TaxTMI 
TaxTMI 
2024 (7) TMI 1787
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....of the case. [2] On the facts and in the circumstances of the case, Ld. CIT(A) has erred allowing the assessee's appeal without considering the facts that the documents No. A-2/12 (pages 1 to 84) and A-2/64 (page 1 to 185) based on which the addition of Rs.2,86,14,610/- was made has evidentiary value and assessee failed to explain with any documentary evidences during the course of assessment proceedings and kept silence on this issue [3] On the facts and in the circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs. 2,86,14,610/- on account of unexplained expenditure u/s 69C of the IT Act, which was correctly added by the Assessing Officer in the income of the assessee on the basis of incriminating documents found and impounded during the course of survey proceedings. [4] Any other grounds and fact to be raised at the time of appeal." 3. The facts of the case as culled out from the CIT(A)'s order are as follows :- "A survey action u/s 133A of the I.T. Act was conducted at the business premises of M/s. Tirupati Developers. During the survey proceedings many incriminating documents related to the appellant were f....
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....the cash receipt in framing the assessment of the appellant, which is not correct. It is very much clear that the impounded documents & registers having entries related do not match. Therefore, the impounded documents cannot be relied upon is not conclusive evidence. In view of the above facts and circumstances, I direct to the AO to delete the addition of Rs. 3,48,000/-. Hence ground no. 2 is allowed. 5. The assess further challenged the addition of Rs. 2,86,14,610/- made on account of unexplained expenditure in respect of booking of plots and brought to tax u/s 69C of the I.T. Act, 1961. The learned CIT(A) granted relief by holding as follows: "The addition of total income was made on account of unexplained expenditure in respect of booking of plots and same is brought to tax u/s 69C of the Act, as per para 3 of the assessment order. As per the impounded documents, cash is paid by the customers who have booked plots of M/s Tirupati Developers through the appellant and the same was entered in the name of appellant in the cash book by M/s Tirupati Developers. Further impounded documents which were seized from the premises of M/s Tirupati Developers had name men....
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....h the CIT(A) has gone amiss in entertaining the addition evidence filed before it. He, therefore, requested that the matter may be set aside for fresh adjudication before the AO. 7. On the other hand, the learned AR submitted that all the evidences are before the Assessing Officer, but he passed a very cryptic order ignoring all the evidences on record. No additional evidences were relied before CIT(A). 8. We have carefully gone through the evidences on record and perused the submission. We find that the department has not pressed the ground of non-adherence to Rule 46A of Income Tax Rules regarding production of additional evidence before the CIT(A). In fact, in the paper book the assessee has submitted vide page Nos. 100 to 130 all the details submitted before the Assessing Officer in reply to notice u/s 142(1) of the I.T. Act, 1961. We find that the same has also been uploaded on a portal on 21st January, 2022, vide acknowledgment No. 959209811210122 which was before the due date of submission of 31st March, 2022. However, the order passed under 31st March, 2022, does not make any reference to the detailed submission so made. The learned AR has correctly drawn our attentio....
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....he said plot was executed before the survey date. The assessee has shown its income much more as per actual transaction than the addition made by A.O. on the basis of impounded document. 3. Document No A-2/17 : The assessee has booked Plot No. 14 of Rajatbhoomi- 4 Layout of M/s. Tirupati Developers for one of its customers. The details are as follows Plot No. Name of Customer Receipts Date 14 Suryakant Sudhirrao Bharne 70,000 22.07.2018 As per impounded document Plot No. Area of Plot Sq. ft Rate Consideration Amount Amount Received Page No. 14 1614.60 670 10,81,782 6,01,000 61 Actual Plot No. Sale Deed Amount Sale Deed Date Survey Date Page No. 14 20,17,000 21-12-2020 25-06-2019 59 to 63 From the above it is clear that the consideration amount and the received amount is much less than the Sale Deed amount and the A.O. has made addition on the basis of impounded document. The assessee has shown its income much more as per actual transaction than the addition made by A.O. on the basis of impounded document. 4. Document No A-2/23: The assessee has b....
