GOPAL S. PANDITH vs. DCIT,

Per Shri Vijay Pal Rao, J.M. : These five appeals by the assessee are directed against the composite order

of Commissioner of Income Tax (Appeals) dt.19.5.2013 arising from Assessment

Order passed under Section 153 r.w.s. 143(3) of the Income Tax Act, 1961 (in

short 'the Act') from 20.5.2006 to A.Y. 2009-10 respectively.

2 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 2. First we take up the appeal for Assessment Year 2005-06 wherein the

assessee has raised the following grounds :

3 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 9. The ld. Commissioner of Income tax (Appeals) erred in upholding the levy of interest u/s. 234 8 as consequential. The appellant crave leave of the Hon'ble Tribunal to raise such other ground or grounds at the time of hearing.”

Section 153A of the Act due to non-offering an opportunity of being heard to

the assessee before approving the assessment order.

as per the provisions of section 153D of the Act no order of assessment or

reassessment under Section 153A shall be passed by the Assessing Officer

below the rank of Joint Commissioner without prior approval of the Joint

Commissioner. The learned Authorised Representative has submitted that the

assessee ought to have been given an opportunity of hearing before granting

the approval under Section 153A r.w.s. 153D and therefore the alleged

approval is not valid and consequently assessment order passed under Section

153A is invalid and liable to be quashed. In support of his contention, he has

relied upon the decision dt.30.3.2012 of Pune Bench of this Tribunal in the case

of Akhil Ghulamali Somji Vs. ITO in ITA Nos.455 to 458/PN/2010. Thus the

4 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 learned Authorised Representative has pleaded that in the absence of proper

approval the assessment is liable to be set aside.

submitted that there is no requirement of any opportunity of being heard to

the assessee at the time of approval of the Joint Commissioner for framing the

assessment under Section 153A. The learned Departmental Representative

has further submitted that the assessee has not disputed that the Assessing

Officer got the approval of the Joint Commissioner before passing the

impugned assessment under Section 153A and therefore there is no error or

illegality in the order of the assessment.

on record. The assessee has challenged the validity of assessment order

passed under Section 153A on the ground that the assessee was not given an

opportunity of hearing prior to grant of approval by the Joint Commissioner for

framing the assessment under Section 153A of the Act. The learned Authorised

Representative has placed reliance on the provisions of section 153D of the Act

as well as the decision in the case of Akhil Ghulamali Somji Vs. ITO (supra). For

ready reference we quote the Sectin153D as under :

5 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 “ 153D. No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section (1) of section 153A or the assessment year referred to in clause (b) of sub- section (1) of section 153B, except with the prior approval of the Joint Commissioner: Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the Commissioner under sub-section (12)of section 144BA.”

The plain reading of the provisions of section 153D reveals that there is a

requirement of taking approval by Assessing Officer below the rank of Joint

Commissioner before passing an assessment order under Section 153A of the

Act from Joint Commissioner. Therefore the condition mandated under Section

153D of the Act does not indicate that such approval must be given after

hearing the assessee on the issue of approval. Thus we find that there is no

such requirement of granting an opportunity of hearing to the assessee by the

Joint Commissioner prior to giving the approval as per Section 153D of the Act

of order of assessment or reassessment under Section 153A of the Act. Pune

Bench of this Tribunal in the case of Akhil Ghulamali Somji Vs. ITO (supra) has

held in paras 13 & 14 as under :

“ 13. In the case of CIT Vs. Ratnabai N.K. Dubhash (Mrs.) (Supra), the difference between cancellation and amendment of assessment in view of the provisions of Sections 143, 144B, 153 and 251 of the I.T. Act 1961 has been dealt with. The Hon’ble High Court has been pleased to hold as under : “In view of the above discussion, we are of the clear opinion that incases falling under section 144B of the Act, the quasi-judicial function of the Income-tax Officer as an assessing authority

6 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 comes to an end the moment the assessee files objections to the draft order. The power to determine the income of the assessee thereafter gets vested in the Inspect-ing Assistant Commissioner to whom the Income-tax Officer is required to forward the draft order together with objections. The only thing that remained to be done by the Income-tax Officer is to pass a final order in accordance with the directions given by the Inspecting Assistant Commissioner. The function of the income-tax Officer to make the final assessment under section 144B(5) of the Act is more in the nature of a ministerial function because he can pass the order only in accordance with the directions of the Inspecting Assistant Commissioner. He cannot vary ordepart from the directions given by the Inspecting Assistant Commissioner. Moreover, the requirements of section 144B of the Act re mandatory. The Income-tax Officer has no option but to follow the same. He cannot make the final order on the basis of the draft order without forwarding the same to the Inspecting Assistant Commissioner along with the objections and without obtaining the directions of the Inspecting Assistant Commissioner. An assessment made by the Income-tax Officer in violation of the provisions of section 144B of the Act would be an assessment without jurisdiction. In the instant case, the admitted position is that on receipt of the draft order of assessment, the assessee did file objections and the Income-tax Officer completed the assessment himself on the basis of the draft order without forwarding the draft order and the objections to the Inspecting Assistant Commissioner and obtaining directions from him. Such an order, on the face of it, is beyond the powers of the Income-tax Officer under section 143 read with section 144B of the Act and, hence, without jurisdiction. The Tribunal, in our opinion, was, therefore, justified in its conclusion that the assessment was liable to be annulled. It was right in holding that the assessment order passed by the Income- tax Officer the instant case without reference to the Inspecting Assistant Commissioner had rightly been annulled by the Commissioner of Income-tax (Appeals). In view of the above, we answer the question referred to us accordingly in favour of the assessee and against the Revenue. This reference is disposed of accordingly with no order as to costs." 14. In the case of CIT Vs. SPL’s Siddharth Ltd. (Supra), before the Hon’ble Delhi High Court, the facts were that notice issued by the A.O u/s. 147 r.w.s 148 of the Act for re-opening the assessment for the A.Y. 2002-03 was set aside by the Tribunal on the ground that the requisite approval of Addl. Commissioner of Income Tax, which is mandatorily required, was not taken. Since 4 years had elapsed from the end of the relevant A.Y, the A.O u/s. 151(1) of the Act was required to take approval of the competent authority. The Hon’ble Delhi High Court after discussing the issue in detail and the case laws cited before it has been pleased to approve the decision of Tribunal. In view of these decisions and the position of law provided u/s. 153D of the Act, we hold that the assessment orders impugned framed in absence of obtaining prior approval of the Joint Commissioner for the A.Ys. under consideration are invalid as null and void and are quashed accordingly.”

