TaxTMI 
TaxTMI 
2018 (6) TMI 1692
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.... the following grounds of appeal 1609/Del/2011 for Assessment Year 2000-01:- "1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 153 A/143(3) and that too without assuming jurisdiction as per law. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 153A/143(3) without assuming jurisdiction as per law and without recording requisite satisfaction as per law and without obtaining requisite approval as per law and without complying with the other mandatory conditions envisaged under the Act and has erred in not computing the alleged income in terms of the provisions of section 153 A. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making an addition of Rs. 2544305/- as undisclosed income allegedly being profit on sale of plots merely on the basis of surmises and conjectures and without any evidence....
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....for an area 3750 sq. yds out of 10083 sq. yds to the purchaser. Page 50- 52 contains calculations relating to profit from sale of this plot. This has been shown below- Selling Price 1,68,38,610 1,68,38,610' C.P. 1.12,50.000 1,12,50,000 5588610 5588610 2794305 (-) 500000 50,88,610 25,44,305 Amount to be paid by Ash: 1,12,50,000 5,00,000 2544305 14294305 13370000(-) Bal 924305 The above calculations show that the selling price of plot was Rs. 1,6838,610/-. The cost price was Rs. 1,12,50,000. The difference is profit of Rs. 55,88610/- Out of this a sum of Rs. 5,00,000 has been deducted leaving a balance is Rs. 50,88,610/-. Below this the half share of this amount i.e. 25,44,305/- has been calculated. The cost plus Rs. 5,00,000/- plus the half share of profit has been added to get amount to be paid by Ash 27,94,305 i.e. Rs. 1,42,94,305/- An amount of Rs. 1,33,70,000/- has been deducted from this to get balance to be paid by Ash. Thus, it means that an amount of Rs. 1,33,70,000 has been paid by Ash whose break up is als....
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....10/- out of‟ which Rs. 38,00,000/- was paid by cheque and the remaining in cash. From the calculations, it is also clear that 50% of the profit of Rs. 50,88,610/- has-been shared with the seller. Thus Rs. 25,44,305/- has been paid to Sh. Navneet Jhamb and the remaining to seller. Thus the amount of Rs. 1,42,94,305 has been paid to SE. Sudhir Kumar Bahl (the seller) by Sh. Ashwani Mahajan and an amount of Rs. 25,44,305 has been paid to Sh. Navneet Jhmb as his share of profit. Thus an amount of Rs. 25,44,305/- has been paid to Sh. Navneet Jamb as his share of profit account of sale of plot NO. 42, Sector 6, Faridabad which has been registered on 29.03.00. 4.5 During the course of assessment proceedings for the assessment year 2000-01, the assessee was asked to furnish various details including explanation/detail in respect of documents seized /impounded from the residence of the assessee, residence of Shri S.D.Kathuria, business premises of M/s Reliance Estate Agency during search/survey on 04.08.2005. Vide questionnaire dated 11.05.2007, note sheet entries dated 02.09.2007, 20.09.2007, 26.09.2007, 05.10.2007. No complete details/explanation in respect of above documen....
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....ed income on account of commission received not disclosed in the regular books or return of income. Accordingly, I make an addition on this account for the A.Y 2000-01. I am also satisfied that this is tantamount to concealment of particulars of income on behalf of the assessee. I therefore, initiate a penalty u/s 271(1 )(c) for concealment of particulars of the said income." 5. The assessee aggrieved with the order of the ld AO preferred an appeal before the ld CIT(A). The addition was challenged vide ground No. 4 of the appeal. The ld CIT(A) dealt with the issue vide para No. 5 of his order as under:- "5. Ground No. 4 is as under: "That having regard to the facts and circumstances of the case Ld. A.O. has erred in law and on facts in making addition of Rs. 25,44,305/- allegedly on account of commission earned merely on the basis of surmises and conjectures and without any evidence or basis and without affording adequate opportunity of hearing." 5.1 In support of this ground of appeal, the learned AR vide his written submissions has submitted as under: 'GROUND NO. 4: Ld. A.O. has made addition of Rs. 2544305/- on account of alleged commis....
