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TMI Blog2015 (11) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... er of ₹ 1 crore on behalf of four office bearers of the assessee-society and respective office bearers have also declared this amount in their individual returns of income. From a careful perusal of the statement of Shri Sunil Kumar Jhunjhunwala of the compilation of the assessee, we find that in the entire statement he has explained the nature of activities of the assessee-society and its officer bearers. In response to question No.8, Shri Sunil Kumar Jhunjhunwala has surrendered an amount of ₹ 1 crore on behalf of himself and three more office bearers with an assurance that tax thereon would be paid upto 30.3.2009. Since the surrender was made in specific terms on behalf of office bearers, the same cannot be treated on behalf of the assessee. Therefore, we are of the view that the Assessing Officer has wrongly interpreted the surrender statement and treated the surrender of ₹ 1 crore in the hands of the assessee; whereas it was made on behalf of the office bearers. Decided in favour of assessee. Undisclosed investment in the purchase of land - Held that:- the benefit of surrender statement in the hands of the individuals cannot be given to the assessee in ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t:- We find that before the Assessing Officer the assessee has not made any effort to reconcile the statement. No doubt, if any amount is given to Shri. Sunil Kumar Jhunjhunwala in the imprest account, there should be details of its expenditure as to how the imprest amount was exhausted and it is for the assessee to furnish complete details in this regard before the Assessing Officer. But he did not do the same. Before the ld. CIT(A), the assessee tried to furnish some details and the ld. CIT(A) has taken cognizance of Annexure B-1 but he has not made any reference to Annexure B-15. Copy of Annexure B-1 is available at page 2 of the compilation of the assessee, in which total amount given to Shri. Sunil Kumar Jhunjhunwala is ₹ 4,92,830/-, but since Annexure B-15 is not available before us, we cannot make any comment with regard to the entries available therein. In the light of these facts, we are of the view that the ld. CIT(A) has not properly examined the issue in the light of both the documents. We are, however, of the view that in the interest of justice, the matter should be restored back to the Assessing Officer to re-examine the claim. Unexplained cash credit under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961. The AO relied on the valuation report of DVO in arriving at this figure. The CIT (A) failed to appreciate that the account's of the assessee were unreliable, in as much as several sets of account's were maintained and also because the assessee could produce very few bills/vouchers of construction expenses before the AO. The AO had therefore, correctly adopted the investment in construction as per books to be ₹ 1,07,47,695/- being the value reflected in the computer hard disk impounded during the survey u/s 133A. 2. The CIT(A) has erred in law and on facts of the case in deleting the addition made by the A.O. of ₹ 1,00,00,000/- based on statement of Sri Sunil Jhunjhunwala, Secretary of the Institution. He failed to appreciate that the surrendered amount of Rs. One Crores as admitted by the secretary is the undisclosed income of the assessee society which was surveyed. The individuals were not surveyed and therefore, there was no reason for them to make any disclosure. The CIT (A) failed to appreciate that on the basis of impended documents there was sufficient evidence that the society was taking donations at the time of admissions. 3. The CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment recorded in the hard disc of the computer found during the course of survey under section 133A of the Income-tax Act, 1961 (hereinafter called in short the Act ), the investment in construction of building in the impugned assessment year was of ₹ 1,07,47,695/-. Whereas the DVO has estimated the investment during the year under consideration at ₹ 1,71,79,700/-. The Assessing Officer accordingly made the addition of the difference of ₹ 64,32,005/- as unexplained investment in construction of building. 3. The assessee preferred an appeal before the ld. CIT(A) on two counts one is with regard to the validity of reference to the DVO for estimating the cost of construction and the second is with regard to the addition on merit. 