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2016 (3) TMI 1022 - AT - Income TaxAddition made on account of unexplained cash credit in Mauritius Bank Account - Held that - Find merit in the plea of assessee that where additional income is being added to the income of assessee, then credit for the amount offered by way of additional income, while recording the statement under section 132(4) of the Act should be allowed to the assessee. Another aspect to be noted in this regard is that the CIT(A) vide para 8.7 at page 8 has also allowed the said addition of Euro 2000 equivalent to ₹ 1,03,560/- to be adjusted out of additional income offered of ₹ 10 lakhs. The Revenue is not in appeal against the said finding of CIT(A). In the entirety of the above said facts and circumstances, we direct the Assessing Officer to allow the credit of the balance of ₹ 10 lakhs against the addition made on account of Euro 26000 i.e. ₹ 14,78,360/- and balance amount is to be added in the hands of assessee. However, since the bank account relates to the assessee, we uphold the addition made on account of interest credited to the bank account of Euro 268.43 equivalent to ₹ 15,413/-. - Decided partly in favour of assessee Addition on account of Bandra Home on protective and substantive basis - Held that - First of all, the figure mentioned on the said document is 20.00 and in the absence of Assessing Officer establishing 20.00 stands for ₹ 20 lakhs, the said addition cannot be upheld in the hands of assessee. Secondly, the said document has not been proved to relate to the assessee and merely because the assessee had given certain information about Bandra flat, which admittedly is owned by one person and was being used by him and was later owned by some other person, we find no merit in the presumption and assumptions made by the Assessing Officer that the entries in the document relate to a rental income of ₹ 68 lakhs, against which the assessee has earned commission of ₹ 20 lakhs. The said flat was being used as guest house and there was no question of earning rental income. Consequently, the objections and assumption raised by both the authorities that the assessee is aware of such flat in Bandra and hence, the name of Ajay relates to the assessee is baseless. First of all, before making any addition in the case of any of assessee, complete details should be available. It is not even clear as to which Bandra flat, the said paper relates and it is also not clear what are the entries made on that document whether relating to sale of the property or giving the same on rent. In the absence of any clarity, the said document at best is a dumb document and entries in the said document are not relatable to the assessee. Both the authorities below have failed to establish connection of the assessee with the said document, which is annexed to PIL and have also failed to establish that the said entries relate to the assessee himself. In the absence of the same, we find no merit in the aforesaid additions either on protective and / or substantive basis and we delete the same. Also once if commission income was added in the hands of assessee, then no addition is warranted on account of rental income, since apparently, the assessee was only a broker and cannot be both a broker and owner in the same breath. We find no merit in the orders of authorities below in this regard - Decided in favour of assessee Addition on account of entry made in the computer in the name of Kohinoor s account - Held that - As third party confirmed by way of Affidavit filed before the Assessing Officer that the said Excel files related to him and he also confirmed all these facts by way of e-mail to the e-mail ID of Assessing Officer and also filed the requisite passport details in this regard that he was in Pune during the period and those documents were prepared by him and they belonged to him.The onus in this regard was upon the Assessing Officer to verify the claim of assessee and not to merely reject the same. The assessee was engaged in the business of real estate and the transaction had to be seen with an angle of business carried on by the assessee. We find no merit in the aforesaid addition made by the Assessing Officer in the hands of assessee, which in turn, has been clarified by him that in case evidence is filed, the same would be deleted. Further, the learned Authorized Representative for the assessee has fairly pointed out that in order to cover up discrepancy from year to year, it has offered additional income in its hands of ₹ 40 lakhs up to 31.03.2007 and ₹ 10 lakhs in the current year under appeal. In the totality of the above said facts and circumstances, we delete the addition of ₹ 47 lakhs. - Decided in favour of assessee Addition made on account of cash seized at the time of search - Held that - With regard to observation of CIT(A) vis- -vis remaining cash in hand being available on the date of search, we find no merit in the said stand of the authorities below. With regard to entries in the books of account, which were made on a later date, however, looking at the difference between the cash found of ₹ 3,78,500/- and the availability of cash as per cash book of ₹ 42,31,973/-, we are of the view that the presumption is in favour of the assessee that the cash found during the course of search is duly explained. In view of the smallness of cash found during the course of search as against the large amount shown in the books of account, we accept the plea of the assessee. However, this decision of our, shall not be used as precedent in any other case. - Decided in favour of assessee Addition on account of entries under the head Sai Account - Held that - The assessee admits to have included the said sum of ₹ 13,62,000/- in the declared income of ₹ 70 lakhs for the year under consideration and since the amount was additional income, there was no merit in any further addition. We find that the CIT(A) vide para 58.7 at page 68 has directed the Assessing Officer to verify the claim of the assessee in this regard and we find no merit in the ground of appeal raised by the assessee - Decided against assessee Addition computed on the basis of cumulative total of credit entries on the seized document - Held that - In the entirety of the above said facts and circumstances, we find merit in the claim of the assessee that the addition cannot be made in the hands of assessee by only totaling of credit side of the entries. The debit side entries, if any, on the said seized document, needs to be considered and only difference of the entries is to be added in the hands of assessee. Further, the assessee claims that it had already offered ₹ 70 lakhs as additional income against the discrepancy, if any, found in the seized documents. The CIT(A) had taken note of the fact that the Assessing Officer had not allowed the benefit of ₹ 70 lakhs while computing addition in the hands of assessee. The Assessing Officer in the remand report has admitted that the same is allowable to the assessee. Accordingly, we direct the Assessing Officer to re -compute the income on the basis of entries in the said document, both credit and debit and to give benefit of additional income of ₹ 70 lakhs before making any addition in the hands of assessee. It may also be clarified here that the additional income of ₹ 70 lakhs also covers the addition of ₹ 13,62,000/-, which has been confirmed by us in respect of ground of appeal No.3. The Assessing Officer shall give reasonable opportunity of hearing to the assessee while re-computing the income of the assessee.
