TaxTMI 
TaxTMI 
2024 (5) TMI 481
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....,65,50,000/- on account of alleged unexplained cash credit u/s 68 of the IT Act and treated as income from other sources. 3. It is, therefore, prayed that the order the ld. CIT(A)-4, Surat may be set aside and that of the AO may be restored to the above extent. 4. The assessee craves leave to add, alter, amend and/or withdraw any ground(s) of appeal either before or during the course of hearing of the appeal." 3. The appeal filed by the Revenue, for Assessment Year 2008-09, is barred by limitation by 3 days. The Revenue has moved a petition requesting the Bench to condone the delay. We have heard both the parties on this preliminary issue. Having regard to the reasons given in the petition, we condone the delay and admit the appeal for hearing. 4. Ground No.1 raised by the Revenue relates to deletion of addition of Rs. 80,74,429/- by ld CIT(A), which was made by the assessing officer, on account of disallowance under section 80IB of the Act. 5. The relevant material facts, as culled out from the material on record, are as follows. A search action under section 132 of the Income Tax Act, 1961 was carried in Vaishnodevi Group of Surat on 28.11.2013 and the case of the asses....
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....by the assessee from this project. Now, the assessee firm has claimed deduction u/s 80IB on this undisclosed income on the ground that the project has fulfilled all conditions laid down in the section 80IB of the Income-tax Act. In this regard, a show cause notices were issued to the assessee on 15.10.2015 and then 49102.2015 to furnish following details to justify his claim of deduction u/s 80IB against this undisclosed income. "a) Details of transaction which lead to generation of this un-disclosed income declared. b) Evidence of transaction which lead to generation of this un-disclosed income declared. c) Name & address of person from whom this undisclosed amount is received. You are requested to provide following details (Project-wise) in respect this undisclosed income of Rs. 2,07,03,663/- (total profit shown from the project Rushikesh) S. N Name and latest postal address of the person PAN Date of amount received Amount in Rs. Reason for payment Reason for not recorded in regular books 7. The assessee-firm has submitted its reply before the assessing officer, which is reproduced as under: "In respect of your query relating details of transaction which le....
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.... regular set of books of accounts is already produced before yourself for verification. In case of expenses which are%. out of books but are part of the profit and loss account as seized from the premises of the partner, they are on actual basis and the assessee had'not maintained the accounting books as regard to this. Copy of profit and loss account was kept for future reference. The bifurcation of disclosure is based on profit earned in the year in concern but it is not possible to segregate year wise expenditure as books and profit and loss account were maintained project wise and not year wise. Sec 292C of the Act categorically states that 292C. Presumption as to assets, books of account, etc (1) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search under section 132 or survey under section 133A, it may, in any proceeding under this Act, be presumed- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such b....
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....d observed that there is no evidence whatsoever, at least, to indicate that the amounts, admittedly received by the assessee, are received from only and only from the flat owners in lieu of the purchase of flats. In view of the same, it was noted by the assessing officer that the assessee has failed to offer a satisfactory explanation about the nature and source of these incomes. After careful consideration of facts of the issue, material evidences on record, the assessing officer concluded the followings: (i) The assessee has credited certain amounts of Rs. 80,74,429/-, in its computation of income under the head Disclosure Income (Rushikesh), which is not a part of audited books of account and disclosed them in the return under the head business income from this project. (ii) The assessee has solely based his claim on the impounded document only i.e. Profit and loss account seized from the resident premises of Shri Rajesh Vaghani, partner of the assessee firm. No link was found that this amount was earned from the project Rushikesh, which was eligible for deduction u/s 80IB. The assessee firm also has not claimed such profit in its original return of income (ROI) while an opp....
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....ot in dispute that project of the assessee, namely 'Rushikesh' is eligible for deduction u/s 80IB of the Act, as evident from the order of the CIT(A) for the AY 2009-10 and 2010-11. The assessee does not have any other activity to earn income from any other source during the impugned assessment year. Based on the above facts, the ld CIT(A) deleted the addition. 10. Aggrieved by the order of ld. CIT(A), the Revenue is in appeal before us. 11. Learned Departmental Representative (ld. CIT-DR) for the Revenue, argued that assessee was informed by the assessing officer about the factual inconsistencies with regards to the contents of the documents impounded and the evidences on record and assessing officer also stated that assessee-firm is not eligible to claim deduction under section 80IB of the Act. Admittedly, if the amounts are profit out of 'on money' receipts, then the details of the total 'on money' received, person from whom such amount was received and the flat of the project in lieu of which it has been received should be stated by the assessee-firm. That is, the assessee was unable to submit the details of the persons from whom the firm has received this amount as 'on money....
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.... additional income offered as undisclosed income. The ld Counsel stated that assessee disclosed and explained that the management of M/s. S.R. corporation was maintaining profit and loss account which covered all transaction i.e. recorded in books as well as those transaction which were not recorded in books. After completion of each project and during the project from time to time, they make profit and loss account for the purpose of distribution of final profit amongst partners. After distribution of profits, they did not maintain all ledgers or details. Only the profit and loss account which was the basis of such distribution was maintained and a copy of the same was given to all partners for their records. One such copy was found and seized by the department during the search at the residential premises of Rajesh Vaghani on 28/11/2013. The undisclosed income is the differential income between profit as shown by the assessee-firm in regular return, as filed before the department from time to time and profit and loss account as seized by the department during the search action. The same relates to the core business of the assessee- firm, as is evident from the profit and loss acc....
