TMI Blog2017 (9) TMI 1684X X X X Extracts X X X X X X X X Extracts X X X X ..... s) : Mr. Mahendra Gargieya with Mr. Lokesh Tai JUDGMENT Since these appeals arise out of the same order, they are being decided by this common order. By way of these appeals, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has partly allowed the appeal of department as well as the appeal of assessee was allowed. This Court while admitting the ITA No.35/2012 on 14.08.2014 has framed following substantial question/s of law:- (1) Whether the Tribunal was justified in on one hand not interfering with the finding that no books of accounts and supporting bills/vouchers were maintained by the assessee at the time of search and simultaneously, on the other hand reducing the addition made on the ground of unexplained construction and working in progress expenses of ₹ 22,32,583/- to merely ₹ 63,770/-? (2) Whether the Tribunal was justified in deleting the addition of ₹ 46,74,000/- made by the Assessing Officer on account of suppressed sales shown by the assessee, even when the documents found during search were corroborated by the assessee s statement recorded u/s 132(4) of the Act and whether an impossible bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of unexplained construction and working in progress expenses of ₹ 13,00,000/- to merely ₹ 50,000/-? (2) Whether the Tribunal was justified in deleting the addition of ₹ 75,000/- being expenditure paid in cash in violation of the provision of Section 40A(3) of the Act, on the ground that since other addition has been made disallowance under this Section is not required? (3) Whether the Tribunal was justified in deleting the addition of ₹ 77,14,000/- made by the Assessing Officer on account of suppressed sales shown by the assessee, even when the documents found during search were corroborated by the assessee s statement recorded u/s 132(4) of the Act and whether an impossible burden can be placed on the revenue to establish the excess consideration received by the assessee? (4) Whether the Tribunal was justified in deleting the addition of ₹ 31,93,100/- made by the Assessing Officer u/s 68 of the Act on account of unexplained cash credit, despite assessee failing to furnish any documentary proof in support of the said cash credits and whether that tantamount to not affording adequate opportunity to the assessee? This Court while admitting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal was justified in deleting the addition of ₹ 73,61,00,000/- made by the Assessing Officer and confirmed by the CIT(A) on account of unexplained cash credit, in spite of holding that the transaction was benami transaction of the assessee? (6) Whether the Tribunal was justified in deleting the addition made on account of unexplained cash found during search of ₹ 10,00,000/- when the same was accepted and offered by the assessee for taxation and no retraction was filed by the assessee, by simply relying upon cash book prepared by the assessee after the search proceedings? (7) Whether the Tribunal was justified in deleting the addition of ₹ 2,10,00,000/- which was made by the Assessing Officer and confirmed by the CIT(A) on account of unexplained investment of the assessee in the Global City Project, when no evidence in support of the said investment was submitted by the assessee? (8) Whether the Tribunal was justified in deleting the addition of ₹ 83,91,000/- which was made by the Assessing Officer on account of unexplained cash deposit of the assessee in bank accounts in the name of various persons, even after confirming the finding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itting the ITA No.47/2012 on 05.04.2012 has framed following substantial question/s of law:- (i) Whether the Tribunal was justified in deleting the addition of ₹ 3,42,60,562/- being expenditure paid in cash in violation of the provisions of Section 40A(3) of the Act? (ii) Whether the Tribunal was justified in giving benefit of Rule 6DD(g) to the assessee, ignoring that the conditions provided in the Rule were not existing and part payment was made by cheque to such persons? (iii) Whether the Tribunal was justified in deleting the addition of ₹ 79,52,500/- made by