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2021 (2) TMI 582 - AT - Income TaxUndisclosed investment in land - addition on the basis of statement made during the course of search and seizure proceedings - basis of analysis of the seized documents a diary in the handwriting of Sh Tushar Kumar which was found from the office premises of the company and some other connected documents thereof - HELD THAT:- Total consideration for purchase of land at Dehradun was ₹ 20, 30, 27, 000/-. Hence, it cannot be said that the amount of ₹ 3.01 Cr. has been paid in cash. Had ₹ 3.01 Cr. been paid in cash, the total cost of purchase paid in cheque as per the four sale deed should be ₹ 17,47,71,637/- whereas in reality the total amount of ₹ 20,30,27,000/- has been paid in cheque. Hence, there is no scope to treat the amount as paid in cash to be brought under unexplained investment u/s 69. Regarding the addition made by the AO of ₹ 3, 84, 00, 000 /-, we find no material to come to such a conclusion. The AO has merely subtracted the amount of ₹ 27, 14,20,134/- mentioned in the seized material which are the estimates of cost of lands and cost of sale value area, average rate, car parking and mall from ₹ 20, 30,27,000/- paid by the assessee in cheque to the farmers for purchase of the land. There was no material to corroborate such an addition, the Assessing Officer merely went back the Annexure A 21 page no. 1 to make such addition. Hence, the action of the Assessing Officer cannot be supported. The appeal of the assessee on this ground is allowed and appeal of the revenue is dismissed. Unexplained Investment in Kashipur Land - HELD THAT:- Addition has been made on a presumptive basis. There was no evidence on record reflecting any payment of cash. Further, while the land has been purchased that Sargam Estate Pvt. Ltd. and reflected in the balance sheet of Sargam Estate pvt. Ltd., no addition is called for in the case of the assessee. It cannot be said that while the cheque has been paid on behalf of Sargam Estate Pvt. Ltd. cash has been paid by the assessee. The nature and contents of the seized material do not reflect any unexplained investment in the land purchased in Kashipur. Hence, we decline to interfere with the order of the ld. CIT (A) on this issue. The appeal of the revenue on this ground is dismissed. Amount received from Harayana Citizen CHS - HELD THAT:- Shri K. G. Rastogi was a construction supervisor at the site. The AO held that from the diary of Shri K.G. Rastogi, the order payments “ appear to be made in cash”. There was no evidence that cash has been paid to the assessee company or to the Director of the assessee company. Even the cheque entries were not proved to be encashed in the bank account of the assessee or the Director. The presence of share certificate, application forms and correspondence at the premises of Shri Tushar Kumar and Shri Mohan Vohra swerved the Assessing Officer to make the addition. The society clearly submitted before the AO that he was neither a member nor office bearer of the society. He was a work supervisor for few contractors of HCCGHS and also to other societies. No link with the society has been found as per the statement of the society. The allegation of the revenue that the HCCGH society is a benami of the assessee company cannot be held to be a valid statement as the society is a separate distinct entity and registered with Registrar of Cooperative Societies, Chandigarh. There was no proof that the society has given money in cash to the company or is Director. In the absence of any material depicting or indicating payment of cash to the assessee, no addition is called for. Hence, we decline to interfere with the order of the ld. CIT (A) on this ground. The appeal of the revenue on this ground is dismissed. Undisclosed expenditure in Wings CGHS - AO made addition by holding that the MoU mentions about payment of amount by Shri Tushar Kumar to Shri Ajay Jain whereas the facts speak otherwise - HELD THAT:- During the search itself, it was conveyed that Shri Tushar Kumar did not want to enter into an agreement with Shri Ajay Jain as per the MoU. The said MoU was also not signed by Shri Tushar Kumar. MoU cannot be treated as executed. There was no evidence of payment of cash. The seized material did not mention any payment of cash. Hence, it cannot be held that the assessee has paid an amount of ₹ 1.80 Cr. for taking the control of the WCGHS which is a Co-operative Society registered with Registrar of Cooperatives. Hence, we decline to interfere with the order of the ld. CIT (A). The appeal of the revenue on this ground is dismissed. Undisclosed investment in M/s Sargam Estate Pvt. Ltd - HELD THAT:- As gone through the facts on record and balance sheet of M/s Sargam Estate Pvt. Ltd., the share capital of ₹ 1, 00, 000 /- remained constant as at 31.03.2007 and as at 31.03.2006. The share application money as at 31.03.2006 was ₹ 32, 18, 000 /- which was refunded to the assessee company after receipt of fresh share application money of ₹ 53, 86, 000 /- by M/s Sargam Estate Pvt. Ltd. Instead of enquiring, the source of application money, the AO brought to tax the amount of share application money refunded to the assessee by M/s Sargam Estate Pvt. Ltd. Hence, the addition made has been rightly deleted by the ld. CIT (A). Unexplained advertisement expenses - HELD THAT:- CIT (A) has rightly deleted the addition as the total expenditure debited on account of advertisement Unexplained investment in stock of jewellery - Addition on account of GP - HELD THAT:- Since there is a panchnama drawn in the case of M/s GTM Jewellery Mart Pvt. Ltd., stock inventory was made in the said company and keeping in view the fact that M/s GTM Jewellery Mart Pvt. Ltd. is a separate assessable entity, keeping in view the fact that the difference is due to difference in price but not in quantity, we hold that the addition cannot be made in the hands of the assessee in the instant year.
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