TaxTMI 
TaxTMI 
2012 (12) TMI 199
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....efault in payments of installments even though such entries of realization are recorded in seized material and there is litigation by the assessee to realize the same from defaulters in the courts of law. In doing so, the Ld. CIT (A) ignored contents of seized documents and rather relied on mere argument of the assessee that no enquiries were made from concerned parties." 4. A search and seizure operation carried out in the premises of the assessee. Notices under section 153C were issued. The assessee filed the return of income. The Assessing Officer made the addition by holding as under :- "1. From the documents seized (page -38) of A21 it is noticed that assessee is charging 25% earnest money at cancellation of the booking. One of such case with Sh. Kailash Chand Khandelwal was brought to assessee knowledge in which the assessee has forfeited Rs.4,17,425/-. Therefore assessee was asked to show why the 25% of the total amount of shop of which booking have been cancelled may not be added to its income. In his reply the assessee has stated that that "in fact no amount relating to the said cancellation has actually been forfeited. The assessee firm has only taken the stan....
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....r are separate entities. In the said letter, the buyer has requested to charge cancellation charges and refund the money. However, this page does not suggest' that the amount was refunded to the said buyer after charging cancellation charges by the said party or that the cancellation charges received, if any, were not recorded in the books of account or the same were received in cash out of the regular books. Thus no adverse cognizance of the said page can be taken against the assessee in any manner. 4.3.1 Further, the assessee filed confirmations from all the buyers whose bookings were cancelled during the year under consideration wherein they confirmed the receipt of the entire booking money through account payee cheques without deduction of any cancellation charges. On perusal of the request letters and confirmations / receipts from the buyers, it is seen that entire booking amount was paid to them without deduction of any cancellation charges. The onus to prove that no cancellation charges were received from the buyers on cancellation of I booking outside the books of account was not on the assessee but on the revenue as the revenue was alleging so. However, the assessee has....
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.... a basis to make any assumption unless there is an evidence to substantiate the same as has been held in the case of CIT V s Naresh Khattar reported at 261 ITR 664 (Delhi- HC). Thus addition cannot be made only on the basis of statement in the Civil suit given in entirely different context in the absence of any evidence brought on record by the assessing officer to rebut the facts. 4.3.4 In view of the overall evidences, it was seen that no cancellation charges were taken by the appellant from the buyers outside the books of account. The amount was forfeited only when the buyer was neither paying installments nor requesting for cancellation of booking as explained herein above. When the amount is forfeited the same was duly declared as income in the books of account. Undisputedly no evidence was found during the course of search to suggest that any cancellation charges were received by the assessee outside the books of account as nothing has been mentioned in the assessment order. It is clearly evident from the assessment order that the addition has been made on presumption by applying a rate of 25% on all the cancellation though no incriminating material has been found to sugge....
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.... cancelled during the year under consideration. All these buyers have confirmed the receipt of the entire booking amount through account payee cheques without deducting any cancellation charges. Since the assessee has discharged its onus by filing their confirmations from the buyers in respect of the amount received after cancellation without charging any cancellation charges, therefore, in our considered view, the CIT (A) was justified in deleting the addition made by the Assessing Officer on this count. We dismiss ground no.2 in all the revenue appeals. 7. Ground No.3 in ITA Nos.2787/Del/2010 and 2789/Del/2010 for assessment years 2001-02 and 2003-04 respectively is related to the deletion of addition of Rs.66,7224/- for AY 2001-02 and Rs.1,51,928/- for AY 2003- 04 made on account of realization of statutory ground rent and interest thereon on behalf of the assessee. The ground in ITA No.2787/Del/2010 read as under :- "3. On the facts and circumstances of the case, the Ld. CIT (A) has erred in law and facts of the case in deleting the addition of Rs.66,724/- on account of realization of statutory ground rent and interest thereon on behalf of DDA despite failure of the as....
