TaxTMI 
TaxTMI 
2014 (6) TMI 999
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....ther years i.e. A.Ys. 2003-04 to 2008-09 except for A.Y. 2007-08. In A.Y. 2007-08, the Revenue has raised some additional issue as well. 3. The assessee is a Private Limited Company engaged in the business of trading in lands and construction of housing projects. A search and seizure action u/s.132 of the Act was conducted on Jadhav-Shah Group of cases on 08.02.2008. During the course of search and seizure action, the Director of the assessee company Shri G.K.Jadhav has offered to tax additional income in his hands for the A.Y.2008-2009 in the statement recorded u/s. 132(4) of the Act as under: " a) On money in respect of plots at Hindustan Nagar at Gat Nos.136, 135, 1399, 1536 & 1131 to 1141 Rs.25,00,000 b) On money in respect of plots at Hindustan Nagar (received in F.Y.2006-2007) Rs.12,00,000 c) On money in respect of plots at Wakas Neral Rs. 9,00,000 d) On money in respect of land at Anthrat Rs.11,82,000 Rs.57,82,000 3.1 The Assessing Officer has assessed the income of the assessee by making various additions to the income returned, details of which are as under: Asst.Year Income returned after adjustments Addition of on money....
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.... suggests that the assessee must have earned income on account of on-money in the earlier years as well. 4.1 The relevant transactions relied on by the Assessing Officer in para 19 of the assessment order are as under: S.No Annexure/Page No. S.No./Gat No. Recorded amount Cash element/ unrecorded amounts i.e.on-money % of onmoney with recorded amount A.Y. 1 A-l/20, 21, 32,33,34 Sale of land G.No.86 and 76 Kokangaon 53,50,000 43,79,000 81.85% 2007-08, 2008-09 2 A-2/41/129 Sale of land G.No.150A, B, C. In fact the transaction is purchase transaction and not sale transaction 59,30,152 42,20,574 71.17% 3 A-2/2/23 to 42 Purchase of Plot 1090.45 sq.mtrs. at S.N0.135A, B, 136, 137 and 137/B 6,00,000 15,00,000 250% 2008-09 4 A-l/14 Sale of plot No.339 1950 sq. mtrs. 10,53,500 12,09,900 115% 5 A-l/1/6 & 7 PlotNo.1858 to 1862 sale to Nitishbhai Runwal 1,65,000 2,04,500 124% 6 A-l/1/6 & 7 3 plots sale to Sanjay Kale 99,000 1,97,826 200% 2008-09 7 A- 1/2/1 5 Sale of 10 plots to Solanki 2,10,000 5,94,000 ....
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....essment an addition of Rs. 1,63,58,657/- was made to the returned income on account of on-money receipts. During the course of search proceedings evidence was found that the assessee has received onmoney in respect of sale & purchase of land entered into by the assessee company. It has been pointed out in the assessment order that in respect of 11 transactions there was substantial on-money ranging 52% to 250%. Shri G. K. Jadhav Managing Director of assessee company has agreed in the statement recorded on oath that 15% to 20% of the total consideration has been received in cash as on-money. Further, the assessee company has offered to tax on money amounting to 57,82,000/- for the transaction into A.Y.2008-09. Considering the fact, the Assessing Officer has reasonably estimated on-money @ 50%. Against the above assessment order assessee went in appeal before the concerned ClT(A), who observed that the addition cannot be made merely on the basis of estimation and therefore deleted the addition by observing that the addition cannot be made in the earlier years on the basis of facts of the prevailing year in the later year. Accordingly, the addition was deleted by CIT(A). In this....
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....ansactions in respect of sale whereas 2 transactions were in respect of purchase of plot. We find that these transactions mainly relates to A.Y. 2008-09. On the basis of these transactions, the Assessing Officer held that the assessee must have earned income in the form of on-money to the extent of 50% of recorded sales during F.Y. 2001-02 to 2007-08 relevant to A.Y. 2002-03 to 2008-09. The Assessing Officer's presumption that the assessee must have earned on-money income in respect of all the transactions was found to be on the basis of the alleged admission of on-money receipt by the assessee. The Assessing Officer has stated in the assessment order that during the course of search G.K.Jadhav has stated on oath that 15% to 20% of the total consideration has been received in cash as on-money. The stand of the assessee has been that the question asked to Shri G.K.Jadhav in this regard was specific and the reply given by Shri G.K.Jadhav to the said question was also specific. The on-money admitted was in respect of specific plots and specific land in specified Gat numbers and not in respect of all the plots and lands sold. On perusal of Question No.3 and reply to the same recorded i....
