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2016 (2) TMI 622 - ITAT PUNE

2016 (2) TMI 622 - ITAT PUNE - TMI - Validity of the assessment - notice u/s.158BC(c) has not been properly served - Held that:- The stand taken by the assessee about the criteria of the notice u/s.158BC is not acceptable. We do not find any infirmity in the order of the CIT(A) on this issue. Once the assessee has been served the notice and in compliance to the same the assessee has responded by filing the return, now he cannot take a ground that the service of notice is improper. Further, the L .....

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the transaction as business income - Held that:- It is an admitted fact that during the course of search the audited books of accounts were not found. The assessee in the block return declared long term capital loss for first 2 years, i.e. A.Yrs. 1994-95 and 1995-96 whereas for A.Yrs. 1996-97 and 1997-98 the assessee declared long term capital gain. The AO considering the continuous purchase and sale of land by the assessee treated the same as adventure in nature of trade. The Ld.CIT(A) after co .....

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ment recorded from the assessee that he had taken loan of ₹ 4 lakhs on different dates during F.Yrs. 1994-95 to 1997-98 in cash from Shri P.S. Puslori. We find the CIT(A) deleted the addition on the ground that while the AO has recorded the statement of Shri P.S. Puslori, however, the AO did not confront the same to the assessee which was utilized against the assessee. The information collected at the back of the assessee which was utilized against him was not confronted to the assessee fo .....

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st revenue

Addition u/s 69 - repayment of loan - Held that:- CIT(A) after proper appreciation of the facts of the case directed the AO not to make any addition u/s.68 . However, he directed the AO to make addition of ₹ 1,01,506/- u/s.69 of the Act in absence of any plausible explanation given by the assessee towards the repayment of the above loan. The Ld. Counsel for the assessee before us also could not give any proper explanation nor he could explain how the order of the CIT( .....

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hri M.K.Kulkarni For The Respondent : Shri S.K. Rastogi, CIT ORDER PER R.K. PANDA, AM : These are cross appeals. The first one is filed by the Assessee and the second one filed by the Revenue and are directed against the order dated 03-10-2003 of the CIT(A)-I, Pune relating to the Block Period 1989-1990 to 1999-2000. 2. This appeal was earlier dismissed by the Tribunal for nonprosecution. Subsequently, the Tribunal vide M.A.No.87/PN/2004 order dated 18-05-2007 recalled its earlier order. Hence, .....

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n. The AO issued notice u/s.158BC to the assessee on 15-09-1999. Since the assessee did not file the return of income, he was issued a questionnaire along with reminder for filing the return on 03-10-2000. Subsequently, the AO issued a notice u/s.142(1) to the assessee on 03-10-2000 along with a detailed questionnaire vide letter dated 03-10-2000. The assessee thereafter filed his return of income for the block period in Form 2B on 08-12-2000 by disclosing ₹ 12 lakhs as undisclosed income .....

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ving two proprietary concerns in the name of M/s. Shivraj Developers and M/s. Group Associates. In these concerns the assessee has carried out some minor contract works for which some income has been disclosed in the regular return filed. The assessee is also transacting in land at Survey No.100/3 and S.No.100/5/1, Chandni Chowk, Kothrud, Pune. In the initial years of the block period, the assessee was employed with Telco as an electrician and was deriving salary income there from. The assessee .....

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during the course of search u/s.132(4) on 16-02-1999. In reply to Question No.8 the assessee had stated that books of account were being maintained on the computer lying at his office premises. When in Question No.9 it was confronted that no such books of account are being maintained on a regular basis and neither anything in the form of back up nor print-outs were found, the assessee had replied that the books of accounts are definitely being maintained and he could be able to show them in his .....

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and at Chandni Chowk, Kothrud. Again in his reply to Question No.23 in the statement recorded u/s.132(4) on 18-02-1999 at his office premises the assessee replied that the books of account had not been found at his residence or his business premises. He had also enquired with his auditors who had admitted that books were not with them. Since he was unable to produce the books of account and was not aware as to where the books of accounts are lying, the assessee in his reply to Question No.24 sta .....

