TaxTMI 
TaxTMI 
2016 (1) TMI 490
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.... pent house in terms of their area. Another sheet of paper inventorised as page 129 of Annexure BF-17 pertained to sale of Flat No. C-1104 of Ratnakar III project of the Assessee which was pertaining to the flat sold to Ms. Indrani Roy and as per the consideration received shown on page 129, the rate as per sale deed worked out to Rs. 1,780 per sq. ft. instead of 4,300 per sq. ft. as mentioned on page 130 of Annexure BF-17 which, according to the A.O implied that Assessee had received only the amount as per sale deed by way of cheque payments and all the remaining amounts were received by way of cash i.e. "on money". Further, on the basis of enquiries conducted from the Office of the Sub-Registrar, Ahmedabad, AO noticed that it was revealed that some of the flats at Ratnakar III project were sold at the rate of around Rs. 1400 per sq. ft as against the rate of Rs. 4,300 per sq feet mentioned at page 130 of the Annexure BF17 that was recovered from the Site Office of Ratnakar IV of the Assessee. A.O also noted that Ratnakar III & IV projects of the Assessee were famous and prized housing projects of Ahmedabad located at most promising and established areas of City. To verify the cur....
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....rried the matter before ld. CIT(A) who upheld the order of A.O by holding as under:- 2.2 I have carefully considered the contentions of the appellant as well as the observation of the A.O. I have also gone through the laws relied upon by the appellant. After careful consideration of the facts of the case, as brought out by the assessing officer and the submissions relied upon by the appellant co-related with the various case laws, I am not inclined to agree with the contention of the appellant due to several reasons and loopholes in the contention and reasonings submitted by the appellant. In my considered opinion the assessing officer has passed a well reasoned order after analysis of various factors cropped up during survey proceedings, the submissions filed at the time of assessment proceedings and analysis of market conditions with corroborative study from Internet and deriving the information that is available in public domain. The assessing officer has not solely relied on the impounded documents, but has also investigated further to verify the rates of properties available in the real estate market, it cannot be ignored. In the assessment order the....
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....wn by the appellant in its books of accounts refects that the rate of flat per suare feet comes to Rs. 1,777/- for this flat. Thus the assessing officer has brought out the important factor that the appellant had been in the practice of accepting 60% percent of the actual consideration in cash and 40% through cheques. The assessing officer therefore considered all the sale of Ratnakar III and Ratnakar IV by taking the actual rate of Rs. 4,300/- per square feet and apportioning the resulting consideration as per the ratio of allocation of A.Y 2010-2111 and 2011 - 2012. With the result the assessing officer has worked out details of the total on money consideration received by the appellant during the assessment year concerned. The assessing officer has also worked out in detail ,vide page number 9,10 and 11, 12 in which the assessing officer has analyzed the market trend of real estate in Ahmedabad and particularly the scheme of the appellant namely Ratnakar III as per popular real estate website 99 Acres.com and Magic bricks.com. A careful analysis of the facts brought out by the analysis of these real estate websites which are fairly and largely considered, to be authenti....
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....ch does not match at all with the current market price going, on at that time even taking the very conservative view. In my considered opinion the appellant has failed completely to give any logical reason of booking sale of flats which were located, in the most prime area of Ahmedabad in satellite area, which is very prominent and sought-after place in the Ahmedabad since last few years. Although prominent and prestigious housing projects, have been started in the satellite or around satellite area in the recent past in the Ahmedabad. It is beyond understanding that, why any prudent businessman, would sale the flats located in such a prestigious and most sought-after locality at that low price which are not believable at all as at that time the market pertaining to real estate was not at all sluggish. Apart from the fact that the case of the appellant could not negate the rate of Rs. 4,300/- per square feet adopted by it after analyzing and bringing the logical basis of it, with the evidence of any other housing project situated in satellite area or around satellite area. The case laws relied upon by the appellant have been considered but the same are on a different facts....
