TaxTMI 
TaxTMI 
2020 (1) TMI 1033
X X X X Extracts X X X X
X X X X Extracts X X X X
....laining the reasons for delay. After hearing both the sides we condone the delay and admit the appeals of the Revenue. ITA No.ITA/618/V/2018-A.Y. 2015-16 2. Ground No.(i) to (iv), (vii), (viii) and (ix) are related to the validity of issue of notice u/s 153C of the Income Tax Act, 1961 (in short 'Act') . Brief facts of the case are that the assessee is engaged in the real estate business and construction of villas etc. A search and seizure action was conducted u/s 132 of the Act in SVBC Gold Group and simultaneously survey u/s 133A of the Act was conducted in the case of assessee firm M/s Navaratna Estates on 24/11/2015. M/s Navaratna Estates is a Partnership firm consisting of seven partners i.e.(i) Shri Suresh Kumar Jain, (ii) Shri Mahendra Kumar Jain,(iii) Shri Ranjith Kumar Jain,(iv) Shri Manchukonda Yetiraja Subramanyam, (v) Shri Manchukonda Shyam, (vi) Shri Manchukonda A.Sriranga and (vii) Shri Manchukonda MouliKrishna. During the course of search and seizure operations conducted in the case of Shri Manchukonda Shyam, one of the partners of the assessee firm at his residence in 8-1-27/63/4, Nauka Nagar, Visakhapatnam, certain incriminating material was found and seized ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he statement recorded on 13.01.2016, Sri Manchukonda Shyam stated that page No.6 of Annexure MKS/1 and page No.20 of MKS/2 were related to the transactions pertaining to sale of land in Nerellavalasa by farmers to some buyers and he acted as a mediator in the above transaction and admitted the income of Rs. 50 lakhs as additional income in his hands. Thus, the Ld. CIT(A) has given a finding that page No.20 of MKS/2 and page No.6 of MKS/1 were not belonging or pertaining to the assessee firm, but they are pertained to Shri Manchukonda Shyam. The remaining three documents i.e. page Nos.12 to 14 of Annexure MKS/1, pertained to A.Y.2016-17 and the AO also made a specific addition of Rs. 51,75,650/- for the A.Y.2016-17, hence, the Ld.CIT(A) viewed that the said documents mentioned in the satisfaction note neither belonged/pertained to the assessee firm nor pertained to the impugned assessment year, hence held that there is no case for initiation proceedings u/s 153C of the act. The Ld. CIT(A) relied on the decision of Hon'ble Supreme Court in the case of CIT Vs. Sinhgad Technical Education Society in Civil Appeal Nos.1101 to 11083 of 2017 and the decision of this Tribunal in the ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....so raised additional ground in cross objections challenging the validity of issue of notice u/s 153C of the Act, without having recorded satisfaction in the case of searched person. The AR submitted that there was no incriminating material for issue of notice u/s 153C of the act and argued that the AO of the searched person has not recorded the satisfaction for issue of notice u/s 153C in the assessee's case. Therefore requested to admit the additional ground which is purely legal issue and no verification is required. The Ld.AR submitted that the Ld.CIT(A) has provided the copies of two satisfaction notes recorded by the AO prior to issue of notice u/s 153C of the Act in the case of the assessee. The two satisfaction notes dated 24.11.2015 in respect of SVBC group and the other one is dated 15.09.2016 for the A.Y 2014-15. As per 153C of the Act, two separate satisfaction notes are to be recorded, one by the AO of the searched person and the other by the AO of the person whose documents were found in the case of searched person. From the satisfaction notes furnished by the Ld.CIT(A) in the case of respondent, both the satisfaction notes were recorded by the AO of the assessee, but ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he residence of Sri Manchukonda Shyam pertains to Navaratna Estates. Since there was a categorical finding given by the AO in the case of the Navaratna Estates, the Ld.DR argued that the AO has rightly initiated proceedings u/s 153C, therefore, requested to uphold the validity of issue of notice u/s 153C and remit the matter back to the file of the Ld.CIT(A) to decide the appeal afresh on merits.. 8. We have heard both the parties and perused the material placed on record. In the instant case, search u/s 132 of the act was conducted in the case of Sri Manchukonda Shyam who happens to be one of the partners of the assessee firm and during the course of search, incriminating material was found evidencing the transactions made by the assessee firm outside the books of accounts i.e. collection of on money. Therefore, the AO initiated proceedings u/s 153C of the Act. The seized material found during the course of search was marked as Annexure MKS/1 and MKS/2. Page No.6 of MKS/1 and page No.12 to 14 and page No.20 of MKS/2 stated to be relating to the transactions pertaining to the assessee with regard to the monies collected outside the books of accounts. As per the provisions of 153....
