ITA Nos. 175, 177 and 178/CHD/2015, (Assessment Year: 2010-2011). Case: New Sagar Enterprises and Ors. Vs The DCIT. ITAT (Income Tax Appellate Tribunal)

Case Number:ITA Nos. 175, 177 and 178/CHD/2015, (Assessment Year: 2010-2011)
Party Name:New Sagar Enterprises and Ors. Vs The DCIT
Counsel:For Appellant: Sudhir Sehgal and For Respondents: S.K. Mittal
Judges:Bhavnesh Saini, Member (J) and Rano Jain, Member (A)
Issue:Income Tax Act
Judgement Date:September 02, 2015
Court:ITAT (Income Tax Appellate Tribunal)


Bhavnesh Saini, Member (J), (ITAT Chandigarh Division Bench)

  1. All the appeals by different assessees are directed against different orders of ld. CIT(Appeals)-III Gurgaon dated 31.12.2014 for assessment year 2010-11.

  2. We have heard ld. Representatives of both the parties and perused the material available on record. The appeals are decided as under:

    ITA 175/CHD/2015 (New Sagar Enterprises, Chandigarh)

  3. In this appeal, assessee challenged the addition of Rs. 32,25,772/-. Briefly the facts of the case are that a search under section 132(1) of the Act was conducted on Pavitra Group of cases on 16.02.2012 by Investigation Wing, Chandigarh. The assessee firm was one of the concern covered under the search. In response to the notice under section 153A, assessee firm filed its return of income declaring total income at Rs. 64,260/- under the head 'Income from Business and Profession'. The assessee filed necessary details at the assessment stage. The Assessing Officer noted that pages No. 1 to 8 of Annexure A-2 seized from the residence of Shri Harsh Goyal, Shri Kunal Goyal & family members, House No. 54 Sector 28A, Chandigarh are hand written note pad. In this Notepad, profit for the year 2009-10 to the tune of Rs. 32,25,772/- has been worked out. Out of this profit, 50% each has been assigned to Shri Goyal and Shri Dharam Pal Garg, appears to be partners of the assessee firm. The scanned copies of the seized documents have been reproduced by the Assessing Officer from pages 3 to 16 of the assessment order. These documents were confronted to Shri Pradeep Goyal during the course of search and his statement was recorded on 16.02.2012 under section 132(4) and the relevant statement is reproduced in the assessment order seeking clarification on the entries contained in the notepad. He has explained that this account does not belong to the firm, however he was not able to explain the entries contained thereon. The Assessing Officer issued show cause notice why this profit of Rs. 32,25,772/- should not be considered as unaccounted for the assessment year under appeal i.e. 2010-11 and the same should not be added back to the taxable income.

  4. The assessee replied before Assessing Officer that these were projected estimate submitted to the State Bank of Patiala, Kalka Road, Mani Majra for sanction of loan. The letter alongwith application is enclosed for further information. The Assessing Officer called for the information from the bank and the reply of the bank is dated 08.11.2013 in which it was stated that Shri Dharampal Garg had approached the bank for loan of Rs. 50 lacs for starting a new business alongwith Mr. Goyal. He has submitted the papers which were not in proper format and were returned back to the party. The bank has not sanctioned any loan to the party presumably due to non submission of further documents i.e. balance sheet. The papers submitted by Mr. Dharam Pal Garg were supplied by the bank to the Assessing Officer.

  5. The Assessing Officer, however, did not accept the contention of the assessee that these were only provisional estimates for getting loan from the bank. The same were not explained in the search. The said documents were considered to be parallel accounts of the assessee and estimate was found to be mere after though and accordingly, addition of Rs. 32,25,772/- was made on account of unexplained profits.

  6. The assessee challenged the addition before ld...

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