9911796707
TMI Blog2023 (2) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Appeal) - 54, MUMBAI (hereinafter fan referred to as 'the CIT(A)') has erred in confirming an addition of Rs.1,31,495/- as unexplained expenditure us. 69 in respect of the credit cards expenses alleged as unverifiable The appellant being aggrieved, prays that the addition made on account of unexplained expenditure us. 69 to the extent of Rs. 1,31,495/- being unjustified, unwarranted, bad in law and illegal be deleted." GROUND II:- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of current liabilities and unsecured loans taken in the name of Rakesh Survey Rs 8,80,000/- and Shree Mukund Associates Rs 35,00,000/- aggregating to Rs. 43,80,000/-as unexplained cash credit for u/s. 68 of the Act. The appellant being aggrieved, prays that the addition made on account of current liabilities and unsecured loans as unexplained cash credit u/s. 68 to the extent of Rs 43,80,000/- being unjustified, unwarranted, bad in law and illegal be deleted. GROUND III- On the facts and in the circumstances of the case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is in appeal before us. 5. The ground no. 1 of the appeal relates to addition of Rs.1,31,495/- confirmed by the ld. CIT(A) in respect of credit card expenses. 6. The facts qua this issue are that during the course of search, various credit cards were found and vide notice u/s. 142(1) of the Act, the assessee was specifically asked to furnish details of payments for all credit/debit cards with him. On comparison of the details submitted by the assessee, the Assessing Officer observed that certain credit cards were not disclosed/accounted for by the assessee. Accordingly, a show cause notice dated 07.12.2011 was issued to the assessee, in reply to which, it was explained by the assessee that those credit card transactions were not reflected in his balance sheet because the same relates to his HUF and are duly accounted for in that entity. However, the Assessing Officer did not accept the same as the details obtained from various banks in respect of those credit cards clearly show that the same are in the name of assessee only. Further, the stand of the assessee was also not supported by any documentary evidence. Eventually, the Assessing Officer made the addition of Rs.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be considered. Since, the payments of Rs. 5,35,705/- are duly verified and stands reconciled, the differential amount of Rs. 1,18,499/- (Rs. 654204 (-) Rs. 535705), is only amount has not been explained by way sources of cheque. The Ld. Counsel of the assessee has shown year wise cash withdrawal by the assessee, which are placed on record. In our opinion, the amount of said withdrawal is sufficient to explain the source of balance amount of Rs.1,18,499/-. Accordingly, the addition on account of credit card payment is deleted. 11. The ground no. 2 relates to addition of Rs. 43,80,000/- confirmed by the ld. CIT(A) u/s. 68 of the Act. 12. The brief facts qua this issue are that the assessee had shown unexplained liabilities in his balance sheet which amounted to Rs. 6,70,30,000/-. This liability included amount of Rs. 8,80,000/- from Mr. Rakesh Surve and Rs. 35,00,000/- from Shree Mukund Associates. The AO made addition for entire liability of Rs. 6,70,30,000/- u/s. 68 of the Act as the assessee failed to discharge his onus to prove the same. During the appellate proceedings, the ld. CIT(A) had called for remand report on various additions made u/s. 68 of the Act in the case. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loans are accepted as genuine by the Assessing Officer and hence, the addition be deleted.Alternatively, he submitted that the assessee has already expired and it was very difficult for his widow, who is legal heir of assessee, to gather documents from various persons, still one more opportunity might be provided for gathering documents from relevant person and file before the AO. 14. The ld. Departmental Representative appearing for the Revenue objected and submitted that the remand report has not accept genuineness of the loans taken by the parties namely Rakesh Surve and M/s. Mukund Associates and hence, requested to upheld the addition confirmed by the ld. CIT(A). 15. We have heard rival submission and perused relevant material on record. We have gone through the remand report reproduced at para 11.2 of the CIT(A)'s order. We find that the assessee has collected documents for discharging onus of the assessee and in most of the cases, documents have been filed. In respect of Rakesh Surve, although the assessee had filed loan confirmation of Rs. 8,80,000/-, however, notice issued u/s. 133(6) of the Act had been returned unserved. In such circumstances, the Ld. AO should have m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not too high as compared to the business activity of the assessee , so same does not deserve any disallowance . Accordingly, the disallowance confirmed by the ld CIT(A) is deleted. 