TaxTMI 
TaxTMI 
2023 (11) TMI 1410
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....cash credit by taking the peak amount of the total transactions shown in the incriminating documents to Rs. 34,84,812/-, by observing that the transactions reflected in the incriminating documents were actually pertaining to the brokerage business of the assessee and accordingly estimating brokerage income of Rs. 34,84,812/- being 1% of the gross receipts of Rs. 34,84,81,157/-. [ii] Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the fact that the incriminating documents in the form of cash book and pocket diary were found and seized form the possession of the assessee and he was unable to produce any evidence to substantiate his claim that he was only engaged in the brokerage business of real estate transactions and thereby erred in restricting the addition made by Assessing Officer which is based on such incriminating documents and was in keeping with the provisions of section 292C of the I.T. Act. [iii] Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the fact that incriminating documents in the form of cash book and pocket diary were foun....
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....search action u/s 132 of the I.T. Act was carried out in the case of Param Group. During the course of search action u/s132 of the Act, carried out in the case of M/s Param Properties of Surat on 04.09.2015, seizure of various incriminating evidences possessed by it, corresponding to facilitation of unaccounted cash transactions of its clients, financiers, other brokers and builders as also earning of income of varying nature and unaccounted investments made by it was found. During the course of initial survey proceedings and the subsequent search proceedings in the case of M/s Param Properties, Shri Pankaj Khandelwal was present at the premises and he was found to be in possession of several incriminating documents and evidences proving huge unaccounted cash transactions. Such documents and evidences were seized and the same are inventorised at Annexure: A to the Panchnama. In the statement recorded on oath u/s 131 of the Act, on 04.09.2015, it was stated by Shri Pankaj Khandelwal that he is working as a real estate broker. However, during the course of search, he has identified and owned up the documents seized from his possession. In the said statement, he had also decoded the f....
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....us other details were also asked to be furnished from the side of the assessee. In response of notice u/s 142(1), the assessee has submitted only regular details but again reiterated that he had prepared various fake diaries to show off people that he had lot of customers and as if he is doing well in real estate business. Accordingly, the assessee vide letter dated 12.12.2017 was once again asked to explain the transactions reflecting in the seized material and was also show caused as to why in absence of proper & satisfactory explanation, transactions reflecting in the seized material should not be treated as unexplained cash receipts and payment and should not to be added to his total income. The show cause notice was reproduced by the assessing officer in the assessment order, vide page No.6. In response to show cause notice the assessee submitted detailed reply before assessing officer stating that he is working as a broker and received dalali only. 5. However, the assessing officer did not consider the reply of the assessee in respect of dalali income and made addition on different footing stating that the income and profits therein imbedded can only be added and brought t....
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....e activities and the details contained in the seized documents are related to the brokerage activities. Therefore, it is reasonable and logical that only brokerage income need to be brought to tax on the total turnover. The seized documents which have been considered in other years by the Assessing Officer are clearly shown the rate of commission in the real estate brokerage earned by the assessee @ 1% on purchase/sale/resale of flats/shops/plots. The ld Counsel further stated that the assessee" is merely a "real estate broker"; and assessee categorically stated in statement recorded on oath u/s 131 of the Act on 04-09-2015 (i.e. during the course of "search action" itself) that he was working as a "real estate broker " (Pg. 3, Para 5 of Assessment Order) The assessing officer himself has also observed that the cash book seized during search shows receipt of cash amounts from several other persons who are "clients " of "assessee " (Pg.4 of Asst. Order). The ld Counsel further pointed out that not a single property, as per the seized material, was found registered or even otherwise to be owned or purchased or sold by the assessee. All persons named in diary and allegedly transacted ....
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....gorically pleaded that during the course of "statements" during "search" as well as "post-search proceedings" and so also during the course of "assessment proceedings "that assessee is merely a "real estate broker" and "transactions appearing in the seized material are fake transactions .We note that assessing officer has not brought on record any concrete evidence even remotely demonstrate that the assessee is an "investor" and has actually entered into the transactions reflected in the seized material on his own. Rather, assessing officer has brushed aside all the above stated aspects and made addition in respect of "peak" of transactions reflected in the seized material. Prior to making addition in respect of "peak " of transactions reflected in the seized material, assessing officer was duty bound to bring on record some cogent material to even demonstrate that assessee is an investor and the transactions reflected in the seized material had actually been carried out by the assessee, which the Assessing Officer has failed to do so. 12. We note that during the appellate proceedings, the assessee stated before ld CIT(A) that he (assessee) was present at the premises of M/s Par....
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....ng the course of search on 04.09.2015 that he (assessee) is into the real estate brokerage activities. The same facts were reiterated by him before the Assessing Officer during the course of assessment proceedings in the statement recorded u/s 131 of the Act. Even the Assessing Officer himself has mentioned in the assessment order in para 5 that these documents seized containing the details of cash receipts and payment on booking/sale/resale of flats/shops/plots. Therefore, ld CIT(A) held that the assessee was into real estate brokerage activities and the details contained in the seized documents are related to his brokerage activities. Therefore, ld CIT(A) also held that it is reasonable and logical that only brokerage income need to be brought to tax on the total turnover. The seized documents which have been considered in other years by the Assessing Officer are clearly shown the rate of commission in the real estate brokerage earned by the assessee @ 1% on purchase/sale/resale of flats/shops/plots. The ld CIT(A) also noted that his predecessor has also accepted the contention for the earlier assessment years of the Assessee that he (assessee) is a real estate broker and thus, h....