TaxTMI 
TaxTMI 
2011 (11) TMI 809
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.... The action of the ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of Rs. 40,54,325/- 3. In the facts and circumstances of the case and in law the ld. CIT (A) has erred in enhancing the assessment by way of a further addition of Rs. 60,75,000/- under section 69 as alleged unexplained investment. The action of the ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the enhancement of Rs. 60,75,000/-. 2.2 Brief facts of the case as contained in the order of the ld CIT(A) are as under:- 'The assessee is a land developer and in consequent to search and seizure operation carried out on 16.11.07, notice u/s 153A was issued in response to which return declaring income of Rs. 4,88,999/- was filed. During the course of search operation various incriminating documents regarding investment in immovable property by way of sale-purchase agreement and construction activity were found and seized. A.O. noticed that for purchase of land for different schemes, the appellant used to prepare two types of agreement. Firs....
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....ce / support documents that advance have been received of booking of plots. No confirmation has been filed from persons who have booked plots in this scheme. Thus explanation offered is unacceptable and without any basis. Thus I have no other option but to treat the amount of Rs. 40,54,325/- as unexplained cash credit us/ 68 for assessee has failed to explained of sources of funds. Thus addition of Rs. 40,54,325/- is being made as unexplained cash credits to the total income of the assessee.'' 2.6 Before the ld CIT(A), the assessee first tried to explain the modus operandi of the business. The assessee enters into agreement to purchase the land from the farmers and he pays certain amount. The assessee then starts marking plots and starts receiving the advance. Money so received in advance is paid to the farmer and land is formally transferred in the name of the society. The assessee submitted the list of plot holders alongwith their addresses and submitted that the AO could have made enquiries for verifying the facts. 2.7 The ld CIT(A) after considering the submissions of the ld.AR confirmed the addition after observing as under:- ''2.4 I have considered the argument....
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....nts and accordingly addition so made by the A.O. u/s 68 deserves to be deleted, has been gone through by the undersigned. Considering the facts and the legal position on the issue, the undersigned vide order-sheet entry dated 16.8.10 has asked the A.R. to show cause as to why this addition so made by the A.O. be changed to be made u/s 69 of the Income tax Act, 1961 as unexplained investment in purchase of land, as this purchase of land was not recorded in the books of account and opportunity was given to put up his case. The A.R. of the appellant vide his written submission dated 11.10.10 has replied that provisions of section 69 are also not applicable because nature and source of the investment is fully explained without giving any details as to how the nature and source of the investment is explained. As already discussed, he has completely failed to explain the source of investment. Accordingly, in view of the facts and circumstances and the legal position on the issue under consideration, the amount of Rs. 40,54,325/- paid for purchase of land, which is unaccounted, is held to be unexplained investment u/s 69 of I.T. Act, 1961 and added to the total income of the appellant. Th....
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....ed in the earlier paragraphs regarding purchase of land for Rs. 40.54 lakhs, it is held that investment of Rs. 60.75 lakhs in purchase of 6 bigha 15 biswa land at village Hathoj for Govind Vatika project developed on 13 bigha 1.5 biswa land is unexplained and accordingly is held to be added u/s 69 of I.T.Act. This will lead to enhancement by Rs. 60.75 lakhs.'' 2.10 Before us, the ld.AR has explained the modus operandi of the business and such modus operandi will be applicable for all the projects. The submissions are as under:- ''1.5 The assessee appellant elaborately explained Modus Operandi as well as his Business Model to the ld AO as well as CIT(A). The ld. AO nowhere in his assessment order has rejected the business model nor has he found the business model explained to be false. The ld CIT(A) has also erred in confirming the action of the ld AO in this regard. The said Modus Operandi is as under:- The assessee appellant started his career as a milk vendor in his village. Thereafter in the year 2000 at the age of 30 years, he started the business of real estate, as he was comfortable dealing with farmers because of his rural background. Assessee a....