4. The ld. CIT(A) has re-examined the issue and held the reference to be valid, as it was made after rejecting the books of account of the assessee. But, so far as the addition on account of unexplained investment in construction of building is concerned, the ld. CIT(A) has noted that at the time of survey, investment in construction of building was shown at ₹ 1,07,47,695/- in the hard disc of the computer and the books of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5(7)(iv) I find that expenditure was incurred after the date of survey on 20.03.2009 and till 31.03.2009. Such expenses were settled through account payee cheques, in Cash and through transfer entries in account of parties to whom advances were made and bill of material supplied was received later. The AO has failed to consider the bills of purchase of building material, furniture and fixtures, electrical installation and transport charges inspite of fact, purchases were made through account payee cheques and material was consumed in building construction which is also evident from the report of DVO. Further, the AO did not appreciate that labour expenses were incurred by way of deployment on day to day basis and payment had been made in Cash. Work was also assigned to labour contractors, on which TDS has been deducted and Annual Returns were filed. The observation of the AO that payments were made in Cash and vouchers are self made is of no consequence once the cost of construction is recorded in the books of accounts. 5(7)(v) I am also inclined to agree with the contention of the appellant that while making the valuation the DVO has considered the rates prescribed for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estment upto the date of survey i.e. 20.3.2009 whereas the investment in construction was made upto the last day of the financial year. The assessee has given the breakup of the investment before the ld. CIT(A). Moreover, in the books of account, the assessee has declared investment in the cost of construction at ₹ 1,63,70,624/-, therefore, there is no justification to adopt the figure of investment at ₹ 1,07,47,695/- on the basis of any document found during the course of survey. 6. Having carefully examined the orders of the lower authorities in the light of the rival submissions, we find that the Assessing Officer has noted that the assessee has maintained two sets of audited books of account signed by different Auditors, but in any case balance sheet submitted to the Revenue authorities disclosed investment in the building at ₹ 1,63,70,624/-. Therefore, the figure given in other books of account should not be accepted. Since the assessee itself has declared investment at ₹ 1,63,70,624/- and the DVO has estimated the investment at ₹ 1,71,79,700/-, the difference was of ₹ 8,09,376/- which is only 4.7% of the investment estimated by the DVO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ident from the above statement that Shri Sunil Jhunjhunwala an office bearer of the appellant -society has made the offer of surrender of undisclosed income on his behalf and including 3 other office bearers. There is nothing in the statement to suggest that the surrender of income related to the undisclosed income of the appellant-society. Moreover, in pursuance of the above surrender of income tax has been paid and income disclosed in return of income as under - 1. ₹ 29,00,000/-in the case of Ms. Madhu Agarwal, assessed to tax vide PAN No. ABKPA4255C in assessment year 2008-2009 and tax of ₹ 9,82,820/- has been paid. 2. ₹ 30,00,000/- in the case of Shri Sunil Kumar Jhunjhunwala, Assessed tax vide PAN No. AAQPJ0350E in assessment year 2009-2010 and tax of ₹ 10,48,468/- has been paid. 3. ₹ 17,00,000/- in the case of Shri Manas Kumar, assessed to tax vide PAN No. AMZPK5022D in assessment year 2009-2010 and paid due tax. 4. ₹ 24,00,000/- in the case of Shri Anil Kumar Jhunjhunwala, assessed to tax vide PAN No. AAQPJ0340E and paid due tax of ₹ 8,20,000/-. 6(6) I find that the AO has incorrectly linked the voluntar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the ld. CIT(A), has invited our attention to the statement of Shri Sunil Kumar Jhunjhunwala appearing at pages 20 to 24 of the compilation of the assessee with the submission that in response to question No.8, Shri Sunil Kumar Jhunjhunwala has categorically stated that he is making a surrender of ₹ 1 crore in the account of himself and three more persons as undisclosed income for a period of 3 to 4 years and tax thereon would be paid by 30.3.2009. The statement was also recorded by the ld. CIT(A) in his order. The ld. counsel for the assessee has further contended that in the entire statement, Shri Sunil Kumar Jhunjhunwala has explained the activities of the assessee and its office bearers. Therefore, surrender made in the name of the office bearers of the society cannot be added in the hands of the assessee. He has also invited our attention to the copy of the assessment order in the case of Shri Sunil Kumar Jhunjhunwala and Shri Anil Kumar Jhunjhunwala along with copy of the orders of the ld. CIT(A) and the Tribunal appearing at pages 522 to 567 of the compilation of the assessee, in which this aspect of declaration of surrendered amount was considered. 10. Havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment in land worked out by the Assessing Officer is as under:- Land Name of Vendors Total transaction amount including both disclosed undisclosed investment paid to vendors only A Mr. Alok Kumar Pandey ₹ 20,15,000/- B Mr. Amar Singh Mr. Indrasen ₹ 51,00,000/- (b) That now the break-up of the total transaction amount paid to vendors, as is from evident from the said page no. 68 is given below: Land Undisclosed Amount paid in Disclosed Amount paid in cheque Total Trans. Amount A ₹ 12,65,000 / - Rs.. 7,50,000 / - ₹ 20,15,000 / - B ₹ 26,00,000/- ₹ 25,00,000/- ₹ 51,00,.000/- Total ₹ 38,65,000/- ₹ 32,50,000 / - ₹ 71,15,.000/- (c) That now the details of total disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal before the ld. CIT(A) with the submission that in order to buy peace, the office bearers of the assessee-society has made a surrender of ₹ 1 crore keeping in mind the aforesaid extra amount as undisclosed income. On the written submission filed by the assessee, the ld. CIT(A) called a remand report from the Assessing Officer and in the remand report, it has been stated by the Assessing Officer that the assessee-society is accepting the fact of payment of ₹ 40,26,460/- out of undisclosed sources. The Assessing Officer further stated that since the property under consideration has been purchased by the society, and not by the individuals, the contention of the assessee that surrender made in the hands of individual, would cover up the unexplained investment made by the society, cannot be entertained. The ld. CIT(A), however, has given a credit of the surrender statement of Shri Sunil Kumar Jhunjhunwala on behalf of the office bearers of the society and deleted the addition. 13. Now the Revenue is in appeal before the Tribunal with the submission that the assessee cannot blow hot and cold in the same breath. If the surrender is made in the hands of the individuals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the funds available with the office bearers cannot become the funds of the assessee. Therefore, the benefit of surrender statement in the hands of the individuals cannot be given to the assessee in order to explain the source of investment. In the light of these facts, we are of the view that the ld. CIT(A) has wrongly given the benefit of surrender statement in the hands of individual, to the assessee in order to cover up the unexplained investment. The assessee-society cannot blow hot and cold in the same breath. If the assessee wants to get the benefit of surrender statement against the undisclosed investment in the purchase of land, it has to own up the surrendered amount in its hands, but in the foregoing paras we have accepted the contention of the assessee that the surrender was made in the hands of the office bearers, therefore, no addition of the same can be made in the hands of the assessee. In that situation, no benefit of surrender statement can be given to the assessee in order to cover up the undisclosed investment in the land. We are, therefore, of the view that since the assessee has failed to explain the source of investment in the land of ₹ 40,26,460/-, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collected from the students for kit, uniform, etc. by Madhu Agarwal and the details of which were in the impounded hard disc of the computer in separate account i.e. Madhu Agarwal Kit Uniform account. The written submissions filed by the assessee were sent to the Assessing Officer for comments and in the remand report, it was stated by the Assessing Officer that now the assessee is taking an entirely different justification as compared to the one given at the time of assessment. The Assessing Officer further commented on the contention of the assessee that the Assessing Officer has considered only receipts and did not consider the payment that no such claim of payment was made at the time of assessment proceedings and now this claim is clearly an afterthought. The ld. CIT(A) again called comments from the assessee on this remand report and thereafter examined the claim of the assessee and being convinced with the explanations of the assessee, he deleted the addition. 18. Now the Revenue is in appeal before us with the submission that if the assessee has received any amount from the students against kit and uniform account, there should be an appropriate narration in the books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer for his comments and in the remand report, the Assessing Officer has again sought complete details furnished by the assessee. 21. Having carefully perused the details available on record, we find that the assessee has not filed complete details before the Assessing Officer during the course of assessment proceedings to justify the credit entry found in the name of Madhu Agarwal. The ld. CIT(A) though called remand report, but we are of the view that in the remand proceedings, the Assessing Officer has not examined the details available before him by making necessary verification. We are, therefore, of the view that in the interest of justice, the matter should be set aside to the Assessing Officer with a direction to re-adjudicate the issue in the light of evidence filed before the ld. CIT(A). We accordingly set aside the order of the ld. CIT(A) and restore the matter to the file of the Assessing Officer with a direction to re-adjudicate the issue afresh after affording an opportunity of being heard to the assessee. The assessee is also directed to place all relevant