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TMI Blog2021 (3) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... stances, the Assessing Officer only on the basis of valuation mentioned in the DVO Report cannot make addition when such difference is less than 15% as compared to the valuation declared in the Books of Accounts. On this count, we are inclined to delete the addition in all these assessment years. This ground of appeal of the assesses is allowed. Estimation of income on undisclosed turnover at 5% - HELD THAT:- As gone through the order of the Tribunal in the case of M.A. Siddique Vs. DCIT [ 2020 (8) TMI 835 - ITAT BANGALORE] wherein the Tribunal considered the business of Supari and observed that in the case of unaccounted sales no bill is issued and therefore no customer will pay taxes and levies which will result into higher profit to the seller. The Tribunal adopted the profit rate of 2% in the case of Supari business. Following the above decision of co-ordinate bench of this Tribunal, we are inclined to hold that the Assessing Officer shall adopt the net profit of 2% on undisclosed turnover of the assessee in all these assessment years. Non-giving of set off of income declared by the assessee in the statement recorded u/s. 132(4) - HELD THAT:- Assessing Officer ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act to the date of completing the assessment u/s. 153A r.w.s. 143(3) of the Act.Accordingly, we direct the Assessing Officer to recomputed the interest u/s. 234A of the Act. The interest u/s. 234B is to be leviable from the date of determination of income u/s. 143(1) r.w.s. ;139, r.w.s. 153A(1)(a) to the date of assessment order u/s. 153A, r.w.s. 143(3) of the Act. The interest u/s. 234B is to be levied only on the additional tax levied on the enhanced income determined u/s. 153A, r.w.s.143 of the Act and therefore the period of charge should be from the date of determination of income u/s. 143(3) r.w.s. 153A to the determination of increased total income u/s. 153A, r.w.s. 143(3) of the Act. We direct accordingly to the Assessing Officer to recompute the interest u/s. 234B of the Act. Levy of interest u/s. 234C of the Act, no serious argument has been made by the ld. AR on this issue. Addition made towards rental receipt - seized material suggests that the assessee is jointly owning property with his sister and there was a receipt of rent of ₹ 9,500 per month which is assessee's share after deduction u/s. 24 - HELD THAT:- Admittedly in this case the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons in these assessment years which are challenged by the assessee before the CIT(Appeals). The CIT(Appeals) given partial relief. Against sustenance of certain additions, the assessee is in appeal before us by way of above appeals. The Revenue is in appeal before us for giving relief to the assessee in Assessment Year 2015-16 in ITA No.2484/Bang/2019. Since common issues are involved in these appeals, they are heard together and passed a consolidated order. 3. First we will take up the assessee's appeals in ITA Nos.2625 to 2627/Bang/2019 in the case of Shri Ahmed Shareef and 2628 to 2631/Bang/2019 by Smt.Shabana Shareef. 4. The first common ground in assessee's appeals in ITA Nos.2625, 2627 2629/Bang/2019 is the CIT(Appeals) erred in addition with respect to under valuation of property at ₹ 7,90,640 in Assessment Year 2014-15 in ITA Nos.2625 2629/Bang/2019 and ₹ 10,63,595 in Assessment Year 2016-17 in ITA No.2627/Bang/2019. In these assessment years, the assessee constructed house property at Maravuru, Mangalore declaring total cost of ₹ 2,27,78,541 upto 31.03.2016. The cost of land as per the Balance Sheet was ₹ 43,12,408. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and the valuer is less than 15 per cent. Not only this the construction of the house spread over a period of 7 years. In the facts of the present case, we are of the opinion that the difference between the plea of the assessee on the issue on investment on house property and valuer's report is so meagre that one can assume it to be bona fide difference, fit to be ignored. Further he relied on the judgements of the co-ordinate bench of ITAT in the case of Ritz Enterprises Pvt. Ltd. Vs. ACIT in ITA No.268/Luck/2015 Dt.17.07.2015 wherein it was held that In the present case, this is accepted position that there are two demerits in the property because there is no parking space and graveyard is there on one side and after accepting these two demerits, the D.V.O. has allowed 10% rebate from DM Circle rate. The difference between the value declared by the assessee at ₹ 49.397 lac and as determined by D.V.O. at ₹ 57.036 lac, the difference is only ₹ 8.639 lac which works out to 15.15%. This is also to be noted that as per the judgment of Hon'ble Patna High Court rendered in the case of Bimla Singh vs. CIT [2009] 308 ITR 71 (Pat) available on p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. For this purpose, he relied on the order of ITAT in the case of M.A. Siddique Vs. DCIT in ITA Nos.62 to 66/Bang/2020 Dt.14.08.2020 for the proposition that the assessee is engaged in the business of Supari may get the net profit of 2%. The ld. DR relied on the orders of authorities below. 5.2 We have gone through the order of the Tribunal in the case of M.A. Siddique Vs. DCIT (supra) wherein the Tribunal considered the business of Supari and observed that in the case of unaccounted sales no bill is issued and therefore no customer will pay taxes and levies which will result into higher profit to the seller. The Tribunal adopted the profit rate of 2% in the case of Supari business. Following the above decision of co-ordinate bench of this Tribunal, we are inclined to hold that the Assessing Officer shall adopt the net profit of 2% on undisclosed turnover of the assessee in all these assessment years. This ground of appeal in ITA Nos.2628 to 2631/Bang/2019 is allowed. Ordered accordingly. 6. The next ground in ITA Nos.2627, 2629, 2630 2631/Bang/2019 is with regard to non-giving of set off of income declared by the assessee in the statement recorded u/s. 132(4) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive in guiding a tax payer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the department, for it would inspire confidence in him that he may be sure of getting a square deal from the department. Although, therefore, the responsibility for claiming refunds and reliefs rests with the assesses on whom it is imposed by law, officers should - (a) draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other; (b) freely advise them when approached by them as to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs . 