TMI Blog2018 (10) TMI 1746X X X X Extracts X X X X X X X X Extracts X X X X ..... e uncontroverted and admitted statement given on behalf of the assessee u/s. 133A and the documents impounded during the survey, which were also virtually admitted by the assessee, there was no error in the order of the Tribunal in accepting the materials on record in order to arrive at an assessment. - Decided in favour of assessee Addition towards valuation of closing stock - firm s business discontinued on account of closure of the business - HELD THAT:- In this case, the closing stock was estimated by applying GP rate at 22% in the assessment year under consideration. Since we have confirmed the estimation of income by applying GP rate at 22%, the closing stock determined by the Assessing Officer is to be confirmed. Accordingly, we find no infirmity in the order of the lower authorities and the same is confirmed. Thus, this ground of appeal of the assessee is dismissed. The appeal of the assessee is dismissed. Undisclosed income on estimate sales - HELD THAT:- Estimation of income for these assessment years on the basis of the seized records found during the search in the year relevant to the AY 2008-09 is justified as the assessee has followed uniform system of suppr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income for the assessment year 2008-09 was filed on 22/09/2009 declaring a loss of ₹ 27,65,223/-. The original assessment in this case for the assessment year 2008-09 was completed u/s. 143(3) on 31/12/2009 fixing the total income at ₹ 19,68,690/-. 3.1 During the course of search at the assessee s business premises on 21/08/2007, it was noticed that the assessee had effected sales by issue of estimate slips instead of sale bills and the sale bills were prepared for accounting purposes only in few cases. It was also noticed that the sales on estimate slips were not accounted resulting in under recording of sales and suppression of turnover. Subsequent to the search, on verification of the accounts maintained by the assessee, it was noticed that the sales on the basis of estimate slips were not accounted by them, either in the computer or in any other books. Similar estimate slips were issued from the different shops of the Sunny Jacob Jewellers Group while selling gold ornaments. The contention of the assessee that they were issuing estimate slips only for showing the customer, but they were issuing bills on finalization of the sales, was rejected b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above discrepancies did not affect the computation of income. 3.6 During the shop inspection by the Commercial Taxes, many incriminating records were recovered. The dealer admitted that he had failed to maintain true and correct accounts for 2005-06 and requested for compounding u/s. 74 of the KVAT Act, 2003 by filing a letter and willingness dated 31/03/2006 which was compounded on the same day. It was found that the assessee did not maintain a daily stock account of ornaments in Form No. 14A as prescribed under Rule 58(13) of the KVAT Rules 2005. The assessee did not maintain tax invoice in Form No. 8J as per Rule 58(1) of the KVAT Rules which goes to show that the assessee was practicing suppression in sales as well as in purchases. It was found that there was no increase in sales during festival and marriage season as per the accounts. Further, the assessee s declared sales figure had no relation to the actual sales. On the basis of estimation based on average daily sales and average running stock, the sales recorded was found to be 1/12th of the actual sales. The self assessments made by filing VAT refund in Form No. 10 for the return period of 05/05, 06/05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clarification to the effect that he was only printing estimate slips and not sale bills and he was only entrusted with the work of printing estimate slips and sale bills were written by Shri Mathew Eapen. According to the AO, none of the above statements was sufficient enough to prove that the business establishments in the group were not issuing estimate slips, instead their statements establish that they were destroying the estimate slips. After having a total appraisal of the statements given by different persons at the time of search, cross-examination, re-examination and on the basis of the information collected during the course of search and pre-search enquiries, it was found that the business concerns of M/s. Sunny Jacob Group of Jewellers were resorting to suppression of sales by effecting a major portion of sales through estimate slips not accounted in the books of account. According to the AO, the inspection by the Sales Tax Department in the business premises of M/s. Sunny Jacob Jewellers, Kottayam also revealed that the assessee was also following the same modus operandi as seen followed by other concerns of the group. Considering the issues came to light during the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs such suppression was upheld in principle. As regards, the estimation of the quantum of G.P. by applying a rate of 19% instead of 22% in the original assessment order by the AO, the same was upheld. 