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....s. Tirupati Developers for its customers. It is the practice of the developer to show such bookings in the name of Assessee Firm. As the payments are against bookings of plot from customers to M/s. Tirupati Developers the same should not have been treated as unexplained cash expenditure u/s. 69C of the Income Tax Act, 1961, in the hands of assessee. The assessee has given detailed explanation regarding the entries in the impounded documents during the assessment proceedings & appellate proceedings, the submissions during the assessment proceedings are at Page No. 103 to 112, 116, & 121 to 128 of the Paper Book & submissions during the appellate assessment proceedings are at Page No. 72 to 85 of the Paper Book. The submissions already made are as follows: 1. The assessee has booked Plots in various Layouts of M/s. Tirupati Developers for its customers. It is the practice of the developer to show such bookings in the name of Assessee Firm, though the payments were against bookings of plot from customers to M/s. Tirupati Developers. 2. The assessee is acting as the Broker/marketing associate of M/s Tirupati Developer and the primary source of income for the ....
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....ot offered any explanation and kept silence on cash expenditure amounting to Rs. 2,86,14,610/-" is wrong. The assessing officer passed order without properly appreciating the facts and submissions of the assessee and neither providing reasons in support of his order. Thus, the assessing officer erred in passing the order by considering partial submission of the assessee. 9. Some observations from the detailed charts Annexure V & Annexure VI (Page No. 121 to 128 of paper book) submitted at the time of assessment & appellate proceedings are as follows: i. The details mentioned at para 1 above is that, there is difference in amount mentioned in impounded document & actual Sale Deed Amount of Plot No. 1 of Suvarnabhoomi Layout. The same can be cross verified from entry No. 2 of the chart placed at 122 of the paper book. ii. The details mentioned in the chart of Plot No. 122, Suvarnabhoomi Layout placed at page No 121 of paper book shows that the amounts are received from customers of Plot the sale deed of the same is executed on 03/01/2019, before 25/06/2019 i.e., the date of survey. iii. Also there are various sale deeds which are executed before 25....
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....essee shall not be allowed as a deduction under any head of income." 11. It is crystal clear that the assessee has explained about the source of such payment. The assessee has acted only as a conduit between the purchaser and the developer. So, naturally it was not incumbent upon the assessee to make any payment to M/s. Tirupati Developers, because he is not the ultimate purchaser of the plot. The assessee only acts as a marketing agent and only 40% of his share as marketing income in respect of payment received from the customer is booked as income. Even if for argument sake we assume that there is an unaccounted cash receipt in the hands of M/s. Tirupati Developers, it is apparent that the appellant has got no role in such payment because his duty is only to find out the potential customers and to take them to the developer for ultimate registration of plots. He is only a meeting point and there is no question of him making the investment. The very business model of the appellant is never in doubt. It is axiomatic that the so called cash payment as per the impounded document must have generated from the purchasers of the plots. The assessee from the very beginning of the proce....
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....ated by the agent so that he can be correctly remunerated. The agent also on the other hand has his own information system to keep a tab on the volume of business generated by him so that it can be matched with the principal and there is no dispute about the generation of the commission. When these glaring facts were before the Assessing Officer and he did not apply his mind, there is no question of giving him a second innings to verify the information once again after the limitation period of assessment was expired long back as per the suggestion of Sr. DR. The learned Sr. DR pointed out that in real estate industry, there is an ample generation of cash transaction and hence the impounded documents have an evidentiary value. But he has failed to draw our attention to any corroborative evidences to justify the entries in the impounded documents. 12. Be it as may, under the Income Tax Act, it is the prime responsibility to tax the correct person. The generation of cash was from the investors of the plot and the assessee has no role for the same. The understatement of sale consideration, if any, can lead to an income in the hands of the developer, and not on the assessee. The lear....