TaxTMI 
TaxTMI 
2025 (7) TMI 101
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....in the residential premises of the its partner Mr.Syed Akhtar 3. The learned CIT(A) ought to have appreciated that since it was joint warrant in the names of Syed Akhatar and M/s. S.A.Builder and Developers, both the names are required to be mentioned in Column-A of the Panchanama which refers to Warrant in the case of, Syed Akhatar and M/s. S.A.Builder and Developers. The learned CIT(A) misconstrued that merely because both names are mentioned, a survey can be understood as a search. 4. The learned CIT(A) should have appreciated that mere mention of the name in a proforma for drawing of Panchnama does not amount to conduct of actual search in the premises of the firm which is a separate and distinct entity. 5. The learned CIT(A) does not deny that the premises of the appellant- firm was actually covered under survey under section 133A on the face of evidences produced by the appellant. 6. The learned CIT(A) should have appreciated that a survey under section 133A is not a search under section 132 as both operate in their respective fields and it is legally not permissible to equate both the actions as same. 7. The learned CIT(A) should ....
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....tions of amount received and repaid through banking channels only in subsequent years. 11. The appellant craves leave to add/ alter/ modify the grounds as may be required for adjudication of the case." ITA No.295/Hyd/2022 - A.Y 2016-17 (Revenue) "1. The ld. CIT(Appeals) erred both in law and on facts of the case in granting relief to the assessee. 2. The ld. CIT(Appeals) erred in admitting additional evidences filed by the assessee as the assessee did not provide any sufficient cause for non-submission of the said evidences before AO as per Rule 46(A)(b). 3. The ld. CIT(Appeals) has erred in ignoring the statement recorded on oath u/s 132(4) of Sri Syed Akhtar, Managing Partner and subsequent affidavit filed by him almost 3 months after the conclusion of the search that on money of Rs. 2.50 crores was received on sale of plots which was not recorded in the books of account. 4. The ld. CIT(Appeals) has erred in ignoring the statement recorded on oath u/s 132(4) of Sri Syed Afsar, Partner and subsequent affidavit filed by him almost 3 months after the conclusion of the search that Rs. 1,83,84,000/- was received towards unaccounted sale ....
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....roup of companies as admitted by the assessees. 2.4 Vide show cause notice issued on 18/12/2019, the assessee was asked to explain why the sum of Rs. 1,44,86,500/- should not be treated as unaccounted sale consideration in view of the fact that in all these cases, the transaction of land is complete, there is no available land for sale and the advances were used by the firm either as overdrawals by partners or towards investments by the firm. 2.5 In its reply filed on 24/12/2019, the assessee contended, inter alia, that it is not possible to visualise as to how non-availability of land could lead to an inference that the advances are bogus and that the department has no case to disbelieve the credits in the books by way of advances. It is also stated in the reply that all the above persons are absconding because of a criminal case instituted against them due to which confirmation letters could not be procured and the lapse in this regard is due to impossibility of performance . 2.6 The assessee's reply is not acceptable. It cannot be assumed that such excess payments may relate to any other plot when no land is available for sale. In fact, no buyer wo....
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....the assessee has sold the land to some of these parties from whom these advances were received and therefore, the addition made by the Assessing Officer on the basis of the suspicion is not sustainable in law. The Assessing Officer has not brought any material on record to disbelieve the credits shown in the books of account by way of advances when in the subsequent years, the assessee has sold land to some of the persons appearing in the list of these advances. In support of his contention, he has relied upon the following decisions: (i) Dhirajpal Girdhari Lal v. CIT [1954] 26 ITR 726 (SC); (ii) Dhakeshwari Cotton Mills Ltd. v. CIT [1954] 26 ITR 775 (SC); (iii) Lalchand Bhagat Ambica Ram v. CIT [1959] 37 ITR 288 (SC); (iv) Umacharan Shaw & Bros. v. CIT [1959] 37 ITR 271 (SC); (v) Oman Salay Mohd. Sait v. CIT [1939] 237 ITR 151 (SC); (vi) CIT v. Rameshwar Singh [1933] 1 ITR 94 (PC); 7.1 The learned AR has further pointed out that for the A.Y 2017-18, the learned CIT(A) has deleted the addition made by the Assessing Officer on account of advances shown in the books of account. 8. On the other hand, the learned DR has submit....