5. Against this, the assessee is in appeal before us. The Ld. AR submitted that the above appeals respectively relate to Assessment Years 2002-03, 2003- 04, 2004-05, 2005-06, 2006-07 and 2007-08. It was submitted that the Departmental appeals were filed against the common order of the Commissioner of Income Tax(Appeals)-lV, Kochi dated 31.03.2016 in Appeal Nos. ITA-350- 357/CIT(A)/IV/2014-15 and the CIT (A) disposed of 6 appeals from 2002-03 to 2008-09 as per common order. It was submitted that the appeals for the Assessment Years 2002-03 to 2007-08 were fully allowed and the appeal for Assessment Year 2008-09 was partially allowed. 5.1 It was submitted that on earlier occasion the assessee was in appeal before the Tribunal for the Assessment Year 2008-09 which was partially allowed by confirming/sustaining the additions made in the assessment year. The grounds of appeal reveal that the CIT(A) deleted the additions for the different Assessment Years as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xamined by the CIT(A) who passed the present impugned appellate order. The CIT(A) has given a tabulation showing the income returned and assessed for the Assessment Years 2002-03 to 2008-09 and Para 7 deals with the Statement of Facts. The ld. AR relied on the CIT(A) s observations and findings wherein it was found that the order passed by his learned predecessor covered the entire span of facts of the case and at the same time the Assessing Officer had not brought on record any new fact on record. It was held that the addition based on estimate of GP rate on the estimated suppressed turnover had no basis. The additions were accordingly deleted. Having regard to the fact that there were no seized materials covering the earlier years, except for the Assessment Year 2008-09, the CIT(A) found that there was no evidence that the assessee had suppressed its turnover for prior years. No incriminating material was found concerning the prior years. The order of the CIT (A) in deleting addition of prior years cannot be faulted. The facts of the case in CIT Vs. Meriya Hotel (332 ITR 537) are entirely different from the facts of the present case and clearly distinguishable. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that has been set aside by the ITAT, Cochin Bench and the same additions that have been deleted by the CIT(A) have been fully reproduced except for a small reduction in the Gross Profit percentage from 22% to 19%. No fresh evidences from the seized documents nor any fresh findings/reasons to support the addition as directed by the ITAT, Cochin Bench while setting aside the said assessment order have been put forth by the assessing authorities while completing the assessment. The reasons for the additions are the same which has already been considered by the CIT(A) and hence, it is a covered matter. 6. On the other hand, the Ld. DR relied on the orders of the lower authorities. 7. We have heard the rival submissions and perused the record. There was a search in the business premises of the firm on 20/08/2007. During the course of search, it was found that the assessee was maintaining its accounts in computerized form. The CPUs used for the purpose at Kottayam and Kottarakkara were seized during the course of search. From the Pazhavangadi, Trivandrum shop one pen drive was seized on the point that it was containing data relating to the accounts. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mate slips on computer when a customer comes and selects a gold ornament for purchase. As a customer may change his selection more than once, more than one estimate slips are likely to be issued in such cases. But, the estimate slips handed over to the sales man for preparation of final bill, which according to the assessee, is written manually, is the final estimate slip where the purchases of the customer is recorded. If there is no likelihood of return or exchange of the ornaments immediately, a customer is issued a sale bill. He is not given estimate slip. But in case there is a possibility of exchange or return immediately instead of sale bill, the estimate slip with the seal of cash received is handed over to the customer with the jewellery. All the estimate slips other than those which are handed over to the customers are destroyed/thrown into the waste basket. Hence, a customer can have an estimate slip with him only if that purchase is one where the immediate exchange or return is expected. Though the assessee is printing estimate slips in the computer, the assessee is not saving the data in the computer. Also, the estimate slips other than those handed over to the custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07. The AO has also pointed-out that at the showroom of M/s. Sunny Jacob Jewellers 916 Kerala Showroom, Pazhavangadi, Trivandrum all the sales of the day are recorded in the computer within 2 to 5 minutes. The period referred to by the AO is between 07.05.2007 to 11.05.2007. He has observed that it is very anomalous and gives more credence to the view that sale bill generated in the computer are made up for accounting purposes only and they do not reflect the actual sales. In Para 13 (a), (b) and (c) some other discrepancies pointed-out for the Kollam shop, Kottayam shop and Kottarakkara Shop. Based on these discrepancies the AO has finally rejected the books of accounts invoking provisions of sec. 145(3) r.w.s. 144. 