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2013 (9) TMI 989 - AT - Income TaxAddition on account of Ram Nagar Scheme - Held that:- No evidence of any investment in land worth the name was found in search from the possession of third party. The A.O. has not even made any investigation regarding investment made in the purchases of land. It is common practice in such type of business where land of another owner is transacted so that after some development, land is divided into plots and prospective buyers are attracted. The plots are sold one by one and out of those sale proceeds, the owner of land as well as the intermediary persons get their shares, as settled between them when land is directly transferred and sold by the owner of the land to the prospective buyers of the land. There is nothing unnatural in this claim of the assessee. The assessee has already offered for taxation his profit, rather to say, more than what has been calculated, a copy of document found from Shri Mohan Lal Suthar wherein he has suffered tax thereon in A.Y. 2006-07. We do not see any reason to make any addition on account of investment in the land being 1/4th of the total price estimated by the A.O. as per this page. This addition is totally baseless and deserves to be deleted. Accordingly, addition is hereby deleted - Decided in favour of assessee. Unexplained investment - Addition on account of expenses shown in the books of account/balance sheet on account of house/farm house - Held that:- This addition pertains to an investment already shown in house/farm in his final account and books of account pertaining to this A.Y. No incriminating evidence was found in this regard during search in the third party. Therefore, this amount cannot be treated as unexplained investment by any means and by simply observing that proper books were not maintained. The investment of ₹ 3,00,024/- represents purchase of land on which house was constructed. The assessee had submitted copy of registered sale deed in support of the investment. The said land was purchased in the joint name of the assessee and his brother Shri Gautam Sharma. The investment is verifiable from the sale deed also. Decided in favour of assessee. Unexplained house hold expenses - Held that:- The facts of this issue are that various members of the family made withdrawals amounting to ₹ 2,89,444/- which has been treated by the A.O. as inadequate for meeting the house hold expenses. This estimation of the A.O. is based on no evidence. Therefore, such addition cannot be encouraged and has to be out rightly rejected - Decided in favour of assessee. Unexplained cash found during search - Held that:- The statements taken during the course of search and seizure operation were also perused. Balance on the date of search was ₹ 1,65,400/-. All the entries are found to be on account of professional fees received by the assessee. In our considered opinion, credit of such entries has to be given. All the family members of the assessee are assessed to tax in their individual capacity. The family of the assessee consists of himself, his wife, mother and children and family of his brother. In such circumstances we are satisfied that the meager sum of ₹ 1,65,400/- found as cash is verily explained.- Decided in favour of assessee. Undisclosed investment in the construction of house property - Held that:- Funds are available with the partners and the credit of the same is shown by them towards investment. Separate addition cannot be made on such expenditure. Funds which have been earned by partners is found to be not utilized elsewhere and therefore, claim of telescopy cannot be denied. Since entire source of investment, cash flow statement etc. is available, there cannot be double addition. This is simply an utilization of such income towards acquisition of new assets and undisclosed income would always be represented by some cash, as it cannot vanish in air. The entire addition therefore, deserves to be deleted. We order to delete the same. The assessee has already surrendered ₹ 2,31,22,799/- as undisclosed income against the above income which truly and correctly covers the maximum possible income which the assessee had earned in the various years under consideration related to search assessment. There is no reason for the income declared by the assessee in various years should not be accepted. The impugned addition has been made simply on the ground that there was separate surrender in relation to different items at the time of search proceedings. - Decided in favour of assessee. Unaccounted silver jewellery - CIT(A) deleted the addition - Held that:- After considering the rival submissions, this small quantity of silver cannot be ruled out as expenditure, which were found from the family of such a big means. However, the reliance of the ld. CIT(A) on Instruction No. 1916 may not be correct in law. However, the spirit of this Instruction should be given regard to. Accordingly, we do not find any merit in this ground and dismiss the same - Decided against revenue. Addition on the basis of difference of cost of construction - CIT(A) deleted the addition - Held that:- the assessee is engaged in construction business only and therefore, deduction for self supervision should be allowed to the assessee in view of various judicial pronouncements in this regard. Considering the fact that no evidence was found during the course of search proceedings regarding supervision of construction of these properties having been outsourced, we find no folly in the finding of the ld. CIT(A) - Decided against revenue.
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