20. The ground no. 4 of the appeal relates to the disallowance of interest of Rs. 16,19,127/- u/s. 36(1)(iii) of the Act. 21. The brief facts qua, this issue is that the assessee has claimed bank interest of Rs. 16,19,127/- in his Profit & Loss A/c. The Assessing Officer observed that the bank loans are personal in nature. In response thereto, the assessee explained that these loans were business loans with personal guarantee given by the assessee and utilized for advancing amounts for purchasing plots of land. However, the Assessing Officer rejected the explanation given by the assessee. The ld. CIT(A) also confirmed the disallowance for the reasons that the assessee has not furnished any evidence of advancing loan for business as contended before the Assessing Officer. 22. We have heard the rival submissions of the parties and material on record. The ld. Counsel of the assessee submitted that the assessee being a real estate agent has to scout for the probable sellers of the CIDCO plots, which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lot No 154 Sector-44 with M/s Madan Associates to the extent of Rs. 6,03,000/- being unjustified, unwarranted, bad in law and illegal be deleted. GROUND III:- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of other cash / unaccounted transaction to the extent of Rs. 1,63,22,000/- by treating it as unexplained expenditure us. 69C of the Act. The appellant being aggrieved, prays that the addition made on account of unexplained expenditure us. 69C to the extent of Rs. 1,63,22,000/-being unjustified, unwarranted, bad in law and illegal be deleted GROUND IV :- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of consideration received for plot no: 22 Sector 6 Airoli to the extent of Rs. 20,34,625/-from out of Rs. 1,24,18,570/- merely based on a loose paper found at sr. no: 49 of Annexure: 2 by treating the same as unaccounted/undisclosed income. Under the facts and circumstances, addition is incorrect and unlawful. The appellate pray to delete the additions of Rs. 20,34,625/- GROUND V :- On the facts and in the circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36(1)(iii) to the extent of Rs. 24,13, 176/-being unjustified, unwarranted, bad in law and illegal be deleted GROUND X:- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of disallowance of donation of Rs. 10,000/-. The appellant being aggrieved, prays that the addition made on account of disallowance of donation u/s. 80G be deleted." 25. The ground No. 7 of the appeal was revised/modified by the assessee on 20/09/2022. The said revised ground is reproduced as under: "REVISED GROUND VII TO BE READ AS UNDER:- On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made on account of current liabilities and unsecured loans as unexplained cash credit aggregating to Rs. 3,33,62,724/-us. 68 of the Act in respect of Rs. 2,16,00,000/- pertains to M/s. Mahavir Universal Homes Pvt. Ltd. (PAN : AAFCM2072C) ; Rs. 90,00,000/- pertains to M/s. Narayan Niryat India Pvt. Ltd. (MOU) and Rs. 27,62,724/- pertains to Basant Reality. The appellant being aggrieved, prays that the addition made on account of current liabilities and unsecured loans as unexplained cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheques. Thus, Rs. 2,76,00,000/- only was received by the Appellant in respect of land to be supplied to Kolambekar in Vadghar Node Area. In view of the above, from the addition of Rs.3.50 Crores, the addition of Rs. 55,00,000/- is sustained being cash payment received Shri Madan Kolambekar in respect of land supplied to Shri Madam Kolambekar in Vadghar Node Area. Accordingly, the ground no.1 of appeal is partly allowed." 29. Before us, the Ld. counsel of the assessee submitted as under: "Amount received from Madan Kolambekar Rs. 55,00,000/- The A.O. has made addition of Rs. 3,50,00,000/- from out that a cash receipt of Rs 55,00,000/- has been sustained by the learnedCIT(A)-54. We categorically denied the receipt of Rs. 3,50,00,000/-in cash from Madan Kolambekar and we confirm having received Rs. 55,00,000/- Lakhs in cash from him which has been duly shown in the appellant's books of accounts. The said income from undisclosed has been offered to tax in the return as Income from other sources us.153A to the extent of Rs 68,00,000/- as part of the disclosure made. Though the appellant has received Rs. 55,00,000/- in cash from Madan Kolambekar, he has denied the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .6,03,000/-. 