TaxTMI 
TaxTMI 
2015 (11) TMI 437
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.... and Rs. 57,50,000/- for Flat No. A-1103 respectively. 3. The statement of one Ms. Chaitrali S. Karkare, Manager, Customer Relations of the assessee company was recorded. Relevant part of the said statement, which has been reproduced by the Ld. AO in Para 4 of the assessment order, reads as under : "Q.10. I am showing you the costing sheet of A-302 in the name of A.K. Singh retrieved from the laptop in your possession, as per this sheet the cost of Flat is Rs. 1,15,64,400/- whereas the value as per the sale agreement is Rs. 78,83,200/- thus there is difference of Rs. 36,81,200/-. Please explain your state for same. Ans. The sheet might have been given to me by somebody for taking the printout. I agree that there is difference of Rs. 36.81 lakhs in the value as per the agreement and the costing as per the said sheet. However I have no knowledge as to how the difference of Rs. 36.81/- is accounted for since I do not look after the accounts. Q.11. I am showing you the similar sheets in case of C-803 where the difference is 8,64,000 and Rs. 7 4,00, 000 and A-1103 where the difference is 57.50 lakhs. Please explain the difference. Ans. As regard A-1103 it might be the agreem....
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....ce, certain incriminating documents were found which clearly showed receipt of on-money in respect of this project. When confronted by these documents, it was admitted by Miss. Chaitrali Shrikant Karkare that in respect of flat nos. A-302, A-202, C-803, A-1103 and A-803 an aggregate on-money of around Rs. 2,40,31,000/- has been received You are requested to go through this statement and confirm the contents especially related to receipt of on-money. You are also required to confirm as to whether this on-money of around Rs. 2,40,31,000/- is being reflected in the regular books of accounts. Ans. After verification of the relevant records and going through the statement of Miss Chaitrali Karkare, I submit that as a matter of principle we do not accept any on money as alleged. Further no additional amount over and above the agreement amount has been received by us from Mr. Rajmani Singh or Mrs Shilpi R Singh or any other person on behalf of them in respect of sale of flat No A-202 of Blossom Boulevard. However, to cover up for any omissions, deficiencies and to buy peace and to maintain harmony with the department and with a request and my clear understanding that the same may be al....
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.... search on the basis of which the AO made the addition. Although the AO during the course of assessment proceedings stated that Ms. Chaitrali Shrikant Karkare had admitted for such on-money, however, the AO has not provided any evidence in support of his inference that the assessee company has received any on-money. Neither any incriminating material nor anything or books of account or documents was found during the course of search. There was no opportunity granted to cross examine the person on whose statement reliance was placed by the AO. Therefore, this amounts to gross violation of principles of natural justice. Despite repeated requests made to the AO to provide with any evidence on the basis of which he proposed to make the addition of Rs. 50 lakhs the AO has not provided any such material in support of his claim. It was argued that no addition on account of any on-money can be made in the hands of the assessee without any evidence or material. Various decisions were also cited before the Ld.CIT(A) to the proposition that no addition can be made in the hands of the assessee. 9. Based on the arguments advanced by the assessee the Ld.CIT(A) deleted the addition by observing ....
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....at, no doubt he agreed to offer an amount of Rs. 1,91,00,000/- as additional Income for the assessment year 2010-11. However, he did so "to cover up any omissions, deficiencies and to maintain harmony with the department and with my clear understanding that the same may be allowed to be capitalised" Nowhere has the admitted receipt of on money by the appellant company. v. There is no independent discussion in the assessment order either of the statements of the owners admitting payment of on money or of the allege incriminating evidence establishing such payments. 7.7 Thus, upon careful perusal of the Impugned assessment order I find that the factual basis for making any addition other than the addition of Rs. 1.91 crore voluntarily admitted by Mr. Darode "to cover up for any omissions, deficiencies and to buy peace and maintain harmony with the department" is indeed very weak in this case. I also find much force in the written and verbal arguments raised by the Ld. AR on behalf of the appellant that the appellant company has nowhere accepted the alleged on money, that no documentary or other evidence either found during the search or gathered during post-search investigation....
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....t ignoring the fact that documents indicating receipt of on-money was found during search and there was a rate difference in this case w.r.t. other comparable sales in the same project. 2. The order of the CIT(A) may be vacated and that of the Assessing Officer be restored. 3. The appellant craves leave to add, alter, amend, and modify any of the above grounds of appeal." 11. The Ld. Departmental Representative strongly supported the order of the AO. 12. The Ld. Counsel for the assessee on the other hand while supporting the order of the CIT(A) submitted that the Ld.CIT(A) while deleting the addition has considered the various submissions made by the assessee. He submitted that the AO has relied on the statement of one of the employees wherein the said employee has categorically stated that she does not look after the accounts and only looks after the customer care. The AO had not given the statement of the purchaser of flat No.A-202 owner to the respondent company. The Director in his statement recorded u/s.132(4) has clearly mentioned that the company as a matter of principle does not accept any on-money and it was stated that the additional income was declared only to c....
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.... cost sheet shown to her in relation to flat No.A-202 in the case of Shri Rajamani Shilpy Singh is same in format as the sheets retrieved from her Laptop. However, she had stated that she does not know how the difference between the cost as per these sheets and the agreement value is accounted for. She had stated that she is not looking after the accounts part and it is only the directors who negotiate the rates etc. Rejecting the explanation given by the assessee and noting that the total on-money received by the assessee is Rs. 2.41 crores whereas the assessee has offered only Rs. 1.91 crores the AO made addition of Rs. 50 lakhs to the total income of the assessee. We find the Ld.CIT(A) deleted the addition on the ground that there was no such admission by any of the directors regarding receipt of on-money. He had offered an amount of Rs. 1.91 crores only to cover up any omission, deficiencies and to maintain harmony with department. Further, no documentary evidence was found during the course of search or post search enquiry evidencing receipt of on-money by the assessee company. 16. We do not find any infirmity in the order of the Ld.CIT(A). From the various details furnished ....