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Shri Ketan V. Shah and others Versus The ACIT, Central Circle-11, Mumbai

2015 (7) TMI 158 - ITAT MUMBAI

Undisclosed income - addition made on the basis of notings on a loose paper - Held that:- Firstly, the loose paper was found in the premises of Shri Sanjay Shah i.e. it was not found in the premises of the assessee. Secondly, it was in the possession of Shri Sanjay Shah so obviously it cannot be in possession of the assessee. Therefore, the provisions of Sec. 132(4A) of the Act is not applicable as the paper was not found from the possession of the assessee.

The most important fact to .....

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bstantive additions have been made. Thus no reason of addition in the hands of the assessee on protective basis. - Decided in favour of assessee.

Addition on account of estimated household expenses - Held that:- a similar addition has been made in the hands of the HUF of the assessee. The fate of that appeal is not known. However, it is an undisputed fact that the assessee was staying in USA for almost 5 years and during the impugned assessment year the assessee was in India only for .....

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so an admitted fact that the Ld. CIT(A) has transmitted all the additional evidences to the AO calling for a remand report. Instead of verifying the additional evidences, the AO left the matter at the discretion of the First Appellate authority. We find that after satisfying himself the Ld. CIT(A) deleted the addition. We, therefore, decline to interfere - Decided in favour of assessee.

Unexplained investment in silver - Held that:- The undisputed fact is that the silver utensils were .....

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CIT(A) has confirmed the addition on the basis of presumption of Sec. 132(4A) which on the facts of the case is not at all applicable - Decided in favour of assessee.

Addition of purchase of immoveable properties - Held that:- CIT(A) has given a categorical finding that the property was purchased in the year 2003. That being the fact of the matter, the impugned addition cannot be considered for the year under consideration. - Decided in favour of assessee. - I.T.A. Nos.2321 & 2322/M .....

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Assessee s appeal 2. Briefly stated the facts of the case are that search and seizure action u/s. 132 of the Act was carried on 21.2.2007 at the business premises of M/s. Shah Himmatlal Manilal & Co. Tobacco Products, Sanjay Agencies & Mr. Sanjay V. Shah at Jalna and residential premises of the assessee at SHARDA , Civil Club Road, Jalna was also covered. During the course of search, following seizures were made: 1. Residence & Lockers a) Cash of Rs. Nil b) Jewellery valued at Rs. Ni .....

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issued a notice u/s. 142(1) of the Act which contains notings in Annexure A/1 which read as under: Page No. 36 1.1.62 crores Transfer arrangement is made Account No will be submitted to you within half an hour. Confirm amount. 1) Transfer arrangement is made. Issue one cheque equal amounting to ₹ 2 crores. Confirm. 1-2 million equity. Outstanding 3 million. 28 lakh dollars. 4.5 lakhs. 17 million value-capital gain. 1.2 million. Dr - 9738002209. Page No. 37. Received 3 SMS as under: Ketan- .....

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nsactions are recorded in the books of accounts. Necessary documentary evidence may be filed to prove the sources of funds for making such transactions. Please note that if the details as called for are not furnished the assessment will be finalized u/s. 144 of the Income Tax Act. Presuming that you have nothing to say in the matter. 4. On receiving no plausible reply, the AO observed as under: The above noting pertains to the transfer of funds from the current business of the assessee to other .....

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; 1.62 cr. These notings pertain to transfer of funds may be to the USA amounting to ₹ 1.62 crs. 2. Transfer arrangement is made. Issue one cheque equal amounting to ₹ 2 crores. Confirm ₹ 2.00 cr These notings pertain to transfer of funds may be to the USA amounting to ₹ 2.00 crs. 3. 1-2 million equity. Outstanding 3 million. 28 lakh dollars. 4.5 lakhs. 17 million value-capital gain. 1.2 million. ₹ 20 lacs Rs. 30 lacs Rs. 14.0 Cr ($ 28 lac) Rs. 4.5 lacs 1.70 Cr. 12 .....

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assessee, during the course search, it is very likely that these noting pertain to this period i.e. F.Y 2004-05 relevant to A.Y. 2005-06. Since the assessee has not come forward with any explanation. The same is taxed in the hands of the assessee as undisclosed income which has been transferred out of the system. The addition on this score works out to ₹ 199850000/- pertaining to A.Y 2005-06. This addition is made on protective basis since this document was found from the premises of M/s. .....

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ess. The Ld. CIT(A) was convinced that the assessee has failed to discharge the presumption u/s. 132(4A) of the Act and confirmed the addition made by the AO at ₹ 19,98,50,000/-. 7. Following observations of the Ld. CIT(A) need specific mention. Vide letter dt. 7.2.2012, an additional ground has been taken specifically in respect of addition of ₹ 19,98,50,000/- made on account of notings in seized documents at Annexure A-1, pages 36 & 37. As the ground No. 1 has generally challen .....

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2007-08 and not A.Y. 2005-06. As the Ld. AO has made the addition only on protective basis, for the detailed reasons given on similar ground for A.Y. 2005-06, I confirm the addition made as it no way harms the interest of the appellant. If the income is held taxable in A.Y. 2005-06 by the highest appellate forum automatically the addition made in this year would be deleted. Accordingly, this ground is dismissed. 8. Aggrieved by this, the assessee is before us. The Ld. Counsel for the assessee ve .....