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....the assessee relied on the decisions of ITAT, Pune, in the case of Samrat Beer Bar Vs. ACIT 75 ITD 9 (Pune) (T.M.), wherein it has been laid down that in the absence of any other evidence, Assessing Officer is not empowered to estimate the suppression of sales for a larger period on the basis of the diary found in search showing suppression of sales for a particular period. 4.6 We find in the case of CIT v. Chetan Das Lachman Das [211 Taxman 61 (Delhi) (H.C.)] wherein there was a search on the assessee and certain evidences were found which indicated that the assessee was suppressing its income. On the basis of the evidences found, the Assessing Officer estimated sales for the 6 years. The said addition was deleted by the Tribunal on the ground that no evidence was found in the course of search. Hon'ble Delhi High Court held that the decision of Tribunal that no seized material was found was not correct since evidences were clearly found indicating suppression of income. Accordingly, Hon'ble Delhi High Court held that the CIT(A) had noted in his order that one of the partners of the assessee firm had admitted the practice of suppressing income. Further, in the said case,....
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.... practice was adopted for all the years including the years for which no evidence was found. On the basis of the above facts, Assessing Officer estimated undisclosed income for the block period. The matter went up to High Court and the Hon'ble High Court held that as the evidence was found for certain years and considering the acceptance of the partner that similar practice was followed in the earlier years, the estimation of income made by the Assessing Officer was correct. In the case before us, the facts are not identical as there was no acceptance by the assessee or its directors that such practice was followed in the earlier years as well. Accordingly, the ratio of Rajnik & Co. is not applicable to the facts of the present case. We further find in the case of Khopade Kisanrao Manikrao v. Asst. CIT [74 ITD 25 (Pune)(TM)], wherein the learned Departmental Representative has relied upon the said decision of ITAT, Third Member of Pune Bench. In the said case, the evidence was found that the assessee had taken on-money on sale of plots. The evidence was found for all the years falling within the block period. Thus the issue arose that on the basis of evidence found for sale of cert....
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....v, 1993 period. The Assessing Officer estimated higher income for the pre Nov, 1993 period. ITAT deleted the addition made by the Assessing Officer and sustained the income declared by the assessee for the pre Nov, 1993 period. The issue before Hon'ble Bombay High Court was whether such deletion of addition made by the Assessing Officer was justified. Hon'ble High Court held that the Tribunal was justified in deleting the addition made because the income does not remain constant over the years. Moreover, evidence of one year cannot be used for other year as held by the ITAT, Pune 'A' Bench in the case of DCIT, Central Circle 1 (2), Pune Vs. Venkateshwara Hatcheries Pvt. Ltd. in ITA Nos.746 & 747/PN/2012 & another. Accordingly, the facts of the said case are not identical and not applicable to the facts of the present case. 4.8 The principles of natural justice require that no one should be punished on the basis of presumption. The addition has been made on presumption that if the assessee was suppressing the sale and expenses for subsequent year, he must have suppressed sales and expenses for earlier year also. Such addition could not be confirmed as the same was not sup....
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....transaction Nos. 4 to 8, the CIT(A) observed that the transactions relate to the A.Y.2008-2009. The total on-money in respect of the said transactions pointed out by the Assessing Officer is Rs. 24,30,226/-. These transactions mainly relate to the plots in Hindustan Nagar Project. Total transactions in respect of sale of plots in A.Y.2008-2009 in Hindustan Nagar project in specific Gat numbers stated by the assessee in statement u/s. 132(4) of the Act, upto the date of search and seizure action u/s.132 of the Act as per audited ledger accounts are Rs. 1,65,71,925/-. The Assessing Officer has pointed-out that the tabular chart of on-money specifically in respect of plots sold for Rs. 16,11,500/-. Therefore, the on-money receipts of remaining plots sold for recorded consideration of Rs. 1,49,60,425/- was to be taxed in the hands of the assessee. The assessee has agreed in his statement recorded u/s.132(4) that it has received 15% to 20% on-money in respect of plots in specific Gat numbers of land. Hence on the basis of statement u/s.132(4) of the Act, the on-money receipt at 17.50% [i.e. average of 15% and 20%] of Rs. 1,49,60,425/- works out to Rs. 26,18,074/-. The total on-money whi....
