TMI Blog2011 (4) TMI 1506X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The assessee is engaged in money-lending business and real estate brokerage. The business is carried on under the name and style of Tex B Securities (P) Ltd. A search u/s 132 was carried out in the residential premises of both the persons on 16-05- 2007. A survey u/s 133A was also carried out in the business premises of M/s. Tex B. Securities (P) Ltd. In the course of search, cash of ₹ 65 lakhs was found and seized from the residence of Shri Duraipandi. Another sum of ₹ 1 crore was found and seized from the bank locker of Punjab National Bank at Anna Nagar held in the name of Shri Duraipandi. 4. Consequent to search operations under section 132, investigations and enquiries were made by the authorities. Shri S. Duraipandi and Shri S. Thalavaipandian explained that the business had been carried on by them jointly in the capacity of AOP. The AOP has the Permanent Account Number. But it was seen that the AOP has not been filing any regular returns of income. The assessing authority processed the seized materials and sought for details from the assessee. The assessee had not maintained regular books of accounts. But statements of accounts were finally p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the agricultural income at ₹ 22 lakhs each for the six assessment years 2002-03 to 2007-08. 8. The position of the agricultural income as per the order of the CIT(A) is reproduced below : Asst. Year Agricultural income returned by the assessee disallowed by the Assessing Officer Agricultural income accepted by the CIT(A). Disallowance of agricultural income confirmed by the CIT(A) 2002-03 ₹ 54,95,000 ₹ 22,00,000 Rs. 32,95,000 2003-04 ₹ 87,15,000 ₹ 22,00,000 ₹ 65,15,000 2004-05 ₹ 36,05,000 ₹ 22,00,000 ₹ 14,05,000 2005-06 ₹ 40,95,000 ₹ 22,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exorbitantly high which transgressed all the levels of probability. So also, such a huge claim of income has not been supported by operating accounts, if any, maintained by the assessee. Therefore, the CIT(A) has rightly refused to accept the claim of the assessee that the entire claim of agricultural income should have been accepted. Now coming to the estimate part of the agricultural income, we agree with the CIT(A) that an estimation of ₹ 22,00,000/- per assessment year is a reasonable estimate. 13. Therefore, in the facts and circumstances of the case, as far as the common issue of agricultural income is concerned, we uphold the orders of the (A) as concluded by him in para 7 of his order. The grounds raised by the Revenue as well as by the assessee on this issue are rejected. 14. The next issue raised by the Revenue in their appeals related to the additions of Rs.. 4.90 crores and ₹ 5.29 crores made by the assessing authority for the assessment years 2007-08 and 2008-09, but deleted by the CIT(A). These additions had been made by the Assessing Officer in the light of the papers found and seized in the course of search, attributable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i was the person who had entered into an agreement for the purchase of land at Kelambakkam in 2006. He was the person who had sold the property in 2007. The second person involved in the transaction was Shri Muruganandam on a 50% share. When the chain of land transaction is so complete with Ms. Jayanthi Krishnamurthy as the seller and Shri S. Duraipandi and Shri Muruganandam as the buyers, it is not necessary to implicate the assessee into the web of these transactions. Regarding the on-money payment the CIT(A) has observed that no evidence is found on records but the same is hanging over only on the basis of the statement of Ms. Jayanthi Krishnamurthy. In these circumstances, we find that the CIT(A) is justified in holding that these money transactions totaling to ₹ 10.19 crores be considered in the hands of the appropriate assessees and could not be considered in the hands of the assessee-AOP. 17. We agree with the above finding of the CIT(A) mainly on the ground that as per the seized records and the subsequent statements furnished by the concerned persons, the assessee-AOP has no role in the episode of land transaction involving the sale of land by Ms. Jay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has already offered an amount of ₹ 1.4 crores, being the cash credit in the capital account by way of income and in the light of the said amount of ₹ 1.4 crores offered as income, there was no justification for making two independent additions of ₹ 17,83,500/- and ₹ 1,63,45,000/. It was the contention of the assessee that the same would amount to doubling of the addition. The Assessing Officer has made an addition of ₹ 25 lakhs as interest income in the hands of the assessee. It is the case of the assessee that the assessee has already offered interest income to the extent of ₹ 24,73,800/- and the Assessing Officer has erroneously made an addition of ₹ 25 lakhs on the basis of the earlier admission of ₹ 25 lakhs made by the assessee and at the same time without looking into the fact that the assessee has already honoured the commitment of ₹ 25 lakhs by offering a sum of ₹ 24,73,800/-. It is the case of the assessee that the addition was made as the interest income returned by the assessee was not exactly ₹ 25 lakhs. 22. After considering all the aspects and evidences of the case, the CIT(A) fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not have sources to deal in that much transactions reflected in the bank accounts. He also found that the assessee has nothing to say against the finding of the assessing authority that these accounts were in fact operated by Shri S. Duraipandi and Shri S. Thalavaipandian. He therefore agreed with the Assessing Officer and held that these additions were rightly made. The additions were thus confirmed. 27. After considering the issue in detail, we are of the view that the case made out by the assessing authority has been supported by evidences available on records. It is true that the account holders by themselves were not in a position to indulge in such financial transactions. So also it is to be seen that those accounts were operated by Shri S. Duraipandi and Shri S. Thalavaipandian. So also those transactions in the bank accounts equated the sequence of business transactions of the assessee-AOP. In these circumstances, we uphold the finding of the lower authorities and confirm these additions. The contentions of the assessee in this regard are rejected. 28. The next issue is the ground raised by the Revenue for the assessment year 2007-08 agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CIT (323 ITR 397) wherein the Court has observed that prior to 1.4.1989 every assessee had to establaish, as a matter of fact, that the debt advanced by the assessee had, in fact, become irrecoverable and that position got altered by the deletion of the word established which earlier existed in section 36(1)(vii) of the Income Tax Act, 1961. 32. In the facts and circumstances of the case, we find that the CIT(A) has rightly applied the above judgment of the Hon'ble Supreme Court and deleted the disallowance of bad debts. The relevant grounds raised by the Revenue are accordingly rejected. 33. The next issue is the one raised by the assessee in its cross objection against the additions of unexplained cash credits confirmed by the CIT(A) for the assessment years 2003-04, 2004-05 and 2005-06. The Assessing Officer has made additions of ₹ 4,71,730/-, ₹ 11,53,407/- and ₹ 36,54,146/- on the basis of the unexplained cash credits reflected in the Balance Sheet filed by the assessee along with the returns of income for the above assessment years. As rightly pointed out by the CIT(A), the assessee itself has tacitly admitted that it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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