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2023 (7) TMI 669 - AT - Income TaxUndisclosed income offered in the statement during the course of search and seizure operation - Addition based on the basis of statement of assessee recorded during search and post search period - HELD THAT:- Addition on the standalone basis of statement of assessee u/s. 132(4) of the Act cannot be held as sustainable in absence collaborative evidence found in supports such addition Assessee right from search and seizure operation till filing of return could not find any substantive material or investment which could be considered for supporting the surrender of reaming amount Rs. 6.5 crore and the AO has made addition in hands of assessee only on the basis of statement of assessee recorded during search and post search period and letter dated 23.04.2012 of the assessee without any supporting and collaborative adverse or positive material against the assessee showing earning of undisclosed income during the relevant financial year. CIT(A) was right in deleting the unsustainable addition made by the AO as relying on case of Ultimate Builders [2019 (9) TMI 1172 - ITAT INDORE] - We are unable to see any ambiguity, perversity or any other valid reason to interfere with the findings arrived by the Ld. CIT(A) Assessment u/s 153A - Addition u/s. 69C - unexplained expenditure - Addition relying on loose papers - HELD THAT:- We are in agreement with the conclusion drawn by the CIT(A) that the impugned loose papers and documents were found & seized from the premises of third party. Therefore, presumption u/s. 292C of the Act will apply to said searched entity, i.e. third party only and not to the assessee enabling the AO to make addition in the hands of assessee in the assessment order passed u/s. 153A/143(3) of the Act. Our conclusion also gets support from the order of ITAT Delhi Bench in the case of Trilok Chand Chaudhary [2019 (9) TMI 95 - ITAT DELHI] Disallowance of over draft interest claimed - HELD THAT:- Undisputedly the appellant from the partnership firm to whom loans were provided has earned remuneration/salary income which has been duly shown in the return filed by the appellant which was accepted by the AO along with tax thereon. Under identical facts and circumstances in the case of Sudhir Dattaram Patil [2004 (12) TMI 625 - ITAT MUMBAI] held that the assessee entitled deduction of interest paid on money/amounts borrowed for investment in the partnership firm in which he has become a partner against the amount received by him from the firm as remuneration/salary and assessed under the head profit and gains of business or profession. This factual position of the present case has not been negated or diluted by the AO nor by the Ld. CIT(DR), during argument before this Bench. Therefore ground of Revenue also dismissed. Unaccounted unexplained investment on the protective basis in the hands of the assessee and has made addition in the case of seller on substantive basis - HELD THAT:- As in the case of Agrawal Buildcon [2022 (1) TMI 1385 - ITAT INDORE] where the substantive addition has been made, the Tribunal was pleased to dismiss the Departmental appeal on the ground that firstly the Department has failed to controvert the fact that the additions have been made on the basis of statement of power of attorney holders, secondly the addition was made without providing any opportunity of cross examination of the third party on whose statement the addition had been made and thirdly, the addition had been made merely on the basis of oral evidences and there is no other positive evidence on record which could prove that the sellers have received on money and offered the same and lastly the addition seems to be made on assumption and presumption as except the copy of registered sale deed, no other incriminating material was found during search proceedings which could indicate that alleged "on money" has been paid by the assessee - thus the order of the Ld. CIT(A) was correct and accordingly be upheld. Addition u/s 69B - differential amount between value as per registered purchase deed vis-a-vis guideline value determined by Stamp Valuation Authority - HELD THAT:- Section 69B as applicable only when the AO successfully discharge onus, lay on his shoulder, establishing that the assessee has made investments which is not recorded in the books of accounts of the assessee or the amount recorded in the books pertaining to the transaction exceeds the actual consideration paid by the assessee and in such a situation when the assessee offers no explanation about such excess amount or the explanation offered by him is, in the opinion of the A.O., not satisfactory. In the present case the assessee requested to call upon the seller to explain the situation but the summon issued u/s. 131 of the Act to the seller was served and the replied in writing to dak of the AO. Merely because the seller was not present in person before the AO, the assessee cannot be alleged to have made any unexplained investment which could entitle the AO to make addition u/s. 69B of the Act. Therefore the Ld. CIT(A) was right in deleting the addition on this issue.
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