Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2006 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2006 (3) TMI 248 - ITAT JODHPURBlock Assessment - unexplained cash - whether or not the income as per the returns not furnished for the years prior to the date of search is liable to be included in the undisclosed income? - HELD THAT:- As per balance sheet and capital account furnished for AY 1989-90, we note that the closing capital balance has been taken at Rs. 71,118. It is further observed that the assessee had not filed his return of income for the first time in 1994. Rather he is an existing assessee since several years back. The copy of the income-tax assessment order of the assessee for the AY 1979-80 has been placed on record. This order was passed on 9th July, 1980 in which total income after deductions was assessed at Rs. 10,670. Thus, the age of the assessee and other necessary material we find that there is no reason to doubt the availability of this much capital. For all the subsequent years the assessee has made available capital accounts, balance sheets and cash flow statements, the particulars of which tally with the chart of incomes as per returns already filed contained in p. S-1 of the paper book. Unexplained investment in gold ornaments - It is clear that the gold jewellery which should have been available with the assessee comes at 1030.886 grams, as against which gold ornaments weighing 939.800 grams were found during the course of search. In such circumstances there cannot be any addition on account of unexplained investment in the gold jewellery. The ground taken by the assessee is allowed and that of the Revenue is dismissed. Estimation of income - We have given our separate finding in respect of the three calculations made by the AO. The undisclosed income is to be computed on the above basis after excluding the amount already shown by the assessee and considered by the AO in the block assessment order. The AO is directed to give effect to our finding and determine the amount of undisclosed income resulting from the business operations of the assessee. It is made clear that the amount which already stands offered for taxation should not be added once again as has been discussed in the preceding para. These grounds are allowed pro tanto. Whether or not the income as per the returns not furnished for the years prior to the date of search is liable to be included in the undisclosed income? - Insofar as the income of the years which is below taxable limit and the returns were not furnished, the same are liable to be excluded by virtue of amendment to s. 158BB(1)(b) carried out with retrospective effect from 1st July, 1995. The Hon'ble Kerala High Court in the case of CIT vs. M.M. Thomas [2003 (3) TMI 37 - KERALA HIGH COURT] has held that the income below the taxable limit of previous years could not be included as undisclosed income of the block period. In view of these facts and the amendment carried out, it becomes apparent that the income for AY 1989-90 to 1992-93 and AY 1995-96 could not have been included in the block assessment as the income in these years is below the taxable limit. We find that for the AY 1997-98 the income has been declared and assessed at Rs. 62,484. The return for this year was filed on 31st Oct., 1998 which is within the time prescribed u/s 139 and 158BB provides for its exclusion. This ground is, therefore, accepted. Unexplained investment in deposit with CRB - We observe that the gifts were received by the assessee along with his wife through account payee cheque and the evidence of having received the cheques was found during the course of search. The remaining amount of Rs. 37,500 has been rightly attributed by the learned CIT(A) to have come out of job receipts on the basis of various annexures. In our considered view, the learned CIT(A) was justified in deleting this addition. Interest on deposit with CRB - AO was right in accepting the source of deposit but was unjustified in treating the interest income in the hands of the assessee for the reason that the house belonged to the HUF and to his father Shri Manohar Lal Soni. It is further found that Shri Anand Prakash Soni HUF was assessed to wealth-tax for the AY 1985-86 and this house was shown as HUF's house and was admitted by the AO while passing the order. Thus, there was no question of taxing the interest income in the hands of the present assessee. We uphold the impugned order on this score. Unexplained investment in the property - It is noted that the main basis for making the addition is the difference in the value determined by the DVO and that shown by the assessee in the sale deed. Apart from the DVO's report no material was found in the search which could show that the assessee had made more investment than that declared in the sale deed. The Hon'ble Bombay High Court in the case of CIT vs. Vinod Danchand Ghodawat [2000 (6) TMI 13 - BOMBAY HIGH COURT] has held that no addition of undisclosed income can be made only on the basis of DVO's report. We note from the assessment order that as per the AO, the assessee had admitted to surrender the amount for taxation on the basis of DVO's report. We have perused his statement, copy of which is available at the paper book. The assessee had stated in answer to question No. 2 that he was ready to pay tax as per rules. He has not surrendered the amount of Rs. 1,20,000 for taxation. Apart from that, we find that the house was purchased by three persons and the assessee was one of the co-owners. Thus, we find no justification in making addition of Rs. 1,20,000. We hold that the learned CIT(A) rightly proceeded to delete this addition. The cross-objection filed by the assessee is simply in support of the reliefs allowed in the first appeal. As the Departmental appeal has been separately disposed of, the cross-objection becomes infructuous. In the result, the appeal of the Revenue is dismissed, the C.O. of the assessee has become infructuous and the appeal of the assessee is partly allowed.
|