TMI Blog2023 (10) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... pted the same also, we find no reason to interfere in the order of the CIT(A) deleting the addition made in the hands of the assessee finding the said income to be doubly assessed to taxed. Decided in favour of assesse. - Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member For the Assessee : Shri Tushar Hemani, Sr.Advocate For the Revenue : Ms. Saumya Pandey Jain, Sr.DR ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER This appeal has been filed by the Revenue against order passed by the ld. Commissioner of Income Tax(Appeals)-12, Ahmedabad [hereinafter referred to as Ld.CIT(A) ] under section 250(6) of the Income Tax Act, 1961 ( the Act for short) dated 20.5.2019 pertaining to the Asst. Year 2017-18. 2. At the outset, it was stated that solitary grievance of the Revenue relates to the deletion of addition made by the AO on account of unexplained expenditure under section 69C of Rs. 2,54,73,420/-. The said addition, it was pointed out, emanated from noting in a diary found during search conducted on the assessee s premises, which diary marked as Annexure A/1 and which allegedly contained details of receipts and payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs of transactions in the diary amounted to Rs. 3,91,33,420/-, which after eliminating duplicate entries the total impact came to Rs. 2,54,73,420/- which included payment of Rs. 1,66,98,800/- and receipt of Rs. 1,45,23,900/-. The partnership firm had surrendered the higher of the payments and receipts, being Rs. 1.66 crores, to the Settlement Commission, while the AO had made addition to the income of the assessee of the total entries found in the diary amounting to Rs. 2,54,73,720/-. The entire facts relating to the case, as stated above, are reproduced at para 3 to 3.4 of the order as under: 3. The appellant is an Individual, who derives income from business as Partner in the firm, M/s Laxmi Constructions, which is assessed to tax as such (the Firm has total three partners - the appellant and his two sons - all three partners sharing P L equally). In addition, the assessee had also minor income from other sources such interest income. There was a search operation u/s 132 of the Income Tax Act at the residential premises of the assessee on 21/10/2016. Simultaneously, survey operation u/s 133A of the Act was carried out at the business premises of the M/ Laxmi Constructions, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53A are ongoing in case of the partner Shri Shyamsunder Agrawal and the impact of the seized material found during the search shall be taken into consideration at the time of finalization of assessment and accordingly the PCIT had not offered his comments on that portion of ITSC application filed by the Firm. In the rejoinder to the Rule - 9 report filed by the Firm before the Hon'ble ITSC, the Firm had submitted that the observation of the PCIT is contrary to his own comments with excluding certain repetitive entries, vide order sheet noting asked the assessed to show cause as to why an amount of Rs. 2,54,73,420/- should not be added to the total income of the assessee. The appellant filed the written submission dated 14/12/2018, wherein it was explained that the income with respect to the entries appearing in the seized diary being Annexure A-1 had been duly considered in the additional income in the petition filed before Hon'ble Settlement Commission, Mumbai and therefore, no addition can be made in the case of appellant assessee again on the basis of such entries as appearing in the seized diary. It was also explained before the AO that, entries in the seized diary i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n law, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,54,73,420/- without appreciated the fact that the department in the Rule-9 Report had not accepted the contention of the assessee and had stated that the impact of seized material found during the search shall be taken into consideration at the time of finalization of assessment proceedings. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,54,73,420/- without considering the fact that in Rule 9 report, submitted by the Department before the Hon'ble ITSC, it has been specifically mentioned that the seized material has been found from the residential premises of the assessee and the same will be considered in the case of Shri Shyamsunder R Aggrawal. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,54,73,420/- without appreciating that during the course of assessment proceedings, the assessee in his statement recorded on oath have admitted that day to day cash receipts and payments are written in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,54,73,420/- it appears that he is banking on the provisions of Section 132(4)/132(4A) of the Act, the Rule 9 Report of the PCIT (Central) to the Hon. ITSC in the case of the appellant's firm M/s. Laxmi Construction. In this regard, I note that the contents of the diary Annexure-Al were explained by the appellant which is not disputed by the Department and nowhere it has been admitted by the appellant that the unaccounted income as per the said diary was his own in his personal capacity and that it was not out of the income and expenses of his only Partnership Firm the source of all income (except some interest income in personal capacity). I do not find that the appellant has failed to discharge his onus in terms of questions asked by the authorized officer during the course of search and that the appellant had admitted the undisclosed income in his personal capacity, which he has not honoured while filing the return of income. Otherwise also there is no bar under the Income Tax Act that the unaccounted income cannot be owned up by another person including Partnership Firm or Company if the evidences and circumstances are so. This also has to be kept in mind that though the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenses recorded in the diary related to his household expenses, and some related to the business of the assessee. Thus it is evident that there was no categorical admission by the assessee of the notings in the diary as all pertaining to him in his personal capacity, on the contrary he had stated that it related to his business also. 11. Moreover, the Ld.CIT(A) has found that all income relating to entries noted in the diary stood disclosed by the partnership to and accepted by the settlement commission. This fact is not disputed before us. In the light of the same we agree with the ld.CIT(A) that the objection of the ld.Pr.CIT to the ITSC being overruled by acceptance of income by ITSC, the said objection was irrelevant to merit any consideration while framing assessment in the hands of the assessee. 12. In the light of the above where the assessee had stated the notings in the diary as relating to his business and which stood disclosed by its partnership firm to the settlement commission, who in turn accepted the same also, we find no reason to interfere in the order of the Ld.CIT(A) deleting the addition made in the hands of the assessee finding the said income to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
