2010 (6) TMI 800 - AT - Income Tax

2011 (12) TMI 601 - AT

Issues Involved:

1. Unexplained investment in two cars.
2. Undisclosed investment in land purchased from Smt. Sarla Devi.
3. Undisclosed income in purchase of Plot No. 3D/46, NIT, Faridabad.
4. Undisclosed investment in purchase of land measuring 15 Kanal 4 Marlas in Village Pali.
5. Undisclosed investment in purchase of land from Smt. Sarla Devi & Shri Tek Chand.
6. Undisclosed investment in purchase of land in the name of Shri Mulak Raj Bhatia.
7. Income from money lending.
8. Undisclosed investment in plot No. 64, Neelam Bata Road, Faridabad.
9. Undisclosed income from real estate business.
10. Unexplained purchase of household goods.
11. Income from Lucky Car draw scheme.
12. Undisclosed commission income from chits business.

Issue-wise Detailed Analysis:

1. Unexplained investment in two cars:
The assessee contested the addition of Rs. 8,80,000 for alleged unexplained investment in two cars. The Tribunal noted that the Assessing Officer (AO) did not ask the assessee about these cars during the statement recorded on 26.4.1999, nor was any enquiry made from Dinesh Kumar or Subash Chander. The Tribunal remanded the issue back to the AO for fresh decision after detailed enquiries and providing the assessee an opportunity to cross-examine his brother Inderjit Singh Sabharwal.

2. Undisclosed investment in land purchased from Smt. Sarla Devi:
The AO added Rs. 5,00,000 based on an alleged agreement to purchase land from Smt. Sarla Devi. The Tribunal found no evidence supporting this claim, as no such agreement was found during the search. The CIT(A) deleted the addition, and the Tribunal upheld this decision, finding the AO's conclusions misplaced and misconceived.

3. Undisclosed income in purchase of Plot No. 3D/46, NIT, Faridabad:
The AO estimated the market value of the plot at Rs. 7,000 per sq. yard, resulting in an addition of Rs. 8,40,000. The Tribunal found no incriminating material indicating any extra payment and held that the addition based on market price estimation was unjustified. The CIT(A)'s deletion of the addition was upheld.

4. Undisclosed investment in purchase of land measuring 15 Kanal 4 Marlas in Village Pali:
The AO added Rs. 30,90,000 based on statements suggesting the land was purchased for Rs. 16 lacs per acre. The Tribunal noted the land was taken on lease for Rs. 3,000, and no material indicated an outright purchase. The CIT(A)'s deletion of the addition was upheld.

5. Undisclosed investment in purchase of land from Smt. Sarla Devi & Shri Tek Chand:
The AO added Rs. 10,00,000 based on statements from Tek Chand and Budh Ram. The Tribunal found no evidence linking the assessee to these transactions, and the CIT(A)'s deletion of the addition was upheld.

6. Undisclosed investment in purchase of land in the name of Shri Mulak Raj Bhatia:
The AO added Rs. 9,35,000 alleging Mulak Raj Bhatia was a benamidar of the assessee. The Tribunal found no evidence supporting this claim, and the CIT(A)'s deletion of the addition was upheld.

7. Income from money lending:
The AO added Rs. 6,61,261 based on entries in a seized diary. The Tribunal noted the AO added two zeros to the figures without basis and found no corroborative evidence. The CIT(A)'s deletion of the addition was upheld.

8. Undisclosed investment in plot No. 64, Neelam Bata Road, Faridabad:
The AO added Rs. 5,00,000 alleging the plot was a benami investment. The Tribunal found no evidence supporting this claim, and the CIT(A)'s deletion of the addition was upheld.

9. Undisclosed income from real estate business:
The AO added various amounts based on documents not recovered from the assessee. The Tribunal found the AO did not examine the assessee regarding these documents, and the CIT(A)'s deletion of the additions was upheld.

10. Unexplained purchase of household goods:
The AO added Rs. 98,000 for household goods. The Tribunal noted the assessee lived with his family, and household goods worth Rs. 30,000 were declared by the spouse. The CIT(A)'s deletion of the addition was upheld.

11. Income from Lucky Car draw scheme:
The AO added Rs. 43,27,400 based on statements and documents not linked to the assessee. The Tribunal found no evidence supporting the AO's conclusions, and the CIT(A)'s deletion of the addition was upheld.

12. Undisclosed commission income from chits business:
The AO added Rs. 20,41,050 alleging the assessee earned commission from chits. The Tribunal found no evidence supporting the AO's conclusions, and the CIT(A)'s deletion of the addition was upheld.

Conclusion:
The Tribunal upheld the CIT(A)'s deletions of various additions made by the AO, finding no evidence supporting the AO's conclusions in each case. The assessee's appeal was partly allowed for statistical purposes, and the revenue's appeal was dismissed.

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