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2017 (4) TMI 101 - AT - Income TaxIssue of set off of undisclosed profit against surrendered income - nature of directions issued by the Coordinate Bench in the first round of appeal and whether the same has been given duly effect to by the AO - Held that:- Undisputedly, the impunged proceedings are set-aside proceedings with directions to consider the additional ground as submitted before the Co-ordinate Bench in terms of examining the set off of undisclosed profit of ₹ 1.28 Crores against the amount surrendered by the assessee. And in light of these directions, the AO has considered the submissions of the assessee and has stated that since the sale of Mahala property has happened on 3.7.2006, the profit arising from such sale of Mahala property amounting to ₹ 1.28 Crores (after considering the sale consideration of ₹ 3.76 Crores and cost of purchase of ₹ 2.48 Crores as per seized documents) has been worked out and the same was allowed set off against the surrender of stock of ₹ 2.8 Crores. In our view, the AO has rightly given effect to the directions of the Coordinate Bench and we see no infirmity in the same. At the same time, we are not in agreement with the findings of the ld CIT(A) where he states at para 4.3 (vi) of his order that set off OF sale proceeds would be available against the undisclosed stock surrender of ₹ 2.8 crores found at the time of search of sale proceeds realized out of books of ₹ 2.51 crores since there is no material/evidence on record that this amount was invested elsewhere and in view of the clear directions of the ld CIT(A) in his order dated 19.5.09.” The reason for the same is that there is no such directions by the ld CIT(A) in the first round and that’s precisely the reason why the assessee took the additional ground before the Coordinate Bench and which has been rightly given effect to by the AO. - Decided in favour of revenue
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