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.... 265-269 Subham Vihar 33020.00 285 33169.80 270-278 Brij Vihar 8274.60 286 8274.60 279-280 1.7 The ld AO as well as the CIT(A) could not properly appreciate the Modus Operandi. Both the lower authorities insisted for specific evidences as if it was a case where regular books of accounts were maintained. Admittedly the income is from undisclosed business and therefore evidences will be of the nature and quality of that of the unaccounted business. Similarly when no books of accounts are maintained, recourse to estimation of income on the basis of assets cum expenditure theory is a settled proposition of law. 1.8 The business model followed by the assessee is also evident from the statements given by Shri Leeladhar U/S 131 of the Income Tax Act, 1961 before the ld. AO on 27.11.2009 in which he has accepted that the advance payment has been made to assessee for the purchase of plot in the proposed scheme before purchase of land.Copy of statements of Shri Leeladhar at PB Page 249-252. It is also evident from the seized records (PB Page 171-178) that assessee used to take payment from persons against bulk booking and pay....
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....Biswa Land Village-Hathoj Narsi Yadav 60.75 8-10 A-7/58 6 Bigha 6.5 Biswa Village Hathoj Madanlal Sharma 44.07 32-37 171 Total 13 Bigha 1.5 Biswa 104.82 1.11 The fact of staggered payments for acquiring land is evident from the PB 29-37. At PB 8-10 is the agreement for purchase of land from Narsi Yadav for Govind Vatika Project. As per PB 8-10, the entire payment is mentioned to have received prior to the advance amount of Rs. 5.11 lacs. However, the said payments, in fact, have been made on the following dates: Actual Date of payments Amount (Rs. In Lacs) Seized Document Annexure/ Page PB 15-10-03 0.11 A-20/2 29 18-11-03 5.00 A-20/2 29 24-12-03 6.00 A-20/2 29 11-2-04 4.00 A-20/2 29 16-4-04 7.00 A-20/2 29 20-5-04 5.00 A-20/2 29 1-7-04 5.00 A-20/2 29 16-9-04 5.00 A-20/2 29 27-9-04 9.70 A-20/2 29 1-10-04 4.50 - 6.06 2-11-04 3.38 Total 60.75  ....
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....m. On this basis, he started marketing the plots and started receiving the advance against sale of plots on such agricultural land, which are evidenced by the following seized documents. Annexure/Page No. Particulars PB Page A-21/Page 1-77 Retail and bulk Sale 38-115 A-22/Page 1-56 Retail and bulk Sale 116-165 A-18/Page Bulk Sale 166-178 A-19/Page 2,13 Bulk Sale 179-180 A-20/Page 2,6,7,8 Bulk Sale 181-184 A-23/Page 28 Bulk Sale 185 On occasions he also received money for bulk booking of plots from the persons who are in this business. The amount so received was used by him for making subsequent payments to the seller of land as per receipts seized during search. Thus, the assessee appellant was able to do the business without investing his own capital. 1.17 The complete cash account for receipts and payment regarding Govind Vatika Project prepared with the help of seized documents for evidencing the above business model is at PB Page187-190. The said date wise account confirm the following: (i) Payment for acquiring the land have been made in a staggered way over a period as again....
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....OKS OF ACCOUNTS:- The Ld CIT(A) has mentioned on page no.4 of his order for A.Y.2004-05 that "neither the purchase of this land nor the amount so paid was shown in the regular books of accounts by the appellant." Furthet at page no.5 of his order for A.Y.2005-06 he has mentioned that "This purchase of land has not been shown in the regular books of accounts and thus it is unaccounted." Further on page no. 4 of Assessment year 2006-07 he has mentioned "As the purchase of this land was not account for in the books of accounts and consequently this payment was also unaccounted, A.O. added the same." Whereas he himself has mentioned on page no.7 of his order for A.Y.2005-06 that appellant has not maintained any books of accounts for this project and for that matter for other projects also. The appellant has categorically admitted before both the lower authorities that no regular books of accounts has been maintained by him inspite of that The Ld. CIT(A) was confused that books of accounts were maintained or not because at one place he has mentioned that regular books of accounts were not maintained and on other place he has mentioned that the purchas....
