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2016 (3) TMI 813 - ITAT AHMEDABAD

2016 (3) TMI 813 - ITAT AHMEDABAD - TMI - Undisclosed investments - Held that:- All the additions deserve to be set aside to the file of Assessing Officer for re-adjudication because at the time of assessment proceedings neither the Assessing Officer was possessing the clinching evidences which could exhibit the unexplained investments exclusively in the hands of assessee nor the assessee could file his explanation with regard to the allegations posed before him on the strength of Panchnama of A .....

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are of the view that it is for the ld. AO to first lay his hands on an evidence which shows unexplained investment by the assessee. The ld. AO thereafter supposed to call upon the explanation of the assessee qua that investment or any assets possessed by him. If the AO is not satisfied with the explanation of the assessee then addition in the hands of assessee can be made. The ld. Assessing Officer shall decide the issues in accordance with law keeping in view the decision of the Special Judge, .....

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this common order. The facts on vital points in all appeals are common, therefore, for the facility of reference we are taking the facts from Asst. Years 2001-02 and 2005-06 mainly. 2. Brief facts of the cases are that the assessee is an employee with Gujarat Police Department and posted as Sub-Inspector of police at Rajgadh Police Station, Tal. Ghoghamba, Dist. Panchmahal. A search by Anti Corruption Bureau (in short A.C.B.) of the State Government was carried out upon the assessee on 28.03.20 .....

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ears 2001-02 to 2004-05. In Asst. Year 2005-06, the Assessing Officer issued notice under section 143(2) & 142(1). In response to the notice Shri Gaurang Shethwala, C.A. had appeared before the Assessing Officer from time to time. While scrutinizing the details for Asst. Year 2001-02 ld. Assessing Officer has worked the investments in FDR, KVP, NSC etc. found during the course of raid in financial years 2000-01 to 2003-04. All these details are mentioned on page 2 & 3 of assessment order .....

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ermined the taxable income at ₹ 2,27,100/-. The computation made by ld. Assessing Officer the reads as under :- 8. Subject to the above remarks and data available on records, the total income of the assessee is computed as under : Rs. Rs. Income from salaries As per statement of income 92,101 Income from other sources 1) Investment in Kisan Vikas Patras as discussed in para-3 1,30,000 2) Investment in Time deposit as discussed in para 5 5,000 1,35,000 Total income determined at 2,27,101/- .....

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he year under consideration, the investment of ₹ 1,30,000 and ₹ 5000/- is made in Kisan Vikas Patra and for the Time deposits respectively by the assessee as per the report/statement of the ACB. A query letter dated 5/10/2006 was issued to the assessee and as per query no.5 source of investment with documentary evidence were called for. In the reply dated 24//11/2006, the assessee has stated as under : All the investments reputed made in my name are actually made in the HUFs account .....

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ip of KVP with Shri D. L. Rathod HUF. On going through the records no return of income in the name of Shri D. L. Rathod HUF is found. The assessee has also not substantiated such claim by any contemporary evidence. It is pertinent to note that the assessee states of having filed return of income AYs 2004-05 and 2005-06 whereas the investment pertains to AY 2001-02. The explanation offered by the assessee has no merit therefore the investment in KVPs is considered as unexplained u/s 69B of the IT .....

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ncome in the name and status of HUF for Ays 2004- 05 and 2005-06 and not for AY 2001-02 relevant to the assessment year under consideration only on 29/03/2006 i.e. after the search on 28/03/2005 of the ACB. The so called HUF as stated is concocted HUF story to cover up the tax liability against him. In the statement of ACB it is clear investment of the assessee from which the documents are found and seized by the ACB Department from his residential premises. The claim of the assessee is far away .....

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g Officer has noticed that the bank accounts maintained by the assessee and his family members on page 9 of the assessment order. The ld. Assessing Officer also took cognizance of the fact that sum of ₹ 30 lacs were recovered by ACB. The details of the recovery are mentioned in paragraph 4.4, which reads as under :- 4.4 In the evening of 22nd March, 2005, ₹ 28 lacs were given to Shri Rathod. Next day morning ACB raided residence of Shri Rathod. From the Panchnama of ACB it is noticed .....

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t appellate authority did not bring any relief to the assessee. 6. Now the assessee is in appeal before us. Before us. The ld. counsel for the assessee contended that the Court of Special Judge (A.C.B), Panchmahals, at Godhra has acquitted the assessee from all the charges which were leveled against him as per section 13(1)(e) and 13(2) of the Prevention of Corruption act. In other words assessee was able to explain his position with regard to the unexplained assets found and seized during the r .....

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of the Special Judge, A.C.B. was not there when assessment order was passed. The ld. Assessing Officer confronted the assessee for each seized material and the assessee failed to explain the source of investment in bank account, FDR, KVP, NSC etc. or cash of ₹ 30,43,400/- found at the time of search. Therefore, no interference is called for in the order of ld. Assessing Officer in all these years. 8. We have duly considered the rival contentions and gone through the material available on r .....

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Judge has considered these allegations and acquitted the assessee. On due consideration of the judgment of Special Judge, ACB, particularly paragraph, 57 & 74, we are of the view that before the Court of Special Judge, ACB, assessee has produced evidences demonstrating his position about alleged unaccounted assets. In all assessment years, the income has been computed on the basis of Panchnama and other details collected from the A.C.B. Considering the judgment of Special Court of A.C.B. wh .....

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