TaxTMI 
TaxTMI 
2025 (5) TMI 1401
X X X X Extracts X X X X
X X X X Extracts X X X X
....cts of the case are that the assessee is an individual engaged in real estate brokerage through his proprietary concern namely City Estate Management. A search and seizure operation under section 132 of the Act was conducted on 28.09.2021 in the case of B Safal Group and City Estate Management Group. During the course of the search, various incriminating documents were found from the premises of the assessee and associated individuals, notably Shri Divyang Vyas. The seized documents primarily included: • "Inquiry Registers" (Annexure A/8 to A/11) containing property details such as plot numbers, rates, and broker details. • Loose papers indicating brokerage receipts on high-value property transactions. • Rough jottings of brokerage-sharing arrangements with associates. 2.1. These documents related to various transactions of lands, commercial buildings and plotting schemes carried out during Asst. Years 2019-20 to 2022-23. Based on the seized materials reassessment proceedings were initiated by issuing notice under sections 148 of the Act. In response assessee filed Returns of Income and the Ld AO concluded the reassessments by observing tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the case of the appellant, the Ld. CIT(A) has erred in upholding that the action of the Assessing Officer in respect rough jottings found from Divyang Vyas in the name of Shri Nirav Shah when no evidence relating to alleged brokerage or any other incriminating material was found during the course of search from the possession of the appellant. 4. The appellant craves leave to add alter amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal." 4.1. The Grounds of Appeal raised by the Revenue in ITA No. 1896/Ahd/2024 for A.Y. 2021-22 are as follows: "1. The Ld. CIT(A) has erred in observing that AO was not justified in taxing brokerage income on entire deal value recorded in the documents found during the course of search at assessee's premises ignoring the detailed reasoning given by the A.O. 2. The Ld.CIT(A) has erred in restricting the addition of Rs. 4,96,30,739/- made by the AO u/s. 69A on account of undisclosed brokerage income calculated at 1% of the total transaction value to mere Rs. 12,40,768/-, i.e. 0.075% of the total transaction value, and further confirming 80% of the same in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d or having transacted through the associate as a broker. And accordingly, the year old has also not pointed out any such instances in any of the assessment orders, including the assessment year 2021-22. Substantial brokerage income in the return of income on year to year basis. And accordingly, all final transaction that has been transacted through the ssc has been offered and disclosed in the return of income Therefore, if the answer for evidence that has earned brokerage income, the presumption made by the land seven point percent, 5% of the total encourage resulting in sales were attributed to the ssc. And 100% of the executed deals for the associated 2122 are accordingly estimated at what percent brokerage income on such transactions was incorrect and without any legal cases. Whereas let us take a per estimated brokerage income from executed deals was estimated at 1% of the 2.5% of the entire day for all the years. Therefore, based on the above arguments submitted the lower authority, despite their odd possible efforts, could not corroborate any cinema transaction, haven't been executed through the SSC as a broker. An arbitrary estimation of brokerage income should not be perp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion could have been verified and accepted either fully or partially". This clearly shows that the Ld AO could have accepted assessee's transaction either fully or partially on merits, if reply to the notice u/s.133(6) of the Act would have been received. Further, it is also seen in para 3.4.2. of the assessment order that the Ld AO had tabulated 41 lands/plots. But it is beyond comprehension as to why the AO failed to verify even a single transaction. It is also not clear that out of total transactions of brokerage, to how many parties, notices u/s.133(6) of the Act were issued for this assessment year. Further, the assessment order is silent about the fact when such notices were issued and why other recourse available with the Revenue were not resorted to, for the verification of the deals, whether executed through the assessee as the broker or not. Needless to say, that it was the onus of the Revenue to make proper verification as no evidence of execution of deals through the broker was found during the course of search. When no credible evidences of unaccounted investments/earning of brokerage income was unearthed during the search proceedings, the question of making additi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e circumstances, in the absence of any material to the contrary being brought to the notice of the court so as to dislodge the findings of fact recorded by the Tribunal, the impugned order of the Tribunal being based upon concurrent findings of fact recorded after appreciating the evidence on record, does not give rise to any question of law, much less, a substantial question of law so as to warrant interference. The appeals, therefore, fail and are accordingly dismissed. [Para 14] 7.3. In light of the above facts as well as discussion we are inclined to agree with the arguments advanced by the Ld. AR and direct the Ld AO to delete the entire addition made based on the inquiry registers unearthed during the course of search proceedings. In result the Ground No 1 to 3 of Revenue appeal is dismissed and Ground No 2 filed by the assessee stands allowed. 