TaxTMI 
TaxTMI 
2025 (7) TMI 121
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....unt of interest on P & F Booking incurred for not making allotment to the parties, being penal in nature. 3. We have heard the rival submissions and perused the material available on record. The return of for AY 2008-09 was filed by the assessee company on 30.09.2008 declaring total income of Rs. 2,39,129/- under normal provisions of Act and book profit of Rs. 88,55,223/- u/s 115JB of the Act. A search and seizure operation u/s 132 of the Act was carried out on 26.02.2009 in the case of the assessee. Notice u/s 153A of the Act stood issued to the assessee on 28.08.2009. In response thereto, the return of income was filed by the assessee on 29.09.2009 declaring income of Rs. 2,39,129/- after setting off of brought forward loss to the tune of Rs. 50,57,210/- under normal provisions of the Act. The assessee however paid tax on the book profit of Rs. 88,55,223/- declaring u/s 115JB of the Act. The ld AO noted that during the year under consideration, the assessee continued its business of builders, developers, colonizers etc. From the details of the work in progress submitted by the assessee for the Jaipur Project, the ld AO observed that the assessee had capitalized an amount of Rs....
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....etion of addition of Rs. 35,93,236/- on IBMS and sinking fund. 6. We have heard the rival submissions and perused the material available on record. The ld AO noticed that assessee had charged certain amount from customers on account of IBMS and sinking fund. Accordingly, as on 31.03.2008, the assessee has shown an amount of Rs. 35,93,236/- on account of sinking fund and IBMS in the balance sheet under the head current liabilities. The assessee submitted that this is a fund which has been created with a view to meet out unforeseen future liabilities on account of natural calamities and hence, the same is shown under the head liability in the balance sheet. The ld AO observed that this is not fund which has been created by the assessee out of its own source or surplus as instead the same has been charged from the customers to whom the shops of mall have been sold by the assessee. The ld AO observed that once an amount has been charged form the customers, it is an income of the assessee and same cannot be transferred to liabilities in the balance sheet. Accordingly, the ld AO brought to tax the sum of Rs. 35,93,236/- as income of the assessee. The ld CIT(A) considered the receipt o....
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....q ft respectively. Based on this, he alleged that there was suppression of sales made by the assessee to the tune of Rs. 1,20,13,828/- made outside the books and brought to tax the same. The ld CIT(A) observed that the assessee has constructed the total area of 211239 sq ft of shopping mall of which 23954 sq ft is sold during the year under consideration and balance 187284 sq ft area is shown as closing stock. The ld CIT(A) deleted the addition by observing as under:- "It is further seen from the financial accounts that the total cost incurred in constructing 2,11,239 square feet of area is Rs. 56,94,02,755 i.e. average cost Rs. 2695.54 per square feet. Hence, from the above calculation, it is seen that the cost of area sold during the year comes to Rs. 6.46 crores (23,954 x 2695.56). Since the total sale price realized and credited to the books of account during the year is Rs. 8.36 crores, therefore, the appellant has earned a profit of Rs. 1.9 crores which is 22.72% of sales. Therefore, in my view AO's finding that the appellant has sold the shop at lesser rates and which provoked him to apply a gross profit rate of 12% is not correct. 10.1 Having said that....
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....roverted by the revenue with cogent evidence before us. Either way it is only an estimated addition made by the ld AO which have no legs to stand in the facts and circumstances of the instant case. Hence, we do not find any infirmity in the order of the ld CIT(A). Accordingly, ground No. 3 raised by the revenue is dismissed. 11. Ground No. 4 raised by the revenue is challenging the deletion of addition of Rs. 5,06,55,588/- on account of unaccounted sales. 12. We have heard the rival submissions and perused the material available on record. Based on the seized material Annexure A-2 pages 40 to 42 seized from the office premises at 401, GOP Plaza, Sector 18, Noida and Annexure A-2 pages 33 to 38 seized from the office premises at 208, Ocean Complex, Sector-18, Noida during the course of search, the ld AO proposed addition of Rs. 5,13,35,588/- and treated it as unaccounted sales. The document seized from GOP Complex is a letter written by Mr. Abdul Bari, a Senior Vice President (marketing) employee of the assessee company and in this letter, he has given details of his claim for full and final settlement of his dues after his resignation from the company. This letter also mentio....
