TMI Blog2015 (3) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 (4) TMI 33 - SUPREME COURT), we are of the view that in the present case the A.O had recorded the satisfaction as required under the Act and therefore the assessment framed was valid and thus this ground is dismissed. - Decided against assessee. Additions in respect of payments made to M/s. Raj Granites and Decent Sales Corporation - Held that:- CIT(A) while deciding the issue has concluded that the cash payments were made by the Assessee and were not recorded in the books of account and further as the source of payment was unexplained, the cash payments represents unexplained expenditure. Before us, no material has been placed on record by ld. A.R. to controvert the findings of CIT(A). We therefore find no reason to interfere with the order of CIT(A).- Decided against assessee. Addition on account of settlements of unaccounted cash loan - CIT(A) deleted the addition - Held that:- CIT(A) while deleting the addition has noted that the amount has been already been taxed in the hands of Gopalbhai Patel in the block assessment and thus the source of money stands proved. Before us, no material has been brought on record by Revenue to controvert the findings of CIT(A) - Decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Notice u/s. 158BD of the Act was issued on 18.10.2000 asking the Assessee to file the return of undisclosed income in response to which Assessee filed return of income for the block period 1.04.1988 to 08.12.1998 on 09.05.2001 and disclosed undisclosed income of ₹ 41,102/-. Assessment was thereafter framed u/s. 158BD of the Act vide order dated 31.10.2002 and the total undisclosed income was determined at ₹ 1,12,69,955/-. Aggrieved by the order of A.O., Assessee carried the matter before CIT(A) and thereafter before Hon ble Tribunal. Hon ble Tribunal vide order dated 12.10.2012 passed in IT(SS)A No. 169 222/AHD/2003 allowed the appeal of the Assessee and remitted the matter back to the file of CIT(A) and directed him to decide the issue with respect to validity of notice issued u/s. 158BD of the Act. Tribunal also allowed the appeal preferred by Revenue in appeal no. 222/A/2003. Aggrieved by the order of Tribunal, Assessee carried the matter before Hon ble Gujarat High Court. Gujarat High Court in Tax Appeal No. 386 559/A/2013 order dated 24.09.2013 quashed the orders passed by Tribunal and set aside both the appeals to Tribunal and directed the Tribunal to deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fixed remuneration at 10% of the cost of the project and is neither the owner of the land nor the superstructure built thereon. (iii) the appellant firm acted as a conducted in passing on the extra cash received from the members of the society, who are the real owners of the property, to the final recipient Ambica Timber Depot, M/s. Ambica Timber Mart and M/s. Decent Sales, as stated by Mr. Bharat J. Shah, partner of the Appellant firm in his statement on oath. (iv) The alleged amount of ₹ 94,979/- passed on to M/s. Ambica Timber Depot, M/s. Ambica Timber Mart and M/s. Decent Sales and accepted by them and taxed in their hands is neither the expenditure of the Appellant firm nor its investment as no asset has been created in the hands of the Appellant firm. 4. Without prejudice to what is stated in the aforesaid Ground of Appeal No. 3, the learned CIT(A) ought to have restricted the addition to ₹ 9,498/- being 1.0% supervision charges, of the alleged cash payment of ₹ 94,979/-, to which the Appellant firm is entitled to by virtue of the agreement between the society and the Appellant firm as developer. 5. The Appellant firm requests the Hon'ble In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,40,000/- made on account of unexplained cash credit in the name of Varshaben V Kansara. 5. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the Assessing Officer. 6. It is, therefore, prayed that the order of the CIT (A) be set aside and that of the AO be restored to the above extent. We first take up Assessee s appeal in IT(SS)A No. 169/AHD/2003. 6. Before us, with respect to additional ground whereby Assessee has challenged the validity of assessment, ld. A.R. submitted that notice u/s 158BD of the Act was issued to the Assessee on 18.10.2000 calling upon the Assessee to file return for the block period. It was submitted by ld. A.R. that Assessee had applied under RTI Act and sought information about the copy of the satisfaction recorded by the A.O of the searched person on the basis of documents seized which was forwarded to the A.O of the Assessee. She submitted that DCIT Circle-9 vide reply dated 14.03.2012 has stated that the copy of the satisfaction recorded was not forwarded to Circle-9 and therefore it was unable to provide the required information. On the basis of the aforesaid reply she submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 15,59,882/- is made to the income of the Assessee for the block period as unexplained investment on protective basis . The ld. D.R. thereafter pointed to para 41 of the decision of Hon ble Apex Court in the case of CIT vs. Calcutta Knitwears in Civil Appeal No. 3958/A/2014 wherein the Hon ble Apex Court has held that the satisfaction note could be prepared by the Assessing Officer either at the time of initiating proceedings for completion of assessment of a searched person u/s. 158BC of the Act or during the stage of assessment proceedings. It does not mean that after completion of the assessment, the Assessing Officer cannot prepare the