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2024 (10) TMI 696
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....ssing this consolidated order, as the issues involved are interconnected having the same assessment year and of the assessee. 2.1 The grounds of appeal taken by the assessee in ITA No. 205/JP/2024 for A.Y 2015-16 are as under; "1. That the impugned notice issued u/s 153A dated 22.02.2017 is bad in law, void ab intio being without jurisdiction, the same therefore deserves to be quashed. Consequently, the impugned assessment order dated 18.10.2018 passed u/s 153A r.w.s 143(3) also deserves to be quashed. 2. The impugned addition made in the order u/s 153A r.w.s. 143(3) dated 18.12.2018 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be deleted. 3. Rs. 6,55,000/-: The Id. CIT(A) erred in law as well as on the facts of the case in confirming the additions made of Rs. 6,55,000/- being difference between ITR filed u/s 153A and ITR filed u/s 139 of the Act. The addition so made by the Id. AO and so confirmed, is totally contrary to the provisions of law and facts on the record and hence the same kindly be deleted in full. 4. Rs. 1,62,00,000/-: The Id. CIT(A) erred in law as well as on the facts of the case in co....
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....hout appreciating the facts that assessee has not submitted agreements related to booking amount at the time of assessment proceedings as well as at the time of remand report proceedings. 3. Whether in facts and circumstances of the case, the CIT(A) is justified in applying the profit ratio on undisclosed amount without appreciating the facts that assessee has failed to explain nature and source of above amount with documentary evidences and therefore, whole undisclosed amount is required to be added as undisclosed income in the hands of the assessee. 4. The appellant craves leave to add, amend or withdraw any of the ground of appeal during the course of appellant proceeding." 3. The brief facts as culled out from the records is that a search & seizure operation under section 132(1) of the Income Tax Act, 1961 was carried out on 30.06.2016 at the various premises of Bajaj Group, Kota to which the assessee belongs. Several persons and premises covered u/s 132 of I.T. Act, 1961. Cash, jewellery and other documents were found and seized from some persons residence and business premises. As is evident from the panchnama placed on record in the present case search was for the five....
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....viations used, it is submitted by Shri Surinder Pal Singh Sahni that AD & R is his own Benami shares, whereas B i.e. Bucchi- nick name of Shri Harvider Singh Kohli and V is Vipin Kumar Lodha. These four associates in their respective post search statement(s) have admitted that amount of Rs. 450.00 lacs as unaccounted profit from Bajaj Enclave project and have offered the same for taxation in their respective hands. During post search investigation statement dated 22.09.2016 of Shri Nawal Kishore Khandelwal was recorded. Wherein reply to Q.-8 of his statement dated 22.09.2016, he admitted that profit from Bajaj Enclave is Rs. 1,62,00,000/- which he will offer for taxation. While in assessment proceeding ld. AO noted that the assessee maintained two banks account, wherein a sum of Rs. 2,18,18,114/- were found credited in respect of which assessee could not offer any satisfactory evidence. He claimed in reply to Q.-7 that the booking amounts have been deposited in a bank account. Therefore, the entire amount of Rs. 2,18,18,114/- required to be taxed as unaccounted income. Ld. AO also noted that the assessee group claimed to have incurred expenditure of Rs. 850.00 Lacs for development....
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.... acceptable as the Search Assessments are for the benefit of the revenue rather than assessee. The returns are filed uls 153A of the act are as a consequence of action taken under Section 132 of the Act on a assessee and thus can't be advantageous for the assessee and moreover the proceedings u/s 153A are analogous to proceedings under Section 147 of the Act to the extert that these are proceedings for the benefit of Revenue and not that of the assessee. The assessee cannot be permitted, to convert these reassessment proceedings es his appeal or revision in disguise and seek relief in respect of items earlier not claimed in the original return of income. Reliance is placed on the the judgment rendered by the Hon'ble Bombay High Court in K. Sudhakar S. Shanbhag Vs ITO [2000] 161 CTR (Bom) 391: [2000] 241 1TR 865 (Bom). This decision was rendered by taking notice of the principle laid by the Hon'ble apex Court in CIT Vs Sun Engineering Works (P) Ltd. [1992] 107 CTR (SC) 209: [1992] 198 ITR 297 (SC) to the effect that in reassessment proceedings, an assessee can neither claim nor be allowed a deduction that was not claimed in the original return. As such the assessment pro....
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....assessee is allowed to claim a allowance, deduction etc. u/s 153A not claimed earlier than it would mean that even in cases where the appeal arising out of the completed assessment has been decided by the CIT(A), ITAT and the High Court, on a notice issued under Section 153A of the Act, the AO would have power to undo what has been concluded up to the High Court. Any interpretation which leads to such conclusion has to be repelled and/or avoided as held by the Hon'ble Supreme Court in the case of K.P. Varghese (supra). In the following decisions it was held that the search proceedings under section 153A are for the benefit of the revenue and therefore any fresh claim is not allowable u/s153A of the act:- 1. Jai Steel (India), Vs Jodhpur Assistant Commissioner of Income-tax [2013] 36 taxmann.com 523 (Rajasthan) 2. Charchit Agarwal Vs Assistant Commissioner of Income-tax, Central Circle 12, New Delhi (2009) 34 SOT 348 (Delhi) 3. Suncity Alloys Pvt. Ltd. V Asstt CIT (2009) 124 TTJ 674 (Jodhpur) The jurisdictional High Court in the case of Jai Steel (India), Vs Jodhpur Assistant Commissioner of Income-tax [2013] 36 taxmann.com 523 (Rajasthan) clearly held as under- "30.....
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....,57,955/- (as per his ITR) whereas he offered for taxation a sum of Rs. 1,54,42,045/- (i.e. 1,62,00,000- 7,57,955/-) only. In this connection it is hereby observed that the returned income of Rs. 7,57,955/- is from his regular business of provisional store and the un-accounted income of Rs. 1,62,00,000/- cannot be reduced by his already disclosed income from other business activity in regular course. As per AO Shri Vipin Kumar Lodha has offered income of Rs. 72,00,000/- before the Hon'ble settlement Commission. Likewise Shri Harvinder Singh has also paid taxes on undisclosed income of Rs. 72,00,000/- in return filed u/s 153A of the Act. Shri Surendra Pal Singh Sahni has also offered undisclosed income of Rs. 1,44,00,000/- in his return filed u/s 153A of the Act. They all were partner in this scheme. Therefore, undisclosed income of Rs. 1,62,00,000/- is added in taxable income of the assessee. 6.5.1 In the remand report the AO provided some more details as under- 1. On the basis of incriminating documents seized from the premises of shri Surender Pan Singh Sahni & Others associates, the assessee has voluntarily offered undisclosed income of Rs. 1,62,00,000/- in his stateme....
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....d a sum of Rs. 162.00 Lacs as his undisclosed income for the A.Y. 2015-16. In these circumstances, it can be said that there were corroborative evidences in the form of statement of other partners of the project, the incriminating document seized during the search etc. in addition to the statement recorded of the assessee. The issue of retraction of statement is being discussed separately. 6.5.3 Contradictory stand of the Appellant without any cogent evidence The appellant argued that he was under a complete dark as to what sales consideration of a particular plot stood decided and how much amount have been received by them in cash (over and above the declared sales consideration), although the assessee was ensured to get his share also out of the same. Under this background only, at the time of recording statement, the assessee was strongly advised by these people to admit such a huge amount in his statement though the assessee never earned over and above the agreed sale proceeds as per sale agreements. The reply of the appellant is full of contradictions. At first the appellant stating that the assessee was ensured to get his share out of the profit received on cash sales. ....
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.... requisite knowledge and experience of the Real Estate Business by the assessee, which in fact is glaringly evident from the plain reading of his statement and not disputed by the AO, not finding any undisclosed asset or undisclosed expenditure only suggests and the probability pre-ponders in his favor of the assessee that he was not given/did not receive the 36% share out of the Rs 4.50 Cr. As discussed above, the assessee accepted earning of profit, the evidence required for making addition is sufficient with the AO. Now, coming to the issue raised by the appellant, it is in the exclusive knowledge of the assessee that how he utilised the profit earned. The assessee has not disclosed the manner of utilization. However, the AO was having enough evidences for making addition which includes sworn in statement of the appellant, statement of other partners and the seized document. The appellant relied upon the decision of Hon'ble Supreme Court in the case of Sumati Dayal vs CIT [1995] 214 ITR 801 (SC). The appellant has not explained how this decision supports his case. Hon'ble Supreme Court in the case of Sumati Dayal Vs CIT [1995] 80 Taxman 89 (SC)/[1995] 214 ITR 801 (SC....
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.... the racing clubs giving particulars of the crossed cheques for payment of the amounts for winning of jackpots, etc. The Chairman had rejected the contention regarding lack of expertise in respect of the appellant and had observed that the expertise was the last thing that was necessary for a game of chance and anybody had to go and call for five numbers in counter and obtain a jackpot ticket and that books containing information are available which are quite cheap. This was a superficial approach to the problem. The matter had to be considered in the light of human probabilities. The Chairman of the Settlement Commission had emphasised that the appellant did possess the winning ticket which was surrendered to the race club and in return a crossed cheque was obtained. It was a neutral circumstance, because if the appellant had purchased the winning ticket after the event she would be having the winning ticket with her which she could surrender to the race club. The observation by the Chairman of the Settlement Commission that the 'fraudulent sale of winning ticket was not an usual practice but was very much of an unusual practice, ignored the prevalent malpractice that was noti....
