TMI Blog2018 (6) TMI 1692X X X X Extracts X X X X X X X X Extracts X X X X ..... e plots when they are registered. AO himself has stated that up to 31st October 2001 only 12 plots was sold and balance 4 plots were sold later on. Further the assessee has also borrowed jointly sum from somebody on interest and interest cost thereon as been reduced from the profit. With respect to the sale of 12 plots, the assessee has complete details about the name who bought the plot of land, the documented sale price etc. These facts are not disputed. Therefore based on all these facts, it cannot be said that the papers are merely an estimate or projection. Assessee is merely a broker and whatever profit arises would squarely falls on the shoulders of the owner of the property and not on the broker - On the similar facts and circumstances in the case of the assessee for different years, we have already dealt with this argument. For the similar reasons we also reject this contention of the assessee. Furthermore we are of the opinion that documents shows emphatically and clearly that in the whole project the assessee was also partner along with the managing director of the company sold plot. These facts were not denied by the assessee further assessee did not produce on its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed these expenditure. Therefore, there is no information available that assessee incurred this expenditure. Therefore, we do not find any infirmity in the order of the Ld. assessing officer in not granting deduction of this amount from the gross profit shown by the assessee. We do not find any infirmity in the order of the lower authority in taxing the 50 % of the profit based on information contained in the loose papers found during the course of search. However, with respect to the determination of overall profit we direct the ld AO to reduce the sales consideration by ₹ 1985000/- because of difference in sale price and further adjustment because of compensation paid of ₹ 5.50 lakhs. Accordingly ground no three of the appeal is partly allowed with above direction. - ITA No. 1609, 1608, 1610, 1611 and 1612 /Del/2011 (Assessment Year: 2000-01, 2001-02, 2002-03, 2003-04 and 2006-07) - - - Dated:- 25-6-2018 - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER Assessee by: Dr. Rakesh Gupta, Adv And Shri Somil Aggarwal, Adv Revenue by: Smt Paramita Tripathy, CIT DR ORDER PER PRASHANT MAHARISHI, A. M. 1. Thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Ld. CIT(A) has erred in law and on facts in not granting the benefit of telescoping while confirming the addition made by Ld. AO. 6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A, 234B and 234C of the Income Tax Act, 1961. 4. Brief fact of the case is that the assessee is an individual. Search and seizure operation was conducted at the residential premises address of the assessee on 04.08.2005. The assessee is a partner in a real estate broker concern namely M/s. Reliance Estate Agency along with Shri S.D. Kathuria. During the course of search, certain loose papers were found and seized from residential premises of the assessee. Consequent to that notice u/s 153A was issued on 08.05.2006. Assessee filed the return of income on 16.06.2006 showing income of ₹ 216650/-. The assessment u/s 153A read with section 43(3) of the Act was passed on 24.12.2007 determining the total income of the assessee at ₹ 2760955/-. The only addition made in the hands of the assessee is with respect to undisclosed income at ₹ 2544305/- of commission rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,11.00 1-9-01 0.375 N.J. 10.00 Lab 0.100 0.100 0.500 0.360 I tax etc 0.080 1,36,15,000 (-) 0.245 133.70.000/- It can be seen from the above break up that an amount of 38.00‟, which would actually be abbreviated form of ₹ 38,00,000 (as the total of all amounts is ₹ 1,36,15,000) has been paid by cheque. 4.3 Enquiries were made with the present owner of plot no. 42, Sector-6, Faridabad. It was found that the plot is owned by M/s Avon Tubetec Pvt. Ltd, which is a company assessed at Delhi. The Director of the company who signed the sale deed on behalf of company is Ashwani Mahajan. Two sale deeds were executed for the sale of a total area of 10083.33 sq. yds for a sale consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich has been registered on 29.03.00. 4.5 During the course of assessment proceedings for the assessment year 2000-01, the assessee was asked to furnish various details including explanation/detail in respect of documents seized /impounded from the residence of the assessee, residence of Shri S.D.Kathuria, business premises of M/s Reliance Estate Agency during search/survey on 04.08.2005. Vide questionnaire dated 11.05.2007, note sheet entries dated 02.09.2007, 20.09.2007, 26.09.2007, 05.10.2007. No complete details/explanation in respect of above documents were filed. The assessee has filed part reply vide letter dated 13.09.2007, 20.09.2007 12.10.2007. The assessee was again asked to furnish complete details/explanation in respect of documents Seized impounded during the search/survey operation on 04.08.2005. He was further asked to give reasons as to why the transactions recorded on the above seized/impounded documents should not be treated as unexplained and be added as undisclosed income for the relevant year vide letter dated 15.10.2007. Again the assessee has not furnish any details and requested for adjournment. Case adjourned to 24.10.2007. No details/explanation i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 4 is as under: That having regard to the facts and circumstances of the case Ld. A.O. has erred in law and on facts in making addition of ₹ 25,44,305/- allegedly on account of commission earned merely on the basis of surmises and conjectures and without any evidence or basis and without affording adequate opportunity of hearing. 