TMI Blog2012 (12) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest payment shown as Rs.49,783/- whereas Jaideep only admitted Rs.6,500/- as interest - no opportunity was provided to cross examine – matter remanded to Assessing Officer - appeal is allowed for statistical purposes - ITA Nos.2787 to 2793/Del./2010 - - - Dated:- 31-1-2012 - SHRI U.B.S. BEDI AND SHRI B.C. MEENA, JJ. ASSESSEE BY : Shri Vinod Bindal Mrs. Sweety Kothari, CAs REVENUE by : Ms. Y. Kakkar, DR ORDER PER BENCH : All these seven appeals filed by the revenue are directed against the order of CIT (Appeals)-I, New Delhi dated 15.02.2010 for assessment year 2001-02 and dated 23.03.2010 for the assessment years 2002-03 to 2007-08. 2. Ground Nos.1 7 in all the appeals, ground no.6 in all the appeals except in ITA No.2789/Del/2010 and ground no.8 in ITA No.2789 are general in nature and do not require any adjudication, hence dismissed. 3. Ground No.2 in all the appeals is same except the difference of deletion of amount, therefore, we are reproducing only ground no.2 from ITA No.2787/Del/2010 :- On the facts and circumstances of the case, the Ld. CIT (A) has erred in law and facts of the case in deleting the addition on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rprises or Gouri Construction or Abhinav Construction or Manish enterprises. Perusal of their booking forms seized during the course of search reveal that they are all identical to each other and in each it is mentioned that in the event of cancellation, cancellation Charges would be levied. Therefore it is clear that it is the policy of the group that such charges are being levied and the presumption is that the assessee is deducting cancellation charges in respect of all cancellations. Otherwise why should they refuse to pay back the money to Shri K.C.Khandelwal? Therefore addition of Rs.14,91,250/- being 25% of the total value of Flat/Space whose booking has been cancelled during this assessment year amounting to Rs.5965000/- is added 10 income of the assessee. 5. The CIT (A) has granted the relief by holding as under :- 4.3 I have perused the assessment order and submission and evidences placed on record by the appellant. On perusal of the evidences, it is seen that seized page referred to by the Assessing Officer is a letter to M/s. Usha Construction Co. by Mr. Parmod Ahlawat requesting for cancellation of plot. The same is not concerned with the assessee at all as both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rwal given in the legal suit filed by one Mr. Kailash Chand Khandelwal, it is seen that Mr.Manish Aggarwal stated that the said plaintiff, i.e. Mr. K. C. Khandelwal defaulted in payment of installments inspite of the repeated demands and therefore the booking was cancelled and the earnest money of Rs.4,17,425/- was forfeited. Thus it was a specific case of forfeiture of booking amount due to non-payment of installments and not of cancellation. In the said case, the Mr. Khandelwal never applied for cancellation and consequent refund. I agree with the contention that forfeiture of the booking amount due to non-fulfillment of stipulated conditions is different from charging any amount against cancellation and the same cannot be equated. Even the said statement of Mr. Manish Aggarwal does not suggest that the said amount was taken as cancellation charges. It does not suggest that cancellation charges were recovered from each buyer at the time of cancellation and were not recorded in the books of account. The statement has been given in reference to a particular case of forfeiture and it cannot be extended to apply to each and every case of cancellation on presumptions. Mere statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the search. In absence of any such evidence, no adverse inference can be drawn which can attract the additions on this count. 6.1 On the similar facts, the ITAT in the case of sister concern in ITA No.3062/Del/2010 in the case of DCIT vs. Manish Buildwell Pvt. Ltd. vide order dated 22.12.2010 has decided the issue in favour of the assessee by holding as under 17. Apropos the first issue about notional addition of cancellation charges, we find no infirmity in the order of CIT(A), in as much as the addition has been made by AO on the ground that assessee should have charged the cancellation charges from customers who cancelled their bookings. In our view the Assessing Officer cannot step into the shoes of businessman and review the business expediency of the assessee s decision of not charging cancellation charges. Assessee contends it to be in the interest of market reputation and customer s relations. It has not been alleged that assessee have received cancellation charges and did not disclose in the books. Assessee having not received any such charges CIT(A) has rightly deleted this addition. It is also noticed that the assessee has filed conformation from all the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee was charging registration charges @ 7% and was showing the same as loans and advances recoverable from the customers. According to him this was a wrong method of accounting. A similar procedure was found to have been adopted by the assessee in respect of electrification charges which were charged @ 15% and shown to be recoverable as loans and advances. According to the assessing officer these were not items of revenue expenditure since they related to the flats/space and formed part of the cost thereof and therefore they were not adjustable against the revenue of the assessee. According to the assessing officer these items of