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TD 85, SMT. K.V. Lakshmi Savitri Devi Vs ACIT, DCIT Vs C. Krishna Yadav 46 SOT 250. The Ld. Counsel further strongly submitted that the Revenue authorities have grossly erred in drawing support from the presumption as envisaged in Sec. 132(4A) inasmuch as the loose paper was not found from the premises of the assessee nor it is the case of the Revenue that the assessee was in possession of the said loose paper therefore presumption drawn is not according to the law. The Ld. Counsel continued to .....

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d addition. 9. Per contra, the Ld. Departmental Representative strongly supporting the orders of the authorities below drew our attention to the various observations in the assessment order wherein the AO has mentioned the number of opportunities given to the assessee to explain his case. It is the say of the Ld. DR that the assessee never attended the assessment proceedings and never came forward with explanation therefore at this stage the assessee cannot say that no proper examination has bee .....

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of all the figures mentioned in the loose paper would not justify the addition of ₹ 19.98 crores. Secondly, the entire addition has been made on the presumption mentioned u/s. 132(4A) of the Act. However, we failed to understand how this presumption is applicable on the facts of the case. Firstly, the loose paper was found in the premises of Shri Sanjay Shah i.e. it was not found in the premises of the assessee. Secondly, it was in the possession of Shri Sanjay Shah so obviously it cannot .....

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oned in para-5 (supra) clearly suggest that the additions have been made on protective basis so this is a protective assessment. However, there is no reference about any case/assessee, in whose hands substantive additions have been made. Even before us, the Ld. DR failed to bring any documentary evidence to show in whose hands substantive additions have been made. 11.2. Though the assessments were made on protective basis, the same has been confirmed by the First Appellate Authority also. The Ho .....

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in totality, we do not find any reason of addition in the hands of the assessee on protective basis. We, accordingly set aside the order of the Ld. CIT(A) and direct the AO to delete the impugned addition. Ground No. 1 to 11 are allowed. 12. Ground No. 12 relates to the addition of ₹ 3,00,000/- on account of estimated household expenses. 13. While scrutinizing the return, the AO noticed that the assessee has not furnished any details of household expenses or sources of meeting the same. N .....

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assessee was staying in USA for almost 5 years and during the impugned assessment year the assessee was in India only for 7 months, considering that the assessee has come from USA, possession of some money cannot be ruled out. We therefore do not find any logic in making the impugned addition. Order of the Ld. CIT(A) is set aside and the AO is directed to delete the addition of ₹ 3,00,000/- 15. In the result, the appeal filed by the assessee for A.Y. 2005-06 is allowed. ITA No. 2241/M/13 .....

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s not explained the source of credit, the AO treated the same as undisclosed income of the assessee. 18. The assessee carried the matter before the Ld. CIT(A). The Ld. CIT(A) has considered this grievance at para-2.10.1 at page-38 of his order. Before the Ld. CIT(A), the assessee produced the bank statement, bank summary explanation of each deposit made in the bank. It was explained that the bank account in question is reflected in the balance sheet of the assessee. These additional evidences we .....

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delete the addition. 19. Before us, the Ld. DR strongly supported the assessment order. 20. The Ld. Counsel for the assessee reiterated what has been submitted before the lower authorities. It is an undisputed fact that additional evidences were furnished before the Ld. CIT(A) but it is also an admitted fact that the Ld. CIT(A) has transmitted all the additional evidences to the AO calling for a remand report. Instead of verifying the additional evidences, the AO left the matter at the discretio .....

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- A.Y. 2007-08 - Assessee s appeal 23. Grievance raised vide ground No. 1 to 11 of this appeal are identical to the grievance raised for assessment year 2005-06 vide ground No. 1 to 11, which we have considered in detail in ITA No. 2321/M/2013. For our detailed discussion/reason given therein, ground No. 1 to 11 are allowed. 24. Ground No. 12 relates to the addition on account of estimated household expenses. 24.1. This grievance is similar to ground No. 12 considered by us in ITA No. 2321/M/13 .....

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in his statement on oath has stated that Shri Ketan Shah (present assessee) is the only person who could give explanation in this regard. On receiving no explanation from the assessee, the AO made the addition of ₹ 4,21,168/- as unexplained investment in silver. 27. The assessee carried the matter before the Ld. CIT(A) but without any success. 28. Before us, the Ld. Counsel for the assessee reiterated what has been stated before the First Appellate authority. 29. We have carefully perused .....

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ed to in the assessment order nor in the order of the First Appellate authority. The Ld. CIT(A) has confirmed the addition on the basis of presumption of Sec. 132(4A) which on the facts of the case is not at all applicable. We, therefore, set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition of ₹ 4,21,168/-. 30. In the result, the appeal filed by the assessee is allowed. ITA No. 2242/M/13 - A.Y. 2007-08 - Revenue s appeal 31. The first grievance of the Revenue i .....

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Kasari. Referring to the statement of Shri Prakash Kasari, the AO observed that he has admitted of having paid ₹ 12.50 lakhs which was deposited by Shri Khetan Shah (present assessee). The AO therefore made the addition of ₹ 25,00,000/- in the hands of the assessee. 33. The assessee carried the matter before the Ld. CIT(A). It was strongly contended before the Ld. CIT(A) that the said property was not owned by the assessee. It was explained that the said property was acquired by Shri .....

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