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2021 (1) TMI 994 - AT - Income TaxAssessment u/s.158BC - limitation to complete the assessment - Reference to limitation provisions of section 158 BE - HELD THAT - Merely because no seizure was effected on the new valuables found in the search carried out just to extend the time limit to pass the assessment order. Keeping in view of the facts and circumstances explained above, after examining the three panchnamas dated 23.3.1999; 21.5.1999 and 16.7.1999, we are of the considered view that search was validly concluded only in July, 1999 and assessment was separately framed within the time limit which expires only on 31.7.2001 being 2 years from the end of the month in which the search was conducted as the assessment order was passed on 25.7.2001. Legal grounds raised by the assessee is not supported by any valid documentary evidences, but on the contrary, revenue s case is well supported by the documentary evidences, as per the paper books filed by department also. The case laws cited by assessee are having the different facts and are not relevant to the present case. Therefore, the legal issue involved decided against the assessee and in favour of the Revenue . Unexplained investments - The assessee was the Director at that time as the audited balance sheet of M/s Esam Trading Company Ltd. as on 31.3.1993 filed with the Registrar of Companies, New Delhi. Therefore, keeping in view of the facts and circumstances as explained above, with the support of documentary evidences, we are of the view that investment of ₹ 37 lacs made by the assessee as per the documents seized from his residence during the search, hence, the addition in dispute has been rightly made by the AO as undisclosed income of the assessee which was also rightly upheld by the Ld. CIT(A). Hence, we uphold the order of the Ld. CIT(A) on this issue of undisclosed income amounting to ₹ 37 lacs on account of investments in M/s Esam India Ltd. Commission income unexplained - In response to the questionnaire dated 17.6.2001 the assessee recorded his statement dated 16.7.1999 by stating that the only investment in the share capital of M/s Esam India Ltd. has been made in 1991-92 which is a cash deposit in company account amounting to ₹ 35 lacs. This was made from his undisclosed and unaccounted income, which he was offering for taxation and he shall file the return of income declaring such amount and pay the necessary taxes on this income. We are of the view that in view of the statement made by the assessee and non-furnishing of any evidence showing that assessee has not received this commission income. The AO has rightly made this addition and Ld. CIT(A) has also rightly upheld the same, hence, we uphold the order of the Ld. CIT(A) on this issue. Addition on account of foreign travels expenditure - The assessee has not filed any evidence in support of his claim on this addition and by merely denying that assessee has not incurred any expenditure. Hence, this addition is liable to be made in the absence of any evidence filed by the assessee. Addition on account of foreign travel expense has rightly been made by the Assessing Officer and upheld by the Ld. CIT(A), because the assessee has not produced any documentary evidences supporting his claim. Addition on account of deposit in the bank - AO has provided opportunity to the assessee to explain this deposits, but the assessee has not availed the same and has not filed any evidence, even no explanation regarding this deposit has been given by the assessee. Therefore, the revenue authorities have rightly treated the same as undisclosed income of the assessee, hence, we uphold the order of the Ld. CIT(A) on this issue. Addition on account of expenditure on repair and renovation on the accommodation owned by the Central Government of India - Revenue has made this addition on the basis of the documents which were found and seized at the residential premises of the assessee and from the office premises of the company Esam India Ltd. wherein 99.98% equity shares is held by the assessee. These documents were recorded in respect of repair and renovation. Assessee has not explained the source of such expenses and hence, we are of the view that in the absence of any explanation and documentary evidences, the AO has rightly made the addition in dispute and Ld. CIT(A) has rightly upheld the same, therefore, we uphold the order on this issue and upheld the impugned order of the Ld CIT(A) on this issue. Addition of expenditure on purchase of cell phones and treated the same as undisclosed income - On the basis of Annexure A-1 seized during the search operation in the case of the assessee on 23.3.1999 for the purchase of cell phones, after giving opportunity to the assessee. The assessee has not attended the AO and not filed any reply. Therefore, in our view this addition has rightly been made and upheld by the Ld. CIT(A). Hence, we uphold the order of the Ld. CIT(A) on this issue. Addition of investments in purchase of cars and treated the same as undisclosed - No doubt the assessee has denied the ownership of these vehicles, but has not substantiated his version with the support of any evidence. On the contrary, the Rolls Royce car no. DLIC1233 and Ferrari and Contessa were found and mentioned in the documents seized from the premises of the assessee owned by the assessee and the assessee has not able to explain the source of investments in these vehicles. Therefore, we uphold the impugned order on this issue. Unexplained expenditure - CIT-A unexplained expenditureheld that opportunity given by the AO was not availed by the assessee and due to lack of evidences supporting the claim of the assessee, the Ld. CIT(A) has given the relief of ₹ 2,20,940/- and the balance of ₹ 36,53,504/- was rightly been upheld by the Ld. CIT(A) as undisclosed income of the assessee for this