expenditure could be capitalized and added as part of the work in progress. On these facts he called upon the assessee to explain why the registration and electrification charges collected from customers cannot be added as revenue receipts. The assessee submitted that according to the system of accounting followed, the registration and electrification charges were not included either in the cost of land or in the work in progress or as cost of the project and they were rightly shown to be recoverable from the buyers. It was also explained that in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and both the methods were acceptable. It was also found by the Tribunal that when the assessee paid the registration and electrification charges they were not claimed as deduction in the profit and loss account. On these findings of fact the Tribunal agreed with the CIT(A) that the amount cannot be added. 15. The aforesaid discussion would show that the decision of the Tribunal is based on factual findings recorded by the CIT (A) with which it agreed. No material was brought before the Tribunal or before us to disturb the factual findings recorded by the aforesaid authorities. The decision of the Tribunal is not therefore open to the challenge as being perverse. Further since the Tribunal s decision is based on findings of fact recorded on the basis of the entries made in the books of accounts, no question of law can be said to arise from the order of the Tribunal on this point. Question No.5 is therefore not admitted. Facts of assessee s case are similar to the facts of Manish Buildwell (P) Ltd. s case. In view of this, respectfully following the decision of Hon'ble jurisdictional High Court, cited supra, which is in the case of assessee s sister concern, we sustain the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n his statement recorded and vide reply to question no. 5 he has admitted that he has paid interest of RS.6500/- in cash for which no receipt was issued. The assesses was asked to furnish details of delayed payments and interest charges on such delayed payments. He submitted that no such interest on delayed payments is charged. However, the seized materials present a different story. In the light of these evidences collected we therefore hold that the assessee has charged interest on delayed payments and in the absence of any data being furnished by the assessee and considering the quantum reflected in the seized documents mentioned above, we estimate the same to be Rs.5,00,000/- per annum. The same is added to the income of the assessee. CIT (A) deleted the addition by holding as under :- 6.3 I have perused the assessment order and submissions of the appellant. On perusal of the seized material it was seen that pages 1, 19, 20 of Annexure -4 and page no. 39 of the Annexure A-21 do not belong to the appellant but to other assessees of the group and therefore no adverse cognizance can be taken against the assessee for the said pages. Page 13 shows calculations made for payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y held by Mr. Jaideep. Mr. Jaideep stated in his statement recorded before the Investigation Wing to have paid Rs. 6,500/- as interest. Thus the statement of Mr. Jaideep does not corroborate with the seized material and shows that interest of Rs. 49,783/- has also not been received by the appellant. Statement of Mr. Jaideep cannot be relief upon as no opportunity to cross-examination has been given to the appellant. Thus no addition can be made for the said amount. Thus the addition of Rs.5,00,000/- made on estimated basis merely on presumptions is hereby deleted. 12. We have heard both the sides and from the record, we find that this addition was made on the basis of statement of Jaideep recorded by Investigation Wing on 3.08.2007 wherein he has admitted to have paid interest of Rs.6,500/- in cash to the assessee. The CIT (A) granted the relief on the ground that the statement recorded before the Investigation Wing does not corroborate with the seized material where the interest payment shown as Rs.49,783/- whereas Jaideep only admitted Rs.6,500/- as interest. Further, the statement of Jaideep cannot be relied upon as no opportunity of cross examine has been given to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2010 to 2793/Del/2010 and ground no.6 in ITA No.2789/Del/2010 are similar except the difference in amount and, therefore, for the sake of brevity, we reproduce ground no.5 in ITA No.2788/Del/2010 as under :- On the facts and circumstances of the case, the Ld. CIT (A) has erred in law and facts on the case in deleting the addition of Rs.1,92,513/- towards undisclosed transfer charges as recorded in seized documents holding that there was no evidence of such receipts and AO did not confront the concerned parties. In doing so, Learned CIT (A) ignored the facts that seized documents are substantial evidence of such receipts and it is in the mutual benefit of the assessee and its clients to deny such payments if confronted. 17. In this ground, the revenue has raised the issue regarding the undisclosed transfer charges of 3.6%. 18. We have heard both the sides. We have also gone through the seized material on which the addition has been made. This issue has also been considered in the case of CIT vs. Manish Buildwell (P) Ltd., cited supra. In para 10, the Hon'ble Delhi High Court has decided the issue as under :- 10. So far as the question No.4 is concerned, it is seen that b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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