TMI Blog2020 (6) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... f income has been accepted by the department but the CIT(A) has not given the effect of net cash accruals for the assessment year 2008-2009 for considering the return of income for the A.Y.2008-2009 and cash accruals during the assessment year 2008-2009, the assessee has not produced any balance sheet in the impugned assessment year as well as preceding assessment years. The assessee is directed to produce correct net cash accruals for the assessment year 2008-2009 only to which the assessee will get benefit from the additions made by the AO for doubting the opening cash shown by her. Further we noted from page No.16 of the paper book, the assessee has not shown the details of bank accounts which will effect the cash balance of the assessee. Accordingly, we restore the issue to the file of CIT(A) as per our observations made hereinabove. This ground of appeal of the assessee is allowed for statistical purposes. Sale of shares from hotel Sai International Private Limited - AO has made addition for want of supporting documents to substantiate the claim and the assessee was also unable to substantiate the same before the CIT(A) with supporting evidence - HELD THAT:- We observe fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wellery has not been explained by the assessee. Therefore, we confirm 85.29 grams of gold and jewellery out of 767.29 grams upheld by the CIT(A) and direct the AO to delete the addition on the exact value of 682 grams gold and jewellery. - IT(SS)A Nos.101-106/CTK/2018 - - - Dated:- 4-6-2020 - Shri C.M. Garg, JM And Shri L.P. Sahu, AM For the Assessee : Shri P.K.Mishra T.Rao, ARs For the Revenue : Shri M.K.Goutam, CIT-DR ORDER PER L.P.SAHU, AM : These six appeals have been filed by the assessee, out of which five appeals for the assessment years 2010-2011 to 2014-2015 have been filed against the order of CIT(A)-2, Bhubaneswar, all dated 02.07.2018 arising out of the assessment order passed by the AO u/s.153A/143(3) of the Act, dated 29.12.2017 and one appeal for the assessment year 2016-2017 has been filed against the order passed by the CIT(A)-2, Bhubaneswar, dated 02.07.2018 arising out of assessment order passed by the AO u/s.143(3) of the Act, dated 29.12.2017. 2. Since the assessee in all the appeals is same and the facts in all the appeals are same, therefore, for the sake of brevity and convenience, all the appeals have been heard analogousl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tantiate the opening balance which were not at all considered. 5. For these and other reasons to be adduced at the time of hearing that the assessee prays to accept the appeal and delete the entire addition in interest of natural justice and fair play. 3. Further the ld. AR of the assessee has filed an application dated 01.08.2019 for acceptance of additional grounds of appeal already taken in the grounds of appeal filed and submitted that due to lack of knowledge the assessee could not raise the legal ground before the CIT(A), therefore, the same has been raised before the Tribunal for consideration. 4. Ld. AR before us argued both on legal ground as well as on merits, therefore, looking to the facts of the case, the legal ground raised by the assessee is taken on record and appeal is heard on legal grounds as well as on merits. 5. Brief facts of the case are that the assessee is an individual deriving income from house property, remuneration from Hotel Sai International Pvt. Ltd. and household business and filed her original return of income u/s.139(1) of the Act, 1961 on 31.03.2011 showing total income at ₹ 1,99,580/-. A search and seizure operation u/s.132 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income, therefore, for want of any evidence, the AO added ₹ 6,62,000/- to the total income of the assessee as unexplained opening cash in-hand considering the income declared by the assessee in the previous assessment year. 6. The AO further noticed that the assessee had purchased a piece of land at New Colony Road, Rayagada for a total consideration of ₹ 2,90,000/-. On verification of the cash-flow statement, the stamp duty of ₹ 20,572/-, which was paid at the time of registration of a piece of land, was not reflected but in the sale deed, it was clearly mentioned that the stamp duty of ₹ 20,572/- has been paid. Therefore, the AO added the same into the total income of the assessee as unexplained investment on stamp duty for registration of land and completed the assessment accordingly. 