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2016 (11) TMI 954 - ITAT MUMBAI

2016 (11) TMI 954 - ITAT MUMBAI - [2016] 50 ITR (Trib) 315 - Unexplained sales - sale of shops on account of cash receipts which was not disclosed in the books of accounts - Held that:- Specific documents have been found during the course of survey which established factum of cash component involved in the sale of a shop. If the other shops which are identical in all respects are sold, then these are expected to fetch a similar price. There cannot be a variation of more than four times. The Reve .....

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the facts of the case before us. Our view also finds support from the judgment of Hon’ble Supreme Court in the case of CST vs. H.M. Esufali H. M. Abdulali [1973 (4) TMI 49 - SUPREME Court]. Thus, with the aforesaid directions, this issue is sent back to the file of the AO. - ITA No.957/Mum/2012, ITA No.5682/Mum/2014 - Dated:- 27-7-2016 - Shri Amit Shukla, Judicial Member, and Shri Ashwani Taneja, Accountant Member For The Revenue : Shri A. Ramachandran (DR) For The Respondent : Shri Chetan A. Ka .....

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on behalf of the Revenue. First we shall take up appeal of the Revenue in ITA No.957/Mum/2012 for A.Y. 2008-09 The Revenue has filed following grounds of appeal: 1.On the facts and in the circumstances of the case and in Law, the Ld.CIT(A) was not justif ied in deleting the additions amounting to ₹ 1,05,62,500/- on account of unexplained sales. 2.On the facts and in the circumstances of the case and in Law, the Ld.CIT(A) was not justif ied in not accepting the fact that there was an unacc .....

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2,500/- made by the assessee on account of unexplained sales made by the assessee on account of sale of shops on account of cash receipts which was not disclosed in the books of accounts. 3.1. Brief facts and background of this case as culled out from the order of the lower authorities are that on 10.01.2007 survey action was done by the department on the assessee firm and search action was done on its partners including Mr. Haresh Patel group. During the year, the assessee was engaged in the bu .....

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ee firm one document was found with regard to sale of ship No.03 wherein the aggregate sales consideration of the shop was shown at ₹ 27,62,500/- out of which a sum of ₹ 6,50,000/- was shown to have been received by cheque and balance amount of ₹ 21,12,500/- was shown to have been received by cash. On the basis of this document addition was made by the AO on account of unrecorded cash component of sale of shops in A.Y. 2006-07 for ₹ 40,00,000/- and A.Y. 2007-08 for ₹ .....

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on made for A.Y. 2007-08 but for A.Y. 2006-07 addition was deleted by him on the ground that no evidence was found by the AO. 3.2. Aggrieved by the order of Ld. CIT(A) for both these year both the assessee and Revenue filed an appeal before the Tribunal. Thereafter the Tribunal vide its order dated 24.02.2016 in ITA No.5113-5114/Mum/2009 quashed the assessment orders on legal grounds, without adjudicating the same on merits. Thus, the issues on merits have not yet been addressed before the tribu .....

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,500/- and brought to tax the same as undisclosed income of the assessee. 3.4. Being aggrieved, the assessee filed an appeal before the Ld. CIT(A) wherein Ld. CIT(A) relying upon his order for earlier years held that there was no evidence of receipt of on money and therefore, addition could not have been made in the impugned year and therefore he deleted the same. 3.5. Being aggrieved the revenue filed an appeal before the Tribunal. 3.6. During the course of hearing, it was submitted by the Ld. .....

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venue cannot close its eyes from truth which is writ large on the face of it. The AO had made an attempt during the course of assessment proceedings to extract truth from the buyers of these shops, but they being affected and interested party did not reveal complete facts. It was further submitted by him that assessee did not come out with proper documentary evidences showing that total market value of these shops was not more than ₹ 6,50,000/-. Under these circumstances, the impugned docu .....

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esidential flats only and since there was no cash component involved in the sale of shops, therefore, no disclosure was made with regard to sale of shops. It was further submitted by him that AO recorded statement of the buyers of these shops who had denied to have paid any cash component. It was further submitted that evidences were found with regard to sale of shops in A.Y. 2007-08 and no evidence was found for sale of shops in impugned year and therefore no addition could have been made only .....

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es before us. The impugned documents on the basis of which addition has been made was admittedly found at the premises of the assessee wherein certain facts were clearly mentioned which have not been denied or controverted so far. These facts are that shop no.03 was sold by the assessee for an aggregate consideration of ₹ 27,62,500/- out of which a sum of ₹ 6,50,000/- was received by cheque and balance amount of ₹ 21,12,500/- was received in cash. During the year under consider .....

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shops at ₹ 6,50,000/- per shop is exactly same as has been mentioned in the impounded documents. As per section 292C of the Income Tax Act 1961, where any books of accounts or other documents etc. are found during the course of search u/s 132 or survey u/s 133A, then it may be presumed that such books of accounts and other documents etc. belong to the person upon whom search/survey has been done and that contents of such books of accounts and other documents are true. Though, it has been .....

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o. 03 was sold for an aggregate consideration of ₹ 27,62,500/- which involved cash component of ₹ 21,12,500/- and cheque component (i.e. agreement value) of ₹ 6,50,000/- per shop. Under these circumstances, the law clearly stipulates and puts the burden upon the shoulders of the assessee to show that other shops did not have a cash component at all or the sales consideration of the remaining shops having identical location and other contribution was equivalent to their agreemen .....

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f income and determine tax payable thereon strictly within the parameters of law, but simultaneously, at various places, the legislature has also drafted appropriate safeguard provisions to ensure that the law of evidence under the income tax proceedings is applied in such a manner so as to ensure that tax evasion is checked. The game of burden is not static under the income tax law. The legal obligations between the assessee and AO swing like a pendulum. It keeps shifting depending upon facts a .....

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shops during the year before us. If the assessee claims that the factual position is different from the facts established on the basis of document impounded from him, then it was for the assessee to rebut the same that too with the help of adequate evidences admissible in the eyes of law. 2.10. We find that nothing has been brought during the course of assessment proceedings in this regard by the assessee. We also find that the AO also failed in bringing any further information or evidence on re .....

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assessee is free to bring further material or evidences on record to establish that sale transactions of these shops have been done only at the amount for which cheques were received by the assessee. If we confirm the addition at this stage without giving this opportunity to the assessee, then it may not be fully justified keeping in view principles of natural justice and facts of this case. The AO shall also make requisite verification of any details or document and may raise requisite queries .....

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ry income could not be ascertained of the current period. Similarly, in the case of Anand Kumar Deepak Kumar (supra), Hon ble Delhi High Court held that if unaccounted sale was found in a year, there cannot be general presumption that unaccounted sale will continue in the post search period also. We find that the facts of the case before us are totally different from the facts involved in these two cases. This case is not being decided merely on the basis of general past history. It is not a cas .....

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tricted tax evasion in our country. Under these circumstances, in the peculiar facts of this case, where specific documentary evidences were found, we find that the burden was clearly on the shoulders of the assessee to disprove or negate the effect of these documentary evidences upon other identical transactions. Therefore, the assessee cannot take the benefit of these judgments on the facts of the case before us. Our view also finds support from the judgment of Hon ble Supreme Court in the cas .....

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