9911796707
TMI Blog2012 (12) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... ion u/s.132 of the Act was conducted on 10-08-2006. During the search operation certain documents, which are marked as Page No.97 to 102 of Bundle No. 1, were seized. These are stated to be hundies given as security against the loans obtained. The AO noted that almost all of them are blank and only signature of the person taking the loan is appearing or some times the name of the concern is mentioned by putting the rubber stamp and no other details are mentioned. A chart of such hundies prepared by the Assessing Officer on the basis of the above seized documents show the following transactions : Page No. Amount of loan given Date of giving of loan Name and address of the loan taking party 98 5,00,000 02-05-2006 Vinod - security cheque No. 415884 of Mahesh Sah, Bank Ltd., Laxmi Road, Pune 99 5,00,000 18-05-2006 J.S. Goel partner of Goel Associates, San Mahu Complex, Pune 100 1,00,000 -- Polyking Industries, Prop: Mukund T. Band 101 3,00,000 21-03-2006 Bhandari Construction Co., Partner - Omprakash M. Bhandari 102 2,00,000 -- Sri S.S. Kegade, 459, Narayan Peth, Pune. 3. On being questioned by the AO it was submitted that the same pertain to F.Ys. 2004-05, 2005-06 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king further loans and which the AO failed to appreciate. It was argued that the addition of Rs. 6,00,000/- is purely on adhoc basis and surmises and suspicion and amounts to double taxation. Accordingly it was pleaded that the same should be deleted. 6. However, the submission of the assessee did not find favour with the CIT(A). The learned CIT(A) analysed the seized documents identified as Page No. 64 to 102 of Bundle No.1 and the statements recorded during the search. He noted that the transactions in the seized documents apparently indicate that the hundies/promissory notes along with post dated cheques were obtained as security as against loans advanced by the assessee. In the statement recorded u/s. 132(4) on 18-8-06, the assessee vide Question No.16 of the statement was asked to explain the nature of transactions recorded in the said seized documents. However, the assessee has expressed his inability to explain the transactions recorded therein. On analysing the transactions recorded in the Page 64 to Page 97 he noted that the same do not contain amounts of loans given by the assessee, the date of loan, full address of the party etc. It is only on Page Nos. 98 to 102 that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch. Therefore, no addition is called for. In his alternate contention the learned counsel for the assessee referred to Page 24 of the Paper Book and drew the attention of the Bench to the details of additional income declared by the assessee, the details of which are as under : Sr.No. A.Y. Original return income Additional income declared Revised total income Assessed Income 1 2001-02 2,24,530/- 56,928/- 2,81,460/- 2,81,460/- 2 2002-03 2,81,850/- 2,28,888/- 5,10,740/- 5,10,740/- 3 2003-04 3,04,090/- 3,62,950/- 6,67,040/- 6,67,740/- 4 2004-05 1,96,650/- 70,087/- 2,66,740/- 6,39,010/- 5 2005-06 3,02,970/- 81,000/- 3,84,510/- 3,84,510/- 6 2006-07 2,03,760/- 90,000/- 2,93,760/- 3,94,510/- 7 2007-08 0 5,50,000/- (Cash 1,00,000/- + Gold A/c 4,50,000/-) 8,78,280/- 25,46,140/- TOTAL 15,13,850/- 14,39,853/- 32,82,530/- 54,24,110/- 8. Referring to the following chart giving the availability of income for set off, the learned counsel for the assessee drew the attention of the Bench to the net income of Rs. 6,80,087/- available for investment in financing, the details of which are as under : A.Y. Income disclosed Utilised for other purposes Net income available for inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, considering the additional income declared by the assessee and in absence of maintenance of regular books of accounts an amount of Rs. 2 lakhs on estimate in our opinion may be allowed as set off for investment in financing out of the income disclosed. Thus out of Rs. 3,61,025/- sustained by the CIT(A) the assessee gets a relief of Rs. 2,00,000/-. The grounds raised by the assessee are partly allowed. ITA No. 1427/PN/2010 (A.Y. 2007-08) : 10. The first issue in the grounds raised by the assessee relates to the order of the CIT(A) in sustaining an addition of Rs. 9,10,000/- out of Rs. 10 lakhs added by the AO. 11. Facts of the case, in brief, are that on the basis of the documents seized during the course of search the AO made addition of Rs. 10 lakhs being amount financed by the assessee as loan. In appeal the learned CIT(A) sustained the addition of Rs. 10 lakhs in principle but gave telescoping benefit of Rs. 90,000/- being the interest income declared by the assessee for the assessment year 2006-07. Since he had already given telescoping benefit for the interest income disclosed for the earlier years while deciding the appeal for assessment year 