2022 (12) TMI 1221 - AT - Income Tax

Addition on substantive basis treating the same as unaccounted income of the appellant - Whether any corroborative seized material found? - rejected the claim of the assessee that he has acted as Middleman only - HELD THAT - It is pertinent to note that the affidavit filed by the Manager of the assessee though was rejected has been taken into account by the CIT(A) in consonance that the excel sheet found and seized from the office premises of the assessee and thus the data shown in the said computer belongs to the assessee. Assessee at no point of time has proved that the excel sheet was not of assessee s and the staff is also not aware of the said excel sheet. The theory of assessee that he is a middleman acting in real estate in certain transactions and earns brokerage also is not been established by the assessee through any documents. It is only oral submissions of the assessee before the CIT(A). CIT(A) has categorically mentioned that only real income has to be taxed and not the gross income of the assessee and, therefore, addition to the extent of Rs.74,50,000/- was taken into consideration on the basis of promissory note. CIT(A) further observed that all the payments as per the promissory notes are made after the date of receipts as reflected in P3 tab, therefore, accepted the assessee s contention. CIT(A) has given a table calculating the cash to the extent of Rs.2,05,50,000/- which was received in cash. Thus, the addition made by the CIT(A) is justifiable. There is no need to interfere with the same. Unaccounted expenses against unaccounted income declared under PMGKY 2016 - HELD THAT - CIT(A) has taken cognisance of Circular No.43 of 2016 dated 27.12.2016, the same declaration of set off was already filed and taxes were paid. The Assessing Officer cannot tax the same amount by invoking provisions of Section 69A of the Act. Thus, the CIT(A) was correct in deleting the said addition. Ground no.3 of Revenue s appeal is dismissed. Undisclosed income - DR submitted that the CIT(A) erred in admitting additional evidences during appellate proceedings and never called for remand report which is violation of Rule 46A of the Income Tax Rules - HELD THAT - It is pertinent to note that from the perusal of the Assessment Order, it can be seen that the said Banakat deed and relevant documents were before the Assessing Officer during the assessment proceedings. CIT(A) has rightly taken cognisance of these documents and the same cannot be treated as additional evidences on merit. CIT(A) has categorically mentioned that the assessee sold certain lands and the sum of Rs.1 crore was already given to the assessee and the balance was to be given as per the schedule in Banakat/agreement. Thus, the transaction was declared as genuine transaction by the CIT(A). There is no need to interfere with the same and hence ground of Revenue s appeal is dismissed.

Issues Involved:

1. Addition of Rs.2,05,50,000/- as unaccounted income for A.Y. 2015-16.
2. Deletion of additions by CIT(A) for A.Y. 2015-16.
3. Addition of Rs.67,50,000/- as unexplained investment for A.Y. 2014-15.
4. Deletion of additions by CIT(A) for A.Y. 2016-17.
5. Set off of unaccounted expenses against unaccounted income declared under PMGKY, 2016.

Detailed Analysis:

1. Addition of Rs.2,05,50,000/- as Unaccounted Income for A.Y. 2015-16:
The assessee contested the addition of Rs.2,05,50,000/- as unaccounted income, arguing that the Excel file retrieved from his staff's computer should not be the sole basis for the addition. The assessee claimed to act as a middleman and presented an affidavit from his manager, which was rejected by the CIT(A). The Tribunal upheld the CIT(A)'s decision, noting that the assessee failed to provide corroborative evidence for his claims and that the Excel sheet was indeed related to the assessee's transactions. The CIT(A) had rightly restricted the addition to Rs.2,05,50,000/- based on promissory notes and other evidence.

2. Deletion of Additions by CIT(A) for A.Y. 2015-16:
The Revenue's appeal against the deletion of several additions by the CIT(A) was dismissed. The Tribunal agreed with the CIT(A) that the protective additions were rightly deleted and that the unexplained cash loan was properly adjudicated. The CIT(A) had correctly observed that the assessee failed to provide necessary confirmations and details regarding the transactions.

3. Addition of Rs.67,50,000/- as Unexplained Investment for A.Y. 2014-15:
The assessee's appeal against the addition of Rs.67,50,000/- as unexplained investment was dismissed. The Tribunal noted that the CIT(A) had provided detailed findings, stating that the assessee did not submit supporting documents during both assessment and appellate proceedings. Thus, the addition was justified.

4. Deletion of Additions by CIT(A) for A.Y. 2016-17:
The Revenue's appeal for A.Y. 2016-17 regarding several deletions by the CIT(A) was dismissed. The Tribunal upheld the CIT(A)'s decision on the grounds that the cash payments for land purchases were properly documented, and the unaccounted expenses against unaccounted income declared under PMGKY, 2016, were correctly set off. The CIT(A) had rightly considered the relevant circular and the fact that taxes were already paid on the declared income.

5. Set Off of Unaccounted Expenses Against Unaccounted Income Declared Under PMGKY, 2016:
The Tribunal upheld the CIT(A)'s decision to allow the set-off of unaccounted expenses against unaccounted income declared under PMGKY, 2016. The CIT(A) had taken cognizance of Circular No.43 of 2016 and observed that the Assessing Officer could not tax the same amount again under Section 69A of the Act.

Conclusion:
The appeals filed by the assessee for A.Y. 2015-16 and A.Y. 2014-15 were dismissed, and the appeals filed by the Revenue for A.Y. 2015-16 and A.Y. 2016-17 were also dismissed. The Tribunal upheld the CIT(A)'s decisions, finding no need to interfere with the conclusions reached based on the evidence and legal principles applied.

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