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....bove this failure he has not furnished any confirmation from the so called advance givers. Such incomplete explanation is totally unsatisfactory and the A.O and Ld. CIT(A) have rightly rejected it and added the unaccounted investment in land as the income of the assessee. iii). The assessee has contended that he provided the details of the plot owners and their addresses to the A.O and the A.O should have verified these details from the plot owners. From the details of the plot owners furnished by the assessee ( APB page no. 253 to 281), it can be seen that only the plot no; name of the plot owner; address and size of the plot are given. Many of the addresses are incomplete. In the list for Brij Vihar on pg. 279 of the paper book for address only 'Jaipur' is written. On the remaining pages related to other projects there are dozens of addresses which are incomplete and from which the person cannot be located. No details are provided as to how much payment was received from the plot owners and when. Without these details how can the A.O make any verification from these plot owners? It is the responsibility of the assessee to give date wise details of the payments rece....
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....that such investments were the income of the assessee." In giving this decision Hon'ble High Court drew strength from following more judgements: 1) Jatindra Nath Sarmah vs. ITO(1978) 113 ITR 898(Gauhati HC ) 2) Raghunath Singh vs. CIT (1965) 57 ITR 562 (P & H HC) 3) Smt. Kamala Devi Jhawar vs. CIT(1978) 115 ITR 401(Cal. HC) In this case also the initial burden to explain the nature and source of the investment in land not recorded in the books of the assessee, lies on the assessee. But, as explained above he has failed to discharge this initial burden and therefore the unexplained investment has been rightly added by the CIT(A) u/s 69. iv). In his submissions, the assessee has also claimed that the advances received from prospective plot owners are reflected in the diaries seized during the search operations. It may be noted that during the assessment and first appeal proceedings the assessee made this general statement only but never explained which entries in the diaries were related to which payments for land. The assessee has furnished the copies of such diaries in the paper book at pg. 38 to 185. From these diaries, it can be see....
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.... may have expired in many of the cases. Even otherwise this evidence is of no help to the assessee because he has failed to give the confirmations from the persons (so called prospective plot owners) from whom such cash is claimed to be received. It may kindly be noted that when as per section 68, even the cash credit entries made in the regular books of accounts are required to be explained by the assessee why should the entries in rough diaries be exempted from such explanation. Therefore, since the assessee has failed to furnish confirmations of the parties from whom advance is claimed to be received, therefore the source of investment in the land remains unexplained. '' 2.13 We have heard both the parties. The action u/s 132 of the Act i.e. search operations were carried on 16-11-2007. The case was centralized with Central Circle on 31-12-2007. Notice u/s 153A was issued on 15-02-2008. The assessee filed return of income on 06-02- 2009. We are not aware as to when the copies of seized documents and copies of statements were provided to the assessee. After filing of return, the case was fixed for hearing on 6-11-2009. The assessee has filed replies vide letters dated....
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....k booking of flats is by shri Ram Niwas Ji Yadav for plot no. `126, 127, 130, 131, 133, 137-139. As per chronological, the payments in chart at pages 187 to 189 are:- 11-01-2004 Rs. 51,000 03-02-2004 Rs. 5,50,000 19-03-2004 Rs. 1,00,000 06-04-2004 Rs. 3,00,000 10-04-2004 Rs. 1,09,000 14-04-2004 Rs. 11,000 All the above entries except of Rs. 11,000/- are available at seized exhibit A-19 page 2 and copy of such page is available at page 179 of paper book. However, the total mentioned at A-19 page 2 is 11,21,000/- and such total is the same as of all the entries mentioned above. It means that no separate entry of Rs. 11,000/- is there but this amount is included. Page 2 of Exhibit A-19 also contains the receipt from Shri Devender and these are the same as contained in all the receipts of Govind Vatika Project. The entries are only for Govind Vatika Project while cash flow statement is for the projects for the financial year and hence there will be difference It is noted that cash in hand as on 31-03-2005 and 31-03- 2006 is more than of Rs. 50,000/- and hence assessee is liable to wealth tax. The explanation of the assessee that it is re....