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....e year under appeal. Your good self would also kindly see that even if it is assumed though denied vehemently that some profit was earned but how could that profit be said to have been earned and realized by the assessee and that too in the year under appeal is bereft of any evidence, logic and rationale whatsoever. Thus the seized material as referred by Ld. A.O. i.e. page 50-55 of Annexure-Al does not establish at all that any profit was earned and that too by the assessee and more so in the year under appeal and thus addition made by Ld. A.O. cannot be sustained under any circumstances. It is relevant to submit as was submitted to Ld. A.O. too during the course of assessment proceedings of the appellant and that of the firm namely M/s Reliance Estate Agency that assessee is in the business of real estate commission agency as partner of M/s Reliance Estate Agency. Your good self would kindly appreciate that in this kind of business, number of persons meet the assessee with different facts and figures, calculations are made, tentative profit or losses are worked out and various permutation and combination are thrown as suggestions by/ to the person engag....
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....ed. Reliance is placed on the decision of Hon'ble Delhi Bench of the Income Tax Appellate Tribunal in the case of ACIT Vs. D.K. Gupta ITSS No. 133/2005 vide order dated 18.01.2008 in which Hon'ble Tribunal has relied upon the decision of Hon'ble Delhi High Court in the case of Girish Chaudhary 163 Taxman 608 to hold that no addition can be made on the basis of dumb document when the A.O. does not have any material to show as to on what basis he reached conclusion that the figures noted in the dumb document was income of the assessee. Income from undisclosed sources - Addition - Jottings on loose paper found during search operation - Additions based on jottings on paper could not be sustained in the absence of any corroborative material or evidence on record for rejecting the assessee's contention that jotting was an estimate and not actually expended amount - ADDL. CIT VS. PR 4 SANTAHL UWALIA 92 TTJ 464 (CTK). Computation of undisclosed income-No addition can be made on the basis of a dumb document in the absence of any corroborative material -N.KMALHAN VS. DY.CIT 91 TTJ 938 (DEL 'C'). Burden is on the revenue to establish....
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....Del) Harakchand N.Jain Vs. ACIT 61 TTJ 223 (Mum): 101 Taxman 324 R. Ramanathan Vs. ACIT 65 ITD 108 (Mad) Parakh Foods Ltd. Vs. DCIT 64 ITD 396 (Pune) 63 TTJ 532(Del)/ 63 ITD 153(Mum). 5.2 In this case written submissions of the AR were sent to AO for his report. AO submitted his report vide his common letter No. ACIT/CC-I/FBD/08-09/1079 dated 28-01-2009 for AYs 2000- 01 to 2006-07 copy of which is enclosed with this order. 5.3 Copy of above report was given to the assessee for his rejoinder. Assessee made his submissions for AYs 2000-01 to 2006-07 vide common letter dated 21-8-2009 copy of the same is enclosed with this order. AR further vide his letter dated 26- 03-2010 stated that commission of Rs. 39,900/- has been earned by M/s Reliance Estate Agency on the sale of plot No. 42 which was sold to Mr. Ashwani Mahajan by M/s Gallant Engg. Enterprises (P) Ltd and the assessee firm was acting merely as an agent on behalf of the seller. 5.4 I have considered the submissions of the AR. In this case during the course of search operation documents as per annexure A-l were seized from the residential premises of the assessee o....
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....of the above AR contended that addition may be deleted. However, AR's contentions are not acceptable. Page No. 54 as stated by the AR is an MOU which no doubt is dated 24-12-1997. But the figures as noted on page 50 to 52 as also noted in para 4.1 of the asstt order and also above in this order contain meticulous details of property sold. This document clearly mentions the selling price, CP (cost price), amount to be paid by Ash [Ashwani Mahajan Director of M/s Avon Tubetec (P) Ltd.]. Two sale deeds were executed for sale of total area of 10083.33 sq yrds for sale consideration of 38 lacs as noted on page 4 of asstt order. These documents also show the amount paid as noted on page 2 and 3 of asstt order. From the facts discussed above and also in the ast order it is established that transaction of sale of plot has actually taken place. Though in the course of asstt proceedings after having been given repeated opportunities assessee submitted that these document do not belong to him and same seem to have come into existence in the ordinary course of business of property, however, no authenticated evidence to prove the above contention was filed even though the above doc....