X X X X Extracts X X X X
X X X X Extracts X X X X
....action. For the sake of clarity and convenience, we extract the relevant part of the order of this Tribunal in the case of Sri Padmavathi Venkateswara Constructions (supra) in para No.9 to 9.3 which reads as under : "9. We have heard both the parties and perused the material placed on record. In the instant case, the contention of the assessee is that the AO has not recorded satisfaction in the case of the searched person for transferring the incriminating material to the AO of the assessee. The Ld.CIT(A) has called for the remand report, in the remand report also, the AO mentioned regarding recording of satisfaction in the case of the assessee, but no mention was made in respect of the satisfaction recorded in the case of searched person i.e. R.Venkatramaiah. The department also did not place any evidence to show that satisfaction was recorded in the case of searched person, R.Venktramaiah, while transferring the incriminating material. As observed from the CBDT Circular No.24/2015 dated 31.12.2015 which is placed in page No.98 of the paper book , the CBDT has given guidelines to all the AOs to record satisfaction even if the AO of the searched person and the other person....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation of the total income of such other person for the relevant assessment year - or years referred to in sub-section (1) of section 153A (Emphasis Supplied) 6. It is therefore clear that firstly satisfaction has to be recorded by the Assessing Officer who conducted search, that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in Section 153A of the Act. Thereafter, the Assessing Officer having jurisdiction over third party on receipt of the seized material or books of accounts or document being handed over to him shall record his own satisfaction after examining the same independently without being influenced by the satisfaction of the Seizing Officer. In other words it is not an automatic action. We find satisfaction of two officers is missing. In this connection we set out the text of the order of the Assessing Officer which is as follows: "A search and seizure operation u/s. 132 was carried out in the group ease of Dr. T. Yadhaiah Goud and others on 25.3.2010. During the course of search operation documents belonging to SHETT....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on, it is clear that the AO of the searched person has not recorded a separate satisfaction for transfer of the material found during the course of search and the department did not place any material to substantiate that the AO of the searched person has recorded separate satisfaction for transferring the material to the AO of the assessee and to initiate proceedings u/s 153C. The Ld.DR contended that if the AOs of both the searched person and the assessee are one and the same no separate satisfaction is required to be recoded and relied on the decision Hon'ble Delhi High court in case of Instronics Ltd and Ganapati Fincap Services Pvt. Ltd. In the case of Instronics Ltd the Hon'ble High Court of Delhi restored the matter back to the file of the ITAT since there is no discussion on whether the documents referred to in the ITAT's order in fact incriminating and the AO of the searched person has recorded the satisfaction that the seized documents belonged to the assessee. The decision of Hon'ble High Court of Delhi in the case of Ganapati Fincap Services Pvt. Ltd. Vs. CIT (supra) is against the writ petition and the facts of the assessee's case are distinguishable, therefore, the ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....faction even if he is also the AO of the other person u/s 153C. 13. Similar issue was considered by the coordinate bench of ITAT Ahmedabad in Parshwa Corporation. v. Deputy Commissioner of Income-tax, Central Circle2, Baroda [2017] 88 taxmann.com 43 (Ahmedabad - Trib.) and held that "18. From the above, it is clear no satisfaction is recorded by the Assessing Officer of person searched. The Assessing Officer of assessee did not record any satisfaction prior to issue of notice u/s 153C. The so-called satisfaction recorded in the notice u/s 153C is totally vague. It has not specified which valuable articles/things/books of accounts/documents were found from Shri Rameshbhai B. Shah which belongs to the assessee. In the assessment order the Assessing Officer has mentioned that in the laptop of Shri Rameshbhai B. Shah the data pertaining to the assessee were found and on that basis notices u/s 153C have been issued. However, in the notice u/s 153C, wherein the Assessing Officer is claimed to have been recorded the satisfaction for issue of the notice, there is no mention about such laptop or the alleged data in such laptop which is claimed to be belonged to the assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that the said document belongs to that person. It is for