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2015 (8) TMI 565 - DELHI HIGH COURT

2015 (8) TMI 565 - DELHI HIGH COURT - TMI - Assessment u/s 153A - addition towards purchase of property made on the basis of slips recovered during the search - ITAT held that as far as the addition of ₹ 37,80,000 was concerned, since the Assessee had admitted to having paid for the property at ₹ 13,000 per sq.ft but not out of the books, it was "just and proper to restore the issue to the file of AO to afford an opportunity of hearing for the Assessee to explain the detail of the in .....

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of addition of ₹ 37,80,000 to the AO for affording an opportunity to the Assessee to explain the details should be interfered with. She urged that even in respect of the addition of ₹ 50 lakhs a similar direction ought to have been issued.

The Court is unable to agree. The second addition of ₹ 50 lakhs stood on a different footing. As is evident from the concurrent orders of the CIT (A) and the ITAT, the said addition was indeed made by the AO purely on surmises wit .....

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ed by the Income Tax Appellate Tribunal ( ITAT ) in ITA No. 2603/D/2013 pertaining to the Assessment Year ( AY ) 2008-09. 2. The background facts are that on 28th August 2008 a search and seizure operation under Section 132 of the Act was carried out in the case of Swastik Pipes groups of cases. Pursuant to the notice under Section 153A of the Act, the Assessee filed his income return declaring income of ₹ 16,00,780 on 2nd July 2010. The Assessing Officer ( AO ) completed assessment by mak .....

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(A) ] by an order dated 22nd February 2013. The CIT (A) noted the explanation offered by the Assessee that had made total payment of ₹ 40,12,501/- till 31.03.208, to acquire the right to own unit No. 504. in Pearl Business Park at Netaji Subhash Place. As regards the loose sheets recovered during the search, the Assessee explained to the AO in a letter dated 16th September 2010 that they were the photocopies of the diary of one of the property brokers whom the Assessee had come into conta .....

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per sq. feet for 540 sq. feet which had to be paid 'out of the books' worked out to Rs. ₹ 37,80,000 and was added to the taxable income of the Assessee. The Assessee explained that he had in fact made full and final payment towards the said unit No. 504 to the Builder on 2nd January 2013 in the aggregate sum of ₹ 78,75,268/- (Rs. 71,52,693/- plus ₹ 7,22,575/- being the allied charges ). The CIT (A) was of the view that once the Assessee had given an explanation for the .....

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sq.ft. for which only a proposal had been put forward by the broker in the loose sheets. The Assessee contended that the AO had proceeded purely on surmises and conjectures to infer that the Assessee had paid ₹ 50 lakhs and added the said sum to his income. Again, the CIT (A) held that once the Assess had offered an explanation, the AO ought to have conducted an inquiry and undertaken verification of the properties. In the absence of any evidence the addition was held to be unsustainable .....

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