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Kashinath Tapuriah Versus Dy. CIT, Central Circle-2, Mumbai

2016 (6) TMI 585 - ITAT MUMBAI

Assessment u/s 153A r/w s. 143(3) - The assessments presently under appeal before us (as well as the corresponding penalty appeals) are consequent to a search action u/s. 132(1) of the Act at the assessee’s different, as it appears, Short Street and Camac Street premises, at Kolkata on 05.1.2007. The same formed part of a concerted action by the Revenue on Hassan Ali Khan and other related parties at different place across India.

Various issues of additions towards unexplained invest .....

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ER Per Sanjay Arora, A. M.: The instant Appeals agitate separate orders by the Commissioner of Income Tax (Appeals)-36, Mumbai ('CIT(A)') of even date (26.2.2010) dismissing the assessees' appeals contesting his assessments under section 153A r/w s. 143 (3) of the Income Tax Act, 1961 ("the Act") for assessment years (A.Ys.) 2001-02 to 2006-07 and u/s. 144 for 2007-08. The other set of seven appeals is in relation to the penalty u/s. 271(1)(c) for these years. The appeals r .....

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India. The first four grounds of appeal, common for all the years, as under, raise legal/jurisdictional issues, and are accordingly taken up first, i.e., prior to the other grounds agitating to the various additions/disallowances on merits: 1. The learned Commissioner of Income Tax (Appeals) failed to appreciate that the assessment order u/s. 143(3) r. w. s. 153A is without jurisdiction and bad in law. 2. The learned Commissioner of Income Tax (Appeals) erred in not granting a reasonable and suf .....

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er of Income Tax (Appeals) failed to appreciate that the learned Assessing Officer had not granted reasonable and sufficient opportunity of being heard to the appellant. 3.1 The pleadings with regard to the assessment being without jurisdiction revolve around canvassing the scope of the assessment, claimed, relying on the decision in the case of CIT vs. Continental Warehousing Corporation [2015] 374 ITR 645 (Bom), to be restricted where the assessment is not pending (as on the date of search u/s .....

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igh Court shall not apply thereto. This in fact is the admitted position, reflected in the tabular chart prepared and furnished by the assessee (APB 10/pg. 1781). The limitation on the scope of the assessment would, therefore, only be for A.Y. 2002-03, for which assessment stands made vide order u/s. 143(3) dated 31.3.2005. The assessee s argument and, consequently, his objection is thus largely to no avail. We may though clarify that his challenge is thus not to the jurisdiction to assess per s .....

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ld. special counsel, Sh. Girish Dave, by placing reliance on the decision in the case of Ashok Chaddha vs. ITO [2011] 337 ITR 399 (Del), holding the issue of notice u/s. 143(2) as not mandatory in the case of an assessment u/s. 153A and, besides, on a third member decision in Sumanlata Bansal vs. Asst. CIT (in ITA Nos. 525 to 530/Mum/2008 dated 20.5.2015 - reported at 2015-TIOL-1053-ITAT-Mum-TM), following the same. The factual position is that the assessee did not file any return in response to .....

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/s. 271F of the Act (for A.Ys. 2001-02 to 2006-07), since confirmed by the Tribunal (in ITA Nos. 2919- 2929/Mum/2009 dated 16.4.2010/APB-9, pgs. 1771-1773), and which order stands admittedly accepted by the assessee. For A.Y. 2007-08, admittedly no original return u/s. 139 was filed (APB 10, pg. 1781). The question of the assessee requesting the A.O. for treating the same as in compliance to notice u/s. 153A, therefore, does not arise for that year. The assessment for A.Y. 2007-08 is in fact mad .....

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. The thrust of the assessee s case qua this Ground is the non admission of additional evidence, since sought to be adduced by him before the ld. CIT(A) (APB 1, pg. 223-273, with page 222 bearing the index). How could then, we wonder, it be considered as a non-allowance of proper opportunity by the first appellate authority, who in fact also sought a remand report from the A.O., placed at APB 1 (pgs. 124-125). The decision to admit, or not to, the said additional evidence is a subject matter of .....

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) failed to appreciate this aspect, as well for having completed the assessment without awaiting for the completion of the investigation in the matter by the Directorate of Enforcement, the agency of the Government of India (GOI) investigating economic offences. With regard to the latter aspect, the same only needs to be stated to be rejected, the proceedings under the Act being independent statutory proceedings, which are to be completed in a time bound manner, on the basis of and upon consider .....

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Nos. 4156-4162/Mum/2010 dated 29.2.2016). 5.2 As regards the plea as to non-allowance of proper opportunity by the A.O., the same we find stands raised before the first appellate authority, and duly dealt with him in his order (as vide Ground 7 and at para 18 for A.Y. 2001-02), stating that no submission in this regard was made before him even as the A.O. had allowed sufficient opportunity to the assessee. The ld. Authorized Representative (AR) would toward this state that the first effective no .....

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even in number, issued u/s. 142(1), mentioning the dates of their issue and service (including one u/s. 143(2) dated 02.12.2008). The matter, though pertinent, is purely factual in-as-much as if adequate opportunity stands not allowed by the assessing authority it may vitiate the proceedings. The charge, however, as we find, is misplaced. The assessment order (vide paras 3 to 6.4/pgs. 2-7 for A.Y. 2001-02) deals extensively with the proceedings as transpired before the assessing authority, with .....

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issued late into the assessment proceedings, which were on in parallel for all the years under reference, sifting through the plethora of materials gathered. The assessee - whose case is one of denial, either before or subsequent to the said notices, was, however, recalcitrant. How, then, is the said date relevant - the assessee only denying any knowledge of any account, throughout denying his association with Hassan Ali Khan (HAK) or of maintaining any foreign bank account? The information with .....

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uld have furnished his explanation/s before the first appellate authority, meeting any deficiency in presenting his case earlier. Ground after ground, we find the ld. CIT(A) to state of either the assessee reiterating his explanation before the A.O. or not making any substantive reply. No wonder, heavy emphasis is laid down before us on admission of additional evidence, placing reliance on the two letters by the assessee (i.e., dated 13.12.2011 at APB 6, pgs. 936, 938) and by his wife, Chandrika .....

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pletion of the assessment proceedings, nay, even after the conclusion of the proceedings at the first appellate stage. How, then, can they be of any consequence in-so-far as the assessee s charge of non-grant of proper opportunity by the A.O. is concerned? How, rather, could the Revenue modify the impugned assessments in any manner. In fact, these are mere requisitions (on the respective banks), not accompanied by the bank account statements, so that by itself this is of little moment as far as .....

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ied by a similar requisition on the respective banks, do not amount to much, except perhaps signify a willingness to co-operate and mislead no longer, i.e., assuming, again, the list furnished to be complete. The second letter, after nearly two years of the first one, and only at the instance of the Revenue, is only a follow up of the first letter. We in fact observe a lack of earnestness on the part of the Department as well, which should have acted with a much more alacrity; it requisitioning .....

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ith regard to the relevant Grounds, in view of the foregoing, rather than being proved, gets disproved, so that the same is without merit. 5.3 Next, we may examine plea for admission of additional evidence. The issue was argued at length before us. Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963, which is a provision regarding production of additional evidence before the Tribunal, reads as under: 29. Production of additional evidence before the Tribunal. The parties to the appeal shal .....

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recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced. Relying on the decision by the Hon ble Apex Court in the case of K. Venkataramiah vs. A. Seetharama Reddy AIR 1963 SC 1526, 1530, it was submitted that the scope of the words substantial cause occurring in rule 29 stands explained therein to mean that where evidence on record is sufficient to enable the court to pass an order, it may yet admit additional .....

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argument raised by the ld. AR is even prima facie not valid. If the words substantial cause in rule 29 are not to be read in the context of the words requires… to enable it to pass an order , which is imminent from a plain reading of the rule, how, it may be asked, is the same to be read and understood as? That is, what then would inform or guide the understanding or the meaning of the said words? Surely, if the said words had received a different or expanded meaning to the said words, t .....

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ood to mean that though the court may not strictly be said to require additional evidence to pronounce the judgment, it still considers that in the interest of justice something which remains obscure should be filled up, so that it could pronounce the judgment in a more satisfactory manner, which would in that case be a case covered under Rule 27(1)(b) of the said Code. In short, the power for admission of additional evidence is to be exercised for a just and fair disposal of the appeal. We do n .....

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We may in this regard also profitably refer to the discussion at para 3.3 (pgs. 6- 9) of the order by the tribunal in the case of HAK (supra). This order has in fact, due to the commonality and over-lap of the issues; rather, even to a large extent the evidences as well as the arguments advanced, to be read in conjunction with the said order, to which therefore frequent (and specific) references stand made, the reasons and principles guiding the said decision, being equally applicable, informin .....

