TaxTMI 
TaxTMI 
2020 (9) TMI 908
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.... ". On the fuels and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/ or on fads in not appreciating the provisions of section 153A of the I.T. Act which requires the total income to be brought under tax without any restriction. 2. On the fads and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and or on facts in holding that such assessment or reassessment u/s 153A is to be restricted only to the incriminating materials found during the search. 3. On the fuels and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting addition on account of on money receipt / unrecorded sale consideration of Rs. 3,18,79,334/-. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting addition on account of unaccounted investment u/s 69 of the C.I.T. Act of Rs. 3,45,01,388/-. 5. On the fads and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and or on fads in deleting the disallowance u/s 40A(3) of the I. T. Act of Rs. 6,00,000/-. 6. On the fa....
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....on money" which they had voluntarily disclosed and additions were made for the assessment year 2012-13 and 2013-14. The assessing officer has further stated in the Shayona Green Scheme of Narayan Developer various loose papers and documents were found and impounded wherein transaction of on money received in cash was reported. During the course of assessment the assessee was asked to furnish detail of the projects block wise and flat wise in respect of Shyona Tilak. The assessing officer stated that there was variation in the rates per sq. yd. in flats of the same block situated on the same floor. The assessing officer was of the view that Shri Sureshbhai Patel one of the partner of the firm in respect of Aryamaan project has adopted modus operandi of sale for all projects like Aaryamaan of Gajanand Corporation, therefore, after taking into consideration the modus operandi adopted in the case of Aryamann Project, the assessing officer observed that assessee had received on money in respect of fixation of sale price of 34 units of Shayona Tilak-2 during the year under consideration. Therefore, the assessing officer stated that the assessee firm was also in receipt of on money in 60/....
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....mental principles of auidi alteram partem mandates a quasi-judicial authority like her to use, if at all. third party evidences only after first granting the opportunity of rebutting the contents/inferences from such third party evidences. The AO has a/so attempted to provide an apparent justification lo her action by using words and phrases like "the group is indulged in" or "the department has collected enough evidences" or "the facts and materials gathered during the search speak loudly about the modus operands' of the group in collecting on-money in all their projects on 60:40 basis" without realizing that the concept of "group" is alien lo Income-tax Act, or to general law of evidence. The "modus operand/" of the "group" as conceived by AO lo have heen "unearthed" during the search, if at all so, would only be a starting point of further enquiry and investigation against the appellant by the AO and certainly cannot be an "evidence", much less a conclusive evidence, against the appellant. There is no material gathered by the AO or unearthed during the search which can be considered adverse lo or against the appellant. 1 have therefore come to a considered conclusion that th....
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....lihood of "extra-receipt" of Rs. 4.08 crores as against "bookreceipt" of Rs. 47.76 crores. The AO has conspicuously not shown at all or even argued as to why and how such "evidences", even if possibly acceptable against the appellant for the rears under reference, would lead to a conclusion that 66.66% of the recorded amounts have been received as "on-money" by the appellant for the respective assessment years. The AO has referred to "wide variation" in the sale-price of flats as is evident from the Annexure to the assessment order. However, this "wide variation" cannot per se and in law, in the absence of categorical evidence of receipt of on-money by the appellant, be of any meaningful import. Moreover, the AO has not validly also rejected (and there does not also appear any basis or reason for that) the books of accounts u/s 145 so as to even enable her in estimating the income of the appellant U/S 144. Thus the addition of "on-money" receipt for each year is presumption and conjectural and is based on no evidence. The AO's insistence in the remand report that the additions is made on the basis of "seized/impounded" material is also without any supporting document i....
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....dities to Bengal by country boats acquired by Sahibgnnj and the notoriety achieved by Dhulian as a great receiving centre for such commodities were merely a background of suspicion and the appellant could not be tarred with the same brush as every arhatdar and grain merchant who might have been indulging in smuggling operations, without an iota of evidence in that behalf."" Budhalal& Co. /2O1I/1O taxmann.com 52 (Ahd.) 5. We have heard both the parties and gone through the facts of the case. Indisputably, GP rate in the year under consideration declined to 24.92 per cent vis-d-ufs28.13 per cent of the preceding year while the Id. CIT(A) concluded that the assessee had logically explained with elaborate reasons, the fall in GP during the year under consideration and the Assessing Officer did riot point out any specific defects in the books of account maintained by the assessee. We find from the assessment order that the Assessing Officer did not point out any defects in the hooks of account while ignoring the book results nor brought any material on record regarding the genuineness of purchases, sales or expenditure incurred by the assessee before discarding the boo....
