2021 (9) TMI 1218 - AT - Income Tax

Undisclosed investment - Addition made on the basis of two seized documents - HELD THAT - AO has made the above addition in the hands of the assessee on protective basis. He further noted that as the documents has been found from the assessee s premises and are in handwriting of the assessee, substantive addition is deserves to be made in the hands of the assessee - as the complete amount involved in those documents covers the disclosure made by the assessee , which is in excess of the sum declared by the assessee, the impugned amount of income comprised in the seized documents subsumed in the amount of the total disclosure - addition was deleted. DR could not show us any reason to deviate from him. Accordingly, Ground No. 1 of the appeal is dismissed. Undisclosed income - addition arises from the disclosure made by Shri Rajiv Gupta on behalf of the entire group - main reason for deleting the addition was that overall disclosure was given on estimated basis and on actual subsequent analysis, it has been found to be on the lower side than what was disclosed - HELD THAT - AO did not investigate that as there is any further income over and above the income disclosed sum by the assessee in his return of income such addition could not have been made. DR could not show any infirmity in the order of the ld CIT(A). We also find Mr. Rajiv Gupta disclosed ₹ 10 crores in the hands of the assessee which was found to be actually only ₹ 9,33,11,511/- which was disclosed by the assessee in his return of income. Therefore, to make any further addition same should have been substantiated by the ld AO with evidences after proper investigation and putting cogent material on record with the disclosure made by the assessee holding that it is not ₹ 9.33 crores but ₹ 10 crores. Such effort has not been made. No evidence is recorded in the assessment order as well as before the ld CIT(A). In view of this, we do not find any infirmity in deleting the above addition. Unaccounted cash - seized documents about money received by him on account of sale of property - HELD THAT - We also found that four different companies have accepted the receipt in cash towards sale consideration of the property which is duly reflected in their books of account and therefore, addition has rightly been deleted by the ld CIT(A). With respect to cash found it is subsumed by the overall disclosure. Further, the ld AO failed to telescopic the above addition which was given by the ld CIT (A). Accordingly, we confirm the order of the ld CIT(A) deleting the above addition. - Decided against revenue.

Summary

Issues:
1. Disallowance of undisclosed investment
2. Deletion of addition of undisclosed income
3. Addition of unaccounted cash

Issue 1 - Disallowance of Undisclosed Investment:
The appeal was filed against the order of the Commissioner of Income Tax (Appeals) granting relief to the assessee for Assessment Year 2009-10. The Assessing Officer (AO) had made additions to the total income of the assessee, including a disallowance of ?1,88,30,489 on account of undisclosed investment based on seized documents. However, the Commissioner held that the total undisclosed income offered by the assessee exceeded the amount involved in the documents, hence no further addition was necessary. The Commissioner noted that as the seized documents were found in the assessee's premises and in the assessee's handwriting, no additional substantive addition was warranted. The Tribunal dismissed Ground No. 1 of the appeal, upholding the Commissioner's decision.

Issue 2 - Deletion of Addition of Undisclosed Income:
The second ground of appeal related to the addition of ?66,88,489, arising from a disclosure made by a third party on behalf of the group. The assessee had disclosed ?10 crores, but the AO added the difference as the disclosed income was less. The Commissioner found that the initial disclosure was estimated and subsequent analysis revealed it to be on the lower side. The Tribunal agreed that no further addition could be made without proper substantiation by the AO, who failed to provide evidence or investigation to support the addition. Ground No. 2 of the appeal was dismissed, upholding the deletion of the addition.

Issue 3 - Addition of Unaccounted Cash:
The third ground of appeal concerned an addition of ?58,69,600 on account of unaccounted cash, comprising two amounts. The Commissioner deleted both additions, one related to the sale of property and the other found at the residence of a relative of the assessee. The Tribunal confirmed the deletion of the additions, noting that the cash amount was subsumed by the overall disclosure made by the assessee. The AO failed to provide sufficient evidence or investigation to support the addition, leading to the confirmation of the Commissioner's decision. The Tribunal upheld the deletion of the additions and dismissed the appeal of the revenue.

In conclusion, the Tribunal confirmed the Commissioner's decision to delete all three additions to the assessee's total income, dismissing the appeal of the revenue.