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Revenue authorities had decided the case without affording sufficient opportunity to the assessee to adduce the same. The latter aspect is not in dispute in the present case, which, it would be appreciated, could not, where so, strictly qualify to be additional evidence - the assessee being prevented to produce it in the first place. The words substantial cause , as a holistic reading of the several decisions cited as well as the analysis in the case of HAK (supra) referred to would suggest, can .....

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er in a more satisfactory manner, with reference to the issue/s arising, which require its deliberation and adjudication, what purpose, one may ask, would it serve. The same has to necessarily relate to the adjudication process and, consequently, to proper adjudication, i.e., the end to which the entire exercise is geared toward and attempts to seek. 5.4 This brings us to our first observation (factual) in the matter. We find no evidence which would enable us to arrive at a decision, much less i .....

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nd relied upon, i.e., by way of additional evidence. In other words, the process necessarily involves a correlation between the evidence and the issue/aspect of assessment under examination, i.e., is to be evidence-issue specific; a particular evidence may pass muster while another not. Apart from, however, broadly mentioning the contents of various paper-books stated as containing additional evidences, no specific pleadings were made qua any evidence, save one, and which, it would be appreciate .....

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t no. 835-357-902-3 with Credit Suisse Private Banking, Zurich) for the period 01.7.2001 to 28.12.2006 (APB-5, pgs. 883-913). The same would, however, be of no avail as, as pointed out during hearing by Shri Dave, with reference to the disclaimer qualifying the said statement (at pg. 890), that the said statement is not suitable for tax purposes. Also, as argued by him, the same originating in a foreign territory, is not apostilled and, accordingly, cannot be accepted in evidence. This, then, ma .....

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ssing and the first appellate authority. The two aspects, save to the extent that are clearly interrelated, are separate and distinct. If there has been non-allowance of proper opportunity by the Revenue authorities, an aspect considered by us earlier, that by itself is a ground sufficient for seeking a set aside qua the relevant issue/s. The same, depending on the facts and circumstances of the case, could be an open set aside or for furnishing some specific evidences, either way serving the ap .....

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spose an appeal or for any substantial cause, including the enhancement of assessment, admit the evidence for the first time. The denial of opportunity to furnish evidence by either the assessing or the first appellate authority, in exercise of their power to adjudicate, is thus a separate ground - not under challenge before us, from that of non-allowance of opportunity, except where the lack of opportunity itself relates to or is toward non-production of the evidence, so as to form a sub-set th .....

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e and distinct aspects of the appellate proceedings before it. This constitute our second observation in repelling the case for the latter before us, the first being toward the matter being, in substance, factual. We have, it may be added, already found no merit in the assessee s argument of the Revenue to have awaited the conclusion of the proceedings before the ED prior to the completion of the assessment under the Act and, consequently, keeping even the appellate proceedings - which are only .....

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an expression of earnestness on the part of the assessee to come clean. There is also no way to hold the said list of bank accounts as exhaustive. We have, however, admitted the report by UBS AG, Zurich, dated 30.10.2007 to ED in the case of HAK (supra) (refer para 3.3 of the said order), to which reference stands also made by the assessee in support of his case, noting that the same as well as the facsimile dated 15.1.2007 by the Swiss Federal Government to the Embassy of India, both available .....

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if some reason not, the very fact of drawing the TI implies balance in the relevant account, at least to the extent. The rationale has been found by us as valid. The matter, however, has been, considering the entirety of the facts and circumstances of the case and for the reasons stated therein (refer paras 11-12, 15, 25, 30, 49 & 65 of the order supra in case of HAK), remanded back to the file of the A.O. to allow the assessee an opportunity to produce the copy of the relevant accounts, es .....

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the said account statement/s for the relevant period reveals no balance, or a balance which does not match at all with the transfer instruction, clearly drawing of the transfer instruction shall be of little consequence. The further question of it being given effect to, and the inference flowing there-from, would also not arise. In other words, as a corollary and a necessary adjunct to having decided in favour of the restoration of the assessment qua the additions made on account of transfer ins .....

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ch as the considerations for the same flow from the principle informing the admission of additional evidence/s by us as well as, similarly, in the case of HAK, the same represents our view point in the matter, so that it was considered only proper to state the same while discussing the said aspect of the assessee s appeals. 5.5 The foregoing discussion decides Grounds 3 and 4 of the instant appeals for all the years. A.Y. 2001-02 6. Ground # 5 is in respect of addition for ₹ 447 crores tow .....

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We have heard the parties, and perused the material on record. 7.1 The addition, thus, is based on a transfer instruction (TI), which though in the instant case is in the form of a letter, reproduced at para 11 of the assessment order as well as, prior thereto, in the show cause notice dated 19.12.2008, reading as under: The Union Bank of Switzerland Zurich July 16, 2000 Attn. Dr. Walli (Through UBS Dubai) Dear Sir, Please transfer a sum of US Dollars One Hundred Million (US $ 100,000,000) from .....

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, which in view of the Revenue cannot hold in view of the specific information contained therein, reliability of which, being received from an official source, cannot be doubted. The respective cases of the parties are thus the same, as in the case of HAK, which stands discussed at length by the tribunal at paras 9-12 of its order (in ITA Nos.4156-4162/Mum/2010 dated 29.2.2016), with paras 11 and 12 bearing its findings. The said addition, in fact, happens to be the first such addition, i.e., ba .....

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ns, and not found by the latter itself in search u/s. 132(1), so that section 132(4) as well as the statutory presumption of section 292C of the Act would, strictly speaking, not apply in relation thereto, to yet have a strong and persuasive evidentiary value. The non-mention of the transferors bank account number or its non-signing by him - though obtaining in some cases, stands discussed, as were the other aspects in relation thereto, viz. the background and the surrounding facts and circumsta .....

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pgs.914-917/APB-5) explains that to be the sole purpose and the raison de tre of his relationship with HAK, who, claimed to have access to huge funds, promised to invest in the assessee s projects. Whether that by itself was sufficient for the assessee to have, on the contrary, as claimed, incur heavy expenditure or, rather, transfer no insubstantial sums to HAK, i.e., to have continued to be deluded by the said promise for several years, is another matter. There is, however, sufficient evidenc .....

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h now debunks the same. Further, HAK vide his notarized statement dated 30.6.2003 at London (forming Annexure-C to the order afore-mentioned), whereat the assessee was also present, states of him as being his advisor. In fact, HAK was found to have lent ₹ 5 crs. to R. M. Consultants P. Ltd., Kolkata a company of KT (assessee) (refer paras 11-12, 18, 30.2 of the order afore-stated). The Revenue in fact is not obliged to prove the nature of the receipt or to locate its source, so that, where .....

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n given effect to. Then, again, even so, the addition is toward unexplained deposit (balance) in account, signified by the drawing of the TI itself. As such, even if not given effect to, the necessary implication and the inference of the balance in account shall follow and hold, justifying invocation of section 69A. There is implication for the transferee s case as well. This is as the TI implies a right in the amount sought to be transferred thereby, and presumably only on own account. This cou .....

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is, the nature of the debt, unexplained, is sufficient to attract the rigor of the provision. 7.2 No improvement in his case stands made by the assessee, i.e., vis-a-vis that before the Revenue, even as indicated above with reference to the arguments in respect of admission of additional evidence by the tribunal. So, however, and even as we say so, we cannot help but observing and, accordingly, state that the tribunal in the case of HAK (supra), decision in which case shall for apparent reasons .....

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with we finding no reason to take any different view in the matter. As such, for the same reasons as stated in the said order, and for which reasons reference is drawn to the six (6) paras thereof adverted to above, we decide likewise, i.e., restore the matter back to the file of the A.O. to adjudicate afresh, allowing the assessee an opportunity to establish his case. He shall be required to produce the relevant bank account/s to exhibit the non receipt of the relevant amount/s - in the whole .....

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re, however, no amount is received, the addition, solely on the basis of a TI, though could be made, would only be where the Revenue has any material to justify the accrual of income and, accordingly, would require being adjudicated on the basis of the entirety and facts and circumstances of the case. Qua TIs where no bank account is specified therein, in-as-much as the assessee cannot prove a negative, it shall, as also clarified in HAK (supra), suffice, i.e., the burden of proof on the assesse .....

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eceipt - in whole or in part, or the non-receipt of the stated sum/s, explaining as to why the receipt should not be deemed as income or, as the case may be, the reason for its non-receipt, and where so, the assessing authority shall decide, giving reasons in support of his decision. We decide accordingly. This also decides other TI based additions in these appeals by the assessee, facts of which are pari materia, being in fact also argued together, viz. Ground # 6 (for the current year). 8. Gro .....

