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2015 (7) TMI 158 - AT - Income TaxUndisclosed income - addition made on the basis of notings on a loose paper - Held that - Firstly, the loose paper was found in the premises of Shri Sanjay Shah i.e. it was not found in the premises of the assessee. Secondly, it was in the possession of Shri Sanjay Shah so obviously it cannot be in possession of the assessee. Therefore, the provisions of Sec. 132(4A) of the Act is not applicable as the paper was not found from the possession of the assessee. The most important fact to be considered at this point of time is that the assessee was staying in USA for almost 5 years from 29.11.2004 to 19.1.2009. The search was conducted on 21.2.2007 which means that on the date of search, the assessee was not even present in India. Lastly, concluding observations of the AO as mentioned in para-5 (supra) clearly suggest that the additions have been made on protective basis so this is a protective assessment. However, there is no reference about any case/assessee, in whose hands substantive additions have been made. Thus no reason of addition in the hands of the assessee on protective basis. - Decided in favour of assessee. Addition on account of estimated household expenses - Held that - a similar addition has been made in the hands of the HUF of the assessee. The fate of that appeal is not known. However, it is an undisputed fact that the assessee was staying in USA for almost 5 years and during the impugned assessment year the assessee was in India only for 7 months, considering that the assessee has come from USA, possession of some money cannot be ruled out. We therefore do not find any logic in making the impugned addition. Order of the Ld. CIT(A) is set aside and the AO is directed to delete the addition - Decided in favour of assessee. Unexplained bank deposit on the basis of bank statement - CIT(A) deleted the addition - Held that - It is an undisputed fact that additional evidences were furnished before the Ld. CIT(A) but it is also an admitted fact that the Ld. CIT(A) has transmitted all the additional evidences to the AO calling for a remand report. Instead of verifying the additional evidences, the AO left the matter at the discretion of the First Appellate authority. We find that after satisfying himself the Ld. CIT(A) deleted the addition. We, therefore, decline to interfere - Decided in favour of assessee. Unexplained investment in silver - Held that - The undisputed fact is that the silver utensils were found from the bed room of Mrs. Mrtudulaben Shah and even panchanama and seizure memo are also in the name of Shri Sanjay Shah. If the additions have been made purely on the basis of presumptions as laid down in Sec. 132(4A), then the silver was not found from the possession of the assessee. The AO has relied upon the statement of Shri Sanjay Shah. However, the contents of such statement has not been referred to in the assessment order nor in the order of the First Appellate authority. The Ld. CIT(A) has confirmed the addition on the basis of presumption of Sec. 132(4A) which on the facts of the case is not at all applicable - Decided in favour of assessee. Addition of purchase of immoveable properties - Held that - CIT(A) has given a categorical finding that the property was purchased in the year 2003. That being the fact of the matter, the impugned addition cannot be considered for the year under consideration. - Decided in favour of assessee.
Issues Involved:
1. Addition of Rs. 19.98 crores based on loose paper notings. 2. Addition of Rs. 3,00,000/- for estimated household expenses. 3. Addition of Rs. 31,31,429/- for unexplained bank deposits. 4. Addition of Rs. 4,21,168/- for unexplained investment in silver. 5. Addition of Rs. 25,00,000/- for purchase of immovable properties. 6. Addition of Rs. 6,35,529/- for unexplained bank credits. Detailed Analysis: 1. Addition of Rs. 19.98 crores based on loose paper notings: The case involved a search and seizure action under section 132 of the Act at various premises, including the assessee's residence. During the search, loose papers with notings were found, which the Assessing Officer (AO) interpreted as evidence of transfer of funds and investments, leading to an addition of Rs. 19.98 crores as undisclosed income on a protective basis. The CIT(A) confirmed this addition, citing the presumption under section 132(4A) of the Act. However, the tribunal noted that the notings were found at the premises of another individual, not the assessee, and the assessee was residing in the USA during the relevant period. The tribunal held that the addition was based on mere presumptions and not justified, directing the AO to delete the addition. 2. Addition of Rs. 3,00,000/- for estimated household expenses: The AO estimated household expenses at Rs. 25,000 per month due to the lack of details provided by the assessee, resulting in an addition of Rs. 3,00,000/-. The CIT(A) upheld this addition. The tribunal, however, noted that the assessee was in the USA for a significant part of the year and found no logic in the estimated addition, directing its deletion. 3. Addition of Rs. 31,31,429/- for unexplained bank deposits: The AO added Rs. 31,31,429/- as unexplained income based on bank statements. The CIT(A) deleted the addition after examining additional evidence provided by the assessee, which the AO did not object to during the remand. The tribunal upheld the CIT(A)'s decision, noting the AO's failure to verify the additional evidence and the satisfaction of the CIT(A) with the explanations provided. 4. Addition of Rs. 4,21,168/- for unexplained investment in silver: The AO added Rs. 4,21,168/- as unexplained investment in silver found during the search. The CIT(A) confirmed this addition based on the presumption under section 132(4A). The tribunal found that the silver was found at another individual's premises and not in the possession of the assessee, ruling that the presumption under section 132(4A) was not applicable and directing the deletion of the addition. 5. Addition of Rs. 25,00,000/- for purchase of immovable properties: The AO added Rs. 25,00,000/- based on documents indicating investment in immovable properties. The CIT(A) deleted the addition after considering additional evidence and a remand report from the AO, which confirmed that the property was acquired by other individuals in 2003, outside the relevant assessment year. The tribunal upheld the CIT(A)'s decision, noting the factual findings. 6. Addition of Rs. 6,35,529/- for unexplained bank credits: The AO added Rs. 6,35,529/- as unexplained bank credits. The CIT(A) deleted the addition based on additional evidence provided by the assessee, which the AO did not object to during the remand. The tribunal upheld the CIT(A)'s decision, consistent with its earlier findings for similar issues. Conclusion: The tribunal allowed the appeals filed by the assessee, directing the deletion of various additions made by the AO, and dismissed the cross appeals filed by the Revenue. The tribunal's decisions were based on the lack of substantive evidence, improper application of presumptions under section 132(4A), and the factual context provided by the assessee's explanations and additional evidence.
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