2019 (6) TMI 1443 - AT - Income Tax

Survey u/s 133A - addition allegedly based on computer printout - Onus to prove - HELD THAT - We observe that Section 102 of the Evidence Act provides that the burden of proof lies on that party would fail if no evidence at all were given on either side. Thus if an assessee claimed that money or bullion found in his possession at the time of search or survey does not belong to him but someone else the onus is on him to establish it because the ordinary presumption is that he is the owner as the money etc. was found in his possession. Similarly in all cases where a particular receipts is sought be taxed as income the initial onus is on the Assessing Officer to prove that it is taxable. Where there is statutory rebuttable presumption against the assessee as in the case of cash credit etc. under section 68 or unexplained investment under section 69 the initial burden of proof is on the assessee to show that the how cash credit is genuine or the investment is not unexplained. Assessee has failed to discharged the burden of proof and rebut the presumption of section 292C of the Act. In the light of above facts and circumstances we note that the assessee has been provided sufficient opportunities keeping in view of the principle of natural justice by the Ld. CIT(A) as well as the AO but he was not able to furnish any explanation or document in support of his contention. In view of this matter we have no reason to deviate from the findings recorded by the lower authorities in applying 8% of Gross Profit of total cash receipts reflected in computer printouts. Accordingly Ground No. (I) of the appeal of the assessee is therefore dismissed. Addition on account of alleged loan - HELD THAT - The impounded material BF-2 page 51 was found from the premises of the assessee being computer printout indicating that loan of Rs. 1 lakh each was given the 4 persons namely Premjibhai Lavjibhai Rameshbhai and Pareshbhai indicating a loan agreement and clearly mentioning that the principal amount with monthly interest and yearly interest from each individuals. Therefore unless otherwise proved it will be presumed that such books of accounts etc. belongs to such person and its contents are true as per provisions of section 292C. Since the incriminating documents was recovered from the premises of the assessee therefore we find no reason to draw adverse inference in the finding recorded by the lower authorities accordingly same is confirmed. However the addition on the basis of seized material is worked out to Rs. 4 72, 000 being loan amount of Rs. 4 lakhs and interest of Rs. 72, 000/- . Therefore addition of Rs. 4, 72, 000 is confirmed and balance addition of Rs. 1 00 000 is deleted. However since the assessee has claimed that telescoping should be allowed with respect to addition sustained in Ground No.1 above Rs. 86.44 lakhs. The assessee is entitled to telescoping of Rs. 4 lakhs. Therefore same is allowed out of Rs. 86.44 lakhs. Therefore addition of Rs. 4 lakhs sustained is covered by telescoping and balance addition of Rs. 72, 000/- is upheld. Accordingly this ground of appeal of the assessee is partly allowed. Addition on account of alleged booking receipts and unaccounted income - assessee failed to explain the loose paper notings - HELD THAT - CIT(A) has analyzed all the entries appearing in the impounded material and also have obtained the remand report from the AO. Therefore since the factual aspects has been examined by the ld.CIT(A) hence we do not find any infirmity in the order of ld.CIT(A) accordingly restriction the addition of unaccounted income of Rs. 34, 82, 000/- 1, 42, 60, 000/- and Rs. 5, 43, 49, 000/- to Rs. 1, 34, 86, 000/- is correctly found to be correct. In view of this matter we do not find any infirmity in the order of ld.CIT(A) accordingly Ground No.5 of the Revenue appeal is therefore dismissed. With regard to claim of benefit of telescoping out of remaining addition of Rs. 74, 66, 000/-. We are of the view that the same is required to be co-related with the amount of received from the prospective buyers at the time of booking. This aspect has not been examined by the lower authorities. Accordingly set-aside for limited purpose to the file of the Assessing Officer for examination if there is any co-relation between income of Rs. 74.66 lakhs generated and said amount was available for set-off against the amount paid. The Assessing Officer will examine the claim of cash flow fund out of which how much amount can be telescoped by way of these payments. Therefore this ground is set-aside for limited verification Enhancement of income by the ld. CIT(A) - HELD THAT - In absence of any evidence on record to substantiate the claim made by the assessee we are not inclined to agree with his version. We also note that claim of the assessee that a sum of Rs. 10 Lakh received as part of sale consideration of Rs. 1.90 crores from Shradda Developer was available is also not found acceptable as the property sold in question was belonging to the assessee and not of Smt. Rasilaben from whom the receipts has been claimed by the assessee. Therefore same cannot be set-off against the receipts from Rasilaben. Moreover no such claim was emanating from the findings of CIT(A). In view of these facts and circumstances we find that the action of the ld. CIT(A) in making enhancement of the income as just and proper. Considering the totality of the facts and circumstances we do not have any reason to deviate from the findings of Ld. CIT(A). In view of this the addition made on account of enhancement of income by the Ld. CIT(A) is upheld. Adjustment of unaccounted receipts / unaccounted expenditure - HELD THAT - We have already given direction to the Assessing Officer to verify the claim of telescoping of Rs. 4 lakhs in Ground No.