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2015 (3) TMI 652 - DELHI HIGH COURT

2015 (3) TMI 652 - DELHI HIGH COURT - [2015] 373 ITR 1 (Del) - Cash receipt of ₹ 1 crores - deletion of the sum of ₹ 1 crores directed by the CIT(A) and upheld by the ITAT - Held that:- We are of the opinion that given the fact-intensive nature of the matter, and - as noted by the CIT(A) - the rare instance where cash transactions were indeed reflected in the books of one of the assessees which had an intimate connection with the present assessee, any further enquiry would involve mo .....

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ssessee - CIT(A) confirmed part addition on unexplained loan and deleted on unexplained expenditure - Held that:- The CIT(A) subjected the record to close scrutiny and the ITAT thereafter went into the record by examining the actual entries. It is not as if the ITAT deleted the entire amount. The rationale for retaining ₹ 6.93 lakhs has been clearly mentioned, i.e. that it pertained to a specific transaction for which a date was attributable or discernable. However, with respect to the oth .....

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Bhat (Open Court) 1. In these appeals, the Revenue is aggrieved by a common order of the Income Tax Appellate Tribunal (ITAT) dated 03.12.2010 in IT (SS) A No.48/Del/2006 and IT (SS) A. NO./85/Del/2006. The ITAT had affirmed the findings of Commissioner of Income Tax (Appeals) [hereafter referred to as "CIT(A)"] in regard to certain amounts originally added in the course of block assessment proceedings by the Assessing Officer (AO). 2. The brief facts are that the assessee's premi .....

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ained purchase of residential property. Other amounts too were added. The assessee's appeals were allowed in part in that an addition of ₹ 39,47,500/- under Section 69C and ₹ 5,00,000/- under Section 69 and a further sum of ₹ 30 lakhs towards unexplained expenditure was affirmed. 3. Both the Revenue and the assessee appealed. The Revenue's appeals were rejected by the impugned order, barring affirmation of a small amount of ₹ 6,93,000/- . The assessee's appeal .....

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t;the Golf Links property". The search operations extended to his premises as well as some co-owners of the Anand Niketan property. 5. The AO, after considering the records held that the value of the property purchased, i.e. D-123, Anand Niketan was not truly disclosed. In doing so, the AO took note of the statements made and materials gathered in the search of co-owners. An important consideration which weighed with the AO in concluding that the amounts were liable to be taxed under Sectio .....

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Regal Flats Private Ltd as well as documents A-12 and A-20, took note of the entirety of the transactions and inferred as follows: "7.7 The assessing officer has taken the statement on oath of Mr. Arjun Khosla and his denial regarding payment of ₹ 1 crore cash is perfectly in line with this type of transaction being recorded all over the country. His statement regarding non-payment of ₹ 1 crore runs counter to the entries found in the cash book of the company which was entered .....

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er action on or near the date of search on 13/05/2003 on Mr. Arjun Khosla could have helped the department in ascertaining truth. Survey u/s 133A on the office premises of the company, search u/s 132 at the residence of the assessee and at the residence of Ms. Mangla Sood, one of the co-owners of property D-123, Anand Niketan provide enough evidence and material in the hands of the Income Tax Department to arrive at the impartial decision regarding the taxability of the cash amount of ₹ 1. .....

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sing Officer should have examined all the papers from Annexure A-1 to A-39 before giving his finding in the assessment order since material found and impounded from the office premises of the company M/s. Regal Flats Pvt. Ltd. provide substantive evidence, the same should be taken as true in accordance with Section 132(4A) of the Income Tax Act." 7. The ITAT noticed that the documents presented before it which were part of the record before the CIT(A) showed that a cash receipt of ₹ 1 .....

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, copy of which is available at page 75 of the assessee's paper book, an amount of ₹ 100 lakhs has been shown on the assets side as imprest to its director. As per the assessment order of M/s. Regal Flats Pvt. Ltd. for AY 2003-04 copy of which is available on pages 180 & 181 of the paper book, it is seen that it has been noted by the AO in this assessment order that company has sold a property bearing No.167, Golf Links, New Delhi for ₹ 225 lakhs and sale consideration is cla .....

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ed long term capital gain on the basis of sale proceeds of ₹ 255 lakhs which has been accepted by the AO of that company and hence, it has to be accepted that this much cash was received by that company although Shri Khosla who is the buyer of that property is denying about any payment in cash to the assessee or to that company. It is to be noted that when a person has made payment out of his unaccounted cash, he will not accept it and hence the denial by Shri Khosla that he has not made a .....

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h from sale of property and transferring of cash to the assessee under imprest. Since this cash book of M/s. Regal Flats Pvt. Ltd. was impounded by the department on the same date, this allegation of the department cannot be accepted that entry in the regular cash book of M/s. Regal Flats Pvt. Ltd. is an after thought. One more objection of the department is that there is no posting in the ledger of that company with regard to this cash transaction. It is bit unusual but simply on the basis of t .....

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the learned AR that since the cash was shown in the balance sheet in the company as imprest lying with the director of the company, the entry was not posted in the ledger by the accountant because he was not aware as to whether the same is to be posted in the running account of the assessee in the books of that company or to a separate account. Considering all these facts, we do not find any reason to interfere in the order of CIT(A) on this aspect to the extent of ₹ 98 lakhs." 8. In .....

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intimate connection with the present assessee, any further enquiry would involve more weighing of evidence rather than interpretation of law. Barring exceptional cases where the findings are based on no evidence or after overlooking material evidence, the scope of appeal under Section 260A of the Act involves examination of substantial questions of law. We see none in respect of this transaction. 10. In respect of the second question sought to be raised, it is noteworthy that block assessment r .....

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ns, the parties used to write rough figures and amounts on a piece of paper relating to estimates for some further dealings. These notings may or may not have materialized in any business. The assessee, therefore, submitted that no further explanation could be given since the notings were made a long ago. The AO was not satisfied with the explanation and added ₹ 39,47,500/- as unexplained expenditure and ₹ 5 lakhs under Section 69A as an unexplained loan given by the assessee. The CI .....

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