6. As regards assessee's ground relating to the invocation of sec. 144 r.w.s. 145(3) is concerned I do not agree with the appellant because the AO has first pointed-out various discrepancies and anomalies in the books of accounts maintained by the appellant and then only invoked provisions of sec. 145(3) r.w.s. 144. The appellant has submitted that the provisions of sec. 145(3) are not fully complied with, because no opportunity of being heard was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resumption is that there is suppression for whole of the search year. Similar view has been taken in the case of Rajendrakumar Lahoti vs. DCIT (266 ITR 621), In the earlier years the additions could not stand the test of appeal because there was no material available with the Department to show that there was suppression of income for those years and, therefore, there could not have been any additions. But for the year under consideration a pattern of suppression has emerged though restricted to only a small period, but it proves that there was suppression for this period and once there was suppression for a period of the year the estimate is possible for whole of the year as pronounced by various judicial forums. Hence for the assessment year 2008-09 I do not have any hesitation in holding that the appellant has concealed income to the tune of ₹ 47,34,209/- as per working given in the order for assessment year 2008-09. I therefore sustain the same. 7.3. In the revised assessment order, the Assessing Officer held as under: The order giving effect to the order n/s.263 of the I.T. Act by the Commissioner of Income-tax (Central), Kochi wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance is also placed on the judgment of the Jurisdictional High Court in the case of CIT vs. Hotel Meriya (332 ITR 537) wherein it was held as under: ( ii) That the partner of the assessee had in unambiguous terms stated that 20 per cent of the sales outturn was suppressed and only 80 per cent was recorded in the account books and it was the practice from the very beginning. So, it was just and appropriate to presume that there was uniform concealment of income in all the assessment years during the block period. Hence the assessee was liable to be assessed during the block period at a uniform rate. In view of the above judgments of the Jurisdictional High Court, we are inclined to dismiss this ground of the assessee. The appeal of the assessee is dismissed. 8. The next ground is with regard to sustenance of addition of ₹ 23,14,809/- towards valuation of closing stock. 9. The facts of the case are that the issue considered U/s. 263 by the CIT cannot and was also not subject matter of appeals before CIT(A) and ITAT. The issue set aside and restored to the file of Assessing Officer by the ITAT was regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that in case of dissolution of firm the firm and the partner, being commercial men, would value the assets only on real basis and not at cost or at their other value appearing in the books. Once this principle is applied and the stock-in-trade is valued at market price, the surplus if any, has to get reflected as profits of the firm and has to be charged to tax. The assessee relied on various judicial decisions in the same line. For example, G.R. Ramachari Co. vs. CIT 1961) 41 ITR 142 (Mad) : Popular Workshops vs. CIT (1986) 54 CTR 323 (Ker): (1987) 166 ITR 348(Ker). Popular Automobiles vs. CFT (1990)89 CTR 248(Ker) : (1989) 179 ITR 632 (Ker) etc. 9.2 The Assessing Officer noted that the firm's business was totally discontinued and the assets were in fact distributed. The only difference was that the entire assets were assigned to one of the partners in satisfaction of his accepting the entire liabilities. After taking over the entire assets and liabilities of the firm the partner continued the business of the firm as part of his proprietary concern, Dona Gold. This would mean that the firm stood dissolved. 9.3 In view of the above, the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO failed in appreciating the facts of the case while applying the above ratio, had not substantiated his arguments with facts. In view of this, the CIT(A) held that the AO has rightly worked out the under valuation of the closing stock and resorted to make an addition of ₹ 23,14,809/-. 11. Against this, the assessee is in appeal before us. The ld. AR submitted that the addition of ₹ 23,14,809/- being difference in valuation of closing stock was wrong. The lower authorities failed to distinguish the facts of the assessee s case with the facts in the case of A.L.A. Firms vs. CIT (189 ITR 285). 12. On the other hand, the Ld. DR relied on the orders of the lower authorities. 13. We have heard the rival submissions and perused the record. In this case, te closing stock was estimated by applying GP rate at 22% in the assessment year under consideration. Since we have confirmed the estimation of income by applying GP rate at 22%, the closing stock determined by the Assessing Officer is to be confirmed. Accordingly, we find no infirmity in the order of the lower authorities and the same is confirmed. Thus, this ground of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerns of the group which showed that the assessee was making sales on estimate slips instead of sale bills. While remitting the issue back to the AO, the Tribunal in its Order No. 690 to 696/Coch/2010 and 23 to 43/Coch/2011 had observed that the CIT(A) in his first appellate order was not justified in deleting the addition for AY 2006-07 to 2007-08 on the ground that there was no material evidence for these years. For these reasons, it was prayed that the order of the CIT(A) may be set aside and that of the AO restored. 