8. Coming to ground no.4, raised by the Revenue, namely deleting the addition of Rs. 43,50,000/- u/s.69A r.w.s. 115BBE of the Act on account of unexplained and unaccounted brokerage income ignoring the seized material & statement recorded during/post search proceedings. 8.1. It is noted that the Department has challenged the d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessment being void ab initio, illegal, without jurisdiction and not following the principle of natural justice. 2. In law and in facts and circumstances of the case of the appellant, the Ld. CIT(A) has erred in holding that the appellant had received brokerage on estimated basis from the total deal value on the basis of inquiry register (data bank) particularly when no evidence relating to alleged caring of brokerage or any other incriminating material was found during the course of search and relied upon by the Assessing Officer in the Assessment Order. 3. In law and in facts and circumstances of the case of the appellant, the Ld. CIT(A) has erred that the appellant had received alleged brokerage on the basis of rough jottings found from Divyang Vyas when no evidence relating to alleged brokerage or any other incriminating material was found during the course of search from the possession of the appellant. 4. In law and in facts and circumstances of the case of the appellant, the Ld. CIT(A) has erred that appellant has received alleged unaccounted Brokerage income merely on the assumption that 50% of the total transactions of the project were carried ou....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 14,00,000/- by CIT(A). Ld. Counsel invited our attention at page no 54 of the assessment order where the copy of seized material found from the premise of Divyang Vyas has been extracted. However, Ld. Counsel has objected that such seized material cannot be relied upon for making addition as it is dumb document. Ld. Counsel further submitted that the details which have been mentioned in seized material do not indicate the name of the property, the details of purchaser/seller and therefore, question of making any addition based on such loose paper is uncalled for. Further, such seized material is not signed and not specifically dated. At most the notings which have been made on pages 57 of Annexure A 3 are merely instances reproduced in the loose paper and do not indicate or lead to a conclusion that the assessee could have earned unaccounted brokerage income was from any of the deals. Further, Ld. Counsel submitted that both the lower authorities were failed to bring any corroborative evidence that notings referred in seized material are actually dealt through the assessee as a Broker. Further, Ld. Counsel also submitted that, Ld. CIT(A) has confirmed the addition of Rs. 14,00,00....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e assessee has relied upon his extensively arguments made in AY 2021 22 of his Ground no 2 where also, Ld AO and CIT(A) were failed to bring single evidence of any execution of deal through the assessee and therefore addition cannot be made merely based on assumption and presumption. On the Other hand, Ld. DR relied upon the order of CIT(A). 17. We have heard rival submissions at length. Ld. DR could not bring any evidence on record to justify that any of the unit sold by the SKZ developer LLP are through the assessee as a Broker. We also found that none of the lower authorities could bring evidence of any deal is executed through the assessee. Therefore, based on our extensive finding given supra, we hereby direct Ld. AO to delete the entire addition and therefore this Ground No.4 stands allowed. 18. In the result, the appeal filed by the assessee in ITA No. 1688/Ahd/2024 for AY 2019-20 is Partly allowed. 19. Now coming to Assessee's appeal for AY 2020-21 for ITA 1689/Ahd/2024. Grounds of Appeal raised by the assessee is reproduced as under: 1. In the facts and circumstances of the case, the Ld. CIT(A) ought to have quashed the assessment being void ab initio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Ld Counsel submitted that, AO has comparted A-3 page no 2 and 9 found from the premise of Divyang Vyas with the excel sheet G-64 found from the premise of B Safal group and came to the finding that as the cost details are nearly matching in the seized material found from the premise of Divyang Vyas and from the premise of B Safal, made addition of brokerage income in the hands of assessee based on page no 9 of A-3, where noting of Rs. 9,47,900/- is jotted below the 2% written in such loose sheet. Ld AR the assessee submitted that, area mentioned in the both loose sheets are different. Further, nowhere commission or brokerage word is mentioned in loose sheet relied by AO for making addition. Ld. AO himself has assumed that Rs. 9,47,900/- is amount of brokerage and the share of the assessee is 80% amounting to Rs. 7,58,320/-. Ld. Counsel also submitted that, none of the party has accepted in his statement that 2% amount of Rs. 9,47,900/- is brokerage amount. Hence, addition made by AO and confirmed by the CIT(A) is without any basis and therefore the same shall be deleted. 22. On the other hand, Ld. DR has relied upon the order of CIT(A). 23. We found that, Ld. AO could not br....