TaxTMI 
TaxTMI 
2018 (1) TMI 656
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.... as its proprietor and also engaged in the business of real estate and developer under a proprietary concern, 'M/s. Charu Developers.' 3.1 There was a search operation in the case of Somashekar P Patil and Others on 18.6.2010. In the case of the assessee [Shantilal J Shah] also, a search was conducted u/s 132 of the Act on the same day i.e. 18.06.2010. In compliance to the notices u/s 153A of the Act dated 2.8.2011, the assessee had furnished copies of returns (filed u/s 139 on 30.9.2008, 30.9.2009, 30.9.2010 and 28.9.2011 with CPC, Bangalore] on 30.08.2011 admitting taxable incomes of Rs. 84,17,320/-, Rs. 13,68,490/-; Rs. 45,40,330/- and Rs. 41.70.340/- for the AYs. 2008-09 to 2011-12 respectively and requested the AO to treat the same as returns furnished in response to the above notices. 3.2 It was found by the AO during the course of assessment proceedings u/s 143(3) r.w.s. 153A of the Act that the assessee had purchased a land ad-measuring 11,000 sft in Leoneard Lane, Bangalore and commenced construction of residential flats by developing projects, namely, Jasmine, Amythest and KRSNA, the details of which are as follows: Name of the Project Date of commenceme....
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..... 23 lakhs by cash on 10.02.2010 [Flat No.CJ103] (2) Receipt of Rs. 23 lakhs by cash on 10.02.2010 [Flat No.CJ003] [On money amounts of Rs. 46 lakhs were added to the income returned for the AY 2010-11 on substantive basis and the same need to be added for AY 2013-14 [because the flat Nos. CJ 003 & 103 were registered on 25.2.2012] on protective basis. However, the assessee had offered additional income of Rs. 40,59,000/- for the AY 2010-11 which he had declared at the time of search operation on 18.6.2010 which had been reflected in the return of income filed by the assessee. Hence, the difference of Rs. 5,41,000/- (Rs.46,00,000 - 40,59,000) was added to the returned income [Refer: Pages 7 & 8 of the asst. order for AY 2010-11] On money received in F.Y.2010-11/ AY 2011-12: (1) Receipt of Rs. 16 lakhs by cash on 10.02.2010 [Flat No.CJ003] (2) Receipt of Rs. 16 lakhs by cash on 24.05.2010 [Flat No.CJ003] (3) Receipt of Rs. 16.06 lakhs by cash on 13.03.2010 [Flat No.CA202] (4) Receipt of Rs. 08.71 lakhs by cash [Flat No.CA002] 3.6 In substance, the AO had concluded the assessments for all the assessment years under dis....
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....010by way of cash and the same is acknowledged by the vendor The sale registration happened in Asst Year 2011-12 the difference of Rs. 62,11,000/- and Rs. 46,05,000/- (62,11,000 - 46,05,000 =16,06,000) is added in the asst. year 2011-12. (iv) During the course of assessment proceedings, the details pertaining to flat no CA 002 was questioned vide questionnaire dated 27.02.2012 was put across to the assessee, same is reproduced below: 'Page Nos.39 to 43 of annexure -A2/CPH/10- 11 which is material seized in the form of sale agreement seized from factory premes (sic) premises of charu perfumery which is a sale agreement with Dr.Dhanu for flat No.CA-002 for consideration of Rs. 39,71,000/-. But as per sale deed, the amount recorded in the books was only Rs. 31,10,000/-. This shows that the balance was received by the assessee as on money.' The document enclosed. The assessee in his reply vide letter dated 05.03.2013 stated, 'the initial agreement executed for flat No.CA 002 had not reached its finality instead of flat No.002 the client purchased flat No.001. During the course of assessment procedure the assessee failed to furnish any cancel....
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.... Flat No.CJ 304 (Jasmine Project) was sold vide sale deed dt.10.10.2011 for a sale consideration of Rs. 93,29,376/- and this income was offered to tax in the AY 2012-13 as business profits. - in compliance to a show-cause notice dt.27.2.13, the assessee had explained to the AO that one flat in Jasmine was registered in the name of Praveen Kumar Shetty (NRI) for a sum of Rs. 93,29,376/- on 10.10.2011 and, thus, a sum of Rs. 15,47,500/- alleged to have been received by me on 10.9.2005 from Shetty was incorrect as by then the land was not purchased. The assessee had not received any other cash payment as it was mentioned in the letter nor was there such proof in any material. Probably the proposal had come by looking at a tentative time schedule in which it was written as received 10=00 - 15.1.08. Received 10=00 - 26.1.08; received 15=00 - 5.2.08 and so on. These figures do not in any way give any idea that they were receipt of money. Further from the above noting it cannot be inferred that 10 means 10 lakhs and 15 means 15 lakhs. There was no basis for such ad-hoc assumptions. In fact, without admitting but only for the purpose of argument, if it is taken to be so a....
