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2015 (6) TMI 889 - ITAT AHMEDABAD

2015 (6) TMI 889 - ITAT AHMEDABAD - TMI - Addition of accrued interest - seized paper clearly indicates computation of accrued interest at per 12% at prevailing market rate on outstanding balance as on that particular date on investment made by the assessee -CIT(A) deleted the addition - Held that:- CIT(A) while deleting the addition has given a finding that the document found at the time of search is a third party document which is neither in the handwriting of the Assessee nor bears her signat .....

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l Chaturvedi, AM,JJ. For the Appellant : Shri O P Vaishnav, CIT/DR For the Respondent : None ORDER Per Bench: 1. These 7 appeals filed by the Revenue are against the order of CIT(A)-, Gandhinagar, Ahmedabad dated 30.03.2011 for A.Ys. 1999-2000 to 2005- 06. 2. Before us, at the outset the ld. D.R. submitted that though the appeals of Assessee relate to 7 assessment years but the facts and circumstances of all the cases are similar except for the assessment years and amounts and the submissions ar .....

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ed paper showed details of sarafi transaction carried out during the period from February 1996 to October 2003 and it was stated that the transaction related to Ms. Jigna P. Shah, the Assessee. Notice u/s. 153C was issued on 04.03.2008 and in response to which Assessee filed return of income showing Nil income. Thereafter the assessment was framed u/s. 143C r.w.s. 153C on 24.12.2008 and the total income was determined at ₹ 5,79,000/-. Aggrieved by the order of A.O., Assessee carried the ma .....

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n that particular date on investment made by the assessee. 5. During the course of search operation carried out at the site office of J.P. Construction, details of sarafi transaction carried out were found. From the details it was noticed that Jigna Shah had advanced ₹ 50 lac to Jigen Shah before February 1996 and it was also mentioned that interest at 12% has been charged by Jigna Shah on such loan. A.O during the course of assessment proceedings and on the basis of seized document conclu .....

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t income at 12% on the outstanding loan amount and worked out the interest income at ₹ 5,79,000/- and made addition of it. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who deleted the addition by holding as under:- Ground No.2, which is on the issue of interest having actually accrued or not is based on the following disputed inferences made by the department on the basis of the document and the statement as above are tabulated below: SI. No. Disputed infer .....

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lace. The assessee insists that no property was transferred although offer was given The interest has been undoubtedly computed @ 12% in the document seized from the third party. The assessee says that it was computed to show the loss which has been incurred by her on the instance of the mediator. The statement and the letter of Shri Jigen Shah also clearly indicates the same, although the AO has read something else into it. The relevant part of the letter and statements are reproduced below: &q .....

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is estimated interest working @ 12% on capital/investment, which is computed by her to say that she has loosed ₹ 24.23 lacs as interest." The above clearly show that interest was claimed to be calculated on the request of mediator. Therefore, it could not have been decided to have been paid when the amount was originally given. Further, when Shri Jigen Shah says that it is computed to show that she has lost 24.23 lacs as interest, it shows notional loss only because according to docum .....

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March, 2000 has indeed been given. In that case because part interest would have been paid therefore, it was the clinching evidence of the accrual of interest. The assessee in her submissions refutes that any property has been transferred. The undated letter seized shows that till the date of writing of the letter no property has been transferred. Shri Jigen Shah in his statement has stated the following: "0.6: In column 4 you have shown 40 lac as property given. PI explain this entry? Ans: .....

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ome other property was indeed transferred. It is worthwhile to mention that search had taken place and Shri Jigen Shah could have been nailed if he was thought to be making a false statement. Further, it appears that the AO has accepted the statement as it has neither brought house property income to tax nor consistent with the addition of cash payments u/s.69A he has made any addition of this payment in kind. Further interest accrued has been computed by the AO as if the house was not transferr .....

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