33. Before us the Ld. counsel of the assessee relied on the order of the Tribunal for assessment year 2003-04 to 2007-08 in ITA No. 3496 to 3498, 4794 & 4795/mum/2015 and submitted that Tribunal has held that assessee was engaged in real estate as agency work of purchase and sale on behalf of other parties and the Assessing Officer had not brought on record anything to suggest that those land transactions were done by the assessee in his name. 34. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. Regarding the transaction of the assessee the Tribunal (supra) has observed that assessee was engaged in brokering activity of purchase and sale of the land. The relevant finding of the Tribunal is reproduced as under: "9.1 We find that assessee had been doing agency work on behalf of other parties. There is nothing on record to suggest that assessee was doing the said transaction at his own. Assessing Officer has not brought anything on record to suggest that above land transaction were done by him in his personal capacity. In such situation, assessee cannot be taxed on the basis of on investment transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils and explanation about the source of these payments. Accordingly, the AO made addition U/s.69C of Rs.7,00,000/- on account of unaccounted payment(which include unaccounted cash payment of Rs.3 lakh) Further, the AO has also invoked provisions of section 40A(3) of the I.T. Act and has disallowed an amount of Rs.3,00,000/-. (ii) The AO observed that page no.2 and 3 of Annexure A-1 impounded from Arneja Office, contained cash payment of Rs.73,50,000/- were made by the assessee to Mr. Vinay Gosawi. As per entries on these pages, total cash payment of Rs.66,00,000/- and cheque payment of R$.7,50.000/- has been made by the assessee in respect of several/properties. The AO observed that cash payments of Rs.10 lakhshave been made during the F.Y. 2007-08 and cash payments of Rs.56 lakh have been made in F.Y. 2008-09 by the assessee. The AO asked the assessee to furnish the source of payment along with supporting documents and other relevant details. Accordingly, the AO made addition U/s.69C of Rs.63,50,000/- (including cheque payment of Rs.7.50 lakh) on account of unaccounted cash payment. Further, the AO has also invoked provisions of section 40A(3) of the I.T. Act and has disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO observed that page no.43 and 60 of Annexure A-3 impounded from Arneja Office, contained total payment of Rs. 16,72,000/- is made by the assessee which includes cash payment of Rs.2,25,000/-. The AO asked the assessee to furnish the source of payment along with supporting documents and other relevant details. The assessee failed to furnish any details and explanation about the source of these cash payments. The AO observed that during the F.Y. 200809, an amount of Rs.16,72,000/- of unaccounted payments (which include unaccounted cash payment of Rs.2,25,000) were made by the assessee. Accordingly, the AO made addition of Rs. 16,72,000/- u/s.69C on account of unaccounted payment. Further, the AO has also invoked provisions of section 40A(3) of the IT.Act and has disallowed an amount of Rs.2,25,000/(Cash expenditure). (vii) The AD observed that page no,1 of Annexure A-2 impounded from Kaveri Bldg, contained payments to the tune of Rs.4,50,000/-.The AO asked the assessee to furnish the source of payment along with supporting documents and other relevant details. The assessee failed to furnish any details and explanation about the source of these payments. The A observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and other relevant details. The assessee failed to furnish any details and explanation about the source of these cash payments. Accordingly, the AO made addition of Rs.1,35,00,000/- u/s.69C on account of unaccounted cash payment. Further, the AO has also invoked provisions of section 40A(3) of the I.T.Act and has disallowed an amount of Rs. 1,35,00,000/- (Xi) The AO observed that page no.24 of Annexure A-2 impounded from KaveriBldg containe two tables. One table shows details of 13 plots and the other table shows details of 11 plots (with file nos.). As regards 13 plots, the assessee has entered into deals of 13 files for a total amount of Rs.7,49,00,000/- which waspayable by the assessee. Similarly, in respect of 11 plots, the assessee has entered into deals of 11 files for a total payable amount of Rs.3,12,00,000/-. Thus the total amount payable is Rs.10,61,00,000/-. As per the sheet, total payment of Rs.10,61,00,000/- has been made, out of which Rs.1,45,00,000/- has been paid by the assessee. The AO asked the assessee to furnish the source of payment along with supporting documents and other relevant details. The assessee failed to furnish any details and explanation abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of cash received. The appellant was unable to substantiate this claim of Rs.65 lakhs. Hence, the addition of Rs.65 lakhs is upheld. d) In point no. (iv) above, the addition of Rs.1,20,85,000/- has already been considered in Ground no.4. Hence, the same being repetitive, addition of Rs.1,20,85,000/- is deleted. e) In point no. (v) above, the AO had made addition of Rs. Rs. 1,30,000/- on account of unaccount cash payment. The appellant was unable to substantiate this claim of Rs. 1,30,000/-, Hence, the addition of Rs.1,30,000/- is upheld f) In point no. (vi) above, out of the total addition of RS. R$. 