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....w of the above discussion, the argument of the appellant are not found to be acceptable. 6.5.4 The AO has taxed real income and not hypothetical income It is argued that there was some taxable income in the hands of an assessee, always lay upon the revenue. In the instant case there is absolutely no evidence at all successfully brought on record beyond doubts that income really accrued and the assessee received the alleged profit of Rs. 1.62 crore. The appellant has mixed up two events in this argument, the accrual of Income and receipt of Income. The assessee accepted earning of profit, the evidence required for making addition is sufficient with the AO which includes sworn in statement of the appellant, statement of other partners and the seized document. Therefore accrual of income is proved beyond doubt. The claim of the appellant that the profit so earned might have been kept by the other partners and not shared with him is not proved with the help of evidences. Now, coming to the second issue raised by the appellant, it is in the exclusive knowledge of the assessee that how he utilised the profit earned. The assessee has not disclosed the manner of utilization. However,....
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....en made in the books of account. This was exactly what had happened in instant case. Here the agreements within the previous year replaced the earlier agreements, and altered the rate in such a way as to make the income different from what had been entered in the books of account. A mere book-keeping entry cannot be income, unless income has actually resulted, and in the instant case, by the change of the terms the income which accrued and was received consisted of the lesser amounts and not the larger. This was not a gift by the assessee firm to the managed companies. The reduction was a part of the agreement entered into by the assessee firm to secure a long-term managing agency arrangement for the two companies which it had floated." On going through the reliance placed by the appellant it is seen that the reliance is misplaced. Hon'ble Supreme Court in the case relied upon by the appellant held that where, the income can be said not to have resulted at all as there is neither accrual nor receipt of income, even though an entry have been made in the books of account. In the case of the appellant the accrual of income is not disputed. The receipt of Income is not disputed. ....
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....urendra Pal Sahni for taxation u/s 153A. It is argued that the impugned seized documents did not belong to the assessee and contained rough jotting of other three associates, even though they admitted, the assessee was neither answerable nor legally expected to explain. However, the AO failed to rebut such contention though raised during the assessment proceedings. He even failed to bring iota of evidence/corroborative documents which suggest that the assessee earned over and above the agreed sale price. It is argued that any entry made/record kept by third party in his own handwriting even though sharing the name of the assessee cannot bind the assessee unless such transaction is further corroborated with some strong and cogent evidence showing the involvement of the assessee. The argument of the appellant is considered but not found to be acceptable. There is clear detection of incriminating material during the search proceedings. The incriminating documents were seized from the premises of Shri Surender Pan Singh Sahni & Other associates. This is an admitted fact. These persons were business partners of the appellant. The appellant was conducting business as per share of p....
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.... liability also has to be shared together by all the partners in the ratio which was decided in the beginning of partnership. The appellant accepted the profit so earned in the statement recorded after search. However, the income so admitted was not offered for taxation in the return filed u/s 153A of the Income Tax act. It is important to note that one of the partners has accepted tax liability before the settlement commission. In these circumstances, it is held that there was incriminating material found from the business partner which was virtually place of business of the assessee also as the documents related to business of the assessee were found there. The argument of the appellant are not found to be acceptable that the incriminating document were found from third party. The admission in the statement is corroborated with the seized documents and admission of other partners. These are strong and cogent evidence showing the involvement of the assessee. Without prejudice to the above discussion, the statement recorded during search and survey under oath is an important piece of evidence and it is an incriminating material. The Kerala High Court on this issue held in the cas....
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....ndent party to other persons involved in the search. Therefore, if the incriminating material was found from one of the partners, the same is incriminating material for all the persons who were involved in the business and also covered during the search proceedings simultaneously. Therefore, the claim of the appellant is incorrect that no incriminating material was found from the premises (control and possession) of the assessee. The other partners' place was also his place of business. It is admitted fact that the business was being run jointly. Therefore, virtually, the incriminating document found from the prossession of other partners place was virtually from the business place of the assessee. If the argument of the appellant are accepted than partners of business will keep the unaccounted transactions at one place and if caught the other partners will say it is not found from our possession and only the person who has been caught will pay the taxes. This is not an acceptable situation. The partners in business are partners for profit and loss. The tax liability also has to be shared together by all the partners in the ratio which was decided in the beginning of partnershi....
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....the statement earlier at the time of survey was wrong. Such retraction, however, should be supported by a strong evidence stating that the earlier statement was recorded under duress and coercion, and this has to have certain definite evidence to come to the conclusion that indicating that there was an element of compulsion for appellant to make such statement. e. However, a bald assertion to this effect at much belated stage cannot be accepted. Applying the aforesaid legal proposition herein, I am of the opinion that once a statement is recorded, it is open to the assessing officer to rely and proceed on the basis that such statement is correct and represents the true state of affairs and the burden is on the deponent to demonstrate by letting cogent, convincing and material evidence that the statement was incorrect. Therefore, the statement made under oath during search and survey proceedings has a strong evidentiary value and is binding on a person, who makes it. 6.5.8 Other Decisions Relied upon by the Appellant The Decisions relied upon the Appellant are discussed as under - Relying on the decisions referred as 72 TTJ 323 (Jd), 73 ITD 434 (Chd) & 63 TTJ 236 (Del) it ....
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....r of Income-tax (Exemption) V. Shia Dawoodi Bohra Jamat [2012] 25 taxmann.com 90 (Gujarat) observed as under. "11. It is settled legal position, that the decisions of the courts are not to be applied in the abstract, but are to be applied to the facts of the case. Without recording any findings of fact, one fails to understand as to how the Tribunal has come to the conclusion that the decisions on which it has placed reliance are applicable to the facts of the present case. It has been often reiterated that the Tribunal is the final fact finding authority, hence, the order of the Tribunal should reflect findings of fact as well the reasons for arriving at its conclusions on the basis of the findings recorded by it. The impugned order of the Tribunal is totally lacking in all quarters. 12. In CCE v. Srikumar Agencies [2008] 232 ELT 577 (SC) the Supreme Court was dealing with a similar case wherein without detailed analysis of the factual position involved, the Customs, Excise and Gold (Control) Appellate Tribunal had merely referred to some judgments and submissions of the learned counsel for the assessees to hold that the assessees were entitled to relief, the court held that c....
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....a common phenomenon in every survey and search. It has been held that in the cases of survey and search, the possibility of tension and surcharge atmosphere can't be ruled out in ACIT Vs. Jagdish NaraianRatan Kumar 22 Tax World 573 (JP), since approved by Hon'ble Rajasthan High Court. The so called admission of the assessee was tutored and being influenced by the false promises made by the other three persons, who's statements were recorded much earlier on 5.09.16 7.09.16 and 9.09.16 admitting their respective share of profits. He made the admission only on the suggestion of his other associates, who might earn the excess money and thus, admission was not voluntary Moreover, statement were recorded on.2 was made on 07.04.2017. There is yet another reason not to blindly believe the so called admission because it is matter of common knowledge that during the course of survey the Revenue Authorities normally do exert unwanted pressure and influence over the appellant's to get something surrendered to make their survey a success. To expect the appellant to fumish an infallible evidence of concrete nature in such a situation is totally beyond comprehension. The state....
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....se. Therefore, we do not find any reason to differ with the findings s so rendered by the Tribunal." In this case also, affidavit filled by the appellant in support of his retraction is perused and the same is not found to be acceptable as the retraction was in the form of mere assertion and also belated. There was no material evidence let in by the appellant to retract the statement made under during the search and survey proceedings and the affidavits are found to be unreliable as the affidavit is a self-serving testimonies. It has been held that any retraction by the appellant should be made at the earliest point of time with sufficient, credible and corroborative evidence to support his claim and not by mere assertion as done in this case. Therefore, I do not find any reason to differ with the findings so recorded by the AO. It is noticed that various judicial authorities have held that a statement uls 132(4)/131 is an important piece of evidence and though it is open to the assessee to show that the statement under oath was erroneous. Such retraction must be made soon after the recording of the statements on oath and further such retraction should be backed with suitable a....
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....retract from statement made under section 132(4) on ground that (a) when there was no evidence or incriminating material discovered at time of search no addition could have been made merely on basis of statement under section 132(4) and (b) that impugned disclosure under admission was obtained forcefully and, hence, not binding Whether statement recorded under section 132(4) is an evidence by itself and any retraction contrary to that should be supported by strong evidence for demonstrating that earlier evidence recorded was under coercion- Held, yes Whether assessee retracted from his earlier statement without demonstrating any evidence to establish that statement recorded earlier was incorrect; an allegation of compulsion or coercion must not be accepted merely on a statement if remained unsubstantiated-Held, yes Whether, therefore, addition made on basis of statement recorded under section 132(4) was to be upheld-Held, yes [In favour of revenue]" In this case also the Assessing Officer made additions in as admitted in the statement under oath. The assessee has not filed any valid retraction. Statement recorded under oath is evidence by itself and any retraction contrary to tha....