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earch the AO analysed the various documents seized from the premises of the assessee during the course of search. After considering the explanations given by the assessee from time to time, the AO determined the undisclosed income of the assessee for the block period at ₹ 1,08,82,364/- being unexplained cash loans, unexplained business income on purchase and sale of land, unexplained cash credits and unexplained transactions for various assessment years of the block period. 8. In appeal th .....

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and therefore, the whole assessment was vitiated in law, considering the judicial verdicts pronounced so far elaborating the legal position. 2. On the facts and in the circumstances of the case and in law the Ld.CIT(A) was not justified in confirming the Sale of land transactions as business income as against the claim of the assessee being that of Long term Capital gain and enhancing such business income by ₹ 4,75,000/-, treating as on money received on such sale transactions as business .....

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5,000/-. 5. On the facts and in the circumstances of the case and in law the Ld.CIT(A) was not justified in confirming the assessment of undisclosed income of ₹ 1,01,506/- against made by A.O. of ₹ 1,71,561/- on account of loan taken on pledging gold ornaments of the wife of the assessee and Ld.CIT(A) ought to have deleted the entire addition of ₹ 1,71,561/-. 6. On the facts and in the circumstances of the case and in law the Ld.CIT(A) was not justified in confirming the additi .....

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,000/- and one single addition of ₹ 12,00,000/- be deleted. 8. On the facts and in the circumstances of the case and in law the assessee denies his liability to pay interest u/s.158BFA(1) of the Act and same be deleted. 9. On the facts and in the circumstances of the case and in law no surcharge is leviable u/s.113 and it be held accordingly. 10. The appellant craves to leave, add/amend or alter any of the above grounds of appeal. 10. The assessee has also taken the following additional gr .....

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led. 11. The Ld. Counsel for the assessee referring to the additional ground submitted that the said ground is purely a legal ground and no fresh facts are required to be investigated. Relying on the decisions of Hon ble Supreme Court in the case of NTPC Ltd. reported in 229 ITR 383 and in the case of Jute Corporation of India Ltd. reported in 187 ITR 688 and the decision of Hon ble Bombay High Court in the case of Ahmedabad Electricity Company reported in 199 ITR 351 he submitted that the addit .....

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see has challenged the validity of the assessment on the ground that the notice u/s.158BC(c) has not been properly served. 15. The Ld. Counsel for the assessee submitted that the notice u/s.158BC(c) issued on 15-09-1999 was not sent through Registered post. Further, notice u/s.143(2) was also issued prior to the filing of the return. Referring to the decision of Chennai Bench of the Tribunal in the case of ACIT Vs. Laxmi Industries and vice versa reported in 7 ITR 495 he submitted that the Tribu .....

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submitted that the notice in the instant case has been issued through RPAD. It was duly served on the assessee. After receipt of the notice the assessee filed his block return. Therefore, now he cannot challenge the validity of the notice issued u/s.158BC(c). 17. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. The grievance .....

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the service of the notice and the block period mentioned is upto 16-02-1999. In response to the said notice the assessee, in his individual capacity, had filed a return in Form 2B on 08-12-2000. Thus, the CIT(A) has held that the assessee has not only duly received the notice but has also filed return of undisclosed income for the relevant block period although the same was beyond the time given in the notice u/s.158BC. In view of the above, he held that the stand taken by the assessee about the .....

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he notice was served otherwise than by Registered Post. In view of the above, the various decisions relied on by the Ld. Counsel for the assessee are not applicable to the facts of the present case. Accordingly, the first ground raised by the assessee is dismissed. 18. In grounds of appeal No. 2 to 4 the assessee has challenged the order of the CIT(A) in confirming the transaction and sale of land as business income as against long term capital gain claimed by the assessee and enhancing the busi .....

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n cash, by cheque and by way of expenditure of building built for Kumbre family. The AO has analysed the year-wise break up of payments at Para 4 page 13 and 14 of the order. Out of the aforesaid land the assessee has sold a part of the land during F.Y. 1993-94 and has shown long term capital loss during 1994-95 and 1995-96 while he has declared long term capital gain during 1996-97 and 1997-98. The transaction in sale and purchase of the plot of land were not disclosed by the assessee in his re .....