17.2 On the other hand, the Ld. AR relied on the order of the CIT(A). 17.3 We have heard the rival submissions and perused the record. Since we have confirmed the estimation of income for the assessment year 2008-09 in ITA No. 372/Coch/2016 by placing reliance on the judgment of the Travancore Logistics cited supra and Meriya Hotel cited supra, estimation of income for these assessment years on the basis of the seized records found during the search in the year relevant to the AY 2008-09 is justified as the assessee has followed uniform system of suppression of sales. This ground of appeal of the Revenue is allowed for all the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in ITA No. 313- 317/CIT(A)/Kochi/2014-15 passed on 31/03/2016 against which the present appeals are preferred was a combined order for the assessment years 2004-05, 2005-06, 2006-07, 2007-08 and 2008-09. It was submitted that the CIT(A) order was received in the office of the CIT, Central Circle on 05/05/2016 and received on transfer in the office of the Pr . Commissioner of Income-tax, Trivandrum on 18/05/2016. Form No. 36 was filed before the ITAT on 18th July 2015 which resulted in a delay of 22 days in filing the appeal for the above assessment years. It was submitted that the delay was due to the late receipt of the appellate order in the office of Pr. Commissioner of Income-tax, Trivandrum on transfer of jurisdiction from the office of Commissioner of Income-tax, Central Circle, Trivandrum. As the delay was due to sufficient causes beyond the control of the Revenue, it was prayed that the delay of 22 days may be condoned and admit the appeals for adjudication. In our opinion, there is good and sufficient reason for condoning the short delay of 93 days. Accordingly, we condone the delay and the appeals in ITA Nos. 341 to 344/Coch/2016 are taken up for adjudication. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of the Revenue is allowed for all the assessment years. 19.8 In the result the appeals filed by the Revenue in ITA Nos. 341 to 344/Coch/2016 are allowed. ITA No. 324/Coch/2016: [Revenue: AY 2004-05 to 2007-08] 20. This appeal filed by the Revenue is directed against the order of the CIT(A)- IV, Kochi dated 31/03/2016 collectively for the assessment years 2004-05 to 2007-08 which is duplication of the appeal and the department filed independent and separate appeals for these assessment year. Accordingly, this appeal of the Revenue is dismissed. ITA Nos. 320 321/Coch/2016: Revenue:2006-07 2007-08 21. These appeals filed by the Revenue are directed against the common order of the CIT(A)-IV, Kochi dated 31/03/2016 for the assessment years 2006- 07 and 2007-08. 21.2 The issue raised in these appeals is whether the CIT(A) was justified in deleting the additions of ₹ 1,31,55,837/- and ₹ 1,68,39,970/- for the assessment year 2006-07 and 2007-08, being unexplained investment made by the assessee in the purchase of property. 21.3. The facts of the case ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment years 1986-87 to 1995-96 no doubt there is no material but it is admitted by the partner of the firm that the taxpayer has practiced suppression of sales turnover. Accordingly, the High Court found that the authorities are justified in making the addition. In the case before us also though the estimate slip found by the revenue authorities relate to assessment year 2008-09 the cashier, Shri Joshi Abraham said in his statement that he is issuing bills only for part of the sales and the balance sales were effected on estimate basis. This statement of the cashier was ignored by the Commissioner of Income-tax(A). Moreover, during the inspection by Commercial Tax Department on 24-02-2006 they found a similar practice adopted by the taxpayer in sale of jewellery by issuing estimate slip. Though proceedings under the Commercial Tax Department are different from income-tax proceedings while computing the total income the modus operandi adopted by the taxpayer can be taken into account in the income-tax proceedings also. The income-tax authority has to reappreciate the materials found by the Commercial Tax Authorities. Moreover, one Mr. Pintu Jacob claimed that he was issuing only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his grievances before the said authority. The relevant observation of the Hon ble Apex Court reads as follows: Upon hearing the learned counsel for the parties, we find that in pursuance of the impugned judgment delivered by the High Court, assessment orders have already been made and the petitioners have also filed appeals against the orders of assessment. In the circumstances, in our view nothing survives in these petitions. However, we clarify that it would be open to the parties to raise all possible legal contentions before the Appellate Authority where the appeals are pending against the orders of assessment. Any observation made by the High Court shall not be treated as conclusive and it would be open to the Appellate Authority to look into all other relevant facts and legal contentions which might be raised before it for coming to its final conclusion in the appeals. 