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.... with regard to purchase of four properties were not actual amounts and he had paid more than that shown in documents - Second addition was with respect to personal expenses - Last additions was of amount of Rs. 3 lakh which assessee claimed as an NRI loan in his cash flow statement and later in a reply stated to be a loan from his elder brother - Later on, assessee retracted from his statement and contended that admissions were made under threat and coercion - Tribunal allowed appeal of assessee and held that no evidentiary value could be attributed to statement under section 132(4) especially in context of there being a retraction and that for making additions, Assessing Officer should necessarily unearth materials during search Whether on retraction being filed by assessee, there was a burden cast on assessee to prove detraction or rather disprove admissions made Held, yes - Whether since assessee failed to prove any threat or coercion and had voluntarily disclosed his Income by making statement under section 132(4), it could be said that retraction made by assessee was a self-serving after thought and no reliance could be placed on same to disbelieve clear admissions made in st....
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....O is found to be justified. The addition made by the AO is upheld. This ground of appeal is treated as dismissed. Addition of Rs. 3,06,00,000/- claim of bogus development expenditure "7.7 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- The AO noted in this case that the assessee and his associates have claimed to have incurred expenditure of 850.00 Lacs for development in this project. As per mentioned table amount of Rs. 1230 Lacs has been incurred on Bajaj Enclave Project wherein Rs. 30 lacs was incurred for roads. However the sale agreement of the land is for only Rs. 350.00 Lacs which is also seized during search action Annexed at page No. 5 to 29 of exhibit -3 of party A-6. The four associate persons in their respective post search statements and their replies have admitted to incur of Rs. 850.00 Lacs as development expenses. According to the AO in this case it is difficult to believe that in a plain plotting, where the cost of land is Rs. 3.50 ....
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....by corroborative evidences. In these circumstances, the conclusion drawn by the AO is found to be correct that the actual profit earned by the appellant was more than the computation made on the seized document. The conclusion of the AO is also supported by the fact that one of the partner Shri Vipin Kumar Lodha has admitted in settlement petition that no such expenditure of Rs. 850 Lacs is incurred and therefore, the corresponding share of the applicant of this amount i.e. Rs. 136 Lakhs (850*16%) is offered as additional income in AY 2015-16. It is argued that document has to be read in its entirety. The facts are not denied that on the seized paper itself, there was entry of the incurring of the expenditure of Rs. 8.05 Crores, based on which the A.O. alleged sale of proceeds and undisclosed income there from. Since both the entries of receipt and payment, were made on the seized document, the A.O. could not read a part of it and ignored the other. Law is well settled that evidence has to read in its entirety, one cannot read the part which suits him best and to ignore the other which does not. Otherwise, following the principal of tax in real income only, the A.O. is bound to r....
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....his addition is also based on admission by one of the partners before the settlement commission. Therefore, it cannot be said that there is contradiction in the order of the assessing officer. It is argued that if the addition of the share of profit Rs. 1.62 Cr is sustained, the share of development expenses of Rs. 3.06 Cr must also be allowed following the concept of real income. As discussed, this amount is additional income which is not offered in the statement but claimed as expenditure which is not real. Therefore, the real income includes this amount also in addition to the amount of Rs. 1.62 Crore already surrendered. Considering facts and circumstances of the case, this amount is treated as additional income which is not surrendered but claimed as expenditure in the statements. The claim of expenditure is not found to be genuine and one of the partners also accepted that no such expenditure was done actually. Therefore, the addition made by the AO is confirmed as per above discussion. This amount is to be treated as additional profit earned which is distributed by the partners earlier. This ground of appeal is treated as dismissed." Addition of Rs. 2,18,18,114/- u....
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....tradictory and hence deserves a complete deletion It is argued that the Correct Amount is Rs. 1,75,31,192 only/-, Alternatively, and without prejudice, further submitted that subjected amount has been wrongly considered at Rs. 2,18,18,114 as against the correct amount Rs 1,75,31,192, which was the total deposits made in the current account with SBI It is clearly evident that Rs. 38,06,922 deposited in the SBI-SB account were transferred during the same previous year itself on 15/10/2014 through banking channel to the current account. Thus, to the extent of the Rs 38,06,922 the deposits have been wrongly considered twice in the total of Rs 2,18,18,114 stated by the AO Therefore, the entire addition kindly be deleted in full. The reply of the appellant is considered. It is argued that the AO has not at all afforded any opportunity to cross examine the other 3 persons, the statements of whom were heavily relied upon by the AO for making the impugned addition/s. The issue of the cross examination raised by the appellant is not found to be relevant in this case because of following reasons- 1. The partner's statements were duly confronted in the search proceedings and after se....
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....ccounts. There is no basis explained for arriving at the profit earned by the assessee. As per the seized document, the profit of Rs. 4,50,00,000/- was earned out of sale consideration of Rs. 16,80,00,000/- as admitted by the partners during the search proceedings. The profit at the rate of 26.78 per cent was earned by these partners on these transactions. The transaction of R. 38,06,922/- is claimed to have been wrongly considered twice in the total of Rs 2,18,18,114/-. The appellant has considered Rs. 1,75,31,192/- as sale receipts. The profit which must have been earned on the sale transaction of Rs. 1,75,31,192/- at the rate of 26.78 per cent profit should have been declared at Rs. 46,94,853/-, Therefore, the addition is confirmed to the extent of Rs. 46.94,853/- considering it as profit from the transactions credited in the bank accounts. It does not include transactions which are not routed from the bank accounts and the addition made of Rs. 1.62 Crore profit is out of sales completely unrecorded and not routed through bank accounts. In other words, the cash amount which is received as sale consideration but not deposited in bank accounts are not included in this amount of ....
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....e framed on the basis of material found during the course of search or requisitioned under s. 132A of the Act at the place of the assessee. Any information/material gathered during the search and survey carried out on third person, cannot be used for the purpose of s. 153A. The AO may frame assessment orders either u/s. 153C or u/s. 147 of the Act as the case may be but not u/s 153A. Thus, based on the material collected during the search at the place of the third parties, no assessment can be made u/s 153A but for that purpose assessments u/s 153C or u/s 147 only could be made. Admittedly, in this case, Search & Seizure operation u/s 132(1) was carried out on dated 01.07.2016 at the residence of the assessee 9G7, Mahaveer Nagar Third, Ladpura, Kota (Raj.) as also at the places of Surinder Pal Singh Sahni & Vipin Kumar Lodha. During the course of search, no cash, no jewellery, no incriminating material or documents were found or seized from the residential premises of the appellant. However, the impugned additions have been made u/s 153A in the hands of the appellant and in hands of these three persons, based on following seized papers viz. a. Pg-17,22 & 23 of Exhibit-41 of Par....
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....t accepted). Interestingly, search team never raised any specific question as to when and how the share of profit of Rs. 1.62 Cr. was paid to the assessee. 2.2 It is not case of Revenue that there was a partnership of the assessee with the other three persons. Consequently, the act/deed done by other persons should not be treated as "act of the firm" (defined under S. 2(a) of the Indian Partnership Act,1932 as "an "act of a firm" means any act or omission by all the partners, or by any partner or agent of the firm which gives rise to a right enforceable by or against the firm.") and impliedly therefore, their acts could not bind the assessee as a partner, which legal and factual misconception heavily prevailed upon the Revenue. In other words, the Revenue was bound to have established that the assessee was a partner in a strict legal sense with the other 3 persons. Although the Revenue loosely referred the 3 persons as partner but did not establish the fact. Otherwise also in the eyes of law no such partnership firm existed being governed by the provisions of the Partnership Act,1932. However, to clarify, they acted merely as joint owners and not as partners. The ld. CIT (A) ha....
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....as been held that: "Search and seizure-Assessment under s. 153A-Scope-In an assessment under s. 153A, income has to be assessed only on the basis of material found during the course of search against the assessee-Cash book was not found from the premises of the assessee-None of the additions, except addition of jewellery in the asst. yr. 2015-16 in the case of D was made on the basis of seized material-As far as the case of SM Ltd. is concerned, the additions were made on the basis of certain information gathered during the investigation carried out by Investigation Wing in the case of an unconnected third person-These materials could not be considered in the assessment proceedings under s. 153A-Likewise, additions made by the AO in the case of R in different assessment years are not based on the seized material found during the course of search carried out at his premises-However, addition of Rs. 44,48,456 in the case of D deserves to be confirmed because the material to this effect was found during the course of search carried out at the premises of the assessee. Held : In case a search is carried out on an assessee, it could give rise to proceedings under s. 153A qua the p....
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....ment year 2011-12 - There was a search upon assessee and during course of search cash, jewellery and some foreign currency was found - Assessing Officer on basis of appraisal report had treated payments made on account of credit card as income of assessee under section 153A - During course of search of 'RG', a document was seized which contained a ledger account of 'D' which showed payment received by assessee during year under consideration in cash - Assessing Officer had stated that such payments had been made out of undisclosed income of assessee and made addition under section 68 - Assessee pleaded that as no document was found from assessee, assessment under section 153A did not stand - Whether since addition had been made on assessee under section 153A assessment on basis of documents found from a separate search at third party, assessment should have been done under section 153C and not under section 153A - Held, yes - Whether assessment having been made under section 153A and not under section 153C, this being a fatal error in 6/29/24, 7:08 PM 2/14 assessment order which was not curable, order of authorities below was to be set aside - Held, yes [Para 26] [I....