Thus it is clear that the issue before the Tribunal in the case of Akhil Ghulamali

Somji Vs. ITO (supra) was passing the assessment order under Section 153A of

7 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 the Act without prior approval of the Joint Commissioner. There is no quarrel

on that proposition of law and the grievance of the assessee is only non-grant

of opportunity of hearing to the assessee and not that the assessment order

passed by the Assessing Officer without approval. The assessee has not raised

this issue or disputed the approval granted by the Joint Commissioner.

Accordingly, in view of our above discussion this ground raised by the assessee

is bereft of any merit or substance and the same is rejected.

section 153A by issuing a notice under Section 153A of the Act.

the Assessing Officer has provided less than 15 days in the notice issued under

Section 153A of the Act to file the return of income which is contrary to the

minimum period of 15 days provided under the statute. He has referred to the

provisions of section 158BC of the Act and submitted that the period prescribed

for filing the return shall not be less than 15 days but not more than 45 days.

Therefore the notice issued under Section 153A of the Act is invalid as the

assessee was not given the minimum period of 15 days and further when there

is no reason recorded by the Assessing Officer for providing the period less

8 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 than 30 days renders the notice issued under Section 153A of the Act is invalid

and consequently the assessment is liable to be quashed.

submitted that there is no such minimum time period is provided under Section

153A rather the return of income is required to be filed within a period as

provided in the notice itself issued under Section 153A of the Act. He has

referred to the provisions of section 153A and submitted that the provisions

itself is simple and clear and therefore no such condition can be imported in

the provision when nothing is provided of giving the minimum period of 15

days for filing the return of income. He has further contended that even

otherwise the assessee has filed the return of income after about 5 months

from the date of notice issued under Section 153A of the Act which was

considered by the Assessing Officer and therefore the assessee cannot take a

plea that the assessee was not given the minimum period of 15 days.

on record. As regards the time period within which the assessee is required to

furnish the return in response to notice under Section 153A is concerned, we

9 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 find that there is no such time specified in the provisions of section 153A(1)(a)

which reads as under :

“ 153A. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall— (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139;”

Thus the language of the provision is plain and unambiguous and the assessee

is required to furnish the return within such period as prescribed in the notice

itself. Therefore there may be issue of reasonable time period in the notice

however it cannot be termed as not less than 15 days. The reasonable time

period depends on the facts and circumstances of the case. Therefore the

minimum period of 15 days as contended by the assessee cannot be imported

to the provisions of Sections 153A(1)(a) when this provision begins with a non-

obstante clause then the provisions of sections 139, 147, 148, 149, 151 and

153 shall have no over-riding effect on this provision. When the new provisions

for assessment or reassessment in case of search under Section 132 of the Act

10 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 was introduced and the legislature has intentionally not provided any such

minimum time period allowing the assessee to furnish the return of income

than the time period provided under Section 158BC cannot be read into this

section. Even otherwise we find that the notice under Section 153A(1)(a) was

issued on 24.9.2009 wherein the Assessing Officer has given time period for

furnishing the return as 30 days from the date of service of notice. Even

otherwise the period of 30 days provided by the Assessing Officer for furnishing

the return of income is a reasonable period. Further the assessee furnished its

return of income in response to the said notice under Section 153A only on

3.2.2010 which is more than 4 months after the date of issue of notice under

Section 153A. In view of the facts and circumstances when the Assessing

Officer has granted 30 days to furnish the return in response to the notice

under Section 153A and thereafter the assessee furnished the return only after

more than 4 months which was accepted by the Assessing Officer, the objection

raised by the assessee is devoid of any merit or substance and therefore

rejected.

Act.

11 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 12. The learned Authorised Representative of the assessee has submitted

that the Assessing Officer issued a notice under Section 143(2) after filing the

return in response to notice under Section 153A of the Act however, the

Assessing Officer chose to consider the return originally filed by the assessee

under Section 139 of the Act and therefore the notice issued by the Assessing

Officer under Section 143(2) relates to the original return filed by the assessee

under Section 139 of the Act and not relates to the return filed under Section

153A. Thus the learned Authorised Representative has submitted tht the

assessment framed under Section 153A of the Act is without jurisdiction and

liable to be cancelled. He has referred to the assessment order and submitted

that the Assessing Officer took the return of income while computing the total

income of the assessee from the return filed under Section 139 and not from

the return filed under Section 153A of the Act.

submitted that the Assessing Officer has clearly mentioned in the assessment

order that the total income declared by the assessee in the original return filed

under Section 139 was Rs.4,37,080 however in the return of income in

response to the notice under Section 153, the assessee has declared a net

12 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 income of Rs.4,20,460 which is less than the income declared in the original

return. Therefore, by considering the income declared by the assessee in the

original return filed under Section 139 was consciously taken into consideration

by the Assessing Officer and which does not mean that the notice issued under

Section 143(2) of the Act after the return of income filed by the assessee in

response to the notice under Section 153A is a notice under Section 143(2) in

respect of the original return.

