9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (10) TMI 499 - AT - Income TaxValidity of search and the assessment proceedings carried - Held that - We observe that during the course of search various incriminating documents were found and the alleged connection of the assessee with the SR Group was unearthed by the revenue authorities. In the given facts and circumstances of the case as well as the findings of lower authorities, we find no merit in this common issue raised by both the assessee s. Appellant assessee is associated with the SR Group, and is the Director in VNS Group of Institutions, Bhopal which is interconnected and having business association with the said Group searched u/s 132. The group is referred to by a common name SR Group . Thus, the contention of the learned AR that the appellant has no connection with the SR Ferro Alloys Group does not appear to be justified. The A.O for the sake of reference and convenience to a search group has used the term SR Ferro Alloys/ SR Group . The said fact has also been mentioned by the A.O in the assessment order itself. Keeping in view the totality of the facts as discussed above, the order of the A.O. is held as a valid assessment. Unexplained cash deposit - Held that - Looking to the amount of income disclosed by both the assessee s and also in the given circumstances of the case, the assessee has been consistently making transactions through its various bank accounts and withdrawing and depositing the cash and also one cannot ignore the possibility of accumulated cash for so many years, we are of the considered view that no addition was called for towards unexplained cash deposit at ₹ 1,28,500/-, ₹ 1,88,939/- and ₹ 1,05,000/- for Assessment Year 2008-09, 2010-11, and 2011-12 in the case of Shri D.K. Swami and similarly no addition was called for in the case of Smt. Preeti Swami at ₹ 63,000/- for Assessment Year 2011-12. We accordingly delete these additions. Addition of Long Term Capital Gain from sale of residential house - issue of exemption u/s 54 - Held that - If the assessee has not declared the same in the return of income but has made the claim during the assessment proceedings, then the lower authorities should have acted as per the provisions of law and should have examined as to whether the assessee has adhered/complied to the provisions of Section 54 of the Act and if it was so eligible to get the benefit then the same should have been allowed. We therefore set aside this issue of exemption u/s 54 of the Act against the Long Term Capital Gain of ₹ 1,88,939/- to the file of Ld.A.O for afresh adjudication and direct the AO to examine the documents of purchase of residential house to be furnished by the assessee and if found correct then allow the claim u/s 54 of the Act and delete the addition for Long term Capital Gain. Addition of unexplained investment - Reference to Valuation Officer - Held that - Assessing Officer has merely made the estimation. There is no finding about the value determined by the Stamp Valuation Authorities in the purchase deed i.e. whether the value as per the stamp valuation authority was more than the purchase consideration paid by the assessee. It is also discernable from records that the names and address of the seller have been provided to the Assessing Authority and one of them has even accepted the transaction. Even if for any reason the Ld.A.O could not place hands on the copies of purchase deeds then also it had sufficient powers u/s 55A of the Act which provides for making reference to the Valuation Officer. From perusal of the above section 55A of the Act the Assessing Officer in order to ascertain the fair market value of the asset may refer to the Valuation Officer for valuation of the impugned assets if he is of the opinion that fair market value exceeds the fair market value as claimed by the assessee. However in the instant case A.O has not taken any resort to comply with the provisions of Section 55A of the Act and merely on the basis of surmises applied the estimated prevailing market rate without giving any basis for the same and computed the unexplained investment in the hands of the assessee. We therefore considered view that A.O ought to have referred the matter to the Valuation Officer to value the fair market price of both the impugned assets mentioned herein above in order to decide the issue. Unexplained investment in the purchase of agriculture land at village Funda, District Bhopal - Held that - Undisclosed investment at ₹ 5,10,000/- was worked out and he accordingly made the addition u/s 69B of the Act. This addition was confirmed by Ld.CIT(A). We also find that the modus operandi of the Ld. A.O of making addition for unaccounted/undisclosed investment in agriculture land is similar to the one made by him in the hands of Shri D.K. Swami towards the unexplained investment in residential houses/flats. In this case also the Ld.A.O has stepped into the shoes of Valuation Officer and has calculated the prevailing market rate which in our view is inconsistent as the Ld.A.O is not an expert in this field and he ought to have made the reference to the Valuation Officer u/s 55A of the Act so as to assess the fair market price. Therefore we direct the Ld.A.O to refer the matter of valuation of impugned agricultural land to the Departmental Valuation Officer. The assessee is also directed to furnish the necessary documents before both the authorities and to provide cooperation in getting the valuation done
Issues Involved:
1. Validity of the search under Section 132 of the Income Tax Act and the subsequent assessment under Section 143(3). 2. Addition for unexplained cash deposits in the bank account. 3. Addition for Long Term Capital Gain. 4. Alleged undisclosed investment in the purchase of residential plots. 5. Unexplained investment in the purchase of agricultural land. Detailed Analysis: 1. Validity of the Search and Subsequent Assessment: The first issue pertains to challenging the validity of the search conducted under Section 132 of the Income Tax Act and the subsequent assessment framed under Section 143(3). The Tribunal observed that during the search, various incriminating documents were found, and the alleged connection of the assessee with the SR Group was unearthed by the revenue authorities. The Tribunal found no merit in this issue raised by both assessees and confirmed the view taken by the CIT(A), dismissing the grounds of appeal related to the validity of the search and assessment. 2. Addition for Unexplained Cash Deposits: The second common issue relates to the addition for unexplained cash deposits. The Tribunal noted that the assessees provided cash flow statements and details of bank deposits, claiming the source of deposits was proved before the lower authorities. Considering the income disclosed by both assessees and the consistent transactions through various bank accounts, the Tribunal concluded that no addition was called for towards unexplained cash deposits. The Tribunal deleted the additions and allowed the respective grounds raised for the relevant assessment years. 3. Addition for Long Term Capital Gain: The third issue concerns the addition of Long Term Capital Gain from the sale of a residential house. The Tribunal found that the assessee sold a house for ?13,00,000, with the Stamp Valuation Authority taking the sale consideration at ?17,16,500, resulting in a Long Term Capital Gain of ?1,88,939. The issue arose when the assessee was denied the benefit under Section 54 of the Act. The Tribunal directed the Assessing Officer to examine the documents of the purchase of the residential house and, if found correct, allow the claim under Section 54, thus deleting the addition for Long Term Capital Gain. This issue was allowed for statistical purposes. 4. Alleged Undisclosed Investment in Residential Plots: The fourth issue pertains to the addition of unexplained investments for the purchase of residential plots. The Tribunal observed that the Assessing Officer made estimations without referring to the Stamp Valuation Authorities or the Valuation Officer under Section 55A of the Act. The Tribunal set aside this issue to the file of the Assessing Officer, directing a reference to the Departmental Valuation Officer to ascertain the fair market value of the assets. This issue was allowed for statistical purposes. 5. Unexplained Investment in Agricultural Land: The last issue involves the addition for unexplained investment in the purchase of agricultural land. The Tribunal noted that the Assessing Officer estimated the fair market price without referring to the Valuation Officer under Section 55A of the Act. The Tribunal directed the Assessing Officer to refer the matter to the Departmental Valuation Officer for valuation of the agricultural land. This issue was also allowed for statistical purposes. Conclusion: In summary, the Tribunal dismissed the grounds related to the validity of the search and assessment, deleted the additions for unexplained cash deposits, directed fresh adjudication for the benefit under Section 54 for Long Term Capital Gain, and referred the valuation of residential plots and agricultural land to the Departmental Valuation Officer. The appeals were partly allowed or allowed for statistical purposes.
|