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....whom search is conducted or requisition made does not render s. 148 otiose-Sec. 148 shall continue to apply to the regular proceedings and also in cases where no incriminating material is seized during the search or requisition-Argument that s. 153C can be invoked in case there is incriminating material for all the relevant preceding years and otherwise s. 148 is to be resorted to, is misplaced-Once there is incriminating material seized or requisitioned belonging or relatable to the person other than on whom search was conducted s. 153C is to be resorted to-Notice under s. 148 is therefore liable to be quashed" B. No material found and seized- No valid notice u/s 153A: 1. Supporting case laws: 1.1 In the case of Smt. Smrutishuda nayak vs UOI (2021) 323 CTR 617 (Ori), it was held that: "Search and seizure-Assessment under s. 153A-Scope vis-a-vis absence of incriminating material-Panchnama in fact reveals that the material recovered is 'nil'-In other words there were no materials on the basis of which the assessment proceedings under s. 153A could have been initiated-In the absence of incriminating material, proceedings under s. 153A could not be taken-It does not matter tha....
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....have been carried out in the case of firm not in the case of all these four person individually and looking the matter from that aspect, the provisions of S. 153A shall apply on such person i.e. the partnership firm which was being run by the four partner jointly [as contended by CIT(A)] and therefore as per mandate of sec. 153A such initiation of proceedings and notice u/s 153A couldn't should have been issued only in case of the/to the said the firm not to the assessee individually. Pertinently the provisions start with non-obstacle clause and therefore, the said provisions will prevail over any provisions. 2. Needless to say, that person has already been defined u/s 2(31) of the Act which includes individual, HUF, firm, AOP, BOI and so on. It is immaterial that a particular person is an assessee or not, having a PAN or not, or any formal document for creation has been drafted or not. However, it is only that person, who is to be legally liable to be taxed and as defined in the law, can alone be taxed. Thus, it is the firm which is the legally speaking person as contemplated u/s 2(31) r.w.s 153A of the act and therefore proceeding could have been initiated against that firm a....
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....dated 01.09.2016 & 09.09.2016 u/s 131(1A) from whose possession seized documents at Pg-17,22 & 23 of Exhibit-41 of Party A-1 (PB 8-10) from the residence of one Sh. Surinder Pal Singh Sahni & Pg. No. 62 of Exhibit-3 of party A-4 (PB 11-23) from the residence of Sh. Vipin Kumar Lodha allegedly showing that Rs. 4.50 Cr. were earned by launching Bajaj Enclave Scheme by four persons were 3. Reliance is placed in the case of Dr. Mrs. Anita Sahai v. DIT [2004] 136 Taxman 247 (All) (DC ) it was held that where notice is issued u/s 131(1A) after search and seizure, would show that there was neither reason to believe nor material before authorizing officer on basis of which he could issue a warrant u/s 132 and therefore, issuance of 131(1A) post search, was devoid of formation reasons to believe and in such circumstances very issue of warrant of authorization can be quashed at a later stage. The court held that: "The respondents in their counter-affidavit had stated that it was respondent No. 4 who had sent the material to respondent No. 1 on the basis of which respondent No. 1 had recorded his satisfaction under section 132(1). It was respondent No. 4 himself who had issued summons und....
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....come. Reliance is placed on the judgment rendered by the Hon'ble Bombay High Court in K. Sudhakar S. Shanbhag Vs ITO [2000] 161 CTR (Bom) 391 : [2000] 241 1TR 865 (Bom). This decision was rendered by taking notice of the principle laid by the Hon'ble apex Court in CIT Vs Sun Engineering Works (P) Ltd. [1992] 107 CTR (SC) 209 : [1992] 198 ITR 297 (SC) to the effect that in reassessment proceedings, an assessee can neither claim nor be allowed a deduction that was not claimed in the original return. As such the assessment proceedings initiated on the basis of an action under Section 132 of the Act also cannot be utilised by the assessee to seek relief not claimed earlier." Hence this ground. Submissions: 1. The following submissions, additional submissions and rejoinders were made before the CIT(A): "1. At the outset, it is submitted that it is a serious misconception on the part of the AO that assessee declared total income at Rs. 85,320/- u/s 153A in much as the assessee revised the same very income through revised computation (PB 6) filed vide letter dated 28.11.2018 declaring total income at Rs. 29,43,477/- and deposited tax of Rs. 10,38,490/- thereon (PB 7). Therefore, t....
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....ion 54 the expiry of one year should be seen as per provisions of section 139 (4). 3.5 Fibrefill Engineers vs ACIT (2016)177 TTJ 556 (ITAT Delhi) In this case it was held that "A bare perusal of this section (139(4)) makes it clear that the legislature itself has allowed the assessee to file return belatedly subject to fulfillment of conditions written in the said section. Therefore, once those conditions are met, then return filed by the assessee would for all technical purposes be considered being filed under section 139(1). Thus keeping in view the decisions noted earlier, we do not find any reason to deny the claim of the assessee on the ground of filing the return belatedly." 3.6 Chirakkal Services Cooperative Bank vs CIT (2016) 384 ITR 490 (Kerala)" 4. A bare reading of CIT(A) order will show that he proceeded on a mere purperted misconception and misreading of the fact while saying that no deduction / reduction could be claimed in the proceedings u/s 153A. There is no dispute on this proposition, however, these are not the correct facts in as much as it was categorically stated that the assessee had initially filed an ROI of Rs. 85,320/-, thereafter a revised computa....
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....ment recorded on 22.09.2016 (PB 85-91). When asked, the assessee vide letters dated 24.10.2018 (PB 24) and 05.11.2018 (PB 14), submitted that the actual profit earned by the assessee from real estate activity is only Rs. 28,39,000/- [i.e. Sale Proceeds Rs. 2,06,40,000/- Less Purchase/Registry/Misc Expenses of Rs. 1,78,01,000/-]. He further stated that due to lack of knowledge of real estate, the assessee entered into an oral agreement with the above three persons i.e. Shri Surinder Pal Sahni, Shri Harvinder Singh Kohli and Shri Vipin Kumar Lodha. According to the oral agreement the assessee has to make investment in the purchase of land and these persons will develop the land and also deal with the customers. These persons having made negotiations with the customers, were having direct contact with / approach to the customers. The assessee only received the amount from the buyers as per sale agreements and after receiving the full payment executed the legal papers in favour of the customers w.r.t. transfer. The assessee was not in the knowledge of excess money, if any received by these people from the customers. However, it is a fact that the assessee did not receive anything o....
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....1. At the outset it is submitted that the impugned addition is completely without any justified basis, corroborative evidences and merely based on surmises and conjunctures. These so-called admission is also not corroborated by any cogent evidence and on the contrary, was retracted later on therefore has no binding evidentiary value. The impugned addition deserves to be completely deleted for the various reasons detailed herein below: 2. Assessee not dealing with buyers: 2.1 The facts are not denied that the assessee was not having any prior experience of the field of Real Estate business and therefore, he joined hands with other 3 persons who were experts in the field. The assessee in answer to Q-8 clearly stated that he was lacking experience in the field of real estate and hence he made collaboration with other persons for the development and marketing purpose. The assessee was performing its duties under the suggestions of these persons and performing its duties as guided by them. The job assigned to the assessee was only to get the papers prepared and registered whereas the other persons were in direct touch of the buyers, negotiating with them and deciding the final figur....
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....e project and therefore under this background, he had an occasion to meet Shri Harvinder PaL Singh, Surendra PaL Singh and Vipin Kumar Lodha, who are the experts of the field. From this discussion, he came to a conclusion that making investment in the Land and entering into a real estate project may result in a good amount of profit. During the course of further discussion, with reference to the Land he had purchased, these persons made projections and estimations and proposed that they may help the assessee out in developing and effective marketing thereof and if it is done, all of them may be earning a good amount of profits out of which, share of 36% was offered to him. ii) As per further discussions, the responsibility of marketing of the plot was undertaken by these three persons who were supposed to convince the prospective buyers to purchase the plot in the scheme. The assessee had already quoted the selling prices which were not to be shared by any of the persons. If anything was received over and above the agreed sale prices (between the assessee and buyer) only, was to be distributed among us, after defraying the incidental expenses. It is under this background that the....
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....sed sources was justified - Held, yes" 2.5 The CIT(A) objected that assessee did not explain how the decision in Sumathi Dayal (Supra) supported his case. In fact, he wanted to match each and every fact found in that case with the facts of the present case, which is a misreading and which is not a correct manner of reading a Supreme Court decision. The following portion was extracted by himself at page 33 in para 6.5.3 of his order: "This raised the question whether the apparent could be considered as real. Apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities." As per CIT(A), what was apparent was that the assessee and others admitted income, was sufficient, whereas, the assessee has repeatedly submitted (and also an undisputed fact) that during search no an iota of evidence could be found by the search team, showing even remotely that the assessee earned Rs. 1.62 Cr. or the so-called firm [consisting of four partners as p....