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....that is share of the appellant amounting to Rs. 2544305/-. He submitted that the addition made based on Page 50 to 55 annexure A1 do not bear any authentication or signature of any persons. He further stated there are no corroborative evidence found during the course of search about the income earned by the assessee. He further stated that page 55-dated 24.12.1997 does not bear the name of the assessee and further it is covered 6 years preceding the date of search i.e. 04.08.2005. He further submitted that Page 54 of seized papers is merely an MOU between buyer and seller and appellant is neither the seller nor the buyer. He further stated that page 54 even otherwise is beyond the period covered u/s 153A of the Act. He further stated that in none of the pages the name of the assessee appears. Even otherwise, he submitted that there is no reason before the ld AO to say that the income is earned by the assessee in this year. He further stated that as the assessee is engaged in the business of commission agent, he meets many persons during the day and many persons come with different facts and figures. He submitted that many permutation and combination of profit are computed hypotheti....
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....further stated that even if the assessee does not give any reply it does not give any authority to the revenue to assess the income of the assessee. He relied on the decision on 282 ITR 553. 8. The ld DR vehemently referred to the statement of the assessee wherein, the assessee has given no explanation to the documents found during the course of search. She therefore, submitted that in absence of that, ld AO has to taken a view with respect to those statements. She referred to question No. 13, 14 and 15 of the statement wherein, the assessee has submitted that he is not in a state of mind to reply to the particular document and further when he confirmed that the same are in the handwriting of the assessee. The ld AR further referred to page 51 and 52 of the seized material wherein, the specific name of "NJ‟ is mentioned. She therefore, stated that "NJ‟ is none other than the assessee himself. She further stated that all those orders of the various coordinate benches and CIT (A) are referred to by the ld AR are with respect to the legality of the assessment proceedings. She submitted that one CIT (A) has also confirmed the addition. She further stated that the decisio....
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....s profit in any of the subsequent years. Therefore, it is apparent that profit in the seized documents is chargeable to tax in the current year only. c. The next argument was that there could not be any presumption of the income from the documents found during the course of search. We agree with the contention of the ld AR that provisions of section 292C of the Act do not give any such right of presuming income from the seized documents. However, to prove that there is no income involved in those seized documents, is to be proved by the assessee because, he is the owner of the documents. In the present case the document, itself shows that the assessee has earned income of Rs. 2544305/- during the year. The assessee also could not explain the documents seized before the lower authorities. The most of the transaction of the paper are dated transaction and the lower authorities have corroborated them with the actual registered deeds between buyer and seller. The documents were not at all explained by the assessee otherwise by giving any concrete evidence. The seized documents show that there are transaction of sale of plots where in the profits have arisen. Name of the assess....
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....sum, when the seized document says so, onus lies on the assessee to rebut the presumption arising out of the document found with stronger evidences. Firstly, the assessee should have explained those papers during the course of search itself. During the course of search, in the statements recorded by the revenue, he did not explain those papers. Even before the ld, Assessing Officer and first appellate authority, the assessee did not explain so. Even before us, the assessee did not try to explain the paper but contended on the legal and technical issue only. In fact, the assessee could have proved the contents of the paper wrong by firstly explaining the papers and nature of transactions contained therein with the income contained therein belonging to whom, it is not done by the assessee at any stage of the proceedings. He also did not attempt to produce the buyer and the seller both, as his witnesses, to show that no such profit has accrued to him and it has accrued to the seller. He could have also explained every entry of the seized documents, but he has not done so. In absence of any explanation or any attempt by the assessee to rebut the presumption available from the seized do....
