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TMI Blog2024 (10) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... , once at the stage before us also the order of the settlement commission dated 03.12.2020 not being disputed the addition accepted by the firm, not disputed by the revenue cannot be sustained in the hands of the assessee on protective basis. Based on these observations ground raised by the assessee stands allowed. - Dr. S. Seethalakshmi, JM And Shri Rathod Kamlesh Jayantbhai For the Assessee : Sh. Vinod Kumar Gupta, CA For the Revenue : MS. Alka Gautam, CIT (V.H) ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM Because the captioned assessee was dissatisfied with the order of the Commissioner of Income Tax (Appeals)-4, Jaipur [ for short CIT(A) ] passed on 30/01/2024 the present appeal is filed. The dispute relates to assessment year 2017-18. The order of the ld. CIT(A) is passed because the assessee preferred an appeal before him against the order dated 31.12.2019 passed under section 153A r.w.s. 143(3) of the Income Tax Act, [ for short Act ] by DCIT, Central Circle-01, Jaipur. 2. In this appeal, the assessee has raised following grounds: - 1. The Ld.AO erred in law as well as on the facts of the case by passing order u/s 143(3)/153A dated 31.12.2019 for want of jurisdiction and vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved. In response to notice issued u/s 153A, the assessee furnished his return of income on 20-10- 2018 declaring total income of Rs. 46,70,770/-. Assessee had not filed his regular return u/s 139 of the Act. Notices u/s. 143(2) 142(1) were issued from time to time and same were complied by the assessee. 3.1 Assessee has declared Remuneration income from Firm Ramesh Mahesh Co., income from business u/s 44AD, Income from STCG on shares sold, income from commission, income from LIC Matured, interest income from saving bank a/c and interest from other sources. 3.2 During the course of search and seizure action at the residential and business premises of the assessee various incriminating documents has been found and seized on analysis of seized documents at Page No. 1 to 11 of Exhibit-28 of Annexure-AS (found and seized from the residence of Shri Mahesh Kumar Ladiwala at B-24, New Light Colony, Tonk Road, Jaipur) and these were the pages of a diary which contains the details of cash loans which have been lended. The amount of cash loan from the above working comes at Rs. 82,37,000/- which was the unexplained investment of the assessee in form of cash loans. Further, assessee had paid R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-1 to 11 of Exhibit-28 of Annexure AS. 4. During the course of assessment, when the assessee was asked to explain the transactions noted on the seized documents found at the residential premises of the assessee, it was submitted that assessee is not engaged in any cash loan business in his individual capacity and the transaction noted on the seized paper were carried out by him on behalf of firm only and the entries noted on the seized papers have been already accepted by M/s Ramesh Mahesh Co. in the application before Income Tax Settlement Commission. (ITSC). 5. Ld.AO made the verification of said contention from the settlement report u/s 245D(3), however, the addition of Rs. 83,28,100/- was made on protective basis by holding as under: The reply of the assessee has been considered and verified from the settlement report u/s 245D(3). However, in order to protect the interest of revenue the above transactions are being added to the total income of the assessee on protective basis 6. In the first appeal, Ld.CIT(A) confirmed the said protective addition on the ground that appellant has not filed a copy of the order of honorable Settlement Commission and the report of the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has given a categorical finding of the fact that the said entries/transactions are covered in the peak working enclosed with report u/s 245D(3), however, the protective addition was made by Ld.AO just to protect the interest of revenue because at the time of assessment, proceedings were pending before ITSC and final order was awaited. 4. Afterwards, ITSC passed a final order dated 03.12.2020 u/s 245D(4) of the act. Now the moot question remained for adjudication is whether the final order of ITSC covers the working of peak as submitted by Ld.PCIT in report u/s 245D(3) so as to give the inclusion of the impugned entries/transactions in the final order of ITSC, which were verified by Ld.AO with the report of PCIT u/s 245D(3). In the light of this we submit as under: 4.1 The peak working determined by ITSC is enclosed to the order as Annexure-1. A perusal of the same shows that said working is also containing 2402 line items. 4.2 A perusal of the working of peak determined by Ld.PCIT and annexed to report u/s 245D(3) shows that the peak working is containing 2402 Line items. 4.3 Further, the said working is exactly the same as submitted by Ld. PCIT in the report u/s 245D(3), from whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eport of the PCIT-Central, Jaipur u/s 245D(3) of the Act to examine the claim of the appellant. In this regard, your honors would appreciate the fact that it is the finding of the Ld. AO himself that the claim of the appellant has been verified from the report u/s 245D(3) which is evident from the assessment order. Further, such report and order were very well under the access of the department, therefore even if the appellant could not submit the same, the Ld. CIT(A) could have easily obtained the same and verify it under the given circumstances. Furthermore, without prejudice to above, it is submitted that the law of fairness and propriety also warranted that the Ld. CIT(A) should have obtained the order to verify the claim since no prejudice would have resulted to the revenue by considering the order and the said action could have assisted in delivering judgement as per Income tax law which mandates fair proceedings and to tax real income and avoid double taxation. 5.4 Further, Ld. CIT(A) has further observed that the appellant has not furnished any information/evidence to rebut the finding of Ld.AO. In this regards it is important to note that appellant is not rebutting the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act on 30.10.2017 at the various premises of Ladiwala and Kanoongo Group, Jaipur. Residential premises of the assessee was also covered. Consequent to search action notice u/s 153A of the Act was issued to the assessee on 09-10-2018 which was duly served. In response to notice issued u/s 153A, the assessee furnished his return of income on 20-10-2018 declaring total income of Rs. 46,70,770/-. Assessee has declared Remuneration income from Firm Ramesh Mahesh Co., income from business u/s 44AD, Income from STCG on shares sold, income from commission, income from LIC Matured, interest income from saving bank a/c and interest from other sources. Assessee had not filed his regular return u/s 139 of the Act. Notices u/s. 143(2) 142(1) were issued from time to time and same were compiled by the assessee. In the search operation at the residential and business premises of the assessee various incriminating documents has been found and seized on analysis of seized documents at Page No. 1 to 11 of Exhibit-28 of Annexure-AS (found and seized from the residence of Shri Mahesh Kumar Ladiwala at B-24, New Light Colony, Tonk Road, Jaipur) and these were the pages of a diary which contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required. The entries now have been already accepted by M/s Ramesh Mahesh co. in the application before ITSC. It is relevant to mention that the same has already been examined in 245D(3) report by the office of PCIT (Central)-Jaipur. There relevant pages of the report are enclosed. Perusal of the comment of PCIT Jaipur shows that after examination contention of the Ramesh Mahesh Co., that these pages has already been incorporated have been accepted. The relevant pages have also reproduced in the report which we have highlighted. As is evident from the record that the order of the assessment was passed on 31.12.2019 whereas the application was filed on 27.03.2019 by the firm where the assessee was partner. The said application being not finalized the ld. AO partly accepting the contention of the assessee decided not to make the addition substantially but he has made these additions with a view to protect the interest of the revenue on protective basis vide order dated 31.12.2019. Now before us, the order of the ITSC dated 03.12.2020 was placed on record, which contains the entry starting from sr. no. 1 to 2402, all these entries incorporate the entries for which the addition was ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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