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TMI Blog2014 (5) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the CIT(A), self serving books are not admitted. The Assessing Officer’s verification of books, his findings, etc. are contrary to his finding of facts on the issue. In this background, the stand of the assessee has been that the Assessing Officer’s observation as regards the books of accounts, mistake of quantification of credits, summations, etc., are facts. These observations ought to have not been brushed aside by the CIT(A). According to us, this approach is not justified. The authorities below should give finding on each and every point while reaching to its conclusion. Return filed based on books of account and income declared was reflected based on cogent reasoning - The main objection of the Assessing Officer has been that there is long gap of 28 months for retracting by way of return while there was no threat or coercion during search - HELD THAT:- For A.Y. 2004-05, source of funds for Ghanawat land deal were claimed from agricultural income and gift from relatives. The Assessing Officer has observed that the agricultural income was not sufficient considering Ghanawat land deal, hence, the said argument was not accepted. While in appeal, the CIT(A) in para 13, page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. So, we set aside the order of CIT(A) and restore the whole issue to the file of the Assessing Officer with a direction to decide the same as per fact and law and after providing due opportunity of being heard to the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... llant. 3. Alternatively and without prejudice to the Ground of 1 & 2, the learned CIT(A)-I, Pune has erred in law and facts in not giving effect of telescoping for the income declared during the course of search. 4. Alternatively and without prejudice to the Ground of 1 to 3, the learned CIT(A)-I, Pune has erred in law and facts not appreciating the fact that the AO did not allow the deductions claimed for various expenditures, including land cost, depreciation on cars, while computing the taxable income." 5. The appellant craves leave to add / delete / amend / modify all / any of the grounds. 2.3 In ITA No.1502/PN/2012 for A.Y. 2007-08, the assessee has filed the appeal on the following grounds. 1. The learned CIT (A)-I, Pune has erred in law and on facts in confirming the addition made by learned AO ₹ 60,85,737/- as against returned income of ₹ 5,65,997/-. 2. The learned CIT(A)-I has erred in law and facts in confirming the addition made by learned AO only on the basis of declaration made during the course of search without appreciating fact that the said declaration has been retracted by the appellant. 3. Alternatively and without prejudice to the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n deal of Sonigara, ignoring the fact that the same is not actually received by the assessee. 4. Alternatively and without prejudice to the Ground of 1 to 3 the learned CIT(A)-I, Pune has erred in law and facts in not appreciating the fact that on the basis of seized documents the addition ought to have been ₹ 32,50,000/- in Sonigara deal instead of ₹ 1,35,00,000/-. 5. The learned CIT(A)-I, Pune has erred in law and facts in confirming the addition made by learned in case of Sonigara deal without considering the affidavits filed by the assessee and without affording CROSS EXAMINATION of Mr. Sonigara to the assessee. 6. The learned CIT(A)-I, , Pune has erred in law and facts in confirming the addition made by learned AO amounting ₹ 15 Lakhs as undisclosed investment of the assessee without giving telescoping effect of the said amount received on sale Lexus car to Mr.Chachalani. Further, The learned CIT(A)-I has erred in law and facts in not considering the confirmation filed by the Mr. Chachalni regarding the same. 7. Alternatively and without prejudice to the Ground of 1 to 6, the learned CIT(A)-I, Pune has erred in law and facts in not giving effect of te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for different assessment years as under: Sr. No. Asstt. Year Undisclosed income declared 1 2005-06 Rs.4.65 lakhs 2 2006-07 Rs.4.5 lakhs 3 2007-08 Rs.63.60 lakhs 4 2008-09 Rs.105 lakhs 5 2009-10 Rs.22.25 lakhs Total Rs.200 lakhs 3.1 It was further noted from the materials available that the assessee in his statement recorded u/s 132(4) on 13.8.2008, has further stated that the deposits appearing in the bank totaling to ₹ 1,47,20,808/- evidenced the cash received in Sonigara land deal of ₹ 32,50,000/- and amount received from the sale of Lexus car of ₹ 15 lakhs were taxable as undisclosed income. The Assessing Officer also noted that the assessee on 14.08.2008 u/s 132(4), in response to Question No.2 and 5 admitted to have received commission of ₹ 6,93,000/- also from certain land deals. Therefore, the Assessing Officer observed that the assessee has admitted to have undisclosed taxable income of ₹ 2 crores for assessment years as detailed above. As stated above, the assessee has further admitted an undisclosed income of ₹ 6,93,000/- in the statement recorded u/s.132(4) on the next date i.e. 14.08.2008. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e books of accounts constructed by the assessee after search on the basis of material found and the stand taken by the assessee is correct. 3.4 The Assessing Officer has also stated in the assessment order that the agricultural receipts and business receipts as per stand of the assessee has been noted in the constructed books. However, the Assessing Officer has not found reconstructed books to be reliable enough which could form the basis of retraction of declaration made u/s.132(4). Therefore, wherever declaration was more than amount appearing in the books or otherwise, the Assessing Officer stuck to the figure of declaration. In certain years, the Assessing Officer has also allowed certain expenses which were found to be genuine and allowable on the basis of third party evidence available on record. However, the Assessing Officer has not allowed any further expenses commission, salary, etc. on assumption basis as the basis of income itself is based on evidences only, including oral and is clearly on net basis. Further, the additions over and above declared income u/s. 