the Assessing Officer to rebut that presumption and come to a conclusion or "satisfaction" that the document in fact belongs to somebody else. There must be some cogent material available with the Assessing Officer before he/she arrives at the satisfaction that the seized document does not belong to the searched person but to somebody else. Surmise and conjecture cannot take the place of "satisfaction". ------- 11. It is evident from the above satisfaction note that apart from saying that the documents belonged to the petitioner and that the Assessing Officer is satisfied that it is a fit case for issuance of a notice under Section 153C, there is nothing which would indicate as to how the presumptions which are to be normally raised as indicated above, have been rebutted by the Assessing Officer. Mere use or mention of the word "satisfaction" or the words "I am satisfied" in the order or the note would not meet the requirement of the concept of satisfaction as used in Section 153C of the said Act. The satisfaction note itself must display the reasons or basis for the conclusion that the Assessing Officer of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pectfully following the view taken by this Tribunal and the decision of Hon'ble Jurisdictional High Court in the case cited supra, we hold that the assumption of jurisdiction without recording the reasons in the case of searched person is invalid. Accordingly, uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue. 10. Additional ground raised by the assessee in cross objection is allowed. Since the cross objections filed by the assessee are in support of the order of the Ld.CIT(A), the same becomes infructuous and hence dismissed. Since we dismissed the appeal of the revenue holding that the AO has assumed jurisdiction wrongly without having satisfaction, we consider it is not necessary to adjudicate the other grounds raised by the revenue in the appeal. 11. In the result the appeal of the revenue is dismissed and the cross objections of the assessee are partly allowed. I.T.A. 612/Viz/2018, A.Y.2016-17 12. This appeal is related to the A.Y.2016-17. Ground No.(xvi), (xvii) and (xviii) are general in nature and no separate adjudication is considered necessary. 13. Ground No. (i) to (viii) are related to the addition made by the AO in respect of 'Blue ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the time of registration of the sale deed B. Rs. 5,00,000/- at the time of construction of the plinth beam C. Rs. 5,00,000/- at the time of construction of ground floor slab D. Rs. 5,00,000/- at the time of construction of first floor slab E. Rs. 5,00,000/- at the time of construction of brick work F. Rs. 1,50,000/- at the time of handing over of the Duplex Villa 3. Total consideration of villa Rs. 53,00,000/-" 13.1. Similarly, the AO has referred another loose sheet in page No.48 of the impounded material in A/NRE/Survey/Buss/01 which was also the schedule of payment for total consideration of Rs. 53.00 lacs for sale of each villa. The survey team seized the copy of hard drives from the business premises of the assessee from which the certain emails were also extracted. From the impounded material and the Email sent from Navaratna Estates to [email protected], the AO observed that villa Nos.83 and 95 were vacant at that time and out of which villa No.83 was sold to Suri Radhika Kalyani vide document No.4819/2014 dated 26.09.2014 and registered at SRO, Bheemili for a consideration of Rs. 36,25,000/- against the quote....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tment for alleged on money receipts on sales. The assessee submitted before the AO during the assessment proceedings that the documents relied up on by the AO proposing the addition was blind and incomplete documents and on the basis of the said documents no addition can be made. The assessing officer did not accept the contention of the assessee stating that it was an afterthought. The AO also did not make addition as proposed in show cause notice dt.02.11.2017 and at the end the said proposed addition was dropped. 13.3. A search u/s 132 was also conducted in the case of Sri Lanka Anil Kumar, a key employee of the assessee firm who is stated to be the authorized person to deal with all the affairs of marketing. During the course of search on 24.11.2015 in the residence of Sri Lanka Anil Kumar, incriminating material was found and seized as Annexure LAK/01 and a statement was also recorded from Sri Lanka Anil Kumar on the said date. Sri Lanka Anil Kumar with regard to page No.6, 7 and 8 of Annexure LAK/01 stated that the details are related to the amounts due from the customers of Blue Marino project of M/s Navaratna Estates and the same were taken from the books of accounts of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....6.12.2017. He bluntly rejected stating that he does not know the entries made in page No.6 to 8 seized