on record. The objection of the assessee against the notice under Section

143(2) is purely based on one fact that while computing the total income of

the assessee, the Assessing Officer took the return of income declared in the

original return filed under Section 139 of the Act. We find that the assessee

filed the return of income on 03.02.2010 in response to notice issued under

Section 153A. Subsequently a notice under Section 143(2) was issued on

10.2.2010. Therefore, it is manifest from the facts of the case that the notice in

question was issued only after the return of income filed by the assessee in

response to notice under Section 153A and it cannot be said that the said

notice issued under Section 143(2) was in relation to the original return when

13 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 the time period for issuing notice was already expired. Therefore there cannot

be any correlation between the total income computation and notice issued

under Section 143(2) so claimed by the assessee. The Assessing Officer has

discussed this issue in para 6 and pointed out that in the return filed in

response to the notice under Section 153A the assessee has declared les

income than income declared in the original return filed under Section 139 of

the Act and therefore the Assessing Officer took the total income returned by

the assessee as declared in the original return while computing the total

income. When the notice under Section 143(2) was issued after the return of

income filed by the assessee in response to notice under Section 153A and

further there was no time available to the Assessing Officer to issue notice on

the original return of income then in the facts and circumstances of the case we

find that the notice in question was issued only in respect of the return filed by

the assessee under Section 153A of the Act. Hence this ground of the assessee

is rejected.

land is assessed as income from business instead of capital gains. The assessee

earned an income of Rs.11,97,996 from sale of Adyar Site. The assessee

14 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 claimed the said income as capital gains and also claimed deduction under

Section 54B of the Act. The Assessing Officer found that the income is taxable

not as Short Term Capital Gains (‘STCG’) but as income from profit and gain of

business. The Assessing Officer accordingly rejected the claim of deduction

under Section 54B by holding that the said property was not an agriculture

land. The assessee challenged the action of the Assessing Officer before the CIT

(Appeals) but could not succeed as the CIT (Appeals) has confirmed the finding

of the Assessing Officer by considering the fact that the asset in question was

shown as business asset in the books of accounts. Further a substantial

improvement has been made in the said property. The CIT (Appeals) again

recorded the fact that the interest paid on the land obtained for the said

property has not been capitalized but claimed against the regular income. In

the Wealth Tax Return, the assessee has shown this property as taxable asset

even after the search in question and issuing a questionnaire to the assessee.

Further the assessee has reported his nature of business as land developer and

promoter. Accordingly, the CIT (Appeals) held that the income from sale of the

property in question is taxable under the head ‘profit and gains of the

15 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 business’. Consequently, the claim of deduction under Section 54B was also

denied.

submitted that in the original return of income the assessee has shown this

income as capital gains and there was no incriminating material found during

the search to warrant the addition of this amount by treating the same as

income being profit and gain from business and profession. The learned

Authorised Representative of the assessee has submitted that when the time

limit for issuing the notice under Section 143(2) was expired on the date of

search then the assessment was not pending but was already over as on the

date of search and proceedings under Section 153A are in the nature of

reassessment as the original assessment for the year under consideration did

not get abate. He has referred the return of income filed under Section 139

and submitted that the original return was filed on 29.10.2005 and therefore

the time limit for issuing notice under Section 143(2) was already expired on

the date of search on 13.2.2009. Hence the assessment was not abated and in

the absence of any fresh material, no addition can be made by the Assessing

Officer. He has relied upon the decision dt.15.6.2014 of Delhi Bench of this

16 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 Tribunal in the case of Sanjay Agarwal in ITA No.3184/Del/2013 and submitted

that the scope of determining the total income in the reassessment famed

under Section 153A is only addition of amounts those flow from the

incriminating material found during the course of search.

submitted that the assessee has claimed the exemption under Section 54B in

the return filed in response to the notice issued under Section 153A therefore

this is a fresh claim made by the assessee in the return filed under Section

153A and further the assessee has offered himself as income of STCG from sale

of agriculture land. He has relied upon the orders of the authorities below and

submitted that when the assessee has shown this property in question as

business asset then the sale of same will give rise to the business income and

not as capital gain. Even if it is treated as capital gain, it will be STCG as

admitted by the assessee and the deduction under Section 54B of the Act

cannot be allowed when the land has not been used for atleast two years prior

to the sale for agriculture purpose.

material on record. We find that there is no tax effect even if the income from

17 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 sale of this property is treated as STCG instead of business income treated by

the Assessing Officer and the only difference is because of the claim under

Section 54B of the Act. There is no dispute that the land in question was not

used for agriculture purpose in the two years immediately preceding the date

on which the transfer took place. Therefore mandatory condition of use of the

land for agriculture purposes for two years immediately prior to the sale is not

specified. Once the assessee failed to satisfy the condition under Section 54B

for availing the deduction then the issue of treatment of the income as business

income or STCG becomes academic in nature being revenue neutral.

Accordingly, in the facts and circumstances of the case, we dismiss these

grounds of the assessee's appeal.

Assessment Year 2006-07 19. For the Assessment Year 2006-07, the assessee has raised following grounds : “ 1. The learned Commissioner of income Tax (appeals) erred in holding that non issue of an opportunity of being heard by the Additional Commissioner before approving an order of assessment u / s . 153A r.w.s. 143(3: of the Act will not vitiate assessment proceedings completed u/s. 153A r.w.s. 143(3) of the Act.

18 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 3. The learned Commissioner of Income Tax(Appeals) ought to have held the notice issued ix] s 153A of the Act, is illegal since return is called without granting statute recognised period for compliance and there is no reasons either recorded or communicated to know how the learned Assessing authority has exercised his discretion for compliance to the notice u / s . 1534A of the Act. 4. The appellant respectfully submits a period of clear 30 days to 45 days was considered reasonable for compliances with regard to filing of return in response to notices. 5. The learned Commissioner of Income Tax (Appeals) ought to have held the notice issued vi] s 143(2) of the Act, relates to the original return flied u/s.139 of the Act and not to the proceedings initiated u / s . 153A of the Act, since the learned Assessing Authority has considered the income returned in the original return. 6. The learned Commissioner of Income Tax (Appeals) erred in upholding the adoption of income under head "POOJA" at Rs.35,00,000/- as against Rs.3,22,553/-admitted by appellant, rejecting the appellant's contention that the offer is Gross receipt and not net income. 7. The Learned Commissioner of Income Tax (Appeals) erred in holding the loan from Mr. Sunil Patil is assessable as unexplained Credit for the assessment year 2006-07.

