2015 (11) TMI 1433 - AT - Income Tax

Unaccounted form of land development expenses and excess cash in proceedings under section 143(3) - Held that - Both the authorities below have strongly relied upon survey statement of assessee s partner Shri Nitin Kopikar whilst making the impugned additions totaling to Rs. 26.23 lacs. There is no supportive material quoted either in the course of assessment or in lower appellate order. The latter order runs into 19th full fledged pages out of which pages 5 to 19 highlight lacks of evidence any incriminating material survey statement being obtained in coercion etc. The CIT(A) brushes all of them aside by a single stroke without adverting to the same. We opine in this factual backdrop that the lower appellant order is not a detailed and speaking one with reasons thereof. Coming to the Revenue s submissions placing a strong reliance upon the tribunal s decision in the connected group case we notice that the said assessee had failed to produce the original retraction affidavit (supra) therein which led an adverse inference. The instant appeal does not raise any such issue. We feel in these peculiar circumstances that once the CIT(A) has not taken into account all of the assessee s argument in affirming the Assessing Officer s action making the impugned additions the matter deserves another innings in lower appellant proceedings.The Ld. CIT(A) shall pass a detailed speaking order. - Decided in favour of assessee for statistical purpose.

Summary

Issues:
1. Addition of unaccounted land development expenses and excess cash in the assessment under section 143(3) of the Income Tax Act, 1961 for A.Y. 2005-06.

Analysis:
The case involved an appeal by the assessee against the order of the CIT(A) confirming additions of unaccounted land development expenses and excess cash in the assessment for the relevant year. The department conducted a survey where the partner of the assessee allegedly admitted to additional incomes in the form of unaccounted land development expenses and excess cash. The Assessing Officer made additions totaling to &8377; 26.23 lacs based on the partner's statement and the loose sheets found during the survey. The CIT(A) affirmed the additions, stating that the partner's declaration was voluntary and made with due consideration, thus justifying the additions. The assessee contended that the additions were made solely based on the partner's statement without corroborative evidence, citing relevant case law. The Revenue supported the CIT(A) order. The tribunal noted the lack of supportive material for the additions and the failure to address the assessee's arguments in the lower appellate order. Given these circumstances, the tribunal ordered a fresh hearing by the CIT(A) for a detailed and reasoned decision, allowing the assessee's appeal for statistical purposes.

In conclusion, the tribunal found that the additions made by the Assessing Officer were solely based on the partner's statement without sufficient corroborative evidence. The CIT(A) failed to provide a detailed and reasoned order, brushing aside the lack of evidence. The tribunal ordered a fresh hearing to allow for a detailed consideration of the assessee's arguments and a proper assessment of the additions made, directing the CIT(A) to pass a speaking order after granting adequate opportunity of hearing.