from Sri Lanka Anil Kumar and does not match the entries made in the books of accounts of M/s Navaratna Estates. In a nut shell, Sri Suresh Kumar Jain has rejected the contention of Sri Lanka Anil Kumar and the AO that the notings made in page No.6, 7 and 8 were related to Navaratna Estates and he further submitted that the statement given by Sri Lanka Anil Kumar has no relevance to Navaratna Estates and whatever he told was wrong to the extent of Navaratna Estates. Sri Suresh Kumar Jain further stated, the statement recorded u/s 131(1) from Sri Subrahmanyam cannot be taken into cognizance since he was not in good health at the time of giving the statement, The AO found from the seized documents of Anil Kumar that the entries made in the notings of page No.6, 7 and 8 of Annexure LAK/01 were matching with the sale of villas with villa number, customer name and the total sale amount accounted for in the books of accounts except on money received outside the books of accounts. The AO viewed that Sri Suresh Kumar Jain is pretending as if he was not aware of the notings in page No.6 to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....king of villa to handing over the villa was given in page No.54 and 48 of Annexure A/NRE/Survey/Buss/01. Email dated 17.02.2014 shows that west facing villa No.83 was sold to Ms.Suri Radhika Kalyani vide document No.4819/2014 dated 26.09.2014 registered at SRO, Bheemili, for a consideration of Rs. 36,25,000/- against the actual value of Rs. 53,00,000/- as found in the impounded material in Annexure/NRE/Survey/Buss/01. The Ld.DR further argued that the other loose sheets also shows that the assessee had sold the villas for Rs. 50 lakhs and above, however, registered at Rs. 36,25,000/- undervaluing the actual sale price of the villa. In the Email sent to Kalyan Mannuru on 10.11.2014 in Annexure- A/NRE/Survey/Buss/6 and Anil Kumar Lanka's communication requesting M/s Brick and Mortar to change the price of Blue Marino to Rs. 54 lakhs establishes that the sale consideration was not less than 50.00 lacs for each villa. Further during the course of survey u/s 133A, bundle of loose sheets were found and seized as Annexure BMHP/133A/Navaratna. On perusal of the page No.50, it is found that out of 110 acres of lay out, 40 villas were sold @Rs. 50 lakhs per villa and 100 villas were sold at ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of in support of the estimate. 16. Per contra, the Ld.AR submitted that the AO referred the seized material found and seized in the business premises of the assessee marked as Annexure NRE/01, page No.54,48 email dated 17.02.2014, email sent to Brick and Mortar on 10.11.2014 and the loose sheets found during the course of survey in Chepaluppada marked as BMHP/133A/Navratna and other evidences found during the course of search and survey in the business premises of the assessee as well as in the residential premises of the partners, but made the addition basing on the seized material found during the course of search from the residence of Sri Lanka Anil Kumar marked as LAK/01 in page No.6, 7 and 8. Therefore, Ld.A.R argued that the other material found during the course of survey or search in the business premises or in the residence of partner has no relevance to the assessment and should not be taken cognizance of. The Ld.AR further stated that the AO had issued show cause notice dt. 02.11.2017 and there was no mention of LAK/01 seized from Lanka Anil Kumar in the show cause notice. Assessee has objected for the proposed addition of Rs. 3.66 crores, out of total sum of Rs. 9.84....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eceipt of on money. Enhancing of price from Rs. 53 lakhs to Rs. 54 lakhs in the mail sent to Brick and Mortar is nothing but business and marketing strategy for getting the better price. There is no indication or evidence for sale of villas at higher than the registered price and same is case with page No.50/BMHP/133/Navaratha, therefore, argued that none of the seized material or the impounded material shows that the assessee had received on money for sale of villas. The quotations and rates quoted by the assessee cannot be taken as a conclusive proof for receipt of consideration when there is registered document showing the sale price of villas before Sub Registrar Office, Bheemili. Hence, argued that the actual sale price is as per the registered document and there is no on money received by the assessee, hence requested to delete the addition made by the AO instead of confirming the addition partly. The Ld.AR further submitted that the facts of the case law relied upon by the AO as well as the Ld.DR in the case of H.M.Esufali H.M.Abdulali are completely different and distinguishable and has no application in assessee's case. Accordingly, the Ld.A.R requested to set aside the or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....asis of page No.54 of