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in the principal amount of ₹ 2 lacs and ₹ 1.25 lacs, to M/s. Harsh Enterprises and Mr. Ramlal Jain respectively, carrying interest @ 21% p.a., as well as brokerage amounts for the period 01.4.1992 to 31.3.2004 and 2006 respectively. Sums in relation thereto, however, fall for assessment for the subsequent years, as for A.Y. 2005-06. In explanation, the assessee vide letter dated 01.12.2008 stated that these were mere rough calculations and notings with regard to interest calculation .....

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03) and 49 (and 102), has vide his said letter dated 01.12.2008 admitted the same to be the loans from Harsh Enterprises and Ramlal Jain, in the stated sum of ₹ 2 lacs and ₹ 1.25 lacs respectively, claiming the same to be duly reflected in his books of account. Even as the same came to be added for A.Y. 2005-06 in the absence of the assessee producing the said books of account and, thus, substantiating his claim, the same abundantly clarifies the said notings to be not mere rough not .....

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ld not result in any double addition, i.e., as where the assessee explains the notings with reference to the notings in some other page/s, taken cognizance of and, accordingly, subject to addition. We state so only with a view to eschew any double addition on any account. We decide accordingly. This also decides Gds. 7, 5, 5, 5 and 14 (of A.Y. 2002-03 to 2006-07). 10. Ground # 8: Page 33 of Annexure A-2 to Panchnama dated 06.1.2007 reveals the details of ₹ 42 lacs given by the assessee to .....

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02 4,20,000 4,20,000 2002-03 4,20,000 4,20,000 2003-04 4,20,000 4,20,000 2004-05 4,20,000 1,00,000 10,000 5,30,000 2005-06 4,20,000 1,20,000 10,000 + 12,000 5,62,000 2006-07 4,20,000 12,000 4,32,000 2007-08 4,20,000 4,20,000 Total 29,40,000 2,20,000 44,000 The interest charged and received having not been disclosed as income, the A.O. sought to bring the same to tax. The assessee explained the same to be rough notings, and that no interest had in fact been received. Being unsubstantiated, the am .....

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at if at a future date some joint property is sold, the amount could be recovered, though no amount was recovered. How could, then, we wonder, the assessee explain the same as mere rough notings before the first appellate authority. At the same time, the assessee s explanation appears plausible. The same is though incomplete in-as-much as no details of the joint property have been furnished. What would therefore be required to be seen is if any property, held jointly, or even individually, stand .....

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ng examined as the same is indicative of funds in her hands, which could have been utilized to pay the assessee. De hors any materials or evidence toward her being in receipt of any sum, it is difficult to hold that the income had arisen to the assessee, considering her financial stringency. We have, rather, considered a claim by the assessee as valid in view of the statutory presumption of section 292C, so that his interest calculation implies an understanding to that effect. Why, the assessee .....

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o have been incurred for different years, from A.Y. 2001-02 (at ₹ 42,535/-) to A.Y. 2007- 08, tabulated at para 10 of the assessment order, as under: Sr. No. Name of the Bank Assessment Year Amount (in Rs.) 1 American express 2001-02 42,535 2 American express 2002-03 1,87,232 3 American express 2003-04 2,02,699 4 American express 2004-05 87,399 5 American express 2005-06 2,50,604 6 American express 2006-07 8,52,867 7 American express 2007-08 8,06,065 8 City Bank 2007-08 8,62,463 9 ICIC Ban .....

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essee failing to make any improvement in his case before the first appellate authority. 13. We have heard the parties, and perused the material on record. No improvement, again, to his case stands made before us by the assessee. We are, however, moved by the fact that the assessee has throughout maintained that the payments were made by cheque/s drawn on his regular bank account/s, duly reflected in his accounts, claiming no part of the same as deduction under the Act, being personal expenses. T .....

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an advanced stage of his life. We cannot but have regard to the trying circumstances in which he was placed during the relevant period as well as the complete disarray in which his office set-up went into on account of the search by the Revenue as well as ED and the subsequent proceedings. In fact, the tribunal has, taking cognizance of the similar circumstances and considering the injustice which a non-allowance of opportunity may entail, restored the matter for fresh adjudication back to the .....

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, which continues to be un-discharged, and adjudicate afresh per a speaking order in accordance with law. Needless to add, the assessee shall be allowed reasonable opportunity to present its case. We decide accordingly. 14. Grounds # 10 and 11 are toward disallowance of profit and loss expenses as claimed per the profit and loss account (Rs.5,91,650/-) and the add-back of creditors (Rs.21,14,448/-), as appearing in the balance-sheet furnished along with the return of income for the year. The ass .....

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careful consideration to the matter. Cleary the assessee s case has not been represented at all before the Revenue authorities, with the ld. AR claiming before us maintenance of proper records, toward which an opportunity may be granted or even additional evidence admitted by us. We, for the same reasons as inform our decision qua Ground 9, consider it fit and proper in the interest of justice that the matter is restored back to the file of the A.O. to allow the assessee an opportunity to presen .....

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d return having been furnished only on 26.3.2003, i.e., belatedly, precluding carry forward of determined loss in view of section 139(3). The facts are admitted, and the assessee s return stands filed beyond the time allowed for furnishing the return of income u/s. 139(1). The provisions of sections 139(3) and 80 are explicit in the matter. The said provisions, however, would came into effect only when the question of carry forward of the loss is to be determined, i.e., to the following years, t .....

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no question of application of sections 139(3) and 80, which would come into play only when a loss, determined under a particular head of income, is to be carry forward for set off against specific income/s for a subsequent year. The Ground, notwithstanding its being not raised before the first appellate authority, is accordingly admitted for adjudication - there being no dispute with regard to the relevant facts. As regards the issue on merits, i.e., set off of loss against the other income for .....

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10 qua expenditure, is set aside to the file of the A.O. with like directions. We decide accordingly. 17. Ground # 13 is merely a recount of the different Grounds in the form of a prayer, while Ground 14 is towards a leave to add or alter any ground of appeal. The same, therefore, do not arise for adjudication. We decide accordingly. A.Y. 2002-03 18.1 Grounds 1 to 4 stand decided vide paras 2 to 5 of this order. 18.2 We may, however, before we begin to address and adjudicate the other grounds ra .....

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earch u/s. 132 or requisition u/s. 132A of the Act. The said decision, being by the Hon ble jurisdictional High Court, is judicially binding. Per the same, the Hon ble Court has held that though a non obstante provision, so as not to restrict the power of assessment of the A.O. u/s. 153A, yet the foundation of action u/s. 153A is a search u/s. 132 or requisition of books of account or other assets u/s. 132A. As such, section 153A, enabling assessment in case of a search or requisition, making sp .....

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rder of the tribunal in All Cargo Global Logistics Ltd. vs. Dy. CIT [2012] 23 taxmann.com 103(Mum)(SB), reproduced at para 31). The Hon ble Apex Court in P. R. Metrani vs. CIT [2006] 287 ITR 209 (SC) had an occasion to consider the scope of the search and seizure proceedings under the Act. Approving the decisions in Pushkar Narain Sarraf vs. CIT [1990] 183 ITR 388 (All) and Daya Chand vs. CIT [2001] 250 ITR 327 (Del), and the reversing the decision in CIT vs. P. R. Metrani (HUF) [2001] 251 ITR 2 .....

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ed purpose of passing an order u/s. 132(5), and was not available for framing a regular assessment. The Hon ble Apex Court found the provisions (forming part of Chapter XIII-C) to have all the trappings of a small code in itself, embodying an integrated scheme (sections 132 to 132B) for a specific purpose, i.e., laying down a complete procedure for search and seizure; the power of the relevant authorities, and confiscation of the assets seized. The material seized though could be used as a piece .....

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-course duly confronting the assessee therewith) and, besides, is impermissible to be reviewed (CIT vs. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC)). Be that as it may, in all cases of completed assessment, as held by the Hon ble Court in Continental Warehousing Corporation (supra), binding on us, the scope of section 153A assessment shall be confined to the findings of the search or, as the case may be, requisition. 19. Ground # 5 is in respect of an addition for ₹ 2,43,80,000/- (the .....

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s a letter of authorisation, signed by the assessee in favour of PA, authorising him to act as his (assessee s) agent as well as of Mr. HAK, i.e., to represent him internationally. Pages 7 and 8 is a copy of the bill dated 05.4.2001 for USD 5 lacs raised by PA on the assessee (KT). The assessee not furnishing any satisfactory explanation, submitted vide reply dated 01.12.2008 (refer page 14 of the assessment order), the A.O. made the addition toward the same. No improvement in his case whatsoeve .....