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.... income, but not on hypothetical income. 3.1 No income can be taxed merely on suppositions, presumptions assumptions or on hypothesis. The law is well settled that to prove that there was some taxable income in the hands of an assessee, always lay upon the revenue. In the instant case there is absolutely no evidence at all successfully brought on record beyond doubts that income really accrued and the assessee received the alleged profit of Rs. 1.62 crore. The only and only basis is the admissions made by the third parties and the diaries/papers maintained by them in their handwriting, which itself were suffering from serious infirmities, factual and legal both and the so called admission of the assessee being tutored and influenced was also retracted and not acted upon. Moreover, the fact that there was a dispute between the assessee and the 3 parties who, must have earned the income but did not share the same with the assessee. There is no other evidence found even remotely to suggest that the profit of Rs. 1.62 Crore came to the assessee in one way or the other. 3.1.1. We place strong reliance on the case of CIT VS Shoorji Vallabhdas & Co. [1962] 46 ITR 144 (SC): "Income-t....
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....sh. During the course, of this project, the assessee of course asked and reminded them to share the receipts w.r.t the share of profit they proposed but nothing happened and therefore, a dispute arose between the assessee and those persons. The assessee has not received directly or indirectly single penny over and above the agreement price. In other words, the share of 36% out of the expected net profit was never given to the assessee. In fact, all the activities i.e. marketing contacting with the prospective buyer and receiving the cash over and above the declared sale prices, might have been done off the record and absolutely without knowledge of the assessee." iv) Unfortunately, even up to the stage of the recording of the statements on 22.09.2016, he was given a strong assurance that he is not required to worry and that he shall be given the profits, as agreed, but nothing of this sort happened. Thereafter, he kept on reminding them to give his share of profit, if any, in as much as they might have earned over and above the declared sale consideration for the simple reason that they were in direct contact with the buyers. But at the same time, he was also comfortable and happ....
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....nt. The working of actual resultant profit earned by the assessee of Rs. 28,39,000/- is given in para no 4 above. In considering above we request your good self for not to consider assessee's share of Rs. 1,62,00,000/- in un accounted profit from "Baja] Enclave project" merely on the basis of seized papers, appear to be deaf and dumb documents on which some rough jottings are mentioned which was found from other associates. The delay which occurred behind making the correct fact before your good self with request for not treating the un-accounted income of Rs. 1,62,00,000/- in the hands of the assessee as he accepted earlier during his statement recorded u/s 131(1A) of the Income Tax Act, 1961 during post search proceedings, is fully justified and under these peculiar facts and circumstances of the case, any other person of a reasonable prudence would have acted in a similar manner. The assessee kept on reminding those persons but failed and when he got the SCN proposing huge additions, it was thought the right time to step back and to explain the true facts and circumstances....." 3.3. Regularly maintained books of accounts is a binding evidence: The Law is well settled that....
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.....2 Admission not a final word: It is settled that mere admissions is not conclusive proof unless it is corroborated with tangible material and evidence. No doubt, the assessee in answer to Q-8 & 9 stated the undisclosed income and offered for taxation. However, it is trite law that the person making an admission is not always bound by it but, if shown that it was due to ambiguity, under tension or was against the facts, it can always be retracted. Kindly refer 72 TTJ 323 (Jd), 73 ITD 434 (Chd) & 63 TTJ 236 (Del). It has been held in Pullangode Rubber Produce Co. Ltd. vs. State Of Kerala & Anr. 91 ITR 18 (SC), "Such admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the appellant who made the admission to show that it is incorrect and the appellant should be given a proper opportunity to show that the books of account do not disclose the correct state of facts" Also refer S. Arjun Singh v. CWT [1989] 175 ITR 91/[1988] 41 Taxman 272 (Del.). Narayan Bhagwantrao Gosavi Balajiwale v. Gopal Vinayak Gosavi AIR 1960 SC 100: The Hon'ble Supreme Court held that an admission is the best evidence that an opposite party can rely ....
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....d income. This issue has been churned by numerous courts as this issue has arisen every now and then in similar litigations, and the courts have settled the legal position by holding that on the issue that any admission made de hors any incriminating evidence found during search cannot be made a basis for making any addition in the hands of the assessee. On some of the decisions the ld. A.R. has relied and they have been extracted along with their held portion, in the earlier part of our order. Moreover, the assessee has disproved his [their] admission with the help of proof as discussed above. In this regard, following decisions are relied: 1. Pullangode Ruber Produce Co. Ltd. v State of Kerala and Another [1973] 91 ITR 18 [SC]. 2. Chitra Oevi vs ACIT [2002] 77 TTJ 640 JU] 3. Abdul Qayume v CIT [1990] 184 ITR 404 (All) 4. Jagdish Chand Gupta v ACIT [1996] 56 TTJ [Chd] 337 58 ITD 142 [Chd] 5. Krishan Lal Shiv Chand Rai v CIT 88 ITR 293 [P & HJ 17).... Accordingly, in view of the above discussion, we are of the considered opinion that no addition on account of on-money payment or investment in construction can be made on the basis of admission u/s 132(4) de hors any incr....
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....which was extracted during the search/seizure and survey proceedings. It is also not in dispute that the assessee retracted the confession on 27.07.2009. It is also an admitted position from the record that the allegation of the Revenue that the assessee had undisclosed income over and above what was mentioned in the return, is based sheerly on the confession and no corroborative material or substantive proof was collected by the Revenue during the search/seizure and survey proceedings. In this background, we are of the firm opinion that the circular No.286/2/2003-IT (Inv.II) dated 10.3.2003 which has been reiterated in circular F.No.286/98/2013-IT (Inv.II) dated 18.12.2014 issued by the Board and the general principles of appreciation of evidence would definitely come into play and while appreciating the rival contentions, the Court would definitely require corroboration of the confessional statement by credible and tangible evidence failing which, it will be considered totally unsafe to rely solely upon the confession for upholding the liability fastened upon the assessee by the ACIT. Since, in the case at hand, admittedly, the Income Tax Authorities did not collect any tangibl....
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....ituary of an assessee." "19. At the cost of repetition, we observe that if the statement made during the course of search remains the same, it can constitute the basis for proceeding further under the Act even if there is no other material. If, on the other hand, the statement is retracted, the Assessing Officer has to establish his own case. The statement that too, which is retracted from the assessee cannot constitute the basis for an order under section 158BC of the Act." 4.3 Valid reasons behind retraction: The alleged admission was not made voluntarily in as much as the assessee was highly tensed and remaining under mental trauma developed hypertension. Not having faced such a situation, he was unable to take any decision, which is a common phenomenon in every survey and search. It has been held that in the cases of survey and search, the possibility of tension and surcharge atmosphere can't be ruled out in ACIT Vs. Jagdish Naraian Ratan Kumar 22 Tax World 573 (JP), since approved by Hon'ble Rajasthan High Court. The so called admission of the assessee was tutored and being influenced by the false promises made by the other three persons, who's statements were recorded muc....
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....ely on the basis of statement recorded u/s 132(4) of the Act which did not constitute conclusive evidence and having been given under mental duress and pressure created by the search team and other 3 persons, who had already admitted and offered in their statement in their wisdom to suit their purpose. Moreover, admission was not acted upon by not offering the income in the ROI filed on 07.04.2017 u/s 153A. It is settled rule of evidence that unless a retracted confession is corroborated it cannot be termed prudent to base the decision on the confessional statement alone. 5. No evidence at all: A. Law is well settled that without evidence, no addition can be made whether it is a case of completed /unabetted or abetted assessment. The search took place on dated 01.07.2016 and concluded on the same day, however, nothing was seized as evident from Panchnama (APB ). Consequently, no notice can be issued u/s 153A. 5.1 The assessee repeatedly contended that these documents found and seized from the other three persons and not from the premises of the assessee. Moreover, pertinently the same were written by them and not by the assessee. The assessee received the amount only as agr....
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....ghtly. It is only if during the course of search under section 132 incriminating material justifying the reopening of the assessments for six previous years is found that the invocation of section 153A qua each of the AYs would be justified." 5.4.3. In the case of Jai Steel (India) v. ACIT [2013] 36 Taxman 523 (Raj), it was held that, "Section 153A bears the heading "Assessment in case of search or requisition". It is "well settled as held by the Supreme Court in a catena of decisions that the heading or the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the Legislature is clear, viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment In case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition, in other words, the assessment should (be) connected with something found during the search or requisition viz., incri....
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.... for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act." 5.4.7 The law on the issue involved is no more Res Integra in as much as very recently the Hon'ble Apex Court in the case of PCIT vs. Abhisar Builders (2023) 332 CTR (SC) 385 has held as under: "13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: (....
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....the appellate authorities (CIT (A), ITAT, HC) where the appeal is pending as stated in para 6 & 7. B. Statement of assessee not an incriminating material : 5.5 In the case AO v. Himalaya Darshan Developers (Gujarat) (P.) Ltd [2021] 128 taxmann.com 435 (Ahmedabad - Trib.) (DC ) held as under: "Besides the above, the Assessing Officer has also made reference to the statement of the director of 'SJSL' recorded under section 132(4) and statement of another director under section 131(1A), wherein it was admitted that the company namely 'SJSL' is engaged in providing accommodation entries. Thus the same is a paper company. On perusal of the statement recorded under section 133(4) reproduced by the Assessing Officer in his order there was remarks made by such director to the effect that material/document seized during the search does not belong to the PS i.e. 'SJSL', or belong to the assessee company. In this regard, there were no incriminating material against OP was found in the search. Further, section 153C emphasize that there should be material or document seized which belong to the OP. As such statement recorded during search is not a material or docume....
