TaxTMI 
TaxTMI 
TaxTMI 
2013 (11) TMI 723
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....elates to the land purchased from CSK Realtor for the venture SAM (Shamshabad Airport Meadows). Out of this a sum of Rs. 1,56,40,000/- is stated to relate for the year ending 31.3.2006 in respect of land purchased at Sr. No. 11 and 12 mentioned above to the extent of 5.31 acres and 3.17 acres amounting to 9.08, acres of land and the balance has been treated as advance by 'the assessee. As per page No. 13 of the impounded material annexure A/VV/2, the cost of the above land of 9.08 acres is mentioned by the assessee therein at Rs. 1,84,00,000/-. During the course of survey on 13.03.2008 in the statement given by Smt. P. Uma Devi, Chief Accounts Officer of WR Housing Pvt. Ltd. in reply to question No. 6 she has stated as under: "In the financial year 2005-06 the company has paid Rs. 3.84 crores. In 2006-07 Rs. 5.5 crores is paid to CSK Realtors and 2007-08 the company has paid till now Rs. 6,05,82,665/-. The company has purchased 53 acres of land at Rs. 24 lacs per acre as per the agreement of sale entered into by both the parties. However, CSK Realtors Pvt. Ltd. demanded to revise the price to Rs. 34 lakhs per acre as the project of SAM is continuing for 3 years. As per the demand ....
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...., with regard to other lands, i.e., SAR 1 , SAR 2 and Jukala lands, the cash payments are as under: SARI - Rs. 1,17,60,000 SAR2 - Rs. 2,34,50,000 Jukala Land - Rs. 30,10,000 Total - Rs. 3,82,20,000 7. In line with the reasons for disallowance as discussed in the para 10 above, 20% of the payments of Rs. 3,82,20,000/ - pertaining to SAR-1, SAR-2 and Jukala lands are also disallowed and added to the total income which works out to Rs. 76,44,000/-. Addition: Rs. 76,44,000. Totally, he added u/s. 40A(3) of the Act an amount of Rs. 1,38,18,400. On appeal the CIT(A) observed that the total payment is as follows: Payment to CSK Realtors Rs. 3,84,00,000 Payments to others Rs. 3,83,19,715 Total Rs. 7,67,19,715 8. Out of this, an amount of Rs. 43,35,000 was paid by cheque and an amount of Rs. 63,00,000 was outstanding and no payment was made. Thus, after deducting a sum of Rs. 1,06,35,000, the balance amount is only Rs. 6,60,84,715. The CIT(A) worked out 20% of this at Rs. 1,32,16,943 and confirmed the same u/s. 40A(3) of the Act. Against this, the assessee is in appeal before us. 9. The learned AR submitted that the above payments were made to agriculturists in the places w....
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....,085) and M. Vijaya Lakshmi and V. Prabha, Jukal (Rs. 30,26,580). 13. Further, it is submitted that these payments were made in excess of the sales consideration shown in the documents registered and it was paid because of insistence of the recipients and mostly on bank holidays. This claim of the assessee as being totally unsubstantiated comprising bald statement advanced only to meet the exigencies with a view to align its inference of the provisions of the statute. Most of the parties mentioned hereinabove were in Hyderabad. The properties sold by them might be situated outside Hyderabad. Being so, it cannot be concluded that the recipients were having no bank accounts or access to the banking facilities. As such it cannot be said that the assessee's case is covered under the exception provided in Rule 6DD of the Income-tax Rules, 1962. Even clause (j) of this Rule cannot be applied which is providing an exception due to non access to the banking facilities causing hardship to the payee or to the business exigencies. Being so, the assessee has failed to establish the circumstances necessitating the payment in cash. More so, the omission of the erstwhile clause (j) of Rule 6DD w....
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....explained by the assessee but neither the CIT(A) nor the AO had gone through the cash book of the assessee by incorporating the entries relating to actual payments to CSK Realtors as per the slip found during the survey. If there is any negative balance in the cash book after incorporating the entries as per the slip marked as A/VVR/2, the same is to be considered as unexplained expenditure in the hands of the assessee. Accordingly, this issue is remitted back to the AO for fresh consideration. 20. The next issue is with regard to deletion of addition on account of unexplained expenditure not recorded in the books of account. 21. Brief facts of the issue are that the AO in his assessment order referred to the material impounded during the course of survey. The AO found that certain illegal amounts have been paid to various people aggregating to Rs. 53,80,000/-. Two sheets of paper were found during the course of survey. In one of the papers payments made from 27.11.2005 to 19.02.2006 aggregating to Rs. 14,50,000 was written and the another contained payments aggregating to Rs. 53,80,000/-. In the sheet where the total amount of Rs. 53,80,000 is found, it is mentioned that payment....
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....essee that the amount was withdrawn from Sri Sai Mac Society and that the said amount was spent without recording in the cash book is not contradicted by the Assessing Officer in the remand report. Therefore, it is to be held that the assessee had sufficient funds for incurring the said expenditure. Therefore, he objected that no addition can be made by applying the provisions of sec. 69 of the Act. Accordingly, the CIT(A) deleted both the additions made by the AO. Against this, the Revenue is in appeal before us. 24. We have heard both the parties and perused the material on record. The contention of the AR is that the assessee has not claimed any expenditure at Rs. 16.5 lakhs and it cannot be considered for addition. Regarding Rs. 53.8 lakhs, he submitted that it was received from Sri Sai Mac Society and made the payment. However, before the AO the assessee has not furnished any information, whatsoever, regarding these two payments. In our opinion, it is appropriate to remit the issue to the file of the AO for fresh consideration and only the payments which are unaccounted relating to the assessment year under consideration are to be added. This ground is partly allowed for stat....
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....s submitted that the sale commission, administrative cost, the profit rate, the advertisement charges and other expenditure has to be excluded for the purpose. Such expenditure is to be reduced while arriving at the closing stock. The assessee submitted that the AO did not consider the said expenditure. It is also explained before the AO that its business is to purchase the land and developing the land into plots. The plots are sold before the entire land is developed. There would be some expenditure which was incurred for development and some expenditure which has to be incurred. Such amount of expenditure which is to be incurred is not evaluated by the assessee and debited to the profit and loss account. The expenditure of sales commission is Rs. 175 per sq. yd., and the administrative cost is about Rs. 94 per sq. yd. If all the factors are taken into consideration, the assessee submitted that there would be no difference in the cost price. Further, the assessee admitted 8% of the profit. The AO also accepted that the proportionate rate is 8%. In the circumstances, the assessee submits that: (a) the method adopted by the Assessing Officer is not correct; (b) The assessee adopte....