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rland, and a close associate of HAK/KT, having been engaged by them to represent their interests internationally. There is sufficient evidence on record to establish this, and toward which we may refer to paras 11.5, 20A to 25, 103-106 of the tribunal s order dated 29/2/2016 in case of HAK (in ITA Nos. 4156 and 4162/Mum/2010). He was in fact found residing at the HAK s Pune residence at the time of search, as stated, since his arrival in India in October, 2006, with a view to pursue his outstand .....

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only confirms the validity of the documents found, so that negotiations toward purchase of real estate properties was under way; the bill by PA under reference being in respect of one such property - Hotel Chateau Gutsah, Luzern, Switzerland. The same was, however, not sold. Liability toward the services of PA could yet arise, being not in any manner dependent on the actual sale of the property and, therefore, validly raised, payment in respect of which could be understandably made. What is intr .....

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seized material lies, have furnished vague replies. Similar addition has been made, in fact also toward purchase cost of the said hotel, in the case of HAK, even though the tribunal found as a fact that the same had not materialized (refer paras 20A, 21, 22 of the order in HAK(supra)). It has, however, set aside the matter to the A.O. toward determining certain aspects of the transaction. The addition toward payment for services (to PA) was deleted for want of any evidence as to payment, with t .....

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ue, exhibit that no such payment, which could well be in the installments, has been made. True, there is no direct proof of payment, yet, by all indica the payments has been made; the assessee himself admitting to being in negotiation for purchase of real estate properties in Western Europe (albeit on behalf of unknown, unspecified friends), and having hired the services of PA for the purpose, so that the non-payment, as claimed, shall have to be reasonably proved. PA, after all, was pursuing HA .....

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ama dated 06.1.2007 (containing 29 pages), found and seized in search from the Pune residence of HAK and RHAK. It contains statement of open outstanding of his account with HAK as on 09.3.2002, reading as under: Position Particulars Quantity Unit In CHF 1.1 Loan to HAK via Mr. Tapuriah (UBP) 1 1,77,000 1,77,000 1.2 Commission promised by Mr. Tapuriah on pos 1.1 1 79,650 79,650 1.5 Mobile telephone bill Mr. Tapuriah 1 5278 5278 1.17 Courier medicine for Mr. Tapuriah 1 180 180 The assessee s submi .....

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see, would be of no moment, particularly considering the statutory presumption of section 292C. At the same time, however, we wonder as to how could the document be read to imply any income in the hands of the assessee (KT). Loan to HAK by PA, even if through the agency of the assessee, or commission promised by him, would not translate into income in his hands; the same being, without doubt, to the account of HAK. Similarly, the bills to the assessee (CHF 5458 for medicine, courier and telephon .....

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₹ 74,100/- on account of interest and brokerage. The same stands disposed vide at paras 8-9 of this order, adjudicating Gd. 7 for A.Y. 2001-02; the respective cases of both the parties being the same. 23. Ground # 8 is toward an addition for ₹ 4,20,000/- on account of interest income and ₹ 12,000/- on account of interest. The same stands disposed vide at paras 10-11 of this order, deciding Gd. 8 for A.Y. 2001-02; the respective cases of both the parties being the same. 24. Gro .....

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iled in breach of the time allowed for furnishing the return allowed u/s. 139(1) (refer para 14 of the assessment order). The assessee, however, claims it to be a loss for the current year. Be that as it may, it is only the loss as determined in assessment that could be set off, which is stated as made u/s. 143(3) on 31.3.2005 (APB 10, pg. 1785). We, accordingly, modify the impugned order to hold in favour of the loss, as determined, to the extent it relates to the current year, against income a .....

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accordingly. A.Y. 2003-04 27. Grounds 1 to 4 stand decided vide paras 2 to 5 of this order. 28. Ground # 5 is toward an addition for ₹ 1,07,700/- on account of interest and brokerage. The same stands already decided vide paras 8-9 of this order, adjudicating Ground 7 for A.Y. 2001-02; the respective cases of the parties being the same. 29. Ground # 6 is toward an addition for ₹ 4,20,000/- on account interest income. The same stands already decided vide paras 10-11 of this order, adju .....

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n exchange worth ₹ 9,45,269/- from 11.7.2002 to 05.2.12005. The assessee, in explanation, vide his letter dated 26.12.2008, submitted that the same, being for foreign travel, could only be verified from his old passport, no longer in his possession. Further, that all the payments stand made through cheques and are duly reflected in his income-tax returns. In the absence its substantiation, however, the expenditure incurred during the current year (Rs.2,21,990/-) came to be added as unexpla .....

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e require being examined for deductibility on the anvil of section 37(1) (or other relevant provision). Consistent with our decision qua other such disputed claims, which are ostensibly accounted for, we restore the matter back to the file of the A.O. to allow the assessee an opportunity to substantiate his claim/s, discharging the onus that lies on him in law. The A.O. shall adjudicate afresh, in accordance with the law, issuing definite findings of fact. We decide accordingly. This also decide .....

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. 2001-02; the respective cases of the parties being the same. 35. Ground # 11 is toward an addition for ₹ 7,04,266/- on account of returned loss. The same stands already decided vide paras 16 and 25 of this order, adjudicating Ground 12 for A.Ys. 2001-02 and 2002-03; the respective cases of the parties being the same. 36. Ground # 12 is merely a recount of the different grounds in the form of a prayer, while Ground 13 is towards a leave to add or alter any ground of appeal. The same, ther .....

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terest (Rs.4,30,000/-) and the principal amount (Rs.1 lac), representing the interest on past loans (Rs.4.20 lacs) and on a fresh loan of ₹ 1 lac (for medical expenses) received from Sushila Tapuriah. Our decision qua interest for earlier years shall obtain for the current year as well. As regards the principal loan (Rs.1 lac), we find no reason not to confirm the same. Apart from the loan being evidenced by the seized material, to which the presumption of truthfulness applies, the same is .....

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We decide accordingly. This decides Gds. 6 and 7 for A.Y. 2007-08 as well, being qua the same set of facts. 40. Ground # 8 is toward an addition for ₹ 87,399/- on account of unexplained expenditure on credit card payments. The same stands already decided vide paras 12- 13 of this order, adjudicating Ground 9 for A.Y. 2001-02; the respective cases of the parties being the same. 41. Ground # 9 is toward an addition for ₹ 74,614/- on account of amount of foreign currency purchased from .....

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or ₹ 20,78,661/- on account of unexplained loans and credits. The same stands already decided vide paras 14-15 of this order, adjudicating Ground 11 for A.Y. 2001-02; the respective cases of the parties being the same. 44. Ground # 12 is merely a recount of the different grounds in the form of a prayer, while Ground 13 is towards a leave to add or alter any ground of appeal. The same, therefore, do not arise for adjudication. We decide accordingly. A.Y. 2005-06 45. Grounds 1 to 4 stand dec .....

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his order. Further, this may be read in conjunction with para 39 of this order, adjudicating Grounds 6 and 7 for A.Y. 2004- 05, which decision shall, the facts and circumstances as well as the respective cases of the parties being the same, obtain for the current year as well. We decide accordingly. 48. Ground # 8: Pages 3 and 4 of Annexure CIL-1A, found and seized from the assessee s residence at Kolkata in search on 05.1.2007, is the working of cash-in-hand of KT (Assessee) and his wife (Chand .....

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be added in assessment for each of the three years, as well as confirmed in appeal. Aggrieved, the assessee is in second appeal. 49. We have heard the parties, and perused the material on record. The assessee claims the balance-sheet as on 31.3.2005 to reflect a balance of ₹ 4,83,804/-, which though is stated to have not been filed, leading to an addition qua the admitted cashin- hand (as on 31.3.2005) being unexplained as to its source. Similarly, for A.Ys. 2006-07 and 2007-08, the cash- .....

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ted are combined for both KT (assessee) and CT, so that only a single cash account, for both, has apparently been maintained by the assessee, deploying it for either deposit (in the bank accounts) or for user (for the purposes) of either. The matter is essentially factual; the assessee being called upon to explain the source of the cash available with him, and which he states as sourced from different bank accounts. The deposit of cash in bank is toward utilisation of the said cash; apart from e .....

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of the cash being withdrawn from bank account may by itself not be conclusive of the explanation as to the source of cash, which only translates into the source of the corresponding bank deposit/s /balance. We decide accordingly. This also decides Grounds 16 and 18 for A.Ys. 2006-07 and 2007-08 respectively; the facts and circumstances of the case as well as the respective cases of the parties being the same. 50. Ground # 9 is toward an addition for ₹ 2,50,604/- on account of unexplained e .....

