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Champaklal S. Kasat Versus DCIT, Cent. Cir. 1 (3) , Ahmedabad

2016 (7) TMI 336 - ITAT AHMEDABAD

Assessment u/s 153A - Addition on the basis of noting found in the seized paper - Held that:- The document was found exhibiting transactions in respect of division of asset. The onus was upon the assessee to explain the position of this document. The assessee did not deny the document. His bald statement was that ₹ 75 lakhs was not received by him or the family members. Now this statement is to be tested in the light of other circumstantial evidences, which suggested the execution of this .....

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law. It cannot be the case that if one person could not be caught while infringing the law then, other one has also right to infringe or to break the law. Even if no inquiry was made in the case of Shri Ramesh S. Kasat how the assessee would discharge his onus to prove that in compliance of page no.129, he has not received the payments. Thus, taking into consideration of the facts, we do not see any reason to interfere in the concurrent finding of the ld.Revenue authorities. Addition confirmed b .....

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hri Gyan Pipara, AR For the Revenue : Shri R.I. Patel, CIT-DR ORDER Per Rajpal Yadav, Judicial Member The assessee is in appeal before us against the order of the ld.CIT(A)-III, Ahmedabad dated 14.02.2011 passed for the Asstt.Year 2004-05. 2. The grounds of appeal taken by the assessee are not in consonance with the Rule 8 of the Income Tax (Appellate Tribunal) Rules, 1963 - they are descriptive and argumentative in nature. In brief, the grievance of the assessee revolves around two issues viz. .....

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Drive-in-Road, Ahmedabad 1.11.2006. In order to give logical end to the proceedings, notice under section 153A of the Act was issued to the assessee, which was duly served upon him. In response to the notice, the assessee has filed his return of income on 21.2.2008 declaring loss at (-) ₹ 14,551/-. The ld.AO has issued notice under section 143(2) on 10.9.2008 which was duly served upon the assessee. During the course of search, loose papers were found which were inventorised as Annexure-A/ .....

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ment of the assessee was recorded under section 131(1A) of the Income Tax Act, subsequent to the search proceedings on 29.3.2007. He has also disclosed method and manner of the family partition between him and his brother. The AO, thereafter, took into consideration various details demonstrating the number of cheques issued by Shri Ramesh S. Kasat in the name of various family members of the assessee and how these cheques have been encashed. It is pertinent to observe that Shri Ramesh S. Kasat h .....

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; 26 lakhs were not honoured. Therefore, the assessee had received ₹ 30 lakhs by cheque and must have received the remaining amount of ₹ 79 lakhs which remained to be disclosed to the department. Accordingly, he made addition of ₹ 79 lakhs. 4. Dissatisfied with this, the assessee carried the matter in appeal. The ld.CIT(A) has reproduced the submissions of the assessee, and thereafter confirmed the addition. The ld.First Appellate Authority has confirmed the addition of ₹ .....

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acs by the appellant from Shri Ramesh Kasat as a part of settlement. During the course of appellate proceedings Shri Jagat Champaklal S Kasat was asked specifically about the remaining terms of settlements. To which he has admitted as under: a. The shares of Jagat Food and Jagat Iron and Jagat Industries were transferred during October 2003. b. Maheshwari sales Corporation(MSC) was dissolved on 14/2/2000 and became the proprietary concern of Shri Ramesh Kasat. c. The Dhana, Dhana Dal and kotri s .....

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also riot distributed 50-50. The agreement was signed by Shri Champaklal S Kasat and Shri Ramesh . Kasat. After the transfer of shares no further distribution or transfer was effected between the two groups. The transfer of shares of companies was the last such transfer. 7. As per the loose paper, total amount of ₹ 1.05 crores was to be paid by Shri Ramesh Kasat to Shri Champaklal S Kasat. Out of this , cheques of ₹ 56 Lacs was given. The cheque of ₹ 10 lakh was taken back by .....

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a mistake on the part of the AO. The total addition, if any, should have been made of ₹ 75 Lacs, that is, ₹ 1.05 crores minus ₹ 30 Lacs received by the appellant. Therefore, the AO was not justified in making the addition of ₹ 79 Lacs. He should have made the addition, if any, of ₹ 75 Lacs only. 7.1. On the merit of the addition, it is to be mentioned that Shri Jagat Kasat son of Shri Champaklal S Kasat in his statement recorded during the course of search admitted .....

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sat on the other side. Some of the companies were taken over by Shri Champaklal S Kasat group and others were taken over by Shri Rarnesh Kasat group. In respect of the division of stock in the ratio of 50-50, the agreement was honoured and in respect of other stock of other companies the division could not be made in the ratio of 50-50. In respect of such concerns, not only the stock was retained by the respective group but also the liabilities were retained in full. This means that the contents .....

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lant at the time of signing of the MOU. The balance amount of ₹ 75 Lacs was therefore received by the appellant from Shri Ramesh Kasat in the year under consideration only after the shares of the companies were transferred by the opposite groups. The contention of the appellant that since the AO has not taxed the amount of ₹ 75 Lacs in the hands of Shri Ranaesh Kasat, therefore, the same amount cannot be taxed as undisclosed income of the appellant, cannot be accepted by me. A mistak .....