7. Feeling aggrieved from the order of the AO, the assessee filed appeal before the CIT(A). The assessee also filed detailed submissions and after considering the submissions the CIT(A) held as under :- Ground Nos.2, 3 4:- 4.1 In these grounds, the appellant has challenged the addition made by the Assessing Officer on account of the excess dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 4,000/- per month. The appellant belongs to an affluent family and such small drawing for house hold expenditure and other ceremonial / social functions is extremely inadequate. There is no doubt that the drawings have been deliberately shown small to justify accumulation of cash balance. Therefore, the cash flow statements cannot be relied upon. Considering these aspects, I am of the considered view that the deposits could not from explained non-cash sources or from the accumulated opening cash balance, but they are from the undisclosed income of the appellant. Accordingly, the addition made by the Assessing Officer of ₹ 6,62,000/- is confirmed. The grounds of appeal are dismissed. 5. Ground No. 5:- In this ground, the appellant has contested the addition made by the Assessing Officer of ₹ 20,572/- on account unexplained investment on stamp duty and registration of land. In the previous grounds, I have confirmed the addition of ₹ 6,62,000/- as undisclosed income of the appellant. The investment of ₹ 20,572/- can be treated as application of undisclosed income. Accordingly, the addition of ₹ 20,572/- is ordered to be de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is a bunch of loose sheet. Please explain the contents. Ans It is an agreement for purchase of immovable property between myself and Smt. Huss Nara Bibi. I have paid an advance of ₹ 5 Lakh. Q.13 Please furnish the source for payment of the above advance. Ans This is from my own income i,e rental income, share income-from firm and petty business income and from money given by my husband . Q14 What are the source for the money given by your husband? Ans His rental income, professional income and receipt from the sale of agricultural land. Q.18 Have you reflected the above transaction and source for the above purchase in your return of income or books of account. Ans No, I don't maintain any regular books of accounts and I have filled my income tax .returns. Q.19 Did you file your balance sheet in your income tax return? Ans No, I have not filled my balance sheet as my income was computed on estimated basis Q.20 If you have not filled your balance sheet then where is the above transactions reflected? Ans The purchase is from my income and my income is from estimated basis only and from rental income. Ld. DR fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3A speaks of abatement of assessment or reassessment pending on the date of the initiation of search within the period of six assessment years specified under the provision that will also not absolve the assessee from his liability to submit returns as provided under Section 153A(1)(a). This being the scheme of the provisions of the Act, the Appellate Tribunal ought to have considered the issue with specific reference to the facts involved in the case and as provided under Section 153A. 21. However, we find that the Tribunal without appreciating the facts and circumstances has proceeded purely on the basis that the cases at hand were covered under the Special Bench decision in All Cargo Logistics Ltd. (supra). In our view the course adopted by the Tribunal was not the proper one to decide the question with regard to the sustainability of the order passed by the First Appellate Authority. Therefore, we are of the considered opinion that the Tribunal has not adopted the right method to decide the issue with regard to the question framed in these appeals and therefore, it is only necessary to remand the matter to the Tribunal for fresh consideration. ii) CIT Vs. Dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n possession of any money, bullion, jewellery or other valuable article in his possession, which has not been or would not be disclosed for the purpose of this Act (hereinafter referred to as undisclosed income or property then the Director General, Director or Chief Commissioner or Commissioner, as the case may be, may authorize any Joint Director, Assistant Director, Assistant Commissioner of Dy. Commissioner of Income tax, called the authorized Officer, to enter and search any building, place, vessel, vehicle or air-craft, etc. where he has reason to suspect that such books of accounts, other documents, money, bullion, jewellery or other valuable article or thing are kept, break open the lock of any door, etc., search any person who is about to go from the above premises, require any person to account for the books of accounts or documents, seize any such books of accounts or documents, money, bullion, jewellery, etc. or things found as a result