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TMI Blog2022 (4) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... be ascertained on the basis of material available on record, surrounding circumstances, human conduct, preponderance of probabilities and nature of linked material and evidence available before the AO. The proceedings before the income tax authorities have been described as quasi-judicial proceedings in character. More so, it was held in the case of Dhakeswari Cotton Mills Ltd. [ 1954 (10) TMI 12 - SUPREME COURT] that assessment proceedings are purely administrative and the assessing office is not a court. As such, strict rule of evidence is not applicable in the income tax proceedings and proceedings before him are not judicial proceedings, though they are deemed to be as such for limited purposes. The AO has, no doubt, to hear evidence on such evidence made consisting of material which will be wholly ineligible in a court of law. In the present case, there is a valid seized material wherein there is entry showing payment of ₹ 15.60 lakhs. The assessee in spite of repeated opportunities simply denied the transaction and did not discharge the onus of explaining the seized material. In such circumstances, the AO having no option, made addition. In our opinion, as per s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance paid to Shantiniketan property - assessee in the sworn statement admitted to have paid advance paid to Prestige Shantiniketan property and since the same was not reflected in the balance sheet, the AO sought to tax the same as unexplained investment - HELD THAT:- CIT(Appeals) observed that the total amount is appearing in the balance sheet and there is no dispute about it. The difference was an estimation error by assessee. The list of payments and amounts mentioned in the agreement match. He therefore deleted the addition on the reason that payments have been made through banking channels. While doing so, he relied on the personal balance sheet produced by the assessee without confronting the same to the AO. Being so, in the interest of justice, we remit this issue to the CIT(Appeals) to call for a remand report from the AO and decide the issue afresh. Unexplained credit in the name of Shri Moideen Bawa - CIT(A) deleted the addition on the reason that there is no debit balance in the name of assessee appearing in the balance sheet of Mr. Bava and assessee has not disputed this fact - HELD THAT:- There is sufficient proof that advances made by Mr. Bava was on behalf of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the premises of M/s. Mumtaz Traders - HELD THAT:- CIT(Appeals) on perusal of sale deeds and the impounded material was of the opinion that the total land recorded is at ₹ 10,52,750 which matches with the amounts in the sale deed. The impounded material mentions the Sy.No. and the village for which the payments are made and these are recording of unaccounted money and cannot be brushed aside in view of the fact that there is clear mention of the fats leading to the purchase of property. The total purchase value is ₹ 21,22,014 of which is ₹ 10,52,750 is already accounted. The assessee could not bring any evidence to the contrary. He therefore sustained the addition of ₹ 10,69,264. In our opinion, whether the amount of ₹ 10,52,750 has been recorded already or not has to be examined with reference to material available on record, after calling for a remand report from the AO. Accordingly, we remit this issue to the CIT(Appeals) for fresh decision. Investment from unexplained sources on account of additional capital - AO added these amounts being additional capital shown in individual balance sheet and in the balance of Mangalore Lime Marine Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee was called to explain the sources of payment of ₹ 1 crore and ₹ 70 lakhs ₹ 1.3 crores along with documentary evidence. In the absence of details of sources and explanation of the assessee of these amounts, the AO brought to tax a total sum of ₹ 3 crores as paid out of unexplained sources. 5. The CIT(Appeals) deleted the addition of ₹ 3 crores on the reason that the same issue was considered in the AY 2007-08 vide his order dated 20.3.2013 where the addition was deleted. Against this the revenue is in appeal before us. 6. We have heard both the parties and perused the material on record. In this case, the CIT(Appeals) has not brought out on record that the source of investment are same as referred in the order dated 20.3.2013 for AY 2007-08. Further there was registration of the impugned property for ₹ 2.35 crores. The AO brought on record that the total sale consideration was ₹ 4 crores. There is no discussed on this issue by the CIT(Appeals). Hence it is appropriate to remit the entire issue to the CIT(Appeals) for fresh decision in accordance with law, after calling for a remand report from the AO. 7. The next grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een described as quasi-judicial proceedings in character. More so, it was held in the case of Dhakeswari Cotton Mills Ltd. v. CIT, 26 ITR 775 (SC) that assessment proceedings are purely administrative and the assessing office is not a court. As such, strict rule of evidence is not applicable in the income tax proceedings and proceedings before him are not judicial proceedings, though they are deemed to be as such for limited purposes. The AO has, no doubt, to hear evidence on such evidence made consisting of material which will be wholly ineligible in a court of law. 9. In the present case, there is a valid seized material wherein there I s entry showing payment of ₹ 15.60 lakhs. The assessee in spite of repeated opportunities simply denied the transaction and did not discharge the onus of explaining the seized material. In such circumstances, the AO having no option, made addition. In our opinion, as per section 292C of the Act, it is to be presumed that the seized material belonged to the assessee and the entries in the seized material is to be considered as correct to that effect and addition to be made, since the assessee failed to discharge the burden cast upon hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansactions. 