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Facts
The appeals stem from a search and seizure operation where 'on money' receipts and unexplained expenditures were discovered. The Assessing Officer (AO) made additions to the total income based on these findings. The assessee contested the validity of the notice under Section 153A as being beyond the limitation period.
Held
The Tribunal held that the notice under Section 153A for assessment years beyond six years is invalid unless there is tangible evidence of undisclosed investment in specified assets. Regarding the 'on money' receipts, the Tribunal restricted the addition to 12.25% of the gross amount, aligning with a settlement commission decision. The addition for unexplained cash expenditure was deleted.
Key Issues
The primary issue was the validity of the Section 153A notice beyond the prescribed time limit. A secondary issue concerned the addition of 'on money' receipts and unexplained expenditures.
Sections Cited
Section 153A, Section 69C, Section 68
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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI PRASHANT MAHARISHI, AM & SHRIRAJ KUMAR CHAUHAN, JM
This is the bunch of three appeals filed by The Assistant Commissioner of Income tax , central Circle -1 (3) , Mumbai [The learned AO] and 2 cross objections filed by the assessee in case of 2 entities namely M/s Bhagwati developers and Shanti enterprises [ Assessee] for two assessment years i.e. assessment year 2012 – 13 and 2015 – 16, involving similar issues arising out of same search, similar arguments of the party contesting similar assessment and appellate orders , therefore, disposed of by this common order. Bhagwati Developers A Y 2012- CO No 80/MUM/2024
First we take up the appeal in case of BHAGWATI DEVELOPERS (the assessee) for assessment year 2012 – 13 wherein ITA number 1346/M/2024 is filed by The Assistant Commissioner Of Income Tax – Central Circle – i. whether on the facts and in the circumstances of the case and in law, the learned CIT (A) is justified in restricting the addition to 12.25% of money of ₹ 64,322,169/– received by the assessee without appreciating the fact that the assessee has failed to submit any detail in respect of the cash receipts and profit element arising cannot be asserted as such. ii. Whether on the facts and in the circumstances of the case and in law, the learned CIT (A) is justified in deleting the addition of unexplained cash expenditure under section 69C of the income tax act, 1961 amounting to ₹ 64,832,240/– without going into the merits of the case discussed in the assessment order.
Assessee is aggrieved and has filed cross objection in CO number 80/M/2024 raising the following grounds of cross objections: – i. on the facts and circumstances of the cross objector's case and in law, the learned CIT A Shanti Developers ITA number 1349/M/2024 and CO number 110/M/2024 (Assessment Year 2012 – 13)
37. The facts in the case of M/S Shanti enterprises in ITA number 1349/M/2024 filed by the learned assessing officer for assessment year 2012 – 13 and cross objection filed by the assessee in CO number 110/M/2024 are identical to the ITA number 1346/M/2024 and CO 80/MUL/2024 for assessment year 2012 – 13 in case of Bhagwati developers.
Assessee being a partnership firm engaged in the business of builders and developers. During the year under consideration assessee was engaged in construction of plot number 09 situated at Ulwe, plot number 06 kharghar, plot number 127 Ulwe and plot number 12 Ghansoli. For this assessment year assessee filed its return of income on 29/9/2015 declaring total income of Rs. 78,550,000/–. The assessee revised it on 31/3/2017 at total income of Rs. 80,073,600/–. Return of income was taken up for scrutiny by issue of notice under section 143 (2) of the act on 28/7/2016.
A survey was conducted on the assessee on 11/3/2017 based on the information received from the office of the ACIT – unit – 2 Mumbai as per letter dated 13/10/2017 regarding bogus unsecured loan taken by the assessee Order pronounced in the open court on 08/10/2024.