Annexure-A/NRE/Survey/Buss/01 and issued show cause notice but did not take the same for computing the income or for arriving at unaccounted income. Different amounts were mentioned in the material found during the course of search regarding the sale price of the villas. One quotation shows 53.00 lacs and another document shows at Rs. 50 lakhs and 60 lakhs. At the end the AO also did not place reliance on the above documents for arriving at the undisclosed income. During the appeal hearing also the department could not place any evidence to controvert the finding of the Ld.CIT(A). We also observe from the seized material or impounded material marked as Annexure NRE/Survey/buss/01 , BMHP/133A/Navaratna, page No.50 and other email correspondence that there was no indication or evidence to support the receipt of on money by the assessee. Therefore, we do not find any reason to disagree with the Ld.CIT(A). With regard to seized or impounded documents mentioned in para No.17 of this order, the Department also did not place any material to controvert the findings of Ld.CIT(A) on this issue. Further though the AO referred the above impounded or seized material and ul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gs, the Ld.CIT(A) considered that there was an element of on money receipt, as recorded on page No.6 of the seized material which was found from the residence of Sri Lanka Anil Kumar marked as LAK/01. During the course of statement recorded from Sri Lanka Anil Kumar, he had stated that page No.6 to 8 related to the information of villa of buyers and major part of the amounts were collected. Sri Suresh Kumar Jain in the statement, confronted with him, completely denied having received any on money and stated that statement given by Anil kumar has no relevance to affairs of the firm and whatever stated by Lanka Anil Kumar was wrong. The AO did not make any cross verification of the statement given by Sri Suresh Kumar Jain with Sri Lanka Anil Kumar or with any of the buyers of the villas to ascertain the receipt of on money. The above scribbling found and seized as annexure LAK/01 does not indicate any on money except giving leads to consider the total sale consideration could be Rs. 52.00 lacs in case of Villa No.122 and Rs. 44.25 lacs in the case of villa No.139. Since the material was found in the residence of Lanka Anil Kumar the presumption is not available to hold that contents ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oose slip containing certain entries recording the payment which was found at the premises of CRK. It does not contain either date of payment or name of the person who has made the payment. According to the Department, CRK denotes C. Radha Krishna Kumar and KRK denotes K. Rajani Kumari. However, no name of the assessee was found in the louse sheet. The property was purchased from P w/o CRK for a disclosed consideration of Rs. 65 lakhs by the assessee. The property has been registered and the sale deed was executed for a consideration of Rs. 65 lakhs on 21st Aug., 2006 which consideration has been accepted by the State registration authorities. Further nothing was brought on record to show that there was any invoking of s. 50C while completing the assessment in the case of the seller. There is no evidence other than the seized material marked as 'A/CRK/104' where relevant entries are made at Rs. 1,65,00,000. The seized material was not found at the premises of the assessee and there is no corroborative material to suggest that the assessee has actually paid Rs. 1.65 crores towards purchase consideration of the property. The assessee and her brother categorically denied the payme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or purchase of the property. The Department has not brought on record the date on which the payment was made and the source from which it is paid and/or any details of bank account from where the cash was withdrawn. Without any of these details, the Department has taken a view that the assessee has paid Rs. 165 lakhs for purchase of the property. The Department cannot draw inference on the basis of suspicion, conjectures and surmises. Suspicion, however strong cannot take place of material in support of the finding from the A0. The A0 should act in a judicial manner, proceed with judicial spirit and come to a judicial conclusion. The A0 is required to act fairly as a reasonable person and not arbitrarily and capriciously. The assessment made should have enough material and it should stand on its own legs. The basis for addition cannot be only the loose sheet or a third party statement. In the absence of corroborative material, and/or circumstantial evidence, the addition cannot be sustained. Thus, no addition can be made on a dumb document and noting on loose sheet. It should be supported by the evidence on record and the evidence on record is not sufficient to support the Revenue&....