the Assessing Officer u/s 68 of the Act on account of unexplained cash credit, despite assessee failing to furnish any documentary proof in support of the said cash credits and whether that tantamount to not affording adequate opportunity to the assessee? This Court while admitting the ITA No.50/2012 on 14.08.2014 has framed following substantial question/s of law:- (1) Whether the Tribunal was justified in on one hand upholding the finding that no books of accounts and supporting bills/vouchers were maintained by the assessee at the time of search and thereby confirming at the of searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich reads as under:- S. N. Question of law DBITA No. 37/2012(AY05-06) A/o 228 154/JP/11 DBITA No. 40/2012 (AY04-05) A/o 153 227/JP/11 DBITA No. 50/2012 (AY06-07) A/o 155 229/JP/11 DBITA No. 44/2012 (AY07 -08) A/o 391 431/JP/11 DBITA43/2012(AY08-09) A/o 392 487/JP/11 1. Whether the Tribunal was justified one hand upholding the finding that no books of accounts and supporting bills/vouchers were maintained by the assessee at the time of search and thereby confirmed the rejection of books of accounts and simultaneously, on the other hand reducing the addition made on the ground of unexplained construction and work in progress expenses. AO CIT ITAT Q No. Addition Pg 6-7 (PB 22-23) Pg 19 Pr. 3.4 (PB48) Pg 2 Pr. 2.6 (PB 83) 1 ₹ 40,00,000/ - Pg 6 pr 8 (PB24-25) Pg 5-6, Pr.3.3, (PB 65-66) 1 13,00,000/- Pg 4 Pr (PB 23) Pg 6-9 Pr. 3.3 (PB38) A/R (PB71) 1 50,00,000/- Pg6-7 Last (PB 26-27) Pg 12-13 Pr. 3.3.3. (PB 53- 54) Pg 12-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 (PB 94-95) 4 ₹ 56,52,427/ - Pg 12 last (PB 30) Pg 13, Pr. 7, (PB 49) Pg 17 Pr. 6. 7 (PB 80-81)4 3193100/- Pg 10-11 Pr (PB 29) Pg 27-33 Pr. 9.4 (PB 59- 65) Pg 29 Pr 8. 5 (PB97) A/R (PB71) 4 69,17,000/- Pg 19 Last (PB 29-40) Pg 68 Pr. 9.5 (PB 109) Pg 72 Pr. 9.2 (PB 183) 4 3,22,64,594/- Pg 10 Pg 14 (PB 33-34) Pg 52-58 Pr. 7.4 onwards (PB 89-95) Pg 111 Pr 8.10 (PB 218) 3,87,00,404/- 5. Whether the Tribunal was justified in deleting the addition made by the Assessing Officer and confirmed by the CIT(A) on account of unexplained investment of the assessee in various properties, when no evidence in support of the said investment was submitted by the assessee? AO CIT ITAT Q No. Addition Pg11-19(PB 31-39) Pg 44 Pr. 9. (PB 85) Pg 65 Pr 7.22 PB 176) 5 2,49,31,125/- 6. Whether the Tribunal was justified in deleting the addition which was made by the Assessing Officer and confirmed by the CIT(A) on account of unexplained cash credit of the assessee on v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and have perused the assessment order and relevant record. It is seen that the appellant has mainly contended that Sh. Sunil Jhalani is not the benami of the appellant. It is seen that Sh. Shankar Khandelwal, the brother of the appellant, has admitted Sh. Sunil Jhalani to be his benami. Considering the same situation the A.O. has considered Sh. Sunil Jhalani to be benami of the appellant s group. However, in such situation, the A.O. was not at all justified to make addition of investment in the hands of appellant during the year, as purchase from benami person will not require any actual investment by appellant during the year. Hence on this logic of A.O., the entire addition needs to be deleted in the year under consideration. 3.3.1 However, considering the argument of the appellant that Sushil Jhalani, Gopal Saini etc has not been admitted to be benami of Tikam Khandelwal and considering that generally one person cannot be considered to be benami for Sh. Shankar Khandelwal as well as appellant Sh. Tikam Khandelwal, it would be appropriate for the A.O. to have examined the source of payment for purchase of the plots and if the source was not explained, then addition should ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce made by the AO on account of depreciation. The grievance of the assessee is that the ld. CIT(A) has confirmed the disallowance so made by the ld. CIT(A) is confirmed and the depreciation is held to be allowed. Thus ground NO. 2 of the revenue and Ground No. 4 of the assessee both are dismissed. 