Can Addition be made on the basis of Unsigned, Undated Document found during search - Held No
Whether presumption stated u/s. 292C of the I.T. Act is a rebuttal presumption - Held Yes
Can penalty u/s 271AAA be levied where regular assessment u/s 143(3) is made - Held No
The AO has proceeded to make an assessment u/s. 143(3) of the I.T. Act. Therefore, the Appellant succeeds on the issue of satisfaction in view of the CBDT’s Circular and also on the merit as the sole addition has been based on the document in which one transaction is allegedly sold without mentioning the date and further no corroborative evidence of any investment made by the assessee was found. Further the document is also unsigned and undated, the addition made in the hands of the assessee of Rs. 96 lacs cannot be sustained. In view of this, we reverse the finding of the Ld. CIT(A) by confirming the addition of Rs. 96 crores in the hands of the assessee under the provisions of section 292C of the I.T. Act, 1961. It is also surprising to note that in the present case the penalty has been initiated under the provisions of section 271AAA of the Act, this relates to the search assessment, but the AO has made assessment under the regular provisions of the I.T. Act
1. The grounds raised in Assessee’s ITA No. 336/Del/2012 (AY 2009-10) read as under:-
i) The Learned CIT ( Appeals) has grossly erred in law and on the facts of the case in confirming the addition of Rs. 96 lacs (Ninty Six lacs) in the hands of the assessee as Unaccounted income from- sources in terms of Sec 69/698/69C of the Income Tax Act.
ii) The Learned CIT (Appeals) has grossly erred in law and on the facts of the case in appreciating that there is no corroborating evidence of the figure of Rs 96 lacs mention d on the loose paper.
iii) The Lea ed CIT (Appeals) has grossly erred in law and on the facts of the case in applying Sec. 292C of the Income Tax Act merely because some papers were found from the premises of the assessee while ignoring vital facts and contentions of the assessee.
iv) The Ld. CIT (Appeals) has grossly erred in law and on the facts of the case in confirming the addition of Rs 5.671acs (Five lacs Sixty Seven thousand) in the hands of the assessee as unexplained jewelle:y u/s 698 of the Income Tax Act.
v) The appellant craves leave to add, alter, demand, supplement or raise fresh grounds of appeal, if considered expedient and advisable at the time of hearing of appeal.
It is prayed that the appellant appeal be allowed
2. Original return of income was filed u/s 139 of the Income Tax Act, 1961 on 27.3.2010 at a total income of Rs. 4,27,00,340/-
3. Search and seizure u/s. 132 of the I.T. Act was carried out at the business and residential premises of Nimitaya and Khinda group during which the residential premises of Sh. Sandeep Singh Khinda and his wife Ms. Samta Khinda were also searched on 6.11.2008 wherein certain documents were found and seized
4. In response to the notice issued under section 143(2) and 142(1) of the I.T. Act, 1961 alongwith detailed questionnaire issued on 12.8.2010 the assessee’s AR attended the proceedings and filed the submissions from time to time as called for
5. Thereafter, the AO assessed the income of the assessee at Rs. 6,06,09,770/- u/s. 143(3) of the I.T. Act, 1961 by making the various additions vide his order dated 31.12.2010
6. Aggrieved by the aforesaid order of the Assessing Officer dated 31.12.2010, assessee filed an appeal before the Ld. First Appellate Authority, who vide impugned Order dated 28.11.2011 has partly allowed the appeal of the Assessee and confirmed the addition 96 lacs on account of unaccounted income from undisclosed sources in terms of Section 69/69B/69C of the I.T. Act, 1961 and Rs. 5.67 lacs as unexplained jewellery u/s. 69B of the I.T. Act, 1961
7. Aggrieved with the impugned order of the Ld. CIT(A), Assessee preferred appeal before the Tribunal
8. Tribunal decided in favour of the Assessee
At the time of hearing Ld. Counsel of the assessee stated that Ld. CIT(A) was erred in confirming the addition of Rs. 96 lacs in the hands of the assessee of the assessee as Unaccounted income from sources in terms of Sec 69/698/69C of the Income Tax Act. He further stated that there is no corroborating evidence of the figure of Rs 96 lacs mentioned on the loose paper. He further stated that Ld. CIT (Appeals) has also erred in applying Sec. 292C of the Income Tax Act, 1961 merely because some papers were found from the premises of the assessee while ignoring vital facts and contentions of the assessee. It was the further contention of the ld. Counsel of the assessee that the addition of Rs 5.671acs in the hands of the assessee as unexplained jewellery u/s 698 of the Income Tax Act.
On the other hand, Ld. CIT(DR) relied upon the order of the Ld. CIT(A) and stated that Ld. CIT(A) has passed a well reasoned order which does not need any interference and the same may be upheld
Cases Referred to
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