TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 675
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....it represents sale transaction entered into with M/s Jayadarshini Housing Pvt. Ltd. , in connection with the sale of 1930 sq. yards of vacant land located at Kanuru, Vijayawada and the agricultural land. Search operations were also simultaneously conducted in the case of M/s Jayadarshini Housing Pvt. Ltd. and its group companies. During the course of search, a statement was recorded from Shri G. Saibabu, Managing Director of Jayadarshini group of companies on 09. 11. 2006. Shri Saibabu also admitted that the company has purchased 20 acres of agricultural land at Medchal along with 1930 sq. yards of site at Kanur village, Vijayawada and paid Rs. 3. 00 crores to Shri P. Sankara Rao, the managing partner of the assessee firm. Shri G. Saibabu further stated that out of the sum of Rs. 3. 00 crores paid to Shri P. Sankara Rao, the sale consideration shown in the registered sale deeds was Rs. 1. 22 crores and the balance amount of Rs. 1. 78 crores was on-money paid in cash to Shri P. Sankara Rao towards purchase of agricultural land as well as the vacant site of 1930 sq. yds. . Shri P. Sankara Rao, Managing partner of the assessee firm also agreed that he has received Rs. 1. 78 crores in ....
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....onal consideration and there is no scientific method followed by the AO for apportioning the amount attributable to the sale of vacant site related to the assessee. For ready reference, we extract relevant part of the order of the Ld. CIT(A) which reads as under : 5. I have seen the submissions made by the appellant, gone through the assessment order besides perusing all other material available on record including the case laws relied upon. The question in this appeal is whether the on-money admitted by the appellant represents income concealed or not. I find from the records the following : a) No material was found during the course of search and seizure operations that the appellant received any additional consideration other than the amount recorded in the books of account. b) The addition was made purely on the basis of the admission made by the appellant at the time of search and seizure operations which was retracted by the appellant himself. c) There is no evidence on record to show that there is any additional consideration received. The total on-money consideration said to have been received relates to two different assets - (i) a capital asset which is exem....
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....ging Director of Jayadarshini Housing (P) Ltd. who had purchased the land from the assessee as well as the Managing partner of the assessee firm had agreed that there was on-money payment. On appeal, the Hon'ble ITAT has also confirmed the on-money payment. However, the Hon'ble ITAT has reduced the undisclosed income in the hands of the assessee firm. As far as the on money is concerned, since both the parties have agreed, it is established that on money was paid in the transaction. The AO referred this issue in para No. 6. 2 of the penalty order, wherein, the assessee admitted the receipt of on money amounting to Rs. 1. 78 crores and admitted the same as additional income in the statement recorded on 21. 12. 2006. For the sake of clarity and convenience we extract relevant part of the penalty order which reads as under : "6. 2 Sri P. Sankararao, Managing partner of firm got confused because he was asked details of several properties. But it can be seen from statement reproduced below that he was only asked about two Properties one sold by assessee firm, another sold by himself. Even in state of confusion he can't concede figure of 1. 78 crores when total registered sale cons....
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.... of the sales consideration of Rs. 1. 78 crores received from Sri G SaiBabu of "Jayadarsini Housing Pvt. , Ltd. ,". 10. While replying to question no number 21 of same statement he reiterated the fact that he received excess consideration Rs. 1. 78 Crores which is reproduced below. "Q No 21 During the course of search proceedings it was noticed that you have purchased around Ac. 20. 00 of land at Medchel, Hyderabad In the year 2002-03 and it was subsequently sold to JayadarsiniHousingi in the year 2004. 05. What is the source of investment of the said land purchase? Ans: The total consideration paid by me at the time of purchase was Rs. 10 laklis. This was made out of my own money where you have found in the form of receipts that was answered in the earlier question. Later, "Shubhadarsi Housing Pvt. , Ltd" could not do any real estate. activity all the transactions were not mentioned in the books of account Subsequently the above said land Was sold to "Jayadarslnl Housing Pvt. , Ltd" for a registered value of Rs. 15 lakhs. However, the excess cash received for this transaction and for another transaction, I have already admitted in the reply to the Q. No. 6. " 7. 2. Afte....
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....2 crores. We also reproduce hereunder the relevant para No. 14 of the penalty order which reads as under : 14. Other explanation of assessee is that "Sri G. Saibabu has not given details of additional consideration received property wise. What Sri G. Saibabu stated was that he paid in all 1. 78 Crores. There is no indication that what is the amount paid for 1930 Square yards sold by Sri Peddu Sankaraa Rao, Managing Partner of M/s. Subhadarsi Estates and what is the amount paid for 20 Acres of land sold by Sri Peddu Sankara Rao Managing Partner of M/s. Subhadarsi Estates. On the other hand Sri P. Sankararao, managing partner of assessee firm stated that he received entire amount of Rs. 1. 78 Crores. Therefore basing on statement of managing partner of firm Sri P. Sankara Rao, addition can't be made in hands of assessee firm. "Sri G. Saibabu in his statement dated 09-11-2006 dearly stated that consideration for both properties put together was negotiated. Exact bifurcation was not decided. Relevant extract of statement of Sri G. Saibabu is as under: "Q. No. 11: Please go through the above replies. When Sri P. Sankara Rao has paid Rs. 4 lakhs for 1000 Sq. Yds. , you have stat....