2002 (5) TMI 208 - AT - Income Tax

Issues Involved:
1. Addition of Rs. 86 lakhs on account of cash seized.
2. Additions on account of alleged commission on billing on job contract work.
3. Additions on account of billing commission on trading activities.
4. Addition of Rs. 1,36,41,971 as unexplained cash credits.
5. Additions on account of unexplained jewellery.
6. Addition of Rs. 1,15,000 on account of various valuables.
7. Telescoping of income.

Summary:

1. Addition of Rs. 86 lakhs on account of cash seized:
The assessee initially admitted that Rs. 86 lakhs seized from Canara Bank was undisclosed income from trading activities. However, during assessment proceedings, the assessee retracted, claiming the amount was from disclosed sources of trading activities. The Tribunal noted that the assessee had provided detailed explanations and supporting documents, showing that the cash was part of regular trading receipts. The Tribunal found the retraction credible and deleted the addition, emphasizing that the initial statement was rebuttable with evidence.

2. Additions on account of alleged commission on billing on job contract work:
The assessee initially admitted earning commission on job work billing for M/s. PPL but later retracted, claiming the statement was made under pressure. The Tribunal noted that the Assessing Officer relied heavily on the initial statement and statements from third parties without allowing cross-examination. The Tribunal found that the evidence did not conclusively prove the assessee earned commission and deleted the addition, emphasizing the need for cross-examination and proper confrontation of evidence.

3. Additions on account of billing commission on trading activities:
Similar to the job work billing, the assessee initially admitted earning commission but later retracted. The Tribunal found that the Assessing Officer did not provide sufficient evidence to support the addition and relied on the initial statement without proper verification. The Tribunal deleted the addition, emphasizing the lack of direct evidence and the need for proper confrontation.

4. Addition of Rs. 1,36,41,971 as unexplained cash credits:
The Assessing Officer added Rs. 1.36 crores as unexplained cash credits based on the statement of Shri Sant Kumar Sharma, who allegedly provided loans to the assessee. The Tribunal found that the loans were genuine, supported by confirmations and banking transactions. The Tribunal noted that the Assessing Officer did not allow cross-examination of Shri Sant Kumar Sharma and deleted the addition, emphasizing the need for proper verification and confrontation of evidence.

5. Additions on account of unexplained jewellery:
The Assessing Officer added amounts for unexplained jewellery found during the search. The Tribunal noted that the assessee had surrendered a sum of Rs. 24 lakhs, which should cover the jewellery. The Tribunal restored the matter to the Assessing Officer to verify if the surrendered amount covered the jewellery and to make appropriate adjustments.

6. Addition of Rs. 1,15,000 on account of various valuables:
Similar to the jewellery, the Tribunal restored the matter to the Assessing Officer to verify if the surrendered amount covered the valuables and to make appropriate adjustments.

7. Telescoping of income:
The Tribunal noted that since the main additions were deleted and the matters related to jewellery and valuables were restored for verification, there was no need to give a separate finding on telescoping.

Separate Judgment by Accountant Member:
The Accountant Member dissented on the deletion of additions related to commission on billing work and billing commission on trading activities. He emphasized the need for proper verification and confrontation of evidence, suggesting that the matters be restored to the Assessing Officer for fresh consideration. The Accountant Member also suggested that the Assessing Officer be given liberty to consider the taxability of the unexplained cash credits in accordance with the law.

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