TaxTMI 
TaxTMI 
2014 (6) TMI 148
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....ceedings are consequent to that. In the proceedings, A.O. consequent to admission by Managing Director of the Company of payment of money outside books in purchase of lands and also admission by recipient, an addition of Rs.1.78 crores was made, even though the assessee subsequently denied the payments. Issue of 80IB in AY2005-06 and 2006-07. 4. Assessee claimed deduction under section 80IB of Rs.1,88,00,917/- in A.Y. 2005-06 and Rs.45,64,600/- in A.Y. 2006-07 on the residential complex constructed and sold in the name of 'Jayadarshini Residency'. Assessing Officer asked for details. Assessee did not furnish complete details. Therefore, A.O. called for sale deeds and noticed that all the flats sold are above 1500 sft and exceeded the limits prescribed under the Act. Therefore, he denied the deduction. 5. Before Ld. CIT(A), assessee made detailed submissions and placed a table indicating that out of the 13 flats in each floor (5 floors), one flat was exceeding the limit whereas, the balance 12 flats are within the limits. In arriving at that calculation, assessee submitted that the super built-up area may be about 2300 sft, but 27.39% common area and 306 sq.ft car parking a....
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....ec.80-IB (10). It would be fair and reasonable to allow the deduction on proportionate basis i.e. on the profit derived from the construction of the residential unit which has a built-up area of less than 1500 sq ft the limit prescribed under sec. 80-IB (10). Further, it was held by the Hon'ble ITAT, Nagpur Bench, Nagpur in the case of ITO vs. AIR Developers, Appeal No.ITA No.447/ Nag/2007, decided on. May 21,2008 that if an assessee has developed a housing project, wherein the majority of the residential units has a built up area of less than 1500 sq. ft. i.e. the limit prescribed by sec.80-IB(10) and only a few residential units are exceeding the built-up area of 1500 sq. ft., there would be no justification to disallow the entire deduction under sec.80IB(10); it would be fair and reasonable to allow the deduction on proportionate basis in that case. The ratio of the above decisions of the ITA T and Kolkata High Court would be squarely applicable to the assessee company. In view of the above the assessee company humbly requests your good offices to kindly delete the addition of Rs.1,88,00,917 made by the Assessing Officer as they are not based on actual facts but were b....
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....opment agreements and sale agreements require verification to determine that assessee has developed the 'project'. Another issue required to be examined is the exclusion of 'common area' and 'car park' area from the builtup area. As per the plan on record, total common area is 27.39% including car park area. However, assessee excluded both independently. Assessee has shown sixty five car parking areas at 306 sq. feet each in the table furnished (at page 19, 20 of paper book) to the CIT(A). The entire car park area, if totaled comes to more than the stilt area approved in the plan (i.e., 121.03 sq. meters). Therefore, we are of the opinion that the CIT(A) erred in allowing the proportionate allowance without subjecting the details furnished to verification. It is also noticed that assessee claimed deduction of Rs.1,88,00,917/- in A.Y. 2005-06 whereas, profit as per P & L account was only Rs.1,15,99,172/-. Likewise, in A.Y. 2006-07 assessee claimed deduction of Rs.45,64,600/- on a profit of Rs.3,35,30,385/-. The actual profit working of the project, excluding other real estate transactions is not on record as copy of 3CB reports were not placed in paper books. This also requires veri....
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....ng the course of search proceedings, Sri P. Shankar Rao has also confirmed that an amount of Rs.1.78 crores in cash was received over and above the registered amount. Assessee has filed a confirmation from Sri P. Shankar Rao that no amount over and above the registered value was received. AO was of the view that the admission of payment made of Rs.1.78 crores in cash in statement recorded u/s 132(4) on oath is in itself evidence as per provisions of the Act. The filing of confirmation from Sri P. Shankar Rao who has also admitted to have received the amount of cash of Rs. 1.78 crores is nothing but a self serving document and cannot be allowed in the light of evidence already available. Further, the introduction of entry for sale of club house and swimming pool also of a similar amount of Rs. 1.74 crores with out any actual sale to the subsidiary company, shows that payments were made over and above the registered price and it was tried to be covered up by introduction of entry of sale of assets. The amount paid in cash for purchase of Kannur land and agricultural land over and above the registered value at Rs. 1,78,000/- therefore was treated as unexplained investment and added to....
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....d.' In this case there was a search in the assessee's residential premises The assessee filed a return declaring an undisclosed income of Rs.1,48,500/-. The assessee did not specifically include a sum of Rs.23 lakhs as undisclosed income in the return even though he admitted the payment of Rs.23 lakhs over and above the amount disclosed in the sale deeds. Based on the admission, the Assessing Officer added the amount of Rs.23 lakhs as undisclosed income. It was held by the Hon'b!e High Court that when the sale deed discloses a sale consideration, it is for the Revenue to show that what was disclosed in the sale deed is not the correct sale consideration. In this case the Revenue could not bring on record any material to show that the assessee has paid any money from his statement and there was no evidence or material found during the course of search'. In the instant case of the assessee, the Assessing Officer has obtained copies of all seized documents and none of these documents supports the contention of the departments that the assessee has paid a sum of Rs. 1.78 crores over and above what was stated in document and recorded in the books. It is further ....
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....nd the assessee has admitted to have paid Rs. 1.78 crores vide statement dated 09.11.2006 whereas, search was conducted on 07.11.2006. Not only that subsequently, also further statements were recorded. Therefore, it cannot be said that assessee was in the state of utter confusion or not in a proper state of mind while making the statement to the department. Not only that by admitting the amounts in the course of search and not retracting immediately, assessee also successfully prevented the revenue authorities in further making the enquiries in this regard. Assessee by his conduct has forced the Revenue to stop its enquiries as assessee has admitted these amounts. It may be true that there is no incriminating material but admission by the assessee is to be accepted as a bonafide admission. The Hon'ble A.P. High Court in the case of Kermax Micro Systems India Ltd. vs. DCIT 362 ITR 13 considered similar situation of retraction and opined that there must be a distinction between admission and the evidence collected during the course of survey. This is a voluntary act of the assessee and if the assessee accepts the payment, there is no point or scope to collect further evidence or maki....
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....ressure from the Department. The statement of the assessee could have been retracted even at the time of filing the return of income. The return of income was examined by the Assessing Officer and a questionnaire was issued on 28.1.2008 in which the Assessing Officer has raised a specific query as to why the additional income of Rs.1.78 crores was not offered to tax. The Assessing Officer has given time to the assessee for furnishing the details up to 18.2.2008 but despite of this notice the assessee did not come forward to retract from his earlier statement admitting the receipt of on money. Thereafter the Assessing Officer further issued a notice on 24.9.2008 asking the assessee again as to why the capital gain should not be worked out on the total consideration including the Rs.1.78 crores on money received by the assessee for the year under consideration. This notice was to be replied by 6.10.2010, but the assessee again did not come forward either to reply to that notice or to retract from the earlier statement. The assessment was to be completed before 31st December, 2008 and the assessee has filed an affidavit retracting from the earlier statement on 8.12.2008 stating therei....