Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (4) TMI 102 - AT - Income TaxQuantification of exact amount of undisclosed income chargeable to tax in the hands of the assessee - Whether Commissioner of Income- tax (Appeals) has gone beyond the scope of the direction given by the Tribunal in determining the exact quantum? - assessee has submitted that the amount of ₹ 10.80 lakhs taken by the learned Commissioner of Income-tax (Appeals) as cash outgoing on account of personal expenditure including repairs and renovation is without any basis - Held that - Matter was restored by the Tribunal to the file of the learned Commissioner of Income-tax (Appeals) for the purpose of correct determination of quantum of addition on account of unexplained cash/assets/interests. Keeping in view this specific direction given by the Tribunal, we do not find ourselves in agreement with the contention of learned counsel for the assessee that the learned Commissioner of Income- tax (Appeals) has gone beyond the scope of the direction given by the Tribunal in determining the exact quantum of addition made on account of unexplained cash. We therefore overrule the objection raised by him in this regard and proceed to decide the issue relating to quantification of undisclosed income on merit. Cash of ₹ 10.80 lakhs was stated by the assessee himself to have been spent on personal expenditure as per the seized documents. As regards the other contention raised by learned counsel for the assessee in this regard that the cash of ₹ 7.50 lakhs received as interest and distributed amongst the partners was used to meet the personal expenditure of ₹ 10.80 lakhs, it is observed that the learned Commissioner of Income-tax (Appeals) has specifically noted in the working given above that the amount of ₹ 7.50 lakhs was distributed to the partners excluding the assessee whereas the personal expenditure of ₹ 10.80 lakhs was found to be incurred by the assessee. We, therefore, find no mistake in the working made by the learned Commissioner of Income-tax (Appeals) while quantifying the unexplained cash found during the course of search at ₹ 5,28,500. It is also noted that if the said amount of unexplained cash is added to the other undisclosed income of the assessee as computed by the Assessing Officer including cash sale of scrap/machinery, total undisclosed income of the assessee would come to ₹ 46,04,348 as computed by the Commissioner of Income-tax (Appeals) and since the same is more than the undisclosed income of the assessee assessed by the Assessing Officer at ₹ 45,83,737, we are of the view that no further relief to the assessee is warranted after the quantification of correct undisclosed income as per the direction of the Tribunal as rightly held by the learned Commissioner of Income-tax (Appeals). We therefore find no infirmity in the impugned order of the learned Commissioner of Income- tax (Appeals) - Decided against assessee. Undisclosed income on account of unexplained fixed deposits and interest received in cash from the builder - notice under section 158BC - penalty imposed under section 158BFA(2) - Held that - As decided in CIT v. Splender Construction 2011 (1) TMI 879 - DELHI HIGH COURT admission of substantial question of law by the hon'ble High Court by itself would not be sufficient to hold that the issue was debatable on which levy of penalty could not be attracted. It was held that the additions made to the undisclosed income of the assessee had been confirmed by the Tribunal in the quantum proceedings showing clearly that the assessee had furnished inaccurate particulars of its income and after admission of the appeal of the assessee filed against the order of the Tribunal, the said appeal was dismissed by the hon'ble High Court. Keeping in view the said decision of the hon'ble Delhi High Court, Supra we reject the contention raised by learned counsel for the assessee being devoid of merit. The issues involving the two additions made to the undisclosed income of the assessee on account of unexplained fixed deposits and receipt of interest from the builder in cash thus have been decided against the assessee by the Tribunal whereby the different stands taken by the assessee as an afterthought with an intention to create a dispute have not been accepted and the explanation/submission made in this regard by the assessee has been rejected after having found the same to be unsatisfactory/unacceptable. As decided in Kandoi Bhogilal Mulchand v. Deputy CIT 2011 (11) TMI 460 - Gujarat High Court the income which is detected as a result of search operation under section 132 is undisclosed income of the assessee within the meaning of section 158BFA(2) of the Act and penalty provision under section 158BFA(2) would arise when the Assessing Officer has assessed the income in the block period in excess of the income declared by the assessee. Thus no justifiable reason to interfere with the impugned order of the learned Commissioner of Income-tax (Appeals) sustaining the penalty imposed by the Assessing Officer under section 158BFA(2) of the Act - Decided against assessee. Unaccounted interest received in cash from the builder and unexplained jewellery found during the course of search - penalty under section 158BFA(2) - Held that - No justifiable reason to interfere with the impugned order of the learned Commissioner of Income-tax (Appeals) sustaining the penalty imposed by the Assessing Officer under section 158BFA(2) in respect of addition of ₹ 7,71,000 made to the undisclosed income of the assessee on account of interest received in cash from the builder. As regards the penalty imposed in respect of addition made on account of unexplained jewellery the explanation of the assessee in respect of jewellery found during the course of search thus has been substantially accepted in the quantum proceedings and keeping in view the estimations and appropriations involved in the valuation of jewellery as made at different stages, we are of the view that the marginal difference of ₹ 41,305 added to the total income of the assessee on account of unexplained jewellery cannot be treated as concealment in order to attract penalty under section 158BFA(2) of the Act. - Decided partly in favour of assessee.