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....uppressed the sale consideration to avoid the tax, then the advances received through proper banking channel cannot be treated as unaccounted sale. At the most, if the Assessing Officer was satisfied that these advances are not a genuine transaction, then the addition could have been made u/s 68 of the I.T. Act, 1961 to the extent received during the year. However, the Assessing Officer has not doubted the transfer of money by these parties in favour of the assessee but the reporting of the transactions in the books of account by the assessee under advances from these parties was doubted by the Assessing Officer on the premise that the assessee is receiving the consideration over and above the consideration reported and declared in the books of account and sale deeds. It is pertinent to note that in the case of suppression of consideration, the excess amount is received as own money, not through banking channel. Once the Assessing Officer fails to co-relate these amounts with specific sale indent between the assessee and these parties, then this cannot be treated as unaccounted sale consideration. The learned CIT(A) has confirmed the addition in para 9.5 as under: 9.5 I ha....
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....eir creditworthiness. The assessee furnished confirmations from some of the parties. As seen from the confirmation letters, the amounts advanced were not against any sale agreement or for any business purpose and are therefore treated as loan creditors. The assessee did not furnish any confirmations in respect of the following creditors : SI. No. Name of the creditor Date Amount received Amounts returned Closing balance 1 GVB Infra 05.11.2015 10,00,000 - 10,00,000 2 Hidayadullah 14.12.2015 30,00,000 - 30,00,000 3 Humera 20.01.2016 10,00,000 - 10,00,000 4 Hussain Begum 15.03.2016 5,00,000 - 5,00,000 5 Kaleel Uddin 07.01.2016 9,50,000 - 9,50,000 6 MogalRizwana 14.12.2015 30,00,000 - 30,00,000 7 Mujeeb Ahmed 31.10.2015 20,00,000 - 20,00,000 8 Naimath Ali Baig 24.02.2016 23,46,000 - 23,46,000 9 Shoukatulla 31.10.2015 10,00,000 - 10,00,000 10 Syed Ahah 19.01.2016 11,00,000 - 11,00,000 11 Syed Ahmed 06.11.2015 9,00,000 - 9,00,000 12 Syed Anees 03.11.2015 50,00,000....
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....not produce the confirmation due to the reason of criminal cases pending against those persons. The learned AR has submitted that the assessee has produced the ledger copies of these persons appearing in the books of account as well as bank account statement where the amounts received from them through cheques/RTGS are duly reflected and therefore, the genuineness of the transaction cannot be doubted. Once the transactions are duly recorded in the books of account and also reflected in the bank account of the assessee, then the assessee has discharged its primary onus. The Assessing Officer has not brought on record any contrary material to show that these transactions are not genuine. 15. On the other hand, the learned DR has submitted that the Assessing Officer has given a finding that the advances shown by the assessee did not appear to be the advance against any sale of land. The assessee failed to produce or explain any justified reason which prevented him from filing the information before the Assessing Officer. Therefore, filing of the information before the learned CIT(A) is nothing but an afterthought. Even the information furnished before the learned CIT(A) does not es....
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....the AO made addition of Rs. 2,25,96,000/- as unexplained credits u/s 68 of the Act. The appellant is aggrieved and is in appeal. 7.6 During the appellate proceedings, the AR of the appellant submitted that the appellant could not produce evidences during assessment proceedings as various parties were not available and some of the parties were under criminal investigation. The AR has now submitted the evidences/ confirmation letters from the parties as detailed below: S. No. Name of the Party Amount received in Rs. Remarks 1 Gvb Infra 10,00,000 Confirmation letter enclosed 2 Hidayadullah 30,00,000 Firm attested ledger extract along with the bank account statement duly highlighting amounts 3 Humera 10,00,000 Firm attested ledger extract along with the bank account statement duly highlighting amounts 4 Hussain Begum 5,00,000 Firm attested ledger extract along with the bank account statement duly highlighting amounts 5 Kaleel Uddin 9,50,000 Firm attested ledger extract along with the bank account statement duly highlighting amounts 6 Mogal Rizwana 30,00,000 Firm attested ledger extract along wi....
