TMI Blog2018 (11) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... explained investment in gold jewellery - Held that:- CIT(A) has considered the entire facts of the case and he has rejected the additional claim of 200gms. made by the assessee before the A.O. In so far as telescoping of an amount of ₹ 8,84,371/-, which pertains to income offered for A.Y. 2010-11 and also an amount of ₹ 3,91,675/- with reference to addition made undisclosed income for A.Y. 2010-11 telescoping benefit was given by the CIT(A) on the ground that there is no evidence on record to show that the above amounts are utilized for any other investment or expenditure. Even before us, the department is not able to produce any evidence that the above amounts offered for taxation in the assessment year 2010-11, which are used for any other investment or expenditure. So under these facts and circumstances of the case, the telescoping benefit given by the CIT(A) to the extent of ₹ 8,84,371/- and also ₹ 3,91,675/- is justified and no interference is called for. Accordingly, this ground of appeal filed by the revenue is dismissed. Addition towards unaccounted outpatient receipts - Held that:- A.O. has not accepted the explanation given by the assessee on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A)’s order and has no impact on assessment made u/s 143(3). D.R. during the appeal hearing could not relate to the addition made in the assessment order. However, on verification of the assessment order, it is noted that the assessee had admitted income of ₹ 89,92,920/- against the declared income of ₹ 50 lakhs u/s 132(4) of the Act and consequential order resulted in total income of ₹ 1,35,00,044/-. - I.T.A.No.65/Vizag/2014 - - - Dated:- 18-5-2018 - Shri V. Durga Rao, Judicial Member And Shri D.S. Sunder Singh, Accountant Member For the Appellant : Shri Deba Kumar Sonowal, DR For the Respondent : Shri Shri G.V.N. Hari, AR ORDER PER V. DURGA RAO, Judicial Member: This appeal filed by the revenue is directed against order of the Commissioner of Income Tax (Appeals) {CIT(A)}, Visakhapatnam vide ITA No.0233/13-14/ACIT,C-1(1),Vsp/2013-14 dated 30.12.2013 for the assessment year 2011-12. 2. Facts are in brief that the assessee is an individual filed return of income for the assessment year 2011-12 on 22.2.2012 declaring total income of ₹ 89,92,290/- and agricultural income of ₹ 55,620/-. The return filed by the assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t found in his seized material of ₹ 21 lakhs. The same is explained as follows:- Cash found Cash seized Explanation given ₹14,46,855/- ₹13,00,000/- An amount of ₹ 9,70,000/- represent professional receipts relating to A.Y. 2010-11, an amount of ₹ 40,000/- relate to assessee s wife and the balance ₹ 4,36,855/- represent professional receipts for the period 1.4.2010 to 20.12.2010 which is part of professional receiptsfound in the seized material of ₹ 21.89 lakhs. ₹3,00,000/- ₹3,00,000/- Represent professional receipts for the period 01.04.2010 to 20.12.2010 ₹2,29,100/- ₹2,00,000/- Represent professional receipts for the period 01.04.2010 to 20.12.2010. 4. It was further submitted that an amount of ₹ 17.46 lakhs was kept in the residence to purchase the property and an amount of ₹ 2.29 lakhs was kept in the hospital chamber to meet urgent expenses. The A.O. has noted that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgency expenditure. The A.O. further noted that the assessee was not able to prove that an amount of ₹ 9,70,000/- pertains to earlier years consultancy fees and ₹ 40,000/- belonging to his wife Smt. K.Kanakadurga Devi out of ₹ 14,46,855/- found in his residence with a corroborative evidence. The assessee also not maintained regular books of accounts and accordingly, the A.O. has made an addition of ₹ 19,75,995/-. On appeal before CIT(A), it was submitted that an amount of ₹ 40 lakhs relates to his wife and an amount of ₹ 9,70,000/- represents professional receipts relating to assessment year 2010-11. In other words, the amount of ₹ 9,70,000/- was claimed to be available for telescoping out of additional professional receipts offered to tax of ₹ 18,54,781/- for assessment year 2010-11. The balance cash found seized during the search represents cash from the professional receipts earned during the year which is evident from the seized material and they are considered as part of current year s professional receipts, separate addition is not warranted. It is further submitted that though the professional receipts earned during the year wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year 2010-11 and therefore, it cannot be said that ₹ 9,70,000/- cannot be treated as undisclosed income. However, the A.O. has not accepted the claim of the assessee on the ground that there is no evidence that the amount pertains to assessment year 2010-11. However, on appeal before the CIT(A), the CIT(A) gave a categorical finding that the assessee has offered a professional receipt of ₹ 18,54,871/- for the assessment year 2010-11 and there is nothing on record to indicate that the additional income offered has been utilized by the assessee, therefore, under those facts and circumstances of the case, the relief of telescoping benefit granted by the assessee to the extent of ₹ 9,70,000/- is justified. Thus, we find no reason to interfere with the order passed by the CIT(A). 