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2016 (9) TMI 1206 - ITAT CHENNAI

2016 (9) TMI 1206 - ITAT CHENNAI - TM - Unexplained investments - revision u/s 263 - Held that:- It is not disputed by the assessee that agreement for sale dated 09.01.2007 did mention an advance of ₹ 40 lakhs as paid by the assessee on that date. It is also not disputed that assessee had in a statement recorded from him on 27.04.2012 admitted such sum to be a part of his unexplained business income. The AO after going through the submissions of assessee had held that assessee had disclose .....

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n assessment year 2008-09. - No doubt, it is true that the said amount was considered in the assessment done for assessment year 2008-09. The Tribunal had an assessee’s appeal cancelled the said addition for a reason that the income did not belong to assessment year 2008-09, and the addition was based on confession given by the assessee. However, a reading of the assessment done for the impugned assessment year show that the AO after reaching a clear finding that the sum of 22.5 lakhs repre .....

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07-08 could not be considered in the said assessment year. However, at the same time what we find is that the PCIT had tied hands of AO by directing him to treat the sum of ₹ 22.5 lakhs as an unexplained investment for impugned assessment year without giving an open hand. Thus, while confirming the order of PCIT, we modify it to the extent that the AO shall proceed untrammeled by the direction of PCIT and shall complete the assessment in accordance with law. - Decided partly in favour of a .....

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e that there was a search in the premises of one Shri Madanlal D.Chawla on 10.01.2012. During the course of the search, a copy of an agreement of sale deed dated 09.01.2007 entered between the assessee and one Shri P.Pongopal was found and seized. As per this agreement, assessee had contracted to purchase eleven flats constructed by M/s.Ponram Promoters for a total consideration of ₹ 1,10,00,000/- against which an advance of ₹ 40,00,000/- was paid by the assessee on 09.01.2007 itself .....

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s known to him from his school days and purchase of flats was done by him as a joint venture with Mr.P.Murugesan. Contention of assessee was that only ₹ 17.5 lakhs out of the total amount of ₹ 40 lakhs belonged to him and this was offered as his income. Mr.P.Murugesan in his statement recorded u/s.131 of the Act confirmed the payment to the assessee. The AO was of the opinion that though Mr.P.Murugesan had appeared and confirmed the payment of ₹ 22.5 lakhs to the assessee, he h .....

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assessee before the Ld.CIT(A). The matter reached this Tribunal in ITA No.116/Mds/2016 dated 24.03.2016. This Tribunal held as under:- 5. We have heard both the parties and perused the material on record. There is no dispute that an agreement of sale was entered with Shri P.Pongopal on 09.01.2007. Consequent to this, assessee paid ₹ 40 lakhs advance. Out of this, assessee disclosed ₹ 17.5 lakhs as payment to purchase of flats. Further, there is a failure for disclosing the balance of .....

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e assessment year under consideration before us. The contention of the Departmental Representative is that since the assessee offered ₹ 17.5 lakhs, the part of advance out of ₹ 40 lakhs balance ₹ 22.5 lakhs has to be considered in the assessment year only. In our opinion, this argument of the Departmental Representative is devoid of merits. The confession given by the assessee cannot be a reason to sustain the addition as held by jurisdictional High Court in the case of Mariam .....

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ion on the part of the AO to make an addition of ₹ 22,50,000/- in the said assessment order. In reply to the above notice, assessee stated that all the facts relating to the issue were available before the AO. Assessee also pointed out that the very same amount was subjected to the assessment for assessment year 2008- 09. As per the assessee, the view of the ld. PCIT to assess the very same amount again for the impugned assessment year would result in taxing the same amount twice. Contenti .....

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the addition of such sum in the correct assessment year. He held that the assessment order for assessment year 2007-08 was erroneous in so far as it was prejudicial to the interests of the Revenue. He set aside the assessment order with a direction to the AO to redo the assessment, by bringing to tax the sum of ₹ 22.50 lakhs as unexplained investment u/s.69B of the Act for the impugned assessment year, after giving proper opportunity to the assessee. 3. Now, before us ld.A.R strongly assai .....

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passed on 21.03.2006, when the Ld.CIT(A) had in an appeal filed by the assessee for assessment year 2008-09 confirmed the addition. Thus, according to him the reasons cited by the ld.CIT for assuming the jurisdiction u/s.263 of the Act were non-existent. 4. Per contra ld.D.R submitted that assessee had during the course of statement recorded at the time of search accepted that the sum of ₹ 40 lakhs was his unaccounted business income. As per ld.D.R, the advance of ₹ 40 lakhs was paid .....

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of ₹ 40 lakhs as paid by the assessee on that date. It is also not disputed that assessee had in a statement recorded from him on 27.04.2012 admitted such sum to be a part of his unexplained business income. The AO after going through the submissions of assessee had held that assessee had disclosed only ₹ 17.5 lakhs in his return of income for the impugned assessment year against the unexplained investments of ₹ 40 lakhs. The AO had considered in detail claim of assessee that .....

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