9911796707
TMI Blog2017 (1) TMI 1250X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 7/02/2014 of learned Commissioner of Income-tax (Appeals)-I, New Delhi, for assessment year 2011-12 raising following grounds of appeal: grounds of appeal: 1. The order of the CIT(A) is not correct in law and facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred in deleting the addition of ₹ 12,16,500/- made by the Assessing Officer on account of unaccounted cash found during the course of search. 3. On the facts and circumstances of the case and the learned CIT(A) has erred in deleting the addition of ₹ 8,55,955/- made by on account of unaccounted jewellery. 4. On the facts and circumstances of the case the learned CIT(A) haws erred in deleting the addition of ₹ 4,03,72,823/- made by on account of unaccounted receipt from Chit Fund Business. 5. The appellant craves leave to add, amend any/all the grounds of appeal before or during the course of hearing of the appeal. 2. The facts in brief of the case are that a search and seizure action was carried out under section 132 of the Income Tax Act, 1961 (in short the Act ) at the premises of the assessee. Pursuant to the search action, in noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition of ₹ 12,16, 500/- on account of cash, ₹ 8,55,955/- on account of unaccounted jewellery found during the course of search and addition of ₹ 4,03,72,823/- on account of undisclosed income from chit fund business. On merits of the claim, he relied upon findings of the Assessing Officer. 4. On the other hand, the learned counsel of the assessee submitted that the learned Commissioner of Income-tax (Appeals) was justified in deleting the addition as in the remand report, the Assessing Officer himself admitted the arithmetical errors committed while making the addition in the assessment order. He submitted that after considering the arithmetical error the addition was worked out to ₹ 6,91,419/- instead of addition of ₹ 4,03,72,823/-on account of undisclosed income from the chit fund business. He further submitted that the learned Commissioner of Income-tax (Appeals) computed the income of Chit fund business at ₹ 22,87,790/-, which was less than the sum of ₹ 50 Lacs, declared by the assessee. He further submitted that cash of ₹ 12,16,500/- and jewellery of ₹ 8,55,955/- duly explained from the aforesaid undisclosed income and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . No. Particulars Amount (Rs.) i) Total collection 12,51,61,077 ii) Receivable 25,19,73,967 iii) Total 37,71,35,044 iv) Less: Payment 12,64,39,808 v) Balance 25,06,95,236 vi) Closing balance 25,20,78,074 vii) Difference 13,82,838 50% thereof held to be pertaining to assessee and, balance 50% held to be pertaining to Shri Ramkesh Basist 6,91,419 7. The learned Commissioner of Income-tax (Appeals) in view of the factual position emerged from the remand report, deleted the addition of ₹ 4,03,72,823/- holding as under: 4.2 The case of the appellant was that the entries and calculation based on such entries were incorrectly worked out by the revenue. To verify this claim, the matter was remanded to the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer in the remand report as income from undisclosed chit fund business. The learned Commissioner of Income-tax (Appeals) also added brokerage at the rate of 2% on the total payments of ₹ 12,64,39,808/-, which was computed at ₹ 25,28,796/-. The learned Commissioner of Income Tax (Appeals) computed undisclosed income at ₹ 45,75,580/- from the chit fund business by adding ₹ 20,46,744/- and ₹ 25,28,796/-worked out above. This undisclosed income was divided into both the directors and addition in the case of the assessee was computed at ₹ 22,87,790/-. The learned Commissioner of Income Tax (Appeals) found this undisclosed income less than the undisclosed income of ₹ 50 Lacs declared by the assessee and therefore he deleted the addition made by the Assessing Officer. 9. We find that learned CIT(DR) also could not advance any argument to persuade us to arrive at a contrary conclusion. In the nature of business carried out by the assessee, the money received was further utilized towards payments, and thus the same money was rotated. In such circumstances making addition on the amount of peak credit is settled law and the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the undisclosed income admitted by the appellant. I find merit in this argument also. The undisclosed income on the basis of seized documents and cash amounts to ₹ 35,04,290/- only, while the appellant has already admitted ₹ 50,00,000/-. The remaining amount of ₹ 14,95,710/- well covers the jewelry found. In this view of the matter also, no separate addition is called for in respect of the jewelry found during search. The addition of ₹ 8,55,955/- is, accordingly, deleted. The second ground of appeal is disposed of accordingly. 11. Having considered the above factual matrix, we find merit in the claim of the assessee that undisclosed income of ₹ 50 lacs warrants telescoping, which explains the source of cash and jewellery found as a result of search. The Hon ble Supreme Court in the case of Anantharam Veerasinghaiah Co. Versus CIT 123 ITR 457 has approved the concept of telescoping. The Revenue has not been able to prove that undisclosed has been invested in investment other than cash and jewellery. Therefore, having regard to the settled proposition of law and in absence of any material placed on record by the Learned CIT(DR) to rebut th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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