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.... case. Relief may please be granted by deleting the said addition of Rs. 3,77,455/-. 3.2 The AO in his assessment order has estimated the profit in the project at Rs. 19,98,070/- and since such project yielded profit in three assessment years from 2003-04 to 2005-06 and accordingly profit to be taxed for the year under reference was taken at Rs. 6,66,023/- which represented 1/3rd of Rs. 19,98,070/-. The findings of the AO are as under:- ''The assessee is not maintaining regular books of accounts. The assessee has not produced any evidence for verification of profit as computed as above and has not declared in the return of income. Assessee has taken minimum development expenses Rs. 169 per Sq. Yard and has given bifurcation is as under:- S.No. Particulars Rate per Sq. Yard 1. Roads - Internal 30 2. Road - Approach 10 3. Tree Guards / Tree 10 4. Arrows, Glow Signs 5 5. Demarcation, Site Plans, Maps etc. 15 6. Boundary wall, Fencing of scheme 30 7. Boundary wall Plots/Blockwise 30 8. Pit Filling 24 9. Site Office Expenses 15 TOTAL 169 As per the enquiries....
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....eveloped in Hathoj at Kalwar Road where more than 50 different schemes are developed. The report does not mention anything specific about the location, which leads to doubt about the Inspector really having visited site. No opportunity of crossexamination was accorded before relying on the report. It was submitted that disallowance may be deleted. 3.3 Alternatively, it was submitted that in any case, the A.O. has added the profit from Govind Vatika project in the return of income and the A.O. should have added only the excess profit estimated by him. The total profit shown by the appellant for this project was Rs. 6,22,705/- and credit for the same should have been given by the A.O.'' 3.5 The ld CIT(A) recorded the findings vide paras 3.4 and 3.5 of his order as under:- ''3.4 I have considered the argument of the A.R. and have perused the assessment order. At the outset it is evident and undisputed that the appellant has not maintained any books of accounts for various projects and it is also undisputed that the expenses on development of this Govind Vatika Project has been shown by the appellant purely on estimated basis. There is no supporting bills or vouchers for....
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....- in A.Y. 2005-06 and addition to the aforesaid extent is upheld.'' 3.6 Before us, the ld.AR has submitted as under:- ''4.5 The basis for disallowance made by the ld AO is a report of the Inspector. Perusal of the report of the inspector does not inspire any confidence about his actually visiting the sites. The report mentions the name of Govind Vatika only and not of any other scheme surrounding to Govind Vatika or adjacent to it to support the visit of inspector ,if done, at correct location. The report is consisted of 15 lines only. Please note that the area where these schemes are being developed is Hathoj on Kalwad Road. The development in that area is scattered over around 15 kms and more than 50 different schemes are being developed by different colonizers in that area. The report does not mention anything specific about the location which leads to doubt about the inspector really having visited the sites. 4.6 The ld. inspector in his report has mentioned about his enquiries from some of the persons residing in the scheme. On the basis of the enquiry from persons he has given a report of no development expenses having being incurred. However, ld. Inspect....
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....he inspector was shown to the AR of the appellant and he was confronted with the facts mentioned in the report. However, no opportunity of cross examination was afforded to the assessee appellant before relying on the report of the inspector. Even otherwise, any report which, on the face of it, is unreliable cannot be made basis of disallowance even if the content of which might have been shown to the AR of the assessee appellant.'' 3.7 The ld DR in his written submissions has mentioned that he is relying on the order of the ld CIT(A). 3.8 We have heard both the parties. It is true that development expenses are not verifiable and no documents found to ascertain the quantum of development expenses. It is definitely an estimate. The quantum of development cost of colony claimed is Rs. 41,26,096/- and 1/3rd of this has been disallowed. If the disallowance as made by the AO is considered then net profit will come to 13.12% and this is quite excessive. Hence, one has to ascertain the estimated expenses. In the instant case, profit per sq. yard shown by the assessee is Rs. 25.62/- per sq. yard. During the course of search proceeding, the statement of assessee was recorded and it wa....