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.... submitted any confirmation letter and PAN in above cases and therefore the appellant has failed to prove the identity of the creditors. Since the appellant has failed to establish the identity of the above creditors, the genuineness of the transactions with the above parties under question and the appellant could not discharge the primary onus on him to prove the genuineness of the transactions. Therefore, the addition made of Rs. 94,50,000/- on account of unexplained credits in the above cases is confirmed. 7.7.3 The AR has submitted copies of sale deed No.2428/2016 and 4866/2018 duly reflecting the transactions of Rs. 11,00,000/- and Rs. 9,00,000/- with Syed Shah Nemathulla and Syed Ahmed respectively. The AR contended that these amounts were adjusted towards advances received from the customers in its books of accounts for the current year. On verification, the contention of the AR is found to be correct as the appellant firm has received these amounts in the current FY towards advances corresponding to the above sale deeds. Since the appellant has proved the genuineness of the transactions with Syed Shah Nemathulla and Syed Ahmed, there is no case for treating the adv....
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....earned CIT(A) merely on the ground of non-furnishing of the confirmation of some of the parties due to unavoidable circumstances for the assessee, the addition is not justified. Hence, the same is deleted. Accordingly, this ground of the assessee is allowed and the ground of the Revenue appeal is dismissed. 18. Ground Nos. 2 to 5 of appeal by the Revenue are regarding the addition made by the Assessing Officer towards unaccounted sale consideration of plots was deleted by the learned CIT(A). The Assessing Officer has made the addition of Rs. 1,83,84,000/- in para 1.3 to 1.5 as under: Non-admission of sales revenue: 1.3 During the course of search, it was found that the assessee had not admitted sales revenue of Rs. 1,83,84,000/-. This amount was offered as additional income in the statement recorded from Syed Afsar, Partner on 13/03/2018. A notarized affidavit dated 15.03.2018 was filed in the name of the firm to the effect that they were voluntarily disclosing Rs. 4,33,00,000/- including Rs. 1,83,00,000/- declared for the transactions of sale omitted to be considered in its books of accounts for the F.Y.2015-16, to avoid protracted litigation. 1.4 How....
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....issible evidence making the voluntary disclosure. He has relied upon the order of the Assessing Officer. 21. On the other hand, the learned AR has submitted that due to an inadvertent mistake, the assessee has not reported some of the sales, but the amounts were shown as advance against the sale. However, once the assessee realized this mistake, it has filed the revised computation of income and declaring these sales as part of the income of the assessee. However, part of these transactions are not related to the assessment year under consideration but the same are for the A.Y 2018-19 and rest of the transaction has resulted a loss instead of profit. Thus, the learned AR has submitted that non-reporting of these transactions is having no revenue loss as these transactions are finally resulting the loss of Rs. 14,08,330/ -. The defect in the books of account was rectified immediately and therefore, the learned CIT(A) has rightly deleted the addition by considering the correct facts. He has supported the impugned order of the learned CIT(A). 22. We have considered the rival submission as well as relevant material available on record. The learned CIT(A) has discussed all the rel....
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.... 3 1048/2016 29-02-2016 Amreen Naaz 69.72 11,85,500 4 1049/2016 29-02-2016 Mizra Naimath Ali Baig 69.00 11,73,000 5 6001/2015 23-12-2015 Fareeda Begum 200.00 34,00,000 6 6002/205 23-12-2015 Syed Mohin 139.50 23,71,500 Total 876.22 1,83,84,000 The sale consideration of Rs. 71,94,000/- pertaining to the Doc. No. 3175/2017 which was registered on 31.05.2017, was considered in the revised computation of income for the AY 2018-19 and the remaining sale consideration pertaining to Doc. No. mentioned in SI. No.2 to 6 of the above table of Rs. 1,11,90,000/- was considered in the current year. The cost of land as per the audited books of accounts is of Rs. 19,140 per sq. yard, hence the cost of land sold is coming to Rs. 1,25,98,331/- and resulting business loss is Rs. 14,08,331/-. The AR further submitted that the AO should not have made addition of whole amount of sale consideration received without deducting the cost of acquisition of land which is an allowable business expenditure u/s 37 of the IT Act. The said addition was made solely based on the sworn statement which w....
