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2025 (1) TMI 707 - HC - Income TaxUndisclosed income from Shipgram Scheme - ITAT restricted addition - HELD THAT - On perusal of the above findings of the Tribunal, we are of the opinion that the same are factual being the findings of fact upholding the findings of fact arrived at by the CIT (Appeals) coupled with the fact that the estimate has been made by the CIT (Appeals) for allocating the sum between the Assessee and M/s. Shivganga Builders @ 30% and 70% for sustaining the addition to the extent of 30%. In view of the concurrent findings of fact arrived at by the CIT (A) and Tribunal, we decline to answer the question being a question of fact confirming the order passed by the Tribunal. These appeals are accordingly dismissed. 1. ISSUES PRESENTED and CONSIDERED The primary legal issue presented and considered in this judgment is:
2. ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents The legal framework revolves around the computation of undisclosed income during a block assessment period, as governed by Section 158BB of the Income Tax Act. This section mandates that undisclosed income should be computed based on material found and seized during a search operation. Court's Interpretation and Reasoning The Tribunal examined the findings of the CIT (Appeals) and the Assessing Officer. It emphasized that the CIT (Appeals) had based its decision on the seized material, specifically Annexure A/12, which was corroborated by affidavits from farmers confirming the selling price of the land. The Tribunal found that the Assessing Officer was bound to accept the cost of land as shown in the seized documents, as it was a factual determination supported by evidence. Key Evidence and Findings The key evidence included the seized documents, particularly Annexure A/12, which detailed the cost of land. Affidavits from farmers confirmed the selling price, supporting the CIT (Appeals)'s valuation. The CIT (Appeals) had enhanced the sale consideration by Rs. 25,00,000, a point not contested by the assessee. Application of Law to Facts The Tribunal applied Section 158BB, emphasizing that undisclosed income should be computed based on seized material. It found the CIT (Appeals)'s determination of the land cost at Rs. 9,53,83,887 to be valid and legally sound, as it was based on the seized documents and corroborated by affidavits. Treatment of Competing Arguments The Tribunal considered the Revenue's argument that the sale consideration should be higher, but it dismissed this contention, finding no illegality in the CIT (Appeals)'s order. The Tribunal also addressed the assessee's argument regarding the valuation of unsold plots, agreeing that the CIT (Appeals) should have valued them at Rs. 210 per sq. yd. instead of Rs. 330 per sq. yd. Conclusions The Tribunal concluded that the CIT (Appeals) had correctly computed the undisclosed income based on the seized material. It reduced the addition from Rs. 17,40,337 to Rs. 3,78,517, but sustained the addition at Rs. 10,00,000 in line with the undisclosed income returned by the assessee. 3. SIGNIFICANT HOLDINGS Preserve Verbatim Quotes of Crucial Legal Reasoning "Section 158BB clearly lays down that undisclosed income has to be computed on the basis of material found and seized during the course of search." "The AO was bound to accept the cost of the land as shown in the seized document." Core Principles Established
Final Determinations on Each Issue
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