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....t disputed the total consideration stated in the seized material. The contention of the Assessing Officer that the assessee has received on-money and has not shown the same in the books of accounts was not accepted as the actual receipt of on-money was not mentioned in the seized papers. The transaction was in progress and not yet completed. In view of the above facts, the contention of the Assessing Officer about receipt of on-money and taxability of the same was rightly rejected by the CIT(A). Again, this reasoned finding of CIT(A) needs no interference from our side. We uphold the same. 4.12 As regards the transaction at Sr.No.2 in the assessment order, the Assessing Officer has claimed that in respect of sale of land at Gat No.150A, B, C, the assessee has paid recorded amount of Rs. 59,30,152/- and has paid unrecorded amount of Rs. 42,20,574/-. In this regard the assessee filed detailed submissions before CIT(A) vide its letter dated 30.03.2010. The contentions in the said submissions of the assessee were supported by audited / unaudited balance sheets as at 31.03.2008 of Shri G.K.Jadhav and other concerns of the Jadhav Group filed on the record of the Assessing Officer. On ....
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....material on record, we find that there is nothing on record to suggest that the assessee is the owner of plot mentioned at serial No.9 of tabular chart. We find force in the argument of learned Authorized Representative that the assessee cannot sale a plot which is not owned by him, so any addition pertained to the transactions of same is not justified. Accordingly, this addition is not justified and the same is directed to be deleted. Accordingly, the assessee's appeal for A.Y. 2005-06 is allowed as discussed above. 5. The next issue raised in Revenue's appeal for A.Y. 2008-09 is with regard to addition on account of alleged unrecorded cash receipts of Rs. 1,30,00,000/-. Shri G.K.Jadhav has entered into an agreement with Shri R.K.Patole and Shri Prakash Lotan Bagul, who were mediators / commission agents for proposed sale of land at Gat No.150A, B, C and Gat No.144 & 145 of Village Talegaon (Vani) admeasuring 53 Hectors and 28.5R for a consideration of Rs. 2,07,81,150/-. The Assessing Officer has alleged in respect of this transaction that the assessee has received Rs. 1.30 crores in cash as per Clause 3 Page 4 of the agreement and as per which 50% amount was to be paid wit....
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....on. 5.2 After going through the rival submissions and material on record, we find that the stand of the assessee has been that the statement on oath of Shri R.K.Patole and Shri P.L.Bagul were recorded by the Investigation Wing on 12.02.2008 and 13.02.2008 wherein both the persons have denied the payment of Rs. 1.30 crores to the assessee. Secondly, the receipts of Rs. 1.30 crores were found with Shri G.K.Jadhav and not with the persons by whom the alleged payments has been claimed to be made. It is not in dispute that the receipts in original in question were found with Shri G.K.Jadhav and actually on receiving the said amount the receipts would have been handed over to Shri R.K.Patole and Shri P.L.Bagul and would not have been found with Shri G.K.Jadhav, if the version of the Assessing Officer is correct. Thirdly, Shri G.K.Jadhav in his statement dated 08.02.2008 recorded u/s. 132(4) of the Act, stated that the amount of Rs. 1.30 crores was not actually received and the said two persons were only mediators and in order to show their investments in the property so that they could show the said receipts to the proposed purchasers for finalizing the deal at higher rate, the said r....
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....icer has arrived at amounts of extra work in respect of F.Y. 2007-08 and 2006-07 to the extent of Rs. 67,08,190/- and Rs. 26,85,832/- respectively as per page 30 to 40 and page Nos.1 to 55 of the diaries seized at Annexure A-6 and A-4 respectively. The Assessing Officer has held that the work carried out by the assessee was out of the books and hence has estimated net profit in respect of the said work at 10% of the alleged receipts stated above and taxed Rs. 6,70,819/- in A.Y. 2008-09 and the alleged profit for A.Y. 2007-08 worked out by the Assessing Officer at Rs. 2,68,583/-, however, the same was telescoped against the addition towards unexplained repayment of loan amounting to Rs. 5,55,33,575/-. 6.1 The matter was carried before first appellate authority, wherein the various contentions were raised on behalf of assessee as detailed in para 7.1.1 of order of CIT(A). The CIT(A) called for remand report in this regard as detailed in para 7.1.2 of his order and the CIT(A) having considered the same, has deleted the addition in question. The same has been opposed before us on behalf of revenue, inter alia, the learned Departmental Representative has submitted that during the cou....