19 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 20. Ground Nos.1 & 2 are regarding validity of assessment on the ground of

non-grant of opportunity of hearing to the assessee for granting approval by

the Joint Commissioner. This issue is identical to the issue involved in Ground

Nos.1 & 2 of the Assessment Year 2005-06. In view of our finding on this issue

for the Assessment Year 2005-06, these grounds of the assessee’s appeal stand

dismissed.

Section 153A on the ground that the assessee was not given a clear 30 days

notice. This issue is identical to the issue involved in Ground Nos.1 & 2 of the

Assessment Year 2005-06. In view of our finding on this issue for the

Assessment Year 2005-06, these grounds of the assessee’s appeal stand

dismissed.

from performing Pooja. The Assessing Officer noticed that the assessee has not

disclosed the income for performing Pooja in the original return filed before the

20 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 date of search. In response to the notice under Section 153A, the assessee

declared income from Pooja of Rs.3,22,553 on the gross receipts of

Rs.14,75,000 after claiming expenses of Rs.11,52,447. During the course of

search, document No. A/GSP/2 dt.13.2.2009 was seized and as per the noting in

page 36 to 38 of this seized document, the assessee earned income of Rs.35

lakhs for the Assessment Year 2006-07. In the statement recorded under

Section 32(4) on 13.2.2009, the assessee stated that the assessee earned

substantial income from Pooja in the form of cash and the same has not been

disclosed in the income tax return. Accordingly, the assessee admitted the

receipt from Pooja income for the Assessment Year 2006-07 of Rs.35 lakhs for

the Assessment Year 2007-08 of Rs.20 lakhs and for the Assessment Year 2008-

09 of Rs.20 lakhs. Thus the assessee admitted the total income from Pooja for

three assessment years at Rs.75 lakhs. Vide letter dt.6.4.2009 the assessee

retracted his admitted income from Pooja and submitted that the actual

income from Pooja is only Rs.10,12,800 on the gross receipts of Rs.50,64,000

for the Assessment Years 2006-07 to 2008-09. Hence the assessee retracted its

earlier statement recorded on 13.2.2009. The Assessing Officer again recorded

the statement of assessee on 13.4.2009 wherein the assessee has took a stand

21 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 that after reducing the expenses from the admitted Pooja income for the

Assessment Year 2006-07 is only of Rs.18,29,800. The Assessing Officer did not

accept the contention of the assessee and made the addition of Rs.35,00,000 as

disclosed by the assessee in the statement recorded on 23.2.2009. The

assessee challenged the action of the Assessing Officer before the CIT (Appeals)

but could not succeed.

submitted that the original return under Section 143(3) was concluded and

therefore, in the absence of any incriminating material, no addition can be

made on the basis of the statement recorded during the search. He has further

contended that the assessee has immediately after the statement recorded on

13.2.2009 filed a letter dt.6.4.2009 and explained that the actual gross receipts

from Pooja was Rs.50,64,000 for all the three years for the Assessment Years

2006-07 to 2008-09. Further the Assessing Officer recorded the statement on

13.4.2009 wherein the assessee has explained that the actual gross receipts for

the three assessment years is Rs.50,64,000 and after reducing the expenses

actual income from Pooja was only Rs.10,12,800. The learned Authorised

Representative has further submitted that for the Assessment Year 2009-10,

22 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 the Assessing Officer has relied upon a different document being seized

material wherein the Pooja income for the Assessment Year 2006-07 is shown

only Rs.15 lakhs. Thus the learned Authorised Representative has submitted

that when the Assessing Officer has relied upon two different materials for the

purpose of making addition in different years which shows different amounts of

income then the addition made by the Assessing Officer without corroborating

evidence of correct Pooja income is not sustainable.

submitted that the addition is not based merely on statement recorded under

Section 132(4) of the Act but there is a seized material clearly showing the

income of the assessee from Pooja at Rs.35 lakhs for the year under

consideration. The assessee has not disputed the seized material therefore, a

subsequent retraction of the assessee is nothing but an after thought without

any supporting evidence. He has relied upon the orders of authorities below.

Departmental Representative and considered the relevant material on record.

The first objection by the learned Authorised Representative is that the original

assessment was completed under Section 143(3) and in the reassessment

23 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 under Section 153A, no addition can be made except based on seized material.

We find that the Assessing Officer has placed a copy of the seized material at

page 10 of the assessment order which clearly shows different entries recorded

by the assessee including an entry of Mandir and Pooja of Rs.35 lakhs for the

F.Y. 2005-06. Therefore, the addition made by the Assessing Officer is not based

merely on statement recorded under Section 132(4) of the Act. It is pertinent

to note that the assessee in the statement had estimated the undisclosed

income of Rs.75 lakhs for 3 assessment years under consideration which

matches the figures and amounts shown in the seized document relating to

Pooja income of Rs.35 lakhs, Rs.20 lakhs and Rs.20 lakhs for the Assessment

Year 2006-07 to 2008-09 respectively. We find that there is no ambiguity in the

statement of assessee regarding the Pooja income which has been clearly

corroborated by the seized material. Thus when there is a sufficient evidence

being seized material which corroborates the statement of the assessee

recorded under Section 132(4) on 23.2.2009 then the subsequent retraction of

the statement by the assessee withut any corroborating evidence cannot be

accepted as the assessee has not explained the facts and circumstances under

which he had admitted a wrong income in the statement and how the income

24 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 shown in the seized material is not correct. Therefore mere retraction of

statement without explaining the circumstances as well as corroborating

evidence, it cannot be accepted being an after thought. Accordingly, we do not

find any substance in this ground of the assessee and the same is dismissed.

Mr. Sunil Patil as unexplained credit.

31.3.2006. The Assessing Officer made enquiry at the address furnished by the

assessee by issuing a notice under Section 133 dt.6.8.2010. However the said

letter was returned unserved with the remark unclaimed. When the assessee

was confronted with this evidence, he mentioned that whereabouts of Mr.