(II) above and Rs. 1, 34, 86, 000/- in Ground No.(III) while dealing these grounds of appeal. The set-off of Rs. 10 lakhs of cash availability is also stands decided. Hence this ground is covered by above grounds hence does not require specific adjudication. Charging of interest u/s 234A is mandatory as held by Hon ble Supreme Court in the case of Anjum M. H. Ghaswala 2001 (10) TMI 4 - SUPREME COURT Unaccounted loans advances and interest - deletion of addition by CIT-A - HELD THAT - We find that the impounded sheet contained name of probable lenders as date of interest column dated and amount of interest payable has been found as blank. Further six persons mentioned in the chart have denied to have done any financial transactions with the assessee. The AO has wrongly treated these as loans given whereas the list/ chart indicates probable lenders. We find that the AO has not brought on record anything contrary to the submissions made by the assessee. Therefore in such circumstances we do not find any infirmity in the order of CIT(A) accordingly same is upheld. This ground of appeal of revenue is therefore dismissed. Unaccounted income - assessee was not able to explain the details of cheques impounded from his premises - CIT-A deleted the addition - HELD THAT - We find that BF-2 Page No. 40 reflected 10 number cheques of Rs. 15 Lakh each in respect of five person. These cheques were pertaining to Bhavnagar District Co-operative Bank Ltd. with whom the assessee nor any of his family members were having any bank account. Further such cheques were not cleared or deposited with bank account of the assessee maintained with Surat Peoples Co-operative Bank Ltd. These facts stands verified by the AO during remand report proceedings and by Ld. CIT(A) in appellate proceedings. Therefore in absence of any corroborating evidences the addition made by the AO in respect of cheque entries has been rightly deleted. Having careful consideration of facts and circumstances we do not find any infirmity in the order of CIT(A) accordingly it is upheld. Accordingly this grounds of appeal of revenue is therefore dismissed. On-money receipts - assessee has failed to produce any explanation regarding the on-money receipts reflected in seized material from his residence - CIT-A deleted the addition - HELD THAT - Summons under section 131 of the Act was issued to Paresh Patel whose statement was recorded on 04.12.2012 in which he stated that Shri Ghanshyambhai D Sutariya is having no connection with his society. He is neither member nor holding any plot in Sarjan society. He do not know as to how the papers of Sarajn were found during survey at the premises of Ghanshyam D Sutariya. The other members from whom information was collected under section 133(6) also denied knowing the appellant or having any type of financial transactions with the appellant. In view of these facts the CIT(A) observed that the appellant has in no way associated with Sarjan Co-operative Society. Having careful consideration of above facts we are of the considered opinion there was no corroborating evidences on record which suggested that the transactions were related to in any manner with the assessee. In view of these facts and circumstances we are of the considered view that Ld. CIT(A) was not in error in deleting the addition so made by the AO. Therefore this grounds of appeal of revenue is accordingly dismissed. Unaccounted expenditure - assessee has given contradictory statement even while admitted that he is an organizer of the Madhav Darshan Co-op Housing Society Ltd. Project. - CIT-A deleted the addition - HELD THAT - AO has made enquiries during the course of remand proceedings wherein he has examined Shri Lavjibhai Haribhai Patel the President of Madhav Darshan Co-op Housing Society Ltd. who developed the Laxmi Darshan Complex. It has been emerged that the assessee has acted as Panch in resolving a dispute arose between members of society on reducing the alignment of shops by the SMC. Since the CIT(A) as well the AO has accepted that the assessee has no financial dealings with Laxmi Darshan Complex. The copy of papers of the society being a copy of decision taken by the member of society was found in possession of the assessee as he being a Panch has retained a copy of decision taken by the Panchayat. Having careful consideration of facts we are of the view that Ld. CIT(A) was correct in deleting the addition made as unexplained expenditure - this grounds of appeal of Revenue is therefore dismissed.