9. In so far as cash found of ₹ 9,65,955/- is concerned, the assessee has taken a plea that it pertains to current year s professional receipts from M/s. R.K. Children s Hospital is a part of the amount of professional receipt of ₹ 21.89 lakhs found recorded in the seized material. The Ld. CIT(A) has considered this issue and observed that it is seen that during the sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of our community, it is more familiar to acquire gold jewellery since childhood so as to enable the lady member to get married with a minimum and comfortable quantity of gold jewellery to be carried by them to the inlaws house representing their Stridhana. The same will depend upon the status of the family. Our family also acquired in the same process with a reasonable jewellery acquired from childhood of our lady members and also the male members to some limited extent from time to time in the past several years is available out of the said jewellery at the time of search operation conducted on me . The A.O. has not accepted the explanation given by the assessee on the ground that there is no supportive evidence available on record to consider the explanation. 11. On appeal, it was submitted before the CIT(A) that an allowance of 200gms. may be given taking into account of his family and community background that each member would possess certain quantity of jewellery and thereby the explained jewellery would be only ₹ 33,57,000/- and not ₹ 37,30,000/-. The assessee had offered additional income of ₹ 1,85,437/- towards professional receipts not accounted fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on record and gone through the orders of the authorities below. The only addition in this case is towards unexplained jewellery weighing 2000gms. valued at ₹ 37,30,000/-. During the course of search, 3040.00 gms gold jewellery was found in the locker and also 544.30 gms. in the residence with total weight of 3584.30 gms. The A.O. has given a benefit of 1550gms. according to the Board circular taking into consideration of their family and ultimately found that the excess weight of gold jewellery works out to 2034 gms. i.e. 3584.30 (-) 1550 gms. The assessee was not able to explain the genuineness of the source for investment in the gold jewelery. The gold jewellery was valued by the A.O. of ₹ 37,30,000/- and addition was made. Even before the A.O., further 200 gms. deduction was claimed by the assessee. The same was rejected on the ground that there is no basis. Before the A.O., the assessee has claimed deduction of ₹ 8,84,371/- as a telescoping benefit towards the amount offered in the assessment year 2010-11 as undisclosed income. The A.O. has not accepted the claim made by the assessee on the ground that there is no evidence to prove that the investment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undisclosed income. The assessee is having a time to file a return of income. The Ld. CIT(A) has considered the submissions made by the assessee and deleted the addition made by the A.O. by following the judgement of the Hon ble Supreme Court in the case of ACIT Vs. A.R. Enterprises (CTR Vol.256 Issue No.6). The relevant portion of CIT(A) order is extracted as under: 7.3 I have considered the submissions. It is not in dispute that the amount of ₹ 23,16,550/- was part of current year professional receipts and has been taken into account while filing the return of income of the year. The sole reason for the addition appears to be that the advance-tax computation was inadequate and has not taken into account the entire professional receipts for the period upto date of search, and the intention not to disclose part of the professional receipts was evident. In this regard it is relevant to note the observation made by the Hon'ble Supreme Court in the case of ACIT Vs. A. R. Enterprises, as follows: - On the other hand, if the search is conducted prior to the due date for filing return, the opportunity to file return and disclose income still persists- In such case, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee on the ground that advance tax paid and addition was made in our opinion, which is baseless, unreasonable and unjustified. On the contrary, the Ld. CIT(A) considered the explanation of the assessee and deleted the addition made by the A.O. by observing that the amount which is found during the course of search has taken into account by filing the return of income. No addition is warranted. We find no infirmity in the order passed by the CIT(A) and this ground of appeal raised by the revenue is dismissed. 20. The 6th ground of appeal relating to unaccounted professional receipts. During the course of search, it was found that the assessee earned professional receipts from in-house patients from M/s. R.K. Children s Hospital. The assessee s share out of such receipts of ₹ 59,91,108/- as per the material seized from the hospital premises was ₹ 21,89,650/-. Before the A.O., it was contended that it is a part of current year s receipts and has been taken into account while computing the income from professional receipts of ₹ 28,30,481/- offered to tax. However, the A.O. has noted that these professional receipts were not recorded in the books of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered them for tax in the return of income filed. There is no element of illegality in such action of the assessee. As the receipts have been admitted in the return of income filed for the year, the element of unaccounted income ceased to exist. Further the concept of 'undisclosed income' as defined in section 15813(b) of I.T.Act does not apply to searches conducted after 31 May, 2003 in view of insertion of section 153A of the I.T.Act by way of amendment to the I.T.Act vide Finance Act, 2003. 6.5 As a result of the amended law there is no element of unaccounted income in regard to the current year's receipts not recorded in the books of account but offered for taxation in the return filed. In the light of the above factual and legal position, I am of the view that the AO is not justified in making the impugned addition of ₹ 21,89,650/-. Accordingly the AO is directed to delete the addition of ₹ 21,89,650/- . 21. On appeal before us, the Ld. D.R. for the assessee has relied on the order passed by the A.O. 22. On the other hand, the Ld. Counsel for the assessee relied on the order passed by the CIT(A). 23. In this case, during the course of sea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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