21.6 Pursuant to the ITAT order dated 16/11/2012, the fresh assessment was completed by making the additions of ₹ 1,31,55,837/- and ₹ 1,68,39,970/- for the assessment years 2006-07 and 2007-08 respectively, being the on-money payments made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he agreed price for 3.312 cents of land was ₹ 18 lakh in place of ₹ 1,70,000/- shown in the document. Likewise, the agreed price for 11.61 cents of land was ₹ 44,48,000/- in place of ₹ 6 lakhs shown in the document. 5. The Ld. CIT (A) has completely overlooked the fact that while recording the statements before the DDIT (Inv.), the assessee in answer to Qn.No.11 on 24-8-2007 had agreed that amounts as per the agreements were paid for purchase of the properties. 6. As regards the properties purchased at Kottayam, the Assessing Officer found that the properties were in the prime locations of Kottayam Municipality and considering the importance and location, the value declared by the assessee in the document was much less when compared with the market value. 7. The Assessing Officer had also taken into account the fact that the properties lying at even interior areas without road frontage had fetched ₹ 5,00,000/- per cent, as evidenced by an agreement found during the course of Survey u/s 133A in the premises of M/s. Hotel Anjali Park, Kottayam on 13-2-2007. For these and other ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naccounted investment of ₹ 1,68,39,970/- ( ₹ 67,37.270/- + ₹ 1,00,82,700/-) has been added to the returned income for A.Y. 2007-08. 22. The Ld. AR has also filed argument note and the same reads as follows: The above appeals are filed by the Revenue against the order of the CIT(A)-IV, Kochi, in I.T.A. Nos.347 348/CIT(A)-IV/Kochi/2015-16 dated 31.03.2016. For the Assessment Year 2006-07, the Assessing Officer made addition of ₹ 1,31,55,837/- as income under other sources vide paragraphs-4 7 of the Assessment Order dated 27.03.2014. In paragraph-4(c) of the Assessment Order, the Assessing Officer observed as under:- Shri. Sunny Jacob, had purchased 3.312 Cents of land at ₹ 18 lakhs. The rate per cent is ₹ 5,40,345/-. The assessee had purchased 11.61 Cents of land for ₹ 44,48,000/- as per which the rate per Cent is ₹ 3,83,118/-. Taking the average, he had purchased 1 Cent of land for ₹ 4,18,710/-. Applying this average rate, the extra amount, Shri. Sunny Jacob had paid for the land is worked as follows . On that basis, a sum of ₹ 81,55,83 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rival submissions and perused the record. The details of the additions made by the Assessing Officer for the assessment years 2006-07 and 2007-08 with regard to the purchase of property at Kollam and Kottayam are detailed below: AY 2006-07 AY 2007-08 I Estimation of on money payment of payment for land purchase near Velankanni Matha Church, Kollam ₹ 81,55,837/- ₹ 67,57,270/- II Estimation of on money payment of payment for land purchase at Kottayam @ 200% of declared cost ₹ 50,00,000/- ₹ 1,00,82,700/- ₹ 1,31,55,837/- ₹ 1,68,39,970/- 22.2 For the assessment year 2006-2007, the above addition was elaborately discussed by the A.O. from para 4 to 7 of the impugned assessment order. The A.O. menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d during the course of survey u/s 133A of the I.T. Act. The A.O. compared the property purchased by the assessee at Kottayam with that of the property purchased by Hotel Anjali Park and after considering the advantages of the property purchased by the assessee held the value of the Kottayam property purchased by the assessee should be enhanced by 200% of the declared cost in the documented price. 22.4 The A.O. had estimated the value of all properties purchased by the assessee at Kollam and Kottayam without any documentary evidence except for two agreements seized by the Department during the search with regard to purchase of property by assessee in Kollam relating to assessment year 2008- 2009. The assessee had also admitted for the addition of difference between the agreed price and the documented price for the assessment year 2008-2009. So the admitted fact is, as regards the purchase of property at Kollam, the Assessing Officer had estimated the on-money based on incriminating documents for an altogether different assessment year. The Assessing Officer had not referred the issue to the Departmental Valuation Officer, which he ought to have done. The A.O. had ado ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition made on account of on-money for assessment years 2006-2007 and 2007-2008 is without any materials seized by the department and the same cannot be sustained. 22.5 As regards the value of property at Kottayam, the A.O. estimated 200% of the documented value by comparing the property purchased by Hotel Anjali Park. Hotel Anjali Park had purchased a freehold property, whereas the assessee had purchased tenanted property and eviction of the tenants was the responsibility of the assessee. Some of the tenants had not evicted even at the time of search. These facts have been noted by the Assessing Officer in para 6(d) of the assessment order concerning assessment year 2006-2007. Moreover, there is no evidence for payment of extra money and this fact has also been accepted by the Assessing Officer. 