5.1 In support of this ground of appeal, the learned AR vide his written submissions has submitted as under: 'GROUND NO. 4: Ld. A.O. has made addition of ₹ 2544305/- on account of alleged commission earned by the appellant in 'respect of sale of Plot No. 42, Sector 6, Faridabad. The addition has been made by Ld. AO on the basis of page 50 to 54 of Annexure A-l on the ground that plot No. 42, Sector-6, Faridabad was sold to Mr. Ashwani Mahajan by M/s Gallant Engineering Enterprises(P)Ltd. through its MD Shri Sudhir Kumar Bahal and the total profit of ₹ 5088610/- was earned which has been paid/shared half to the appellant I.e. Shri Navneet Jhamb to the extent of ₹ 2544305/-. Copies of page 50-55 of Annexure-Al seized from the residential premises of the assessee is enclosed in the paper book and yo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as submitted to Ld. A.O. too during the course of assessment proceedings of the appellant and that of the firm namely M/s Reliance Estate Agency that assessee is in the business of real estate commission agency as partner of M/s Reliance Estate Agency. Your good self would kindly appreciate that in this kind of business, number of persons meet the assessee with different facts and figures, calculations are made, tentative profit or losses are worked out and various permutation and combination are thrown as suggestions by/ to the person engaged in such kind of business. Therefore, to ascribe any income on the basis of such jottings in the hands of the assessee cannot be justified. Moreover, it is matter of common knowledge that a commission agent receives the commission and is not concerned with the profit or loss which belongs to the owner of the property. As per the admitted facts, the owner of impugned Plot no. 42, Sector-6, Faridabad is in the name of M/s Gallant Engg. Electrical (P) Ltd. and therefore any profit if at all is there, though denied, cannot be treated to have been earned and realized by the appellant and added in the hands of the assessee. Your go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on - Additions based on jottings on paper could not be sustained in the absence of any corroborative material or evidence on record for rejecting the assessee's contention that jotting was an estimate and not actually expended amount - ADDL. CIT VS. PR 4 SANTAHL UWALIA 92 TTJ 464 (CTK). Computation of undisclosed income-No addition can be made on the basis of a dumb document in the absence of any corroborative material -N.KMALHAN VS. DY.CIT 91 TTJ 938 (DEL 'C'). Burden is on the revenue to establish that figures appearing in the loose papers found in search constituted undisclosed income of the assessee and taxable. Monga Metals (P) Ltd. Vs. ACIT 67 TTJ 247 (All) Since the loose papers did not indicate name of assessee, from list of persons given in loose papers it could not be inferred that either any loan or any advance was given to or received from those persons, and since total amount on those loose sheets indicated a very small amount, those loose papers alone would have to be considered as dumb papers having no evidentiary value and no addition could be sustained on the basis of them. Chander Mohan Mehta Vs. ACIT 71 ITD 245 (Pune): 65 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that commission of ₹ 39,900/- has been earned by M/s Reliance Estate Agency on the sale of plot No. 42 which was sold to Mr. Ashwani Mahajan by M/s Gallant Engg. Enterprises (P) Ltd and the assessee firm was acting merely as an agent on behalf of the seller. 5.4 I have considered the submissions of the AR. In this case during the course of search operation documents as per annexure A-l were seized from the residential premises of the assessee on 04-08-2005. Page No. 50 to 54 of A-1 pertain to plot No. 42, Sector-6, Faridabad. Page 53 is a MOU containing terms of understanding between seller and buyer. As per clause I seller will execute sale deed for an area of 3750 sq yards out of 10083 sq yards to the purchaser. AO noted that pages 50-52 contain calculations relating to profit from sale of above plot as under: Selling Price 1,68,38,610/- 1,68,38,610/- C.P. 1,12,50,000 1.12.50.000 5588610 5588610 27.94.305 (-)500000 25.44.305 Amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ea of 10083.33 sq yrds for sale consideration of 38 lacs as noted on page 4 of asstt order. These documents also show the amount paid as noted on page 2 and 3 of asstt order. From the facts discussed above and also in the ast order it is established that transaction of sale of plot has actually taken place. Though in the course of asstt proceedings after having been given repeated opportunities assessee submitted that these document do not belong to him and same seem to have come into existence in the ordinary course of business of property, however, no authenticated evidence to prove the above contention was filed even though the above documents in question revealed very precise and meticulous details of sale of