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....r, without recording any finding that the books of account maintained by the assessee were incorrect, rendering it impossible lo deduce the profits, proceeded to reject the book results, invoking, the provisions of section 145 of the Act. No specific discrepancies or defects in the books of account of the assessee have been pointed out before us nor was any material brought lo our notice to establish tlinlpnrrbH.sr.s were inflated or receipts suppressed. In these circumstances, there was no justification in invoking the provisions of section 145 of the Act [CIT v. Vikram Plastics [1999] 239 ITR161 (Guj.). Since the Assessing Officer had not recorded any findings for rejecting the book results and applying the gross profit rate of 26 percent in the year under consideration, we arc of the opinion that the Id. CIT(A) was justified in deleting the addition. Even the revenue have not placed before us any material con/rover/ing the aforesaid findings of facts recorded />r the Id CITlA). If there was no challenge to the transactions represented in the books, then it is not open to revenue to contend that what is shown by the entries is not the real stale of affairs. In the light of these ....
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.... operandi of one of the group members. Similarly there is no presumption in law that assessee would continue from year to year to engage in and earn unaccounted income even if categorical evidence of such unaccounted earning by the very assessee for one year are also in assessing officer's possession. The Id. counsel has stated that the addition of on money receipt made by the assessing officer was not based on evidences, therefore, the whole addition was made without any merit. 7. We have heard both the sides and perused the material on record. The assessee was engaged in the business of development and construction. There was a search action u/s. 132 of the Act carried out on 15l October, 2013 in the case of the assessee. During the course of assessment, the assessing officer noticed that assessee has worked as developer for Shayona City and Shayona Estate. The assessing officer stated that in the group cases of other project pertaining to Aryamaan Scheme of Gajanand Corporation there was on money receipt which was voluntarily disclosed and additions were made for assessment year 2012-13 and 2013-14. In short there was a 60/40 ratio of actual sale receipt meaning that R....
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....ove facts and finding of Id. CIT(A), we do not find any infirmity in the decision of Id. CIT(A) after placing reliance on the decision of Hon'ble Jurisdictional High Court in the case of Saumya Construction 387 1TR 529 (Guj) wherein it is held that if in relation to any assessment year no incriminating material is found no addition or disallowance can be made in relation to that assessment year in exercise of power u/s. 153A of the Act. Therefore, these three grounds of appeal of the revenue are dismissed. Ground No. 4 (Unaccounted investment u/s. 69 of Rs. 3,45,0 1, 388/-) 8. During the course of assessment, the assessing officer has noticed that a survey action u/s. 1 33 A was conducted on shop no. 22/23 Shayona Complex, Ahmedabad and various documents pertaining to land transaction were found and impounded. As per the banakhat there was noting of sale consideration of Rs. 4,57,41,388/- between Shri Ramesh Nagjibhai Desai (seller) and Shri Suresh Kr. Ranchhodbhai Patel. However, the final sale deed was executed for Rs. 1,12,40,000/- in favour of the assessee firm. This issue was confronted while recording a statement of Shri Suresh Ranchhodbhai Patel on I0lh December....
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....tor of the document or the party from whom the document is impounded/seized, and certainly not a party wholly and completely a stranger to the document. Thus, I have no hesitation in holding that there is no merit in the addition as made by the A O and in any case the import of seized/impounded material has to be considered in the case of Shri Sureshbhai Patel who is not only the signatory to the said document but who has also undertaken to be fully liable for tax liability, if any in law, arising on account of the said document without taking a plea that the transaction pertains to the appellant firm. Thus, the addition of Rs,3,45,01,388/- is deleted. Ground 6 succeeds. " 10. During the course of appellate proceedings before us. the Id. departmental representative has submitted that assessing officer has correctly made the protective addition in the case of the firm since the payments have been made by the partners. On the other hand, Id. authorized representative has referred the finding of Id. CIT(A) as per page no. 10 to 12 of the CIT(A) order and stated that Id. CIT(A) has correctly held that no addition can be made in the case of the firm as the said document 'banakhat....
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....hat the payment to agriculturists is saved by Rule 6DD. The AO observes that the appellant did not discharge the onus of showing how rule 6DD applies, and further, 2 land purchased is stock-in-trade of the appellant" and is therefore hit by s. 40A(3) and thus she makes addition. The Ld. AR brought my attention to the fact that the amount of whole of the purchase price for the land at survey number 210/2 has been shown in the Balance-sheet under the head "Deposits and Advances", the amount has not been debited to the P & L Account and therefore, the AO is wrong in observing that the land in question is "stock-intrade". The Ld AR also drew my attention to page 13 (Balance sheet) and page 60-61 (Land Account) of PB to highlight that the amount of payment has not been debited to P&L account to be validly hit by provisions of S~. 40A(3). Alternatively, the AR submitted that the payments are to agriculturists insisting for cash-payment and hence the transaction is saved by Rule 6DD. After considering the material on record, I first observe that the addition is based on no seized material but is based entirely and evidently on the accounts which stood filed before the date of the....