2000 (5) TMI 1070 - AT - Income Tax

Issues Involved:

1. Treatment of Rs. 23,00,000 as undisclosed income.
2. Addition of Rs. 78,34,000 as undisclosed income.
3. Addition of Rs. 11,24,000 based on agreements found during search.
4. Addition of Rs. 4,50,000 based on "Vasai Profit".
5. Addition of Rs. 5,16,500 as undisclosed rent income.
6. Addition of Rs. 4,49,652 as undisclosed interest income.
7. Addition of Rs. 28,23,408 as undisclosed income.
8. Addition of Rs. 56,256 as undisclosed interest income.
9. Addition of Rs. 3,46,909 as undisclosed income.
10. Addition of Rs. 25,000 as undisclosed income.
11. Addition of Rs. 16,75,252 as undisclosed capital and interest income.
12. Addition of Rs. 11,98,242 as undisclosed capital and interest income.
13. Treatment of Rs. 2,61,769 and Rs. 16,67,922 as undisclosed income.
14. Treatment of Long Term Capital Gains for assessment years 1994-95 and 1995-96.
15. Double addition of source and application of income.

Summary:

1. Treatment of Rs. 23,00,000 as undisclosed income:

The assessee argued that the property sale to M/s. Vishal Developers was not completed due to non-possession and other disputes. The Tribunal found that the transfer of property was not complete, and there was no evidence of receiving Rs. 23 lakhs in cash. The addition was deleted as the transaction was not proved.

2. Addition of Rs. 78,34,000 as undisclosed income:

The Assessing Officer added Rs. 78,34,000 based on seized documents indicating loans to Mr. S.R. Dantal. The Tribunal found that the documents were not rough sheets and had evidentiary value. However, the addition was restricted to Rs. 42,12,000 as the interest calculation was not substantiated.

3. Addition of Rs. 11,24,000 based on agreements found during search:

The Tribunal upheld the addition of Rs. 11,24,000 based on agreements found during the search, which were signed by Shri S.R. Dantal. The assessee could not rebut the presumption that the receipts were for payments made by him.

4. Addition of Rs. 4,50,000 based on "Vasai Profit":

The Tribunal upheld the addition of Rs. 4,50,000 based on a seized document indicating the assessee's share in "Vasai Profit". The document, though unsigned, bore the assessee's name and indicated undisclosed income.

5. Addition of Rs. 5,16,500 as undisclosed rent income:

The Tribunal deleted the addition of Rs. 5,16,500 as the seized rough sheet did not bear the assessee's name or property details. It was considered a working of a proposed project and not linked to actual rental income.

6. Addition of Rs. 4,49,652 as undisclosed interest income:

The Tribunal upheld the addition of Rs. 4,49,652 based on seized documents showing interest calculations. The documents were not considered dumb papers and were relevant for assessment.

7. Addition of Rs. 28,23,408 as undisclosed income:

The Tribunal upheld the addition of Rs. 26,58,590 (after reducing the declared amount) based on seized papers showing the assessee's capital account in M/s. Gem Builders. The source of capital was unexplained.

8. Addition of Rs. 56,256 as undisclosed interest income:

The Tribunal upheld the addition of Rs. 56,256 based on a seized paper showing interest calculations on an advanced amount. The assessee failed to explain the entries.

9. Addition of Rs. 3,46,909 as undisclosed income:

The Tribunal deleted the addition of Rs. 3,46,909 as the seized paper was considered a dumb paper, not indicating the source or nature of the amount.

10. Addition of Rs. 25,000 as undisclosed income:

The Tribunal upheld the addition of Rs. 25,000 based on a seized paper showing interest calculations on amounts advanced to Mr. Jain. The assessee could not satisfactorily explain the entries.

11. Addition of Rs. 16,75,252 as undisclosed capital and interest income:

The Tribunal upheld the addition of Rs. 16,75,252 based on seized papers showing loans advanced and interest received. The entries were in coded language and were considered relevant for assessment.

12. Addition of Rs. 11,98,242 as undisclosed capital and interest income:

The Tribunal confirmed the additions of Rs. 6,72,004 and Rs. 5,26,238 based on seized papers showing interest calculations. The amounts were decoded and considered as undisclosed income.

13. Treatment of Rs. 2,61,769 and Rs. 16,67,922 as undisclosed income:

The Tribunal held that income subject to TDS and advance tax payments should not be treated as undisclosed income. Such income should be assessed in regular assessments, and necessary deductions should be allowed.

14. Treatment of Long Term Capital Gains for assessment years 1994-95 and 1995-96:

The Tribunal directed that capital gains should be assessed at the rate of 20% in regular assessments and not included in the block assessment.

15. Double addition of source and application of income:

The Tribunal held that making additions for both source and application of income would amount to double taxation. The Assessing Officer was directed to verify and give necessary set off to the assessee.

Conclusion:

The assessee's appeal was partly allowed with specific directions for each issue. Additions were either upheld, restricted, or deleted based on the relevance and materiality of the seized documents.

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