9911796707
TMI Blog2017 (5) TMI 1319X X X X Extracts X X X X X X X X Extracts X X X X ..... There was an assessment completed u/s. 143(3) of the Income Tax Act [Act] originally. As the case was selected for scrutiny under CASS in Cycle No. 1 of AST package for the AY. 2010-11 to verify the taxability of sale of property for the transaction amount of Rs. 63,89,000/- on 05-06-2008, which was registered at SRO, Gangamma gudi Road, Tata Nagar, Tirupati. During the course of scrutiny proceedings, Assessing Officer (AO) noticed that assessee along with his wife Smt. S. Suvarna, jointly purchased an immovable property for a consideration of Rs. 63,89,000/- on the said date. Hence, the transaction relates to 'purchase of property' and not 'sale of property'. Since the issue was of 'limited scrutiny' under CASS, the AO accepted assessee's contentions and completed the assessment, accepting the income returned vide order dt. 12-10-2011. It was stated in the body of the order that in response to the notices issued, assessee's AR Shri B. Mohan, CA appeared from time to time and furnished the information called for. After examining the details and facts of the case, the income returned is accepted and assessment is completed accordingly. 3. Later it has come to the notice, due to an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove contentions. Additional evidence was also furnished in the form of statement of earlier years which in fact were on the record of the AO as assessee was on record in earlier years. Ld.CIT(A), Guntur sent the additional information on remand to the AO, who vide letter dt. 09-10-2014, did not agree on verification of the capital account for the AY. 2008-09, whereas assessee stated that he has advanced the amounts in the earlier year relevant for AY. 2007-08. However, at the end, AO also reports that extracts of copies of all returns filed by assessee were forwarded to CBI in connection with another case and due to misplacement of files at that time, returns of income for AY. 2006-07 and 2007-08 were not readily traceable. While sending the report, there are certain wild allegations made by the AO that assessee seems to have produced false/fabricated evidence before the Hon'ble CIT(A). Assessee, however, gave a rejoinder making detailed submissions and as the file got transferred from Guntur to Kurnool again, submitted before CIT(A), kurnool detailed submissions which were again sent on remand to the AO. AO in the report dt. 28-12-2015 examined the capital accounts and the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/-. Under these circumstances, the assessee resorted to increase capital by way of return of advance money which was forfeited as on 01.04.2008, since the repayment of such huge amounts exceeding Rs.l0 lakhs by the parties on same day i.e. on 01.04.2008 was unusual. It is only after thought of the assessee to increase the capital by showing receipt of advance money which was forfeited by the landlords as the landlords will never repay the huge amount of advance money which was forfeited by them for the default of the assessee". 5. Consequent to the above report of AO, Ld.CIT(A) confirmed the addition by stating as under: "9. Ground No.1 is general in nature and do not call for any comments. 9.1 Ground Nos.2, 3, 4 & 5 are related to completion of assessment u/s. 144 and treating Rs. 33,33,080 as unexplained cash credits u/s. 68 of the Act. I find from the assessment order of the AO that the case was converted to scrutiny for verification of the taxability of escapement of income of a immovable property located at Gangamma gudi road, Tata Nagar, Tirupati. The said property was purchased by the appellant for a consideration of Rs. 63,89,000/- on 5-6-2008 vide Doc No-3003/2008. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the pretext that they are all tax paid remittances unless the appellant establishes this fact. As can be seen from the remand report of the AO, it is a case of unaccounted investment of money in the guise of investment made being returned and the claim of the appellant is untenable for the following reasons :- a) There is no clarity on the sums advanced and returned by the appellant b) The appellant has routed his unaccounted money into the books in the guise of advances returned c) In order to justify the sources for investment, the appellant retorted to this act of bringing in unaccounted money back into the books in the guise of loans/advances 9.6 The case was selected for scrutiny and assessment was made u/s 144 r.w Sec 147. The case came up primarily through CASS to verify the taxability of the property transaction amounting to Rs. 63.89 lacs on 5-6- 2008. It is not a case of the appellant voluntarily disclosing to the department the transaction and the resultant entries made. If not for the detailed enquiry launched by the AO, the whole unaccounted gamut of the transactions would not have come to the fore. Accordingly, I propose to confirm the action of the AO in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the return for that year by including the amount on the first day itself, which lead to the discrepancy. Instead of accepting the same, AO made wild allegations against assessee in the remand reports which are not warranted. Further AO also confirmed that assessee was having sufficient capital to advance the amounts for purchase of agricultural land. Those persons also were summoned and statements were recorded, who confirmed that they have returned the advances on advice from the elders of the village without forfeiting any amount. Having confirmed the amounts, AO still went on making certain wild allegations and AO also has threatened those people also that the amount which was paid to assessee will be assessed as other sources, as can be seen from the statement recorded vide Question No. 11 (placed in paper book at Pg. 53 & 56). It was the submission that the discrepancy for which the notice u/s. 147 was initiated having been satisfied by assessee, Assessee was put to inconvenience by making wild allegations and without any proper basis. 9. Referring to the order of the CIT(A), it was submitted that the findings in para 9.1 by the CIT(A) is entirely wrong. In fact the AO exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT [350 ITR 651] (Bombay). 13. In reply, Ld. Counsel submitted that the books were produced at the time of original assessment, the order sheet entries indicate that the purchase transactions were examined and assessee, as admitted by the AO, has sufficient capital to advance the amount of Rs. 36 Lakhs way back in AY. 2006-07 and receipt of those amounts after cancellation of such agreements was not an after thought. It was only a mistake in entering the opening figure as the advances received on 01-04-2008 itself and instead of reflecting the same separately, the consolidated amount on 01-04- 2008 was uploaded by mistake. For this mistake, assessee should not be punished and requested for expunging all the allegations made in the remand reports and also in the order of the CIT(A). 14. With reference to reopening the assessment, it was contended that all the information was furnished before the AO and the proceedings being without any tangible material and bad in law. He relied on the decision of Madhukar Khosla Vs. ACIT [367 ITR 165] (Del). 15. We have considered the rival contentions and perused the documents placed on record. As seen from the reports, the order of the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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