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.... of Income Tax v. Harjeev Aggarwal (supra). Lastly, as already pointed out hereinbefore, the facts in the present case are different from the facts in Smt. Dayawanti Gupta v. CIT (supra) where the admission by the Assessees themselves on critical aspects, of failure to maintain accounts and admission that the seized documents reflected transactions of unaccounted sales and purchases, is non-existent in the present case. In the said case, there was a factual finding to the effect that the Assessees were habitual offenders, indulging in clandestine operations whereas there is nothing in the present case, whatsoever, to suggest that any statement made by Mr. Anu Aggarwal or Mr. Harjeet Singh contained any such admission." 5.7 The relevant paragraph of the decision of the Hon'ble Hon'ble Delhi High Court in the case of Harjeev Agrawal (supra) also reproduced as under: "20. In our view, a plain reading of Section 158BB(1) of the Act does not contemplate computing of undisclosed income solely on the basis of a statement recorded during the search. The words "evidence found as a result of search" would not take within its sweep statements recorded during search and seizure operations.....
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....king the powers under section 132(4) of the Act, does not arise. Therefore, the statement of the managing director of the assessee, recorded patently under section 132(4) of the Act, does not have any evidentiary value. This provision embedded in sub- section (4) is obviously based on the well established rule of evidence that mere confessional statement without there being any documentary proof shall not be used in evidence against the person who made such statement. The finding of the Tribunal was based on the above well settled principle." 6.1 Documents found and seized from the other party premises and not from the assessee: It is further submitted that the documents found & seized (i.e. paper number 17, 22 & 23 of Exhibit- 41 of Party A-1) from the residence of Sh. Surinder Pal Singh Sahni & Pg. No.62 of Exhibit-3 of Party A-4 from the residence of Shri Vipin Kumar Lodha for which they explained that Rs. 4.50 Cr. was total profit earned from Bajaj Enclave Project. Therefore, the AO presumed that the assessee might have earned un-disclosed income of Rs. 1.62 Cr. The AO also took support of income offered by Shri Vipin Kumar Lodha of Rs. 72 Lakh before Hon`ble Settlement Commi....
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....re of 7 lakh shown against the figure of 68 lakh shows the extra expenditure incurred by them jointly of 7 lakh each. (Internal page 33, PB 99) * Seized Page 62 (PB 13) shows the figure of 65 plus 57 and 37 i.r.t the other project Salasar Dham for which Shree Surendra Pal Singh Sahani is responsible who managed the site project (internal page 35 and 36 , PB 101 and 102) b. Sunder Pal Singh Sahni (PB 106 and 107) * He explains some of the papers related to Salasar Dham and Bajaj Enclave Project. Page 13 is a paper showing rough calculation of Bajaj Enclave Page 13, 17, 19, 22. At the back side 22 some estimated payments made by him. (Internal page 39, PB 106) c. Statement of Harvinder Singh Kohli dt 07.09.2016 (PB 108 to 113) Seized Pages 22 to 40 shows the details of receipt of the allotment of plots in the Bajaj Nagar Colony. (Internal page 2, PB109) d. Statement of Harvinder Singh Kohli dt 09.09.2016 ( PB 114 and 115): Seized Page 73 and 74 shows the details of the instalment received on account of sale of plots in Bajaj Enclave. Seized Page 75 shows estimated profit from Bajaj Enclave. Seized Page 76 shows account settlement between partners relating to Bajaj Encla....
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....ch have been made by the Birla Group and Sahara Group, we are of the opinion that it would not be legally justified, safe, just and proper to direct investigation, keeping in view principles laid down in the cases of Bhajan Lal and V.C. Shukla (supra)." 7. No opportunity for cross examination - Addition to be deleted: The law is well settled that the assessee, against whom the evidence/witness are being used, must be given an opportunity for cross examination. In this case however, admittedly the AO has not at all afforded any opportunity to cross examine the other 3 persons, the statements of whom were heavily relied upon by the AO for making the impugned addition/s. Reliance is placed on Andaman Timber Industries Vs. Commissioner of Central Excise (2015) 281 CTR 0241 (SC) /127 DTR 0241 (SC). In the recent case of CIT vs Sunita Dhadda [2018] 100 taxmann.com 525 (Rajasthan), the Hon'ble Rajasthan High Court has taken similar view, which has now been affirmed by Hon'ble Apex Court also in the case of CIT vs. Sunita Dhadda and SLP no. 9432/2018. of the revenue was rejected vide order dated 28.03.2018. In this case the Hon'ble Rajasthan High Court has considered several decisions on....
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....t occasion. The CIT(A) did not deny that there was no mode prescribed. Hence, it was too much to expect from a poor layman assessee. 8.4. The CIT(A) admitted that the assessee was not present at the time of search at his residence, but later on offered the undisclosed income "in the statement recorded during the course of the poor search proceedings..." , yet however, he attached the same evidentiary value with full legal force with the support of S.132(4), which against the law. Further, the ld. CIT(A), wrongly stated that, there was a clear detection of incriminating material during the search proceedings, of Surendra Pal Singh Sahani and other associates, which is against the express legislative intention. 8.5. As per the mandate of S.153A, in the case of completed/unabated assessment, (or otherwise also) no addition is legally possible unless an incriminating material is found during search from the control possession of the searched person (assessee) only without considering the seized material found (if any) from the control and possession of a third party/s. The later situation of fact may hold good for invoking S. 153C but not for valid initiation of proceedings under S....
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....ntal expenditure would be by a sum of Rs. 8.50 Cr. When asked, the assessee vide letter dated 05.11.2018 submitted that assessee never incurred any expenditure on account of Development Expenses. The assessee only purchased the land and associated with these 3 persons for developing, plotting and marketing the land. All the expenditure was born by the other 3 persons. However, ignoring the reply of the assessee, the AO finally concluded that the claimed expenditure of Rs 8.50 Cr and the development was never incurred and it was merely an attempt to reduce the taxable income, it was a claim of bogus expenditure made. Further, the AO was of the view that the assessee failed to submit the information/details/ documents in respect of incurring of expenditure for plotting on plain land. Finally, he made the addition of assessee`s share of Rs. 3.06 Cr. (36% of Rs. 8.50 Cr.) on account of bogus expenditure incurred. In the first appeal, the ld. CIT(A) also confirmed the addition, holding as under: "7.7....As discussed, this amount is additional income which is not offered in the statement but claimed as expenditure which is not real. Therefore, the real income includes this amou....
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.... papers is correct whereas other part of the content of papers are not correct & true. Thus, while assessing any income on the basis of incriminating documents, it should be read in entirety. Either this paper is to be considered as rough jotting or otherwise it has to be read in entirety and not in part. Whatsoever mentioned on these papers has to be considered in totality...." 3. Document has to be read in its entirety: The facts are not denied that on the seized paper itself, there was entry of the incurring of the expenditure of Rs. 8.05 Crores, based on which the A.O. alleged sale of proceeds and undisclosed income therefrom. Since both the entries of receipt and payment, were made on the seized document, the A.O. could not read a part of it and ignored the other. Law is well settled that an evidence has to read in its entirety, one cannot read the part which suits him best and to ignore the other which does not. Otherwise, following the principal of tax in real income only, the A.O. is bound to reduce the expenditure. 4. Statement supports: Interestingly, in Q-8 (heavily relied upon by the AO), the assessee confirmed the fact of purchasing land as also that he associate....
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.... and alleging the same as bogus expenditure and disallowing the same (36 % share). 5. Contradictory approach of AO: The learned AO at Pg. 21 of the impugned order although clearly stated the "4 associate persons in their respective posts search statements and their replies have been admitted to incurred of Rs. 850.00 lakhs as development expenses", but at the same time, he doesn't believe the quantum of the expenditure incurred for the suspicion he entertained. Whereas, he could comfortably make addition Rs. 1.62 crore (out of the profit of Rs. 4.50 crore) merely on the basis of the admission made by the other 3 persons and the assessee but at the same time, here when the other 3 parties have again admitted to have incurred Rs. 8.50 Crores, the AO comfortably ignored the same because it suited him best. Thus, there is a clear contradiction and double standard adopted by the AO, which is not permeable in law. Such an inconsistent approach cannot be approved. Therefore, the entire addition deserves to be deleted in full. 6. Alternatively, if the addition of the share of profit Rs. 1.62 Cr is sustained, the share of development expenses of Rs. 3.06 Cr must also be allowed followin....
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....gh the CIT (A) agrees with the contention that a seized document, if relied upon, has to be read in entirety and there can't be any pick and choose theory applied. However, simply because Sh. Vipin Lodha had admitted the income of his share out of Rs. 8.50 crore offered before the Settlement Commission, there is no valid reason why the assessee should also be burdened with this addition. In fact, the assessee right from the beginning has consistently taken a stand that these three persons were involved in the plotting and marketing, negotiating with the customers and even in receiving the agreed sale proceeds from them and even the assessee submitted in so, in response to Q. No. 8 (stated above) vide letter dated 05.11.2018, stated that whether these persons had incurred some expenditure or not, the assessee was not at all concerned with this aspect. If as per the statement of these three persons and the seized document, it is held that some expenditure was incurred, then the net profit being Rs. 4.50 crore only be considered and consequently it is only Rs. 1.62 crore could be considered at the best or at the worst in the hands of the assessee (if assuming so, though not admitt....
