AI Drafter 
TaxTMI 
TaxTMI 
2011 (3) TMI 1676
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....sp;2. Substantive ground is ground No.1 in all the years, reproduced below:- (extracted from 2036/Ahd/2007) The CIT(A) has erred in law and on facts in deleting the addition of Rs. 96,50,613/- made by the A.O. on account of on money receipt on sale of flats. 3. Assessments in all the years were made u/s.143(3) r.w.s. 153A of the Act. For all the years the date of assessment orders were 28/3/2006. Facts in brief, as emerged from the corresponding assessment order, were that a search u/s.132A was carried out on 18/06/2003. At the outset it has been mentioned that one of the partners, Shri Bimal Chimanlal Shah had taken the responsibility and admitted the undisclosed income of Rs. 31.76 lacs on behalf of the group concerns. The assessee firm is engaged in the business of real estate and development of two projects Amarjyot Apartments and Amardham. It is worth to mention that the construction of 'Amarjyot Apartment' was done by M/s.Bimal Construction, Prop. Shri Chimanlal M.Shah. The entire addition of 'on-money' for all the years was based upon three papers found during the course of search marked as Page No.19, Page No.80 and Page No.65. It is also worth to mention that in t....
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.... 15,000/- ---------------- --------------- 918000 920,460/- Less : Payme....
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....nbsp; Interest (PTO) 84,000 (3 month) 10,000 (Ashwin) 5.2. Reverse side of the page: 1,00,0000 Cheque 6, June 98 1,00,000 Cash 15,July 98 1,00,000 Cash 6,Aug, 98 3,00,000 1,00,000 Cash 10 Oct.98  ....
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....st June. We do not consider it necessary to reproduce the chart which was made by the AO on the basis of the information written on page 80, however, the conclusion drawn by the AO was as under:- "On perusal of the details mentioned in this page is its noticed that in the first column of this page the area of 12 unsold flats admeasuring 14750 sq.ft. of Amardham Computer "c" project as on the dated 1/4/2003 are written. In the second col. The same details as on 1st May is mentioned and in the third col. The details of the 11 unsold flats admeasuring 13,6000 sq. feet is written. Below this, the details of name of the flat holder, flat no., outstanding sales consideration amount to be received as on 1/4/2003, 1/5/2003 and 1/06/2003 are written. In this regard, Shri Chamn M.Shah, in his statement recorded u/s.131 of the Act on 7/08/2003, has given the details such as the name of the flat holders, flat no., amount shown as received in the books of accounts as on 1/4/2003, outstanding amount to be received was mentioned on page no. 80 of BF 22 as on the date 1/4/2003 and total value of the flat. On perusal of the details, it is noticed that sale of various flats range from Rs. 288 to ....
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....the bank, relevant portion is reproduced below:- "Amardham C Flat 3 301,401,702 5043.59 x 549 = 27,68,903.40 3950.00 x 591 = 23,34,450.00 51,03,353.00 50,00,000.00 1,03,353.00 68,625.00 34,728.00 The figure of 5043.59 is the meansurement of area of some of the plots at Dharanagar, Abrama. The figure of 3950 is measurement of three flats as mentioned in this page and Rs. 591 is the sale rate per sq.ft. for the flat no.301, 401 and 702 Amardham Complex 'C'. During the course of search proceedings Shri Chimanbhai M. Shah, in his statement has stated that these working has done for getting the loan of Rs. 50,00,000 against the sale/mortgage of the plot/flats shown as above. Further he ....
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....47.42/7 Sevajibhai hisab 47.42/7 7.60/750 .60/750 ------------- 7.00 Balance On perusal of the noting mentioned on this page as mentioned above it was noticed that some figures are related to the flat no.604 and 605. As per the noting it is evident that the assessee has received Rs. 6.40 it means 6,40,000/- and 11.23/200 means 11,23,200/- by cheque means 11,23,200/- by cheque which when divided by area of these two flats of 3200 sq.feet, comes to Rs. 351/- per....
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....the lapse of about 2 ½ months. The statement was first recorded u/s.132(4) on 18/06/2003, and later on, on 01/08/2003. The affidavit was filed on 26/09/2003 through which the retraction was made. There was an allegation of duress, coercion and intimidation. As per AO, on the basis of three loose papers which were made Annexure BF-22 of the seized material, page No.19 gives the rate of Rs. 625/- per sq.ft., page 80 gives the rate of Rs. 700/- and page No.65 page Rs. 691 and reverse side of this at Rs. 551/-. As against that as per AO, rates from Amardham Apartment as disclosed by the assessee were Rs. 400, Rs. 451, Rs. 468/-. Finally, he has concluded as follows:- "19. It is clear from the above that presumption of receipt of "onMoney" can be made for other flats sold during cotemporary period. The calculation of year wise 'on money' receipt is worked out here under: A.Y. Sales shown in sq.feet Estimated sales rate Estimated sales consideration Sales consideration shown in the books of accounts Difference 1998-99 58600 450 26,370,000 16719387 9,650,613 1999-00 5300 500 2,650,000 1595302 1,054,698....
