2007 (1) TMI 196 - AT - Income Tax

Issues Involved:
1. Initiation of reassessment proceedings.
2. Ignoring directions of CIT(A) in the appeal of the director.
3. Non-presentation of Shri Budhi Parkash Bali for cross-examination.
4. Non-supply of evidence and findings regarding impugned payments.
5. Ignoring evidence of agreement and decree of the Delhi High Court.
6. Ignoring directions regarding contract receipts and profit element.
7. Failure to relate alleged receipts to specific contract sections.
8. Legal power to sell the property under the Transfer of Property Act.
9. Non-adjudication of total alleged receipts by the Assessing Officer.
10. Misstatement regarding attendance and submissions.
11. Addition of Rs. 15,21,697.
12. Additional ground regarding invoking section 150(1) of the Income-tax Act.

Detailed Analysis:

1. Initiation of Reassessment Proceedings:
The assessee contested the initiation of reassessment proceedings, arguing that reasons for reopening were recorded without assessment records. The Tribunal found that the reassessment was valid under section 150(1) of the Income-tax Act, as the notice was issued to give effect to the findings of the Tribunal in the case of Mohan Lal Mangotra. The Tribunal held that the issuance of notice was valid even if it was sanctioned by the JCIT, as section 2(16) defined "Commissioner" to include JCIT.

2. Ignoring Directions of CIT(A) in the Appeal of the Director:
The assessee argued that the Assessing Officer ignored the directions of CIT(A) while disposing of the appeal of the director, Shri Mohan Mangotra. The Tribunal found that the issue was already addressed by the Tribunal in the case of Mohan Lal Mangotra, where it was held that the addition should be made in the hands of the companies.

3. Non-Presentation of Shri Budhi Parkash Bali for Cross-Examination:
The assessee contended that the Assessing Officer did not present Shri Budhi Parkash Bali for cross-examination. The Tribunal did not find merit in this argument, as the issue was already addressed in the earlier Tribunal order.

4. Non-Supply of Evidence and Findings Regarding Impugned Payments:
The assessee argued that the Assessing Officer did not supply evidence regarding impugned payments. The Tribunal found that the Assessing Officer had sufficient evidence, including seized documents and statements, to support the addition.

5. Ignoring Evidence of Agreement and Decree of the Delhi High Court:
The assessee claimed that the Assessing Officer ignored the agreement with Shri Budhi Parkash Bali and the decree of the Delhi High Court. The Tribunal found that the agreement dated 29-11-1999 was not relevant as it was much later than the search date of 7-4-1995.

6. Ignoring Directions Regarding Contract Receipts and Profit Element:
The assessee argued that the Assessing Officer ignored directions regarding contract receipts and only the profit element being chargeable to tax. The Tribunal held that in property transactions, the entire amount of on-money received represents unaccounted income, and not just the profit element.

7. Failure to Relate Alleged Receipts to Specific Contract Sections:
The assessee contended that the Assessing Officer failed to relate the alleged receipts to specific contract sections. The Tribunal found that the Assessing Officer had correctly apportioned the amounts received from the sale of shops/offices.

8. Legal Power to Sell the Property Under the Transfer of Property Act:
The assessee argued that the company had no legal power to sell the property under the Transfer of Property Act. The Tribunal found that the agreement dated 15-12-1991 provided the companies with the right to sell 40% of the constructed area if Shri Bali failed to make the payment.

9. Non-Adjudication of Total Alleged Receipts by the Assessing Officer:
The assessee claimed that the Assessing Officer did not adjudicate the total alleged receipts. The Tribunal found that the Assessing Officer had correctly made the addition based on the evidence available.

10. Misstatement Regarding Attendance and Submissions:
The assessee argued that the Assessing Officer misstated that no one attended the last hearing and no submissions were received. The Tribunal did not find this argument relevant to the core issues of the case.

11. Addition of Rs. 15,21,697:
The assessee contested the addition of Rs. 15,21,697. The Tribunal upheld the addition, finding that the assessee failed to prove that the amount was received in earlier assessment years and not in the year under consideration.

12. Additional Ground Regarding Invoking Section 150(1) of the Income-tax Act:
The assessee raised an additional ground that the Assessing Officer erred in invoking section 150(1) for reopening the assessment. The Tribunal found that the notice under section 148 was correctly issued to give effect to the Tribunal's findings in the case of Mohan Lal Mangotra.

Conclusion:
The Tribunal dismissed both appeals, upholding the reassessment proceedings and the addition of Rs. 15,21,697, finding no error in the order of the CIT(A).

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