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RAJNI M. PATEL Versus DEPUTY COMMISSIONER OF INCOME-TAX

Unexplained capital gain ans sale proceeds - Held that:- Once Smt. Shardaben R. Patel has recognised the sale consideration by computing capital gain on transfer of the two flats and the return was filed before the search, then it has been demonstrated that source of the funds in purchasing two fixed deposits is the transfer of the two flats by Smt. Shardaben R. Patel. The assessee has discharged the onus before us also, and therefore, no addition can be made in purchase of fixed deposits. We al .....

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instance of the assessee against the assessment order dated December 26, 2007 passed under section 158BC read with sections 143(3) and 254 of the Income-tax Act, 1961. The grounds of appeal are not in consonance with rule 8 of the Income-tax (Appellate Tribunal) Rules, 1963. They are descriptive and argumentative in nature. In brief the grievance of the assessee is that the learned Assessing Officer failed to carry out the directions given by the Tribunal while setting aside the assessment orde .....

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the brief history of the assessment. 3. A search and seizure operation was carried out at the premises of the assessee on September 21, 1995. Along with the assessee various firms and associated concerns were also covered under the search operations. In order to give logical end to the search proceedings, a notice under section 158BC of the Act was served upon the assessee. In response to the notice, the assessee has filed return of income on February 9, 1996 declaring total income of ₹ 2, .....

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ctions given by the Tribunal are being reproduced at page 2 of the assessment order, they read as under : "The proper order to be passed in such a case would be to set aside the assessment and to direct the Income-tax Officer to make a fresh assessment in accordance with procedure prescribed by law. It would not be correct merely to uphold the assessment and direct the Income- tax Officer to make appropriate modification. We accordingly set aside the assessment with the directions to make i .....

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ction 143(2) read with section 158BC on August 7, 2007 under the set aside proceedings and thereafter framed the assessment order on December 26, 2007. The computation of income determined by the Assessing Officer reads as under: Computation of income indicating unaccounted income (Rs.) (Rs.) Assessment year 1986-87 House hold expenses 50,000 Assessment year 1987-88 House hold expenses 50,000 Assessment year 1988-89 House hold expenses 50,000 Assessment year 1989-90 House hold expenses 70,000 As .....

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s 90,000 5,40,000 Assessment year 1994-95 Undisclosed bank account 2,00,000 Land at Sangrali village 2,42,000 Visit of relatives from foreign country 2,50,000 House hold expenses 80,000 Unaccounted deposits in NRE account 4,59,987 FDR as above 50,000 12,91,987 Less : Set off as discussed above 23,035 12,68,952 Assessment year 1995-96 Undisclosed bank account 2,00,000 House hold expenses 1,10,000 Visit of relatives from foreign country 2,50,000 Unaccounted deposits in NRE account 2,77,374 8,37,37 .....

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discussed above 12,78,600 18,18,740 Total undisclosed income 55,15,066 Add : Total income including undisclosed income 10,58,438 65,73,504 Less : returned income/assessed income 8,01,711 Total undisclosed income 57,71,793 R/O 57,71,790 5. The learned authorised representative for the assessee while impugning the order of the Assessing Officer submitted that the assessee is a partner having 33.33 per cent. shares in 8 firms shown in the paper book page 19. The search under section 132 of the Act .....

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00. According to the learned counsel for the assessee the total amount of ₹ 63,57,387 has been offered by various firms which came to the share of the assessee. He submitted that even if the merits of additions are not to be looked into except one addition whereby the addition of unexplained investment in the bank account have been made, the assessee will be satisfied if telescopic benefit of the additions were given equal to the amount available to the assessee from the partnership firms. .....

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e shall not be subjected to double taxation on the disclosed amount in view of the clear position of law laid down in Chapter XIV-B. The assessee has further requested that the disclosure made in the firms referred to above represents mainly the unaccounted money which was utilised by him along with Shri Ajay V. Bhatt and Shri Suresh A. Patel in the ratio of 33.33 per cent. Therefore, it has been requested by the asses see that he shall be allowed credit in respective years against the unaccount .....

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ed set off of one-third share from the disclosed income of the firms referred to above against the disclosed/accepted amount of undisclosed income against any amount which he has not accepted during the course of assessment proceedings." 8. The learned Assessing Officer had agreed that the assessee is entitled for telescopic benefit but, while giving actual benefit to the assessee, he restricted all these to a sum of ₹ 13 lakhs which is the amount the assessee himself disclosed. We ar .....

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are of profit coming to the assessee from the 9 partnership firms to the extent of ₹ 63,57,387. The learned Assessing Officer shall give telescopic benefit of this amount against various additions made by him in the assessment order. 9. With regard to the additions made on account of unexplained deposits in the bank account is concerned, the assessee has contended that his sister Smt. Shardaben R. Patel was the owner and in possession of two flats, she has sold those flats for a considerat .....

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essee was sent by the Assessing Officer under section 143(1). Copy of such intimation is available at page 196 of the paper book. The contention of the assessee is that two fixed deposits were made by his sister though they were maintaining a joint bank account with the Bank of Maharashtra. The certificate of the bank is available at page 198. The assessee has also placed an affidavit of Smt. Shardaben Patel whereby she has deposed that she had inherited two flats on the death of her husband Shr .....

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