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....ages 344 to 353 and were made part of arguments for addition on account of alleged explained cash credit for assessment years 2003-04 to 2006-07. The additions agitated were:- 2003-04 Rs. 5,21,000 2004-05 Rs. 40,54,235 2005-06 Rs. 40,51,000 2005-06 Rs. 1,24,00,000 2006-07 Rs. 1,10,00,000 According to the assessee, total assets found were explained except to the undisclosed assets of Rs. 25.00 lacss. Reliance was also placed on the following decisions. 1.Musstaq Ahmed and Ors vs ACIT, 66 TTJ 305 (Jaipur) 2. ACIT vs Shri Mahesh Chand Jain (ITSSA No.105/JP/05) 3. DCIT vs Ramkumar Dhanuma(2000) 24TW 305 (Jaipur) 4.3 Before us, the ld.AR has reiterated the same submissions. 4.4 We have heard both the parties. It is true that facts found during the course of search are to be considered. The word 'may' is being mentioned in Section 68 & 69. The Honb'le Apex Court in the case of CIT Vs. P Mohan Kala, 291 ITR 278 has held that the assessee has to give an explanation and the AO has to consider that explanation. The AO has to apply his mind before coming to the conclusion as to whether the explanation is satisfactory ....
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....casions I also receive money for bulk booking of plots from the persons who are in this business. The amount so received is used by me for making subsequent payment to the farmers (sellers of land) as provided in the initial agreement with them for my buying the land. Thus I am able to do the business without investing any capital of mine." The assessee explanation has been carefully considered but not been found justifiable. Assessee has not able to give evidence / for advance booking of plots in Govind Vatika project. Thus assessee has given sketchy cash flow for summery without any evidence / support documents that advance have been received of booking of plots. No confirmation has been filed from persons who have booked plots in this scheme. Thus explanation offered is unaceeptable and without any basis. Thus I have no other option but to treat the amount of Rs. 1,24,00,000/- as unexplained cash credit u/s 68 for assessee has failed to explained of sources of funds. Thus addition of Rs. 1,24,00,000/- is being made as unexplained cash credits to the total income of the assessee.'' 6.3 The ld CIT(A) has confirmed the addition vide para 2.6 of his order after observing as....
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.....O. could have made verification is devoid of any merit. 2.7 Another argument taken by the appellant that there was no cash credit in the books of accounts and accordingly addition so made by the A.O. u/s 68 deserves to be deleted has been gone through by the undersigned. Considering the facts and the legal position on the issue, the undersigned vide order-sheet entry dated 16.8.10 has asked the A.R. to show cause as to why this addition so made by the A.O. be changed to be made u/s 69 of the I.T. Act, 1961 as unexplained investment in purchase of land, as this purchase of land was not recorded in the books of account and opportunity was given to put up his case. The A.R. of the appellant vide his written submission dated 11.10.10 has replied that provisions of section 69 are also not applicable because nature and source of the investment is fully explained, without giving any details as to how the nature and source of the investment is explained. As already discussed, he has failed to explain the source of investment. Accordingly, in view of the facts and circumstances and the legal position on the issue under consideration, the amount of Rs. 12400000/- paid for purchase ....
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..../- confirmed by the ld CIT(A) is deleted. 7.1 The third ground of appeal is against addition of Rs. 40,51,000/- confirmed by ld CIT(A) on the ground that investment in land in respect of 'Brij Vihar Project' is unexplained. 7.2 Our finding is the same as given in the case of 'Govind Vatka Project' and 'Gokul Vihar Project and accordingly we held that the ld CIT(A) was not justified in confirming the addition and the addition of Rs. 41,51,000/- is deleted. 8.1 The fourth ground of appeal raised by the assessee is as under:- ''4. In the facts and circumstances of the case and in law the ld. CIT (A) has erred in upholding the addition of Rs. 5,33,395/- against the addition of Rs. 6,66,023/- made by the ld. AO in respect of Govind Vatika Project by disallowing 1/3 development expenses. The action of the ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of Rs. 5,33,395/-. 8.2 The Revenue has raised the ground of appeal no. 1 as under:- ''1. Whether on the facts and circumstances of the case, the ld CIT(A) (Central), Jaipur has erred in law and on facts....
