9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (6) TMI 20 - AT - Income TaxAssessment u/s 153A - Addition based on Cash found in search - HELD THAT - AO accepted the income as shown in the Income Expenditure A/c - This income is source of cash found in search. Thus, taxing professional receipt on the one hand and also taxing the cash balance found in search has resulted into double taxation. Hence, separate addition of cash surrendered in search is uncalled for. So far as observation of AO that cash book is manipulated is concerned, we may point out that while making surrender for cash found assessee did not consider the receipt from private practice for which patient register maintained in normal course was seized. In fact the entries in the cash book are fully verifiable from the patient register found in search. The AO has not found any defect therein. Due to preconceived mind AO has treated the incomplete cash book which was later completed by the assessee on receipt of seized patients register as manipulation of the cash book. At the same time AO has accepted the cash book for assessing the income. Thus, the allegation of manipulation by AO is without basis. Considering the totality of facts and circumstances, we are of the view that the ld. CIT(A) has passed a well-reasoned order and no new facts or circumstances have been brought before us by the ld DR in order to controvert or rebut the factual findings so recorded by the ld. CIT(A), therefore, we see no reason to interfere into or deviate from the findings so recorded by the ld. CIT(A) qua this issue and we uphold the same. Receipt of on-money pertaining to land transaction - HELD THAT - AO has stated that the agreement of the land are of July 2014 and Jan 2015 and therefore it is unbelievable that cash received on sale of this land was still lying with at the residential premises of the assessee after more than one and half years. In this connection, the ld. AR has stated that cash was received subsequently after the agreement to sale. In fact the purchaser first paid the cheque and thereafter paid the cash. The assessee has specifically stated that the cash was received few days back as the cash was to be paid before the registry and registry was to be done after 11th August 2016. Thus there is no basis with the AO to hold that amount was received more than one and half years back. Otherwise also there is no bar that the assessee can t keep cash with himself for more than one and half years and therefore the observation of the AO as to keeping of the cash at the residential premises is only on surmises and conjectures. Whether CIT(A) instead of giving relief to the assessee merely on the ground that opportunity to cross examine the buyers was not given should have himself done the needful by exercising its power u/s 250(4)? - As it was not mandatory for Ld. CIT(A) to carry out enquiries or get the cross examination done at her end inasmuch as section 250(4) of the Act only give a discretion to CIT(A) for further enquiry if the facts so warrant but do not compel him to make further enquiry/ provide opportunity of cross examination. Considering the totality of facts and circumstances, we are of the view that the ld. CIT(A) has passed a well-reasoned order and no new facts or circumstances have been brought before us by the ld CIT-DR in order to controvert or rebut the factual findings so recorded by the ld. CIT(A), therefore, we see no reason to interfere into or deviate from the findings so recorded by the ld. CIT(A) qua this issue and we uphold the same. Addition as buyer of the land denied to pay any on-money in land transaction to his wife - HELD THAT - AO only on assumption and presumption held that this represents the undisclosed investment. There is neither any mention of name or the date to whom the alleged loan has been given and therefore on the basis of this paper no addition can be made on account of the alleged loan. So far as the statement of the buyers are concerned, we are of the view that neither any specific question was asked from them nor any person making payment of On money will accept about the same. Hence simply because the buyer did not say anything about the on money payment , statement of the assessee in the absence of any contrary evidence can t be rejected. The AO has made the addition u/s 68 of the Act. This Section applies when any sum is found credited in the books of accounts, source of which is not explained to the satisfaction of the AO. Noting on a paper can t be said to be an entry in the books of accounts. We also draw strength from the decision of Coordinate Bench of Mumbai Tribunal in the case of S.P. Goyal Vs. DCIT 2002 (4) TMI 952 - ITAT MUMBAI .wherein the Coordinate Bench has held that loose sheet of paper torn out of a diary could not be construed as books for the purpose of section 68 and further held that addition could not be made simply on the basis of certain notings on loose sheets of a diary without any corroborative evidence in the form of extra cash, jewellery or investment outside the books. - Decided against revenue.
Issues Involved:
1. Deletion of addition of Rs. 17.30 lakhs. 2. Deletion of addition of Rs. 1,77,34,000/-. 3. Deletion of addition of Rs. 10,00,000/-. 4. Procedural lapses and the right to cross-examination. Issue-wise Detailed Analysis: 1. Deletion of Addition of Rs. 17.30 Lakhs: The Revenue challenged the deletion of Rs. 17.30 lakhs by the CIT(A), arguing that the assessee had surrendered this amount in his statement recorded under Section 132(4) of the Income Tax Act, 1961. The assessee contended that the cash book was incomplete at the time of search due to the accountant's illness and exams. After receiving the seized patient registers, the books were completed, showing a cash balance of Rs. 1,74,77,081/-. The AO accepted the income shown in the Profit & Loss account without finding any defect in the entries. The CIT(A) ruled that taxing the cash balance found during the search would result in double taxation since the professional income worked out was more than the cash balance. The ITAT upheld the CIT(A)'s decision, noting that no new facts or circumstances were presented to rebut the CIT(A)'s findings. 2. Deletion of Addition of Rs. 1,77,34,000/-: The Revenue contested the deletion of Rs. 1,77,34,000/-, arguing that the assessee failed to provide the source of this amount, which was claimed to be received as on-money from a land transaction. The CIT(A) noted that the cash found during the search was claimed to be from the sale of agricultural land owned by the assessee's wife, which was corroborated by documents seized during the search. The purchasers of the land denied making any cash payments. However, the CIT(A) found that the AO did not provide the assessee an opportunity to cross-examine these purchasers, which violated the principles of natural justice. The ITAT upheld the CIT(A)'s decision, emphasizing that the documentary evidence had more evidentiary value than the oral statements of the purchasers. 3. Deletion of Addition of Rs. 10,00,000/-: The Revenue challenged the deletion of Rs. 10,00,000/-, arguing that the buyer of the land denied paying any on-money in the land transaction. The assessee explained that the amount noted on a seized paper was the last installment to be received for the agricultural land sold by his wife, which was not received as the registry was not executed. The CIT(A) ruled that the AO's addition was based on assumptions and presumptions without any corroborative evidence. The ITAT upheld the CIT(A)'s decision, noting that the addition under Section 68 was not justified as the noting on a paper could not be considered an entry in the books of accounts. 4. Procedural Lapses and the Right to Cross-Examination: The Revenue argued that the CIT(A) should have conducted further inquiries or provided an opportunity for cross-examination under Section 250(4) of the Income Tax Act. The CIT(A) found that the AO did not provide the assessee an opportunity to cross-examine the purchasers whose statements were relied upon for making additions. The ITAT upheld the CIT(A)'s decision, emphasizing that denial of the right to cross-examine violated the principles of natural justice, rendering the order a nullity. Conclusion: The ITAT upheld the CIT(A)'s decision to delete the additions of Rs. 17.30 lakhs, Rs. 1,77,34,000/-, and Rs. 10,00,000/-, emphasizing the importance of procedural fairness and the right to cross-examination. The ITAT found that the AO's reliance on statements without providing an opportunity for cross-examination and the lack of corroborative evidence justified the CIT(A)'s deletions. The appeal of the Revenue was dismissed.
|