Sunil Patil was not known however, payment was received through cheques

and therefore, it was pleaded that genuineness cannot be doubted. Since the

assessee failed to discharge its onus to prove the genuineness / identity and

credit-worthiness of the creditor, the Assessing Officer made addition of the

said amount as undisclosed income. On appeal, the CIT (Appeals) has allowed

telescoping to the extent of Rs.35 lakhs being the addition made on account of

Pooja income and confirmed the remaining addition of Rs.7 lakhs.

25 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 30. Before us, the learned Authorised Representative has submitted that the

original assessment was completed under Section 143(3) wherein the Assessing

Officer accepted the credit in the name of Mr. Sunil Patil and therefore in the

absence of any seized material during the search, the addition is not warranted.

He has relied upon the decision of Hon’ble Delhi High Court in the case of Anil

Kumar Bhatia 352 ITR 493 (Del).

upon the orders of the authorities below and submitted that this issue was not

examined by the Assessing Officer while passing the order under Section 143(3)

of the Act.

on record. There is no quarrel on the proposition that if the assessment for a

particular assessment year is not pending as on the date of search then it

willmay not abate because of the search and seizure action under Section 132

of the Act but the Assessing Officer shall reassess the total income of the

assessee. Therefore if during the search proceedings no incriminating material

or other evidence found then a particular income or item of income which is

accepted in the assessment under Section 143(3) cannot be reassessed. In the

26 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 case on hand though the assessee has submitted that the Assessing Officer

accepted the credit in the name of Mr. Sunil Patil of Rs.42 lakhs and there is no

evidence or seized material found during the search to support the undisclosed

income. However from the record produced before us, we find that the

assessee has filed a return of income on 3.2.2010 along with the Balance Sheet

wherein this amount of unsecured loan in the name of Mr. Sunil Patil has been

shown and it is not clear whether this record was filed by the assessee along

with the return of income filed on 24.11.2006 on which the assessment was

completed for the year under consideration. Accordingly, we direct the

Assessing Officer to verify whether this unsecured loan in the name of Mr.

Sunil Patil was duly disclosed in the return filed on 24.11.2006 or during the

assessment proceedings completed vide order dt.21.11.2008. This issue is set

aside to the record of Assessing Officer for proper verification and re-

adjudication.

grounds :

“ 1. The learned Commissioner of income Tax (appeals) erred in holding that non issue of an opportunity of being heard by the Additional Commissioner before approving an order of assessment u/s 153A r.w.s.

27 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 143(3) of the Act will not vitiate assessment proceedings completed u/s 153A r.w.s. 143(3) of the act. 2. The action of the learned CIT (A) is contrary to the procedure contemplated by the CBDT. 3. The learned Commissioner of Income Tax(Appeals) ought to have held the notice issued u/s 153A of the Act, is illegal since retum is called without granting statute recognised period for compliance and there is no reasons either recorded or communicated to know how the learned Assessing authority has exercised his discretion for compliance to the notice u / s 1534A of the Act.

28 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 under Section 143(2) was issued and time to issue such a notice had expired. 9. The Learned Commissioner of Income Tax (Appeals) erred in upholding the disallowance made u/s. 40A(3) of the Act without considering the contention that section 40A(3) is not applicable and addition is not warranted. 10. The Learned Commissioner of Income Tax (Appeals) e r r ed in upholding the addition of Rs.3 lakhs made applying the provisions of section 69B of the Act. 11. The Learned CIT(A) ought to considered the repayment of loan to Mr. Sunil Patil as available for set of, having held the loan borrowed from Mr. Sunil Patil is not genuine. 12. The learned Commissioner of Income tax (Appeals) erred in upholding the levy of interest u / s . 234 B as consequential. The appellant crave leave of the Hon'ble Tribunal to raise such other ground or grounds at the time of hearing.”

153A on the ground of non-grant of opportunity of hearing to the assessee for

granting approval by the Joint Commissioner. This issue is identical to the issue

involved in Ground Nos.1 & 2 of the Assessment Year 2005-06. In view of our

finding on this issue for the Assessment Year 2005-06, these grounds of the

assessee’s appeal stand dismissed.

29 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 35. Ground Nos.3 & 4 are regarding the validity of notice issued under

Section 153A on the ground that the assessee was not given a clear 30 days

notice. This issue is identical to the issue involved in Ground Nos.1 & 2 of the

Assessment Year 2005-06. In view of our finding on this issue for the

Assessment Year 2005-06, these grounds of the assessee’s appeal stand

dismissed.

not pressed.

Pooja. This issue is identical to the issue involved in Ground Nos.1 & 2 of the

Assessment Year 2005-06. In view of our finding on this issue for the

Assessment Year 2005-06, these grounds of the assessee’s appeal stand

dismissed.

as not pressed.

Act.

30 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 40. During the course of assessment proceedings, the Assessing Officer

asked the assessee to provide all the expenses claimed in excess of Rs.20,000.

The assessee vide letter dt.27.10.2010 submitted that details will be filed in due

course however the assessee did not furnish any such requisite information to

the Assessing Officer. Accordingly, the Assessing Officer took the information

regarding the payments in excess of Rs.20,000 in cash from the ledger account

of the assessee and made an addition of 20% of Rs.4,30,800 amounting to

Rs.86,160 under Section 40A(3) of the Act.

amount taken out by the Assessing Officer from the ledger account has not

been claimed as business expenditure and therefore the same cannot be

disallowed under Section 40A(3) of the Act. He has further contended that this

is also a double addition as an amount of Rs.3 lakhs in the name of Smt. Vani

Mahesh was also added by the Assessing Officer under Section 69B of the Act

as unexplained investment.

contended that there is no double addition as far as this amount of Rs.3 lakhs in

the name of Smt. Vani Mahesh. He has referred to the finding of CIT (Appeals)

31 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 and submitted that the addition made on account of unexplained credit is a

different transaction. He has relied upon the orders of the authorities below.

record, we find that the Assessing Officer made the addition under Section

40A(3) of the Act when the assessee has not furnished the details of the

expenditure of more than Rs.20,000 in cash. The Assessing Officer took the

figures from the ledger account however, the assessee claimed that the

amount was not claimed as a business expenditure therefore it cannot be

disallowed. Further the assessee also claimed that this is a double addition of

the same amount of Rs.3 lakhs in the name of Smt. Vani Mahesh as the

Assessing Officer has made an addition on additional investment under Section

69B of Rs.3 lakhs. Since the relevant record has not been examined by the

Assessing Officer and also not available before us therefore in the facts and

circumstances of the case, we set aside this issue to the record of Assessing

Officer for proper examination of the relevant record as well as the details to

be filed by the assessee and then decide the same after affording an

opportunity of hearing to the assessee.