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....losed in the return u/s 153A and directed that the same be reduced from the addition made by the AO and accordingly upheld the addition of Rs. 3,18,414/-. 9.4 Another aspect is that the assessee has shown profit on the basis of percentage completion method. The percentage completion of project is based on the amount paid to the party from which land purchased as these details are available and details of receipt of booking are not available. The assessee showed profit of Rs. 12,128/- during assessment year 2005-06 and Rs. 1,97,458/- during the assessment year 2006-07. The AO has bifurcated the addition made for the project for both the assessment years in equal proportion. The method of accounting of profit in the case of project is either percentage completion method or project completion method. There is no such method to divide profit equally for all the years as the return for a particular year is to be filed before one is able to ascertain the period during which project will be completed. Hence, the action of the AO in making addition equally for both the assessment years is not acceptable. One has to estimate the profit. During the course of search, the assessee in his st....
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....essee had not shown the amount of Rs. 3,99,256/- in his return of income filed u/s 153A for assessment year 2005- 06. 10.3 The assessee showed a profit rate of Rs. 26/- per sq. yard. The AO made addition of Rs. 7,44,000/- and such addition amounted to addition of Rs. 48.50/- per sq. yard i.e. the AO has applied the rate of 74.50/-per sq. yard. 10.4 The ld CIT(A) has considered that assessee himself has shown undisclosed income from this project and accordingly directed the AO to reduce the same from undisclosed income determined. 10.5 We have considered that rate per sq. yard shown by the assessee is not acceptable and the rate determined by the ld CIT(A) is excessive. In case of Brij Vihar Project, we have held that profit of around 1/3rd is to be added. Thus the addition which is required to be confirmed will be Rs. 1,33,090/-. Hence, the ground of appeal raised by the assessee is partly allowed while ground of appeal of the Revenue is dismissed. 11.1 The fourth ground of appeal raised by the Revenue is as under:- ''4. Whether on the facts and circumstances of the case, the ld CIT(A) (Central), Jaipur has erred in law and on facts in directing the AO to delet....
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..... The action of the ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of Rs. 21,00,000/-. 14.2 The finding of the ld CIT(A) on this issue is as under:- ''2.11 Similar facts are there in respect of purchase of 2 bigha 10 biswa land at village Begus for which the appellant has made payment of Rs. 21,00,000/- The appellant has not shown this land also in his books of account or books of account of HUF, if any maintained. In any case, as the appellant has ben actually doing the business in his indivudual capacity and no evidence of income of HUF etc was furnished either before the A.O. or even before the undersigned, it is appropriate to hold that the appellant has himself invested in purchase of this land also and merely for the purpose of agreement he has put HUF therein. Accordingly, the payment made by appellant for purchase of land being unaccounted, the addition made by the A. O. amounting to Rs. 21 lakhs is also upheld.'' 14.3 Before us, the ld.AR has filed the following submissions. ''3.3 Ranjeet Singh Yadav HUF entered into an agreement with Mr.Mool Chand Gurjar f....
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....expression "person" occurring in Section 2(31) is a very crucial definition because it is with reference to the category of entities specified in Section 2(31) that the liability to tax under the Income Tax Act, 1961 is determined. If the person is not capable of being considered as a person within the meaning of section 2(31), then no liability attaches. It has been held by the apex court in the case of CIT vs. Rameshwarlal Sanwarmal [1971] 082 ITR 0628 (SC) that individual and HUF are totally different units of taxation and that they are two different assessee. This principal emerges from the charging section 4 of the Act itself. 3.8 It is humbly submitted that addition were made in the hand of the assessee appellant for the land purchased by other person i.e.Ranjeet Singh Yadav HUF which is against the charging section itself. In view of the above, there is no basis for confirming the addition of Rs. 21.00 lacs. Therefore, humble prayer is made for deleting the same.'' 14.4 On the other hand, the ld DR has relied on the orders of authorities below. 14.5 We have heard both the parties. It is true that the assessee has not filed the required evidence. The assessee i....