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AO accordingly made addition of ₹ 27,31,000/- to the total income of the assessee for the block period, (i.e. ₹ 15,57,000/- for A.Y. 2004-05 & ₹ 11,74,000 for A.Y. 1998-99). 20. In appeal the Ld.CIT(A) gave certain relief to the assessee and sustained addition of ₹ 4,75,000/- which are unrecorded by observing as under : 10.3 I have gone through the statement on oath of the appellant u/s.132(4) and u/s. 131 as well as perused the seized papers which were produced befo .....

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cumstantial evidence available on record and no attempt whatsoever has been made by the assessing officer to gather any evidence from Mr.Jugal Soni, Mr.Shriram Soni or Kumbres or any other person who is mentioned in the loose papers which are basically rough jottings on small pieces of papers and do not lead us to the type of conclusion arrived at by the appellant specially in the light of the detailed explanation given by the appellant. 10.4 At this stage itself, it would also be relevant to po .....

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addition of ₹ 20,50,000/- (Rs. 15,50,000 + 5,00,000 = 20,50,000/-) on the same set of facts that is seizure of blank cheques. Once he makes an addition of ₹ 20,50,000/- where there is the need to make addition of ₹ 11,74,000/- (15,00,000-3,26,000= 11,74,000/-) as undisclosed income. The assessee contends that in the absence of any independent evidence in the circumstances when the admission was backtracked the A. O. was not justified in making an addition of ₹ 20,50,000/- .....

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itions are evidently required to be considered adequately and this matter will be discussed specifically in different grounds of appeal. 10.5 At this stage, it would be relevant to refer to ground no.29 taken by the appellant. It is true that in absence of any other material available with the department, the purchase and sale transactions are to be treated as per the registered documents. While this may help the appellant in so far as the purchase of property is concerned as the paper seized an .....

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d above the recorded consideration. In the statement on oath u/s. 132(4) dated 17.02.1999, which was recorded in an elaborate manner wherein the appellant has admitted the total receipts from the sale of plots of land of ₹ 25,70,000/-, out of which the following amounts are unrecorded: F.Y.1993-94 Rs.1,80,000 F.Y.1994-95 ₹ 20,000 F.Y.1995-96 Rs.2,75,000 Rs.4,75,000 The appellant also admitted that these money has been utilized by him for business purposes and to pay back his outstand .....

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ded consideration in Para 3 of the assessment order and the addition of ₹ 11.74 lacs made in Para 3.1 of the assessment order are directed to be deleted. 21. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 22. After hearing the rival arguments made both the sides, we do not find any infirmity in the order of the CIT(A). It is an admitted fact that during the course of search the audited books of accounts were not found. The assessee in the block return declared .....

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,75,000/-. We do not find any infirmity in the order of the CIT(A) in absence of any material brought to our notice to take a different view. Accordingly, the same is upheld and the grounds raised by the assessee on this issue are dismissed. 23. Ground of appeal No.9 by the assessee reads as under : On the facts and in the circumstancfes of the case and in law no surcharge is leviable under section 113 and it be held accordingly. 24. After hearing both the sides, we find the above issue has been .....

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26. So far as the additional ground is concerned it is the submission of the Ld. Counsel for the assessee that since the notice issued u/s.143(2) is prior to the date of filing of the return in Form 2B, therefore, the entire assessment proceedings is bad in law. 27. The Ld. Counsel for the assessee submitted that the search took place on 16-02-1999 u/s.132 of the Act and the notice u/s.158BC(c) was issued on 15-09-1999. The assessee filed the return in Form 2B on 08-12-2000 and the notice u/s.1 .....

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ied. He further submitted that notice was not issued through RPAD. Relying on various decisions he submitted that a notice sent under certificate of posting and not by registered post would not amount to proper service of notice. He accordingly submitted that since the notice u/s.143(2) was issued prior to the filing of the return and the manner of service of notice was also improper, therefore, the entire assessment proceedings should be held as void ab-initio. 28. The Ld. Departmental Represen .....

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notice u/s.143(2). Further, the notices u/s.142(1)/143(2) were duly served on the assessee and thereafter the assessee has participated in the assessment proceedings. Therefore, the additional ground raised by the assessee has to be dismissed. 29. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We find a search action u/s.132 of the I.T. was conducted on 16-02-1999 at the residential and b .....