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.... for Assessment Year 2001-02. 15. The assessee has raised the following grounds of appeal:- "1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 153 A/143(3) and that too without assuming jurisdiction as per law. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 153A/143(3) without assuming jurisdiction as per law and without recording requisite satisfaction as per law and without obtaining requisite approval as per law and without complying with the other mandatory conditions envisaged under the Act and has erred in not computing the alleged income in terms of the provisions of section 153 A. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making an addition of Rs. 6,97,834/- as undisclosed income allegedly being profit on sale of plots merely on the basis of surmises and conjectures and w....
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....ted that page 61 of annexure A1 clearly show details of cash and cheque consideration. Annexure A1 was found form the residence of the assessee which shows that the total consideration of the 16 plots was Rs. 45891800/-, out of which consideration in cheque was approximately Rs. 1.5 crores and balance consideration of Rs. 30891800/- was in cash. Further calculations were also mentioned in the paper according to which it was found by AO that out of total sale of Rs. 4.58 crores the cost of the project was Rs. 3.24 crore and the gross profit is of Rs. 1.34 crores. Interest was also shown to have been paid of Rs. 12.77 lacs resulting into net profit of Rs. 1.21 crore that was shared by Shri Manmohan Singh, the seller and Shri Navneet Jhamb assessee in 50:50 ratio. The cheque amount of the transaction is most of the cases exactly matched with the registered deed. The above calculation was also found corroborated at another page at 55 at Annexure A2 in case of four plots. Page No. 57 of annexure A1 also showed the revised calculation of the profit and further profit details of the four plots sold after 31.10.2001 and 12 plots sold prior to that date. Based on the above documents the ld ....
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....ed Land would be sold to M/s TML Investments (P) Ltd for Rs. 1.50 crore. However, M/s TML Investments (P) Ltd, subsequently cancelled its letter of intent to continue with their offer of purchase of land at Jharsentli. This was communicated to M/s Reliance Estate Agency vide letter dated 16th Feb 2000. 4.2 Out of the land measuring 89 Kanals 13 Marlas, a land of 75 Kanals was released by Director, Urban Estate, Madhya Marg, Sector-18, Chandigarh. The remaining land was acquired for roads and green belt. The released land was sub-divided into sixteen industrial plots of varying sizes as per plan approved by the town planner, MCF. The land at Vill. Jharsentli was subdivided into sixteen industrial plots whose details were obtained from the Municipal Corporation of Faridabad. The details of plots as per sub-division plan have been tabulated as follows:- Table 1: Details of plots at Vill Jharsentli Plot No. Area in Kanals/Marlas Area in Sq. Yards Dimensions A-l 2K 1230 66'X165' A-2 2K 1210 66'X165' A-3 2K 1210 66'X165' A-4 2K-9M 1476 80'-6"X185' A-5 1K-1M 650 65'X90' A-6 17M 500 50'....
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....per Sq.Yds for the plots tabulated below:- Plot No. Sold to Total Cheque Area Rate per Sq.Yds Date of sale. A1 GLVERMA 1331000 495000 1210 409 08.11.2000 A2 GLVERMA 1331000 495000 1210 409 28.02.2001 A3 GLVERMA 1331000 495000 1210 409 28.02.2001 A4 RAMJIPRASAD 1623600 490000 1476 331 12.09.2000 A5 USAKA 650000 495000 650 761 19.04.2001 A 6 USAKA 500000 400000 500 800 19.10.2001 A7 MITTAL 600000 400000 500 800 04.04.2001 A8 MITTAL 6080400 1980000 6736 293 29.09.2000 B1 INDICATION 6652800 1980000 6048 327 16.07.2001 B2 METAFORGE 1313000 500000 1213 412 19.10.2001 B3 SURVIVAL 1331000 490000 1213 403 28.02.2001 B5 NAGPAL 1277000 495000 1277 387 27.04.2001 4.3 However, the calculations contained on pages 56-62 of Annexure A-l and pages 13 to 17 and 53-57 of Annexure A-2 shows that the actual sale consideration of the 16 plots tabulated in Table 1 and 2 is much more than what is shown in the registered sa....