of such search and may place mark of identification on any books of accounts or other documents or take copy thereof and to prepare inventory of the same. The purpose of section 132 for issue of warrant of authorization is to un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onducted or requisition is made. It would , therefore, clarify that not only the warrant of authorization is to be issued in the name of the assessee but search shall have to be necessarily conducted or in case of requisition under section 132A, the requisition is to be made actually. Hon ble Allahabad High court in the case of Chandra Prakash Agrawal v. CTT; 287 ITR 172 considering the definition of requisition under section 132A of the Act as is referred to in section 158BA of the Act observed that the word requisition means taking of actual possession. The requisition is complete only when the seized books of accounts and other documents which have been requisitioned have been delivered to the requisitioning authority. The provisions of section XIV-B of the Act would come into play only when the books of accounts or other documents or assets are actually received by the Assessing Officer pursuant to the requisition made under section 132A. It was held Held, that no search under section 132 had been conducted by the Income-tax Department. The search, if any, was conducted on June 7/8 of 2001 by the Central Excise Department. The Income-tax Department had sent a requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount Particulars Amount To Opening Balance Cash 854,567.64 By Municipal Tax 2,400.00 Andhra Bank SB A/c. 4,017.00 SBI SB A/c. 1,755.36 By Investment in Agrigold 18,000.00 To House Property Income 228,000.00 By Interest on HB Loan 78,336.00 To Remuneration from Hotel Sai Int. 160,000.00 By Repayment of AB BH Loan 146,164.00 To Received Rent Advance By Investment in RITAM, Rayagada 400,000.00 To Received from N Trinath R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Andhra Bank of ₹ 147/- and interest from State Bank of India at ₹ 943/-, which is evident from the paper book page No.32. These incomes have not been disclosed by the assessee in his return of income. These are the real income which have been received by the assessee in the impugned assessment year which should have been disclosed in the return of income. It is clear from the cash-flow statements that the assessee has made certain payments out of his income and opening cash available with her. It is also clear that the interest income is also part of the income. The AO has doubted the availability of opening cash i.e. payments are also in doubt to the extent of ₹ 6,62,000/-. The contention of the assessee is that the additions can only be made on the basis of incriminating material found during the course of search and seizure proceedings and in support of his contention, ld. AR relied on the decision of Hon ble Delhi High Court in the case of Kabul Chawla (supra) and drew our attention to para 37 of the said decision. For the sake of clarity we would like to reproduce the summary of the legal position drawn by the Hon ble Delhi High Court at para 37, which read a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. Ld. AR inviting our attention to sub-para (vii) of Para 37 of the said decision of the Hon ble High Court, submitted that in the case of the assessee there is no incriminating material found during the course of search, therefore, as per the decision of the Hon ble High Court in the above case, the interference by the AO u/s.153A of the Act with the assessment already completed u/s.143(3) of the Act is unjustifiable. However, on careful perusal of the para 36(vii) of the above observations of the Hon ble High Court, we found that the Hon ble High Court in the above para has observed that Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at opening balance of ₹ 6,62,000/-. Further on perusal of the CIT(A) s order, the assessee has filed return of income for the assessment year 2008-2009 also. This return of income has been accepted by the department but the CIT(A) has not given the effect of net cash accruals for the assessment year 2008-2009 for considering the return of income for the A.Y.2008-2009 and cash accruals during the assessment year 2008-2009, the assessee has not produced any balance sheet in the impugned assessment year as well as preceding assessment years. The assessee is directed to produce correct net cash accruals for the assessment year 2008-2009 only to which the assessee will get benefit from the additions made by the AO for doubting the opening cash shown by her. Further we noted from page No.16 of the paper book, the assessee has not shown the details of bank accounts which will effect the cash balance of the assessee. Accordingly, we restore the issue to the file of CIT(A) as per our observations made hereinabove. This ground of appeal of the assessee is allowed for statistical purposes. 