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2014 (4) TMI 20 - AT - Income TaxAddition made u/s 68 of the Act - Unaccounted cash payments – Assessment u/s 153A of the Act - Held that:- The denial by both the parties, consequent to impounding of the cash receipt from the assessee's premises was only self- serving - It is a business practice of paying amounts in cash in real estate transactions and evidencing them is generally not possible, unless there are receipts given by the parties affirming the receipt of cash - More so when cash was paid outside books of accounts. As seen from this transaction, even though a development agreement was entered in October, 2006, the transaction was not concluded and the owners who were supposed to get developed area towards their share could have asked for as compensation or for further payment in view of the enhanced values in the market. There could be re-negotiations and as part of that assessee could have paid the amounts - Since assessee admits that there was re- negotiations/settlement at that point of time, it has to be considered that assessee indeed paid the amount to the owners/consenting parties at that point of time and denial subsequently was certainly a self-serving one - The details of payments he could not confirm - paying amount to the owners by way of cash even when it is only a development agreement was not ruled out - a cash receipt was found in the course of proceedings in the assessee's premises, the assessee could have paid the amount out of its unaccounted sources and the receipt has to be believed as genuine payment of money – thus, the order of the CIT(A) upheld – Decided against Assessee. Addition made on account of low profitability – Held that:- As seen from the computation of income filed by the assessee there was no denial of rental income - The AO admitted the later figure while arriving at the income declared by the assessee whereas, according to the assessee, the gross income from the rental of the property was to be taken at Rs.1,54,65,736/-, as per the statement recorded in the course of search - Since the difference arose due to payment of municipal tax and statutory claim, the basis for making the addition by the A.O. itself was wrong - There is no other issue to be considered as the assessee has shown the profits and loss from various projects and also admitted an amount of Rs.70,00,000/- in the course of search - Just because there is a shortfall in declaring the income after claiming statutory deductions, the same cannot be considered as shortfall in declaration of the income when AO did not find any other shortfall or mistakes in the accounts maintained by the assessee – thus, the contentions of the assessee are accepted and addition made by the AO set aside – Decided in favour of Assessee.
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