Issues Involved:
1. Quantification of undisclosed income. 2. Penalty under section 158BFA(2) of the Income-tax Act, 1961. Detailed Analysis: Issue 1: Quantification of Undisclosed Income Case of Mr. Vasant Thakoor: - The primary issue was the quantification of the exact amount of undisclosed income chargeable to tax. - A search and seizure operation was conducted on September 4, 1997, leading to a block assessment determining undisclosed income at Rs. 53,52,237. - The Commissioner of Income-tax (Appeals) (CIT(A)) directed further inquiries, and the Assessing Officer (AO) recalculated the income at Rs. 43,83,737. - The Tribunal directed the CIT(A) to determine the correct quantum of addition for unexplained cash/assets/interests. - The CIT(A) accepted the quantification of interest at Rs. 7,50,000 but disputed the quantification of cash sales of scrap/machinery, which the AO estimated at Rs. 30 lakhs. - The CIT(A) found the correct amount to be Rs. 24.92 lakhs based on seized documents, leading to a total undisclosed income of Rs. 46,04,348. - The Tribunal upheld the CIT(A)'s order, dismissing the appeal of the assessee. Case of Mr. Madhukar B. Thakoor: - The issue was similar to Mr. Vasant Thakoor's case, focusing on the quantification of undisclosed income from the sale of scrap/machinery. - The AO initially computed the undisclosed income at Rs. 21,76,560, including Rs. 12.50 lakhs from cash sales. - The CIT(A) re-evaluated and estimated the undisclosed income from scrap/machinery at Rs. 4,94,300. - The Tribunal upheld the CIT(A)'s order, dismissing the appeal. Issue 2: Penalty under Section 158BFA(2) Case of Late Shri Balchandra B. Thakoor: - Penalty was imposed under section 158BFA(2) for additions of Rs. 4,20,000 (unexplained fixed deposits) and Rs. 7,38,000 (interest received in cash). - The CIT(A) sustained the penalty for these additions, noting that the assessee had sufficient time to disclose the correct income but failed to do so. - The Tribunal upheld the CIT(A)'s order, dismissing the appeal. Case of Mr. Mohan B. Thakoor: - Penalty was imposed for additions of Rs. 7,71,000 (interest received in cash) and Rs. 41,305 (unexplained jewellery). - The Tribunal upheld the penalty for the interest received in cash but found the addition for unexplained jewellery to be marginal and not warranting penalty. - The appeal was partly allowed, sustaining the penalty for the interest received in cash. Case of Mr. Madhukar B. Thakoor: - Penalty was imposed for additions of Rs. 7,52,000 (interest received in cash) and Rs. 4,94,300 (cash sale of scrap/machinery). - The Tribunal upheld the CIT(A)'s order, sustaining the penalty for both additions. Conclusion: The Tribunal dismissed the appeals concerning the quantification of undisclosed income, upholding the CIT(A)'s determinations. In cases involving penalties under section 158BFA(2), the Tribunal upheld the penalties for interest received in cash and other significant additions, while providing partial relief in one instance concerning unexplained jewellery. The decisions emphasize the importance of accurate disclosure and the consequences of failing to do so.
|