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....egistered on 31/05/2017 does not pertain for the year under consideration but it pertains to the A.Y 2018-19 and the assessee has declared the same for the A.Y 2018-19. For the rest of the transactions, the assessee has given the details and calculations of the income and arrived at a loss of Rs. 14,08,330/-. All these details and records were forwarded to the Assessing Officer for examination and remand report. As it is clear from the assessment order that the assessee has filed the revised computation including the transactions in question and also declaring the loss of Rs. 14,03,330/-. The Assessing Officer has simply rejected the said factual details filed by the assessee and revised the computation solely on the ground that the assessee has admitted additional income in this regard in the statement and affidavit filed by the assessee. It is pertinent to note that if a statement recorded u/s 132(4) or u/s 131 of the I.T. Act, 1961 as well as statement made in the affidavit is contrary to the actual facts, then the facts which are duly supported by the undisputed evidence in the shape of registered sale deed are required to be considered and not the statement which is found to b....
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....l relief granted vide proviso to section 40(a)(ia) of the Act is available in the case of failure to deduct tax at source. This relief is not available in a case where the assessee has deducted tax but has not remitted the same into Government account. The assessee's case is that of failure to remit the amount deducted and is therefore outside the purview of the second proviso to sub-section (1) to section 40(a)(ia) of the Act which is applicable to an assessee who has failed to deduct tax at source. Accordingly, 30% of the expenditure is liable to be disallowed. Since the quantum of TDS in default is Rs. 42,55,000/-, the corresponding land cost on which the tax was deducted is Rs. 42,55,00,000/-. The amount disallowable u/s 40(a)(ia) of the Act being 30% of Rs. 42,55,00,000/- works out to Rs. 12,76,50,000/-. I am satisfied that penalty proceedings u/s 271(1)(c) of the Act are attracted for furnishing inaccurate particulars of income. Disallowance: Rs. 12,76,50,000/- 26. Thus, the Assessing Officer noted that the assessee has purchased the land from M/s. Neelanchal Roadways (P) Ltd and also shown as TDS payable of Rs. 42,55,000/-. Since the assessee has not deposits this ....
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.... the Act only if both of the following two conditions are not fulfilled: i. The Deductor does not deduct, or after so deducting fails to pay, or does not pay, the whole or any part of the tax, as required by or under this Act and ii. where the assessee (i.e Payee) has also failed to pay such tax directly. And by applying the "Doctrine of Harmonious Construction" to the first proviso to sub-section (1) of section 201 it can be construed that the word 'fails to deduct' includes the following three cases: a) does not deduct, b) or after so deducting fails to pay, c) or does not pay. In the present case, the payee has paid the tax directly and all the four conditions specified in the first proviso to sub-section (1) of section 201 are complied with, therefore the AR requested to delete the disallowance of Rs. 12,76,50,000/- under section 40(a)(ia) of the Act. 10.5 The submissions of the AR of the appellant as well as the comments of the Assessing Officer have been considered. It is seen that the appellant firm has deducted tax of Rs. 42,55,000/- u/s 194IA of the Act on payments made to M/s. Neelanchal Roadw....
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....id to the Government. To answer the first question it is necessary to examine Section 201(1) of the Act. For ready reference Section 201(1) of the Act is reproduced below: Consequences of failure to deduct or pay 201. "[(1) Where any person, including the principal officer of a company,- (a) who is required to deduct any sum in accordance with the provisions of this Act; or (b) referred to in sub-section (1A) of section 192, being an employer, does not deduct, or does not pay, or after so deducting fails to pay, the whole or any part of the tax, as required by or under this Act, then, such person, shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect in such tax: [Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a payee or on the sum credited to the account of a payee shall not be deemed to be an assessee in default in respect of such tax if such payee- (i) has furnished his return of income under section 139; (....