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.... @ 1% to the tune of Rs. 2.71.11.319/-. The revenue has taken in this figure as sacrosanct determination of sales at Rs. 275.86 Cr. on Jaipur project alone. backwards worked and The revenue deemed the target sales as total sales and brought the amount to tax based on the seized material of the party SOB 6A and SOB 6 Annexure A-2. The bookings accounted for Meerut project for the A.Y. 2005-06, A.Y. 2006-07 and A.Y. 2007- 08 was Rs. 1.58 Cr. Rs. 3.91 Cr. and Rs. 6.23 Cr. respectively whereas for the Jaipur project, the bookings were to the tune of Rs. 24.28 Cr. Rs. 0.37 Cr. and Rs. 14.23 Cr. The land has been purchased in Meerut for a sum of Rs. 1.58 Cr. and the land at Jaipur worth Rs. 13.84 Cr. has been purchased. The revenue authorities have accepted the total amount of booking received of Rs. 31.97 Cr. till 2009 whereas as per the letter of Sh. Abdul Bari, the sale figure has been considered as Rs. 60 Cr. for determination of profits. Similarly, the revenue has accepted the total booking of Rs. 70.29 Cr. towards the sale whereas for determination of the profits, the projection as mentioned by Sh. Abdul Bari of Rs. 279 Cr. has been considered. While considering the letter of Sh. A....
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.... AO in this regard are as under:- a. no stock of any painting was available at the time of the search at the assessee premises; b. in the balance sheet of Mr. Saudagar Shah, there is no stock of paintings reflected. Only sales and purchases are reflected in his trading account. The total value of purchase and sales is reflected in the profit and loss account in the year ended on 31.03.2008 of Mr. Saudagar Shah was Rs. 3,24,69,832/- and the same does not tally with the transaction recorded in the slip pad which total to Rs. 7,75,92,000/-. Thus, there is no nexus with the income tax return, balance sheet and audit report relating to Mr. Saudagar Shah and the noting of the slip pad; c. the assessee brushed aside his onus by not producing Mr. Saudagar Shah in time and instead was directing the revenue to make independent enquiry of Mr. Saudagar Shah. In the mean while, Mr. Saudagar Shah expired on 13.12.2010. Hence, the assessee had only projected a story of framing Mr. Saudagar Shah thereby jeopardizing the entire investigation qua Mr. Saudagar Shah; d. the value of sale of purchase of painting of high value which could have been done only through b....
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....r Shah who came forward to own up the said slip pad and the contents written thereon as belonging to him and this fact was also supported by way of an affidavit of Mr. Saudagar Shah filed before the ADIT (Investigation) during the post search enquiries. Hence, it was pointed out that the assessee had duly discharged its onus by rebutting the presumption u/s 292C of the Act. The assessee also placed reliance on the decision of the Hon'ble Supreme Court in the case Mehta Parikh and Co. Vs. CIT reported in 30 ITR 181 (SC) which held affidavit cannot be rejected unless it is put to test or verification or cross examination. It is pertinent to note that affidavit of Mr. Saudagar Shah was filed in May 2009 before the Investigation wing and he expired on 13.12.2010. Hence, the department had practically 18 months time to make independent enquiry of Mr. Saudagar Shah after the filing of affidavit which the revenue chose not to make. The ld CIT(A) appreciated the aforesaid contentions of the assessee and deleted the addition made in the sum of Rs. 7,75,92,000/- by observing as under:- "16. I have gone through the above submissions of the appellant and have perused the AO's ....
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....nt's stand has been, that the said diary does not belong to him but to Mr. Saudagar Shah. 16.4 I find that from the very beginning AO had shifted the entire burden upon the appellant and no enquiry has been done even after the appellant having filed the copy of ITR and Income and Expenditure account, Balance Sheet and Tax Audit Report for Assessment Year 2007-08 and 2008-09 in respect of Mr. Saudagar Shah. The AO has not conducted any enquiry to examine the contents of the information filed by the appellant in respect of Mr. Saudagar Shah nor any enquiry was conducted independently since 22.05.2009 till he died on 13.12.2010. The ADI and the AO kept sitting on the information for more than 18 months and instead of doing enquiry whatsoever, put the entire burden on the appellant to produce Mr. Saudagar Shah inspite of the fact that the address of Mr. Saudagar Shah was available with the AO. 16.5 The presumption under Section 132 (4A) read with Section 292C is available to the AO but the same is rebuttable. No doubt the burden to rebut such a presumption lies heavily of the appellant but I find that in the facts of the present case, this burden was shifted to th....
