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2020 (6) TMI 803 - AT - Income TaxUnexplained loan given - Addition based on the seized paper - HELD THAT:- The figure “1998” is mentioned on this page and the Assessing Officer interpreted the same as relatable to this assessment year 1999-2000. Assessing Officer’s order is silent on the reasons. These figures could be taken for assessment year 1998-99 too. Thus, there exists an ambiguity. Considering the same, we are of the opinion that interpreting the figures “1998” as relatable to the A.Y. 1999-2000 is not proper. Assessing Officer and CIT(A) failed to give reasoned order for taxing the “entry” in this year. The same cannot be taxed in 2000-01 too. Therefore, we are of the opinion such additions are not sustainable. Accordingly, the ground no.1 raised by the assessee is allowed. Agricultural income - As undisputed fact that the Department Authorities are engaged in the time barred issues. Therefore, we are of the considered opinion, that grounds no.3, 4 and 5 should be remanded to the file of the Assessing Officer for fresh adjudication. The direction to the Assessing Officer shall include that (i) the Assessing Officer shall comply with the calculation related exercise by passing a modification order in the hands of M.N. Navale (Bigger HUF) in the time barred manner and (ii) after due calculating of the said agricultural income and also after following the direction of the Tribunal (supra), the Assessing Officer shall examine the availability of funds and also examine the correctness of the claim of loans of Rs.10,37,000/- and a sum of Rs.1,50,000/- and also the sources thereof from M.N. Navale (Bigger HUF). The Assessing Officer shall grant reasonable opportunity of being heard to the assessee in accordance with set principles of natural justice. Ownership of the seized papers - Whether seized documents/papers do not belong to the assessee? - HELD THAT:- It is not the case of the Revenue that there was any investigation into these papers. No question is raised/asked while recording the statement of the assessee during the search action in this aspect. Therefore, considering the incompleteness of the proceedings of the Revenue to these papers, in our considered view, the addition made by the Assessing Officer appears to be premature. Thus, the matter should be travelled to the file of the Assessing Officer for one more round of investigation/recording of statement. It is necessary to establish the relatability/belongingness of the papers to the assessee under consideration. Accordingly, the matter is remanded to the file of the Assessing Officer for fresh adjudication. The Assessing Officer shall grant reasonable opportunity of being heard to the assessee in accordance with set principles of natural justice. Thus, the grounds no.1 and 2 are allowed for statistical purposes. Addition on account of difference in rent received, relying on a noting found recorded on the loose papers seized during the search and seizure action - HELD THAT:- CIT(A) also confirmed the addition made by the Assessing Officer without appreciating all the facts relating to the property. There is no dispute on these facts. The only dispute is with reference to the monthly rent. It is the case of the assessee that at the relevant point of time i.e. A.Y. 2002-03, the property was let out to Sunind Private Limited and the applicability of monthly rent is Rs.30,000/- only. In the subsequent year 2004 onwards, the property is rented to STES with the applicable rent of Rs.75,000/- and this applicable Rs.75,000/- is born out of the records. Therefore, the addition of Rs.5,40,000/- made by the Assessing Officer in the assessment year 2002-03 is not correct. We find the dates and the lease deed are relevant and the rental agreement between the assessee and the STES. This aspect was not raised before the lower authorities as pointed out by the ld. DR for the Revenue. In all fairness, therefore, we are of the opinion that this issue requires re-verification of facts relating to the date of letting out of property to the assessee and the date of rent to STES in 2004. Considering the fact that the seized paper or lease deed does not contain the date or the year, the Assessing Officer is directed to re-verify the same and pass a speaking order after granting reasonable opportunity of being heard to the assessee.
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