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.... of such specified security or sweat equity share by the assessee; or (iii) from the date of the assessee ceasing to be the employee of the employer who allotted or transferred him such specified security or sweat equity share, whichever is the earliest]. "Explanation .- For the removal of doubts, it is hereby declared that if any person, including the principal officer of a company,- (a) who is required to deduct any sum in accordance with the provisions of this Act; or (b) referred to in sub-section (1A) of section 192, being an employer, does not deduct, or after so deducting fails to pay, or does not pay, the whole or any part of the tax, as required by or under this Act, and where the assessee has also failed to pay such tax directly, then, such person shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default within the meaning of sub-section (1) of section 201, in respect of such tax.". (Emphasis added) Explanation to Section 191 of the Act states that a person is deemed to be an assessee in default within the meaning of Section 201(1) of the Act when the deductor who is ....
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....ct to both the provisions as much as possible without making any provision otiose. Applying the principle of harmonious construction, it would suffice if the phrase 'fails to deduct' in the first proviso to Section 201(1) of the Act also includes the situation of the assessee where the assessee has deducted the tax but has failed to pay the deducted amount to the Government. This harmonious interpretation would take care of the situation where the assessee has failed to deduct or after deducting has failed to pay to the Government but produces a tax payment certificate from the payee as in both the situations the net result is that taxes have not been paid to the Government. It is clarified that this construction of the statute is only limited to cases where the payee furnishes a certificate that due taxes on the transaction have been paid and the income was declared in the return filed by him. This is held so to resolve the conflict since the assessee is not an assessee in default by virtue of Explanation to Section 191 of the Act and at the same time is treated as an assessee in default as per the first proviso to Section 201(1) of the Act. As clarified earlier and at the....
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..... The learned CIT(A) should have appreciated that mere mention of names are the name in a proforma for drawing of Panchnama does not amount to conduct of actual search in the premises of the firm which is a separate and distinct entity. 5. The learned CIT(A) does not deny that the premises of the appellant- firm was actually covered under survey under section 133A on the face of evidences produced by the appellant. 6. The learned CIT(A) should have appreciated that a survey under section 133A is not a search under section 132 as both operate in their respective fields and it is legally not permissible to equate both the actions as same. 7. The learned CIT(A) should have appreciated that no valuable or books of account belonging to the firm were seized from the residential premises of Syed Akthar (partner). 8 The learned CIT(A) ought to have appreciated that the prerequisite for initiation of proceeding under section 153A is that a search under section 132 must be actually conducted in the premises of the person and a search is person specific. 9. In the light of the above legal principles since the initiation of proceeding under section ....
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.... 7. Whether in the facts and circumstances of the case, and in law, the ld.CIT(Appeals) is correct in deleting the addition made towards unaccounted sale considerations to the tune of Rs. 83,35,88,400/- holding it as advances when no purchaser would pay more than the agreed sale consideration. 8. The appellant craves leave to amend or alter any ground or add any other grounds which may be necessary." 30. Ground No., 10 of the assessee's appeal and Ground No.5 of Revenue's appeal are common being part relief granted by the learned CIT(A) in respect of the addition made by the Assessing Officer towards unexplained cash credit. The Assessing Officer has made the addition towards unexplained credit u/s 68 of the Act for the amount shown by the assessee as advance from the customers in para No. 1.6 to 1,7 as under: Advance from customers: 1.6 During scrutiny it was seen that amounts shown under the head "Advances from customers" did not appear to be advances against any sale of land. Therefore the amounts shown to have been received under this head are loans and required to be considered u/s.68 of the Act. Vide show cause notice dated 18/12/2019 ....
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....300 83,35,88,440 In the show cause notice issued on 18/12/2019, the assessee was asked to furnish objections against the action proposed to assess the sum of Rs. 83,35,88,440/- as unaccounted sale consideration. The relevant extract from the show cause notice is reproduced below: "The balance amount of Rs. 83,35,88,440/- is being shown as 'advances from customers'. In respect of Heera group, vide your letter dated 03.12.2019, copies of undated letters from Heera Gold Exim Ltd., Heera Retail (Hyderabad) Pvt. Ltd. and HeeraFoodex Private Limited were filed wherein in each letter, a general confirmation has been given that the amounts were given for purchase of land and construction of building advance as on 31/03/2017 without furnishing any specific details of the lands. Since the transaction of sale of land is complete in the above cases and the balance amounts were used by the firm either as withdrawals by the partners or investments in loans and advances (asset), it is clear that the surplus amounts received are the monies received over and above the recorded sale consideration. In fact, there was no land available with the firm for sale. Therefore, it....
