AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (4) TMI 1549
X X X X Extracts X X X X
X X X X Extracts X X X X
..../-, out of total addition of Rs. 2,43,650/-( Rs. 3,57,120/- for A.Y. 1997-98), on account of estimated on-money alleged to have been received /collected by the appellant in the booking of Ruturaj Complex in complete disregard of available material, evidences and explanation. The addition of Rs. 1,00,000/- being made in complete disregard of the available material, evidences and explanation is prayed to be deleted. 2.1. For both the years, the assessment was made u/s.144 of the I.T. Act respectively dated 23/03/1999 and 13/03/2000. It was noted by the AO that a survey was conducted u/s.133A of the I.T. Act on 23/03/1995. A search was also conducted u/s.132 of the Act at the residence of the Directors. Their statement was also recorded u/s.132(4) of the Act. The AO has reproduced one statement of Shri Chandrakant J.Patel recorded u/s.132(4) of the Act dated 31/03/1995. On the basis of the said statement, wherein there was a reference of charging of 'on-money', for the year under consideration, i.e. for AY 1996-97 the AO has enquired in respect of four units which were stated to be booked during the year under consideration. The AO has recorded certain findings in re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eneral inflation. Finally, an addition of Rs. 2,43,650/- was made. The said addition was challenged before ld.CIT(A). After hearing the submission, ld.CIT(A) has granted part relief, relevant para reproduced below : "3.2. I have considered the submissions of the ld. A.R. and the facts of the case, This is the first assessment after the block period, pursuant to search on 23.3.95. The addition has been made on the assumption that the same rate of on-money was received in this year also. In this connection, a pertinent fact is that the appellant has, during the year, itself suo motu enhanced the selling price as recorded in the books in comparison to the selling price recorded in the books during the financial year 1994-95. The estimated addition is not based on any material evidence, but solely on the strength of the statement made during the search. An admission made at the time of search is certainly binding so far as assessment of the block period is concerned, but it cannot bind the assessee in respect of all future assessments. If a similar addition is made, it must be duly supported with evidence and cannot be based only on a statement. At the same time, it canno....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... noted that even the first appellate authority was not sure about the basis on which the AO had made the said addition, hence, the ld.CIT(A) has commented that an admission at the time of search is binding as far as the block period in search case is concerned, but the said statement should not fasten the assessee in respect of all the future assessments. The ld.CIT(A) has also commented the addition in respect of 'on-money' must be duly supported with evidence pertaining to the year under consideration. However, suspecting that receiving of 'on-money' being a prevalent practice in respect of real estate business he has confirmed an adhoc addition upto Rs. 1 lac and rest of the amount was deleted. This approach of ld.CIT(A), thus clearly indicates that the addition was merely made on presumption and there was no definite evidence in the hands of the Revenue. We are also of the view that merely on assumption the same rate of 'on-money' should not have been extrapolated by the AO for the year under consideration that too on a basis of a statement recorded in the past not connected with the assessment proceedings for the year under consideration. We are also of the view that the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rs.4,08,691/- 5. Having heard the submissions of both the sides and also on perusal of the contra copies of accounts filed before us, we find no justification in the sustenance of the difference of Rs. 4,08,691/- in the hands of the assessee. The assessee has furnished a copy of account of M/s.Royal Resorts and Hotels Ltd. in its books of accounts and also furnished a statement of accounts of the assessee in the books of the said party. The ld. AR of the assessee Mr. Mukund Bakshi has also explained the reconciliation. He has pointed out that firstly, there was a difference in the opening balance in the respective books of accounts of Rs. 1,80,000/-. There was a difference in respect of charging of interest because, on one hand, the said party has accounted for interest of Rs. 2,61,149/-, whereas, on the other hand, the assessee has accounted for only Rs. 97,900/- which has created a difference of Rs. 1,63,249/-. However, he has emphasised that as far as the question of total transfer of advances on different dates was concerned, the same has duly been reconciled and no difference was found in those transfers in the books of accounts of both the concerns....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... which the Revenue had sought to contend or argue their case that the shareholders funds to the tune of over Rs. 172 crores was utilised for the purpose of fixed assets in terms of the balance sheet as on 31st March, 1999, is fallacious. Firstly, the balance sheet as of 31st March, 1999 is nor relevant. What would be relevant would be balance sheet as on 31st March, 2000. Apart from that, the counsel has been unable to point out from the balance sheet that the balance sheet as on 31st March, 1999 showed that the shareholders funds were utilised for the purpose of fixed assets. The P&L a/c and the balance sheet would not show whether shareholders funds have been utilised for investments. The argument has to be rejected on this count also. Apart from that both in the order of the CIT(A) as also the Tribunal, a clear finding is recorded that the assessee had interest-free funds of its own which had been generated in the course of the year commencing from 1st April, 1999. Apart from that in terms of the balance sheet there was a further availability of Rs. 398.19 crores including Rs. 180 crores of share capital. In this context, the finding of fact recorded by CIT(A) and Tribunal ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed CIT(A) has erred in dele4ting the addition on account of unaccounted receipts of Rs. 4,81,866/- over looking the fact that the addition was not made on protective basis. 9.1. It was observed by the AO that Rituraj Housing Pvt.Ltd. (RHPL) is the real owner of the project "Rituraj". It was alleged that the assessee-company was the consultant of the said project. Since the assessee-company was engaged in the booking, allotment, collection and handing over of the possession in respect of shops, offices, flats, etc., therefore, assessee should have shown receipts from the members. As per Profit and Loss account assessee had not shown any receipts from the members. The AO has, therefore, made a calculation of the profit which was added on protective basis in the hands of the assessee as per the following observation: "7.2. As per the detailed discussion in the case of RHPL A.Yr.1994-95, and other group cases e.g. Kotel Properties Pvt.Ltd. A.Y. 1996097, the total amount received from the members during the year as shown in the books of accounts has to be considered as the accounted receipts on which net profit to be determined. Since the assessee has not shown any inco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion that for AY 1996-97, an assessment order passed u/s.143(3) of the Act read with section 254 of the Act dated 20/02/2009 for AY 1996-97 in the case of M/s. Rituraj Housing Pvt.Ltd. is placed before us and therein the said sum of Rs. 4,81,866/- has now been added substantively. Once the Revenue Department has finally settled the issue in the hands of the said company, therefore there is no reason to assess the same on protective basis in the hands of the assessee, therefore we hereby affirm the findings of the ld.CIT(A). This ground of the Revenue is hereby dismissed. 11. Ground No. 2 reads as under: 2) The learned CIT(A) has erred in deleting the addition of Rs. 15,72,882/- in respect of unexplained share capital over looking the fact that in the subsidiary remand report dated 13.09.2008, nothing is there in respect of unexplained share capital and the assessee could not submit any proof of credit worthiness of the subscribers to substantiate its claim that the increase in share capital is genuine one. 11.1. The observation of the AO was that the paid up share capital of the assessee-company had increased from Rs. 7,14,842/- to Rs. 27,27,6....