DCIT, CENTRAL CIRCLE, DEHRADUN vs. KAMAL GHANSALA, DEHRADUN

In ground No. 1 to 3, the Revenue has challenged deletion of addition of Rs.1,80,98,276/- made on account of difference in the valuation of property declared by the assessee and as determined by the Departmental Valuation Officer (DVO).

Briefly, the facts are, the assessee is a resident individual. For the assessment year under dispute, the assessee filed his return of income on 29.09.2012 declaring income of Rs.3,12,37,010/- in addition to agricultural income of Rs.4,91,230/-. Subsequently, a search and seizure operation was conducted in case of the assessee on 29.11.2013. Pursuant to such search and seizure operation, proceeding under section 153A of the Act was initiated against the assessee. In course of assessment proceedings, the Assessing Officer noticed that as per audited balance sheet appended to the return of income, in the year under consideration, the assessee has purchased a property at Nainital for a declared consideration of Rs.1,22,77,040/-. Whereas, as per valuation of the property done by the bank found in course of search and seizure operation, the value of property has been determine at Rs.3,03,75,316/-. Thus, there was difference in the value of property to the extent of Rs.1,80,98,276/-.

We have considered rival submissions and perused materials on record. From the facts discussed by learned first appellate authority, it is observed that while the assessee has declared the cost of investment in the property at Rs.1,22,77,040/-, the DVO has also determined the value of the property almost matching the value declared by the assessee. Whereas, the Assessing Officer has made the addition purely based on a document seized from the assessee, wherein, the bank has valued the property at Rs.3.03 crores.

In ground No.4, Revenue has challenged deletion of addition of Rs.7,50,000/-, being unsecured loan received by the assessee during the year.

Briefly, the facts are, in course of assessment proceedings, the Assessing Officer noticed that in the year under consideration, the assessee had received unsecured loan aggregating to Rs.1.24 crores from eight persons. Noticing this, he called upon the assessee to prove genuineness of such loan transactions. In response to the query raised, the assessee furnished necessary details in respect of loan transactions. After verifying the details, the Assessing Officer was of the view that the loan transactions are not genuine.

We have considered rival submissions and perused materials on record. In the present appeal, as could be seen from the grounds raised, the Revenue is contesting the deletion of addition of Rs.7,50,000/-, being unsecured loan from one Shri Reshant. It is observed from the discussions made by learned first appellate authority that the assessee has furnished confirmation, copy of Income-tax return, computation of income and bank account of the creditor. He has also furnished ledger account and his own bank account to demonstrate that the loan was repaid in assessment year 2014-15. Thus, as could be seen from the aforesaid finding of fact recorded by learned first appellate authority, the assessee has discharged its burden of proving the loan transaction. Whereas, nothing has been brought on record by the Revenue to disturb the finding of fact recorded by learned first appellate authority. In view of the aforesaid, we uphold the decision of learned Commissioner (Appeals) by dismissing the ground raised. In the result, appeal is dismissed.

In ground No. 1 to 3, Revenue has challenged deletion of addition of Rs.27,38,000/- made by the Assessing Officer on account of difference in valuation of property as declared by the assessee and as determined by the DVO. The issue raised in these grounds is identical to the issue raised in ground No. 1 to 3 of decided by us in earlier part of the order. Thus, our decision therein will apply mutatis mutandis to these grounds as well. Accordingly, grounds are dismissed.

In ground No. 4, Revenue has challenged deletion of addition of Rs.2.00 crores, being unsecured loan received from Shri Rajeev Jain and Smt. Shailbala Jain.

Briefly, the facts are, in course of assessment proceedings, the Assessing Officer noticed that in the year under consideration, the assessee has received unsecured loan from four persons aggregating to Rs.2.10 crores. After examining the details called from the assessee, the Assessing Officer was of the view that the genuineness of the loan transactions could not be proved by the assessee. Accordingly, he added back the amount of Rs.2.10 crores to the income of the assessee. The assessee contested the addition before learned first appellate authority. Being convinced with the submissions of the assessee and evidences furnished, learned Commissioner (Appeals) deleted the addition.