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1/- on account of unexplained loans and credits. The same stands already decided vide paras 11 & 12 of this order, adjudicating Ground 11 for A.Y. 2001-02; the respective cases of the parties being the same. 53. Grounds # 12 and 13 are toward carry forward and set off of long-term capital loss and shor-term capital loss, claimed at ₹ 51,43,476/- and ₹ 35,43,583/- respectively. The same have been set off against long-term capital gain (LTCG) of ₹ 1,10,05,128/- disclosed by t .....

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ound 14 of the assessee s appeal, which follows consequent to the confirmation of the A.O. s action by the ld. CIT(A) in-as-much as no improvement stood made by the assessee to his case in the appellate proceedings. 54. We have heard the parties, and perused the material on record. Admittedly, the assessee has not adduced any evidence toward his claim of loss under the head capital gains , whether long-term or short-term, as well as the returned LTCG of ₹ 110.05 lacs, brought to tax, there .....

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the head capital gains obtains consequent to the A.O. s findings, issued having regard to the provision of section 71 of the Act, i.e., which allows the set off of loss from one head of income against income from another for the same year; the return having been filed only on 29.7.2006, i.e., much after the time allowed for furnishing the return u/s. 139(1), the same shall not be, in terms of sections 80 and 139(3), stand to be carry forward. Two, there is no indication if the assessment for th .....

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n the case of Continental Warehousing Corporation (supra). There is, firstly, admittedly no intimation u/s. 143(1) or order u/s. 143(3), so that the stated issue does not arise for consideration, save for A.Y. 2002-03, for which, as afore-discussed, concluded assessment u/s. 143(3) stands made. Further, this issue will also not arise for A.Y. 2007-08 for which no return has admittedly been filed u/s. 139 and the impugned assessment (u/s. 144) for which year is the original assessment. As, howeve .....

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law. On merits, the gist of the afore-said decision, even otherwise binding on us, stands stated at para 18.2 of this order, making reference to different paragraphs thereof. The same, carefully perused, in our view, makes it abundantly clear that when the Hon ble Court speaks of a completed assessment, it adverts and refers to just that, i.e., an assessment completed observing the due process of law, for which there is an order of assessment (or reassessment) in force as on the date of search o .....

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. This is also what stands clarified by the Board per its Circulars. Then, at para 12 (reproduced), it clarifies that in passing an assessment u/s. 153A r/w s. 143(3), the A.O. cannot disturb the finality of an (re)assessment order, unless of-course the relief granted under a finalised assessment is contrary to the facts unearthed during the course of section 153A proceedings. It further expresses itself unequivocally at para 29 (of its later decision), at pg. 660 of the Reports, as under: If th .....

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ion 153A). Whether the processing of the return u/s. 143(1) could be said to be an assessment is a matter dealt with, and can be said to be concluded by the decision by the Hon ble Apex Court in CIT vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. [2007] 291 ITR 500 (SC). Tracing the legislative history of the provision, for which it makes reference to its earlier decision in Apogee International Ltd. vs. Union of India [1996] 220 ITR 248 (SC), it explained that the legislative intent is very clear fr .....

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the power to make adjustment to removal of arithmetic errors or that otherwise apparent on the basis of the return itself or the documents accompanying the same. The processing of the return, leading to an Intimation u/s. 143(1), may not be done by the AO himself and, further, is without prejudice to the provision of section 143(2) (refer pgs. 507 to 510 of the reports). The intimation u/s. 143(1), it further explains, is not an assessment and cannot be treated as an assessment order, also expla .....

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ision in brief, may as well reproduce a part thereof (pgs. 509-510), as under: In the scheme of things, as noted above, the intimation under section 143(1)(a) cannot be treated to be an order of assessment. The distinction is also well brought out by the statutory provisions as they stood at different points of time. Under section 143(l)(a) as it stood prior to April 1, 1989, the Assessing Officer had to pass an assessment order if he decided to accept the return, but under the amended provision .....

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ed above that under the first proviso to the newly substituted section 143(1), with effect from June 1, 1999, except as provided in the provision itself, the acknowledgment of the return shall be deemed to be an intimation under section 143(1) where (a) either no sum is payable by the assessee, or (b) no refund is due to him. It is significant that the acknowledgment is not done by any Assessing Officer, but mostly by ministerial staff. Can it be said that any assessment is done by them? The rep .....

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lly, we may, for the sake of completeness of the discussion in the matter, which we have though found as completely covered by the decisions by the Hon ble jurisdictional and the Hon ble Apex court cited supra, consider the argument of the processing of a return u/s. 143(1) as leading to an assessment, i.e., after the expiry of the time prescribed for the service of notice u/s. 143(2), in the context of section 153A proceedings or a s. 153A assessment. There is no concept of deemed assessment, i .....

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ent (or reassessment), becomes finalized and cannot be visited again. That is, what s. 153A contemplates is an assessment of total income on a scrutiny of the assessee s claims, i.e., following the verification procedure under the Act, and due application of mind by the A.O. And it is precisely for this reason that where the assessment stands so framed, passing an assessment order, the same is held as not liable to be visited again. This is subject to the caveat that no adverse material, incrimi .....

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xpressing his opinion u/s. 143(1) does not arise. There is no determination of income in such a case by the A.O., who is precluded for making enquiries, nay, even affecting prima facie adjustments to the return (w.e.f. 01.6.1999). The income so accepted, being not determined by the A.O. and sans any assessment order, can only be said to be returned or processed income, and not assessed income. The assessee s argument, to our mind, constricts the scope of the proviso to section 153A beyond its ma .....

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ion (supra) and Murli Agro Products Ltd. (supra), judicially binding on us, and which we further find as consistent with the decisions in Rajesh Jhaveri Stock Brokers Pvt. Ltd. (supra) and Kelvinator of India Ltd. (supra), as also the scope and purport of a s. 153A assessment as explained by the Hon ble Courts of law. 55. Grounds 15 & 16 are in respect of disallowance of deduction for ₹ 1 lac and ₹ 1,18,406/- claimed u/s. 80G and 80D of the Act, made and sustained in the absence .....

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erely a recount of the different grounds in the form of a prayer, while Ground 18 is towards a leave to add or alter any ground of appeal. The same, therefore, do not arise for adjudication. We decide accordingly. A.Y. 2006-07 57. Grounds 1 to 4 stand decided vide paras 2 to 5 of this order. 58. Ground # 5 is toward an addition in the sum of ₹ 52,45,215/- on account of unexplained expenditure on the renovation of his residence at 10A, Prithviraj Road, New Delhi by the assessee. The assesse .....

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Kolkata residence, being dated 07/2/2006, relate to the period under consideration. They are in respect of renovation expenses of the captioned property, bearing the details of the work and the payment schedule, duly signed by the contractor. Summarising the expenses on various counts, as under, in the A.O. s view, the burden to rebut the presumption of section 292-C was on the assessee (reproducing the same at para 7), which he had not discharged by furnishing any material, merely denying the .....

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s of the addition, is placed at pgs. 1022 to 1038 of the assessee s paper-book (APB) [# 6]. At pgs. 1022 and 1038 is the communication in the nature of a Circular to all residents of 10A, Prithviraj Road, New Delhi - the assessee occupying Flats # 4 to 6, signed by one, Suresh Arora (on behalf of Rajan Kapoor, resident of Flat # 1), informing the cost of upkeep and maintenance, estimated at ₹ 6.25 lacs, to be distributed in 8 shares, of which two (2) fall to the share of the assessee. No a .....

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cription thereof, or even reference thereto, in the said papers. This figure is in fact of the cost of the civil work (as per the revised estimate at pg. 1035), with electrical work being estimated thereat at ₹ 8,80,000/- (i.e., both aggregating to ₹ 23,87,085/-). This, in fact, summarises the revised cost estimate (dated 07.2.2006), appearing at pgs. 1029 to 1036, being thus in supercession of the provisional estimate (dated 24.8.2005), appearing at pgs. 1023 to 1028, estimating the .....

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e assessee s plea of no work at all having been carried out due to paucity of funds, is a bald plea, not borne out by the record, which suggests otherwise. The very fact that the exercise detailing the work to be undertaken, alongwith concomitant cost, was carried out again, only implies a renewed interest in the project, which was for same reason not undertaken earlier. Would it be so, if the assessee was constrained for funds? The paucity of funds has not been shown in any manner, the assessee .....

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rst week), is to be made up to 95% after completion of 7 weeks. The onus is clearly on the assessee, who has not in any manner shown that, even to, the work was, though planned, not actually carried out, or was executed only partially, or that the same stands duly accounted, paid for through disclosed sources and/or only subsequently. In fact, no material in rebuttal has been brought on record at any time; the assessee merely denying the transaction. Then, the assessee states of the flats, purch .....