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01. Therefore, even if the first notice u/s.143(2) was issued prior to filing of the return, however, it is a fact that the AO has issued a fresh notice u/s.143(2) on 29-01-2001 after the assessee filed the return in Form 2B on 08-12-2000. Therefore, the argument of the Ld. Counsel for the assessee that the assessment proceedings should be held as void ab-initio in view of the issue of notice u/s.143(2) prior to the date of filing of the return of income cannot be accepted. The AO has issued the .....

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me cannot make the entire assessment proceedings invalid since a fresh notice u/s.143(2) has been issued by the AO after filing of the return in Form 2B by the assessee. The notice was duly served on the assessee and the assessee had participated in the assessment proceedings. Things would have been different had the AO not issued a fresh notice u/s.143(2) after the return was filed. Under these circumstances, the various decisions relied on by the Ld. Counsel for the assessee are not applicable .....

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payment of undisputed tax liability by more than 2 years without any reasonable cause and hence there was no ground whatsoever for condonation of delay. 31. After hearing both the sides we do not find any infirmity in the order of the CIT(A). We find the original appeal was filed before CIT(A) on 19-03-2001 against the order of the AO passed u/s.158BC(c) on 28-02-2001. Since the tax due on the returned income was not paid by the assessee the CIT(A) dismissed the appeal u/s.249(4)(a) of the I.T. .....

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ibunal, the CIT(A) condoned the delay in filing of the appeal before him. Under these circumstances we do not find any infirmity in the order of the CIT(A) in admitting the appeal after the delayed payment of admitted tax liability by more than 2 years. Ground raised by the Revenue is accordingly dismissed. 32. Grounds of appeal No.2 and 3 by the Revenue read as under : 2. On the facts and in the circumstances of the case, the Ld.CIT(A) erred in deleting the addition of ₹ 24,24,428/- made .....

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plain the investment with respect to advance given to various parties amounting to ₹ 24,24,428/-. The AO noted that the assessee in his statement recorded u/s.132(4) was unable to give verifiable sources for the advances made and was unable to furnish any plausible explanation for not considering the advance as undisclosed income. He, therefore, made addition of ₹ 24,24,428/- to the total income of the assessee. 33.1 On the basis of the various submissions filed by the assessee, the .....

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er charts relating to cash flow statement submitted by the assessee during the assessment proceedings as well as before the appeal proceedings, the CIT(A) noted that the AO in the remand report has mentioned that those entries in the diaries have been verified and found to be properly entered in the cash flow statement with certain minor variations. The CIT(A) further noted that the seized diaries not only contain the loans and deposits taken or given by the assessee but also have details of oth .....

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the remand report of the AO and after considering the various entries found in the seized diary as well as the entries appearing in the books of account produced before him has deleted the addition and since the Ld. Departmental Representative could not controvert the factual findings given by the CIT(A), therefore, in absence of any contrary material before us we do not find any infirmity in the order of the CIT(A) on this issue. Accordingly, the above 2 grounds by the Revenue are dismissed. 34 .....

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the provisions of section 68 based on the nothings of seized material. 35. Facts of the case, in brief, are that the AO on the basis of the transactions reflected on page 3 of Bundle No.2 seized from the office of the assessee vide Annexure A1 on 16-02-1999 made addition of ₹ 15,57,000/- being payment of unrecorded consideration of ₹ 15,57,000/- for the purchase of land from Kumbres at Chandni Chowk, Kothrud, Pune. Similarly, the AO made addition of ₹ 11,74,000/- u/s.68 based o .....

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categorically stated that the addition made by the AO is not based on proper appreciation of facts and the evidence available. Even there is also no circumstantial evidence available on record and no attempt has been made by the AO to gather any evidence from Shri Jugal Soni, Shri Shriram Soni or the Kumbre s or any other person as mentioned in the loose papers. He has also given a finding that the AO in the computation of undisclosed income had made certain apparent double additions. After con .....