2006-07, therefore, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not reconcile the differential cash amount of Rs. 6,69,742/-, the same was offered as unexplained cash for the assessment year 2007-08. However, this additional income was not offered in the return of income filed by the assessee for the assessment year under appeal. On a query in this regard by the Assessing Officer, it was submitted by the assessee that though he had offered the above sum as his additional income during the survey operations, later on while going through the seized documents including cheques and other transactions, he realised that the said amount dates back to earlier assessment years and thus, declared in the respective years on the basis of which additional cash account was prepared and attached with the return of income filed. The year-wise declaration of income made was stated to be as under : F.Y. Amount (Rs.) 2000-01 55,250.00 2001-02 2,28,888.00 2002-03 3,62,950.00 2003-04 70,087.00 2004-05 81,000.00 2005-06 90.000.0 2006-07 1,00,000.00 9,88,175.00 It was stated that out of the above income, cash of Rs. 6,80,087/- was available as on the date of search after various expenses/investments, as shown in the additional cash account f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee. We have also considered the revised income declared by the assessee and the cash flow statement and on the basis of the same we have already allowed relief to the tune of Rs. 2 lakhs for A.Y. 2006-07 and Rs. 50,000/- for A.Y. 2007- 08 being cash available towards the financing business of the assessee. Therefore, no further cash balance is available to the assessee which can be treated as explained for the cash found on the date of search. Further we find the assessee in Question No. 7 of the statement recorded u/s. 132(4) on 18-08-06 had also admitted that the cash amounting to Rs. 6,69,742/- is his extra income for the A.Y. 2007-08. Relevant question and answer reproduced by the CIT(A) at Page 11 of his order reads as under : "Q.17. Please see the Q.No. 11 and its answer. You will find that the amount of Rs. 4,18,358/- came from your source of income, while the amount of Rs. 6,69,752/- is remained unexplained. Please clarify if ? I can't explain the above stated income, therefore, this amount of Rs. 6,69,742/- is declared as an extra income for the assessment year 2007-08 and requesting you not fine on this amount." Since the assessee in his statement recorded u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Particulars Value of new ornaments made out of the melted gold 1,97,992 Page No. 25 Particulars In this page, the value of old jewellery given for melting mentioned 1,78,015 Less : Value of new jewellery as mentioned in 1,97,992 Page No. 24 Balance Payable Page No. 26 Labour charges payable to jeweller (paid in cash) 3,300 Page No. 29 Particulars Payable to the jeweller against jewellery 11,183 Summary Balance receivable from jeweller as per page 28 1,17,590 Less : Amount payable to jeweller as per page No. 25 19,590 Amount adjusted as per page 29 11,183 Balance amount receivable adjusted for further jewellery making 86,817 20. However, the AO did not accept the explanation given by the assessee in absence of any evidence produced before him to support the contention that jewellery in question was indeed the same jewellery acquired by inheritance and received as Streedhan. The AO therefore made addition of Rs. 6,04,378 as unexplained investment u/s. 69C of the I.T. Act. 21. Before the CIT(A) the assessee reiterated the same submissions as made before the AO. It was submitted that the loose papers seized during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hange of old jewellery so as to compare the same with the list of the jewellery items found and inventorised during the search operations. The assessee also could not produce any evidence to substantiate that these entries also relate to old jewellery items given for remaking the new items of jewellery and the old items were out of Streedhan or jewellery declared under VDIS 1997. In absence of any corroborative evidence unlike Loose Sheet No.25 r.w. loose sheet No.27 he held that the AO was justified in making the addition of Rs. 3,78,674/-. 24.1 So far as the addition of Rs. 11,183/- on the basis of entries recorded on loose sheet No. 29 he upheld the action of the AO in absence of any explanation by the assessee regarding the source of acquisition of the gold jewellery items recorded in the said seized documents. 24.2 As regards the other additions are concerned since the same are not challenged we are not discussing the same. 25. Aggrieved with the above two additions, the assessee is in appeal before us. 26. The learned counsel for the assessee strongly challenged the order of the CIT(A) and admitted that in absence of any evidence on record the conversion of old jewellery t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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