13. Thus, appeal of the assessee for A.Y.2010-2011 [IT(SS)A No.101/CTK/2018) is partly allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmed the additions made by assessing officer amounting to ₹ 3,00,000 (Three lakhs) received through bank towards sale of shares at par (face value which is equal to cost of acquisition), treating it income of the Assessee, without considering the written submission of the assessee and evidence thereof in this regard i.e., register of shareholders and confirmation letter and director's register duly certified by managing director of the company. 6. For these and other reasons to be adduced at the time of hearing that the assessee prays to accept the appeal and delete the entire addition in interest of natural justice and fair play. 15. Ground Nos.1 to 3 are relating to legal issue, which we have decided the same in the appeal of the assessee for A.Y.2010-2011 against the assessee. Therefore, the legal grounds raised by the assessee in the present appeal is dismissed. 16. In respect of ground No.4, we find that the AO in the assessment order has observed that the assessee was unable to explain the entire deposits into the bank account resulting into difference of ₹ 5,22,571/- has been added to the total income of the assessee. The assessee has produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justice. 2. For that, when documents seized during the course of search operation were duly explained by the Assessee and accepted by the learned A.O, hence he should not have disturbed the Assessment Under Section,143(l)(a) of the Act. The impugned additions made in the order of Assessment for Assessment year 2012-13 being not sustainable in the eye of law is liable to be deleted in the interest of justice. 3. For that, In course of search, no such incriminating materials could be unearthed by the Search Team, the documents seized by the Search Wing were explained by the Assessee during the course post search inquiry as well as during the course of Assessment also. And when there were no such incriminating material found during the course of search and the seized documents, were well explained by the Assessee which were also accepted by the Search Team as well as by the A.O., then he should have accepted the return filed by the Assessee and should have also accepted the Assessment passed U/s.l43(1)(a) of the Act and should not have disturbed the completed Assessment. Hence the impugned additions made in the order of Assessment for Assessment year 2012-13 being not sustai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the order of Assessment for Assessment year 2013-14 being not sustainable in the eye of law is liable to be deleted in the interest of justice. 3. For that, In course of search, no such incriminating materials could be unearthed by the Search Team, the documents seized by the Search Wing were explained by the Assessee during the course post search inquiry as well as during the course of Assessment also. And when there were no such incriminating material found during the course of search and the seized documents, were well explained by the Assessee which were also accepted by the Search Team as well as by the A.O., then he should have accepted the return filed by the Assessee and should have also accepted the Assessment passed U/s.l43(l)(a) of the Act and should not have disturbed the completed Assessment. Hence the impugned additions made in the order of Assessment for Assessment year 2013-14 being not sustainable in the eye of law is liable to be deleted in the interest of justice. 4. For that, when during the course of Search Assessment proceeding, the Assessee produced day-wise cash flow statement, capital account, ledger account along with cash book and copi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is also directed to substantiate her claim with sufficient evidence in respect of difference of accounts. This ground of appeal of the assessee is allowed for statistical purposes. 26. Further in respect of ground No.5, we find that during the course of assessment proceedings the assessee could not furnish supporting documents to substantiate her claim. Before us, ld. AR submitted that the rent received by the assessee as advance was already shown as an income for subsequent years. Therefore, in the interest of justice, we send this issue to the file of AO for deciding the issue afresh after affording reasonable opportunity of hearing to the assessee. The assessee is also directed to cooperate with the AO for early disposal of the case. This ground of appeal of the assessee is allowed for statistical purposes. 