TMI Blog2015 (4) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... sion income at 2 per cent. of ₹ 4.30 crores received by the assessee on behalf of M/s. Splender Land Base Ltd., as per agreement seized during the search and seizure operations at the premises of Sh.Vipin Verma of Delhi. Out of the same agreement, the assessee had received cash of ₹ 70 lakhs, which the assessee claimed that the same has not been received and M/s. Splender Land Base Ltd. has also stated that the said cash has also not been paid. Therefore, on the basis of assumption and presumption, the learned Commissioner of Income-tax (Appeals) cannot come to the conclusion that the said cash has actually been received by the assessee. If the said cash has been received by the assessee then the said cash has been received for and on behalf of M/s. Splender Land Base Ltd. and the same has been paid to the farmers and such receipt can be treated as capital receipt and only a commission income at 2 percent can be added as income in the hands of the assessee, though the said amount of ₹ 70 lakhs have been added in the income of M/s. Splender Landbase Ltd. Therefore, there cannot be double taxation in the hands of the assessee unless proper agreement has been execute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax (Appeals) while upholding the addition of ₹ 70 lakhs under section 69 of the Act has erred in not considering that onus on the Department to prove that the assessee had made any investment was never discharged. 7. That the learned Commissioner of Income-tax (Appeals) has erred in not considering that when the Assessing Officer had accepted the account books as produced during the assessment proceedings, no addition could be made by him to the total income as computed from the audited financial statements based on such books of account. 8. That the learned Commissioner of Income-tax (Appeals) has erred in not considering that in view of the fact that Splendar Land Base Ltd. denied to have made any payment in cash of ₹ 70 lakhs no addition under section 69 of the Act could be total income of the assessee. 9. That above all, the learned Commissioner of Income-tax (Appeals) while upholding addition of ₹ 70 lakhs has erred in not considering that under the provisions of section 69A of the Act any amount or valuable assets, if at all established so cannot be added to the total income of two assessees, i.e., firstly in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deals regarding sale of land owned by farmers to well known builders and colonisers via DLF Commercial Companies Ltd., Splender Land Base Ltd. and its subsidiaries and others for which the assessee earns commission at settled percentage of the sale proceedings. During the course of requisition proceedings under section 132 a bunch of 8 loose papers were found in possession of Sh. Vipin Verma, out of which, papers at serial numbers 1 to 4 is a copy of agreement dated September 30, 2006 between the assessee and M/s. Splender Land Base Ltd. New Delhi in respect of purchase of land about 68.45 acres of land by the assessee for M/s. Splender Land Base Ltd. at ₹ 81 lakhs per acre. However, the agreement is not signed by M/s. Splender Land Base Ltd., New Delhi, the buyer party. As per its paragraph 2 at page 3, the assessee-company has received ₹ 5 crores as detailed below : (i) ₹ 20 lakhs in cash on September 1, 2006, (ii) ₹ 40 lakhs by demand draft No. 387890 dated September 1, 1996 of Duetche Bank, (iii) ₹ 30 lakhs by demand draft No. 394697 dated September 7, 1996 of Duetche Bank, (iv) ₹ 2 crores by cheque No. 092230 dated October 13, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Splender Land Base Ltd., the same should not be assessed in its hands. From the above facts, the Assessing Officer came to the conclusion that the appellant-company is engaged in real estate business outside its books, i.e., without recording all such business dealings in its books of account. Further, it has been held that it is an undenying fact that cash of ₹ 70 lakhs has been received by the assessee-company. Since the assessee failed to account for this transaction of ₹ 70 lakhs in its books of account and neither the same has been disclosed in its return of income requisitioned under section 153C, the Assessing Officer added it as assessee's undisclosed income from unexplained sources by invoking the provisions of section 69A of the Income-tax Act, 1961. 4. The learned Commissioner of Income-tax (Appeals) confirmed the action of the Assessing Officer and also enhanced addition to ₹ 8,60,000 being commission at 2 per cent. accrued on ₹ 4.03 crores. 5. Learned counsel for the assessee, Sh. Sudhir Sehgal, made the written submissions before us and relied upon the submissions made before the learned Commissioner of Income-tax (Appeals). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper books 5 and 6. It was argued that the business of the assessee is to arrange land on behalf of the companies and get the land registered directly from the farmers to such builders, i.e., M/s. Splender Land Base Ltd. Our attention was invited by Sh. Sudhir Sehgal, learned counsel for the assessee, that the assessee does not own immovable property in the audited balance-sheet and whatever has been received is an advance receipt and cannot be taxed as income, since the assessee is a commission agent and maintaining accounts on mercantile system, which has been accepted by the learned Commissioner of Income-tax (Appeals) is undisputed. Moreover, the said sum of ₹ 70 lakhs is alleged to have been added as income in the hands of the assessee, argued by learned counsel for the assessee that the said income has been added in the hands of M/s. Splender Land Base Ltd. and there cannot be double taxation and the said amount cannot be brought to tax in the hands of the assessee and it is against the scheme of the assessee. Moreover, the addition cannot be made under section 69A which, in fact, has been made in the hands of M/s. Splender Land Base Ltd. has been argued by learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lhi-Trib) 2013. 8. The learned Joint Commissioner of Income-tax (Departmental representative), Mr. Mahavir Singh, on the other hand, argued that all money transactions of ₹ 20 lakhs and ₹ 50 lakhs totalling ₹ 70 lakhs have not been declared by the assessee, cannot be disputed, even if the agreement has not been signed by M/s. Splender Landbase P. Ltd. The learned Departmental representative, therefore, relied upon the orders of the learned Commissioner of Income-tax (Appeals) and that of the Assessing Officer. 9. After hearing the parties and perusing the material available on record, we are of the view that the agreement is unsigned by the party, M/s. Splender Land Base Ltd. cannot be disputed that the assessee is acting as a commission agent, which has been admitted and accepted by the learned Commissioner of Income-tax (Appeals), who has computed the commission income at 2 per cent. of ₹ 4.30 crores received by the assessee on behalf of M/s. Splender Land Base Ltd., as per agreement seized during the search and seizure operations at the premises of Sh.Vipin Verma of Delhi. Out of the same agreement, the assessee had received cash of ₹ 70 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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