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herefore, in view of the decision of honourable Supreme Court in the case of Sumati Dayal reported at 214 ITR 801, the preponderance of probability clearly shows that the amount of ₹ 1.05 crores was also received by the appellant when the full and final distribution of the business has taken place in the year under consideration. The addition of ₹ 75 Lacs, is, confirmed. In other words, out of the addition of ₹ 79 Lacs made by the AO, only ₹ 75 Lacs is confirmed. 5. Befor .....

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the answer on the ground that he has not made any declaration of undisclosed income. Thus, the alleged admission is to be excluded from the evidence. In his next fold of submission, he contended that the noting on page no.129 of Annexure A/1 has been signed on 4.1.2000, i.e. during the accounting period relevant to the Asstt.Year 2000-01. Even if that we accept, then no addition can be made in the Asstt.Year 2004-05. In his next fold of submission, he contended that the assessee as well as his s .....

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IT(A). He contended that all these aspects have been taken into consideration. The finding of the ld.CIT(A) is not based on any piece of evidence in isolation, rather, it is the result of setting of all the facts cumulatively. 7. We have considered rival contentions and gone through the record carefully. It is pertinent to observe that when the explanation or evidence of party is based upon a number of facts supported by any evidence and circumstances required consideration, whether the explanat .....

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duced by the ld.CIT(A) at page no.9 of the impugned order. It reads as under: ENGLISH TRANSLATION OF STATEMENT DATED 04-02-2000 SIGNED BY SHRI C S KASAT AND SHRI RAMESHBHAI KASAT ₹ 1.05 crores to be paid Jagat Food And MSC and C G road office to be given to Rameshbhai Jagat iron and Jagat Industries to be given to Champaktal Dhana , dhana dal and kotri stock to be distributed half half- ' Liabilities half half And alt rest half half Accounts to be finalized before 10-02-2000 Chandubhai .....

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he notings of Page No. 129 of Annexure A-l are in respect of your Business Partition. So, please give explanation in respect of each entry noted thereon. A.7 In this regard, I would like to state that I along with my family members and Shri Ramesh Kasat, who is my younger brother, were doing the business. Thereafter, in the year 2000, Shri Ramesh Kasat remove us from the business and in consideration for that he told me that he would give Rs. One crore five lacs and for that the business of Jaga .....

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standing in writing has been made on which there is sign of myself and that of Rakesh Kasat. 9. This question was asked almost five months of the search. Similarly, the ld.CIT(A) has made reference to the statement of the assessee recorded during the course of search and in the finding extracted supra, the ld.CIT(A) has highlighted as to how the assets have been distributed between both the brothers. In order to give effect of this page, Shri Ramesh S. Kasat had issued cheque of ₹ 56 lakhs .....

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ved in accounting year relevant to this assessment year. Thus, if we visualize the circumstances, then, chain of events is complete. The efforts at the end of the assessee to create a dent in the story of the AO that Shri Jagat Champaklal has not made any voluntary disclosure during the course of search, because he did not sign reply to question no.13 asked from him while recording his statement under section 132(4) of the Income Tax. We are of the view that even if this piece of evidence is exc .....

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he obligations for the purpose of this document, then, how the weight can be given to a simple denial of the assessee vis-à-vis the evidence suggesting that transactions performed in compliance of the documents. The next reason given by the ld.counsel for the assessee is that no inquiry was made in the case of Shri Ramesh S. Kasat. The assessment has been framed under section 153A r.w.s. 143(3) of the Act. It is pertinent to note that there is no negative equity in law. It cannot be the c .....

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jected. Addition confirmed by the ld.CIT(A) to the extent of ₹ 75 lakhs are upheld. 10. As far as next ground of appeal is concerned, the brief facts of the case are that the addition of ₹ 3,31,800/- was made by the AO on account of unexplained investment in respect of a property at Pan Market. This addition has been made on the strength of DVO s report. On appeal, the ld.CIT(A) has deleted the addition of ₹ 2,46,000/-. Similar addition was made in the case of Dinesh T. Kasat a .....

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t. As regards the merit of the addition, it is undisputed fact that the property in question was a tenanted property which the appellant was occupying for so many years and that the property was situated in the disturbed area, in my opinion, the valuation done by the DVO at ₹ 3,31,800/- is on higher side particularly if these two factors have considered. At the same time, the total consideration of ₹ 46,000/- shown by the appellant is at a lower side. It would be fair to estimate the .....

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r of the Tribunal]. In these cases, there were two issues before the Tribunal viz. addition on account of low withdrawals towards household expenses and addition on account of unexplained investment which was worked out on the basis of DVO s report. The Tribunal while dealing with this issue has observed that during the course of search no incriminating material was found which can help the AO to make additions. The finding recorded by the tribunal from para-3 to 5, in this case, read as under: .....

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luation made by the DVO on the instructions of the Assessing Officer. 4. It would be pertinent to mention here that both these additions have been made without there being any incriminating material found at the time of search. It is now well settled proposition of law that no addition can be made in the assessment made u/s. 153A of the Act pursuant to search and seizure operations u/s. 132 of the Act unless some incriminating material is found at the time of search. This proposition is well set .....

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r.w. s 143(3) of the I.T. Act could not have disturbed the assessment/reassessment order which has attained finality, unless the materials gathered in the course of the proceedings u/s. 153A of the Income Tax Act establish that the reliefs granted under the finalized assessment/reassessment were contrary to the facts unearthed during the course of 153A proceedings. If there is nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings, the AO wh .....

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