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f the flats, would be interested in the renovation, and was interacting with the contractor, specifying and discussing the works to be carried out, and would be called upon to pay, and whose names appears on the records of the resident s association/society inso- far as the communication there from is concerned - in other words, has, in any case, the beneficial interest in the flats, which he holds out to the world as belonging to him. Income-tax law recognises beneficial ownership as against le .....

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e no hesitation in confirming the addition in principle. However, as observed earlier, there is clearly a double addition of ₹ 15.07 lacs, even as pointed out by the ld. AR. We, accordingly, uphold the addition at ₹ 37,38,125/-. The assessee gets part relief. We decide accordingly. 60. Ground # 6 is in respect of an addition of ₹ 53 lacs on account of unexplained payment to one Syed Ahmed Abbas Naqvi (SN). Pages 3 and 3A (of the loose papers) seized during search on 05.1.2007 f .....

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s 14.02.06 5 lacs 16.02.06 8 - lacs 13.04.06 Balance 1.05 cr as on 16.4.2006 ₹ 3 lacs received from Mr. T. Balance 1.02 cr as on 23.5.06 The paper shows that ₹ 53 lacs were received by Sh. Naqvi from the assessee at various places and dates. Thus, leaving payable at ₹ 1.05 crore as on 16.4.2006. ₹ 3 lacs were again received from Mr. T thereby reducing balance to ₹ 1.02 crore as on 23.5.2006. Page No. 3 is as follows: From & to Mr. Tapuriah Rate 90,000 - USD = i. .....

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. 3A and ₹ 51 lacs as per pg.3), was paid by the assessee to SN, who vide a statement of oath u/s. 132(4) dated 05.1.2007 stated that the amount/s received were toward payments in respect of the transactions between the assessee and M/s. Soir Jewellers and, accordingly, the amounts were given to one, Mr. Imtiaz (of Soir Jewellers - SJ), on assessee s behalf. Copy of the assessee s accounts in the books of Soir Jewellers reflected payment/s received from KT (assessee) at ₹ 84 lacs (du .....

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ested of him was assistance by way of finance, and though the possibility of diamond exports was discussed with him, the same did not materialise, also disclaiming the transactions listed in the seized papers (vide statement u/s. 132(4) dated 11.1.2007). SN, on being confronted with the assessee s statement, would, in rebuttal, allude to the dishonour of cheque/s issued by CT in favour of SJ (pgs. 27, 28 of Annexure A2, seized from the assessee s residence) vide his statement dated 21.3.2007. Th .....

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the assessee s residence, further proved the same. The additions for the consecutive years, at ₹ 53 lacs and ₹ 54 lacs respectively, were confirmed, so that aggrieved, the assessee is in second appeal. 61. We have heard the parties, and perused the material on record. The documents found in search from the residence of assessee and SN, and the latter s statement given in explanation, to each of which the statutory presumption as to truthfulness of their contents u/s. 292C shall apply .....

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absence of which the assessee would yet be liable to explain the payments to him (SN). What, then, is the explanation for the payments recorded as received from assessee in the books of SJ. The assessee does not deny either knowing SN or HAK (stated in the documents found), or even SJ, admitting to having discussed business plans, which though did not materialize. Then, again, why were cheques (for ₹ 125 lacs) issued by CT, his wife, to SJ? The cheque (# 684614) dated 05.12.2005, signed b .....

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facts as found from the various documents seized in search. It is the assessee who, therefore, would be required to produce SN - who has merely affirmed the truthfulness of the documents found in search, even otherwise mandated by law (section 292-C of the Act). In our view, it is, on the contrary, the assessee who needs to explain the documents found from his residence in relation to this addition, as well as to how was SN in the know of the same, i.e., the dishonoured cheque and the lawyer s n .....

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pgs. 3, 3A) and the amount reflected as received from the assessee (Rs.103 lacs) in the accounts of SJ. The matter is purely factual, decided by us on the basis of the various materials found in search, to which the presumption of section 292C shall also apply, as well as that led in support, viz. the copy of the assessee s account in the books of SJ (f.ys. 2005-06 and 2006-07). Accordingly, the assessee s reliance on the decisions in the case of CBI vs. V. C. Shukla, AIR 1998 SC 1406 and Kishin .....

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e was further supported by a confirmatory email dated 15.12.2008 from the said Shabeeh Abbas Sayed, along with a copy of his passport. The assessee, on being confronted with the same, confirmed having fallen sick in London, and that, fearing hospitalisation, had requested for funds from his friend, SN, who arranged for the same through his friend, Shabeeh Sayed. However, as the assessee was not required to be hospitalised, the entire amount brought (GPB 20000) by the said friend was returned the .....

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es, and perused the material on record. Evidence in respect of the assessee having been paid GPB 20,000 (equivalent to INR 18 lacs) was found in the material seized in search from the residence of SN. The transaction is explained as occasioned by the assessee s medical condition in late 2005, while at London, requiring funds on an emergent basis, for which he contacted SN, who in turn arranged the same through his London based friend, Shabeeh Abbas Sayed. Mr. Sayed confirms the transaction, furt .....

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ither SN or Mr. Sayed any sum - on that account. The question, therefore, is whether it was accepted in the first place or not. The obligation to explain the source (of repayment) shall arise only in case of the former, resulting in an addition (to the returned income) where not satisfactorily explained. The assessee s explanation obviates that need by stating that the money, though offered, was in fact not accepted in-as-much as he was not required to be hospitalised. The explanation is contrar .....

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basis or material of it being so, i.e., of being not hospitalised. Then, the question is: How is it relevant? The explanation is sans any details - as for example the statement of medical expenses incurred (suitably supported), matching it with the funds available with the assessee thereat (also including that expended during his stay abroad) and, thus, justifying the claim that the need for funds would arise only in case of hospitalisation. Rather, as apparent, the funds were clearly required .....

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is evidence on record. The assessee in fact suffers, as a reference to his bail applications shall show (APB-4/pgs. 773-798), from serious medical problems, which only get accentuated with advancing age. The burden therefore to rebut the same, including by way of cross-examination (of the persons who were part of the evidence, and had issued corroborative statement/s), is on the assessee, whose plea qua the same, putting the blame for its non-conduct at the door of the Revenue, is not maintaina .....

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mains unexplained. We decide accordingly, confirming the addition. 64. Grounds # 8 to 11 are toward unexplained travel expenditure, found on the basis of the seized material, being Annexure A1 (pg. 109/Gd. # 8) and Ann. A2 (pgs. 40, 41 & 46 qua Gds. 9-11) to the Panchanama dated 06.1.2007. The same stand discussed at paras 8(iii), 9(i) to 9(iii) of the assessment order. In each case, the payments stand admitted, the evidence being in the form of passenger tickets in the assessee s name and/o .....

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ng Co. P. Ltd. (RMI), either directly or through personal expenses/withdrawals. The same stood not accepted by the Revenue in the absence of the assessee leading evidence toward the same. Surely, personal withdrawals cannot be on an omnibus account to explain any expenditure. These are specific payments, occasioned by specific evidence/s. No case for sufficiency of withdrawals, which are primarily for regular and household expenditure, is also made out. The ld. Authorized Representative (AR) wou .....

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ayments in cash are ascribed to personal withdrawals, the matter would necessarily require visiting the aspect of adequacy of such withdrawals, considering the assessee s lifestyle, including on health care, besides of-course the availability of cash on the date/s of payment/s. Then there is the aspect of duplication, vehemently made out during hearing, not as much as payments could be made through credit cards, for which separate addition/s have been made, and finally settled through cheque/s, .....

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ely for the current year (f.y. 2005-06), which the assessee (vide his reply dated 01.12.2008) explained to be in cash out of personal drawings in HUF account, besides - in case of telephone expenses, in cash and cheque/s in his account and of his wife. Also, the payment for the electrical bill, was made only in part (Rs.55,000/-), the balance being disputed. The same, however, came to be added and confirmed in the absence of substantiation of his claims by the assessee, so that, aggrieved, he is .....

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55,000/- are detailed in the bill itself. Also, there is nothing to exhibit of the balance being in dispute or not paid, the repair work in fact continuing upto 30.11.2005, over 2 month after the last payment of ₹ 10,000/- was made on 28.9.2000. As regards the telephone expenses, the same are in the nature of regular expenses. However, the bills found are for a part of the year (commencing from 15.1.2006 up to 01.2.2008), working to an average of ₹ 26,000/- p.m. The expenditure for .....

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r, monthly withdrawal of Rs. xxx (signifying the same), of which Rs.xxxx (stating the amount) is toward monthly telephone expenses, which would only but be a small part of the total expenditure that the personal/household withdrawal is toward, focussing thus on the adequacy thereof with reference to such expenditure. The explanation is wholly unsatisfactory, besides being unsubstantiated. Some of the impugned expenditure is stated to be paid by cheque, and which could well be from an explained s .....