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....; Land 200000000 Paid to Navneet 207760 32448040 Land for sale 45375 Sq.Yds From project paid to Costing 717.6547 Manmohan Singh 2550000 .... Navneet 207760 Total selling price 45891800 Cost Price 32448040 Cost price 20000000 Gross profit 13443760 Expenses 11954040 Lalani t.m. TML due Principle 1277000 1000000 INT Security Oct.01 44000 Tentative profit 12166760 Sirsa 50000 Road expenses 400000 1422575 intt c....
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....d that the cheque amounts detailed on page 61 of A-1 exactly matches the amounts as per the registered deeds. This means that transactions detailed on page 61 of A-1 are genuine transactions. 4.6 The calculation of cheques and cash amounts received on plots have also been made on page 55 of Annexure A-2. The front side of page 55 is a hand written page containing calculation of cash generated from the sale of plots except plot No B4, B6, B7 &B8. These figures are identical to the figures detailed on page 61 of A-l. Here out of a total sum of Rs. 2,39,20,800/-, Rs. 87,15,000/- has been received by cheques and Rs. 15205800/- has been received by cash. From this an amount of Rs. 11954000/- and payment of Rs. 2350000/- made to Manmohan Singh have been deducted. The backside of page 55 details profits earned on the remaining plots i.e B4, B-6, B-7 & B-8. Sale amount of these plots has been calculated at Rs. 2,02,23,000/- and further an amount of Rs. 62,85,000- has been shown as payable to M/s Indo American Electricals Ltd. This amount is also the sum of the cheques component of sale consideration of plots B4, B6, B7 & B8 as detailed on page 61 of A-1. An amount of Rs. 26,50,000....
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....nbsp; B-7 B-8 Total 32876800 11030001 10923399 10923399 4.9.1 During the course of assessment proceedings for the assessment year 2003-04, the assessee was asked to furnish various details including 'explanation/details in respect of documents seized/impounded from the residence of the assessee, residence of Shri S.D.Kathuria, business premises of M/s Reliance Estate Agency during search/survey on 04.08.2005. Vide questionnaire dated 11.05.2007, note sheet entries dated 13.09.2007, 20.09.2007, 26.09.2007, 05.10.2007. No complete details/explanation in respect of above documents were filed. The assessee has filed part reply vide letter dated 13.09.2007, 20.09.2007 & 12.10.2007. The assessee was again asked to furnish complete details/explanation in respect of documents seized/ impounded during the search/survey operation on 04.08.2005. He was further asked to give reasons as to why the transactions recorded on the above seized/impounded documents should not be treate....
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....mentioning calculation of alleged profit in the notice. Moreover, over and above the cost price, the EDC charges of Rs. 1,10,30,00/- have also been paid in connection with the above project as mentioned by your good self only in the notice and based upon the information gathered from MCF Faridabad regarding EDC charges paid to them in connection with this project. Your goodself would appreciate that the tentative profit has been worked out at different stages and different sheets by the clients but in actual there is hardly any alleged profit left after taking into account the cost price of Rs. 3,24,48,040/- and EDC of Rs. 1,10,30,001/- and further expenses as mentioned at Page 61 of 373400/-. It again shows that all the figures on these pages are were calculations of tentative/estimates/projections of profit and expenditure incurred at different stages relating to the project by the client. The only payment shown on these pages as made to Navneet Jhamb at Page 61 mentioned is of Rs. 2,07,760/- upto a particular stage and which in any case is covered within the total amount of commission received. In view of the above your goodself will appreciate that to....