32 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 44. The assessee has also raised an additional ground which reads as under :

“1. The learned CIT (Appeals) erred in holding that the addition of Rs.39,00,000 has been made on seized material and payments have been made to Mr. Hiren Kumar Patel. Order of the learned CIT (Appeals) is opposed to law.” 45. We have heard the learned Authorised Representative as well as learned

Departmental Representative and considered the relevant material on record.

This is not a new plea raised by the assessee before us but this addition was

made by the Assessing Officer based on the seized material and the assessee

has also challenged the action of the Assessing Officer before the CIT (Appeals)

however in the ground raised before us in Form 36, the assessee did not raise

this ground in the original ground filed along with Form 36. Thus we find that

inadvertently the assessee could not raise this ground which has arisen from

the impugned orders of the authorities below. Having regard to the facts and

circumstances when this ground is arisen from the impugned orders then we do

not find any reason for not admitting the ground for adjudication on merit.

Hence we admit the additional ground for adjudication on merit.

of page 75 of the seized material, the Assessing Officer noted that the assessee

has paid total amounting to Rs.19 lakhs to one Mr. Hiren Kumar Patel. The

33 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 assessee claimed that the figure written as 19 represents only Rs.19,000 and

not Rs.19 lakhs. The Assessing Officer noted that the amount mentioned in the

seized material are in the form of abbreviation and which represent the

amount in lakhs, not in thousands. The Assessing Officer has observed that the

assessee himself has written Rs.19 lakhs in the form of “19”. Therefore the

Assessing Officer treated this amount as Rs.19 lakhs as against the claim of

Rs.19,000. The CIT (Appeals) has confirmed the action of the Assessing Officer.

submitted that there is nothing on record to prove that the assessee has paid

the alleged amount of Rs.58 lakhs to Mr. Hirenkumar Patel. He had submitted

that the amounts noted down in the margins of the diary entry rewritten in

thousands and not in lakhs. He has submitted that these amounts in the

margin clearly shows that they represent entries in the diary and not an extra

payment which is not recorded in the said diary. The assessee right from the

beginning has explained this before the Assessing Officer. He has not paid the

alleged amount of Rs.58 lakhs as stated by the Assessing Officer what the

payments were made, the same were recorded in the books of account. The

learned Authorised Representative has submitted that the payments made

34 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 during the year under consideration were only Rs.82.50 lakhs and the same is

recorded in the books of account. There is no material on record to say that

the assessee has taken the said sum of Rs.58 lakhs from Mr. Hirenkumar Patel.

The learned Authorised Representative has further submitted that it is only an

allegation and assumption of the Assessing Officer and not a real transaction of

payment made by the assessee.

submitted that the Assessing Officer has analysed the entries at page No.75 of

the seized material as reproduced by the Assessing Officer at page 30 of the

assessment order from which it is clear that the assessee has paid a sum of

Rs.18 lkahs on 7.8.2006 and again paid Rs.1 lakh on 18.8.2006, total amounting

to Rs.19 lakhs which has been written in the margin as a figure of 19. Therefore

the remaining amount written in the margin in the abbreviated form represents

the amounts in lakhs and not in thousands as claimed by the assessee. He has

relied upon the orders of the authorities below.

on record. The Assessing Officer made total addition of Rs.58 lakhs on account

of undisclosed investment being payment made by the assessee out of the

35 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 books to one Mr. Hirenkumar Patel. The CIT (Appeals) while confirming the

addition has granted the benefit of telescoping to the extent of an addition of

Rs.39 lakhs on account of Pooja income and therefore confirmed addition of

remaining amount of Rs.19 lakhs. The limited controversy before us is whether

the abbreviated or coded amounts written in the margins of the diary at page

75 of the seized material represents the amounts in lakhs or in thousands. The

Assessing Officer has considered these amounts as payments made by the

assessee in lakhs and therefore calculated the total payment made by the

assessee out of books of Rs.58 lakhs. For ready reference we reproduce the

entries as well as the numbers written in the margin of the seized documents at

page No.75 which is reproduced by the Assessing Officer at page 30 of the

assessment order as under :

HIREN KUMAR NAVINCHANDRA

04-08-2006 Ch.No.055331 of the Dhanalakshmi Bank and 16,65,000 M.G.Road. 1,00,000 17,65,000 07-08-06 Cash 35,000 18,00,000 18-08-06 Ch.No.55339 of the Dhanalakshmi Bank and M.G. 1,00,000 +5 Road 19+1+5+5 30 12/10/06 30+5 – 17/12 35+12+6 53.+ .5

36 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 From the numbers written in the margin it is clear that the Assessing Officer

took the first number being 19 as sum total of Rs.18 lakhs + Rs.1 lakh, the

payment made by the assessee on 7.8.2006 and on 8.8.2006 respectively. The

other numbers mentioned in the margins are not recorded in the books of

accounts therefore those were considered by the Assessing Officer as payment

out of books. As it is apparent from these numbers written in the margin that a

proper care was taken for distinguishing the amounts in thousands by putting a

point (.) before the number as in the case of last number written as 0.5.

Therefore the other numbers written in the margin with the dates clearly

indicates the payment made by the assessee in lakhs. Therefore we do not

find any error or illegality in the orders of the authorities below on this issue

and confirm the addition of Rs.19 lakhs as sustained by the CIT (Appeals).