Issues Involved:
1. Validity of the assessment order under section 143(3) r.w.s. 153A of the Income Tax Act. 2. Addition on account of unexplained cash credit in the Mauritius Bank Account. 3. Addition on account of the Bandra Home transaction. 4. Addition on account of entry made in the computer in the name of Kohinoor's account. 5. Addition on account of cash seized at the time of search. 6. Addition on account of unexplained cash in the cash book. Detailed Analysis: 1. Validity of the Assessment Order: The assessee raised a ground challenging the validity of the assessment order passed under section 143(3) r.w.s. 153A of the Income Tax Act. However, this ground was not pressed by the assessee and was dismissed as not pressed. 2. Addition on Account of Unexplained Cash Credit in the Mauritius Bank Account: The primary issue was the addition of Rs. 14,93,773/- made by the Assessing Officer (AO) due to unexplained cash credits in a Mauritius Bank Account. The AO noted that the bank account was found in the name of Ajay Jain but was owned up by the assessee. The AO presumed the entries in the papers belonged to the assessee under section 132(4A) of the Act. The CIT(A) upheld the addition, noting the improbability of the assessee's claim that the amount was mistakenly deposited by Mr. Ajay Beegoo. The Tribunal allowed partial relief by directing the AO to adjust the addition against the additional income of Rs. 10 lakhs offered by the assessee. 3. Addition on Account of the Bandra Home Transaction: The AO made an addition of Rs. 68,00,000/- on a protective basis and Rs. 20,00,000/- on a substantive basis, based on a document attached to a PIL alleging corrupt practices. The document mentioned "Bandra Home" and "Ajay," which the AO presumed referred to the assessee. The CIT(A) upheld the additions, but the Tribunal found no merit in the presumption that the document related to the assessee. The Tribunal deleted the additions, noting that the document was not found from the possession of the assessee and lacked clarity on the entries. 4. Addition on Account of Entry Made in the Computer in the Name of Kohinoor's Account: The AO made an addition of Rs. 47,00,000/- based on an Excel file found on the assessee's computer. The assessee claimed the entries belonged to Mr. Ajay Beegoo, who confirmed this via an affidavit and email. The CIT(A) upheld the addition, but the Tribunal deleted it, noting that the AO failed to verify the claim and that the presumption under section 132(4A) could not be drawn against the assessee without establishing a link. 5. Addition on Account of Cash Seized at the Time of Search: The AO added Rs. 3,78,500/- found during the search, rejecting the assessee's explanation of cash balance as per books. The CIT(A) upheld the addition, but the Tribunal allowed the assessee's plea, noting that the cash found was small compared to the cash balance in the books, and the presumption was in favor of the assessee. 6. Addition on Account of Unexplained Cash in the Cash Book: The AO made an addition of Rs. 1,18,97,000/- based on entries in a seized document. The CIT(A) upheld the addition but directed the AO to verify if the amount included in the declared income of Rs. 70,07,190/-. The Tribunal directed the AO to re-compute the income, considering both credit and debit entries in the document and allowing the benefit of the additional income of Rs. 70 lakhs offered by the assessee. Conclusion: The Tribunal provided partial relief to the assessee by allowing adjustments and deletions of certain additions. The grounds of appeal raised by the assessee were partly allowed, and the AO was directed to re-compute the income considering the Tribunal's directions.
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