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.... 26.02.2009 therefore, the AO's contention that the slip pad belonging to Mr. Saudagar Shah, is an afterthought and is a cooked up story, in my humble view, does not hold good. 16.11 Further, I have also evaluated the AO's argument that the appellant's contention of belongingness of slip pad to Mr. Saudagar Shah be not accepted because the total of purchase and sales reflected in the Profit and Loss account for the period ending 31.03.2008 of Mr. Saudagar Shah does not tally with the total of the transaction recorded in the slip pad, in this regard it is stated that the entries in slip pad might relate to sales, purchase, debtors, creditors, expenses etc. because it is not necessary that total of trial balance will tally with sales and purchases. This interpretation of the AO appears to be quite absurd in my humble view. 16.12 Hence, considering in totality all the facts and evidences on record, the appellant by rebutting the presumption under Section 132(4A) read with Section 292C, had put the onus on the AO and AO had no material to show that transactions recorded in the slip pad belongs to the appellant. Therefore, from the above discussion....
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....tings in the slip pad Annexure A-2 does not belong to it and that the same belong to Mr. Saudagar Shah. To support this argument, an affidavit of Mr. Saudagar Shah was filed before the investigation Wing in May 2009 itself who had duly owned up the said seized documents and the contents thereon by giving all the explanations thereon. Mr. Saudagar Shah is regularly assessed to income tax and had filed his income tax returns for AYs 2007-08 and 2008-09 much prior to the date of search on the assessee herein. It is not in dispute that no enquiry whatsoever was sought to be carried out on Mr. Saudagar Shah either by the Investigation Wing or by the ld AO. As stated earlier, affidavit of Mr. Saudagar Shah was filed in May 2009 and he expired only in December 2010, thereby giving 18 months time to the department to examine the veracity of the contents of the affidavit. Surprisingly, the affidavit filed by Mr. Saudagar Shah was never put to test/ examination/ cross examination by the department. In the absence of such examination, contents of the affidavit had to be construed as true and correct and cannot be rejected at once. Reliance in this regard has been rightly placed by the ld AR o....
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.... and the amounts written were in coded form. The assessee stated that these were rough calculations and it does not relate to its business. The ld AO did not believe the explanation of the assessee and after analising the notings of the diary, came to the conclusion that the said diary belongs to the assessee and as per the notings in pages 1 to 8 thereon, the assessee has given certain money on interest @0.75 per month. Accordingly, the loan transaction for the year was Rs. 5 lakhs and interest transaction for the year Rs 1,80,000/- was arrived and total addition of Rs. 6,80,000/- was made by the ld AO as undisclosed investment. This action was upheld by the ld CIT(A). The ld AR placed on record copy of the Tribunal in assessee's own case for AYs 2005- 06, 2006-07 and 2007-08 in ITA Nos. 5231, 5392 and 5579/Del/2011 respectively dated 14.10.2022 wherein, the same issue has been considered and Tribunal had deleted the addition made on account of undisclosed investment. Respectfully following the same, the Ground No. 1 raised by the assessee is hereby allowed. 28. Ground No. 3 raised by the assessee is general in nature and does not require any specific adjudication. 29. In th....
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.... for assessee's appeal for AY 2009-10 except with variance in figures. 39. In the result, the appeal of the assessee in ITA No. 1623/Del/2014 for AY 2009-10 is allowed. ITA No. 3115/Del/2014 for AY 2010-11 (Majestic Properties Pvt Ltd ) Revenue's appeal 40. Ground No. 1 raised by the revenue is identical to Ground No. 2 raised by the assessee for AY 2008-09. Hence, the decision rendered by us for Ground No. 2 in assessee's appeal for AY 2008-09 shall apply mutatis mutandis for Ground No. 1 for revenue appeal for AY 2010-11 except with variance in figures. 41. Ground Nos. 2 to 6 raised by the revenue for AY 2010-11 are identical to Ground Nos. 1 to 8 raised by the revenue for AY 2009-10. Hence, the decision rendered by us for AY 2009-10 in assessee's appeal shall apply mutatis mutandis for Ground Nos. 2 to 6 for revenue appeal for AY 2009-10 except with variance in figures. 42. Ground No. 7 raised by the revenue is challenging the disallowance of Rs. 30,18,514/- u/s 14A of the Act read with Rule 8D of the Income Tax Rules (hereinafter referred to as the Rules). 43. We have heard the rival submissions and perused the material available on record. The ld AO observed ....