 shall apply mutatis mutandis to ground No. 7. Ground No. 8 being consequential in nature, does not require any finding. Ground No. 1 challenging the impugned order on technical aspects of the matter becomes academic as we have decided the appeal of the assessee on merits. Ground No. 9 being general does not require any finding. 23. Resultantly the appeal filed by the assessee in ITA No. 1464/JP/2024 stands partly allowed. 24. Vide ITA No. 1465/JP/2024 for A.....
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....15-16 B. A search action was conducted on 29.07.2016 at residential premises of Shri Chandra Mohan Badaiya (Chandra Prakash Agarwal Group) at A-178, Surya Nagar, Taroo Ki Koot, Tonk Road, Jaipur. During the search back up of data available in mobile phone of Shri Chandra Mohan Badaiya were taken by the computer specialist in the PEN Drive and the same was seized as Exhibit-4 of Annexure AS as mentioned in the Punchnama. A working copy of the said PEN Drive was also prepared during the search operation and the same is critically examined and a image extracted from mobile phone of assessee was found at F:\Chandra Mohan Badaya Phone Data\ Photos\ Camera Roll in the PEN Drive. The scan copy of the image is as under: CMN GIVEN AMOUNT INCLUDING INTEREST DATE DUE DATE PRINCIPAL AMI NO.OF DAYS RATE AS PER DAY INTEREST 26-06-2014 15-03-2015 15700000 2.62 140 5758760 01-07-2014 15-03-2015 2400000 257 140 863520 15-08-2014 15-03-2015 1400000 212 140 415520 08-09-2014 15-03-2015 2500000 188 140 658000 10-09-2014 15-03-2015 600000 186 140 156240 11-09-2014 15-03-2015 2000000 185 140 518000 18-09-2014 15-03-2015 1000000 178 140 249200 23-09-2014 15-03-2015 2000000 173 140 48440....