We have considered rival submissions and perused materials on record. As could be seen, in the present appeal, Revenue is contesting deletion of addition of Rs.2.00 crores, being unsecured loan taken from Shri Rajeev Jain and Smt. Shailbala Jain. From the facts on record, it is observed, in pursuance to an agreement of sale in respect of a property at Dehradun, the assessee had received advance of Rs.2.00 crores from Shri Rajeev Jain and Smt. Shailbala Jain. As per the terms of the agreement, total sale consideration to be received by the assessee was to the tune of Rs.4.00 crores, out of which, the assessee received Rs.2.00 crores. However, the sale transaction could not fructify and ultimately, has to be cancelled. On cancellation of agreement to sale, the assessee has also returned back the amount of Rs.2.00 crores to Shri Rajeev Jain and Smt.

Other grounds raised by the Revenue, being general grounds, do not require adjudication.

The only effective ground raised by the Revenue relates to deletion of addition of Rs.2.75 crores made to the income of the assessee on account of voluntary surrender of income at the time of search and seizure operation.

Briefly, the fats are, in course of assessment proceedings, the Assessing Officer noticed that in course of search and seizure operation, a statement u/s. 132(4) of the Act was recorded from the assessee, wherein, the assessee declared additional income of Rs.2.75 crore and also offered to pay advance tax of Rs.84,94,500/- through post dated cheques. Even, in course of post search proceedings, the assessee made declaration to offer the amounts surrendered in the statement u/s. 132(4) of the Act as income for the assessment year 2014-15. However, in the return of income filed, the assessee did not offer the amount to tax. Considering the above, the Assessing Officer added back the amount of Rs.2.75 crores to the income of the assessee. The assessee contested aforesaid addition before learned first appellate authority. Being convinced with the submissions of the assessee, learned Commissioner (Appeals) deleted the addition.

We have considered rival submissions and perused materials on record. A reading of the assessment order reveals that presuming that the assessee has offered the additional income of Rs.2.75 crores in assessment year 2014-15, the Assessing Officer made the addition. However, the facts on record speak something else. As could be seen from the statement recorded from the assessee in course of search and seizure proceedings, a copy of which is placed in paper book, the assessee had never stated that the entire amount of Rs.2.75 crores would be offered in assessment year 2014-15. The assessee has clearly stated that the amount will be offered as additional income not only for the assessment year 2014-15, but to cover any leakages or discrepancies found or that may be noticed during the course of search held on 21.11.2013. Further, in an affidavit filed before the Joint Director of Income Tax (Investigation), Dehradun in course of post search proceedings, the assessee reiterated its earlier stand and stated that the additional income offered is not only by the assessee but other concerns managed by the assessee and for discharge of tax liability in any year, in which, the revenue leakage may be found in course of search and seizure proceedings. Thus, the allegation of the Assessing Officer that the assessee has offered the amount of Rs.2.75 crores in the impugned assessment year is unfounded. From the factual finding of learned first appellate authority, it is further evident that the assessee has followed up his declaration of additional income at the time of search and seizure proceedings by disclosing additional income of Rs.1,41,50,000/- in assessment years 2008-09 to 2013-14 and has further surrendered an amount of Rs.1,77,47,000/- as income for the assessment year 2008-09 to 2013-14 in course of proceedings before the first appellate authority. Thus, effectively, the assessee has offered additional income of Rs.2,78,97,000/- in assessment years 2008-09 to 2013-14. The aforesaid factual finding recorded by learned first appellate authority remains uncontroverted before us. In view of the aforesaid, we do not find any valid reason to interfere with the decision of learned first appellate authority. Accordingly, we dismiss this ground.

Other grounds raised by the Revenue, being general in nature, do not require specific adjudication. Appeal is dismissed.

To sum up, all the appeals are dismissed.