satisfaction note to the effect that their exists Income Tax belonging to any person other than the searched persons in respect of whom the search was made u/s. 132 or requisition of books of accounts were made u/s. 132A of the Act. The ld. D.R. further pointed that Hon ble Apex Court has further held that the legislature has not imposed any embargo on the Assessing Officer in respect of the stage of proceedings during which the satisfaction is to be reached and recorded in respect of the person other than the searched person. Further he po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales Corporation. Before us, ld. A.R. has relied on the reply received under RTI Act about the non availability of satisfaction note to which we find that subsequently DCIT Circle-9 vide letter dated 10.05.2012 address to CIT has stated that the query of the Assessee was misunderstood by him to be with respect to the satisfaction note prepared by the investigation wing. In the letter it is further submitted that the reasons recorded by the A.O are on records and can be given to the Assessee at any time. Considering the aforesaid facts and in the light of the decision of Hon ble Apex Court in the case of Calcutta Knitwears (supra), we are of the view that in the present case the A.O had recorded the satisfaction as required under the Act and therefore the assessment framed was valid and thus this ground is dismissed. All the other grounds raised by Assessee are considered together as they pertain to the additions made by the AO. 9. During the course of search, it was noticed that cash payment of ₹ 2,51,519/- was made to Raj Granite and Marble Industries for purchase of Marble cash of ₹ 3,93,689 was made to Ambica Timber Mart and Ambica Timber Depot and ₹ 17, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imber Depot a sum of ₹ 2,62,025/- has been paid by cheque and is duly recorded in books of accounts and only cash payment of ₹ 77,732/- is unrecorded. The A.O will verify this aspect and restrict the addition to the extent of unrecorded cash payment. To sum up additions in respect of payments made to M/s. Raj Granites and Decent Sales Corporation are confirmed. In respect of payment made to M/s. Ambica Timber, the A.O will work out the addition as directed above. 10.Aggrieved by the order of CIT(A), Assessee is now in appeal before us. 11.Before us, ld. A.R. reiterated the submissions made before A.O and CIT(A). On the other hand ld. D.R. supported the order of lower authorities. 12.We have heard the rival submissions and perused the material on record. We find that ld. CIT(A) while deciding the issue has concluded that the cash payments were made by the Assessee and were not recorded in the books of account and further as the source of payment was unexplained, the cash payments represents unexplained expenditure. Before us, no material has been placed on record by ld. A.R. to controvert the findings of CIT(A). We therefore find no reason to interfere with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of material seized during the course of search, A.O noticed that Shri Rajesh Thakkar and his family have been allotted 5 flats in Revati Scheme. It was also noticed that Assesse was accepting on money in the booking of various flats. On the basis of document seized, it was noticed that Assessee had collected on money from various persons listed in the order. A.O accordingly made the addition in respect of on money aggregating to ₹ 38,12,100/-. Aggrieved by the order of A.O, Assessee carried the matter before CIT(A) who deleted the addition by holding as under:- The ld. Authorized representative pointed out that these papers were seized from the premises of Janak K. Kansara and he was the only person responsible for these items. Besides thus it was argued that payment was made by these persons for investment in their respective properties and as such even if it is presumed that money was received appellant would be liable to tax on only profit part of it and not the entire receipts. Finally the ld. Authorized representative pointed jout that the same amount was also added in the hands of Janak K. Kansara, and these amounts have been accepted in that case as being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave carefully considered the issue. It is apparent that this addition is baseless. Finally, from the reply and certificates given by the society. It is apparent that all these properties are not owned by the family members of Kansara Group. Secondly, appellant is only supervising and developing the scheme on behalf of the society. Hence none of the alleged construction expenses are claimed by the appellant as it is only entitled to supervision charges at a fixed rate. Construction expenses pertain to the society and not the appellant. Hence the addition is deleted. 23.Aggrieved by the order of CIT(A), Revenue is now in appeal before us. 24.Before us, ld. D.R. supported the order of A.O. On the other hand ld. A.R. reiterated the submissions made before ld. CIT(A). 25.We have heard the rival submissions and perused the material on record. We find that CIT(A) while deleting the addition has given a finding that the properties were not owned by the family member of Kansara Group and further the construction expense pertains to the Society and not of the Assessee. He accordingly deleted the addition. Before us, no material has been brought on record by Revenue to controvert the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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