Assessment Year 2008-09,

“ 1. The learned Commissioner of income Tax (appeals) erred in holding that non issue of an opportunity of being heard by the Additional Commissioner before approving an order of assessment u/s 153A r.w.s. 143(3) of the Act will not vitiate assessment proceedings completed u/s 153A r.w.s. 143(3) of the act. 2. The action of the learned CIT (A) is contrary to the procedure contemplated by the CBDT.

37 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 3. The learned Commissioner of Income Tax(Appeals) ought to have held the notice issued u/s 153A of the Act, is illegal since return is called without granting statute recognised period for compliance and there is no reasons either recorded or communicated to know how the learned Assessing authority has exercised his discretion for compliance to the notice u / s 1534A of the Act.

38 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 10. The Learned Commissioner of Income Tax (Appeals) h a v i n g u p h e l d t h e i n c o m e f r o m c o n t r a c t o u g h t t o h a v e d i r e c t e d t h e l d . A s s e s s i n g A u t h o r i t y t o c o n s i d e r t h e a d d i t i o n a s a c c r e t i o n t o t h e o p e n i n g a c c o u n t o f w o r k i n p r o g r e s s f o r t h e y e a r 2 0 0 9 - 1 0 . 11. The Learned CIT(A) erred in upholding the disallowance made under Section 40A(3) of the Act without considering the contention that provisions of section 40A(3) of the Act without considering the contention that provisions of section 40A(3) of the Act without considering the contention that provisions of section 40A(3) are not applicable and addition is not warranted. 12. The learned Commissioner of Income tax (Appeals) erred in upholding the a d d i t i o n o f R s . 2 2 , 4 4 4 / - m a d e u n d e r t h e h e a d C r e d i t s no longer payable. 13. The learned CIT (Appeals) erred in upholding the levy of interest u/s.234B as consequential. The appellant crave leave of the Hon'ble Tribunal to raise such other ground or grounds at the time of hearing.”

of our findings in the Assessment Year 2005-06.

under Section 69B of the Act being investment in Flat. The assessee has

purchased a residential Flat No.1504 for Rs.33 lakhs as per the sale agreement

dt.13.2.2009. The document was impounded during the search and seizure

39 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 action. However the sale consideration is shown only at Rs.15 lakhs. In the

statement recorded under Section 132(4) on 13.4.2009, the assessee stated

that the Flat was in incomplete state and the owners did not complete the

construction and because of this he paid to the owner only Rs.15 lakhs and he

himself spent Rs.18 lakhs for completion work. However he has accounted only

Rs.3 lakhs out of the above additional work and the balance of Rs.15 lakhs was

spent out of his unaccounted income. Thus the assessee admitted the

unaccounted income of Rs.15 lakhs being investment in the Flat. The Assessing

Officer accordingly made an addition of the said amount of Rs.15 lakhs under

Section 69B of the Act. The assessee challenged the action of the Assessing

Officer before the CIT (Appeals) but could not succeed.

submitted that when there is an addition on account of Pooja income of Rs.20

lakhs then the benefit of telescoping against the addition of unexplained

investment could have been given.

upon the orders of the authorities below.

40 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 55. Having considered the rival submission as well as the relevant material

on record. We find merits in the submission of the learned Authorised

Representative that when there is an addition on account of Pooja income for

Rs.20 lakhs for the year under consideration then the benefit of telescoping of

the said amount shall be given against the addition of unexplained investment.

Even otherwise if an addition of Rs.20 lakhs was made by the Assessing Officer

and was sustained by the CIT (Appeals) on account of unaccounted Pooja

income then to the extent of the addition the source of investment stand

explained. Therefore we direct the Assessing Officer to allow the telescoping

benefit of the Pooja income against the addition if it is not allowed against

some other addition.

business income as against capital gains.

consideration, the assessee sold Moodabidiri property i.e. Pandit Health Resort

& Spa for a consideration of Rs.2.5 Crores to M/s. Benefit Filmcity (India) Pvt.

Ltd., Mumbai. This land was purchased by the assessee on 30.07.2004 for a

consideration of Rs.40 lakhs and was sold on 14.9.2007 after development and

41 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 setting of Hotel under the name Pandit Health Resort & Spa. The Assessing

Officer noted that that this property is nothing but a resort set up by the

assessee for carrying out his hotel business. When the construction work was

in progress, he sold the property. The assessee claimed the income from sale

of property as income from capital gains. The Assessing Officer assessed the

said income as business income by considering the fact that the assessee has

shown this property in his Balance Sheet as business asset. The CIT (Appeals)

confirmed the action of the Assessing Officer.

assessee purchased the land in the year 2004 and sold after 4 years. There is

no dispute that this land was a capital asset and the profit arising from the sale

of land is nothing but capital gain. The property was developed as an asset and

not for doing the business of hotel/spa. When the property was not used for

business purpose then it is only a capital asset and sale of its results in capital

gain and not business income.

has claimed the interest expenditure against the business income and has not

42 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 capitalized the same in the cost of the asset and therefore it was a business

asset. He has relied upon the orders of the authorities below.

on record. There is no dispute that this land was purchased in the year 2004

and was sold in the year 2007 therefore the assessee retained this land for

more than 3 years. It is not the case of the revenue that the land was shown as

stock in trade. Therefore even if the land was shown as business asset and it

was sold prior to the completion of construction work. It would not partake the

character of business undertaking or asset on which depreciation is allowed.

Therefore this land was sold as an individual asset and not as a particular unit of

business of the assessee. Accordingly, we are of the view that the gain arisen

from the sale of land will be assessed as ‘Long Term Capital Gain’ (LTCG).

However if any gain is earned on the construction part of the property, the

same will be assessed as STCG. Accordingly, principally we allow the claim of

the assessee and direct the Assessing Officer to accept the claim of LTCG to the

extent of the land and if any gain is earned by the assessee on account of

construction of the property, the same will be treated as STCG.

