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Assistant Commissioner of Income Tax Circle-2 Kota Versus Surendra Pal Singh Sahni

Unexplained cash at Bank and cash in hand U/s 68 - Undisclosed bank accounts - undisclosed rental income - Held that:- Assessing Officer had made addition on the basis of closing balance, the assessee also not submitted the details of credit and debit entries of all the bank accounts for the year under consideration, therefore, the assessee was also not came with clean hands after evading tax from F.Y. 1997-98 by acquiring Kirti Nagar, New Delhi flat. Thereafter Bal Mandir house, Kota in A.Y. 20 .....

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on rent. Even the assessee had not disclosed full particulars of income from where he earned the undisclosed income. This question was asked by the Bench at the time of hearing but no positive reply was given by the ld AR of the assessee. Therefore, in absence of full details, the ld Assessing Officer has to decide the assessee’s case on estimated basis. Further the ld CIT(A) also had not passed reasoned order, so that we can conclude that he was justified in deleting the addition made by the l .....

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ficer and the appeal is allowed for statistical purposes only - ITA No. 673/JP/2014, C.O. No. 35/JP/2014 - Dated:- 23-6-2016 - SHRI KUL BHARAT, JM AND SHRI T.R.MEENA, AM For The Revenue : Shri R.S. Dangur (Addl.CIT) For The Assessee : Shri C.M. Birla (C.A.) ORDER PER T.R. MEENA, A.M. The appeal filed by the revenue and cross objection filed by the assessee arise against the order dated 25/7/2014 passed by the ld. CIT(A), Kota for the assessment year 2005-06 wherein the Revenue as well as the ass .....

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s submission that he has disclosed rental income what he actually received which has necessitated him more payment of tax on undisclosed income ₹ 8,71,000/- which could have been otherwise less by ₹ 21,600/- being 30% of ₹ 72,000/-. 2. The assessee filed his return for the A.Y. 2005-06 on 31/7/2005 declaring total income at ₹ 1,28,940/-. The assessee has income from house property and other sources. The ld Assessing Officer observed that the assessee had filed revised ret .....

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e as he cannot now take the plea of his coming forward to offer his income voluntary for tax. In fact he was continuing evader of tax, who had now filed return of income to regularize his undisclosed income. Thereafter the ld Assessing Officer issued notice U/s 143(2) and 142(1) of the Act alongwith questionnaire dated 29/11/2012. The assessee had shown undisclosed income in revised capital account, which is as under:- Rent from L-113, Kirti Nagar New Delhi Flat ₹ 132000/- Rent from Bal Ma .....

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rent from L-113, Kirti Nagar, New Delhi Flat at ₹ 1,32,000/- for which no rent agreement had been produced and rent was received in cash. In absence of any written rent agreement, the mere explanation of the assessee cannot be accepted. It has to be something more, accordingly, he proposed rental income at ₹ 17000/- per month. The assessee had also given the reply and claimed that the assessee would have got standard deduction @ 30%, if he would have shown higher rental income, whic .....

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e assessee, he estimated the rental income on the basis of ₹ 17,000/- per month for the property situated at Kirti Nagar, New Delhi and difference of ₹ 72,000/- was added in the income of the assessee. The ld Assessing Officer further observed that as per revised balance sheet, cash at bank was ₹ 50,29,106/- and cash in hand was ₹ 21,01,548/-. The assessee stated that these were the balances of Benami account and cash in hand from his cash books. The assessee had filed an .....

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that the above money could be attributable to which particular or source of income in respect of cash deposited in the bank. The only contention being these balances were getting carried over from the cash book/bank account balances for the previous years. After considering the assessee s reply, the ld Assessing Officer held that the cash deposited in the bank accounts are undisclosed income of the assessee. The assessee claimed that the amounts deposited in the bank were out of house rent, bank .....

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lt of opening balance + income during the year - withdrawals during the year. The assessee claimed that the income was separately added by the Assessing Officer and the opening balance cannot be taxed in the current year, therefore, no addition on the basis of closing balance of bank account can be made. Four benami accounts firstly disclosed in the F.Y. 2011-12 and before that these were not known to the department, therefore, benefit of these years U/s 148 was not available to the assessee as .....

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08) CTR 208, the same cannot be taxed. All four accounts belonged to the assessee, thus the Assessing Officer should have proceeded as if these accounts were assessee s accounts. Once these accounts were treated as assessee s account, opening balance of these accounts could not be taxed in the hands of assessee in the light of Hon ble Rajasthan High Court decision in the case of CIT Vs Parmeshwar Bohra (2007) 208 CTR 218 (Raj). Accordingly, he allowed the appeal. Similarly, he also deleted the a .....

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R has vehemently supported the order of the ld Assessing Officer and further argued that the ld CIT(A) has allowed the appeal without providing any opportunity to the Assessing Officer on evidences submitted during the course of appellate proceedings. The belated return was not voluntary but these bank accounts were first time disclosed in the F.Y. 2011-12 on 18/4/2011 and before that these were not known to the department. Accordingly, opening balance is also undisclosed income of the assessee .....

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He suo moto revised his return from A.Y. 2005-06 to A.Y. 2010- 11 on 18/4/2011 and paid tax of ₹ 42,50,280/-. The assessee also enclosed revised capital account and revised balance sheet alongwith the return and also financial statement for the A.Y. 2005-06 and followings additional opening balances were taken as on 01/4/2004:- (i) Kirti Nagar New Delhi Flat which was purchased in F.Y. 1997-98 ₹ 810000/- (ii) Bal Mandir Kota House which was purchased in F.Y. 2001-02 ₹ 1584830/ .....

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h book, which is cross verified by the ld Assessing Officer, if there was insufficient fund for bank deposit, it is taken as undisclosed income. Total of such income during the A.Y. 2004- 05 was ₹ 8,71,000/-. After claiming standard deduction, additional income of ₹ 15,44,610/- was disclosed by the assessee. The ld Assessing Officer had verified all entries of the bank accounts as well as cash book, which has not been disputed by him. The closing balance in all the bank accounts were .....

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the parties and perused the material available on the record. The assessee had submitted that additional income after claiming of standard deduction had been shown at ₹ 15,44,410/- whereas total income disclosed in the belated revised return at ₹ 16,73,352/-. The assessee considered the rental income from the Kirti Nagar, New Delhi flat, Bal Mandir House, Kota, interest from bank and on account of insufficient fund at ₹ 8,71,000/-. It is undisputed fact that four Benami accoun .....

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basis of closing balance, the assessee also not submitted the details of credit and debit entries of all the bank accounts for the year under consideration, therefore, the assessee was also not came with clean hands after evading tax from F.Y. 1997-98 by acquiring Kirti Nagar, New Delhi flat. Thereafter Bal Mandir house, Kota in A.Y. 2001-02. The assessee disclosed shortage of cash as income at ₹ 8,71,000/- but it is not clear where this amount has gone, which is statutory obligation on t .....

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