16 72.0001-(unaccounted cash payment is of Rs.2,25,000/-). The appellant was unable to substantiate claim of Rs.16.72 lakhs. Hence, the addition of Rs.16.72 lakhs is upheld. g) In point no. (vil above, the addition of Rs.4,50,000/- has already been considerd at sr. no. xi. Hence, the same being repetitive, addition of Rs. 4,50,000/-is deleted h) In point no. (vil) above, the addition of Rs.1:18,00,000/- has already been considerd at sr. no. xi. Hence, the same being repetitive, addition of Rs.1,18,00,000/- is deleted. (i) In point no. (ix) above, the addition of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice, amount of Rs. 1,30,000/- paid to Kam.lakar S. Tandel. (this property to belonging to Kamlakar Tandel was sold to by Kaeser Khan) The cheque amount has been recorded through my account which was shown in my bank statement on 04.04.2008. All the cash amounts were paid by the buyer on behalf of whom I negotiated the deal. This record is kept by my office staff as a record of transactions arranged by me for the sake of taking up the matter with the landowners-cum-farmers. (iv)The learned Assessing officer has made additions for Rs.16,72,000/- on the basis of Page 43 & 60 of Annexure A-3 impounded/seized from Arena Office, amount Rs. 12,22,000/payable of Rs. 2,25,000 in cash and Rs. 14.47.000/- in cheque to various farmers. This record is kept by appellant's office staff as a record of transactions arranged by me for the sake of taking up the matter with the landowners-cumfarmers. (v)The learned Assessing officer has made additions of Rs 24,20,000/- relating to this A.Y. on the basis Page 25 of Annexure A-2 impounded from Kaveri Bldg. It is submitted here that out of the above, a sum of Rs. 15,00,000/- has been paid to Sai Ganesh Builders through cheque ng. 532361 which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authorized Representative submitted that addition in question is not justified by way of making estimation of turnover and profit thereon. Assessing Officer has not given actual working as to how the estimated turnover of Rs.38,06,951/- was calculated. The stand of deceased assessee has been that he used to deal in Navi-Mumbai areas.He used to identify those suitablelocations of CIDCO plots belonging to different farmers, get them properly allotted to them and enter into MoUs with them for sale of the said plots of land to the Real Estate developers who were in need of these plots. It was clarified that though he was not buying and selling the plots on his own, yet he, as a broker, negotiated the deals between the seller-cum-farmers and the buyers-cum-developersbuilders. Since, deceased assessee earned reasonable amount of commission in the Real Estate deals made through him. Deceased assessee was doing said business for developers/investor as stated above.Assessing Officer did not agree with the concept of commission agency by assessee. Since, Assessing Officer did not accept the books of account, so, he estimated the turnover and profit thereon.Ld. Authorized Representative su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Rs.80,56,500/- and that of 1 flat in Sairaj Aptt on plot 83 & 84, Sec. 1, Sanpada worked out at Rs. 12,34,490/. Thus, the total value of all these properties against part consideration of plot no.22, sector 6, Airoli was Rs.1,24,18,570/-, The A made addition of Rs.1,24,18,570/- on account of unaccounted/undisclosed income of the assessee. The appellant has stated that the A.O. has made this addition as unexplained investment, based upon Page no. 49 of Annexure-2 seized from Kaveri Building.However, it was the proposal made by the appellant to settle dispute for plot no.22 in sector-6, Airoli and such proposals did not materialized as they were not accepted by the builder. Hence, no addition could be made only on the basis of a proposal which never materialized. Further, the appellant has stated that if at all additions are to be made then addition of Rs.20,34,625/- is to made since, the value of the flat requested to be allotted to the appellant was only Rs.20.34.625/- It is seen rom page 49 af affickale R2 iTher the name of Shri Suni Guatappears at sr.no 4 of the project, MIs. Raj Uday Cooperative Housing Soc. Ltd bearing flat 1001 amounting to Rs.20,34,625/-. Thus, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lat, ONLY on the basis of a proposal which never materialized. Hence. it is prayed that the addition confirmed in this regard to the extent of Rs. 20,34,625/- should be deleted." 