IT : Where money lending activity was not subject matter of assessment before Assessing Officer, Commissioner (Appeals) erred in making addition on said issue
IT : Where statement of builder that assessee made payment to him for purchase of shop was not subject to any cross examination by assessee issue of unexplained investment to be remanded back to Assessing Officer for fresh examination
IT : Where expenditure in question could not be explained by assessee, same was rightly treated unexplained expenditure
IT : Without referring to any evidence on basis of which cost of construction declared by assessee, same could not be rejected
IT : Cash found in search being genuine sale consideration of property, no addition to be made
IT : Agricultural income, cannot be estimated without taking into consideration agricultural operation
IT : Jewellery inherited from is to be estimated considering status of assessee and level of income of entire family
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[2014] 49 taxmann.com 411 (Pune - Trib.)
IN THE ITAT PUNE BENCH 'B'
National Auto World
v.
Income-tax officer*
G.S. PANNU, ACCOUNTANT MEMBER
AND R.S. PADVEKAR, JUDICIAL MEMBER
IT APPEAL NOS. 376,887,953, 1043, 1049,1053 &1054/(PN) OF 2012
AND 26 TO 28, 32,336, 387, 444, 526 TO 528,869,870,873 & 874/(PN) OF 2013
[ASSESSMENT YEARS 2002-03 TO 2007-08]
NOVEMBER 29, 2013
I. Section 251 of the Income-tax Act, 1961 - Commissioner (Appeals) - Power of (Jurisdiction) - Assessment years 2002-03 to 2007-08 - Where money lending activity was not subject matter of assessment before Assessing Officer, it was not open to Commissioner (Appeals) to raise same and make addition on account of unexplained investment in business of money lending activities - Held, yes [Para 28] [In favour of assessee]
II. Section 69 of the Income-tax Act, 1961 - Unexplained investment (Immovable property) - Assessment years 2002-03 to 2007-08 - Following search proceedings, diary containing certain notings were found and seized - While assessee stated that notings in question were only proposals for investments in different projects of a builder, builder admitted of having received a sum from assessee for acquisition of shops and flats by assessee - Accordingly payment noted in diary was treated as unexplained investment by assessee - Whether since there was no finding as to whether such amount stated by builder was out of total payments noted in diary or that same was over and above amounts noted in seized diary and moreover builder was not cross examined by assessee, conclusion of unexplained investments having been made by assessee was unsustainable - Held, yes - [Para 50] [Partly in favour of assessee]
III. Section 69 of the Income-tax Act, 1961 - Unexplained investment (Immovable property) - Assessment year 2006-07 - Whether where expenditure on account of stamp duty and registration charges could not be explained by assessee, such expenditure was rightly treated as unexplained and added to income of assessee - Held, yes [Para 61] [In favour of revenue]
IV. Section 69 of the Income-tax Act, 1961Unexplained investment (Immovable property) - Assessment year 2006-07 - Assessing Officer estimated cost of construction of godown at Rs. 200 per sq. ft. as against Rs. 175 per sq. ft. shown by assessee which resulted in an addition - Commissioner (Appeals) deleted addition on ground that no material had been referred to in assessment order which could suggest that Assessing Officer was in possession of any evidence to support enhanced estimated cost of construction - Whether since revenue had not referred to any evidence on basis of which cost of construction declared by assessee could be rejected, Commissioner (Appeals) made no mistake in deleting impugned addition - Held, yes [Para 72] [In favour of assessee]
V. Section 69A of the Income-tax Act, 1961 - Unexplained money (Immovable property) - Assessment year 2006-07 - Whether where impugned cash found in search was claimed by assessee to have received from a party against sale of property and said transaction was found genuine, Commissioner (Appeals) rightly deleted addition of said sum as unexplained cash - Held, yes [Para 75] [In favour of assessee]
VI. Section 145 of the Income-tax Act, 1961 - Method of accounting (Estimation of income) - Assessment year 2006-07 - Commissioner (Appeals) deleted addition on account of agricultural income by noticing that Assessing Officer merely made an estimation without taking into consideration facts relating to agricultural operations - Whether following order of Tribunal in assessee's own case for assessment year 2003-04, impugned order to be affirmed - Held, yes [Para 76] [In favour of assessee]
VII. Section 69 of the Income-tax Act, 1961 - Unexplained investment (Jewellery) - Assessment year 2006-07 - At time of search, jewellery totalling to 2,509.50 gms. was found from assessee's locker and after allowing benefit of 409 gms. of jewellery declared by assessee under VDIS, Assessing Officer treated balance jewellery as unexplained - Considering status of assessee and also presence of Stridhan, Commissioner (Appeals) accepted certain jewellery as explained and balance of 627.45 gms. was held unexplained - Whether considering status of assessee and level of income of entire family, it could not be ruled out that assessee was in possession of jewellery inherited from his parents which would cover remaining jewellery weighing 627.45 gms and, hence, entire addition was to be deleted - Held, yes [Para 92] [In favour of assessee]
VIII. Section 69 of the Income-tax Act, 1961 - Unexplained investment (Immovable property) - Assessment year 2006-07 - Following search action, an addition on account of unexplained investment in property was made - Plea of assessee was that while considering availability of cash for explaining investments/outgoings, depreciation allowance being a non-cash expenditure, should be considered to be available in hands of assessee in cash-flow statement prepared and furnished during assessment proceedings - Whether Assessing Officer was to be directed to make an estimation of amount of cash available corresponding to depreciation allowance, allow credit to extent of 40 per cent of claim made by assessee in cash-flow statements for each year - Held, yes [Para 130] [Partly in favour of assessee]
IT : Where statement of builder that assessee made payment to him for purchase of shop was not subject to any cross examination by assessee issue of unexplained investment to be remanded back to Assessing Officer for fresh examination
IT : Where expenditure in question could not be explained by assessee, same was rightly treated unexplained expenditure
IT : Without referring to any evidence on basis of which cost of construction declared by assessee, same could not be rejected
IT : Cash found in search being genuine sale consideration of property, no addition to be made
IT : Agricultural income, cannot be estimated without taking into consideration agricultural operation
IT : Jewellery inherited from is to be estimated considering status of assessee and level of income of entire family
■■■
[2014] 49 taxmann.com 411 (Pune - Trib.)
