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TMI Blog2014 (7) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... ents were made in that ratio - there is no reason to doubt his statement that the unaccounted amount was contributed by him out of his undisclosed sources - all the documents proves the contention of the assessee that the unaccounted payment involved in the land deal was financed to the extent of ₹ 1.00 crore by the undisclosed income declared by Shri Ramesh Nakrani in his hands - there was no reason to reject the submissions of the assessee firm that the unaccounted portion involved in the land deal was met out of undisclosed income delared by Shri Ramesh Nakrani - the assessee has explained the sources for making payment to the extent of ₹ 1.00 crore in respect of the land deal - CIT(A) was justified in giving credit of ₹ 1.00 crore against the addition of ₹ 1,44,36,000/- made by the AO. There should not be any doubt that the suppressed amount of consideration should be arrived at by comparing the actual consideration with the accounted consideration - the AO has adopted the figure of ₹ 1,65,00,000/- as accounted consideration and accordingly computed the suppressed amount - the claim of the assessee is admissible under Rule 27 of Appellate Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income tax Act, 1961. (14) I say that since the Appeal did not come up so far for an effective hearing, the earlier AR engaged by the Appellate firm through oversight skipped the filing of the said Memorandum of Cross objection within the prescribed time limit and that was the reason for such a delay for a period of 217 days. (15) I say that the delay in filing the Memorandum of Cross objection was not intentional and not with any ulterior motive and that the Respondent firm cannot think of wilfully neglecting to file the said Memorandum of Cross Objection within the prescribed time limit. 4. A careful perusal of the contents of the affidavit would show that the assessee is furnishing reasons in only paragraph 14, wherein the assessee finds fault with his then authorised representative. However, a perusal of the assessment order, the order of Ld CIT(A) would show that the assessee was represented by Shri D.C. Sejpal, Chartered Accountant. We further notice that the memorandum of Cross objection was also filed with the Tribunal was also forwarded by Shri D.C. Sejpal. We notice that the assessee, though states about earlier AR , yet it has not furnished the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objection filed by the assessee is dismissed in limine. 5. We shall take up the appeal filed by the revenue. The facts relating to the issue contested by the revenue are discussed in brief. The assessee is a partnership firm falling within M/s Pathnik Constructions Group and is engaged in the business of building construction and development. This group was subjected to the search on 18.02.2009. The flag ship company of the group is M/s Kalpana Struct Con Pvt Ltd and the address of the said company and that of the assessee firm was found to be one and same. The key partner of the assessee firm is Shri Ramesh K Nakrani. 5.1 During the course of search operations conducted in the residential premises of Shri Ramesh K Nakrani, certain loose papers were unearthed. Page no. 6 of loose paper file, which is marked as Annexure A/1 contained details of payments made in respect of a plot purchased at a place called Ulwe . The said page was written in pencil on both sides and amounts were found noted in coded figures. In the sworn statement taken from Shri Ramesh K Nakrani, he explained the details noted in the above said seized paper. The AO noticed that the assessee firm has pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ramesh Nakrani does not explain the source of unaccounted cash payments of ₹ 1,44,36,000/- made by the assessee on its above land deal. Accordingly, the AO took the view that the assessee has failed to explain the unaccounted payment of ₹ 1,44,36,000/- to his satisfaction. Since the above said payments are related to business activities of the assessee, the AO took the view the same is hit by the proviso to sec. 69C of the Act, which states that the unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income. Accordingly, the AO assessed the above said sum of ₹ 1,44,36,000/- as the income of the assessee under the head Other sources. 6. Before ld CIT(A), the assessee contended that the loose paper, on the basis of which the impugned addition was made, was not recovered from the premises of the assessee and hence the same cannot be considered for computation of assessee s income. It was further submitted that the assessment to the extent of ₹ 1.00 crore, which has already been offered by Shri Ramesh Nakrani, results in double assessment of same income. 