132(4) based on materials gathered by him during assessment and other seized materials not considered while gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see 2 2004-05 --- Rs.Nil Rs.1,73,000 3 2005-06 Rs.4.65 lakhs Rs.Nil Rs.4,65,000 4 2006-07 Rs.4.5 lakhs Rs.Nil Rs.1,86,632 5 2007-08 Rs.63.60 lakhs Rs.5,66,000 Rs.60,85,737 6 2008-09 Rs.105 lakhs Rs.25,88,485 Rs.68,95,430 7 2009-10 Rs.22.25 lakhs Rs.Nil Rs.1,70,96,830 Total Rs.200 lakhs Rs.31,54,485 Rs.3,09,02,629 3.6 The year-wise cases was discussed in the appeal and having discussed in detail, the CIT(A) partly allowed the appeal of the assessee for A.Y. 2007-08 & 2009-10 and for A.Y. 2008-09 was dismissed. For A.Y. 2004-05 to 2006-07, the appeals of assessee were dismissed. Before us, the learned Authorized Representative has reiterated the submission made before authorities and submitted that the CIT(A) erred in law in confirming the additions made by the Assessing Officer against the return of income. The CIT(A) erred in confirming addition only on the basis of declaration made during the course of search without appreciating the fact that the said declaration has been retracted by the assessee. A similar ground has been taken by the assessee in all the years and requested to delete the additions in question. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral income, adequacy of business income, expense details, etc. The Assessing Officer has also verified the transactions with Mr. Sonigra for Rawet land. The statement of said Sonigra was also recorded. Based on these enquiries, the Assessing Officer finalized the assessment. The learned Authorized Representative has pointed out that the Assessing Officer even after accepting the wrong declaration of income due to wrong credits, summations in bank statement, preferred to make further addition. The income computed by the Assessing Officer has been summarized which is detailed in para 3.5 of this order. 4.3 The CIT(A) confirmed all additions made by the Assessing Officer except for cash balance of ₹ 88,000/- in A.Y. 2009-10. While doing so, the CIT(A) has confirmed the stand of the Assessing Officer that the income declared in search should be taxable income of assessee, subjected to further addition / reduction. 4.4 With regard to justification of retraction, the stand of the assessee has been manifold. The learned Authorized Representative has submitted that a mistake in the declaration during search was due to incorrect bank credit summation which is matter of record. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were disallowed by the Assessing Officer. This shows that the details of expenses as reflected in books of accounts prepared could not be brushed aside. According to us, the reasoning of retraction should not be rejected at the strength of admission by assessee but retraction based on prepared books of accounts should be rejected by cogent reasoning only. According to us, material put forward on behalf of assessee has been rejected in adhoc manner, which is not justified. Having said so, let us analyse the year-wise proposition as raised by the learned Authorized Representative before us. 4.6 For A.Y. 2004-05, source of funds for Ghanawat land deal were claimed from agricultural income and gift from relatives. The Assessing Officer in para 7.2 of pages 11 & 12 has observed that the agricultural income was not sufficient considering Ghanawat land deal, hence, the said argument was not accepted. While in appeal, the CIT(A) in para 13, page 22 observed that considering the lavish life style of assessee, the agricultural income of ₹ 1.95 lakhs was not sufficient to explain the source of land payment. In this background, the stand of the assessee has been that the amount payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t neither the receipts nor the expenses were found complete and reliable. Based on books, consolidated charts were given on behalf of assessee. Ignoring the same, Assessing Officer's addition based on search declaration was held as valid by CIT(A). In this regard, the stand of the assessee has been that best possible attempt was made to explain the problems in taking credit, summations as taxable income. Bounced cheques, repaid advances, etc. could not be instances of income. Evidences placed on record should have been rejected after due deliberation on the same. A similar objection was raised for A.Y. 2008-09. Regarding A.Y. 2009- 10, the learned Authorized Representative has submitted that the valid cash source exists for ₹ 15 lakhs paid to Ms. Kavita Kajale on 03.05.2008. The Assessing Officer observed at page 22 of its order that the payment of ₹ 15 lakhs was not reflected in books and the assessee's explanation was not accepted. In appeal, in this regard, the CIT(A) has observed that at this stage, the explanation could not be considered in view of rule 46A since this claim was not made before the Assessing Officer. In this regard, the stand of the assessee has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash from Ravet land deal from Sonigra. However, the assessee was in receipt of ₹ 33 lakhs for another land deal at Shinde Wasti as stated above which did not ultimately materialized. These facts have not been dealt by the Assessing Officer and the CIT(A) pproperly. Nothing emerges from the search material as such indicating that the entire amount was paid to the assessee. The Assessing Officer and the CIT(A) on the basis of statement of Sonigra have presumed that the said amount has been received by the assessee. Further, the CIT(A) stated that the assessee was aware of the contents of the statement given by Sonigra. However, the assessee claimed to be not aware of the fact that statement of Sonigra, which has been taken on record. Copies of the statement were not provided and crossexamination opportunity was also not provided. In this background, the argument of the assessee has been that in all the years involved, the Assessing Officer has decided to make taxable income on the basis of declaration made during search. At the time of search, the declaration of income was based on bank statement plus seized papers found during search. Further, the bank transactions summary wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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