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....ase of Shri Mohd.Shaik Hussain, the confirmation was not filed by the assessee. The assessee has stated in the submission before the learned CIT(A) that the assessee filed PAN of Shri Mohd. Shaik Hussain during the course of assessement proceedings, however, the confirmation was filed before the learned CIT(A) which was also forwarded to the Assessing Officer for examination and remand report. In the remand report, the Assessing Officer has stated that the assessee has submitted confirmation letter along with ledger account as additional evidence. The only objection reiterated by the Assessing Officer was that the assessee could not produce any sale/purchase document/agreement to substantiate the claim that this amount was received as advance against the same. The learned CIT(A) has considered this issue in para 7.5 to 7.7.2 as under: 7.5 I have carefully considered the submissions of the appellant, the order of the Assessing Officer, as well as the comments of the Assessing Officer thereon. Briefly the facts are, during scrutiny proceedings it was observed that the amounts shown under the head "Advances from customers" did not appear to be advances against any sale of lan....
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....nsaction with Gausis Begum has been discharged by the appellant. Since the genuineness of the transaction with Gausia Begum has been established by the appellant, the AO is directed to delete the addition of Rs. 23,00,000/- made on account of unexplained credits u/s.68 of the Act. 7.7.2 However, the appellant has not submitted any confirmation letter, PAN details and bank account statement of Mohammed Shaik Hussain during appellate proceedings. The appellant has failed to establish the identity, creditworthiness and genuineness of the transaction with Mohammed Shaik Hussain, therefore the appellant has not discharged the primary onus on him to prove the genuineness of the transaction. Therefore, the addition made of Rs. 48,00,000/- on account of unexplained credits in the hands of the appellant is confirmed and accordingly, the appeal on this ground is PARTLY ALLOWED. 35. Thus, the addition made in respect of Smt. Gausia Begum was deleted by the learned CIT(A) by considering the confirmation and Aadhar details, whereas the addition in respect of Shri Mohd. Shaik Hussain was confirmed on the ground that the assessee failed to establish the identity, creditworthiness and ....
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....t this addition was made by the Assessing Officer based on the transaction recorded in the books of account and not on the basis of any incriminating material. Hence, ground No.10 of the assessee's appeal is allowed and Ground No.2 of the Revenue's appeal is dismissed. 37. Ground Nos. 3 & 4 of the Revenue's appeal is regarding addition of Rs. 2.5 crores surrendered in the statement made u/s 132(4) of the Act. The learned DR has submitted that during the search & seizure operation, the Managing Partner of the assessee has admitted various deficiencies and unaccounted income and accordingly, surrendered a sum of Rs. 2.50 crore in the hand of the assessee firm. This was a voluntary disclosure made by the Managing Partner and also confirmed by subsequent affidavit. Therefore, not offering the said income to the tax in the return of income has resulted the addition made by the Assessing Officer based on the voluntary disclosure of the assessee. The learned CIT(A) has deleted this addition by ignoring the statement of the Managing Partner recorded u/s 132(4) as well as the affidavit filed subsequently. He has relied upon the order of the Assessing Officer. 38. On the ot....
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....the assessee firm. The entire statement was only in respect of the transactions and activities of the partners of the assessee firm. We further note that the partners have also approached the Settlement Commission to settle all the disputes by filing declaration u/s 245D. There is an order of the Settlement Commission u/s 245D(4) of the Act dated 24/07/2023. Thus, except some vague reference of the assessee firm, the entire proceedings u/s 132 and the statement recorded u/s 132(4) of the Act were restricted to the business activities and transactions of the partners as well as undisclosed income of the partners and not of the assessee firm. The learned CIT(A) has considered this issue in para 6.5 of his order as under: "6.5 I have considered the submissions of the AR. It is seen that the appellant has offered Rs. 2.5 crores as unaccounted sale consideration for sale of plots for the A.Y 2017-18 in the statements recorded u/s 132(4) of the Act during search proceedings and also filed a notarized affidavit regarding voluntary disclosure of Rs. 2.5 crores. Later, during the assessment proceedings, the appellant retracted from this admission by not including Rs. 2.5 crores as ....