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (2010) 128 TI] 36, wherein under similar set of facts, the Hon'ble ITAT decided the issue in favour of the assessee as under: "The assessee has claimed to have made payment of Rs. 1,01,687/- only upto 31st March, 1999 and has consistently taken the stand that it has not paid balance amount of Rs. 3,81,414/- as stated in the seized document. No evidence could be brought on record by the Revenue to show that in fact the assessee had paid the amount of Rs. 3,81,414/- to OD. No document containing signature of the assessee or handwriting of the assessee to corroborate the above making of payment by the assessee was found during the course of the search. Even at time of cross examination by the assessee the partner of OD could not produce any evidence that the amount written in the seized document was in fact received from the assessee. As the assessee has categorically denied to have made any payment in excess of Rs. 1,01,687/- upto 31st March, 1999 in respect of purchase of flat the said denial cannot be brushed aside without bringing any positive material on record. Merely recording made by a third party or statement of a third party cannot be treated as so sacrosanct s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f search or brought on record on the basis of enquiry conducted by the AO which could establish the fact that the actual consideration passed between the parties is not as mentioned in the registered sale deed but as per the sale agreement found during search operation. It is also an interesting fact to note that in the statement recorded from the assessee u/s 132(4) the revenue authorities have not put any question with regard to the sale agreement seized at the time of search and seizure operations. Smt. P. Nalini Devi also in her statement further clearly stated that the property was sold at Rs. 23.50 lakhs and not at the rate of Rs. 1.68 crores. The Hon 'ble Supreme Court in the case of K.P. Verghese reported in 131 ITR 597 has held that onus is on the department to prove that the assessee has understated the value of the property and has paid more than what is mentioned in the registered sale deed. The Hon'ble Supreme Court in the case of Moosa S. Madha and Azam S. Madha vs. CIT( 89 ITR 65) has held that photo copies have little evidentiary value. Therefore, photocopies of any document cannot by itself be considered as evidence for purpose of making addition in assessm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efore find no necessity to interfere with the finding of the CIT (A) on this issue. Hence the grounds raised by the revenue for the years under consideration are dismissed." 22. The Hon'ble A.P. High Court in ITA No.232 of 2013 in the case of CIT Vs. Smt. R. Nalini Devi has upheld the order of the ITAT Hyderabad Bench. The Hon'ble High Court while, considering the issue held as under: "We have heard the learned counsel for the appellant and gone through the impugned judgement and order of the learned Tribunal. It appears, the Assessing Officer had relied on a photocopy of an unsigned sale agreement in order to find that consideration amount has been paid at Rs. 1,68,00,000/-. Therefore, this amount was not disclosed. The learned Tribunal has correctly concluded that unsigned photocopy of the agreement for purchase of the property cannot be a material to rely on, when the registered sale deed has been produced and the same shows that the property was purchased at a price of Rs. 23,50,000/-. This registered sale deed was disclosed at the time of original assessment. According to us, the agreement of sale loses its force, the moment registered sale deed is ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... value of the property and ascertain whether any under valuation is done, if so what is the correct value of the property. Further, the A.O. did not brought on record any evidence to support his contention to say that there is on money exchanged between the parties. In the absence of proper enquiry and sufficient evidences, we find no reason to confirm the addition made by the A.O. Therefore, we reverse the CIT(A) order and direct the Assessing Officer to delete the addition. " 17.6. Though the above decisions are rendered in respect of on money payment, the same findings and observations are equally applicable for on money receipts also. In 15 villas, which were neither sold nor registered, there is no case for addition of undisclosed income, hence the same required to be deleted. In the remaining 25 villas there is no evidence brought on record to show that the assessee has received on money except the scribbling paper seized or impounded at the time of survey or the loose sheets seized from third party, Sri Lanka Anil Kumar. The scribbling also does not indicate the on money receipt with date and name of the party. No other evidence was brought on record by the revenue to est....