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....d that the assessee has solely based his claim on the impounded document only i.e. Profit and Loss account seized from the premises of Shri Rajesh Vaghani, Partner of the assessee-firm. We note that assessee-firm merely based on the copy of profit and loss account found from the premises of the partner and statement of the partner has claimed that 'on-money' belongs to business income, and there is no other material or piece of evidences to prove that the 'on-money' found during search belongs to income from other sources. 14. Therefore, we note that the question of doubting the veracity of seized material does not arise. Income Tax is on actual income and the paper, as seized depicts the actual profit earned by the assessee. The correctness of the document seized cannot be doubted and more so by the department as per section 292C of the Act, which armors the presumption that the seized material is correct and hence cannot be doubted. When the statute itself proves a deeming provision regarding the veracity of the seized material, the question of doubting or providing corroborative evidence does not arise, more so when the same seized paper is the basis of disclosure of unaccounte....
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.... other than real estate development and in the impugned assessment year, the assessee had income being generated from the project 'Rushikesh'. Hence, the income is earned from the said eligible business. The seized material found during the course of search showed that the additional income earned by means of 'on-money' was from Rushikesh project, which was eligible for deduction u/s 80IB of the Act. Therefore, based on these facts and circumstances, the ld CIT(A) held that assessee is eligible for deduction u/s 80IB of the Act, and hence ld CIT(A) allowed the deduction of Rs. 80,74,429/ u/s 80IB of the Act. We have gone through the above findings of ld CIT(A) and noted that conclusion reached by ld CIT(A) does not contain any infirmity. The conclusions arrived at by the CIT(A) are, therefore, correct and admit no interference by us. We, approve and confirm the order of the CIT(A) and dismiss ground No.1 raised by the Revenue. 15. In the result, ground No.1 raised by the Revenue is dismissed. 16. Ground No.2 raised by the Revenue, relates to addition of Rs. 5,65,50,000/-, on account of alleged unexplained cash credit under section 68 of the Act. 17. Succinct facts qua the issue ....
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....e land in question. It is not very clear that whether an amount of Rs. 1,12,00,000/- could be spent in couple of weeks' time, as Popatbhai Kakadia had purchased the land in question in second and third week of March 2008. It was further noted by ld CIT(A) that an amount of Rs. 1,62,94,570/- has been spent by Mr. Popatbhai Kakadia on the said land before the said land was brought into the books of the assessee-firm on 30th September 2008. So to say, during the FY 2007-08, relevant to the impugned assessment year, the land in question did not belong to the assessee firm. It was only in March 2008, Mr. Popatbhai Kakadia bought it from three vendors and spent further amount of Rs. 1.62 Crore on its title and development before the same was brought into the books of the firm, as the capital of Mr. Popatbhai Kakadia. Therefore, the facts of the purchase of land and notings found of receipt of cash in the residential premises of Mr. Rajesh Vaghaiii are not matching for making an addition in the hands of the assessee-firm in the impugned assessment year. As stated earlier, the land in question has been bought in the month of March 2008 by Mr. Popatbhai Kakadia. The said land was brought in....
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.... The said land was brought into the books of the assessee-firm after removing the encroachments etc. for a total value of Rs. 2,19,34,070/-. Hence, it was submitted by ld Counsel that the assessee- firm, as such, has not spent any amount, on either purchase or for removal of encroachment of the said land. Therefore, ld Counsel contended that ld CIT(A) has appreciated the assessee`s facts in right perspectives and deleted the addition, hence the order of ld CIT(A) may be upheld. 22. We have heard both the parties and noted that Ld. Counsel for the assessee, submitted the following documents and evidences, before the Bench viz: (1) Copy Remand Report dated 23.08.2019 during the course of CIT(A) proceedings (vide Pb. 1 - 11), (2) Copy of Receipt of Registration Fees and Index copy along with Supplementary Partnership Deed of M/s. S. R. Corporation dated 30.09.2018 (vide Pb. 12 - 21), (3) Partnership Deed of M/s S. R. Corporation dated 19.05.2005 (vide Pb. 22 - 28), (4) Party-wise and Year-wise bifurcation of part seized material along with copy of part of seized materials (vide Pb.29 - 36), (5) Firms and Partners- wise disclosure chart (vide Pb.37), (6) Copy of three Purchase Deeds o....
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....ered the same in their returns, for AY 2009-10. The AO added the balance amount of Rs. 5,65,50,000/- in the hands of the assessee- firm. In fact, as seen from the 'seized material, the amount ought to have been taxed in the impugned assessment year was Rs. 1,12,00,000/- as this amount was shown as received in AY 2008-09 and Rs. 3,60,60,000/- in AY 2009-10 and Rs. 92,90,000/- in AY 2010-11 as per the said seized loose sheets. However, the AO added the entire Rs. 5,65,50,000/- in the assessment year 2008-09. The details of the said notings, assessment year- wise are as under: Sr. No. Name of Person Total Amount Year wise Bifurcation of amount Respective Year 01. Gordhan Dada 3,27,50,000 1,00,00,000 A.Y. 2008-09 1,80,00,000 AY.2009-10 47,50,000 AY.2010-11 02. Shambhubhai 1,22,00,000 9,00,000 A.Y. 2008-09 94,00,000 A.Y. 2009-10 19,00,000 A.Y. 2010-11 03. Maheshbhai Mavani 8,50,000 3,00,000 A.Y 2008-09 5,50,000 A.Y. 2009-10 04. Bhikhubhai Khaini 71,50,000 51,50,000 A.Y. 2009-10 20,00,000....