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.... 4.9.6 It is obvious that the assessee in his individual capacity along with Sh Manmohan Singh sold 16 plots in Jharsentli and made profits on the sale of the aforementioned plots after TML Investments Ltd backed out of the transaction with M/s Indo American Electricals Ltd. The cash profits arising out of sale of the said plots were not reflected in the books of account or the return of the assessee for the relevant years. This is clear from an examination of the following evidence: (a) It is clear from the above that the calculations detailed on page 61 of A-l pertain to sale of plots A-l to A-8 and B-l to B-8 subdivided on the land belonging to M/s Indo American Electricals Ltd. These calculations show the cheque amounts and cash amounts received on account of the sale of plot. For instance plot A-l was sold to one GL Verma for a sum of Rs. 13,31,000/- out of which 4,95,000/- is the cheques amount shown in the registered deed and 8,36,000/- is the cash amount received and not reflected as income of the assessee in his books of account or his return for the relevant year. The total sale price of the plots has been calculated at Rs. 4,58,91,800/- from which the cos....
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....ts on the sale of the aforementioned plots after TML Investments Ltd backed out of the transaction with M/s Indo American Electricals Ltd. The cash profits arising oik pf sale of the said plots were not reflected in the books of account or the returfi of the assessee for the relevant year. As regards the contention of the assessee that the EDC charges of Rs. 1,10,30,000/- paid over and above the cost price in connection with the above project has not been considered for calculating the alleged profit is not correct. It has been gathered from MCF that total payment received from IAEL for release of land was Rs. 1,10,30,000/-. Hence the considering of EDC charges of 1,10,30,000/- in the hands of the assessee does not arise. In view of above facts the contention of the assessee is not acceptable. Since, the document clearly shows that the transaction has taken place and the assessee has earned total profit of Rs. 1,09,23,399/- out of which profit of Rs. 6,97,834/- pertains to assessment year ^0di-u^ on' sale. Hence the profit of Rs. 6,97,834/- pertaining to assessment 2u01-uz is added to the assessee‟s taxable income as undisclosed income of the assessee. I am satisfied that....
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....document would show again some "tentative profit" but this time a new figure of Rs. 66,40,601/-. Page 58 of Annexure A-l would show that again it is unauthenticated, does not bear the name or the signature of the asses see and is not even in the handwriting of the assessee. It is equally important to submit that these documents were found by the search team as the loose documents and were not even part of any books or any pad or any diary which prove that these depict any real transactions or profit as alleged by Ld. AO and thereafter added in the hands of the appellant. Page 59 of Annexure A-l again is unauthenticated, unsigned document and does not bear even the name of the assessee. It also refers to the word "tentative profit". Page 60 of document No. A-l is unauthenticated and unsigned loose document and is not in the handwriting of the assessee. The name of the assessee appears on this page but a figure of Rs. 2,07,760/- is mentioned there against but it cannot lead to Ld. A.O. for making the impugned addition of this much of amount or for reaching to the conclusion as reached by Ld. A.O. It is again important to submit that this document a....
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....es not want to join issue with A.O. on that score as of now with the prayer for liberty to raise contentions later on when used against the appellant. Ld. A.O. has mentioned in para 4.4. at page 7 of the assessment order that for instance plot A-l was sold to one Mr. G.L. Verma for a sum of Rs. 13,31,000/- out of which Rs. 4,95,000/- is the cheque amount shown in the registered deed and Rs. 8,36,000/- is the cash amount received and was not reflected in the income of the assessee in his books of accounts or in his return. It is submitted in reply to this adverse observation that when the seller was M/s Indo American Electrical Ltd. and the purchaser was Mr. G.L. Verma, where was the occasion for the assessee to show any profit or loss arising on this purchase / sale transactions in his return of income even if the allegation of cash made by Ld. A.O. is accepted for the sake of academic interest? Ld. A.O. mentions in para 4.4 himself that the gross profit in respect of these plots was Rs. 1,34,43,760/- but Ld. A.O. when it comes to the taxing in the hands of the assessee, calculated the alleged profit at Rs. 2,18,46,799/- at page 9 of the assessment order. This inc....