22.6 Moreover, the CIT(A) in the original round of litigation had and elaborately considered the issue of on-money payment and had categorically found that additions for assessment years 2006-2007 and 2007-2008 are not warranted. (CIT(A) s order dated 22.09.2010). The relevant finding of the CIT(A) as regards the deletion of on-money payment for purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to be at central junction, Kottayam, Vide 5(b) the A.O. has compared this piece of land with one property purchased by one Hotel Anjali Park, Kottayam @ 500000 per cent as per agreement found from them during the course of a survey u1s 133A. The AO has compared this property with that of the appellant and after considering the replies submitted by the appellant has adopted the valuation this property @ 200% of the declared cost and has finally mad the addition of₹ 5000000 on account of purchase of this property as payment of on money for the A.Y, 2006-07, ₹ 100827001- for A.Y 2007-08 and ₹ 160000/- for A.Y 2008-09. 18.2 The appellant has agitated both the additions. Before me it has been submitted that there cannot be a similar rate for a bigger plot, which is at the interior than a plot which is facing the front and is very strategically located and also is very crucial being approach plot to the bigger plot. Regarding Kollam property the appellant has also submitted the site plans which show that unless some road access is provided to the bigger plot no viable commercial project could be feasible on that property. The amount which has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21. In Para 6(c) of the assessment order the AO has not accepted the assessee's explanation regarding Kollam property and has observed that all the properties are of similar nature and since the Department is in possession of the two real agreements, similar rate is applicable to all the properties in the vicinity and hence the difference in rate is applied and added back as undisclosed income. 22. One major factor which emerges in the entire discussion made by the AO and as per submissions of the appellant is that the AO has merely made estimation of the valuation of all the properties purchased by the appellant at Kollam and Kottayam except for properties purchased through those two agreements which have been seized by the Department and the actual valuation has been admitted and disclosed by the appellant. Except for these two agreements nothing incriminating has been either found or seized for the other properties during the course of search at the residence as well as all the business concerns of the appellant where he is either a partner or director. In the case of Kottayam property the appellant's contention have been admitted by the AO bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Officer who is authorized as per the Income Tax Act to determine the actual market value for such a property as provided u/s 142A of the Income Tax Act. Hence the guidelines in this regard are not followed by the AO while determining the actual investment made by the appellant in purchase of immovable property. The AO has not even mentioned as to what was the circle rate notified by the Revenue Authorities for the purposes of determining the market value of the said properties. It is a generally acceptable principle that when a property is registered with the registering authority the valuation cannot be challenged and this is acceptable throughout the country unless something incriminating is found by the Department during the course of any action. 26. In the case of Moidu Alias Kunhippa vs. ACFT the Hon'ble ITAT Cochin Bench has decided the issue in ITR No. 256 (AT) 75 favouring the appellant and held that additions made on pure estimates are not justified. Nothing contrary-to this has so far been held by the Hon'ble jurisdictional High Court. Coupled with this it is held in various case laws by the Hon'ble courts that in a search and seizure c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the AO was held to be not sustainable and hence were deleted for 2006-07. 23.4 Against this, the Revenue is in appeal before us. The Ld. DR submitted that the evidences unearthed during the search u/s. 132 hold good only for the year in which the search took place (i.e. AY 2008-09) and that the assessment u/s. 153a for the preceding years in the light of these evidences were based on presumptions and hence not maintainable. The Ld. DR relied on the jurisdictional High Court in the case of CIT vs. Hotel Meriya, cited supra in which court had held that when it is revealed in a search u/s. 132 that the assessee was following a particular method to conceal income, it is just and reasonable to presume that the same practice was followed by the assessee throughout the assessment years in the block period. The Ld. DR submitted that the income generated from the unaccounted sales had been invested in immovable properties worth more than ₹ 6 crores which itself is a concrete evidence for the concealment of income for all the years. It was submitted that the Commercial Taxes Department had also detected the suppression of sales during an inspection of 5 business co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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