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2022 (10) TMI 283 - HC - Income TaxAssessment u/s 153A - Disallowance of Agricultural income - HELD THAT - The assessee preferred to explain a few details/recoveries made by the Department in the search and seizure by filing a cash flow statement. The cash flow statement is an abstract of books of account or primary evidence on the source of income, genuineness of income, and reliability of income to the source claimed by the assessee. In the absence of satisfactory discharge of onus, having perused all the three orders, we are of the view that the findings are properly and correctly rendered by the Authorities as well as the Tribunal. There is no question of law, much less a substantial question of law falling within the jurisdiction of this Court under Section 260A of the Act. The question is answered in favour of Revenue and against the assessee. Investment in M/s.Tristar investments, Bangalore - Whether the Authorities and the Tribunal are justified for including Tristar investments in the computation of the assessee or not? - The assessee can successfully challenge the adding of investment in Tristar Investments by pointing out how the findings recorded from the admitted and undisputed documents are unavailable. The converse of the situation is the findings are rendered from the documents seized from the associates of the assessee, where the assessee's investments in undisclosed in regularly maintained accounts are dealt with. In our considered view, these are the simple findings of the fact recorded by the authorities from the circumstances noted and documents considered by them. We see no reason to disturb the findings recorded on this behalf. Therefore, the question is answered in favour of the Revenue and against the assessee. Amounts credited in the bank accounts of the assessee s employees - Whether the Assessing Authority was right in law in holding that the credits in the bank accounts of the employees represent a share of profit of the appellant in the above partnership concern when the firm itself had not made profits, as per assessment orders passed in its case? - The recipient of the amount explained his nature and circumstance in which substantial amounts are transferred to the credit of those employees. The genuineness or otherwise of the accounts of those firms cannot constitute an issue for examination in the assessments of the assessee. The enquiry, in the case on hand, is on the suppressed or undisclosed income of the assessee. The burden is on the assessee to discharge that the employees are also speaking. We are convinced embarking upon the enquiry into any of the situations would result in going beyond the jurisdiction of this Court under Section 260A of the Act. We have carefully examined the findings, and what is available for including the credits in favour of the assessee s employees has been added to the assessee's income. Except for raising a monotonous objection, nothing substantially pointed out to treat the same as a substantial question for consideration by this Court. The question is answered in favour of the Revenue and against the assessee. Loan to Mohanraj - Whether the Appellate Tribunal did commit an error of the law when the Tribunal set aside the order of the CIT(A) and remanded the matter to the Assessing Authority, Particularly when the addition is based on the retracted statement of Mohanraj? - We have seen the reasons given by the Tribunal for remanding the matter as noted in the order of the Tribunal. Firstly, no ground is made out to interfere with the order of remand, and after perusing the reasons, we appreciate that the reasons, made with the CIT(A) for taking a different view, are found to be untenable. We are in agreement with the view taken by the Tribunal, and the order of remand does not warrant our interference. The question is answered in favour of the Revenue and against the assessee. These questions are answered in favour of the Revenue and against the assessee. Difference in valuation of the factory building and purchase value estimation - After perusing the reasons considered by the Tribunal, we are in complete agreement with the view taken by the Tribunal for remand is warranted in the circumstances of the case. No ground, much less a substantial question of law is made out disturbing the findings recorded by the Tribunal for ordering of remand to the Assessing Authority. The questions raised are answered in favour of the Revenue and against the assessee.
Issues Involved:
1. Disallowance of Agricultural Income 2. Investment in M/s. Tristar Investments, Bangalore 3. Amounts Credited in the Bank Accounts of the Assessee’s Employees 4. Loan to Mohanraj 5. Difference in Valuation of Factory Building and Purchase Value Estimation Detailed Analysis: (a) Disallowance of Agricultural Income The primary issue was whether the orders under appeal concerning agricultural income suffered from an error of law and non-application of mind. The assessee claimed agricultural income from properties in Maharashtra and Malappuram district. The Assessing Officer rejected the claim for Maharashtra due to doubts about the genuineness of notarized lease agreements and treated the income as from other sources. For Malappuram, the claim was partially accepted, and the rest was added as income from other sources. The Tribunal upheld these findings, noting that the assessee did not satisfactorily discharge the onus of proving the agricultural income. The court found no substantial question of law and ruled in favor of the Revenue. (b) Investment in M/s. Tristar Investments, Bangalore The question was whether the inclusion of Tristar Investments in the assessee's income computation was justified. During a search, documents indicating an investment by the assessee in Tristar Investments were found. The Revenue added Rs. 70,00,000/- to the assessee's income based on these documents and statements from associates. The assessee denied the investment, but the Tribunal upheld the addition, noting that the documents and statements provided sufficient evidence. The court found these to be findings of fact and ruled in favor of the Revenue. (c) Amounts Credited in the Bank Accounts of the Assessee’s Employees The issue was whether the credits in the employees' bank accounts represented the assessee's share of profits. The Revenue found substantial amounts credited to the accounts of the assessee’s employees, attributed to profits from Tristar Investments. The assessee's explanations were deemed evasive, and Rs. 10,00,000/- was added to his income. The Tribunal upheld this addition, and the court found no substantial question of law, ruling in favor of the Revenue. (d) Loan to Mohanraj The question was whether the Tribunal erred in remanding the matter to the Assessing Authority based on a retracted statement. Mohanraj initially stated he borrowed large sums from the assessee but later retracted his statement. The Tribunal remanded the matter, finding the reasons for the CIT(A)'s different view untenable. The court agreed with the Tribunal's decision to remand and ruled in favor of the Revenue. (e) Difference in Valuation of Factory Building and Purchase Value Estimation The Tribunal reviewed the CIT(A)'s findings on the valuation of the factory building and purchase value estimation of plant and machinery, finding them unsustainable. The Tribunal allowed the Revenue's appeals and ordered a remand. The court found no substantial question of law to disturb the Tribunal's findings and ruled in favor of the Revenue. Conclusion All issues were decided in favor of the Revenue, with the court finding no substantial questions of law to warrant interference with the Tribunal's findings. The appeals were dismissed accordingly.
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