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....appearing on the seized documents just to make addition. In fact, all these loose documents have come in to existence in detailed and exhaustive submissions have already been made in other years and in the cases of the firm namely Reliance Estate Agency and thus no credence can be lent to these documents for the purpose of making addition as done by Ld. AO unfortunately. Thus the addition made by Ld. A.O. by presuming without any material so many things cannot be approved." 5.2 In this case written submissions of the AR were sent to AO for his report. AO submitted his report vide his common letter No. ACIT/CC-I/FBD/08-09/1079 dated 28-01-2009 for AYs 2000- 01 to 2006-07 copy of which is enclosed with this order. 5.3 Copy of above report was given to the assessee for his rejoinder. Assessee made his submissions for AYs 2000-01 to 2006-07 vide common letter dated 21-8-2009 copy of the same is enclosed with this order. 5.4 I have considered the submissions of the AR. In this case during the course of search operation certain documents as per annexure A-l and A-2 were seized from residence of assessee which included certain pages such as pag....
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....of total consideration has been accepted in cash which is not reflected in the registered deeds. Only the amount disclosed as cheques has been shown. The details of cash and cheque amount received on the sale of plot has been given on page 61 of A-l seized from residence of Sh. Navneet Jhamb and the same has been noted by the AO in table 4 page 6 and 7 of asstt order. As noted in the assessment order the sale price of the plots has been calculated at Rs. 4,58,91,800/- from which the cost of project of Rs. 3,24,48,040/- (including cost of land of Rs. 2 crores) has been deducted to calculate the gross profit of Rs. 1,34,43,760/-. On the basis of above and also on the basis of entries made on page 55 of annexure A-2, page 57 of A-l and after considering the submissions of the assessee AO concluded that the assessee has earned total profit of Rs. 1,09,23,399/- out of which profit on sale of plots of Rs. 23,37,343/- pertains to asstt year 2002-03 the year under consideration and accordingly made the addition of above amount. Assessee however has contended that page No. 56 of A-l does 'not bear the name or signature of the assessee and /or is not in the hand writing of the a....
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....lso in the asstt order assessee has sold 16 industrial plots on which consideration in cash over and above the cheque amount has also been received. While the cheque amounts are as per sale deed, cash consideration has not been reflected in the accounts. The total sale price of plots has been calculated at Rs. 4,58,91,800/- from which the total cost of project of Rs. 3,24,48,040/- (including cost of land of Rs. 2 crores) has been deducted to arrive at gross profit of Rs. 1,34,43,760/-. The principal amount of amount of Rs. 12,77,760/- from Lalani has further been deducted to get a net profit of Rs. 1,21,66,760/-. This, profit has been further shared by Sh. Manmohan Singh and Sh. Nanveent Jhamb in 50:50 ratio. The interest burden has been shared in the ratio of 25:75. As noted in the asstt order the cheque amounts detailed on page 61 of A-l exactly matches the amount as per registered deeds. The calculation of cheques and cash amounts received on plots have also been made on page 55 of annexure A-2. The front side of page 55 is a hand written page containing calculation of cash generated from sale of plots except plot No. B-4, B-6, B-7 and B-8. These figures are identical to the fig....
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....ission agent only in respect of purchase and sale of property and not as an owner of property and therefore profit cannot accrue to him is not acceptable. There is no bar on Real Estate Commission Agent to purchase and sale the properties on profit basis. In other words a real estate commission agent is free to earn commission on the purchase and sale of property and can also venture into purchase and sale of property on profit basis. Assessee has not controverted with evidence the fact of earning profit noted in the above documents and therefore it cannot be accepted that assessee has not entered into purchase and sale of above plots with the profit motive. In any case the fact of the matter is that the documents clearly reveal earning of profit by the assessee along with Sh. Manmohan Singh and that itself is a substantive piece of evidence to disregard AR's specious contention that he was not earning any profit because he is partner in a firm M/s Reliance Estate Agency which is doing only business on commission basis. The contention of AR about different figures of profit noted by Assessing Officer in the assessment order is also not acceptable because Assessing Officer has j....
