TaxTMI 
TaxTMI 
2023 (10) TMI 1609
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....onducted in the Red Rose Group of cases on 12.07.2018 during which the case of the assessee was also covered. Since this being the A.Y relevant to the search year, notice u/s 143(2) dated 9.1.2020 was issued and served on the assessee. Subsequently, notice u/s 142(1) was also issued calling for certain information in response to which the assessee filed the requisite information. 3.1 The Assessing Officer noted that during the course of search at the residence of Shri Mujeeb UR Rahman on 12.07.2018 cash of Rs. 70,30,000/- was found. Since the assessee could not explain the source of cash so found, the same was admitted as additional income over and above his regular income for the financial year 2018-19 relevant to A.Y 2019-20. Since the assessee had admitted the additional income of Rs. 70.00 lakhs and could not explain the source of the same, the Assessing Officer brought the same to tax u/s 69A r.w.s. 115BBE. 4. Before the learned CIT (A), the assessee challenged the action of the Assessing Officer in invoking the provisions of section 69A r.w.s. 115BBE to the additional income of Rs. 70.00 lakhs declared in the return of income. It was argued that the asses....
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....ot justified. Referring to the decision of the Coordinate Bench of the Tribunal in the case of ACIT vs. Devender Rao Gorukanti in ITA No. 439/Hyd/2022 dated 31.5.2023 for the A.Y 2021-22, he submitted that under identical circumstances, the Tribunal had upheld the order of the learned CIT (A) directing the Assessing Officer to tax such amount under normal provisions of the Act and not u/s 69A r.w.s. 115BBE. 8. The learned DR, on the other hand, heavily relied on the order of the Assessing Officer and the learned CIT (A). She submitted that when the assessee could not explain the cash of Rs. 70,30,000/- found at the time of search, he offered the same amount to tax as additional income and therefore, the learned CIT (A) was fully justified in upholding the action of the Assessing Officer in bringing to tax the amount of Rs. 70.00 lakhs u/s 69A r.w.s. 115BBE. 9. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find a search & seizure operation u/s 132 of the I.T. Act was c....
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.... apart from providing health care services, has invested in real-estate through number of legal 14 Devender Rao Gorukanti entities who are regularly filing returns of income. Further, the assessee during the course of search proceedings, in his statement recorded u/s. 132(4) has stated that he has earned business income from real-estate. We find Shri Bommanagiri Jaipal, Shri Circoori Prabhakar and Shri Srinivas Telugu have filed their affidavits individually before the AO stating that the assessee Shri G. Devender Rao is into real-estate business since past 10 years and was involved in the realestate settlements deals for purchase and sale of lands situated at Velimela, Vikrabad, Sangaraddy etc. We find the AO thereafter, has not conducted any further enquiry to disprove the various evidences filed by the assessee during the course of assessment proceedings as well as before the DDIT(Inv.). Further, the assessee has paid advance tax thereon prior to the date of search. Therefore, under these circumstances, once the assessee has proved the initial burden that he is engaged into real-estate business and has earned income from such real-estate, therefore, without making any further en....
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....ng that there was an element of compulsion for the appellant to make such statement. (e) However, a bald assertion to this effect at much belated stage cannot be accepted. Applying the aforesaid legal proposition herein, we are of the opinion that once a statement is recorded, it is open to the Assessing Officer to rely and proceed on the basis that such statement is correct and represents the true state of affairs and the burden is on the deponent to demonstrate by letting cogent, convincing and material evidence that the statement was incorrect. Therefore, the statement made under section 132(4) of the Income tax Act, 1961 has a strong evidentiary value and is binding on a person, who makes it. 13. We find the Chandigarh Bench of the Tribunal in the case of Bhuwan Goyal (supra) while deciding an identical case at para 10 of the order has observed as under:- 10. We have considered the submissions of both the parties and perused the material available on the record. In the present case it is not in dispute that the assessee surrendered the income of Rs. 3.64 Crores in the statement recorded under section 132(4) of the Act the said surrender ....
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....he Act and disclosed the same in the return of income filed under section 153A of the Act. The assessee explained the source of investment of Rs. 1.10 Crore in the reply to Question No. 11 which has been reproduced at page no. 8 of the impugned order by the Ld. CIT (A) and read as under: "Q. 11. Do you want say anything else ? Ans: yes, one agreement dated 05/04/2016 was found from residence at the time of search on 31/08/2016 which was executed by Mr. Sumit Thaper on my behalf and Sh. Hernek Singh S/o Sh. Daulat Singh for an amount of Rs. 1,10,00,000/-. Out of this amount of Rs. 10 Lacs was transferred from my bank account to Mr. Sumit Thaper which is duly accounted for (proof of this will be submitted later on) and rest of the amount has been paid in cash. The source of Rs. 1 Cr. Paid in cash are out of commission income and profit earned from real estate transaction in past. However, no documentary evidence is available with me. Hence to BUY peace of mind and to avoid litigation. I hereby voluntarily offer Commission income as well as profit earned on real estate transactions as an additional income of Rs. 1 Cr. (One Crore) over and above m....
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....n an assessee offers no explanation or the explanation offered is not satisfactory in the opinion of the AO, then the amount of such expenditure is to be taxed as income u/s. 69C of the Act. The satisfaction to be recorded by the AO should not be objective satisfaction exercised at his discretion, but a subjective satisfaction based on the facts of the case. It would then mean that justification for exercise of the power has to be found by the authority by making a subjective satisfaction on the basis of objective material and such satisfaction must be reflected in the reasons recorded in writing while exercising the power. (Vide: Dee Vee Projects Ltd. v/s. Union of India & Ors., Writ Petition No. 2693/2021, dated 11.02.2022 (Bombay High Court)). In the present case, the assessee is in the business of running a diagnostic centre and the only source of income is the receipts from patients which is stated to be the source for unexplained expenditure. That being the case the AO has not brought any contrary material on record to state that the source for the expenditure was other than from business income and has formed the opinion based on conjectures and surmises. While exercisi....