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....d unaccounted income of Rs. 20,01,00,000/-. The relevant portion of the statement is reproduced as under: .................... A careful study of the statement of managing director of M/s. Sambhav Infrastructure Private Ltd. and the statement of site engineer at Stavan Arise. Shri Kunal Soni and Shri Jayendra Keshavlal Patel, Site Supervisor at Stavan Paradise, shows that there is definitely a strong element of on money being the received by the owners which is regular practice. In the statement Shri Kunal Soni has also accepted the practice of consideration of sale of flat been received in the ratio of 60% cash and 40% in cheque. As per the statement of Shri Kunal Soni the rate of cost of that in at Stavan Paradise comes to Rs. 3851 per sq. ft. as the flat area is 1350 sq. ft. Further as per the statement of Shri Jayendra Keshavlal Patel, Site Supervisor at Stavan Paradise the Flats at Stavan Paradise Scheme are sold at a price of Rs. 1.4 to Rs. 1.5 crore per flat. However, the sale of flats of stavan Paradise Scheme has been recorded in the books of accounts in the range of Rs. 30,00,000/- to Rs. 44,50,000/-. In view of the facts as emerged from the of ....
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....ite are not authenticated by government authority and cannot be the basis for making any addition. Ld. CIT (A) further, erred in comparing market rate obtained from 99acres.com which is in respect of resale of property. Ld. CIT (A) ought not to have confirmed the findings of Id. AO on this basis. It be so held now. 3. Ld. CIT (A) erred in law and on facts in confirming addition made by AO merely on the basis of page no. 130 of Annexure BF - 17 which does not contain name of the appellant, name of the project etc. Ld. CIT (A) ought not to rely on rate written on loose paper as appellant demonstrated other fact like size of flat, type of flat in appellant's projects are not similar to that of appellant. It be so held now. 4. Ld. CIT(A) erred in law and on facts in confirming addition made by AO on assumption that the appellant would have charged on money by applying unrealistic and uncorroborated rate of Rs. 4300 per sq.ft. 5. Ld. CIT(A) has failed to appreciate that comparison made by learned A.O. on the nexus between the two pages is factually incorrect in view details submitted. 6. Ld. CIT (A) erred in law and on facts in making reliance on ....
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....ct that at the time of Survey itself, Assessee had denied that the paper belong to it, the paper to be not in the hand-writing of any of the Directors or the Employees of the Assessee, no reference in the document about the Assessee or its Directors nor any reference to the Scheme Ratnakar III and further the document did not bore any date and therefore it is not known as to which period it pertained to. He further submitted that the details contained in the impounded document could not be linked to Ratnakar III Scheme of the Assessee because in the the impounded document there was reference to Penthouse but on the other hand in Ratnakar III Scheme that was constructed by the Assessee there was no Penthouse. He further submitted that the area of the bed rooms referred to in the impounded document were also different than the area of bedrooms of Ratnakar III Scheme. He also submitted that the terms of payment do not match to the terms of payment as per another impounded paper in the case of Mrs. Indrani Roy. The ld. A.R. further submitted that during the course of Survey no other material was found which could substantiate or prove that Assessee has received any amount in excess of ....
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....o a case of Sambhav Infrastructure P. Ltd that was decided by him and based on the facts of that case and the statements recorded therein drew the conclusion about the practice of accepting of "on money" being rampant in the business of Real Estates. He further placed reliance on the following decisions:- (i) ACIT vs. Sharad Chaudhary (2015) 55 Taxman.com 324 Delhi Tribunal (ii) CIT vs. Maulik K. Shah (2008) 307 137 (Guj) (iii) CIT vs. Discovery Estate P. Ltd. ITA No. 1089/A/2011 order dated 18.02.2013 Delhi High Court (iv) Rajdeep Builders vs. ACIT (2012) 52 SOT 62 (v) Cit vs. Dolphin Builders P. Ltd. (2013) 356 ITR 420 (M.P) 7. He further submitted that all the transactions are through Registered Deed and the books of accounts have also not been rejected. He therefore submitted that the entire addition has been based on the basis of suspicion and without any material evidence and therefore the same needs to be deleted. The ld. D.R. on the other hand strongly supported the order of A.O and ld.CIT(A) and further submitted that Assessee has not placed any material on record to demonstrate that the documents found from the premises of A....