27. With regard to ground No.6, ld. AR submitted that the registration charges amounting to ₹ 28,385/- was borne by the assessee out of drawings shown in the cash-flow statement, therefore, the addition made by the AO and confirmed by the CIT(A) is unjustified. On perusal of the orders of both the authorities below, we find that the assessee could not subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. For these and other reasons to be adduced at the time of hearing that the assessee prays to accept the appeal and delete the entire addition in interest of natural justice and fair play. 30. Ground Nos.1 to 3 are relating to legal issue, which we have decided the same in the appeal of the assessee for A.Y.2010-2011 against the assessee. Therefore, the legal grounds raised by the assessee in the present appeal is dismissed. 31. In respect of ground No.4, we, on perusal of the order of the CIT(A), find that the CIT(A) has already given the relief to the assessee by allowing the appeal of the assessee, therefore, there is no room for the assessee for further grievance before the Tribunal. Accordingly, this ground of appeal of the assessee has become infructuous. 32. Thus, appeal of the assessee for A.Y.2014-2015 in IT(SS)A No.105/CTK/2018 is dismissed. 33. Now, we shall take up the appeal of the assessee in IT(SS)A No.106/CTK/2018 for A.Y.2016-2017, wherein the assessee has raised the following grounds :- 1. For that, the impugned order of Assessment passed U/S.153A read with section 143(3) of the Act is without jurisdiction and without the authority of law, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded the same into the total income of the assessee. In appeal, the CIT(A) observed that the assessee has explained the investments in gold ornaments and jewellery of 1650 grams amounting to ₹ 45,44,500/- and accepted the same, however, the CIT(A) confirmed the remaining gold ornaments and jewellery being 767.29 grams amounting to ₹ 21,13,302/- holding the same as unexplained. Against the order of CIT(A), the assessee is in further appeal before the Income Tax Tribunal. 36. Ld. AR before us filed a written submissions which read as under:- WRITTEN NOTES OF SUBMISSION ON BEHALF OF THE APPELLANT : FACTS: - For that, a Search and Seizure operation U/s.132 of the Income Tax Act, 1961 was conducted in the residential premises of the Assessee on 12.02.2016. Consequence to search, Assessment proceeding for Assessment year 2016-17 was initiated. During course of search, in the residential premises and from the locker No.75/4 and 145/2 at Indian Overseas Bank, Rayagada, the following gold and jewellery were found and seized. SI No. Particulars of premises searched Gold jewellery found grams ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order passed by the forums below, this present appeal is preferred for kind interference of this Hon'ble Tribunal. SUBMISSIONS.- For that, the learned C.I.T(A) has committed gross error in fact as well as of law in not allowing the addition of 917.29 grams of gold and jewellery valued at ₹ 25,26,438.00 made by the learned A.O. The findings given by the learned C.I.T.(A) in paragraph No.4.6 at page No.4 of his order is completely illegal, wrong and contrary to the facts on record. Therefore, the addition of gold and jewellery of 767.29 grams valued at ₹ 21,13,302.00 being not sustainable in the eye of law, needs to be deleted in the interest of justice. For that, the Appellant wants to draw kind attention of this Hon'ble Tribunal to Annexure-3 at page No. 16 and 17 of the Paper Book that is the written submission filed before C.I.T.(A). Further, the Assessee also drew attention to Annexure-5 to Annexure-8 i.e. from Page No.36 to 96 of the Paper Book, these documents formed part of seized materials and were well available before the Investigation Wing, the A.O as well as before the learned C.I.T.(A), therefore the findings given by him that, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the learned A.O. and consequential addition made by him runs contrary to his own finding of fact, as such, the impugned addition made by him, needs to be deleted in the interest of justice. 8. For that, the Assessee/Appellant submits herewith a detail chart of gold and jewelleries owned and purchased by her for better appreciation of facts; 1. Total gold and jewelry found from residence and locker 2417.290 grams 2. Learned A.O. allowed during Assessment 1500.000 grams 3. Learned C.I.T(A) allowed in appeal 150.000 grams Total 1650.000 grams Now dispute is for 767.290 grams Sl.No Weight Date of Purchase Reference to Paper Book 1. 