9911796707
TMI Blog2019 (12) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... also engaged in money lending business. The regular assessment under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 ["Act" in short] was completed on 29.12.2006. The assessee preferred an appeal against the above order and the ld. CIT(A) partly allowed the appeal. Aggrieved by the above order of the ld. CIT(A), the assessee preferred an appeal before ITAT. An appeal has also been filed by the Department. The ITAT vide its combined orders in ITA No. 530/Mds/2010, 417/Mds/2010 & ITA No. 252/Mds/2010 dated 05.05.2011 set aside the order of the ld. CIT(A) and restored the matter back to the file of the Assessing Officer. After hearing to the assessee and considering the materials available on record, the Assessing Officer completed the assessment under section 143(3) r.w.s. 254 of the Act by making various additions. 2.1 Facts leading the ground of addition on investment in properties are that the assessee along with his brother has purchased a property at Door No. 4,5, 6 & 7 at Madurai Main Road, K. Abishekapuram, Crawford, Trichy on 09.05.2001. The cost of the property along with the stamp and registration charges works out to Rs..6,91,800/-. 50% share of the assessee works o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submission that at this point of time; it is not possible for the assessee to ask for confirmation of the transaction from the vendor and prayed for deleting the addition. 2.3 Per contra, the ld. DR has submitted that the assessee has not furnished any piece of evidence for the payment of Rs..3,83,000/- in the earlier assessment year 1998-99, instead, it was clearly mentioned in the purchase deed that the entire payment was made on the day of registration on 09.05.2001. Therefore, the ld. DR pleaded for confirming the orders of authorities below. 2.4 We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. With regard to the claim of the assessee that the sum of Rs..3,83,000/- would have been paid earlier in the assessment year 1998-99 for the purchase of the Crawford land property, the assessee has not brought on record any material evidence. Moreover, from the purchase deed, the Assessing Officer noticed that the entire consideration was paid for the purchase of the Crawford land property on the day of registration on 09.05.2001, which is relevant to the assessment year 2002-03. In the absence of any material evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard the rival contentions perused the materials available on record and gone through the orders of authorities below including reliance placed by the assessee. On the date of survey, a register containing details of loan outstanding as on 01.01.2004 and subsequent transactions were found. The Assessing Officer requested the assessee to explain, the assessee has admitted that he was in the business of money lending in his individual capacity for the past 3-4 years. Further, he also admitted that he was in the habit of writing the accounts on a monthly basis and destroying the same as the month is over. It was also admitted that this money lending in individual capacity is not admitted in the returns. Also he explained the method of money lending elaborately. As per the assessee, if the borrower seeks one thousand rupees, then an amount of Rs..900/- would be advanced to him and the mode of repayment is Rs..10/- per day for 100 days. As per the above working the rate of interest works out to 40.5%, even without considering the fact that the interest collected on a daily basis is redeployed and earns interest, leading to a net rate of interest which is higher than 40.5% as calculated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... einabove. Similarly, the agricultural income as per the details filed during the proceedings for the assessment year 2002-03 [for the assessment year 1999-2000] is Rs..90,000/-, whereas, as per the original return, it was only Rs..80,000/-. Thus, it is amply clear that the assessee's statements are not backed up by evidences or facts, but has been tailored to suit the needs, which contradicts his own statement filed earlier. Hence, due to the reason of non-production of details and evidences for the claim of outstanding loan amount and the amount of interest income offered, the Assessing Officer could not place any on the figures submitted in the return of income. However, in the subsequent assessment year, the interest income has been estimated at Rs..2,50,000/- and the same has been accepted by the assessee. Though as per the working of the system of advancing loans to the parties, as narrated earlier, the interest rate works out to 40.5%, however considering the practical aspects of the business, and probable time gap before redeployment of the funds, etc., the interest rate is conservatively estimated to be 36.5%. As per the assessee's admission, there are no books of accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the end of the year, or for the interest income offered in the return of income filed by the assessee. However, as per the details of statements filed during the course of assessment proceedings, the Assessing Officer noted that the assessee was offering interest income as per his wish and not the actual income received, because the rate of interest varies from 17% to 52%. Moreover, during the course of assessment proceedings, the assessee filed the return of income for the assessment year 1999-2000, the gist of computation is reproduced herein above, reveals that while presenting the details for the assessment year 2002-03, the assessee has conveniently claims that the interest income received was Rs..45,000/- [for the assessment year 1999- 2000], whereas, as per original return filed on 22.02.2000, the income from other sources was only Rs..1,200/- as reproduced hereinabove. Similarly, the agricultural income as per the details filed during the proceedings for the assessment year 2002-03 [for the assessment year 99-2000] is Rs..90,000/-, whereas, as per the original return, it was only Rs..80,000/-. Thus, it is amply clear that the assessee's statements are not backed up by e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove case law has no application to the facts of the present, because, by considering the system of money lending business explained by the assessee as well as gist of computation of income filed in the return of income for the assessment year 1999-2000 is the only basis for quantifying the rate of interest in the assessment year under appeal by the Assessing Officer. So far as assessee's partner's case, the basis for quantification of interest was not on record and nothing was available in the Tribunal's order. Therefore, we are of the considered opinion that the above additions made by the Assessing Officer was validly confirmed by the ld. CIT(A). Thus, the grounds raised by the assessee stand dismissed. 4. The next ground relates to confirmation of disallowance of agricultural income. During the current year, the assessee has claimed to have earned an income of Rs..1,10,000/- from agricultural operations. The assessee was requested to produce the bills, voucher, account books for agricultural operations, etc. in support of his claim. Apart from the copy of the patta, no other evidences for having earned the above income was produced. On perusal of the patter, the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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