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; the respective cases of both the parties being the same. 68. Ground 15 is toward an addition for ₹ 4,20,000/- on account of interest income and ₹ 12,000/- on account of interest. The same stands disposed vide at paras 10-11 of this order, deciding Gd. 8 for A.Y. 2001-02; the respective cases of both the parties being the same. 69. Ground 16 is toward addition qua unexplained cash in hand (Rs.25,95,000/-), and stands disposed vide para 48-49 of this order, deciding Gd. 8 for A.Y. 20 .....

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el agent, M/s. Travel Hub Pvt. Ltd., Kolkata. The date of journey (specifying the place) as well as of booking, along with the amount billed, is tabulated at para 14 of the assessment order, discussing the said addition. The assessee s case of the expenditure being accounted, without exhibiting the same, led to its confirmation, so that he is in second appeal. The assessee s case before us remains the same, i.e., of the same being accounted, besides also resulting in double addition in-as-much a .....

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, issuing defining findings of fact. We decide accordingly. 72. Ground # 19 is in respect of an addition for ₹ 6,48,665/- toward purchase of foreign exchange. The case of the parties is the same as qua Ground 18, so that we have no reason to take a different view, and decide likewise (also refer paras 31-32). 73. Ground 20 relates to an addition qua unexplained expenditure incurred during the relevant previous year in foreign exchange (GBP 2488), i.e., at ₹ 25,765/-, being toward boo .....

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22 are in respect of unexplained expenditure (at ₹ 81,727/-) and unexplained loans and creditors (Rs.33,09,861/-). The same stands discussed at paras 17 and 25 of the assessment and the impugned order respectively. The case of both the parties being the same, i.e., as for Gds. 10 and 11 respectively for A.Y. 2001- 02, we decide likewise. 75. Ground # 23: The assessee returned short-term capital gain (STCG) at ₹ 25,31,868/-, paying the tax thereat at the rate of 10%, which is claimed .....

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at ₹ 25,82,844/- (the assessment order though records the said date as 26.5.2008 - at para 19 thereof, which though under the circumstances, would be of little consequence) and, further, is backed by materials. We, for the same reasons as inform our decision with regard to Gd. 14 for A.Y. 2005-06, decide likewise. 76. Gds. 24 & 25 are in respect of denial of deduction u/s. 80G (Rs.2,683/-) and u/s. 80D (Rs.18,780/-) claimed by the assessee per his return of income. The basis for the sa .....

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any ground of appeal. The same, therefore, do not arise for adjudication. We decide accordingly. A.Y. 2007-08 78. Ground 1: The assessment for this year is distinguishable from that for the preceding years in-as-much as no return was admittedly filed u/s. 139 of the Act and, two, is framed u/s. 144 of the Act. The search conducted, being prior to the close of the relevant previous year, the search year, there is no question of the assessee having filed the return by that date or of the assessme .....

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assessee, as well as of HAK and SN, were supplied to his representative, Shri Pradeep Shah, CA, on 05.9.2008, 17.11.2008 and 21.11.2008. No return, despite notice u/s. 142(1), being filed, with the assessee also failing to make compliance, not responding even to summons u/s. 131 dated 16.12.2008, the assessment was finally framed u/s. 144 after duly show causing the assessee qua the same (vide letter dated 01.12.2008), also informing that the assessment was getting time barred on 31.12.2008, to .....

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ns any discussion in the matter. The assessee fails on its Gd. 1, which is accordingly dismissed. 79. Grounds # 2 to 4, common for all the years, stand decided vide paras 4 and 5 of this order. 80. Ground # 5: Annexure A1 to Panchanama dated 06.1.2007 is a bunch of seized miscellaneous papers, containing 110 pages. Page 46 thereof is a list of expenses (Rs.17,29,000/-) which were explained by the assessee to be an estimate drawn to meet certain liabilities. The same were expected to be met by sa .....

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rious expenses listed, aggregating to ₹ 17.29 lacs, is explicit, and in the nature of regular expenditure, viz. toward credit cards, electricity and telephone expenses, rent, staff salary and bonus, car instalments, etc. (with some also referring to the relevant month/s, being from June to November, 2006). There is no question of it being, as stated by the assessee, an estimate of certain liabilities to be met in future. Unless, therefore, the assessee explains the same with reference to i .....

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some of which are further stated to be sold, and which (sale) also stands reflected therein. That is, the said sale is the assessee s explanation toward the source - to whatever extent, of the said expenditure. Admittedly, only some of the shares have been sold later, so that the listing of the shares on the said page can at best be stated as of the holding, stated toward the intent of being sold. It could well be that the other shares were not sold (or required to be), or even that the same, th .....

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what price; when were the sale proceeds received and how were they applied, would be among the pertinent questions (of fact). Then, again, is the question of sale of shares being offered to tax, where exigible. The assessee has singularly failed to discharge the burden of proof on him. We, under the circumstances, consider it proper to restore the matter back to the file of the A.O. to allow the assessee one final opportunity to substantiate his claims with all the relevant material or evidence .....

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ame in accordance with law, issuing definite findings of fact. We decide accordingly. 82. Gd. # 6 concerns an addition (at ₹ 7,45,000/-), again based on seized material, being pg. 50 of Annexure A-1 (supra) (APB-6, pg. 1139). The same relates to some transactions for a total of ₹ 5,50,000/- with one, Binu Babu, and interest, again for three separate amounts, aggregating to ₹ 1,95,000/-. The assessee denied the transactions, stating them to be rough notings , which the Revenue d .....

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the assessee s explanation is selfcontradictory - stating the transactions as not representing actual transactions, but only rough notings, it questions the addition/s qua interest transactions (Rs.1.95 lacs) on the ground that these are by cheque, implying that these are actual transactions of (receipt of) interest. Could it be that a part of the transactions noted are actual, and the balance not? Further, the interest part, which is admitted, itself confirms the transactions to be financial t .....

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urnished, before him, and that the assessee had failed to discharge the burden of proof on him, only denying the transaction/s. The interest of justice, however, dictates our decision as to restoration; the interest amount indicated to be by cheque/s. Again, if the interest is accounted, could it be that the principal amount is not by cheque, though the question of it being accounted/disclosed is, again, wide open. The assessee, who is accorded one final opportunity to substantiate his claims, s .....

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of this order. We are conscious, we may add, that these are section 144 proceedings. However, the interest of justice and judicial proprietary would prevail in adopting a consistent approach. We decide accordingly. 85.1 Grounds 9 to 14 concern common issues, and are accordingly taken up together. We proceed by tabulating the basic details with regard thereto, as under: Ground Expenditure Based on Amount Remarks 9 Travel Seized material 2,15,000 10 Travel and other expenses Seized material 11 Tr .....

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expenditure has been included twice, i.e., based on invoice/s raised and/or payment and/or statement of account (including the amount shown as balance outstanding or carry forward); which we consider to be a distinct possibility, particularly in the absence of any explanation/ correlation in the assessment proceedings. Needless to add, the assessee shall regard it as one, final opportunity in the matter, allowed in the interest of justice. We decide accordingly. Reference is also made to Ground .....

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unt to tax. This decides the Grounds tabulated above, save Gd. # 10. 85.2 Ground 10 is in respect of unexplained expenses on viz. travel, mobile, AMC, personal expenditure (as on medicine), etc. (APB-6, pg. 1140). The statement is in the handwriting of, as it appears, the assessee. No explanation stood furnished, except for stating it to be through personal withdrawals, without of course showing it to be so. So, however, we observe that the expenditure includes payment for credit cards (American .....

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of only ₹ 10,000/- being outstanding. The assessee s claim of the amount being accounted (through personal withdrawals) stands rightly rejected by the Revenue, being unsubstantiated. The claim of only ₹ 20,000/- having been paid, though, merits acceptance, and no separate addition is called for qua pg. 1153. We decide accordingly, restricting the addition to ₹ 20,000, and the assessee gets part relief. 87. Ground 16 is in respect of telephone expenditure (mobile) for ₹ 3 .....

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lained cash-in-hand (Rs.13,53,000/-), and stands disposed vide paras 48-49 of this order, deciding Gd. 8 for A.Y. 2005-06; the respective cases of both the parties being the same. 90. Ground 19 is in respect of an addition for ₹ 50,000/-, based on seized material (APB-6/pg. 1207) on account of cash withdrawal (from RMC), toward incurring expenditure, viz. on mobile phone, salary (to five persons), etc. The assessee s stand is of the same being withdrawn from the books of Roberts, Mclean &a .....