6.1 The 5th ground of appeal of the assessee is that the ld. CIT(A) has erred in not allowing the claim of Depreciation. 6. 2 During the court of hearing, the ld. AR of the assessee has not pressed this ground. Hence, the same is dismissed being not pressed. 7. 1 The sixth ground of appeal of the assessee is that the ld. CIT(A) has erred in not annulling the assessment order as the AO has not provided proper opportunity of being heard. 7. 2 We have heard both the parties. This issue has been decided us in the case of Shankar Lal Khandelwal in ITA No. 155/JP/2011 dated 12-08- 2011. Following that order, we hld that the ld. CIT(A) was justified in not annulling the assessment order. Thus Ground No. 6 of the assessee is dismissed. 8. 1 The 4th ground of the revenue is that the ld. CIT(A) has erred in not admitting the additional evidence. 8. 2 We have heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide any evidence in this regard to support his claim whether he has incurred expenses for running the taxi. Moreover, the statement filed showing the vehicles are not taxi but are private vehicles which have no stay permit. Hence out of above 1/3rd is disallowed which works out to ₹ 208504/- and the same is added to the total income of the assessee being unverifiable. 8. On account of depreciation: On perusal of details and ledger account produced by the assessee it is noticed that the assessee has claimed depreciation @30% at ₹ 5,62,631/-. The assessee has claimed depreciation in the return filed in response to notice u/s 153A on 2.7.2008. In his original return the assessee neither shown income from hiring of taxi nor claimed depreciation on taxi in his original return filed u/s 139(1). During the course of assessment proceedings the assessee was asked as to why depreciation claimed on taxi be not disallowed as the assessee has claimed depreciation in the original return filed u/s 139(1) of I.T. Act. but has claimed depreciation in the return filed in pursuance to notice u/s 153A of IT Act. The assessee filed reply dated nil stating that - It would be wrong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground raised in appeal to make a new claim of deduction or allowance as such where admittedly the regular assessments are shown as completed assessment on the date of initiation of u/s 132 of the Act. Such a ground in all these appeals stands rejected. Hence the claim of depreciation is not allowable in view of the judgment of ITAT, Jodhpur bench, Jodhpur delivered in the ab above case. Therefore, Rs.5,62,631/ - is disallowed and added to the total income of the assessee. Learned counsel relied upon decision of the Supreme Court reported in Attar Singh Gurmukh Singh vs. Income Tax Officer Ludhiana, 1991(1) SCC 667 and contended that Section 40A(3) was inducted for the benefit of assessee and while considering the constitutional validity the Supreme Court has observed as under:- In our opinion, there is little merit in this contention. Section 40A(3) must not be read in isolation or to the exclusion of rule 6DD. The section must be read along with the rule. If read together, it will be clear that the provisions are not intended to restrict the business activities. There is no restriction on the assessee in his trading activities. Section 40A(3) only empowers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 170 CTR 160 (SC) M. Janardhana Rao v/s Joint Commissioner of Income Tax (2005) 273 ITR 50 (SC) DCIT v/s Marudhar Hotels (P) Ltd. (1999) 155 CTR (Raj) 437 On admission of additional evidences: Smt. Prabhavati S. Shah v/s CIT (1998) 148 CTR (Bom) 192 Taking into consideration the issue and the facts we have gone through the order of the Tribunal the Tribunal while considering gross profit of the assessee for the previous year has rightly estimated 1% of the total turnover. In that view of the matter, the view taken by the Tribunal is required to be affirmed. Similarly, the assessee has made a chart showing of gross profit chart which reads as under:- Assessment Year 2003-04 2004-05 Assessee AO CIT(A) Assessee AO CIT(A) ITAT Gross Profit 2010000 2010000 2010000 2010000 1786000 1786000 1786000 1786000 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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