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TMI Blog2013 (7) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the earlier years - there is no difference in quantity of items as the difference is only on account of the valuation report. - Additions deleted. Whether confirming the addition on account of shoppers stop card is valid - most of the additions have been made in the routine manner as the issue has not been discussed in right perspective in taking into consideration the submission and other evidences filed -It is also a matter of fact that no incriminating material was found during the course of search as only during the assessment proceeding these expenses were found made through credit cards – Additions deleted. Whether confirming the addition of loan taken from an NRI businessmen in Russia -Held that:- There is no material to hold that the assessee has shown bogus loan - Similar addition was made for assessment year 2000-01 and after discussing the issue in detail, court deleted the loan shown by the assesse - For the same reasoning - Additions deleted. Whether confirming the addition on account of credit card payment made by the mother of the assesse - It is stated that the payment was made through credit card of her mother - This aspect has not been examined, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e quashed. Reliance was placed on the decision reported in 23 ITR 766 (Trib) and 141 ITD 151 i.e. in the case of All Cargo Global Logistics Ltd.. Copies of these orders have been filed by the learned AR. 7. In reply, learned DR stated that on similar facts, the Tribunal in the case of Scope (P) Limited, (2013) 33 Taxman.com 167, has held that the AO is bound to issue notice under Section 153A as the provision of Section 153A are different from the provision of Section 158BD and BC. It was further submitted that the decision on which reliance has been placed by the learned AR have already been considered by this Bench. It was further stated that the decision of the Hon'ble Punjab and Haryana High Court in the case of Anil Bhatia and the decision of the Special Bench in the case of All Cargo Global Logistics Ltd (supra) have been taken into consideration and found that on search conducted after enacting the provision of Section 153A, the AO is bound to issue notice to the assessee, therefore, the assessment cannot be held as bad in law. 8. We have heard the rival submissions and considered them carefully. After considering the submission and taking into consideration the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the three relevant assessment years on merit. 10. In appeal of the assessee i.e. ITA No.5888/M/2009 filed for the assessment year 2000-01, grounds No.1 to 3 are against confirming the addition of Rs.7,00,000/- received as gift from friend of the assessee Mr. Sujit Kumar Singh, who is NRI businessman in Russia having immense wealth as professional receipt, addition of Rs.5 lakhs received as gift from another friend Shri T.R.Irani, who is a builder in Mumbai and confirming the addition of Rs.4 lakhs taken as loan from Mr. T.R.Irani, respectively. 10.1 The facts in succinct are that the assessee engaged in the profession of dance profession with certain restaurant/dance bar. A search and seizure action under Section 132 of the Act was conducted at the assessee's residence on 29-08-2005 and cash of Rs.22,77,100/- and jewellery of Rs.18,10,627/- were found, out of which unexplained cash of Rs.22 lakhs and unexplained jewellery valued at Rs.12,24,339/- were seized. Notice under Section 153A was issued on 16-2-2006 and assessee furnished a letter on 29-3-2006 stating that the return filed originally on 3-10-2000 be treated as a return filed in response to the said notice under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Mr. Sujit Kumar Singh and Mr. Irani, who have given gifts. In respect of the loan, confirmation was also filed. It was submitted that the loan was given in earlier year i.e. for the assessment year 1999-2000 and the same was repaid also during the year under consideration. All the entries have been made in the balance sheet. Therefore, the loan amount cannot be added to the income of the assessee of the year under consideration. Further details were filed before the CIT(A). A remand report was also sought by the CIT(A) and the same was sent by the AO vide letter dated 9-2-2009. In the said remand report it was stated by the learned AO that summons were issued under Section 131 in the name of Mr. Sujit Kumar Singh, however, they have returned back. Thereafter fresh summons were also issued at the Ville Parle, Mumbai address, which was accepted, however, Mr. Sujit Kumar Singh failed to appear before the AO. It was submitted that the creditworthiness of Mr. Sujit Kumar Singh was not doubted because as per statement of affairs, sufficient funds were available with him, however, he could not produce, therefore, it was submitted that the gift given cannot be accepted as genuine. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be produced, hence, the addition made and sustained, in our considered view, is not justified as all every details were filed. This is a case of search. No doubt, the AO is bound to complete the assessment but if any addition is to be made that has to be made on the basis of material or on the basis of any other information received after the search. In the present case, no adverse material was found against the assessee. An enquiry was made on the basis of balance sheet filed by the assessee herself along with the return. 10.6 Learned DR has placed reliance on the decision of the Tribunal in the case of Scope (P) Limited (supra), but in this case it has been held by the Tribunal by recording its finding in para 13 that the AO cannot resort to a roving and fishing enquiry to find out whether any income has escaped assessment during the reassessment proceedings, when there is no incriminating material found or seized during the course of search action under Section 132. Undisputedly, there was no incriminating material in respect to gifts of Rs.7 lakhs, Rs. 5 lakhs and in respect of loan of Rs.4 lakhs from these two persons mentioned above, therefore, for these reason also, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details given at the time of filing the return by the assessee itself. Therefore, the ratio of this decision is not applicable on the facts of the present case. Learned DR also supplied a copy of the decision of the Tribunal in the case of M/s Keerthi Housing (P) Ltd., decided in ITA No.1302-1303/Hyd/2011, vide order dated 15-2-2013. In this case, the Tribunal following the decision of the jurisdictional High Court in the case of Gopal Lal Bhadruka Vs. DCIT (supra), has held that the AO can consider any other material, which was available at the time of completing the assessment. After considering this decision of the Tribunal, we found that there is a decision of Hon'ble Gujarat High Court, which was in favour of the assessee, wherein it has been held that without any material, no addition can be made in the case of search while completing assessment under Section 153A. However, the decision of Hon'ble Gujarat High Court in the case of Vujaybhai N. Chandrani Vs. ACIT, reported in 231 CTR 474, was not taken into consideration for the reason that the decision of the jurisdictional High Court in the case of Gopal Lal Bhadruka (supra), was available before the Tribunal. The decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention of the assessee was found correct. However, the AO referred the matter to the DVO for valuation of the flat, who valued the property at Rs.11,87,500/-. The assessee has shown the cost of Rs.9,20,000/-. Therefore, the AO made an addition of Rs.2,67,500/- as difference between the valuation done by the DVO and the value shown by the assessee in the balance sheet. 