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2015 (6) TMI 69 - ITAT CHENNAIUnaccounted investments made in immovable properties - Block assessment - Held that:- The assessee has declared all the impugned immovable assets in the VDIS declarations filed by him, much earlier to the date of search. The entire quantum of declaration was not accepted due to technical reasons, i.e., non-payment of entire amount of tax before the due date. Under these set of facts, the right course that was available to the Department was to assess those income, i.e., that was not covered by the VDIS certificate, by reopening the assessments under section 148 of the Act. It appears that the Department has failed to assess those income under section 148 of the Act. The Department is not entitled to make good its failure by assessing those assets under block assessment proceedings, since the block assessment made under Chapter XIV is a complete code by itself and it is well settled proposition that the regular assessment proceedings and block assessment proceedings are parallel to each other and can be taken up simultaneously. The decision rendered in the case of CIT v. Naveen Gera [2010 (8) TMI 194 - Delhi High Court] is applicable to the facts of the instant case wherein held that, if the details of the properties already disclosed to the Department under VDIS, then it cannot be said that the Department came in possession of any information which it did not possess earlier. - Decided in favour of assessee. Addition made in respect of vehicles - undisclosed income of the assessee was computed under investment method - AO took the view that the depreciation is admissible only if the undisclosed income is computed under the income method - CIT(A) held that the depreciation is admissible as deduction against income determined even under "investment" method also - Held that:- There should not be any dispute that the depreciation is a statutory deduction and the same is allowable as deduction while computing the total income. Further the depreciation is a non-cash expenditure. The total income may be computed under different methods and the "investment" method is only method of computing the total income. Hence, even if the value of vehicles is taken at cost, the depreciation should be allowed separately. However, if the value of vehicles is taken at written down value, then the depreciation is deemed to have been allowed. - Decided in favour of assessee. Unaccounted investment in stock-in-trade - CIT(A) deleted the addition -Held that:- Assessing Officer has simply placed reliance on the sworn statement given by the assessee at the time of search, wherein the assessee had accepted the value of ₹ 12,86,021. However, the assessee has pointed out that the abovesaid value was determined on the basis of selling price, whereas the cost price of those goods actually work out to ₹ 10,57,990. There should not be any dispute that the value of stock is normally valued at cost or market price, whichever is lower. Though the assessee might have admitted the value determined by the search officials in the statement taken at the time of search, yet he has found out the mistake and corrected the same at the time of filing block return. In our view, the mistake pointed out by the assessee in the valuation taken by the search officials cannot be ignored.In the absence of any other material to contradict the stock valuation (at cost) shown by the assessee, we are of the view the same should be adopted - Decided in favour of assessee. Undisclosed investment in jewellery and silver articles - CIT(A) deleted part addition - Held that:- CIT(A) has granted relief to the extent of gold belonging to the mother and spouse of the assessee and also that declared under VDIS scheme, we do not find any infirmity in his order, since the ladies in the Indian families normally possess jewelleries to that extent. Accordingly, we approve his order on this issue. In respect of the silver articles also, the learned Commissioner of Income-tax (Appeals) gave relief in respect of silver items belonging to the assessee's mother (2500 gms), spouse (3750 gms) and that declared under VDIS scheme (1000 gms). The learned Commissioner of Income-tax (Appeals) did not accept the claim of receipt of gifts (1500 gms) by the assessee. No infirmity in the order of the CIT(A) - Decided in favour of assessee partly. Disallowance of sundry creditors - CIT(A) deleted the addition -Held that:- Undisclosed income of the assessee was computed under "investment method". While computing the income under this method, the loans and ascertained liabilities are required to be deducted from the aggregate value of assets for the purpose of arriving at the income. The assessee has pointed out that the liability towards creditors are collated from the seized material only and the assessee has also linked the outstanding liability with specific seized material. However, it is seen that the Assessing Officer did not bring any material on record to disprove the claim of the assessee. We notice that the CIT(Appeals) has observed that the Assessing Officer was not correct in ignoring the seized materials in selective manner, i.e., the view of the CIT (Appeals) was that the seized materials should be given due credence in toto, unless contrary is shown. - Decided in favour of assessee. Addition made towards insufficient drawings - CIT(A) deleted the addition - Held that:- It is an admitted fact that the Assessing Officer has made this addition on estimated basis without making reference to any of the seized materials. It is a well settled proposition of law that the block assessment can be made only on the basis of seized materials. Apart from this legal position, we notice that the learned Commissioner of Income-tax (Appeals) has also taken into consideration about the fact that the assessee was residing in a rural place, where the cost of living is generally low vis-a-vis the metro cities. Hence, in our view, the learned Commissioner of Income-tax (Appeals) was justified in deleting this addition made only on estimated basis and not with reference to any seized material. - Decided in favour of assessee.
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