evidence to justify the credit entries in the name of Madhu Agarwal along with bills and vo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has made a general reply without specifying as to what amount was spent under which head of expenditure. The Assessing Officer further stated that application of this amount has to be supported by actual bills and vouchers of expenses. Supporting evidence was not filed despite several opportunities to the assessee. The ld. CIT(A) again called the comments of the assessee on the report submitted by the Assessing Officer and in response thereto the assessee has contended that in the remand proceedings the Assessing Officer has supplied copies of Annexure B-1 B-15 and from a perusal of these Annexure, the imprest cash for different expenditures was to the tune of ₹ 4,92,830/- and there was cash imprest for expenses of ₹ 14,65,480/-. The ld. CIT(A) re-examined the claim of the assessee and being convinced with the explanations of the assessee, he deleted the addition. 24. Now the Revenue is in appeal before the Tribunal with the submission that during the course of assessment proceedings despite repeated reminders, the assessee has neither furnished any reply nor made any effort to reconcile these expenses with the books of account. Even if the aforesaid amount was g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in the light of Annexure B-1 B-15. If the amount is given to Shri. Sunil Kumar Jhunjhunwala under the impress account, it is for the assessee to explain the same along with bills and vouchers and corresponding entries. Accordingly we set aside the order of the ld. CIT(A) and restore the matter to the file of the Assessing Officer to readjudicate the issue in terms indicated above. 26. Apropos ground No.6, the facts in brief borne out from the record are that during the course of assessment proceedings, the assessee was confronted with the information as reflected in the AIR/CIF and the assessee was asked to explain and justify the nature of the said transactions as reflected therein along with documentary evidence, etc. But the assessee remained silent and at last he simply stated that all the entries shown in the AIR are recorded in the books of account and may be verified. Thereafter, the Assessing Officer has again asked the assessee that the said entries as reflected in the bank account do not reconcile with the books of the assessee. He was required to correlate entries from the books of account, but the assessee failed to prove the authenticity and genuinene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erified. However, since the assessee had claimed that copy of AIR information was not provided to it, the same was made available to on 01.10.2012 in response the assessee has submitted a rely dated 05.10.2012 a copy of which is being enclosed with this report A perusal of reply reveals that the assessee has submitted that during the year cash fee form the students was received. In this regard, if is submitted that in the written submission dated 18.04.2012 submitted by assessee before your good self the assessee has furnished details of cash receipts and deposits in bank. With reference of Department of Pharmacy there is some inconsistency in both the replies. In the reply dated 18.04.2012 the cash received form students has been shown at ₹ 1,23,58,233/- whereas now the cash received from students is being shown at ₹ 20,02,406/- similarly, the figures of cash deposited in various bank accounts are also somewhat varying. The assessee has also not reconciled all the deposits made by it in various bank account and only the selected entries of cash deposit in bank accounts have been stated. The total deposits in bank accounts are much more than the AIR/CIB informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there should be a corresponding entry in the books of account which the assessee did not furnish during the course of assessment proceedings. Whatever evidence was furnished, it was furnished before the ld. CIT(A) first time. Though the ld. CIT(A) has called a remand report, but in the remand proceedings the Assessing Officer has a limited jurisdiction to examine the details. Had it been a case of original assessment, the Assessing Officer could summon the relevant record in order to verify the cash deposits in the bank. Moreover, the assessee itself has submitted that there is a typographical error in figures given at page 35 before the ld. CIT(A). The ld. D.R. has further contended that since the issue was not examined properly by the ld. CIT(A), the matter may be restored to the Assessing Officer for its proper adjudication. 30. The ld. counsel for the assessee, besides placing reliance upon the order of the ld. CIT(A), has submitted that the assessee has furnished complete details before the ld. CIT(A) who has properly examined the same before allowing the relief to the assessee. Therefore, no interference is called for in his order on this issue. 31. Having carefully ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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