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2020 (12) TMI 823 - AT - Income TaxValidity of reopening of assessment u/s 147 - recording reasons for reopening of assessment based on the same seized material found during the course of search against the assessee - HELD THAT:- It is not a denying fact that during the course of search several material was found against the assessee which clearly indicated that there was an escapement of income in the case of the assessee. A.O. framed the original assessment on the basis of the same seized material found during the course of search, but, such assessment order under section 143(3) was quashed by the Ld. CIT(A) because of non-service of notice under section 143(2) therefore, the same seized material found during the course of search could be the basis for reopening of the assessment under section 147/148 - There is no illegality in the action of the A.O. in recording reasons for reopening of assessment based on the same seized material found during the course of search against the assessee. Following the above decisions in the case of Krishna Developers & Co [2018 (2) TMI 607 - SC ORDER] we do not find any reason to quash the reopening of the assessment in the matter merely because the Departmental appeal was pending before the Tribunal when reasons for reopening of the assessment were recorded. If the A.O. would not have recorded reasons for reopening of the assessment on 28.03.2013, then, the period of limitation in favour of the Revenue would have expired to initiate re-assessment proceedings. Thus, the A.O. was justified in reopening of the assessment in the matter. Unrecorded sales from business of sale of gold jewellery - gross profit rate determination - unrecorded sales by applying the gross profit rate of 18% - HELD THAT:- Since the assessee from the beginning have denied the contents of the seized Diary that he did not deal in trading of gold jewellery, therefore, onus was upon the A.O. to prove that assessee actually deal in gold jewellery. The assessee has shown the business income and income from other sources which have not been doubted by the authorities below. Since this similar seized document have been considered in earlier A.Y. 2005-2006 and similar addition have been deleted, therefore, the issue is covered in favour of the assessee by the aforesaid decision of the Tribunal in favour of the assessee. In the absence of any corroborative evidence to suggest that assessee dealt with trading of gold jewellery, there were no justification to presume from the contents of the Diary that assessee was in fact dealing in gold jewellery - No justification to sustain any addition against the assessee. We, accordingly, set aside the Orders of the authorities below and delete the entire addition. Addition on the basis of loose paper found during the course of search - assessee had incurred a sum on the birthday party function of his grand-son at Soubhagya Banquet, Preet Vihar, New Delhi - HELD THAT:- Addition is not warranted in the hands of the assessee. The seized paper do not indicate the name of the assessee if he has incurred any expenditure. The assessee is grand father of Mr. Ayush, therefore, presumption would be that father of the boy must have incurred the expenditure. Otherwise, there is no liability of the grand father to incur any expenditure on the occasion of birthday of his grandson. There is no evidence available on record to suggest that the assessee has incurred any expenditure on the birthday of his grand-son. No further enquiries have been made from the owner of the Banquet Hall or any other person whose name is appearing in the seized paper to verify as to who has incurred the expenditure for the party of the grand-son of the assessee - addition is made merely on presumption and as such, there is no justification to make addition in the hands of the assessee. We, accordingly, set aside the Orders of the authorities below and delete the entire addition. - Decided in favour of assessee. Addition towards bank deposits - assessee claimed before A.O. that deposits are made out of assessee’s brokerage income - HELD THAT:- The authorities below failed to note that assessee has filed return of income showing business income and income from other sources - whatever income is declared in the return of income + some amount accumulated in earlier year could have been available to the assessee so that entire addition is unjustified. We accept the alternative claim of assessee and whatever business income is declared by assessee on account of brokerage, available to the assessee. Addition could be sustained to the extent of ₹ 1,58,859/- only considering the income declared in the return of income and other income available to the assessee on account of accumulation of income - we set aside the Orders of the authorities below and restrict the addition to ₹ 1,58,859/- only.
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