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2015 (1) TMI 655 - AT - Income TaxUnaccounted receipt on the allotment of plots - CIT(A) confirmed the addition - block assessment proceedings - Held that - CIT(A) has erred in confirming the addition of ₹ 12,44,06,000/- made on account of alleged unaccounted receipts on the allotment of plots in Ardee City, Gurgaon as the same additions made by the AO during reassessment proceedings u/s 143(3)/147 of the Act have not been found to be acceptable and sustainable by the Tribunal and the orders of the Tribunal have attained finality, thus, additions made on the same set of facts and circumstances on the same issue in the order passed by the AO in block assessment proceedings u/s 158BD/158BC for block period of 1.4.1996 to 20.9.2002 are not sustainable. The additions made in the hands of purchasers about alleged investment from undisclosed sources have also not been found to be unsustainable thus no adverse inference about undisclosed income can be drawn.- Decided in favour of assessee.
Issues Involved:
1. Addition of Rs. 12,44,06,000 on account of alleged unaccounted receipt on the allotment of plots in Ardee City, Gurgaon. 2. Legal infirmities in the order passed by the assessing authority. Issue-Wise Detailed Analysis: 1. Addition of Rs. 12,44,06,000 on Account of Alleged Unaccounted Receipt: The assessee contested the addition of Rs. 12,44,06,000 made by the AO and upheld by the CIT(A) on the grounds of alleged unaccounted receipts from the allotment of plots in Ardee City, Gurgaon. The ITAT Delhi Bench had previously addressed similar issues in the assessee's own cases for AY 1997-98, where the Tribunal had directed the AO to delete the additions made on account of unaccounted receipts. The Tribunal observed that the additions were based on a seized document (A-I page 5) which was not a proper cash book and the entries therein represented market values, not actual values. It was noted that the AO had presumed the entries to reflect actual costs without corroborative evidence. The Tribunal emphasized that documents should be read as a whole, and selective acceptance of entries was not permissible. The Tribunal found that the AO's addition was based on presumption and lacked substantial evidence. Consequently, the Tribunal dismissed the revenue's appeal and directed the deletion of the addition. 2. Legal Infirmities in the Order Passed by the Assessing Authority: The assessee argued that the reassessment order passed u/s 143(3) r/w section 147 of the Act was legally infirm, as the additions made were not sustainable. The Tribunal noted that similar additions made during reassessment proceedings had been deleted by the ITAT in the assessee's own cases and in the case of the purchaser, Chavan Rishi International. The Tribunal observed that the CIT(A) had ignored the Tribunal's previous orders and the Settlement Commission's findings, which held that no adverse inference about undisclosed income could be drawn without corroborative evidence. The Tribunal emphasized that the CIT(A)'s approach was not justified and that the additions made by the AO were not sustainable. Conclusion: The Tribunal concluded that the CIT(A) had erred in confirming the addition of Rs. 12,44,06,000 on account of alleged unaccounted receipts. The Tribunal directed the AO to delete the impugned additions, as the same additions made during reassessment proceedings had been found unsustainable by the Tribunal and the Settlement Commission. The Tribunal allowed the assessee's appeal, setting aside the impugned order and directing the deletion of the additions. Order Pronounced: The appeal of the assessee was allowed, and the impugned order was set aside. The AO was directed to delete the impugned additions. The order was pronounced in the open court on 15.1.14.
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