6.2 Further the ld.AR placed reliance on the CBDT F.No.286/2/2003/IT(INV) Dt.10.03.2003, which clearly refrains the Assessing Officer recording confessional statement during the course of search and seizure and survey operations and also warns the Assessing Officer not to admit to obtain any confessional statement as to the undisclosed income, any action contrary shall be viewed adversely. It also states that the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he taxing statute or it is not. If it is not, the Income-tax Officer has no power to impose tax on the said income. 6.3 As we discussed earlier, the addition shall be confined to the incriminating material found during the course of search action. Accordingly, we direct the Assessing Officer not to consider the additions made on the basis of statement recorded u/s. 132(4) of the Act. This ground of appeals by the assesses is allowed. 7. The next ground in ITA No.2624/Bang/2019 in Assessment Year 2015-16 in the case of Shri Ahmed Shareef cash deposits in Bank accounts as per audited Balance Sheet which was disclosed in the Books of Accounts of the assessee and Department in ITA No.2484/Bang/2019 with regard to sustaining only addition at 5% of cash deposits as undisclosed turnover of ₹ 2,61,00,100. 7.1 The facts of the case are that the deposit in the Assessment Year under consideration to the extent of a sum of ₹ 2,61,00,100 into various Bank accounts. The Assessing Officer made entire addition as unexplained income in the hands of assessee. However, the CIT(Appeals) sustained the addition at 5% of this amount. Against this, both the assessee as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment under section 153A, on the amount by which the tax on the total income determined on the basis of such reassessment or recomputation exceeds the tax on the total income determined under sub-section (1) of section 143 or on the basis of the earlier assessment aforesaid. Section 234B (3) reads as follows: 234B(3). Where, as a result of an order of reassessment or recomputation under section 147 or section 153A, the amount on which interest was payable under sub-section (1) is increased, the assessee shall be liable to pay simple interest at the rate of one percent for every month or part of a month comprised in the period commencing on the day following the date of determination of total income under subsection (1) of section 143 and where a regular assessment is made as is referred to in sub-section (1) following the date of such regular assessment and ending on the date of the reassessment or re-computation under section 147 or section 153A, on the amount by which the tax on the total income determined on the basis of the reassessment or recomputation exceeds the tax on the total income determined under sub-section (1) of section 143 or on the basis of the regular asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second proviso to section 153A which specifically says that any assessment or reassessment, if any, relating to any assessment year falling within the period of six years referred to in section 153A(1) pending on the date of the initiation of the search shall abate. In such a situation obviously once a notice u/s. 153A is issued all past assessments and reassessments pending as on the date of the initiation of the search would no more survive. Further, in view of the provisions of section 153A(1)(a) as a return filed in response to the noti8ce u/s 153A is to be treated as a return under section 139, the section 143(1) referred to in section 234B(3) would have to be considered as the intimation in relation to such return which has been filed in response to a notice u/s 153A. This view also finds support because the intimation has to be issued within 12 months from the date of filing the return and as per the second proviso to section 153A, the assessment and reassessment proceedings which are pending at the time of initiation of the search have abated and as per the provisions of section 153A the return filed in response to such notices becomes by act of the provisions itself a ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the levy of interest is compensatory in nature. The method of computation of the interest is specifically provided in the sections 234A(3) and 234B(3) in the case of assessments under section 153A and section 234C. Non-application of a particular provision of the Act which is undisputedly is a mistake apparent from the record. The non-application of a specific provision being mistake apparent from record, we are of the view that the finding of the learned CIT(A) in holding that the Assessing Officer was right in invoking the provisions of section 154 is on a right footing and does not call for any interference. Further there can be no two views in regard to the levy of interest under sections 234A, 234B and 234C, especially when the provisions of the said section themselves specifically provide for the levy. In the circumstances we are of the view that the Assessing Officer was right in invoking the provisions of section 154 for rectifying the mistake of the non-levy of interest under sections 234A, 234B and 234C of the Act in the original assessment. 8.2 On the other hand, the learned Departmental Representative submitted that the Assessing Officer rightly confirmed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts that the assessee is jointly owning property with his sister Ms. Shamshad Begum at Falnir. The seized material suggested that there was a receipt of rent of ₹ 9,500 per month which is assessee's share after deduction u/s. 24 of the Act. The assessee's taxable income is ₹ 1,05,000 on this count. The CIT(Appeals) deleted it by observing that the property was unoccupied and the Assessing Officer has not examined any tenant or made any enquiry in this regard. Hence the CIT(Appeals) deleted the addition. Aggrieved the action of the CIT(Appeals) on this issue, the Revenue is in appeal before us. 9.1 We have heard the rival contentions, perused and carefully considered the material on record. Admittedly in this case the Assessing Officer has not examined the tenants. It is also brought to our notice that it was unoccupied in the Assessment Year under consideration and no income derived. Hence in our opinion, the CIT(Appeals) justified in deleting the additions made by the Assessing Officer. The order of the CIT(Appeals) on this issue is confirmed. This ground of appeal of Revenue on this issue is dismissed. 10. The next ground in Revenue s appeal in ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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