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are dismissed. 38. Ground of appeal No.6 by the Revenue reads as under : 6. On the facts and in the circumstances of the case, the Ld.CIT(A) erred in holding that the addition of ₹ 15.50 lakhs sustained by him on account of repayment of loans would take care of the amount of ₹ 11.74 lakhs without any evidence to interlink the two transactions. 39. Facts of the case, in brief, are that the AO made addition of ₹ 11.74 lakhs in Para 3.1 of the assessment order on the basis of page .....

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onsidering the submissions made by the assessee the Ld.CIT(A) deletion the addition by observing as under : 16. Now coming to ground nos. 22 to 26, which all relate to the addition of ₹ 15 lacs (with relief of ₹ 3,26,000/-) made by the assessing officer as unexplained cash loans on the basis of certain seized papers, the issue has generally been discussed earlier. However, coming to specifics, the assessing officer has made an addition of ₹ 11. 74 lacs in Para 3.1 of the assess .....

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usal of the seized paper referred to above reveals that it is a rough jotting on which certain interest computation has been made. The submission of the appellant in this regard has been considered along with the appellant's submission dated 15.07.2003, which is quoted hereunder: "The A.O when he says that he had taken a loan in cash has been accepted by him in his own submission is not correct. No cash loans were taken from Soni's. they were by account payee cheques and have been r .....

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giving credit of ₹ 3,26,000/- from this figure and sustaining an addition of ₹ 11,74,000/- itself is imaginary. " 16.1 After considering the facts of the case, I have to hold that the addition of ₹ 11,74,000/- is not at all justified and the same is directed to be deleted. The grounds of appeal Nos. 22 to 26 are accordingly allowed in favour of the appellant. 40. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 41. After hearing both the sides w .....

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enue is dismissed. 42. Ground of appeal No.7 by the Revenue reads as under : 7. On the facts and in the circumstances of the case, the Ld.CIT(A) erred in deleting the addition of ₹ 4 lakhs received in cash allegedly from Shri P.S. Pulsori in various years. 43. Facts of the case, in brief, are that the assessee in his reply to questionnaire issued by the AO had given details of loan taken from Shri P.S. Puslori at point No.7 of his reply dated 07-02-2001. The AO noted that Shri Puslori is a .....

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n loan of ₹ 4 lakhs on different dates from F.Y. 1994-95 to 1997-98 in cash from Shri Puslori. The AO noted that the following transactions admitted to be loans received in cash were not found to be reflected in the books of account of Shri Puslori : 08-04-2004 Rs.1,25,000 in cash 31-03-1996 Rs.75,000 in cash 10-02-1997 Rs.60,000 in cash 08-07-1997 Rs.1,40,000 in cash 44. The AO recorded the statement u/s.131 of Shri Puslori who denied to have any such payments to the assessee. He accordin .....

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onclusion. This was completely overlooked by the AO. The assessee filed a copy of account of Shri Sambhaji S. Patil in the books of M/s. Karan cables, a concern of Shri P.S. Puslori wherein the transactions of loan have been reflected. It was submitted that the amount of ₹ 4 lakhs taken as loan has been returned to Shri Puslori by demand draft of ₹ 4 lakhs on 11-02-1998. Certificate from Shri Ganesh Bank of Kurundwad Ltd. Kothrud, Pune was also submitted by the assessee before the CI .....

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s in their cable network business. The appellant has admitted that he had taken loan in cash from Shri.P.S.Puslori and Shri.P.S.Puslori has admitted the position as per the information submitted by the appellant. The assessing officer did not confront the appellant with the information collected at his back from Shri.P.S.Puslori and as such it is fatal defect in the decision making process of the assessing officer. The additions made are, therefore, liable to be deleted. Ground nos. 16 and 17 ar .....

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had taken loan of ₹ 4 lakhs on different dates during F.Yrs. 1994-95 to 1997-98 in cash from Shri P.S. Puslori. We find the CIT(A) deleted the addition on the ground that while the AO has recorded the statement of Shri P.S. Puslori, however, the AO did not confront the same to the assessee which was utilized against the assessee. The information collected at the back of the assessee which was utilized against him was not confronted to the assessee for which the Ld.CIT(A) held that the addi .....

