TaxTMI 
TaxTMI 
2017 (10) TMI 378
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....133A of the Income Tax Act, 1961 (hereinafter called as 'the Act') was conducted in the assessee's case and during the course of survey, the assessing officer found certain incriminating material indicating unaccounted payments for purchase of the property. On the basis of the information collected during the survey u/s 133A of the Act, the assessment was re-opened u/s 147 of the Act by issue of notice u/s 148 and completed the reassessment on total income of Rs. 2,17,97,350/-. During the assessment proceedings, the assessing officer made the addition of Rs. 2,05,59,255/-, which is the challenged by the assessee. During the course of survey, the A.O. impounded the books of accounts & loose sheets. From the books of accounts impounded by the A.O. marked as Annexure SSKC/23 page 59, it was revealed that the assessee had purchased a site admeasuring 1393.4 Sq.yds. located at Tadigadapa village of re-survey No.11/8 from Ponnam Venkateswara Rao for a consideration of Rs. 2,36,30,135/- inclusive of registration expenses, commission, UDA Plan, UDA license fee and bank charges and got it registered on 14.12.2007. In page No.59, it was also mentioned that the cash payment for site p....
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.... me a Xerox of page no. 59 of another spiral notebook, which contained the following notings: 8. I again confirmed the notings therein to be in the writing of Sri B. Srinivas and again shown him some of the writings in my own handwriting in the said Xerox copy of the spiral notebook for example at pages 3, 4 & etc. I also explained him that the figure of Rs. 2,36,30,135/- was simply copied by me from page number 59 above into some other loose sheets while calculating project cost. I simply copied the said figure as it is noted in the said page number 59 as written by Sri B. Srinivas. I did not know the actual site cost of either Patamata Lanka Site or Tadigadapa Site. I simply copied the said figures because they were written by Sri B. Srinivas putting the heading "Site Cost". The management never required persons like myself who are in the clerical cadre to note down anywhere any site cost in any of the books or papers as our job is concerned with gathering of information regarding payments made at site towards construction cost for control purpose and also as, the management might have felt the information regarding site purchase cost to be sensitive to be known to a person of....
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....lready, during the course of survey proceedings, the Managing Partner has accepted that on money was paid, but however, when he was summoned to the Income Tax Office on 25.03.2011 in course of the post survey investigations and recorded a statement, then he has retracted from the earlier statement and struck to his guns that the total amount paid to the vendor was Rs. 27,86,900 only which was paid through banking channels. At this stage, the proper course of action on the part of the AG could be to (i) verify the actual amount received by the vendor and in case of discrepancy in light of the findings of the survey, allowing the appellant to cross examine the vendor, which has not been made in the case on hand; (ii) to gather information as to what are the prices that similar properties have fetched in and around the places, where the impugned property was situated and incase of discrepancy, calling for explanation from the appellant, which has not been done; (iii) at least referring the matter to the DV for his opinion, which has also not been done; (iv) digging out for the sources o such funds for the appellant to invest and at the same time also finding out the destination of the....
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....urred by payment of on money of Rs. 1,95,00,000/-. Therefore, the Ld.DR argued that the retraction is nothing but an after thought and there is no reason to disbelieve the expenditure incurred for purchase of the site. The total expenditure incurred for purchase of the site was Rs. 2,36,30,135/- and the assessee has not disputed the payment of Rs. 27,86,900/- paid by DD, Regn expenses, UDA plan expenses, UDA license fee and Bank charges etc. mentioned in the impounded document for purchase of the site and the dispute was only with regard to the cash payment. The Ld. DR argued that once the assessee accepts some of the contents of the documents are true, there is no reason to dispute the remaining items of expenditure. The Ld. D.R. further argued that as per section 292C of the Act, the burden is on the assessee to disprove the contents of the seized material but not on the revenue. The Ld. CIT(A) erroneously held that the onus is on the revenue to prove the payment of Rs. 1,95,00,000/-. The Ld. DR further argued that the assesse had filed the affidavit from Mr. Babujee, without verifying the credentials of Mr. Babujee the CIT(A) has admitted the additional evidence. It was not know....
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.... On the other hand, the Ld. A.R. argued that the A.O. simply relied on the dumb documents, which were found and seized at the time of survey. Regarding page No.1 of the paper book, the Ld. A.R. argued that it is a dumb document without the date of the payment and the cash payment recorded was extrapolated and overwritten. Though the assessee has accepted the payment during the survey, subsequently the assessee had retracted from the statement given at the time of survey. The Ld. A.R. argued that A.O. should verify the actual amount paid to the vendor and confront the finding with the assessee. Further, the Ld. A.R. argued that the A.O. failed to gather market information of similar properties sold in and around the impugned property and referred the matter to the DVO for valuation of the property before making the addition. The Ld. A.R. argued that onus lies on the revenue to substantiate that the assessee had invested the impugned amount u/s 69 of the Act. The Ld. AR further argued that the documents found at the time of survey cannot be taken as conclusive evidence and the A.O. should bring cogent material on record for substantiating the addition. The survey was conducted on 09/....
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.... Rs. 10,000 UDA License Rs. 6,515 Cash given Rs.1,95,00,000 Total Rs.2,36,30,135 Therefore, it is clear from the above that apart from the amount which was paid by you as per the registered sale deed is only Rs. 27,86,000/- and whereas you have paid cash online amount of Rs. 1,95,00,000/- to the said seller. Do you confirm it and if yes please explain the sources of such online payment. Ans. So far I have done my business transactions through the means raised by Syndicate Bank during the year 2007-08 worth Rs. 50 lakhs. The loan has been taken at Syndicate Bank at Labbipet, Vijayawada and also Siddhartha Branch, Vijayawada. Thus, the total loan amounts to Rs. 1 Crore. Also I would like to mention that I have raised advances from the flats purchasers which were duly recorded. These served the purpose of raising revenues for the acquisition of sites at Tadigadapa and Patamata Lanka. Yes, I confirm the above payment." 9. Subsequently, summons u/s 131 of the Act was issued to the assessee and the statement was recorded on 25.3.2011. During the course of the statement recorded on 25.3.2011, the assessee retracted from the statement and stated that....
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....was conducted and the incriminating material was found evidencing the unaccounted payments. The Ld.CIT(A) has completely shifted the burden on the revenue ignoring the provisions of section 292C of the Act. As per section 292C of the Act, material found during the course of survey or search, which is in the possession of the persons searched be presumed that the contents are true and books of accounts, documents, money, bullion, jewellery, belonging to such person. In the assessee's case, during the course of survey, a spiral note book was found which gave item wise details payments for site purchase as under: Site Purchase 12/12/2007 Sy. Bank DD 27,86,900.00 Registration 2,65,200.00 Commission 1,11,520.00 UDA Plan 9,50,000.00 UDA License 10,000.00 Bank charge+stamp 6,515.00 Cash 1,95,00,000.00 2,36,30,135.00 12. It is the assessee, who has to prove the contents are false or incorrect. In this case the assesse has not discharged it's burden. The ld. A.R further argued that the AO has not given the survey statement which was sought by them o....