6.1 The Ld CIT(A) notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld CIT(A) was justified in allowing credit of ₹ 1.00 crores against the addition made by the AO. The Ld A.R further submitted that the addition of ₹ 1.00 crore made by the assessing officer in the hands of the assessee firm results in double assessment of same income, which is not permitted under the Income tax Act. The Ld A.R further placed reliance on the decision rendered by the Jodhpur bench of Tribunal in the case of Nand Kishore Malani Vs. DCIT (2013)(40 taxmann.com 160). The Ld A.R submitted that the department, in the above said case, has recovered certain documents from the partner and the said partner declared undisclosed income shown in the said document in return filed by him u/s 153A. Later the department found that the relevant bills related to a firm and the AO assessed the same in the hands of the firm. Under these set of facts, the Tribunal held that the amount declared by the partner cannot be again added in the hands of the firm. 8.1 The ld A.R further submitted that Shri Ramesh Nakrani has specifically admitted in the sworn statement that the cash amount involved in the land deal was paid by him. He estimated the cash portion at about ₹ 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t dated 18- 02-2009). (A.O page no.5) Ans.:- I confirm that this is cash paid from account of my undisclosed sources and hence out of books. . Answer to Q.No.3 asked in the statement taken on 19.02.2009 (CIT(A) page No.5):- I Confirm that cash is involved in the said transaction which is approx. Rs. One crore. I also reiterate that the same is paid by me from my undisclosed sources and I offer the same for tax. There is no dispute with regard to the fact that the revenue, in the instant case, did not unearth any tangible evidence to prove the payment of on money in the impugned land deal. The actual consideration involved in the land deal came to light on the basis of the document seized from the residence of Shri Ramesh Nakrani. The said document contained only coded entries and said coded entries was also decoded by him only. The aggregate consideration noted in the incriminating document was found to be ₹ 3.42 crores. However, another figure of 309.36 was also found noted in the same document. Shri Ramesh Nakrani submitted that the actual consideration paid in the land deal was ₹ 309.36 crores. Thus, there were two figures depicting actual considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nakrani by making corresponding debit to the Land account. Further we notice that the assessee firm has shown the impugned land as its Fixed asset in its Balance Sheet. All these documents, in our view, proves the contention of the assessee that the unaccounted payment involved in the land deal was financed to the extent of ₹ 1.00 crore by the undisclosed income declared by Shri Ramesh Nakrani in his hands. 9.4 We notice that the decision rendered by Jodhpur bench of Tribunal in the case of Nand Kishore Malani (supra), which was relied upon by the Ld A.R, supports the case of the assessee. The facts prevailed in that case was that the assessee was a partner of a firm and he declared undisclosed income in his hands on the basis of documents seized from his premises. The DRI found that the relevant bills related to the firm and accordingly collected the duty thereon from the firm. On that basis, the AO made substantial adddition in the hands of the firm and made protective assessment in the hands of the assessee. The Tribunal held in the case of firm that entire amount was surrendered by the assessee and he has paid tax thereon and hence addition could not be made in the ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Ld A.R, the assessee firm has accounted a sum of ₹ 1,75,15,280/- in its books of account. Accordingly, it was contended that the unaccounted amount computed by the AO is higher by ₹ 10,15,280/-. We find force in the said contentions of the assessee. There should not be any doubt that the suppressed amount of consideration should be arrived at by comparing the actual consideration with the accounted consideration. In this case, the AO has adopted the figure of ₹ 1,65,00,000/- as accounted consideration and accordingly computed the suppressed amount. Now the assessee claims before us that the assessee firm has accounted for a sum of ₹ 1,75,15,280/-. In support of the same, the assessee has produced a copy of Balance sheet pertaining to the FY 2009-10. In our view, the claim of the assessee is admissible under Rule 27 of Appellate Tribunal Rules, 1963. Further this contention related to computation of unaccounted income only. However, the said contentions require factual verification at the end of the assessing officer. Accordingly, we set aside this issue to the file of the AO with the direction to examine the claim put forth by the assessee with the bo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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