43 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 61. Ground No.10 is regarding addition on account of contract receipts.

income in respect of certain projects from which substantial work in progress

has been declared. Accordingly, the Assessing Officer made an addition of

Rs.11,61,020 based on the working provided by the assessee. The CIT (Appeals)

has confirmed the action of the assessee.

submitted that the project was not completed during the year and the assessee

has offered the income from the said project for the assessment year 2009-10.

He has referred the return of income and computation of income for the

Assessment Year 2009-10 wherein the assessee has offered revenue receipts of

Rs.3.32 Crores. Thus the learned Authorised Representative has submitted that

there is a double addition to the extent of Rs.11,61,020 which was assessed by

the Assessing Officer during the year under consideration.

upon the orders of the authorities below.

on record. We find that the assessee has offered the income from this project

44 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 for the Assessment Year 2009-10. Therefore the addition made by the

Assessing Officer from this project for the year under consideration is required

to be reduced from the income for the Assessment Year 2009-10 to avoid

double taxation of the same income. Accordingly, we direct the Assessing

Officer to take necessary step in this aspect.

which is identical and stand dismissed in view of our finding for the Assessment

Year 2005-06.

Assessing Officer has made an addition of Rs.22,444 on account of amounts

standing to the credit as on 31.3.2008. The learned Authorised Representative

of the assessee has submitted that the Assessing Officer has already made an

addition of Rs.2,22,444 under Section 41(1) being the amount standing to the

credit as on 31.3.2006. Therefore this amount of Rs.22,444 has already been

added as income for the Assessment Year 2006-07 and a such no further

separate addition is called for.

upon the orders of the authorities below.

45 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 69. Having considered the rival submission as well as relevant record, we are

of the view that if this amount of Rs.22,444 is part of sum of Rs.2,22,444 being

an addition made by the Assessing Officer under Section 41(1) of the Act for the

Assessment Year 2006-07 then this addition cannot be made for the year under

consideration. Hence, we direct the Assessing Officer to verify the fact as

pointed out by the assessee and then decide the same accordingly.

grounds :

“ 1. The learned Commissioner of Income Tax (Appeals) erred in upholding the adoption of income under head "POOJA" Rs.30,00,000j- as against RsA,09,165j- admitted by the appellant, rejecting the appellant's contention that the offer is Gross receipt and not net Income.

46 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 considering that the appellant had taken up contract of only one project, which was completed in financial year 2008-09. 6. The learned CIT (Appeals) erred in upholding the levy of interest under Section 234B as consequential. The appellant crave leave of the Hon'ble Tribunal to raise such other ground or grounds at the time of hearing.” 71. Ground Nos.1 & 2 are regarding addition on account of Pooja income.

These grounds are identical to that of the earlier assessment year and therefore

in view of our finding for the Assessment Year 2005-06 this issue is decided

against the assessee.

sale of mutual fund units. The Assessing Officer disallowed the claim of Short

Term Capital Loss on sale of SBI Mutual Fund units to be set off against the

business income on the ground that the income from Mutual Fund is exempt

under Section 10(35) of the Act. The CIT (Appeals) has confirmed the action of

the Assessing Officer.

Departmental Representative and considered the relevant material on record.

There is no dispute that the income from Mutual Fund in question is exempt

under Section 10(35) of the Act therefore, any loss from the same source

47 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 cannot be allowed to be set off against the taxable income. Accordingly, we do

not find any error or illegality in the orders of the authorities below.

Assessing Officer on percentage completion method for the Assessment Year

2008-09 against the income offered during the year on completion of the

project.

Departmental Representative and considered the relevant material on record.

While dealing with an identical issue for the Assessment Year 2008-09, we have

directed the Assessing Officer to set off the income assessed in the said

assessment year based on the percentage of uncompleted project against the

income of the project offered by the assessee on completion during the year

under consideration. Accordingly this ground stand disposed off.

“ 1. The learned CIT (Appeals) erred in holding that the deposits inthenames of the family members of the appellant are assessable in the hands of the appellant for the Assessment Year 2009-10. Order of the learned CIT (Appeals) is opposed to law.”

48 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 Though this issue was raised by the assessee before the CIT (Appeals) but could

not succeed however in the original grounds raised along with Form No.36, the

assessee inadvertently did not raise this ground and accordingly filed the

additional ground.

submissions of the parties, we find that this is not a fresh plea raised by the

assessee but the additional ground raised is emanating from the impugned

orders of the authorities below. Accordingly, we admit the additional ground

for deciding on merits.

Rs.28 lakhs was detected in the name of Smt. Rajeshwari G Pandit, Smt. Sushma

G Pandit and Smt. Sabitha G Pandit, the family members of the assessee. In the

statement recorded under Section 132(4) of the Act on 13.4.2009, Smt.

Rajeshwari G Pandit has stated that the investment in the Fixed Deposit is

made by her husband (the assessee) and the details and source of funds are

available with him. The Assessing Officer accordingly made an addition by

49 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 holding that the Fixed Deposit was made out of the funds of Sri Gopal S Pandit,

the assessee. The assessee challenged the action of the Assessing Officer

before the CIT (Appeals). However, the CIT (Appeals) has deleted the addition

by granting the telescoping benefit of the addition of Rs.30 lakhs made on

account of undisclosed income from Pooja.

deposits were not made during the assessment year 2009-10 and therefore this

cannot be assessed to tax during the year under consideration.

submitted that this plea was not raised before the authorities below and

therefore the assessee cannot be allowed to take a fresh plea.

we are of the view that the dates of deposits is matter of record as per the

seized material available with the Assessing Officer and therefore if the

deposits or part of the deposits were made in the earlier year then the addition

50 ITA No. 1186 to 1188 & 1197 & 1198/Bang/2013 to that extent cannot be made in the year under consideration. Accordingly,

we direct the Assessing Officer to verify the dates of deposit in question and

then decide this issue.

Sd/- (A.K. GARODIA) (VIJAY PAL RAO) Accountant Member Judicial Member *Reddy gp

Copy to : 1. Appellant 2. Respondent 3. C.I.T. 4. CIT(A) 5. DR, ITAT, Bangalore. 6. Guard File.

By Order

Asst. Registrar, ITAT, Bangalore