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ersonal staff, or of any of his companies? If they are of RMC or some other company, how, we wonder, could the same, i.e., the said expenditure, be added in the assessee s hands? Again, if the companies are defunct, with no business, what, and for whom, the services were being rendered by them. No such inquiry stands made, the question in which respect may arise only where not accounted for in the books of the company/s, in which case the same could be considered as paid by the assessee in his c .....

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accordingly. 91. Gds. # 20 to 22 are in respect of three separate additions, based on seized material (APB 6/pg. 1208-1211), as under, which the assessee claims to be dumb documents: Ground Amount (in Rs.) Annexure CIL-1 (pgs.) APB-6 (pgs.) 20 10,07,426 11-12 1208 21 61,99,965 14 1210 22 1,99,94,946 16 1211 The assessee s only case qua the said documents, found from the premises of Chandrika Investments Private Limited, 27B, Camac Street, Kolkata during search on 05.1.2007, is that these are ro .....

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suspense, expenses, etc., and then summed up. The AO has added all such totals appearing at all the three pages. His totals are correct, except for that at page 14 (of Annexure CIL-1) - being at ₹ 68,28,506/- (as against ₹ 61,99,965/-). Also, the figure noted as 375853 is actually 3175853 , so that the relevant total would work to 96,28,506 (as against the adopted figure of ₹ 61,99,965/-). Continuing further, the documents are not dumb, as stated by the assessee. Against each .....

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assessable in his hands. The matter, accordingly, is restored to the file of the AO for fresh determination after hearing the assessee. We decide accordingly. 93. We may consider Grounds # 23 and 24, being related, together, beginning by tabulating the relevant data, as under: Ground Amount (in Rs.) Annexure CIL (pg.) APB (pg.) 23 26,67,914 17-19 1212-1213 24 4,57,048 21 - The assessee explains the amount, which is a subject matter of Ground 23, as working of the gratuity of staff, for making p .....

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pages (even as one page is missing in the assessee s paper-book). Page 1212 (of APB-6) is toward gratuity to staff and salary for April. True, the year is not mentioned, but the basic question is: With which company or concern - the assessee having proprietary business/es as well, were the said persons, i.e., G. S. Gupta, R. K. Lohia and B. K. Lohia, employed? The expenses on their salary and gratuity would stand to be paid by that firm. The assessee has not stated the name of the company/concer .....

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s the month of April would correspond to the time period when the gratuity was given to these persons. Being written on the same page (# 17 of Annexure CIL-1), immediately below the working of the gratuity to the very same persons, the salary (for the month of April) should be that following the financial year ending March, which appears to be March, 2005 (the period for gratuity being mentioned as 92 to 05). This gets in fact borne out by the gratuity amount (Rs.1,93,000/-) being included in th .....

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account of the relevant company, i.e., of the company/employer in case of regular staff salary/gratuity. This is as the company s being private limited companies, with apparently no regular business, the ultimate responsibility to discharge the legal obligations would be on the promoter-directors - KT, who may well have deployed them for personal purposes or for some other group concern. Even if finally recorded in the books of the company which is legally liable for the same, the question (of f .....

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ion, who shall decide in accordance with law, issuing definite findings of fact upon hearing the assessee, who shall also be supplied page 21 (of Annexure CIL-1), for ₹ 4,57,048/-, stated by him as not available. We having - for like considerations, similarly restored the matter for other years also, guided by the interest of justice, do likewise for the current year as well. The AO in the set-aside proceedings, we may clarify, would be at liberty; rather obliged to bring the correct amoun .....

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explanation by the assessee, the same does not appear in the computation of assessable income at para 20 of his order. The same is, thus, a mistake apparent from record. The assessee, accordingly, did not appeal this addition before the first appellate authority, whose order thus does not bear any reference thereto. The said Ground is accordingly not maintainable before us. We decide accordingly. 96. Ground 26 is qua credit card expenses, at ₹ 20,23,701/-. The brief facts are that the ass .....

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ond as he had no record of such expenditure, which was sought from different banks, and was awaited, except from ABN Amro bank, which was being forwarded. Further, the expenditure was in any case accounted for, being paid by cheque/s. The AO found the assessee s reply as sans any details, with even the stated information, stated received from ABN Amro bank, being not furnished. The same accordingly came to be added as income (by way of unexplained expenditure), and confirmed for the same reason, .....

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ven considering him as constrained for time before the assessing authority. The assessee s claim of the relevant expenditure being booked as personal expenses, thus, remains no more than a bald plea. His further statement of having not claimed the said expenditure in his income tax accounts, is, again, without merit in-as-much as the assessment is not based thereon - the assessee in fact not filing any return for the year. There is as such no material on record, except for the information receiv .....

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ssed. Besides showing if the assessee was stating the truth (or not), this would eliminate scope for any unjustified addition. The assessee s balance-sheet as on 31.03.2007 (APB-6/pgs. 1239 - 1240) shows personal expenses (other than withdrawals, at ₹ 3 lacs) at ₹ 17.07 lacs. Though not clear as to how the loss for the year as reflected in the profit and loss account (Rs.9.06 lacs) has been adjusted in the balance-sheet, we, admitting the same as an additional evidence, restore the m .....

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tickets), as found from the information gathered from M/s. Travel Hub Pvt. Ltd., the assessee s travel agent, as under: (Amount in Rs.) Date of Journey Date of Booking Sector Bill Amount 4.4.2006 1.4.2006 Bom/JRH/Bom 129106 13.6.2006 13.6.2006 CCU/Bom 72854 26.6.2006 24.6.2006 CCU/Del/CCU 29368 Open 6.11.2006 Open 63199 Voide Charge 200 24.5.2005 Swis Visa 18850 5.10.2005 Medical INS 2900 29.4.2006 Medical INS 1983 18.5.2006 UK Visa 15400 28.7.2006 Medical INS 2300 24.11.2006 Swis Visa & Med .....

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the same expenditure. The onus though, we may clarify, is strictly on the assessee, and set aside is only toward the limited purpose of explaining the source of the payment of the admitted expenditure. We decide accordingly. 99. Ground # 28 is in respect of addition for ₹ 5,41,000/- in respect of cash found from the assessee s Kolkata residence at the time of search on 5.1.2007. As the assessee did not furnish any evidence in support of his claim of cash being accounted, the same came to .....

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s at 31.3.2005. The data is only indicative in-as-much as sufficient cash balance at an earlier point of time does not necessarily imply or translates into an adequate (cash) balance at a given, later point of time. That apart, the search yielded a host of incriminating materials in the form of renovation (of house property), travel, healthcare, mobile/telephone expenses, etc. which being apparently unexplained/unaccounted, have been either confirmed or restored back to the file of the AO to all .....

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lf, failed to adduce any evidence toward the same being accounted for. So, however, considering that we have, as afore-stated, restored the addition/s toward different expenses, which would have a direct bearing on the availability of cash as on 05.1.2007, we consider it only proper that this matter is also restored to the file of the AO to enable proper adjudication, i.e., considering all the relevant aspects. The burden of proof to establish his claims would though be on the assessee. We decid .....

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ealth-tax returns for A.Y. 1999-2000. The assessee reiterated his stand in first appeal, emphasizing that they are old assessees, assessed to wealth tax, drawing attention to the returns , as afore-stated, for A.Y.1999-2000. Also, that the difference between the value of the jewellery (and utensils) shown in accounts, and that adopted for assessment, is on account of valuation, which had witnessed a manifold increase in the recent years - the market value as on the date of search being adopted f .....

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redit be allowed only in respect of that reflected in CT s books/returns, when the assessee states it to belong to and duly disclosed by three persons, including her? This requires to be explained or reconciled? The assessee, as it appears, has a strong prima facie case, given the fact of the three persons, to whom the jewellery and utensils found is stated to belong, being regular assessees to wealth-tax, and of it being reflected in their accounts, forming part of their income-tax returns, tho .....

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54 lacs stands made for A.Y. 2006-07 (Gd. 6) and 2007-08 (Gd.7) respectively toward payment/s to Soir Jewellers (SJ) against purchase of diamond jewellery, which has since been confirmed by us (refer paras 60-63 and 84 of this order). It is not clear as to what part of the valuables found consist of diamonds or diamond jewellery. Again, if (and to what extent) is the same old jewellery, which (jewellery) also cannot be put in locker prior to its purchase from SJ. However, where and to the extent .....

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of the assessee. We remit the matter to the file of the AO for allowing the assessee opportunity to state and present his case, considering that the expenditure is incurred through credit card/s, payment/s qua which have been also separately added. We decide accordingly. 104. Ground # 31 is merely a recount of the different Grounds in the form of a prayer, while Ground 32 is towards a leave to add or alter any ground of appeal. The same, therefore, do not arise for adjudication. We decide accor .....

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