X X X X Extracts X X X X
X X X X Extracts X X X X
....yd. The plot was located at northwest corner of project Sea Pearl. The statement was recorded from Sri M.Y. Subrahmanyam, wherein he has stated that they have purchased four plots from SVR Township at Chepaluppada, marked as plot Nos.61 to 64 near the villas with LP No.57/2007. The total area of the plots acquired was 2000 sq.yds consisting four plots and they have sold 1750 sq.yds @13,000/- per sq.yd and registered at Rs. 6,000/- per sq.yd reflecting in the books of accounts and the difference amount of Rs. 7,000/- per sq.yd amounting to Rs. 1,22,50,000/- was admitted as undisclosed income for the financial year 2014-15 and there was no dispute. The said plot No.61 to 64 are in the vicinity of Sea Pearl Project, therefore, argued that the AO extended the sale price of Rs. 13,000/- per sq.yd to the Sea Pearl project also and estimated the unaccounted income which is fair and reasonable. The Ld.DR submitted that since the plot No.61 to 64 were sold at Rs. 13,000/- per sq.yd and Sea Pearl also fetches the same price, hence, the same price required to be adopted for the Sea Pearl project also as held by Hon'ble Supreme Court in the case of Commissioner of Sales Tax, Madhya Pradesh Vs.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rought on record by the department to controvert the finding of the Ld.CIT(A) or to controvert the contents of MoU between the assessee and the Kranthi properties dated 25.07.2013. Therefore, we do not find any infirmity in the order of the Ld.CIT(A) and the same is upheld. The appeal of the revenue is dismissed and the cross objections filed by the assessee becomes infructuos on this issue, hence dismissed. 21. Ground No.12 and 13 are related to the addition of Rs. 2,69,314/- on account of unaccounted cash. During the course of survey, against the book balance of Rs. 10,03,364/-, the AO found the physical cash of Rs. 7,34,050/- resulting in deficit cash of Rs. 2,69,314/-. During the course of survey, in the statement recorded u/s 131(1), Sri M.Y.Subrahmanyam, Managing partner of the assessee firm had stated that he had withdrawn cash of Rs. 2 lakhs for his personal purpose on 23.11.2015 which was not taken into account. However, the AO did not accept the submission of the assessee and made the addition of Rs. 2,69,134/- as unaccounted income u/s 68 of the Act. 22. Against the order of the AO, the assessee filed appeal before the Ld.CIT(A) and the Ld.CIT(A) deleted the additi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reply, Sri Shyam stated that the vouchers were related to the transactions of Sri Nageswara Rao and he further stated that sale consideration was Rs. 50,00,000/- was received by cheque and the registration charges were Rs. 4,50,100/- and other charges were borne by the purchaser. He also stated that the stamp duty and registration charges were collected by them from the customer to pay on his behalf for the purpose of registration. He also stated that no unaccounted money was involved in this transaction. The AO observed that there was inconsistency in the statement given by Sri Manchukonda Shyam and hence inferred that the vouchers were related to the sale transaction mentioned in the sale deed of Sri Nageswara Rao on 14.07.2015 pertaining to Navaratna Estates. Thus, held that the sum of Rs. 51,75,650/- consisting of Rs. 50,00,000/- plus Rs. 1,75,650/- mentioned in page No.14 dated 14/1 was treated as on money received for sale of land on 14.07.2015, accordingly brought to tax as undisclosed income. 25. Against which the assessee went on appeal before the CIT(A) and the Ld.CIT(A) deleted the addition observing that the AO has tried to establish the contents of the land to the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce the voucher does not indicate any of the information, the same cannot be inferred to be related to M/s Navaratna Estates to draw adverse inference. The Ld.AR further submitted that Sri Manchukonda Shyam has already explained in the statement recorded on 13.01.2016 in question No.3 that the document was related to 0.80 cents of land at Nidigattu, Ramajogi Agraharam to Sri Nageswara Rao by Navaratna Estates. The cost of land per acre was Rs. 70,00,000/- hence the cost of 80 cents of land comes to approximately Rs. 50,00,000/- and the remaining was collected for payment of stamp duty and other expenses. Therefore, argued that since the contents of the voucher were explained and no evidence is brought on record to disprove the statement given by Shyam, there is no case for making the addition. The Ld.A.R further submitted that the AO recorded the statement from Sri Manchukonda Shyam on three occasions, on all the occasions, Sri Shyam explained that voucher was related to sale of land to Sri Nageswara Rao which was collected along with other expenses such as registration, stamp duty etc. and nothing was received over and above the registered document. Therefore, submitted that there ....