TaxTMI 
TaxTMI 
2022 (9) TMI 184
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed in all the appeals, it was stated, related to addition made to the income of the assessee on account of alleged on- money received by it in the business of real estate development carried out. It was contended by the ld. Counsel for the assessee that in all the three years involved the addition was based on a common premise and his arguments therefore were to be considered with respect to all the three years involved. 3. Briefly referring to the facts of the case ld. Counsel for the assessee pointed out that a search operation was carried out in the Bafna Panchal Group of cases on the 7/01/2014 and survey was carried out in the case of the assessee on the very same date. On the basis of documents/loose papers found during the course of search/survey, notice u/s. 148 of the Act was issued for two assessment years i.e. A.Y. 2012-13 & 2013-14. In response to the same, return of income was filed by the assessee for the said years and for A.Y. 2014-15 regular return of income u/s 139(1) of the Act was filed. That thereafter assessment was framed making addition on account of on- money received by the assessee treating it as its undisclosed sales. Ld.Counsel for the assessee stated....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1050 2011-12 960000 808 969600 112-A 2050 2100000 1024 2011-12 1640000 834 1709700 12140 14375500 1184 9712000 7952935 10 635 1175000 1850 2012-13 508000 0 405 395 600000 1519 2012-13 316000 331 130745 414-415 590 875000 1483 2012-13 472000 367 1216530 211-A 295 320000 1085 2012-13 236000 765 225675 2 12- A 295 320000 1085 2012-13 236000 765 1225675 416 295 320000 1085 2012-13 236000 765 225675 318 295 445000 1508 2012-13 236000 342 100890 407 285 310000 1088 2012-13 228000 762 217170 215 295 320000 1085 2012-13 236000 765 | 225675 216 295 320000 1085 2012-13 236000 765 225675 307, 395 490000 1241 2012-13 316000 609 240555 417 295 320000 1085 2012-13 236000 765 225675 304 395 640000 1620 2012-13 316000 230 90850 204 595 885000 1487 2012-13 476000 363 215985 9 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted by the assessee was on carpet area and not on super built up area and therefore the excess differential received by the assessee as per the statement of Mr. Sorathia of Rs. 800 per sq. Ft was to be applied on the carpet area and not as done by the AO applying it on the super built area for calculating the undisclosed income. He pointed out that the Ld CIT(A) thereafter went on to apply a net profit rate of 17.5% to the total turnover of the assessee including both the disclosed and undisclosed sales and worked out the net profit accordingly earned by the assessee for the impugned years. Reducing the income originally returned by the assessee for the impugned years form the net profit so computed the ld. CIT(A) made addition of difference to the income of the assessee, thus restricting the addition to Rs. 10,71,290/-, 18,45,389/- and 12,65,787/- for all the three impugned years respectively. In this regard he drew our attention to the table at page 24 of the CIT(A) reflecting the above figures as udder: (Copy) A.Y Business Income (BI) before Interest and Remunerati on(Rs) Turnover as per books (Rs) On-money as computed (Rs) N.P at 17.5% (Rs) (Book TO + On-money) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as asked whether he had any knowledge /information of the rate at which the properties were bought, to which he had replied that since it was his son who had done the dealings ,he had confirmed the rates from him on phone that it was done at Rs.2400/- per sq. ft. Ld.Counsel contended that this admission of rate of Rs2400 per sq. ft paid for purchase of property by Mr. Sorathia was therefore only here say and not on the basis of his own knowledge and information. ii) That as per the order of the Ld. CIT(A) no other incriminating material relating to undisclosed receipt was found during survey or search operation carried out in the group cases. And in the absence of any material to support the statement of Mr. Sorathia which in any case was based on here say his statement recorded during survey had no meaning. Reliance was placed on the following decision in this regard: (i) Paul Mathews & Sons vs. CIT [2003] 129 taxmann.com 416 (ii) CIT vs. S. Khader Khan Son [2012] 254 CTR 228 (SC) (iii) CIT vs. S. Khader Khan Son [2008] 300 ITR 157 (iv) CIT-III, vs. Golden Finance [2014] 220 taxmann.com 162 (Guj.) iii) Without prejudice to the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0 216 178.75 4 00 000 2 238 29000 307 240.00 8 50 000 3 542 0 417 175.00 4 00 000 2286 20000 304 240.00 6 40 000 2 667 0 204 363.00 8 85 000 2 438 0 9 389.00 9 00 000 2314 33 600 5 389.00 10 00 000 2571 0 2 389.00 20 25 000 5206 0 3 389.00 20 25 000 5206 0 4 389.00 20 25 000 5206 0 111-112 734.00 28 00 000 3 815 0 311-317 3 000.00 60 00 000 2 000 12 00 000 A.Y. 2014-15 406 240.00 4 50 000 1 875 1 26 000 409 175.00 4 50 000 2571 0 408 175.00 5 21 000 2977 0 404 240.00 6 00 000 2 500 0 403 240.00 6 50 000 2 708 0 14 389.00 7 50 000 1 928 1 83 