14. The CIT(Appeals) noted that the total amount as per the agreement to sell for Kanyana village is ₹ 13,57,014 stated in the assessment order. The amount recorded in books of assessee is ₹ 717,16,735 with a difference of ₹ 6,40,279. Since this difference of ₹ 6,40,279 along with other amounts are already confirmed by him in ground No.12 raised before him, he was of the opinion that taxing the same again would amount to double taxation and hence deleted the addition of ₹ 6 lakhs. 15. Before us, the contention of the ld. DR is that this amount does not pertain to addition made under any other head and it specifically pertains to balance payment made towards remaining portion of property at Kanyana village. In our opinion, these facts are to be examined by the CIT(Appeals) after obtaining a remand report from the AO. Accordingly, this issue is remitted to the CIT(Appeals) for fresh decision. 16. The next issue is with regard to deletion of addition of ₹ 75,335 being peak credits in unaccounted bank accounts. Before the CIT(Appeals), the assessee submitted that the AO worked out peak cash credit at ₹ 75,335 on 31.3.2009 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals) observed that the total amount of ₹ 35,23,686 is appearing in the balance sheet and there is no dispute about it. The difference of ₹ 4,76,314 was an estimation error by assessee. The list of payments and amounts mentioned in the agreement match. He therefore deleted the addition on the reason that payments have been made through banking channels. While doing so, he relied on the personal balance sheet produced by the assessee without confronting the same to the AO. Being so, in the interest of justice, we remit this issue to the CIT(Appeals) to call for a remand report from the AO and decide the issue afresh. 23. The next issue relates to deletion of addition of ₹ 51,22,605 on account of unexplained credit in the name of Shri Moideen Bawa. The balance sheet of the assessee contained loan outstanding of ₹ 2,17,04,700. The balance sheet of Moideen Bava did not contain the corresponding debit of ₹ 76,80,000 in AY 2005-06 and ₹ 78,56,200 for AY 2007-08 and the balance was brought to tax in this assessment year. 24. The assessee submitted that Mr. Moideen Bava has paid various amounts on behalf of assessee and hence in his books the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not confronted to the AO. Accordingly, we remit this issue to the CIT(Appeals) to confront the evidence to the AO and decide the issue afresh. 30. The next issue is with regard to deletion of addition of ₹ 1,61,91,389 on account of unexplained investment in purchase of property in the name of Mrs. A.K. Fouzia. 31. The assessee purchased two properties amounting to ₹ 2.90 crores in the name of Mrs. A.K. Fouzia. The AO noted from the balance sheet that only ₹ 1,28,08,611 was shown as loan and hence he taxed the balance amount of ₹ 1,61,91,389 as income of assessee. The CIT(Appeals) observed that the addition cannot be sustained for the reason that assessee is maintaining two balance sheets, one for business and other for personal assets and liabilities. The personal b/s shows a debit of ₹ 2,75,70,434 with business b/s showing ₹ 1,28,08,611 as debit, the total comes to ₹ 4,03,79,045. Therefore, total investment of ₹ 2.90 crores stands explained according to the CIT(A) and therefore he deleted the addition. 32. In our opinion, the personal balance sheet is to be examined by the AO whether assessee has filed the same before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to the purchase of property. The total purchase value is ₹ 21,22,014 of which is ₹ 10,52,750 is already accounted. The assessee could not bring any evidence to the contrary. He therefore sustained the addition of ₹ 10,69,264. 38. In our opinion, whether the amount of ₹ 10,52,750 has been recorded already or not has to be examined with reference to material available on record, after calling for a remand report from the AO. Accordingly, we remit this issue to the CIT(Appeals) for fresh decision. 39. The next ground is regarding addition of ₹ 28,13,710 and ₹ 5,25,00 as investment from unexplained sources on account of additional capital. The AO added these amounts being additional capital shown in individual balance sheet and in the balance of Mangalore Lime Marine Industries where assessee is a partner respectively. The assessee stated that the additional capital is out of various debits in various other concerns and hence the credit stands fully explained. However, assessee could not produce the break up of individual firms from which these debits are supposed to be considered. With regard to assessee s contention that the balance sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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