Summary

Issues Involved:
1. Addition of Rs. 86,44,340 based on computer printout.
2. Addition of Rs. 5,72,000 on account of loan.
3. Addition of Rs. 1,34,86,000 on account of booking receipts.
4. Enhancement of income of Rs. 38,90,500 by CIT(A).
5. Adjustment of unaccounted receipts/unaccounted expenditure.
6. Deletion of addition of Rs. 4,82,56,000 made on account of unaccounted loans, advances, and interest.
7. Deletion of addition of Rs. 1,50,00,000 on account of unaccounted income.
8. Deletion of addition of Rs. 12,63,96,132 and Rs. 40,27,600 on account of on-money receipts.
9. Deletion of addition of Rs. 97,24,958 on account of alleged unaccounted expenditure.
10. Restriction of addition made on account of unaccounted income of Rs. 34,82,000, Rs. 1,42,60,000, and Rs. 5,43,49,000 to Rs. 1,34,86,000.

Detailed Analysis:

1. Addition of Rs. 86,44,340 Based on Computer Printout:
The Tribunal upheld the addition of Rs. 86,44,340 made by the AO based on computer printouts found during a survey. The assessee's denial of ownership of the computer was not accepted due to the lapse of time and insufficient evidence. The Tribunal relied on section 292C of the Act, which presumes the correctness of documents found during search or survey.

2. Addition of Rs. 5,72,000 on Account of Loan:
The Tribunal partially allowed the assessee's appeal by confirming the addition of Rs. 4,72,000 (Rs. 4,00,000 loan + Rs. 72,000 interest) instead of Rs. 5,72,000. The Tribunal also allowed telescoping of Rs. 4,00,000 against the addition of Rs. 86,44,340, thus sustaining only Rs. 72,000.

3. Addition of Rs. 1,34,86,000 on Account of Booking Receipts:
The Tribunal upheld the addition of Rs. 1,34,86,000 made by the CIT(A) based on the assessee's failure to explain the source of repayments to buyers. The Tribunal dismissed the Revenue's appeal for additional amounts as these were already covered by the confirmed addition.

4. Enhancement of Income of Rs. 38,90,500 by CIT(A):
The Tribunal upheld the enhancement made by the CIT(A) of Rs. 38,90,500, which included Rs. 14,85,000 received from the assessee's wife and Rs. 24,05,500 of unexplained cash deposits. The assessee failed to substantiate the sources adequately.

5. Adjustment of Unaccounted Receipts/Unaccounted Expenditure:
The Tribunal directed the AO to verify the claim of telescoping Rs. 4,00,000 and Rs. 1,34,86,000 against the addition of Rs. 86,44,340. The set-off of Rs. 10,00,000 claimed by the assessee was not accepted.

6. Deletion of Addition of Rs. 4,82,56,000 Made on Account of Unaccounted Loans, Advances, and Interest:
The CIT(A) deleted the addition of Rs. 4,82,56,000 as the impounded document contained probable loans and interest calculations, which were not actual transactions. The Tribunal upheld this deletion.

7. Deletion of Addition of Rs. 1,50,00,000 on Account of Unaccounted Income:
The CIT(A) deleted the addition of Rs. 1,50,00,000 as the cheques mentioned in the impounded document were not deposited in the assessee's bank account. The Tribunal upheld this deletion.

8. Deletion of Addition of Rs. 12,63,96,132 and Rs. 40,27,600 on Account of On-Money Receipts:
The CIT(A) deleted the addition as the impounded documents related to Sarjan Co-operative Society, with which the assessee had no connection. The Tribunal upheld this deletion.

9. Deletion of Addition of Rs. 97,24,958 on Account of Alleged Unaccounted Expenditure:
The CIT(A) deleted the addition as the assessee was only a Panch in a dispute resolution and had no financial dealings with the Madhav Darshan Co-operative Housing Society. The Tribunal upheld this deletion.

10. Restriction of Addition Made on Account of Unaccounted Income of Rs. 34,82,000, Rs. 1,42,60,000, and Rs. 5,43,49,000 to Rs. 1,34,86,000:
The Tribunal upheld the CIT(A)'s decision to restrict the addition to Rs. 1,34,86,000, considering the totality of facts and circumstances. The Revenue's appeal was dismissed.

Conclusion:
The Tribunal provided a detailed and reasoned judgment, addressing each issue comprehensively. The additions based on substantial evidence were upheld, while those lacking corroborative evidence were deleted or restricted. The Tribunal's approach ensured a fair and just resolution of the appeals.