600 11 389.00 7 75 000 1 992 1 58 600 12 389.00 7 75 000 1 992 1 58 600 106 367.00 14 30 000 3 896 0 107 367.00 1475000 4 019 0 211 1 260.00 18 50 000 1 468 1 1 74 0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e charged from the customer in the year. Similarly, in F Y 2012-13 and 2013-14, the assessee has charged maximum rate of Rs.1850 per sq. ft. for office no. 10 and Rs.2383 per sq. ft. for office no. 106 respectively. If it is considered that the assessee has not charged on-money from these purchasers in whose case actual sale price documents are prepared, it is also proved that the assessee has accommodated other customers to whom the sales of the offices/shops are made in the concerned year. Therefore, if the yearwise maximum price is taken as actual rate of that year and the same rate is applied to other buyers in the concerned year, the amount of on-money could be worked out as mentioned in Column No. T of the tabular calculation at Para No. 6.7 above. The total undisclosed income in this method from FY 2011-12 to 2013-14 comes to Rs. 3,52.62,485/-. The total undisclosed income calculated through both the above mentioned methods is very close to each other as the difference is Rs.8,95,485/- only (Rs. 3,52,62,485/ less Rs. 3,43,67,000/-). This difference is mainly due to static calculation without considering location of the property, direction etc in the case of on-money valuatio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h came to Rs.800/- per sq.ft., applied to the area of each property sold ,was treated as on-money received by the assessee .This rate of Rs.2400/- per sq. ft adopted by the department as the actual rate of sale of properties, was based on the statement of one Mr.Devji Sorathiya who was summoned for recording his statement u/s 131(1A) of the Act during survey proceedings conducted on the assessee on 07-01-2014.The Revenue authorities have justified the on-money alleged to be received by the assessee in each year on another basis also by taking the maximum rate at which property was sold in a particular year to be the actual rate and treating the properties sold at lower rates accordingly to having been accommodated by taking on-money. The reasoning being that the rate of property is at a particular level at the time of certain time period. It is also an undisputed fact that six group concerns of the assessee firm (Bafna group) had filed settlement petition before the Hon'ble Settlement Commission ,in consequence to search action undertaken on them, and had admitted to on money received on sale of units by them. The application of net profit rate of 17.5% to the total disclosed as we....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ention of the Revenue that documents found during survey revealed Mr.Sorathiya as being the original allotee and therefore his statement was believable, we find, is of no consequence in view of the fact that Mr. Sorathiya ,as per his own admission, himself had no knowledge of the rate of allotment which he had got to know from his son and as we have noted above his son denied any extra amount agreed to be paid for the properties allotted to him. Therefore, we hold, no credence can be given to the statement of Mr.Sorathiya relating to the rate of Rs.2400/- per sq. ft being the actual rate at which the properties were sold by the assessee. 15. The contention of the Revenue that the admission of on money received by other entities of the group to the settlement commission lends credence to the statement of Mr.Sorathiya, we find is also not acceptable. Nothing has been brought to our notice by the Revenue to demonstrate the parity of the facts and circumstances of those cases with that of the assessee. The Revenue has not even pointed out the facts and circumstances in which surrender/admission had been made by each such concern to the Settlement Commission. It appears to be a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The addition made therefore by estimating profits for all the three years of Rs.10,71,290/-,Rs.18,45,389/- & Rs.12,65,787/- respectively is deleted. 20. Having adjudicated the common issue arising in all the three appeals before us , we now proceed to adjudicate the appeals before us. We have noted that identical grounds were raised in all the appeals .we shall therefore reproduce the grounds raised in the assesses appeal for A.Y 201213 and dispose off all the appeals accordingly. ITA No.1160/Ahd/2018 (Asstt.Year 2012-13): 21. The effective grounds of appeal are as under: "1. In the facts and in the circumstances of the case, the learned CIT(A) has erred in rejecting the relevant ground of appeal raised by the appellant before him challenging the validity of the proceedings initiated u/s.147 of the l.T. Act. 2. In law and in facts and circumstances of the case of appellant, the Assessing Officer has erred in initiating reassessment proceedings within four years without any tangible material on record which shows that income has escaped assessment and consequently reassessment carried out u/s 143(3) r.w.s 147 of the Act is bad in law and required to be q....