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y the Revenue is dismissed. 49. Ground of appeal No.8 by the Revenue and Ground of appeal No.5 by the assessee are as under : 8. On the facts and in the circumstances of the case, the Ld.CIT(A) erred in restricting the addition made on loans taken and their repayments to ₹ 1,01,506/- as against the amount of ₹ 1,71,561/-. 5. On the facts and in the circumstances of the case and in law the Ld.CIT(A) was not justified in confirming the assessment of undisclosed income of ₹ 1,01,5 .....

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sions made and arguments advanced by the assessee directed the AO to delete the addition of ₹ 1,71,761/- made u/s.68. However, he directed the AO to make addition of ₹ 1,01,506/- u/s.69 of the Act in absence of any plausible explanation given by the assessee towards the repayment. The relevant observation of the CIT(A) at Para 14.1 and 14.2 of the order read as under : 14.1 This issue is also a subject matter of question no.50 of the statement u/s.131 wherein certain pages of seized .....

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f the I.T. Act, 1961. The assessing officer has also not accepted the claim of the appellant that the maximum amount of loan taken was ₹ 91,000/-. 14.2 First of all, the addition u/s. 68 is technically not correct as the same has not been found to be not recorded in any books of accounts. Secondly, the jewellery related to the pledge has been seized as per Annexure C dated 16.02.1999 of the panchanama at the residence of the appellant and this aspect has been admitted by the assessing offi .....

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he addition, therefore, is called for in the investment of the appellant in the repayment of the loans taken and the interest paid thereupon, source of which remains unexplained. In the light of these aspects, the addition that is required to be made is ₹ 91,000 + 2,753 + 7,753 = ₹ 1,01,506/-. Therefore, while the claim of the appellant that the addition u/s.68 is not called for an amount of R.1,71,761/- is found to be correct, the addition of ₹ 1,01,506/- u/s.69 of the I.T. Ac .....

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1/-. However, he directed the AO to make addition of ₹ 1,01,506/- u/s.69 of the Act in absence of any plausible explanation given by the assessee towards the repayment of the above loan. The Ld. Counsel for the assessee before us also could not give any proper explanation nor he could explain how the order of the CIT(A) is erroneous. Since the Ld.CIT(A) on the basis of analysis of the seized document and on the basis of the various statements recorded from the assessee u/s.132(4) as well a .....

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he total addition of ₹ 20.50 lakhs merely on the ground that cheque was issued in the name of Mrs. Patil without appreciating the fact that the business was being handled by Mr. S.S. Patil and ignoring fact that the assessee admitted the said unaccounted amount in the statement u/s.132(4). 6. On the facts and in the circumstances of the case and in law the Ld.CIT(A) was not justified in confirming the addition of ₹ 15,50,000/- out of total addition made by the A.O. of ₹ 20,50,0 .....

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Facts of the case, in brief, are that the AO on the basis of signed blank cheques or post dated cheques found during the course of search proceedings from the premises of the assessee as well as the statement recorded u/s.132(4) on 19-02-1999 made addition of ₹ 20,50,000/- to the total income of the assessee as undisclosed income for the F.Y.1997-98. 56. Before CIT(A) the assessee submitted that there is no independent evidence available with the AO that the repayment of loan was made out .....

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cts of the case as well as the submission of the appellant during the appellant proceedings. While the certificates issued by the suppliers of material, as additional evidence are not admissible at this stage, the fact remains that this aspect relating to these cheques having been issued for purchase of materials is a part and parcel of the reply of the appellant to question nO.3 of the statement u/s.132(4) dated 19.02.1999. Furthermore, the cheque of ₹ 5 lacs belongs to the proprietary co .....

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of the admission of the appellant in the statement u/s.132(4) and failure of the appellant to rebut the presumption against him by any credible evidence on this issue, the addition of ₹ 15,50,000/- is to be sustained out of ₹ 20,50,000/- (Relief of ₹ 5,00,000/-) on facts as well as in view of the legal position brought out in later paragraphs. 57. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 58. After considering the rival arguments made by both .....

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so could not point out any error in the order of CIT(A) giving relief of ₹ 5 lakhs. Ground raised by the assessee as well as the Revenue are accordingly dismissed. 59. Ground of appeal No.10 by the Revenue reads as under : 10. On the facts and in the circumstances of the case, the Ld.CIT(A) erred in deleting the addition of ₹ 4,94,275/- being peak credit in the account of S.R. Kulkarni. 60. Facts of the case, in brief are that during the course of assessment proceedings the AO confro .....

