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2017 (6) TMI 132 - AT - Income TaxUnexplained investment - search under section 132 - joint holder of property - Held that - We find that the addition was made on the basis of documents found during the course of search, which is purchase deed. The purchase deed was in the name of two persons who have purchased this land in equal shares. Therefore, addition of total investment cannot be made in the hands of the assessee. We direct the AO to treat unexplained investment to the extent of 50% of ₹ 4,85,000/-. Addition to this extent is confirmed and this ground of appeal is partly allowed. Default within the meaning of section 234B - Held that - CIT(A) has not recorded any finding on the grounds raised by the assessee in the Asstt.Year 2006-07 and 2007-08. Similarly, with regard to the facts stated by the assessee before us that a request was made for adjustment of seized cash against advance tax liability, no finding is discernible from the orders of the ld.CIT(A) in other years. Therefore, we deem it appropriate to set aside this issue to the file of the ld.CIT(A) for fresh adjudication. While dealing with this issue, the ld.CIT(A) shall keep in mind the order of the ITAT in the case of Kanishka Prints P.Ltd. (2013 (7) TMI 14 - ITAT AHMEDABAD ) . This ground of appeal is allowed for statistical purpose in all the assessment years.
Issues:
1. Addition of unexplained investment based on purchase deed valuation. 2. Adjustment of cash seized against advance tax for interest calculation under section 234B. Issue 1: Addition of Unexplained Investment The case involved the assessment years 2006-07, 2007-08, 2008-09, 2009-10, and 2011-12. The primary dispute in the Asstt.Year 2006-07 was the addition of ?4,85,000 as unexplained investment. The AO had made the addition based on a purchase deed found during a search, indicating a land purchase for ?4,85,000. However, the stamp duty valuation was much higher at ?95,85,200. The AO calculated additional investment by the vendee at ?92.00 lakhs, leading to an addition of ?48,42,600 in the hands of the assessee. The CIT(A) ruled that the addition in the hands of the purchaser cannot be made under section 50C of the Act. While the CIT(A) deleted the addition based on the deeming purchase consideration, he treated the ?4,85,000 as unexplained investment since it was not shown in the books. The ITAT held that as the purchase deed was in the name of two persons sharing the land equally, only 50% of the unexplained investment of ?4,85,000 could be attributed to the assessee, affirming the addition to that extent. Issue 2: Adjustment of Seized Cash Against Advance Tax for Interest Calculation The second issue revolved around the adjustment of cash seized against advance tax for interest calculation under section 234B. The assessee had requested the AO to adjust ?50.00 lakhs seized in cash towards advance tax, specifying amounts for different assessment years. The CIT(A) did not address this issue in the Asstt.Year 2006-07 and 2007-08, merely directing the AO to charge interest under section 234B. The ITAT found that the CIT(A) had not addressed the request for adjustment of seized cash against advance tax liability in any year. Citing the ITAT's decision in Kanishka Prints Pvt. Ltd. Vs. ACIT, the ITAT set aside the issue for fresh adjudication, instructing the CIT(A) to consider the application of the seized cash against advance tax liability before calculating interest under section 234B. The appeal was allowed for statistical purposes in all assessment years. In conclusion, the judgment addressed the issues of unexplained investment addition based on a purchase deed valuation and the adjustment of seized cash against advance tax for interest calculation under section 234B. The ITAT partially allowed the appeals, confirming the addition of unexplained investment to the extent of 50% and remanding the seized cash adjustment issue for fresh adjudication.
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