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....any surplus of the registration and electrification charges collected from the customers over the amounts paid to the State Government, the surplus would be shown as income in the year of receipt. The assessing officer rejected the explanation on the ground that revenue receipts and capital expenditure cannot be adjusted against each other. He, therefore, added the amount of Rs.3,82,94,536/- as the assessee's income. 12. On appeal the CIT (A) recorded the following findings:- a) The assessee declared the amount as advances recoverable in its balance sheet. b) The electrification and registration charges did not represent capital expenditure because they were incurred in relation to the construction of the mall project which was stock-in-trade for the assessee as he is engaged in the business of developing and selling real estate. c) The amount paid has not been claimed as expenses in the profit and loss account and was shown in the asset side of the balance sheet as recoverable from the customers. d) When the registration and electrification charges are recovered from the buyer later they are duly recorded in the books of accounts. This is at the time of handing over....
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....r of CIT (A). The similar payment collected on behalf of the DDA and paid to DDA were held to be not taxable in the case of the assessee and the Hon'ble High Court has held that the factual findings recorded in the order of the Tribunal has not been dislodged, therefore, the order of the Tribunal cannot be said to be perverse. The findings of the Tribunal were recorded on the basis of entries made in the books of account and no question of law has arisen from the order of the ITAT and Hon'ble High Court did not admit the question. Since the factual position is the same, we find no merits in this ground of revenue's appeal which is accordingly dismissed. 10. Ground No.4 in ITA Nos.2787/Del/2010 & 2789/Del/2010 and Ground No.3 in ITA Nos.2788/Del/2010 & 2790/Del/2010 to2793/Del/2010 are similar and accordingly, ground no.4 from ITA No.2787/Del/2010 is reproduced as under :- "4. On the facts and circumstances of the case, the Ld. CIT (A) has erred in law and facts of the case in deleting the addition of Rs.5,00,000/- on account of interest on account of delayed payments even though such entries of realization are recorded in seized material and in doing so, Learned CIT (A) ignor....
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.... made for payment of advance tax and the amount of gross profit computed on sale of property has been wrongly construed as interest by the assessing officer which is not correct. The only relevant page is page 15 which shows calculation of interest of Rs.49,783/- for some property at Plot 2 of the appellant. On perusal of the said page, it appears that the said calculation has been made at one go and not on regular intervals of time and therefore it appears to be made at the time of settling the account with buyer when they were not paying the installment or were delaying in making the payments. The said calculations mention the amount due and received and the balance and some amount of interest but it does not mention on the said page that the interest has been received from them. 6.3.1 Further, the assessee produced confirmations from the buyers that no interest was charged from them. Thus the onus of the assessee got discharged and shifted on the assessing officer to prove otherwise. However, the assessing officer did not bring any evidence on record to prove otherwise even in the remand proceedings. Thus the assessing officer failed to discharge the onus shifted on him. I ag....
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.... has been given to the assessee. We find hat the Assessing Officer made an addition of Rs.5 lacs. The seized material shown that the Jaideep paid interest of Rs.49,783/- and he admitted in the statement of Rs.6,500/-. The CIT (A) deleted the addition that no opportunity was provided to cross examine. Considering all these facts and in the interest of justice and equity, we find it proper to restore the issue to the file of the Assessing Officer with a direction to decide the issue afresh after providing opportunity of being heard and also, if desire, to cross examine Jaideep. Accordingly, this ground of appeal is allowed for statistical purposes. 13. In ground no.5 in ITA Nos.2787/Del/2010 & 2789/Del/2010 and ground no.4 in ITA Nos.2788/Del/2010 & 2790/Del/2010 to2793/Del/2010 are similar except the difference in amount and accordingly, ground no.5 from ITA No.2787/Del/2010 is reproduced as under :- "On the facts and circumstances of the case, the Ld. CIT (A) has erred in law and facts on the case in deleting the addition of Rs.9,40,790/- on account of registration and electrification charges received from clients on the ground that such expenditure are revenue in nature wher....