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age No.12 was identified as computerized summary of the transactions between Shri S.R. Kulkarni and himself. The amount paid to Shri S.R. Kulkarni was out of his own business fund. The assessee has further stated that these transactions were not recorded in his regular books of account maintained on tally package. He had also confirmed that these were not included in his income-tax returns. The AO analysed the details of loans taken and repayment made to Shri S.R. Kulkarni in F.Yrs. 1996-97, 199 .....

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ddition of ₹ 4,94,275/- to the total income of the assessee being the peak credit : Fin. Year Cash/Cheque Receipt Payment Balance 1996-97 Cash 2,25,000 76,000 1,49,000 1997-98 Cash 9,29,100 12,32,375 Cheque 37,000 50,000 (-)1,67,275 1998-99 Cash 7,27,500 5,65,000 (-)5,275 61. Before CIT(A) the assessee made elaborate submissions based on which the Ld.CIT(A) deleted the addition by observing as under : 18.2 I have gone through the submission of the appellant and the records available and it .....

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Cable on 06.08.1997 and advance against sale of land reflected therein. In such a situation, no addition on this account is required to be made on merits. Even otherwise, as has been pointed out by the appellant, addition on account of undated cheques having already been made, separate addition on this account is not called for. In this connection, it would be relevant to point out that the assessing officer has somehow not properly considered the submissions of the appellant on record while arr .....

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he matter is evident otherwise on the basis of the position of law and facts, due additions have been sustained, but the assessing officer should take more care in framing the assessment order of this nature in future. 'Pg. No. 3 - A.O. says that the assessee has filed documentary evidence for details called for vide questionnaire. Therefore, the following evidences were submitted before A.O. which have not been considered by the A.O in Block assessment order. 1. Q. No.1 - Details of return .....

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.02.1999 recorded u/s.132 ( 4) - addition ₹ 15,33,292/- 11. Q.No.52 - Bundle No.43 -pg.63 - ₹ 20,40,000/- Consideration for sale of land 12. Q.No.55 - Bundle No.46 - Details of payment & receipts. 13. Q.No.59 - pg.27 to 31 - Bundle No.2 - Toursafe account, 1,2 & 3 of Bundle No.5 14. Q.No.86 - Bundle No.1 - pg.no.58 - Blank cheque of ₹ 3,50,000/-. 15. Q.No.88 - pg.No.87 - Bundle No.5 - Transactions between S.R. Kulkarni & assessee. On pg. No. 9 - A. O. observes that .....

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2, there are figures of loans raised & interest paid. The A.O. has made the total of ₹ 1, 71,561/- which includes the interest paid of ₹ 728 + ₹ 404 + ₹ 2753 + ₹ 3676 = ₹ 7,561/-. The earlier loans of ₹ 28,000/- (Rs. 18,000+Rs. 10,000) were repaid by raising a loan of ₹ 45,000/- which itself was also repaid on 14.03.1997. On 14.03.1997, fresh loan of ₹ 91,000/- was taken which was repaid on 10.08.1997 by paying interest of ₹ 3,676/- .....

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e been made. These repayments have been made from out of undisclosed income. Karan Cable ₹ 1,40,000/- Entire account has been squared off by repayment by crossed account payee pay order No.14671 of ₹ 4, 00,000/-. But still A O. has made separate addition as undisclosed income of ₹ 4,00,000/- in his para no.8 of assessment order. S.R.Kulkami - ₹ 9,29, 100 + ₹ 37,000 Here also AO says that the repayment has been made in cash from out of undisclosed sources in lieu of .....

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here is sufficient circumstantial evidence to infer that the assessee has taken loan of ₹ 15,00,000/- as per Bundle No.12 pg.no.1 which was applied for making unrecorded payment of ₹ 15,57,000/- as per Bundle No.2,pg.no.1 - the paper seized dt.16.02.1997. This ₹ 15,57,000/- has been separately added as undisclosed income - unrecorded consideration for land. At the same time, the A. O. says that loan of ₹ 15,00,000/- has been utilised for making this payment. This has been .....

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