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....o prove the incurrence of development expenses by the assessee. Thus, whatever view may be taken by the authorities below may hold good so far as the other three persons are concerned but the assessee could not have been made liable for this allegedly earned additional income as interpreted by the CIT(A). The CIT(A) therefore, seriously erred in dismissing this grounds appeal which was based purely on surmises, conjectures, assumptions and presumptions, and ignoring that there was no iota of evidence found referring to the assessee in the case of any of the searches nor the assessee admitted of such additional income. A-GOA-6 Impugned addition of Rs. 46,94,853/- u/s 68 of I.T. Act on account of the alleged unexplained credit in the Bank Account: Department's Ground of Appeal (in short "D-GOA") -1-3: Deletion of double addition of Rs. 38,06,922/- (out of total cash deposits Rs. 2,18,18,114/-) wrongly allowed by ld. CIT(A): [(AO Pg. 23-24 Pr 9)/CIT(A) Pg. 66 Pr.8.8] Facts: During the assessment proceedings u/s153A, the AO noted that the assessee deposited Rs. 2,18,18,114/- in two bank accounts (Rs.41,06,922/- in Bank A/c No. 612400009561 and Rs. 1,77,11,192/- in Bank A/c No....
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....922/- is claimed to have been wrongly considered twice in the total of Rs 2,18,18,114/-. The appellant has considered Rs. 1,75,31,192/- as sale receipts. The profit which must have been earned on the sale transaction of Rs. 1,75,31,192/- at the rate of 26.78 per cent profit should have been declared at Rs. 46,94,853/-. Therefore, the addition is confirmed to the extent of Rs. 46,94,853/- considering it as profit from the transactions credited in the bank accounts. It does not include transactions which are not routed from the bank accounts and the addition made of Rs. 1.62 Crore profit is out of sales completely unrecorded and not routed through bank accounts. In other words, the cash amount which is received as sale consideration but not deposited in bank accounts are not included in this amount of addition. Hence, the amount of addition of Rs. 1.62 Crore upheld while deciding ground no. 1 is completely earned from different transactions which are not done through banking channel. The transactions as reflected in the bank account are considered for confirming addition which is being discussed in this ground of appeal. Accordingly, addition of Rs. 2,18,18,114/- made by the AO is ....
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....re already produced vide letter dated 05.11.2018 to the AO (PB 14-25). The content as of the said letter are reproduced herein : "Complete detail of sale of plots to various customers have already been submitted vide letter 24.10.2018 and copies of sale agreement produced herewith for your kind verification. In case your good self-desire, we may submit the copies of all the sale agreement before your good self." Otherwise merely because of non-production of the agreements, such a huge addition could not be made. The assessee is having copies of agreements in each and every case, which were offered to the AO also. Some exemplary agreements are available in the paper book (PB 123-140) and the rest can be submitted if so desired. 1.3. In this regard, the assessee filed a detailed written reply on 24.10.2018 (PB 24-25). The extract of the submission is as under: "As regards explanation of sum of Rs. 2,18,18,114/- credited in two bank account (Rs.41,06,922 in bank account no. 61240009561 & Rs. 1,77,11,192 in bank account no. 61241432737). In this respect we submit that during above year assessee has received Rs. 2,06,40,200/- in cash/cheque towards sale of various plots situated a....
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....d in the bank account. 4. It is evident from the face of the impugned order w.r.t. the impugned addition that the AO was predetermined to make a high pitch assessment based on incorrect legal and factual allegations. 5. Correct Amount- Rs. 1,75,31,192 only/-: Alternatively, and without prejudice, further submitted that the impugned addition has been made u/s 68 on account of the deposits made in the two bank accounts of the assessee. Without prejudice to our other submissions explaining the source of the subjected amount, otherwise the subjected amount has been wrongly considered at Rs. 2,18,18,114 as against the correct amount Rs 1,75,31,192, which was the total deposits made in the current account with SBI. It is clearly evident that Rs. 38,06,922 deposited in the SBI-SB account were transferred during the same previous year itself on 15/10/2014 through banking channel to the current account, which fact is clearly evident from the bank statements [PB (SB 26-28) and (CA 29-36)] as from also from the copies of the bank ledger accounts in the assessee books (PB 44 A Current account ledger) and (PB 37-38 SB account ledger). Thus, to the extent of the Rs 38,06,922 the deposits hav....
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....he savings account on the closure of the Saving Bank Account. Interestingly, the AO also included the amount of interest credited in the SB account. Thus Rs. 38,06,272/- along with the interest and some other Cheque returned entries have also been considered unexplained, which clearly shows non-application by the ld. AO. Hence, alternatively, to the extent of Rs. 41,06,922-/ there was nothing, even remotely, to be considered as unexplained. 2. Complete copy of the Cash Book starting from the very opening day i.e. 01.10.2014 which was the first day of the commencement of the business by the assessee till 31.03.2015 showing opening & closing balances as also day to day closing balances of cash in hand is also being submitted (PB 144-148). Pertinently, the entire cash receipts, particularly the entire amount of cash deposited in the aforesaid two bank accounts, under consideration, duly reconciled with the said cash book. ----xxx--------xxx--------xxx--------xxx--------xxx--------xxx---- 4. As told to us, statement of the assessee were not recorded u/s 132(4) but there is no reference to any such statement in the impugned assessment order." 2. Part sustenance of the addition ....
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....the cash book, ledger accounts of the different schemes, the bank statement, etc. On the request of the ld. CIT(A), the complete cash book (APB 144-148) showing the opening cash-in-hand, closing cash-in-hand was also submitted vide letter dt.07.02.2022 (APB 180-181). (his comments on the claim of the assessee of regular maintenance of the accounts vide pg. 36 pr 6.5.5 is being separately commented). The ld. CIT(A) did not find any fault in the cash book, copies of ledger accounts, the sale agreements and the details showing the receipt of the sale proceeds of different schemes in Bajaj Enclave and the specific submission made before the AO for working of the profit of Rs. 28.39 lakh at page 23 Pr. 9 of the AO (and available at APB 15) which shows that the assessee incurred cost of Rs. 1,75,50,000/- towards cost of land along with other ancillary exp. Further, the fact of purchasing the plot by the assessee can't be disputed, which was based on the registered purchase agreement. 2.4 The CIT(A) not having rejected any of the supporting documents which clearly depicted the actual profit earned by the assessee Rs 28.39 lakh out of the declared sale consideration and was also de....
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....round ? The deletion of Rs. 38.06 lakh was fully justified as stated above and the profit rate has nothing to do with that. On the contrary the assessee feeling aggrieved is in appeal against such application of profit rate while sustaining the addition of Rs. 46,94,853/-. Thus, it can be said that the Revenue is also in agreement (in their D-GOA 2) with the ground A-GOA 6 taken by the assessee. 3.4 However, the allegation that agreements were not submitted is factually incorrect in as much as every time and opportunity, the assessee produced these registered documents before the A.O. and CIT(A) both as is evident from the written submission dated 17.01.2022 para 1.2 (APB 169) also reproduced herein above. Otherwise also, these were the registered agreements and were available in the public domain. Since there were voluminous records hence, they were only produced and if any of the authority so wanted, copies of the selected one or all of them could have been filed before the authorities below. But otherwise also such an allegation is completely irrelevant in the context of the ground taken by the Revenue. 3.5 While explaining the cash deposits of Rs 2,18,18,114/-, the assess....
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....bsp; S. No. Particulars Pg. No. 1. PCIT vs. Saumya Construction (2017) 297CTR (Guj.)387 1-16 2. CIT vs. Smt. Shivali Mahajan & ors. (ITA No.5585/Del./2015 39-52 3. ACIT vs. Atual Kumar Gupta (2023) 152 taxman.com 99 53-64 4. DCIT vs. BSR Builders Engineers & Contractors [ITA No. 732 to 734/CHNY/2023 17-38 5. Tirupati Construction Company vs. ITO DB CWP No. 17651/2022 65-74 6. Shyam Sunder Khandelwal & ors. vs. ACIT (2024) 236 DTR (Raj) 328 75-83 7. Smt. Smrutishuda Nayak vs. UOI (2021) 323CTR 617 84-97 8. Mrs. Anita Sahai vs. DIT (2024) 136 Taxman 247 98-103 9. Bharat Kumar Azad (2013) 50 Tax World 33 (JP) 104-108 10. CIT vs. Naresh Kumar Jain (2014) 3699 ITR 171 109-114 11. CBDT Circular No. 286/2/2003 dated 10.03.2003 115 12. PCIT vs. Abhisar Builders (2023) 332 CTR (SC) 385 116-129 13. PCIT vs. Best Infrastructure Pvt. Ltd. 397 ITR 82 (Del.) 130-145 8. The ld. AR of the assessee drawing our attention to page 12 & 13 of his paper book wherein the panchanama of the search conducted in the case of the assessee is placed on record from where he draw our attention to date and time of starting of search and completion of search which reads as....