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....006-07 5,18,075/- 2007-08 99,914/- 2008-09 2,91,205/ The AO made addition of Rs. 22,56,940/- which represented an addition @ Rs. 64.54/- per sq. yard. This means that the profit is at Rs. 90.54/- per sq. yard. The ld CIT(A) directed the AO to reduce the declared undisclosed income in the return u/s 153A and hence reduced the addition to Rs. 13,47,760/- which means that the ld CIT(A) adopted profit rate at Rs. 64.50/- per sq. yard. Looking to our discussion as contained in earlier paras in respect of other projects, we feel that profit should be determined on percentage completion method and it will be fair and reasonable to restrict the addition as 1/3rd of profit disclosed by the assessee 16.4 The addition for different assessment years will be :- A.Y. Amount 2006-07 1,72,692/- 2007-08 33,315/- 2008-09 97,069/- 16.5 The third ground of appeal of Revenue is against the relief of Rs. 2,19,843/- given by the ld CIT(A) in respect of Manglam Residency Project. This issue has been considered in the case of the assessee for assessment year 2005-06 and following that finding, the addition to the extent of Rs. 73,281/- is ....
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....or Rs. 23.75 lakhs was mentioned and the appellant failed to explain the nature and source of payment for the same. 4.2 Before me, it was submitted that as per this agreement only Rs. 3.75 lakhs was given as advance to the seller. However, later on the deal could not be finalized due to some dispute in the land, which came into the knowledge of appellant after the execution of the agreement. The appellant had not paid any further amount to M/s. Kesara, the seller. The land is still in the name of Sh. Kesara, which can be verified by your good self from the copy of Jamabandi which is submitted (before me). Address of Sh. Kesara was also given for further verification of the A.O., if any. In view of the above, it was submitted that the addition may be deleted. Copy of the submission and copy of Jamabandi was also shown to the A.O., who was present during the hearing. It was also submitted that this land has not been in any way considered or included in any of the project of the appellant. 4.3 I have considered the argument of A. R. and have perused the assessment order and relevant record. On perusal of copy of agreement dated 21.03.07, given by A. O. it is seen tha....
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....ng the course of assessment, the assessee appellant also requested vide letter dated 1st December, 2009 to ld AO to summon Mr. Kasaria u/s 131 for verification of facts, which was not exercised. No other seized paper shows that assessee had paid Rs. 20.00 lacs to Mr.Kesara. 2.5 The ld AO made the addition considering the sale agreement found in which purchase of 1 Bigha land for Rs. 23.75 lacs was mentioned and the assessee appellant failed to explain the nature and source of payment for the same. Learned AO also failed to support his findings about payment of Rs. 20 lacs during appeal proceding before Ld.CIT(A) However, the ld CIT(A) considering that there is no evidence regarding further payment of Rs. 20.00 lacs and land has not been taken possession by the assessee appellant, Jamabandi still indicate the name of owner as sh. Kersara deleted the addition to the extent of Rs. 20.00 lacs. 2.6 In respect of payment of Rs. 3.75 lacs, it is humbly submitted that the peculiar modus operandi followed by assessee appellant as explained above did not involve any capital of his own. Rs. 3.75 Lacs paid by the assessee has also been shown in the cash flow summary submitted....
