TMI Blog2005 (2) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... by the learned Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal"). The facts are the assessee was the director of M/s. Cosmopolitan Construction (P) Ltd. (for short "CCPL"). A diary marked UPD 10 was seized in the course of search and seizure against CCPL. Particular entries in UPD 10 reflected that CCPL received consideration amount in cheque as well as in cash against the flats purchased under project P-206. The cheques were accounted for but it was alleged that the cash entries were unaccounted. This was sought to be alleged as income of the assessee out of his own business. The assessee contended that the sum of Rs. 2,95,002 belonged to CCPL. CCPL had earlier moved the Settlement Commission and made disclosures with details pertaining to the assessment years 1986-87 to 1989-90. CCPL filed an application before the Commission disclosing the said sum for the assessment year 1989-90. According to the assessee, since the said sum was subjected to tax at the hands of CCPL, it cannot be taxed in his hands. So far as the sum relating to Rs. 1,00,000 is concerned, the assessee requested one S.K. Pincha to make payment of the said sum to RICCO on his behalf a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve has not been able to establish the distinction between the disclosure before the Settlement Commission by the company and by the specific finding of the learned Assessing Officer as per the diary serial marked UPD-10 pages 96 and 97 which otherwise should have also been disclosed before the Settlement Commission. We are, therefore, of the view that the addition of Rs. 2,95,002 was made after specific enquiries by the income-tax authorities and the fact that the assessee has not been able to establish the complexity of number of projects undertaken, number of flats sold and those remaining unsold, cost of construction per sq. ft. as against the actual expenditure incurred by the company which could have left a residual income. All the cash transactions remained out of books of M/s. Cosmopolitan Construction P. Ltd. These facts are not borne out of the order of the Settlement Commissioner under section 245D. We, therefore, confirm the addition." While dealing with the addition of Rs. 1,05,625 the Tribunal held as follows: "We have considered the rival submissions and have gone through the paper book submitted by the learned Authorised Representative and we have also perused th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounted for the cash received. Subsequent to search, CCPL filed a settlement application before the Settlement Commission which included the assessment year 1989-90. Revised accounts were filed for the previous year wherein the aggregate amount of the advance received from the flat buyers in cash as well as by cheque was shown. In arriving at the cash amount received from the buyers of the flats, CCPL took into consideration the cash receipts reflected in the seized diary marked as UPD 10. The said diary mentioned in detail the names along with the dates, the amount received in cash as well as by cheque. According to Mr. Khaitan, pursuant to a specific query by the Settlement Commission, CCPL by letter dated September 13, 1991 explained the items appearing at pages 96 and 97 in the seized diary marked UPD 10, which appears at page 78 of the supplementary paper book. The Settlement Commission taking note of project 206 assessed the entire additional income of CCPL for the assessment year 1989-90 at Rs. 4,13,840 which included the income from the said project 206 after taking into consideration the undisclosed cash receipts including those reflected in the seized diary UPD 10. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal, but a copy of the purported affidavit affirmed by the creditor was filed. Since it was incomplete, the Department was justified in not relying on the same. Thus, according to Mr. Shome, the learned Tribunal was justified in confirming the loan credit under section 68 of the Income-tax Act, 1961, as there was no sufficient documentary evidence to prove the identity and credit-worthiness of the creditor. We have considered the submissions of Mr. Khaitan and Mr. Shome for the respective parties. Regarding question No. 1, it is to be determined whether in view of the disclosure made by CCPL, before the Settlement Commission, the learned Tribunal was justified in upholding the order passed by the Commissioner of Income-tax (Appeals). Since section 68 of the Income-tax Act casts an obligation upon the Revenue to apply its discretion judicially and rationally, it is to be seen whether while dealing with the issue, the identity of the person and creditworthiness were established and the genuineness of the transaction was tested. Before us pages 56 to 78 of the supplementary paper book reveal the names and details of payment made in cheques and cash which were disclosed by CCPL bef ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