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.... assessee‟s premises. Assessee has failed to explain the contents of the documents correctly. The Sale of plots is evidenced by the sale deeds. The decisions were based on reliance on another decision and further same has been referred to by the ld AR in other additions also in the hands of the assessee. She submitted that in view of the overwhelming evidences found during the course of search, which could not be rebutted by the assessee with any strong contrary evidences, there is no reason to deviate from the orders of the lower authorities. 23. We have carefully considered the rival contentions as well as perused the orders of the lower authorities. Facts relating on the issue is during the course of search at residence of assessee on 04/08/2005, certain documents were found and seized. It was found that there was a plot of land belonging to M/s Indo American Electricals Limited whose managing director is Mr. Man Mohan Singh. This plot of land was decided to be sold through M/s. Reliance Estate Agency, where in assessee is the partner. Therefore, advertisement etc was given in the newspapers however; this plot could not be sold. Later on this plot was divided into 16 pl....
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.... complete details about the name who bought the plot of land, the documented sale price etc. These facts are not disputed. Therefore based on all these facts, it cannot be said that the papers are merely an estimate or projection. 25. The second contention of the assessee is that assessee is merely a broker and whatever profit arises would squarely falls on the shoulders of the owner of the property and not on the broker. On the similar facts and circumstances in the case of the assessee for different years, we have already dealt with this argument. For the similar reasons we also reject this contention of the assessee. Furthermore we are of the opinion that documents shows emphatically and clearly that in the whole project the assessee was also partner along with the managing director of the company sold plot. These facts were not denied by the assessee further assessee did not produce on its own the managing director of the seller company before the Ld. assessing officer to show that the profit belongs to him. It was also not denied that the plot originally to be sold was subdivided into 16 plots and therefore there is bound to be expenditure for roads, electricity etc, no evi....
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....his extent the Ld. assessing officer is directed to reduce the overall profit of Rs. 2, 18, 46, 799/- and proportionate profit of the assessee. 28. With respect to the deduction of certain expenditure out of the profit of the profit, it is submitted that in page No. 62, there is a mention of some compensation of Rs. 5.5 Lacs and it is the cost of the project that should have been granted as deduction. We have carefully considered this contention of the assessee. Assessee has failed to explain to whom the compensation has been paid and for what reasons. It was also not shown to us that for what reasons the compensation was payable. However, the above amount is mentioned in the seized documents and it is mentioned where the other expenditures are mentioned. The documents found during the course of search are required to be believed completely. When some additions are made based on those papers, there is no reason that information contained in those papers should not be believed. The amount of compensation is precisely mentioned in the seized papers. Therefore, such figure cannot be an estimate or projections. If the above amount of compensation is not included in to the total expe....
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....cts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making an addition of Rs. 2337343/- as undisclosed income allegedly being profit on sale of plots merely on the basis of surmises and conjectures and without any evidence or basis. 4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the assessment in violation of principles of natural justice in as much as passing the impugned order by recording incorrect facts and findings and without providing opportunity of cross examination and without confronting the entire adverse material used against the assessee and without providing adequate opportunity of hearing. 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not granting the benefit of telescoping while confirming the addition made by Ld. AO. 6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A, 234B and 234C of the Inc....
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....by the ld First Appellate Authority based on the same documents seized during the course of search. There is no change in the facts and circumstances of the case for these years. The arguments of both the parties were same as made for AY 2001-02. 33. On careful appreciation of the facts and based on the seized documents we have upheld the addition made by the ld AO in the hands of the assessee for Ay 2001-02. For the similar reasons we uphold the additions in the hands of the assessee in these two respective assessment years. However with respect to the quantum of addition we have directed the ld AO to reduce the sales consideration by Rs. 19,85,000/- and to grant deduction of compensation expenses of Rs. 5.50 lakhs after verification. Therefore with similar direction, we party allow ground no. 3 of the appeal of assessee for AY 2002-03 and AY 2003-04. 34. No other grounds of both these appeal are pressed and hence they are dismissed. 35. In the result appeal of the assessee for AY 2002-03 and 2003-04 is partly allowed. Assessment Year 2006-07 36. The assessee has raised the following grounds of appeal 1612/Del/2011 for Assessment Year 2006-07:- "1. That hav....