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....ela Dhar was recorded by the A.O. He noticed that there were only single financial transaction of Sh. Leela Dhar with the appellant. Moreover, details of which plot or land were to be purchased by the appellant on behalf of Sh. Leela Dhar were also not known. The A.O. also noted that Sh. Leela Dhar was not able to explain the source of the money received. Accordingly, A.O. treated the statement of Sh. Leela Dhar as unreliable and cash found at the premises of the appellant as unexplained and added the same. 3.2 Before me, it was submitted the cash advance receipt was submitted vide letter 24.11.09 before the A.O. and statement of Sh. Leela Dhar was recorded by the A.O. on 27.11.09, in which he has accepted that he has given Rs. 10 lakhs. The appellant being in the business of real estate, receives money from a number of persons and accordingly during the course of search, being under mental strain, the appellant might have said the amount being received from 5-6 persons. Sh. Leela Dhar is assessed to tax. Considering these facts, it was requested that the addition may be deleted. 3.3 It have considered the argument of the A.R. and have perusal the assessment....
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.... 7.7 The only reason of rejecting the explanation of the appellant given by the ld. AO at Pg.4 of his order (A.Y. 2008-09) is that during the course of search the assessee had explained this as receipt from 5-6 persons whereas during assessment proceedings this is explained to be a receipt from only one person i.e. Shri Leela Dhar. It may be noted that the assessee is into the business of Real Estate who receives money from a number of persons against booking of plots. During the course of search, under mental strain, the assessee might have said the receipt being from 5-6 persons, because due to nature of his business and frequency of transactions forgetting the exact details is not unnatural. The ld. AO is satisfied about the source as well as the identity of the persons therefore; under these circumstances without proving the explanation being wrong or unsubstantiated the same cannot be rejected. 7.8 The ld CIT(A) at page 3 of his order(A.Y. 2008-09) has upheld the addition made by the ld AO on the ground that their is no earlier transaction with Shri Leela Dhar. Only one transaction of high amount is shown. He alleged that it is difficult to believe that the asses....
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....sessee stated cash found from his residence represents the amounts received from 7-8 parties. During the course of assessment proceedings, the AO recorded the statement of Shri Leela Dhar Gurjar on 27-11-09 u/s 131 of the Act. Shri Leela Dhar Gurjar stated that he knows Shri Ranjeet Yadav for the last three years. Shri Leela Dhar Gurjar stated that he has made two transactions of purchase and sale with Shri Yadav. Shri Leela Dhar Gurjar stated that he paid Rs. 10.00 lacs on 13-11-07 for purchasing plots in a scheme at Kalwar Road Sirsi. Shri Leela Dhar Gurjar has also stated that the names of the farmers from whom the land was to be purchased and these names were Shri Sohan Yadav and Shri Mohan Yadav Shri Leela Dhar also stated that he has not received back the sum. The confirmation of Shri Leela Dhar Gurjar was filed. The bank account of Shri Leela Dhar Gurjar shows cash withdrawal of Rs. 10.00 lacs on12-11-07. The assessee has discharged the onus to show that statement recorded at the time of search is rubuttable. The AO has recorded the statement on oath of Shri Leela Dhar Gurjar. On the basis of evidences furnished by the assessee during the course of assessment proceedings, we....
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....Late Shri Babulal Guzar resident of 24, Suraj Nagar, Kalwar Road, Jaipur, amounting to Rs. 10 lakhs. Note 2: The jewellery is acquired by assessee appellant partly out of his own savings in different years and partly he received the same on various ceremonial occasions from his friends and relatives including the jewellery received during his marriage from his in laws. Note 3: The car was purchased in the F.Y. 2004-05 which has already been disclosed in return filed u/s 139(1) for the A.Y. 2005-06. The car has been financed through HDFC car loan. Note 4: It has already been disclosed in the return of income filed for the A.Y. 2000-01. Note 5: The land was purchased by assessee appellant on 17/06/88 and construction was done. The said land and building has already been disclosed in the return filed by him for the A.Y. 2000-01. The assessee appellant is presently residing at this property. Note 6: The property was purchased by assessee appellant in the year 1999- 2000 (beyond the period). Note 7: The land was purchased by assessee appellant's wife on 13/01/2000. The said property has already been disclosed in the return filed by assessee appellant's wife for the A.Y....