block period. In spite of the fact that the assessee remained non-cooperative before the revenue authorities, sufficient relief has been given to the assessee, hence, no interference is called for in the well reasoned order of the Ld. CIT(A) on this issue, therefore, we uphold the finding of the Ld. CIT(A) on this issue. Addition on account of deposits in the Bank of Maharastara and treating the same as undisclosed income - The chain of ownership and authorized signatories of each of these concerns as brought out by the AO in the assessment order clearly prove that the main person to whom all these accounts belonged is the assessee only as this chain started with the bank account of Kudos Exports Pvt. Ltd. which is a 100% subsidiary of Esam India Ltd. wherein the assessee has ownership of 99.98% equity. Ld. CIT(A) has elaborately discussed the same at page no. 55-56 of the impugned order and held that all these firms were found to be non-existence at the given address and therefore, in our view the AO has rightly been made the addition which the Ld. CIT(A) has upheld. Hence, we uphold the impugned order on this issue. Addition on transactions recorded in the diary alleged to be handed over by Ms. Asmita Aggarwal on 16.7.1999 and treated the same as undisclosed income of the assessee - This addition has been made by the revenue authorities on the basis of documentary evidences and especially to the assessee who remained non-cooperative with the revenue authorities and for lack of evidence. Assessee has not discharged his burden of his onus laid upon him to prove that this diary did not belong to him, but he failed to prove the same and in the absence of any valid explanation and evidence, the AO has rightly made the addition found recorded in the diary and which has been rightly been upheld by the Ld. CIT(A). Undisclosed investments in house hold items - Assessee was requested to explain the source of acquisition of these traveler cheques failing which an amount of ₹ 38,500/- was proposed to be treated as undisclosed income. Vide his reply dated 24.7.2001 assessee has stated that the traveler cheques were purchased out of income earned out of India. During the block assessment proceedings, assessee has not brought on record any information showing that he in fact earned income out of India during the block period. The AO as well as Ld. CIT(A) has rightly made the additions. Undisclosed foreign exchange - AO has made the addition on the basis of seized material and after giving opportunity to the assessee, which the Assessee has not availed the same and the Ld. CIT(A) has rightly upheld this addition in dispute by dismissing the ground of the assessee. Undisclosed of payment made to Ms. Rita Luther - AO has made the addition on the basis of seized material mentioned in the assessment order and the impugned order. No contrary evidence has been filed by the assessee. Therefore, the AO has rightly made this addition and Ld. CIT(A) has rightly upheld the same. Addition on account of profit of M/s Delhi Exports - In reply to the question raised by the AO the asessee has not furnished any proof of having filed the income tax return of his concern M/s Delhi Exports, hence, Assessing Officer has made the addition in dispute. Ld. CIT(A) has also upheld the impugned addition on the basis of the finding given by the AO. We have gone through the orders passed by the revenue authorities and we are of the view that assessee has not furnished any proof, which is contrary to the evidence collected by the revenue authorities therefore, in the absence of the same the addition in dispute is deserve to be upheld, hence, we uphold the same Addition on account of profit of M/s Globetrotters - To negative the version of the revenue authorities assessee has not given any explanation whatsoever the amount of ₹ 3.34 crores is verifiable from the seized documents is held to be correctly added by the AO to the undisclosed income of the assessee, which was upheld by the Ld. CIT(A). Hence, we uphold the action of the Ld. CIT(A) which has been made on the basis of the seized material. Undisclosed income on account of receipt by M/s Vino Veritas - AO is of the view that the assessee is a real beneficiary of the amount transferred to the order of Vino Veritas and added this amount as undisclosed income of the assessee. Ld. CIT(A) has also upheld the order of the Assessing Officer by holding that assessee has not able to explain the source of ₹ 7,67,30,400/- having been transferred from M/s Esam India Ltd. to Vino Veritas. After going through the orders passed by the Revenue authorities, we are of the view that revenue authorities have righty made the addition in dispute for lack of evidence and non-cooperation of the assesee, hence, there is no need to interference in the impugned order on this issue, therefore, we uphold the same Addition on account of receipts from Sh. SC Bharjatia - The assessee is a real beneficiary of this amount, hence, we are of the view that the findings given by the ld. CIT(A) is as per record and evidence and therefore, the same is upheld. Unexplained payment made by M/s Kudos Exports Ltd, deposits made with General Credits Finance Ltd., payment to Sh. Arjun Amla upheld because for lack of evidence on the issue in dispute filed by the assessee Assessing Officer as well as Ld. CIT(A) has given full opportunity to the assessee for substantiating his claim on legal as well as on merits, but the assessee remained non-cooperative before the revenue authorities, hence, Assessing Officer has made the additions in dispute on the basis of the search material, after confronting the same to the assessee, but the assessee has not substantiated his claim by filing any evidence before the authorities below. Therefore, no interference is called for in the well reasoned orders of the revenue authorities - Decided in favour of revenue.