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....orate the amount surrendered by the Partner of the assessee firm, then the addition made solely on the basis of the statement of the partner without any description of the nature of the undisclosed income or any transaction resulting any undisclosed income is not sustainable in law. Accordingly, we do not find any error or illegality in the impugned order of the learned CIT(A). Thus, ground No.3 of the Revenue's appeal is dismissed. 41. Ground Nos.6 & 7 are regarding the addition made by the Assessing Officer on account of unaccounted sale which was deleted by the learned CIT(A). The Assessing Officer has made the addition towards unaccounted sales in para No.1.8 to 2.1 as under: 1.8 It is noticed that the assessee firm received a total amount of Rs. 103,22,88,740/- (comprising of opening balance Rs. 49,14,58,740/- and receipts during the year Rs. 54,08,30,000/-) towards advance against sale of land. After making adjustment of the cost of the land sold for Rs. 190,87,00,300/- the balance amount of Rs. 83,35,88,440/- was remained with the assessee firm as detailed in the statement given below: (Rs.) S L NAME OF THE PERSON OPENING BALANCE RECEIPT DURI....
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....osed table. Since these sales cannot be taken as untrue as the same are registered and refunds cannot be disbelieved as these were returned by account payee cheques and RTGS the question of doubting receipt of advance and treating the same as unexplained does not arise. " 2.0 In respect of M/s HeeraRetail (Hyd) Pvt Ltd. and Shaik Nowhera, it was stated that the latter was lodged in jail for alleged criminal activity, however confirmation letters have been filed and there was some adjustment during the year toward's sale of land to them which shows the bonafide of the transaction. 2.1 The assessee's contentions are not acceptable. With regard to the contention that land was transferred against advances to some persons and balance was returned, it can be seen thatin all the seven cases above, though land was transferred, amounts remained in the assessee's books as advances. Normally a purchaser would not pay more than the agreed sale consideration of the property purchased. Hence, the monies paid by the above purchasers which are shown as outstanding are part of the agreed sale consideration for land already registered. Apparently, the SRO's value wa....
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....00,000 3,85,93,500 82,12,12,010 3 Mohd Sharrif 72,00,000 0 69,65,900 2,34,100 4 Abdul Rahim 0 40,00,000 34,00,000 6,00,000 5 Mohd Moid 28,00,000 0 27,65,900 34,100 6 Mirza Rafiullah Baig 24,53,230 0 6,50,000 18,03,230 7 Amjed Ali 2,00,000 0 50,000 1,50,000 Total 49,14,58,740 54,08,30,000 19,87,00,300 83,35,88,440 A show cause notice was issued to the appellant stating that in the above cases the transaction of sale of land is complete and the balance amounts were used by the firm either as withdrawals by the partners or investments in loans and advances. The AO observed that there was no land available with the firm for sale and therefore questioned as to why the amount of Rs. 83,35,88,440/- should not be considered as unaccounted sale consideration. In response, the appellant firm submitted that it has sold land to some persons who have given advances and refunded the balance advances in some cases. The sales cannot be taken as untrue as the same are registered and refunds cannot be disbelieved as these were returned by account payee cheques and RTGS. H....
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....dence was available to prove that the closing advance amounts are on-money receipts. The AO has considered the opening balance of Rs. 49,14,58,740/- as on 01.04.2016, the receipts of Rs. 54,08,30,000/- during the year and adjustments against sale of land amounting to Rs. 19,87,00,300/- as bonafied business transactions, however has not considered the closing balance of Rs. 83,35,88,440/- as pending advances from the customers. The closing balances include all the three transactions i.e. opening balances, advances received and balances adjusted during the year on account of sale. The AR contended that the addition made by the AO is against the facts of the case and is purely based on mere suspicion and requested to delete the addition. 8.5 I have considered the submissions of the AR. It is seen that the appellant firm had opening balance of advances as Rs. 49,14,58,740/- and receipts of Rs. 54,08,30,000/- during the year towards advance against the sale of land. After making the adjustment of Rs. 19,87,00,30/- towards the cost of land sold, the closing balance for the year was Rs. 83,35,88,440/-. The appellant firm sold land to the parties who have given advances and refund....