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.....CJ 003 with basic quality and ultimately was sold for Rs. 64 lakhs on 25.5.2012 and that with regard to flat No.CJ 103, the first agreement was entered into with Syed Roshan Abbas and Mir Mohammed Raza for a premium apartment, but, subsequently, they refused to buy the same and, hence, the agreement got cancelled and no cash was received. However, Mir Mohammed Raza had agreed to buy the ordinary flat with basic fittings and fixtures and MOU was entered for Rs. 56,85,400/- and, however, after negotiation, he paid Rs. 66 lakhs and entered into sale deed on 25.5.2012; - The AO had, in the impugned order, stated that the seized materials clearly shown that the assessee was in receipt of advance of Rs. 23 lakhs on 10.2.2010 against the flat CJ 003. Those documents were duly signed by both the parties and, therefore, considered the same as 'on money' receipts. Likewise, the 'on money of Rs. 23 lakhs' was also added with respect of Flat No.CJ 103 to the income returned for the AY 2010-11 on substantive basis and for the AY 2013-14 on protective basis [Flat Nos.CJ 003 & CJ 103]; - It was the case of the assessee that the signatures in the loose papers based on which addi....
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.... no cash was received. However, Mir Mohammed Raza had agreed to buy the ordinary flat with basic fittings and fixtures and MOU was entered for Rs. 56,85,400/- and, however, after negotiation, he paid Rs. 66 lakhs and entered into sale deed on 25.5.2012; With regard to a sale agreement with Dr Dhanu for CA 002 for consideration of Rs. 39,71,000/- as the party was not interest for the same the sale agreement was understood as cancelled and no payments were received on sale agreement. Dr Dhanu had purchase flat No. CA 001 for Rs. 31,10,000/- and the sale amount was shown in the P & L account for the year-ended 31.3.2011 [AY 2011-12] ; - The AO had, in the impugned order, stated that the seized materials clearly shown that the assessee was in receipt of advance of Rs. 23 lakhs on 10.2.2010 against the flat CJ 003. Those documents were duly signed by both the parties and, therefore, considered the same as 'on money' receipts. Likewise, the 'on money of Rs. 23 lakhs' was also added with respect of Flat No.CJ 103 to the income returned for the AY 2010-11 on substantive basis and for the AY 2013-14 on protective basis [Flat Nos.CJ 003 & CJ 103]; - It was the case....
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.... assessee require to be rejected. 6. We have carefully considered the rival submission, perused the relevant records and also the documentary evidences produced by the learned counsel in the form of a paper book. We have, with due regards, perused the case laws on which the assessee had placed strong reliance. 7. As the issue raised by the assessee being identical for all the assessment years under consideration, these four appeals were considered together and disposed of by this consolidated order. 8. The main contention of the assessee was that the elaborate explanation offered during the courses of assessment proceedings as well as at the appellate stage have not been properly appreciated and taken into account while arriving at the conclusion by the authorities below. It was, further, stressed that on proper appreciation of facts and explanation offered, it was explicitly clear that the assessee had not received any 'on money' as alleged and, therefore, the question of addition(s) in any of the years under dispute does not arise. 8.1 On the other hand, the case of the assessing officer was based on materials seized/found during the course of search in the form of ag....
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.... relevant AYs. The On money transactions relating to F Y 2009-10/AY 2010-11 received for flat no CJ 103 receipt of Rs. 23,00,000 by cash on 10,2,2010. Hence, the on money amt of Rs. 23,00,000/- is hereby added to the income returned for AY 2010-11 on substantive basis and the same needs to be added for AY 2013-14 [because the Flat No CJ 201 was registered on 25.05.2012] on protective basis" [Refer: Page 9 of the asst order for 2010-11] 8.4 Moreover, the assessing officer's observation has not been rebutted by the assessee with any documentary evidence even before the first appellate authority. We would like to point out that the assessee himself offered an amount of Rs. 40,59,000/- at the time of search as his income. Taking this into account, the AO had rightly concluded the assessment by adding only the difference of Rs. 5,41,000/- [Rs.4600000 - 4059000] to the assessee's income. Thus, we are of the view that the assessee should not have any grievance with the stand of the AO in respect of the AY 2010- 11. 8.5 It is most appropriate to refer to the sworn statement of the assessee u/s 132(4) of the Act on 01.07.2010 wherein the assessee had specifically adm....
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.... by name 'Charu Amathest', Near Bhashayam Circle, Rajajinagar, Bangalore of M/s. Charu Developers. The page-wise details are mentioned as under: Flat No Name of the buyer and date of agt. Total area (sft) Rate Page No.A/2/CPH/10-11 CA 002 Dr.Dhanu 25.2.2010 700(commercial) 39,71,000 39-43 CA 202 C.Sandeep & R.J.Sushma 1740 62,11,000 44-48 CA 102 K.S.Mallikarjunaiah 1685 40,00,000 49-54 CA 202 C.Sandeep & R.J.Sushma 20.4.2010 1740 40,00,000 55-59(repeat of pages 44-48 During the post search procedure, in the sworn statement dated 16.8.2010 given before the Wing, the assessee Mrs.Shantilal Shah has disclosed Rs. 40,59,000/- in the hands of Mr.Shantilal Shah (Indl) Prop: M/s. Charu Devellpers for the asst. year 2010-11" [Refer: Pages 5 to 7 - asst order for Asst.year 2008-09] 8.6 The sworn statement of the assessee has neither been retracted nor contradicted either during the course of assessment proceedings or before the first appellate authority. 8.7 The assessee had explicitly conceded and confessed in the swor....