43. Before us the ld. Counsel of the assessee has also filed additional evidence that the allottees of said flat are different persons and not the assessee. The assessee has filed an information downloaded from the web-site of the CIDCO, which is extracted as under: 44. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. Before us the ld. Counsel of the assessee has filed additional evidence to support that said flat was never allotted to the assessee and it was merely a proposal, which never materialized. In view of the evidence collected by the widow of the demised assessee i.e. legal heir, we feel it appropriate to admit the additional evidence and restore the matter to the file of the ld. Assessing Officer for necessary verification from the relevant authorities regarding allotment of concerned flat and then decide the issue in dispute in accordance with law after providing adequate opportunity of being heard to the assessee/legal hei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement in the form of the cash book. The ground No. 5 (five) of the appeal of the assessee is accordingly allowed for statistical purposes. 48. The ground No. 6 of the appeal of the assessee relates to addition confirmed by Ld. CIT(A) for unexplained investment in jewelry of Rs.16,81,573/-against the addition made of Rs.33,63,147/- by the Assessing Officer. 49. The facts qua the issue in dispute are that during the course of the search action total jewelry of Rs.33,63,147/-including diamond jewelry of Rs.14,57,538/-and bullion worth Rs.6,16,000/- was found from the residence of the assessee. Before the Assessing Officer, the assessee explained that in addition to the normal jewelry which could be available with family members according to the CBDT circular, jewelry was received by the wife of the assessee from her parents and his mother who expired in the year 2007. The ld. Assessing Officer rejected the contention of the assessee and divided the 50% of the jewelry in the hands of the assessee and his minor son and balance 50% jewelry in the hands of his wife and his daughter, and accordingly computed unexplained investment of the assessee Rs.16,81,574/-however in the computat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08-09 and 200910. Accordingly, the ground of the appeal of the assessee is allowed for statistical purposes. 52.1 In modified ground No. seven, the assessee has challenged addition of Rs.3,33,62,724/-confirmed by the Ld. CIT(A) under section 68 of the Act out of the addition of Rs.5,12,94,285/- made by the Assessing Officer. 52.2 During the course of the first appellate proceeding, the Ld. CIT(A) called for a remand report from the Assessing Officer and thereafter taking into consideration written submission of the assessee, sustained addition of Rs. 3,33,62,724/-observing as under: "16.3 The facts of the case and findings of the AO recorded in the Assessment Order, remand report and the written submissions of the appellant have been considered. i)In the case of loan of Rs.2,71,00,000/- given to MIs. Madan Associates, it pertained to earlier year. Therefore, no addition is to be made during the year. ii) In the case of loan of Rs.15,00,000/- given to Mis. Rishi Enterprises pertained to earlier year. Therefore, no addition is to be made during the year. iii) In the case of loan of Rs.2,16,00,000/- given to MIs. Mahavir Universal Homes Put. Ltd. As per the ledger account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) is reproduced as under: "11.4 The facts of the case and findings of the AO recorded in the AssessmentOrder, remand report of AO and the written submissions of the appellant have been considered. i. ................... ii. ........................ iii. In the case of loan of Rs.2,16,00,000/- given to M/s. Mahavir Universal Homes Pvt. Ltd, the appellant has filed confirmation from the said party and also submitted copy of ROl, bank statement etc. before the AO. Therefore, this loan is held as genuine iv. ..................... v. ....................... vi. ...................... ........................... Accordingly, the ground no.6 of appeal is partly allowed." (emphasis supplied externally) 53.1 In view of the above verification, the claim of the assessee is accepted and the addition in dispute of Rs. 2,16,00,000/- made in the year under consideration is deleted. 53.2 Regarding the amount of Rs.90,00,000/-pertaining to Mrs. Narayan Niryat India Private Limited, the assessee submitted that it is a trade advance for which a copy of the MOU dated 24/07/2008 confirming the same is already placed on record. The remand report submitted by the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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