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Shri V. SUBRAMANI, Versus The Asst. Commissioner of Income Tax, Central Circle I, Tiruchirapalli.

2011 (7) TMI 1270 - ITAT CHENNAI

I.T.A. No. 1047 & 1046/Mds/2011 - Dated:- 27-7-2011 - SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER Appellant by: Shri V. Subbarayan, DCIT (Retd.) Respondent by: Shri K.E.B. Rengarajan, Jr.Standing Counsel O R D E R PER SHRI S.S. GODARA, JUDICIAL MEMBER : These appeals have been preferred by the assessee against the order of the CIT(Appeals), Tiruchirapalli, dated 28.3.2011 passed in ITA Nos.414/08-09 & 416/08-09 pertaining to Asst. years 2003-04 and 2005-06 .....

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search some incriminating evidence was allegedly found from the assessee s premises. Thereafter, a notice under sec.153 of the Act was served on the assessee on 21.6.2007. In response, the assessee filed his return of income as follows:- Asst. Year Date of Filing Income returned 2001-02 12/08/2008 40,690 22002-03 12/08/2008 49,190 2003-04 12/08/2008 53,120 2004-05 12/08/2008 86,800 2005-06 12/08/2008 1,40,620 2006-07 12/08/2008 1,65,280 2007-08 22/11/2007 1,17,000 3. The Assessing Officer issue .....

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n the preassessment show cause notice ie. inadequate drawings, unexplained investment in residential house, unexplained cash credit, election expenditure. 5. With regard to unexplained investment in the residential house, the Assessing Officer found that the total cost of construction of the residential house (co-owned by assessee and his wife) was as follows :- Asst. Year Subramani Inbajothi Total Value 2003-04 2,73,300 - 2,73,300 2004-05 2,73,300 2,73,300 2005-06 2,73,300 2,50,000 5,23,100 200 .....

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amount ie. G.3,19,486/- (5,92,960 - 2,73,474) In this manner, the assessee s income was computed as G.6,20,306/-. 6. The assessee preferred appeal before the CIT(Appeals) wherein the addition towards drawings has been restricted to G.14,000/- only, unexplained cash credit of G.1,10,000 as well as election expenses (supra) stand deleted. As far as unexplained investment of G.3,19,486/- is concerned, the same has been confirmed. Therefore, the assessee is aggrieved. 7. In support of various submi .....

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ssessee s wife) and prayed for acceptance of the appeal. 8. The Departmental Representative, on the other hand has strongly supported the order of the CIT(Appeals) and prayed for rejection of the appeal. 9. In view of the submission of both the parties, the moot question before us is whether the CIT(Appeals) has rightly confirmed the Assessing Officer s finding regarding unexplained investment in the case of assessee? 10. We have given our thoughtful consideration of the matter and have also gon .....

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Even if the same is accepted, the fact that the construction lasted upto Asst. Year 2007-08 cannot be lost sight of. The record of the case available before us also highlights the fact that the house is coowned by the assessee and his wife. In the case of assessee s wife, the cost of the house has been adopted as G.13,64,864/- and the same amount has been declared by the assessee. In his wife s case, the entire cost of construction stands accepted by co-ordinate Bench as well (Chennai ITAT). Mea .....

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. Hence, we see no reason to sustain the addition confirmed by the CIT(Appeals). Accordingly, the same is deleted. 11. ITA No.1046/Mds/2011 : The facts of this case are that in the same very search herein above, the Department allegedly came across certain jottings mentioning some unexplained payments by the assessee. Consequently, a notice under sec.153A of the Act was served on the assessee. In response to the same, the assessee filed return of income of G.1,40,620/- on 12.8.2008. Thereafter, .....

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Assessing Officer held on the basis of jottings that the assessee had failed to explain the entries. Therefore, the Assessing Officer invoked the provisions of sec.69(c)of the Act and treated the said payment as unexplained expenditure . 13. The assessee preferred appeal before the CIT(Appeals) wherein the addition made by the Assessing Officer qua inadequate drawings has been restricted from 1,51,000/- to G.86,000/-. Regarding the addition of unexplained expenditure, the Assessing Officer s fi .....

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s as well as pleas raised in the grounds of appeal and submitted that the CIT(Appeals) has wrongly confirmed the addition of G.2,90,000/-. In this regard he has also placed reliance on the judgment of Hon ble Punjab & Haryana High Court in the case of CIT v. Atam Valves (P) Ltd (332 ITR 468 (P&H) and the judgment of Hon ble Gujarat High Court in the case of CIT v. Maulikkumar K. Shah (307 ITR 137) (Guj.). In the light of the above judicial decisions, he has prayed for acceptance of the a .....

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findings as well as case law cited before us. It transpires that the basis of addition ie. unexplained payments is the jottings recovered by the Department in the course of search proceedings which are available before us in Tamil transcription. On our asking, the DR has read the contents as under :- Account for amount given : President of the District … G. 80,000/- Counselor … G.1,30,000/- Chairman of Panchayat … G. 80,000/- I have written the above said account. 18. We obs .....

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conclusion. While holding so, we draw support from the case law reported in 332 ITR 468(supra) wherein it has been observed as under :- During the pendency of assessment proceedings, a survey was conducted by the Department under Section 133A of the Income-tax Act, 1961 in the premises of the assessee and certain incriminating documents were found including a 'Slip Pad' containing payment of wages to various persons. The slips were written by an employee of the Assessee. The employee an .....

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