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....d the pages found during the course of search, the Ld. CIT(A) has concluded that there was no basis for making any addition of alleged 'on-money' in the hands of the assessee, as follows:- "5. I have carefully considered the facts of the case and submissions made by the Appellant. The Addition made by the Assessing Officer is based on three seized documents. In page No.19 of the seized document, it is observed that the Assessing Officer has failed to interprete the document. If the interpretation of the Assessing Officer is accepted then it will have to be held that the appellant has purchased total materials of sand and grit amounting to Rs. 5,45,300/- from the said party, whereas the total material purchased from all the parties for the entire project was only Rs. 4,44,060/-. The AO has also worked out the outstanding amount of the said party to Rs. 27,275/-, whereas the actual outstanding amount due from the said party was Rs. 1,39,400/- and the proof of payment received after the search proceedings against such outstanding were placed before me to show that even the said party has accepted the said outstanding amount in the sum of Rs. 1,39,400/-. The AO observed with respect....
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....e papers have further been corroborated by the statement of Shri Chimanlal M.Shah through which he has admitted the existence of 'on-money'. In this regard, he has referred the said statement dated 18/06/2003 carried on upto 01/08/2003, recorded on oath u/s.133A of the Act, copy placed in the compilation, relevant portion reproduced below:- "Page No.19 On Page No.19, the details of sale of Flat No.204 made by Sarlaben Mansukhbhai Patel, wherein the Flat having area of 1400 sq.ft. is sold at the rate of 601 accordingly the sale consideration amount comes to Rs. 8,75,000/-. Moreover, adding Rs. 26,000/- of Maintenance Deposit and Rs. 15000 for Electric Meter, Water, Drainage charges, the total amount comes to Rs. 9,18,000/- which is shown there. Out of which the payment of Rs. 8,90,725/- is received and the amount of Rs. 27,275/- is remaining to be recovered. Below to it, the details of working for the payment received, is shown. The said Flat No.A-204 of Amardham Complex, M/s. Amar Corporation, was sold to Smt. Sarlaben Mansukhbhai (Manubhai) Patel in March, 2002. In the Books of Account, the sale price for this flat is shown at the rate of Rs. 421/- per sq.ft. ....
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....ers had nothing to do with the day-to-day business activity of the assessee. Ld. AR has made an attempt to clarify the contents of those three documents. As far as the transaction with Smt.Saralaben was concerned as noted on page 19, he has mentioned that the correct transaction was at the rate of 421 sq.ft.and the total consideration of Rs. 5,89,401/- was duly recorded in the books of accounts. If at all, the Revenue Department alleges that 'on-money' @ Rs. 180 per sq.ft. was received then as per the said statement it should remain confined to the said flat only. There was no evidence that the said on-money of Rs. 180/- was allegedly received in respect of rest of the flats sold by the assessee. Few case laws were cited by the ld.AR were that Paul Mathews & Sons (2003)263 ITR 101(Ker.), CIT vs. S. Khader Khan & Son (2008)300 ITR 157(Mad.) and Ashok Manilal Thakkar vs. ACIT (2005) 97 ITD 361 (Ahd.). Ld.AR has also referred few decisions in respect of the validity of the statement and the position of law in case of retraction as follows :- Heirs and Legal Representatives of Late Laxmanbhai S.Patel vs.CIT [2008]174 Taxman 206 (Guj.) Abhi Developers vs. ITO [2007]12 SOT 444 (....
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....e incriminating material on which the Revenue has placed reliance are three loose papers marked as page Nos.19, 80 & 65. On the analysis of page 19, it was found that there was a mention of a flat which was sold to one Smt. Saralaben Mansukhbhai. If the Revenue Department wanted to place reliance on this page, then the only recourse available was to treat the transaction as undisclosed transaction which was found written in the said loose paper. If we see the contents of the loose paper 19 and the connected statement of Mr.Chimanbhai then it is evident that in his statement he had made it clear that if there was 'on-money' of Rs. 180/-, the same was in respect of "this" flat. Apart from the loose paper and the statement of Mr. Chimanbhai there is no incriminating material through which it was found that the 'on-money' was received in respect of the other flats. The question of extrapolation can arise only in a situation when the documents give an indication that there was a regular occurrence in a systematic manner. Only in that situation, there is a possibility of extrapolation otherwise not. As far as other two pages are concerned page 60 & 85, both of them have not been made the....
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....t could be held that the assessee was in the practice of charging on-money on other facts as well. 10. As far as the general principle is concerned,an admission can be said to be an extremely important piece of evident, if made as per the prescribed law. But such an admission cannot be said to be conclusive. It is open for the assessee to show that the said admission was incorrect. The said retrieval is termed as"retraction"in legal terminology.A retraction is admissible but it must be within a reasonable time and the onus is on that person to establish that the impugned admission was incorrect. He has to place convincing reason or evidence to show that the earlier admission was not the correct position of fact but the correct position was as per the retracted statement. In the case of S. Khader Khan & Son(supra) the scope of section 133A was dispute, however, the finding was that solely on the basis of the statement given by one of the partners, it is not lawful to assess an income. Therefore, as far as the present case is concerned, since the statement is not by the partner of the firm and moreover the same was retracted by filing an affidavit, coupled with the fact that no....