TaxTMI 
TaxTMI 
2013 (6) TMI 547
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....Sri Chandrakant Kankaria, a real estate broker, on 14-02-2007 certain documents numbered from 1 to 42 in loose paper Bundle No.2 were seized. Since certain documents belonging to the assessee were seized from the searched person, therefore, the Assessing Officer initiated proceedings u/s.153C of the Income Tax Act. In response to notice u/s.153C on 10-10-2008 the assessee filed his return of income on 10-11-2008 declaring total loss of Rs.5,20,420/-. 3. During the course of assessment proceedings the Assessing Officer noted that the seized papers relate to the transfer of land at Survey No. 208/1/1, Lohegaon, Pune and transfer of certain rights of construction termed as covenant rights upon the said land. The land consisted of a number of plots owned by various members of Lohegaon Co-op. Housing Society. The covenant rights were owned by Sri Suresh M. Talera and his sister-in-law Smt. Sumandevi C. Talera. The purchaser of the plots and the covenant rights is M/s. Lunkad Realty through its partner Sri Kantialal Lunkad. The assessee was a facilitator in the sale and purchase of some of the plots for which he was to receive commission from M/s. Lunkad Realty. The payments to the as....
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....t owners were made from time to time since 19-03-2004. Services provided by the assessee over the years in this regard cannot be termed to be of no value in the relevant years. Therefore, the payments made to the assessee in the relevant years are indicative of the value paid for the services already rendered in the concerned year. Hence, the Assessing Officer was of the opinion that the payments made from time to time can only be termed as the assessee's income from commission in the relevant years. 5. Rejecting the explanation given by the assessee the Assessing Officer held that representation in the accounts is only one of the form whereas in substance the amounts received by the assessee are nothing but income. He accordingly made addition to the income of the assessee on account of undisclosed commission, the details of which are as under : Assessment Year Amount 2001-02 Rs.1,00,000/- 2002-03 Rs.2,40,000/- 2004-05 Rs.20,00,000/- 2005-06 Rs.23,10,000/- 2007-08 Rs.25,00,000/- TOTAL Rs.71,50,000/- 6. The assessee did not challenge the addition made by the Assessing Officer. Thereafter the Assessing Officer initiated penalty proceed....
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....tance relate to levy of penalty U/s.271(1)(c) by the Assessing Officer and confirmed by the CIT(A). 9. The assessee has also taken identical additional ground in all the appeals which read as under :- "On the facts and the circumstances of the case and in law the assessment order passed u/s.143(3) r.w.s.153C of the I.T. Act is illegal and is bad in law as the Assessing Officer of the searched person (Shri Chandrakant Kankaria) handed over the documents found in the premises of the said Shri Chandrakant Kankaria which are neither in the handwriting of the appellant nor the same belong to the appellant. For assuming jurisdiction u/s.153C of the I.T. Act money, bullion, jewellery or other valuable article or thing or books of accounts or documents seized etc. should belong to the person who was not searched. As the documents found and seized do not belong to the appellant the assessment framed u/s.143(3) r.w.s. 153C is bad in law. Since the assessment is bad in law consequently the levy of penalty u/s.271(1)(c) is illegal and bad in law. The appellant hereby request your Honour to kindly quash the penalty order and obliged" 10. After hearing both the sides the additional grou....
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....e is therefore dismissed. 14. Now coming to the merit of the case the Ld. Counsel for the assessee referring to Page 50 of the Paper Book drew the attention of the Bench to the amount of Rs.3,40,000/- from Lunkad Housing, Rs.43,10,0000/- from Lunkad Developers and Rs.25 lakhs from Lunkad Realty shown by the assessee under the head "Loans and Advances - Current Liabilities" as per Annexure-D. Referring to Page 18 of the Paper Book he drew the attention of the Bench to the amount of Rs.20 lakhs received by the assessee from Lunkad Developers on 19-02-2004 which has been shown as interest free. Referring to page 9 of the paper Book the Ld. Counsel for the assessee drew the attention of the Bench to the details of Bank Accounts of Mr. Atul Bhagat which includes the S.B. Account No.11259 maintained with Bank of India, Wanowrie Branch, Pune. He submitted that the entire amount received by the assessee on account of advance received for land transactions have been deposited in the said bank and the entire amount has been received by cheque. He submitted that since the formalities for transfer of the entire area was not completed, therefore, the assessee had shown the same as advance. ....
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.... and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. There is no dispute to the fact that the assessee has received an amount of Rs.71,50,000/- as commission from A.Y. 2001- 02 to 2007-08, the details of which are given at Para 5 of this order. There is also no dispute to the fact that the above amounts have been received by cheque and deposited in the Savings Account maintained with Bank of India Wanowrie Branch, Pune. There is also no dispute to the fact that the assessee has not offered to tax the commission income in the respective assessment years and shown the entire amount in the balance sheet under the head "Loans and Advances-Current Liabilities". It is the case of the Revenue that the assessee, by not offering the commission received in respective assessment years to tax, has concealed the particulars of income and furnished inaccurate particulars and therefore penalty u/s.271(1)(c) of the Income Tax Act is leviable. It is the case of the assessee that since the transfer of all the plots are yet to be completed, therefore, the assessee has treated the amount received under the head 'Commission" ....
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.... have been sold during A.Y. 2007-08. Sr.No. Plot No. Name of the party Area Date of Registration 1 7 Poona Grafikon Unit III 3902 13-09-2006 2 13 Choice 4037 13-09-2006 3 20 Rosary Grafikon 5288 13-09-2006 4 70 Angles 3714 13-09-2006 5 72 Goodwill Developers 3165 13-09-2006 6 76 Goodwill Promoters 3824 13-09-2006 7 10 Grafikon United 3902 13-09-2006 18.3 Page 64 of the paper Book which was seized from the residence of Sri Chandrakant Kankaria shows the following noting :- "15717 X 190 = 29,86,230/- to be paid to Bhagat after deal & formation & transfer of plots from SMT+CMT". 18.4 Since the assessee was due to receive commission on the basis of sale of plots and since 7 plots have been sold during the F.Y. 2006-07 relevant to A.Y. 2007-08, therefore, the assessee was supposed to offer commission income on account of sale of the above plots. Therefore, by not offering the commission income on account of sale of the above plots during A.Y. 2007-08 there is concealment of particulars of income and penalty is leviable on account of commission relatable to sal....