Issues Involved:
1. Limitation period for completing assessment under Section 158BC. 2. Non-opportunity of hearing to the assessee by CIT(A). 3. Jurisdiction and validity of notices issued under Section 143(2) and 158BC. 4. Additions made by the Assessing Officer (AO) on various accounts such as investments, commission income, foreign travel expenditure, deposits, repair and renovation, purchase of cell phones and cars, unexplained expenditure, and income from various sources. Issue-Wise Detailed Analysis: 1. Limitation Period for Completing Assessment under Section 158BC: The assessee argued that the assessment order dated 25.07.2001 was barred by limitation as per Section 158BE(1) of the Income Tax Act, 1961. The contention was that the search was concluded on 23.03.1999, and thus the assessment should have been completed by 31.03.2001. However, the Revenue argued that the search concluded on 16.07.1999, and hence the assessment was within the time limit. The Tribunal upheld the Revenue's position, noting that new valuable items were found in the third panchnama dated 16.07.1999, making the assessment validly concluded in July 1999 and thus within the time limit. 2. Non-Opportunity of Hearing to the Assessee by CIT(A): The assessee claimed that the CIT(A) did not provide a proper opportunity of hearing. However, the Tribunal found that the CIT(A) had indeed provided full opportunity to the assessee, who had argued his case by filing various documentary evidences. Thus, this ground was dismissed. 3. Jurisdiction and Validity of Notices Issued under Section 143(2) and 158BC: The assessee raised issues regarding the validity of notices issued under Sections 143(2) and 158BC, and the jurisdiction of the AO. These issues were not argued by both parties during the hearing, and thus were not adjudicated by the Tribunal. 4. Additions Made by the AO: The Tribunal addressed various additions made by the AO on different accounts: - Investments in M/s Esam India Ltd. (?37,00,000): The AO made this addition based on seized documents showing outstanding loans from directors. The Tribunal upheld this addition as the assessee failed to provide contrary evidence. - Commission Income (?35,00,000): The addition was based on the assessee's statement admitting undisclosed income. The Tribunal upheld this addition due to lack of evidence from the assessee. - Foreign Travel Expenditure (?4,02,557): The addition was upheld as the assessee did not provide any evidence to support his claim against the expenditure. - Deposits in Bank Accounts (?29,88,526): The Tribunal upheld this addition due to the assessee's failure to explain the deposits. - Expenditure on Repair and Renovation (?1,19,41,051): The addition was based on seized documents, and the Tribunal upheld it due to the assessee's failure to explain the source of expenses. - Purchase of Cell Phones (?1,90,360): The addition was upheld as the assessee did not attend the AO's proceedings or provide any reply. - Investments in Purchase of Cars (?1,95,44,196): The Tribunal upheld this addition as the assessee failed to substantiate his denial of ownership with evidence. - Unexplained Expenditure (?38,74,444): The Tribunal upheld the addition, noting that the assessee remained non-cooperative and failed to provide evidence. - Deposits in Bank of Maharashtra (?7,24,71,120): The addition was upheld as the assessee failed to explain the deposits, and the chain of ownership linked the deposits to the assessee. - Income as per Diary (?1,42,10,625): The addition was based on a diary handed over by the assessee's ex-wife, and the Tribunal upheld it due to lack of evidence from the assessee. - Investment in Household and Personal Items (?79,68,269): The addition was upheld as the assessee failed to explain the source of acquisition. - Investment for Purchase of Foreign Exchange (?1,27,688): The Tribunal upheld this addition due to lack of evidence from the assessee. - Payments to Rita Luther (?2,00,000) and Sandeep Puri (?1,00,000): Both additions were upheld as the assessee failed to provide contrary evidence. - Profit of M/s Delhi Exports (?2,77,00,000) and M/s Globetrotters (?3,34,00,000): The additions were upheld based on seized documents showing profits not accounted for by the assessee. - Cash Expenditure (?1,05,250): The addition was upheld as the assessee did not provide any evidence to the contrary. - Income Received through M/s Vino Veritas (?7,67,30,400) and M/s European Capital Ltd. (?1,33,00,000): Both additions were upheld as the assessee failed to explain the source of funds. - Cash Payments Received (?8,06,800): The addition was upheld as the assessee did not provide any explanation. - Receipts from Sh. SC Bharjatia (?75,00,000): The addition was upheld as the assessee was found to be the real beneficiary. - Bogus Purchases (?17,39,40,857): The addition was upheld due to lack of evidence from the assessee. - Deposits in General Credits Finance Ltd. (?54,00,000): The addition was upheld as the assessee failed to explain the source of deposits. - Payment to Sh. Arjun Amla (?3,20,40,000): The addition was upheld due to lack of evidence from the assessee. - Income as per Documents Seized from Ms. Asmita Aggarwal (?11,00,42,100): The addition was upheld as the assessee failed to provide any explanation regarding the entries recorded in the seized documents. Revenue’s Appeal: The Revenue's appeal was dismissed on account of low tax effect as per the latest CBDT circular. Cross Objection by Assessee: The cross objection filed by the assessee became infructuous due to the dismissal of the Revenue's appeal and was dismissed as such. Conclusion: Both the appeals filed by the assessee and the Revenue were dismissed, and the cross objection by the assessee was also dismissed. The Tribunal upheld the well-reasoned orders of the revenue authorities on all issues.
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