×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
These are the cross appeals filed by the assessee and the Revenue against the separate orders of ld. CIT(A)-IV, Jaipur dated 31/12/2018 for the A.Ys. 2015-16 and 2017-18 in the matter of order passed U/s 143(3) read with Section 153A of the Income Tax Act, 1961 (in short, the Act).
2. In all these appeals, common issues are involved, therefore, for the sake of convenience and brevity, a consolidated order is being passed.
3. Firstly we take assessee’s appeal being ITA No. 128/JP/2019 and Revenue’s appeal being ITA No. 285/JP/2019 (A.Y. 2015-16).
In these cross appeals, the assessee and the revenue have taken following grounds of appeal:
Grounds of assessee’s appeal:
“1. On the facts and in the circumstances of the case and in law the ld. CIT (A) erred in confirming the addition of Rs. 6,29,260/- on a/c of brokerage @ 4% alleged to be earned on sales of plots noted on page No. 1 to 6 of exhibit 9 of Annexure AS seized from Shop No. 8,9,10, Ganesh Nagar-VIA, Murlipura, Jaipur without establishing the fact that such brokerag was actually received or receivable to the assessee. It is contended that Id AO made the addition more so
when the plots mentioned in the seized documents do not pertain to the assessee as the assessee is neither buyer nor seller of such plots.
2. The appellant prays for leave to add, to amend, to delete, or modify the all or any grounds of appeal on or before the hearing of appeal.”
Grounds of revenue’s appeal:
“1. Whether on the facts and in the circumstances of the case and in law the CIT(A) is justified in deleting the addition of Rs. 86,81,500/- made by the A.O. on account of unaccounted business income.
2. The appellant craves, leave or reserving the right to amend modify, alter add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.”
4. Rival contentions have been heard and record perused. Facts in brief are that the assessee is an individual and during the year under consideration derived income from house property, business of property developers, capital gain on sale of plots, interest and other income. Search and seizure operations u/s 132(1) of Income Tax Act, 1961 were carried out by Income Tax department over the assessee group on 19.11.2016. Notice U/s 153A of the Act was issued inresponse to notice issued u/s 153A of the Act, the assessee filed his return of total income on 21.04.2017 declaring total income of Rs. 1,17,30,470/- which was completed by the A.O. at an income of Rs. 2 08,91,970/-. In the assessment order the addition of Rs. 91,61,500/- was made by the AObeing alleged unaccounted business income alleged to be earned on sales of plot at Ganesh Vihar Scheme computed on the basis of noting found on Page 1 to 6 of exihibit-9, Annexure-AS seized from Shop No. 8,9,10, Ganesh Nagar-VIA, Murlipura, Jaipur.
5. By the impugned order, the ld. CIT(A) has deleted the addition of Rs. 85,32,240/- and upheld the addition of Rs. 6,29,260/- after having a followingobservation:
“8. I have perused the written submissions submitted by the Ld. A/R and the order of AO. I have also gone through various judgments cited by the Ld. A/R and those contained in the order of AO. I have also gone through the copies of seized material, pages on the basis of which the AO has proceeded to make an addition of Rs.91,61,500/- being the entire cash component evident from the seized material being the on money received by the appellant hence was taxed in the hands of appellant.
8.2 I am not in agreement with stand taken by the appellant that these documents are dumb document as such document are email found from the office premises of appellant and subsequently statement of Nirmal Kcdia was recorded u/s 131 of the act main portion of which is scanned on page 3 of the order. Since the documents are systematically written and have co relation elsewhere and also there is a statement of partner these cannot be termed as dumb document.
Further I am also not inclined to admit the inference of AO that entire cash component is to be taxed in the hand of appellant for the following reasons:
1. That in the statement itself Shri Nirmal kedia has indicated that appellant is not the buyer or seller in these documents. Infect there are buyers and seller who are well identifiable. The mere presence of sale deed does not conclude that these are plot which are owned by appellant. Fact of ownership as per sale deed and the persons who have purchased is established by appellant by filing the allotment letters and also the necessary affidavit of the seller to whom the plot were sold.
2. That the name of each plot owner and buyer of such plot is mentioned at page 1-3 (APB 70-72). On the main page the sale price of each plot is mentioned. Perusal of these papers reveals all the plot were sold at similar rate irrespective to the fact whether the plot is sold in cash or cheque. On page 1-3(refer APB page 70-72) the word remitted (bank)' and remitted (cash) and total remitted has been mentioned which implies whatever amount is received it has been given to the seller of plot
3. That the AO has not taxed the cheque transaction evident from such seized document in the hand of appellant. It is the cash component which is assumed to be undisclosed income of the appellant. It is a trite law that transaction from the seized document cannot be interpreted
differently. If the cheque transac ion is taxed in the hand of seller, in this case different individual sellers, then cash as evident from the seized document can only be attributable to respective individual sellers.
8.3 Considering the above I am of the view entire cash cannot be taxed in the hands of appellant especially when the cheque undisputedly has gone into different seller as listed. It is only the brokerage which can be taxed, same was admitted by the AO also in the order. The total remittance (cash and cheque as per these pages is as under