IN THE ITAT PUNE BENCH 'B'
National Auto World
v.
Income-tax officer*
G.S. PANNU, ACCOUNTANT MEMBER
AND R.S. PADVEKAR, JUDICIAL MEMBER
IT APPEAL NOS. 376,887,953, 1043, 1049,1053 &1054/(PN) OF 2012
AND 26 TO 28, 32,336, 387, 444, 526 TO 528,869,870,873 & 874/(PN) OF 2013
[ASSESSMENT YEARS 2002-03 TO 2007-08]
NOVEMBER 29, 2013
I. Section 251 of the Income-tax Act, 1961 - Commissioner (Appeals) - Power of (Jurisdiction) - Assessment years 2002-03 to 2007-08 - Where money lending activity was not subject matter of assessment before Assessing Officer, it was not open to Commissioner (Appeals) to raise same and make addition on account of unexplained investment in business of money lending activities - Held, yes [Para 28] [In favour of assessee]
II. Section 69 of the Income-tax Act, 1961 - Unexplained investment (Immovable property) - Assessment years 2002-03 to 2007-08 - Following search proceedings, diary containing certain notings were found and seized - While assessee stated that notings in question were only proposals for investments in different projects of a builder, builder admitted of having received a sum from assessee for acquisition of shops and flats by assessee - Accordingly payment noted in diary was treated as unexplained investment by assessee - Whether since there was no finding as to whether such amount stated by builder was out of total payments noted in diary or that same was over and above amounts noted in seized diary and moreover builder was not cross examined by assessee, conclusion of unexplained investments having been made by assessee was unsustainable - Held, yes - [Para 50] [Partly in favour of assessee]
III. Section 69 of the Income-tax Act, 1961 - Unexplained investment (Immovable property) - Assessment year 2006-07 - Whether where expenditure on account of stamp duty and registration charges could not be explained by assessee, such expenditure was rightly treated as unexplained and added to income of assessee - Held, yes [Para 61] [In favour of revenue]
IV. Section 69 of the Income-tax Act, 1961Unexplained investment (Immovable property) - Assessment year 2006-07 - Assessing Officer estimated cost of construction of godown at Rs. 200 per sq. ft. as against Rs. 175 per sq. ft. shown by assessee which resulted in an addition - Commissioner (Appeals) deleted addition on ground that no material had been referred to in assessment order which could suggest that Assessing Officer was in possession of any evidence to support enhanced estimated cost of construction - Whether since revenue had not referred to any evidence on basis of which cost of construction declared by assessee could be rejected, Commissioner (Appeals) made no mistake in deleting impugned addition - Held, yes [Para 72] [In favour of assessee]
V. Section 69A of the Income-tax Act, 1961 - Unexplained money (Immovable property) - Assessment year 2006-07 - Whether where impugned cash found in search was claimed by assessee to have received from a party against sale of property and said transaction was found genuine, Commissioner (Appeals) rightly deleted addition of said sum as unexplained cash - Held, yes [Para 75] [In favour of assessee]
VI. Section 145 of the Income-tax Act, 1961 - Method of accounting (Estimation of income) - Assessment year 2006-07 - Commissioner (Appeals) deleted addition on account of agricultural income by noticing that Assessing Officer merely made an estimation without taking into consideration facts relating to agricultural operations - Whether following order of Tribunal in assessee's own case for assessment year 2003-04, impugned order to be affirmed - Held, yes [Para 76] [In favour of assessee]
VII. Section 69 of the Income-tax Act, 1961 - Unexplained investment (Jewellery) - Assessment year 2006-07 - At time of search, jewellery totalling to 2,509.50 gms. was found from assessee's locker and after allowing benefit of 409 gms. of jewellery declared by assessee under VDIS, Assessing Officer treated balance jewellery as unexplained - Considering status of assessee and also presence of Stridhan, Commissioner (Appeals) accepted certain jewellery as explained and balance of 627.45 gms. was held unexplained - Whether considering status of assessee and level of income of entire family, it could not be ruled out that assessee was in possession of jewellery inherited from his parents which would cover remaining jewellery weighing 627.45 gms and, hence, entire addition was to be deleted - Held, yes [Para 92] [In favour of assessee]
VIII. Section 69 of the Income-tax Act, 1961 - Unexplained investment (Immovable property) - Assessment year 2006-07 - Following search action, an addition on account of unexplained investment in property was made - Plea of assessee was that while considering availability of cash for explaining investments/outgoings, depreciation allowance being a non-cash expenditure, should be considered to be available in hands of assessee in cash-flow statement prepared and furnished during assessment proceedings - Whether Assessing Officer was to be directed to make an estimation of amount of cash available corresponding to depreciation allowance, allow credit to extent of 40 per cent of claim made by assessee in cash-flow statements for each year - Held, yes [Para 130] [Partly in favour of assessee]
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