Kailash Ramavatar Goenka Vs ACIT (ITAT Ahmedabad)
ITAT Ahmedabad held that once the unaccounted receipts from the sale of properties are subjected to taxation as part of the capital gains computation, the related unaccounted expenditures stand explained and cannot be taxed separately as unexplained expenses. Accordingly, addition u/s. 69C unwarranted.
Facts- The assessee is an individual and a resident of India. He is a key person in the Sankalp Group of Concerns, engaged in the hospitality and real estate sectors.
A search u/s. 132 of the Act, was conducted on 30.10.2018 in the case of the Sankalp Group of Ahmedabad, covering entities related to Kailash Goenka Group and Robin Goenka Group. Incriminating materials, including handwritten diaries, loose papers, unrecorded bills, and other documents, were seized during the operation. During the course of search evidence of on-money transactions in real estate projects, unaccounted cash sales in the restaurant and hotel businesses were found which were not recorded in the books of accounts. Unexplained cash payments for land purchases, brokerage, salaries, and personal expenses were also observed. During the course of search unaccounted cash and jewellery were seized and statements of key employees of the group handling cash transactions were recorded.
Notices under Section 153A of the Act were issued, requiring the assessee to file returns for multiple years. Accordingly, the assessee filed returns of income, and the assessments were completed by the AO. In case of additions relating to unaccounted cash receipts and expenses including investments, the AO calculated the tax as per the provisions of section 115BBE of the Act.