11.2 Learned CIT(A) has confirmed the action of the AO. 11.3 After considering the submissions of both the parties, we found that there is no basis for making any addition of Rs.2,67,500/-. The assessee has disclosed the amount of Rs.9,20,000/-, whereas the DVO valued this property at Rs.11,87,500/-. This is a minor difference in valuation. There is no other evidence against the assessee that the assessee has paid over and above the amount shown in the balance sheet, therefore, without any material or evidence the addition made only on the basis of DVO's report, is not justified. This is a case of search. There should be some material found against the assessee, during the course of search. As stated above, there was no material found against the assessee and the addition was made only on the basis of DVO's repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is noted that the original return was filed under Section 139(1) on 31-3-2002, declaring the total income of Rs.15,38,913/-. The return was accompanied by income and expenditure account, balance sheet and capital account. Thereafter the same return was filed in response to notice under Section 153A. After examining all these details and submission along with the order of the learned CIT(A), we find that the learned AO as well as learned CIT(A) were not justified in not taking into consideration the explanation of the assessee that no loan was taken from the mother and father as the loan of Rs.4 lakhs was taken from Shri T.R.Irani in the year 1999-2000. In view of the above facts, we are of the view that the addition made by the AO, which is confirmed by the learned CIT(A), is not justified. Corrected balance sheet and explanation was filed during the assessment proceeding, which should have been examined by the AO. Accordingly, we hold that the loan of Rs.4 lakhs taken from Mr. T.R. Irani, which was taken in the assessment year 1999-2000, is not justified in making the addition in the year under consideration. Accordingly, we delete the addition of Rs.4 lakhs. 12.6 In regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of rs.6,07,200/- for the year under consideration also. 14. Remaining issue is in respect of addition of Rs.3,37,341/- made by the AO on account of gift received from Mr. Sujit Kumar Singh. 14.1 After examining the balance sheet, the AO found that the assessee has shown gift of Rs.3,37,341/- from one Shri Sujit Kumar Singh. The assessee was required to produce the person and to file necessary details. The confirmation of loan was filed, confirmation of bank details were also given. Since the assessee could not produce the person, therefore, the AO rejected the explanation and made the addition. 14.2 Learned CIT(A), in appeal, has also confirmed the action of the AO after taking into consideration the remand report sent by the AO. 14.3 We have considered the rival submissions along with the orders of the authorities below and other details and found that the onus lay upon the assessee has been duly discharged. Each and every detail proving the gift genuine was filed. The amount of gift is duly incorporated in the balance sheet enclosed along with the return of income. There was no material found during the course of search to hold that the gift received by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16.1 The total jewellery of Rs.18,10,627/- was found during the course of search. The AO noted that the assessee has shown jewellery in different assessment year from assessment year 2000-01 to assessment year 2006-07 at Rs.15,38,712/-. Remaining jewellery of Rs.2,71,95/- was treated as unexplained. Accordingly, addition was made. 16.2 The CIT(A) has also confirmed the addition made by the AO. 16.3 After considering the submission and perusing the material on record, we find that as per seized material, the weight of gold jewellery was of 1073.53 gms, whereas as per valuation report, it was 837.90 gms. Most of the bills pertaining to jewellery, are relating to earlier year for which the additions have already been made in the earlier years. The addition of Rs.2,71,915/- was made only on the basis of valuer's report, otherwise, there is no difference in items of jewellery for which the additions have already been made in earlier years. Therefore, we are of the view that on the basis of difference in valuation report, the addition should not have been made. The quantity of jewelley has already been shown in the earlier years. There is no difference in quantity of items as the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o hold that any bogus loan has been shown by the assessee. The loan taken from Shri Sujit Kumar Singh, who is a friend of the assessee, was shown in the balance sheet filed along with the return and confirmation of the same was filed. Only on the basis of that Shri Sujit Kumar Singh could not be produced, the addition was made and sustained. The loan was taken through proper banking channel as 9,975 dollars were received, which was converted into Indian rupees and were shown in the balance sheet. Therefore, there is no material to hold that the assessee has shown bogus loan. Similar addition was made for assessment year 2000-01 and after discussing the issue in detail, we have deleted the loan shonw by the assessee. For the same reasoning and in view of the discussion made above, we delete this addition also. 20. The next issue relates to confirming the addition of Rs.11,000/- on account of credit card payment made by the mother of the assessee. 20.1 As per the seized material i.e. Serial No.27 31 of Annexure- A/1, it was found that the assessee has made a payment amounting to Rs.11,000/-. She was asked to explain the source of payment. In reply, the assessee has stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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