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....2 taxmann.com 99 (Delhi-Trib.) & Tirupati Construction Company vs. ITO DB CWP No. 17651/2022. The ld. AR of the assessee thus relying on the decision of the PCIT vs. Abhisar Buildwell Pvt. Ltd. [2023] 149 taxmann.com 399 (SC) submitted that in the absence of incriminating document no addition can be made in the hands of the assessee. 10. As regards the ground No. 3 raised by the assessee, the ld. AR of the assessee submitted that no addition can be made if there is no incriminating document found no addition can be made. To drive home to this contention he relied upon the decision in the case of Kabul Chawla case [2015] 61 taxmann.com 412/234 Taxman 300/380 ITR 573 (Delhi) and PCIT vs. Abhisar Buildwell Pvt. Ltd. [2023] 149 taxmann.com 399 (SC). 11. As regards ground No. 4, the addition of Rs. 1,62,00,000/- being alleged undisclosed profit and Bajaj Enclave. The assessee submitted detailed submissions before lower authorities as to why the said income cannot be added in the hands of the assessee. The assessee is merely landowner had discussion with the other person who are responsible to develop the property and market the same by finding buyer of the property, there is no furth....
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....re income admitted should be made to confess as to the income. Therefore, merely the estimated income cannot be made in the hands of the assessee. 12. As regards ground No. 5 for an addition of Rs. 3,06,00,000/- being undisclosed development expenses added in the hands of the assessee. The ld. AR of the assessee submitted that the assessee never incurred any expenditure on account of development expenditure. The assessee only purchased the land and associated and those three persons were to develop, plot and market the land. All the expenditure to be borne by those three persons and the assessee has no role to play. Ignoring that factual aspect of the matter, the AO added a sum of Rs. 3,06,00,000/- (36.5% of 8.5 crores) on account of bogus expenditure incurred. The assessee stands were consistently clear that he is the only landowner partner, he is not involved or acknowledged incurring expenditure in respect of alleged land. The ld. AR of the assessee also submitted that seized document be read as a whole and not in part as it is evidently clear that both the entries of receipt of payments were made recorded in the alleged seized document. The AO should not read it apart of it. O....
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.... was not claimed in the original return of income. The finding of the ld. CIT(A) is based on decision of Hon'ble Supreme Court in K.P. Varghese v. ITO [1981] 131 ITR 597/7 taxman 13. As regards the addition made in the hands of the assessee on account of unaccounted income from Bajaj Enclave, unexplained development expenditure and unexplained deposit made in the bank account. The ld. CIT(A) has, based on written submissions already granted substantial relief to the assessee. So far as to the receipt of sales considerations recorded in the bank account of the assessee and as regards the profit of the project and unexplained expenditure incurred by the assessee on the Bajaj Enclave project the ld. DR relied upon the detailed finding recorded in the order of ld. CIT(A). He also submitted that nowhere assessee dispute the fact that there were four partners in the project and therefore, ld. DR on that aspect of the matter relied upon the order of the ld. CIT(A). Ld. DR thus concluded that when based on the same documents other partners have already adhered to the disclosure made why not in the hands of the assessee. The assessee has willfully given declaration in statement recorded p....
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....eclaring total income of Rs. 85,320/-, which is for a less amount of Rs. 6,55,000/- with the earlier return filed as per provision of section 139 of the Act. In the Bajaj group search incriminating documents were seized but in the case of assessee search was carried out for five minutes and no incriminating material was found. The document found at the Bajaj Group relates to Bajaj Enclave Project wherein the assessee is the owner of the land where that "Bajaj Enclave" Project being developed. The ld. AO noted that as per seized document vide page no. 17, 22 & 23 of Exhibit- 41 of party A-1 found from the residence of Shri Surinder Pal Singh Sahni & page no. 62 of Exhibit-3 of party A-4 from the resident of Shri Vipin Kumar Lodha. On conjoint reading ld. AO found that a sum of Rs. 4,50,00,000/- was earned by the persons named herein below which remained unaccounted, as detailed below : Bajaj Enclave Particulars Amount Rs. Total Sales Realization (472x356) 1680 Less Road + Payment (30 + 1200) 1230 Total Un-disclosed profit 450 450*.36 Khandelwal Khandelwal 162 AD 72 B 72 R 72 V 72 In his explanation to the above-mentioned seized ....
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....this issue is going to the route of the proceeding before us, we considered it to decide it first to decide. As is evident that a search & seizure operation u/s. 132(1) of the Act was carried out on 30.06.2016 at the various premises of Bajaj Group, kota. Whereas in the case of the assessee, a search was conducted at the resident of the assessee on 01.07.2016. As is evident from the record that the alleged search in the case of the assessee was carried out only for five minutes starting at 2.55 and ended at 3.00. The ld. AO through ld. DR did not place on record the nature of document found at the premises of the assessee which are incriminating in nature. With this basic fact now, to decide the technical ground raised by the assessee and before going further on the issue we would like to go through the relevant provisions of section 132 and 153A of the act along with Rule 112 of the Income-tax Rules' 1962, which are reproduced herein under:- Relevant part of section 153A of the act Assessment in case of search or requisition 153A. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a pe....
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....er documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), then,- (A) the Principal Director General or Director General or Principal Director or Director or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, may authorise any Additional Director or Additional Commissioner or Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, or (B) such Additional Director or Additional Commissioner or Joint Director, or Joint Commissioner, as the case may be, may authorise any Assistant Director or Deputy Director, Assistant Com....
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....mpowered by the Board in this behalf shall be in Form No. 45; (b) the authorisation under the proviso to sub-section (1) of section 132 by a 59[Chief Commissioner or Commissioner] shall be in Form No. 45A; (c) the authorisation under sub-section (1A) of section 132 by a 59[Chief Commissioner or Commissioner] shall be in Form No. 45B. (2A) Every authorisation referred to in sub-rule (2) shall be in writing under the signature of the officer issuing the authorisation and shall bear his seal. xxx xxx xxx If we peruse all these provisions together i.e. provisions of section 132 and 153A of the act along with Rule 112 of the Income-tax Rules' 1962 activate the applicability of provision of Section 153A of the Act will arise. As it evident that the search is initiated on the strength of warrant of authorization issued by the authorizing officer to the authorized officer in terms of Section 132 of the act read with Rule 112 of the Income-tax Rules'1962. Search warrant can be issued against any person who is falling within the scope of either or more of the conditions as mentioned in clause (a),(b) or (c) of section 132(1) and against whom "reasons to believe" has been for....
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....of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated, and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under section 153 A only on the basis of some incriminating material unearthed during the course of search ....
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....asons stated above, it is concluded as under: (i) that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment under section 153A; (ii) all pending assessments/reassessments shall stand abated; (iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and (iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under sections 1....
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....see from real estate activity is only Rs. 28,39,000/- [i.e. Sale Proceeds Rs. 2,06,40,000/- Less Purchase/Registry/Misc Expenses of Rs. 1,78,01,000/-]. He further stated that due to lack of knowledge of real estate, the assessee entered into an oral agreement with the above three persons i.e. Shri Surinder Pal Sahni, Shri Harvinder Singh Kohli and Shri Vipin Kumar Lodha. According to the oral agreement the assessee has to make investment in the purchase of land and these persons will develop the land and also deal with the customers. These persons having made negotiations with the customers, were having direct contact with / approach to the customers. The assessee only received the amount from the buyers as per sale agreements and after receiving the full payment executed the legal papers in favour of the customers w.r.t. transfer. The assessee was not in the knowledge of excess money, if any received by these people from the customers. However, it is a fact that the assessee did not receive anything over and above the amount showing sale agreement amount. Moreover, the assessee recorded all these transactions in his books of account fairly. There was no any iota of evidence found ....
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....ked to explain the source of the same, the assessee vide letter dated 24.10.2018 submitted that the amount of Rs. 2,18,18,114/- were deposited out of sale proceeds of various plots situated at Bajaj Enclave. In support of the same plot wise sale details (PB 26-71) was submitted. However, AO alleged that the assessee submitted ledger accounts only to explain the source of cash deposit, however, he failed to file copy of agreements to Sale. Finally, he made the addition of Rs. 2,18,18,114/- on account of unexplained credit u/s 68. Before the ld. CIT(A) the assessee filed various details in support of the credit made in the bank account. We note that ld. CIT(A) not having rejected any of the supporting documents which clearly depicted the actual profit earned by the assessee Rs 28.39 lakh out of the declared sale consideration and was also declared in the Revised Computation as admitted by the CIT(A) himself and even by the AO at page 23. Thus, there was no reason for the CIT(A) to have applied in the appellate stage to higher GP rate of 26.78% [ derived from the seized material of total estimate of project] as against the declared profit rate of 13.75%. The revenue has not taken any ....
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....ments (APB123-140) before the ld CIT(A) about the nature and source of credit in the bank account. The assessee also submitted a detailed cash book. The remand report on the documents filed were called for from the ld. AO. The relevant part of the remand report on this aspect of the matter is as under: The submission made by the assessee before your good office is not acceptable. During the course of assessment proceedings, it is noticed that in two bank account of the assessee a sum of Rs. 2,18,18,114/- were found credited in respect of which he could not offer any satisfactory evidence during post search enquiry. He only claimed in reply to Q. No. 7 that the booking amount have been deposited in his bank account. The applicant has filed submission which is reproduced as under: "As regards explanation of Rs. 2,18,18,114/- credited in two bank account (Rs. 41,06,922 in bank account number 61240009561 and Rs. 1,77,11,192/- in bank account number 61241432737). In this respect we submit that during the above year assessee has received Rs. 2,06,40,200/- in cash/ cheque towards sale of various plots, situated at Bajaj enclave and deposit / credited the same in his bank account. Copy....