43.91 grams 04.03.2012 Page No.37 38 (NTR-05-67) 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Page No.50 (bill enclosed) 20. 18.00 grams 19.01.2016 Page No.50 (bill enclosed) Total 567.87 grams 9. That, total 567.87 grams gold jewellery were purchased by the Assessee whose bills and vouchers and details were produced by the Assessee at the time of Assessment along with cash flow statement explaining the source of availability of fund for purchase of jewellery. In none of the years, the learned A.O could question the purchase of gold jewellery. Therefore gold and jewellery purchased in previous years accepted by the forums below cannot be questioned in this year. That apart, gold and jewellery purchased during this year are well explainable and the learned A.O has accepted the cash flow statement. Once he has accepted purchase of Gold and jewellery for this year in his order of Assessment in 1st para at page No.5, same cannot be disallowed again. Therefore the impugned addition needs to be deleted in the interest of justice. 10. That, the Forums below have committed gross error of law as wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessee/Appellant. The learned C.I.T(A) also should not have ignored the explanations and evidences produced before him and before the learned A.O. as well as the seized materials while confirming addition of 767.290 grams valued at ₹ 21,13,302.00. The impugned addition, thus runs contrary to the facts available on record, as such, the same is not sustainable in the eye of law, hence needs to be deleted in the interest of justice. That, in the family of the Assessee, the Assessee has been staying with her husband, father-in-law, mother-in-law, daughter and son. As per the CBDT circular, the eligibility of gold and jewellery owned by them are of 1550.00 grams. The sister-in-law of the Assessee has kept 100.00 grams of jewellery in her bank locker as she had no locker account. Further, from the documents seized as NTR-05, it can be found that, the Assessee in couple of years had purchased 282.58 grams and 85.29 grams of gold and jewellery were purchased after taking consumer loan of ₹ 1,00,000.00 from Andhra Bank in the financial year 2008-09. Further, the Assessee and her husband had purchased 200.00 grams each totaling to 400.00 grams of gold and jewellery. So ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d added the same to the total income of the assessee. In first appellate proceedings, the CIT(A) considering the submissions of the assessee has accepted that the source of 1650 grams gold and jewellery has been explained and confirmed the remaining gold and jewllery found and seized during the course of search. On perusal of the assessment order, it is found that the AO himself in first para at page No.5 of the assessment order has mentioned that the assessee has explained the sources with regard to acquisition of gold jewellery weighing around 682 grams. The ld. AR before vehemently submitted that even though the A.O. has accepted the fact that 682.000 grams of gold jewelry over and above that 1550.000 grams were explained but while completing the Assessment has allowed only 1500.000 grams and confirmed the addition of 917.29 grams, therefore, impugned addition made by him, needs to be deleted. Ld. AR also drew our attention to the statement of details of gold purchased by the assessee at page 36 of the paper book along with bills. On careful perusal of the same, we find that 282.58 grams gold and jewllery were in the acquisition of the assessee. It was also submitted by the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the assessee's case, wherein no specific deduction of gold jewellery possessed by family members and grand children was given by the Assessing Officer from the total gold jewellery found at the time of search and seizure operation and differential gold jewellery of 1924.22 gr. is the gold jewellery possessed by the female members and minor children of the assessee's joint family and this quantity of 1924.22 gr. is well within the total limit of jewellery at 2100 grms. as per the CBDT instruction no.1916 dated 11.05.1994. 43. As per the above quoted judicial pronouncements and the facts and circumstances of the case, the assessee deserves to get benefit of the aforesaid CBDT Instruction No.1916, dated 11.05.1994, according to which 1650 grams is not to be treated as undisclosed investment. The CIT(A) has also held that the assessee is entitled to have 1550 grams of gold as per the following family members :- N. Roja 500 gms. N. Trinath Rao (Husband) 100 gms. N. Rushikesava Rao (Father-in-law) 100 gms. J.N. Gajalaxmi(Mothe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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