plot which contained not only the selling price, cost price, but also the amounts paid on different dates. Above documents, therefore, cannot be called dumb documents. The phrase paid 60.00 up to 21/6/00 noted on page 52 proves beyond doubt that various transactions noted on above documents have actually taken place in respect of which amount of ₹ 60 lacs has been paid up to 21-6-2000. As noted by the AO pages 50-55 of A-l give detailed account of transaction with br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seized papers is merely an MOU between buyer and seller and appellant is neither the seller nor the buyer. He further stated that page 54 even otherwise is beyond the period covered u/s 153A of the Act. He further stated that in none of the pages the name of the assessee appears. Even otherwise, he submitted that there is no reason before the ld AO to say that the income is earned by the assessee in this year. He further stated that as the assessee is engaged in the business of commission agent, he meets many persons during the day and many persons come with different facts and figures. He submitted that many permutation and combination of profit are computed hypothetically to take business decision. Therefore, the presumption of any income based on such papers is not proper. He further held that plots are owned by M/s. Gallant Engineering Electrical P Ltd and therefore, any profit to be attributed shall be attributed to that party. He further referred to the decision of the coordinate bench in ITA NO. 3817/Del/2010 for Assessment Year 2001-02 wherein, the search was also conducted on Manav Rachna Group on 04.08.2005 along with the assessee wherein, the seized paper suggested that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 15 of the statement wherein, the assessee has submitted that he is not in a state of mind to reply to the particular document and further when he confirmed that the same are in the handwriting of the assessee. The ld AR further referred to page 51 and 52 of the seized material wherein, the specific name of NJ‟ is mentioned. She therefore, stated that NJ‟ is none other than the assessee himself. She further stated that all those orders of the various coordinate benches and CIT (A) are referred to by the ld AR are with respect to the legality of the assessment proceedings. She submitted that one CIT (A) has also confirmed the addition. She further stated that the decision of Avon Tubetech relied upon by the ld AR does not apply to the facts of the case in view of the para 2.7 of the order. She submitted that in that particular case there was no independent enquiry, no supporting agreement, no receipts etc was found. He submitted that in the present case there are clear-cut indication in the documents itself which shows that the assessee has earned the income. 9. In rejoinder, the ld AR further submitted that (NJ) does not mean the name of the assessee. He further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments, is to be proved by the assessee because, he is the owner of the documents. In the present case the document, itself shows that the assessee has earned income of ₹ 2544305/- during the year. The assessee also could not explain the documents seized before the lower authorities. The most of the transaction of the paper are dated transaction and the lower authorities have corroborated them with the actual registered deeds between buyer and seller. The documents were not at all explained by the assessee otherwise by giving any concrete evidence. The seized documents show that there are transaction of sale of plots where in the profits have arisen. Name of the assessee is shown in those documents. Ld AO asked assessee to explain those documents but assessee took shelter under the legal arguments and never explained the documents. He also did not attempt to explain that how his name crops up in those documents and to whom this income belongs. Assessee could not show that income stated in the seized document is not of the assessee but of somebody else. In view of the overwhelmingly apparent contents of the documents seized, absence of any contrary evidences produced by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the legal and technical issue only. In fact, the assessee could have proved the contents of the paper wrong by firstly explaining the papers and nature of transactions contained therein with the income contained therein belonging to whom, it is not done by the assessee at any stage of the proceedings. He also did not attempt to produce the buyer and the seller both, as his witnesses, to show that no such profit has accrued to him and it has accrued to the seller. He could have also explained every entry of the seized documents, but he has not done so. In absence of any explanation or any attempt by the assessee to rebut the presumption available from the seized documents, the revenue authorities are justified in making addition of ₹ 2544305/- in the hands of the assessee. f. With respect to the several decisions in the case of the seller, where the addition has been deleted, does not help the case of the assessee for the simple reason that those additions have been deleted only on the technical grounds and no such grounds has been raised by the assessee. g. The assessee has further relied upon the decision of the Hon'ble Delhi High Court in case of CIT Vs. Prem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed assessment order u/s 153A/143(3) without assuming jurisdiction as per law and without recording requisite satisfaction as per law and without obtaining requisite approval as per law and without complying with the other mandatory conditions envisaged under the Act and has erred in not computing the alleged income in terms of the provisions of section 153 A. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making an addition of ₹ 6,97,834/- as undisclosed income allegedly being profit on sale of plots merely on the basis of surmises and conjectures and without any evidence or basis. 4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the assessment in violation of principles of natural justice in as much as passing the impugned order by recording incorrect facts and findings and without providing opportunity of cross examination and without confronting the entire adverse material used against the assessee and without providing adequate opportunity of hearing. 5. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... project was ₹ 3.24 crore and the gross profit is of ₹ 1.34 crores. Interest was also shown to have been paid of ₹ 12.77 lacs resulting into net profit of ₹ 1.21 crore that was shared by Shri Manmohan Singh, the seller and Shri Navneet Jhamb assessee in 50:50 ratio. The cheque amount of the transaction is most of the cases exactly matched with the registered deed. The above calculation was also found corroborated at another page at 55 at Annexure A2 in case of four plots. Page No. 57 of annexure A1 also showed the revised calculation of the profit and further profit details of the four plots sold after 31.10.2001 and 12 plots sold prior to that date. Based on the above documents the ld AO found that the profit of ₹ 2.18 crores was shared between Shri Manmohan Singh and the appellant equally where in the share amounting to ₹ 10923399/- is belonging to the assessee and is chargeable to tax in the hands of the assessee. As the plots from which the income was earned is sold in different years, the ld AO bifurcated total income on the basis of the year in which plots are sold and determined the income of respective years. He accordingly determined the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning land was acquired for roads and green belt. The released land was sub-divided into sixteen industrial plots of varying sizes as per plan approved by the town planner, MCF. The land at Vill. Jharsentli was subdivided into sixteen industrial plots whose details were obtained from the Municipal Corporation of Faridabad. The details of plots as per sub-division plan have been tabulated as follows:- Table 1: Details of plots at Vill Jharsentli Plot No. Area in Kanals/Marlas Area in Sq. Yards Dimensions A-l 2K 1230 66 X165 A-2 2K 1210 66 X165 A-3 2K 1210 66 X165 A-4 2K-9M 1476 80 -6 X185 A-5 1K-1M 650 65 X90 A-6 17M 500 50 X90 A-7 17M 500 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 IK 6M - do- Flowmore Engg (P) Limited through its Director Sh. Anshu Mittal 29-Sept- 00 1980000 B-l 10KV - do- Indication Instruments Limited through its Director Sh. T.M. Lalani 16-Jul- 01 1980000 B-2 2K -do- Meta Forge (India) 19-Oct-01 500000 B-3 2K - do- Survival Die Cast Pvt Limited through its Director Sh. R.B. Singh 28-Feb- 01 490000 B-4 2K 2M - do- Reliant Engineer 23-May- 02 200000 B-5 2K 2M -do- Sh. P.P. Nagpal 27-Apr-01 495000 B-6 10K -do- Gurdayal Nirman 30-Dec- 1800000 7M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... METAFORGE 1313000 500000 1213 412 19.10.2001 B3 SURVIVAL 1331000 490000 1213 403 28.02.2001 B5 NAGPAL 1277000 495000 1277 387 27.04.2001 4.3 However, the calculations contained on pages 56-62 of Annexure A-l and pages 13 to 17 and 53-57 of Annexure A-2 shows that the actual sale consideration of the 16 plots tabulated in Table 1 and 2 is much more than what is shown in the registered sale deeds. In fact the aforementioned documents contain detailed calculations of profit from sale of plots belonging to M/s Indo American Electricals Ltd at village Jharsentli. Study of the documents show that a substantial part of the total consideration has been accepted in cash which is not reflected in the registered deed. Only the amount disclosed as cheques has been disclosed. Page 61 of Annexure A-l clearly details the cash and cheques amount on plots tabulated in 1 able ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 777000 1277 Paid to msingh 2350000 B5 NAGPAL 1277000 495000 782000 1277 Sale b2 713000 807760 B6 Not sold 6250000 1980000 4270000 6250 Sale A6 100000 B7 Not sold 6428000 1825000 4603000 6428 813000 B8 Not sold 8016000 1980000 6036000 80.16 Road exp. 300000 Total 45891800 15000000 30891800 45214 Electricity 100000 Land Sold AVG 1029 per Sq Yrds Paid msingh 407760 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Interest Net profit Nov to jan 02 17400 Tentative MS 6083380 250000 5833380 Security NJ 6083380 750000 5333380 Gift to com 25000 Paid to msingh at Hospital on 19jan 50000 ✓ Paid to msingh 500000 Paid msingh 200000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of ₹ 2350000/- made to Manmohan Singh have been deducted. The backside of page 55 details profits earned on the remaining plots i.e B4, B-6, B-7 B-8. Sale amount of these plots has been calculated at ₹ 2,02,23,000/- and further an amount of ₹ 62,85,000- has been shown as payable to M/s Indo American Electricals Ltd. This amount is also the sum of the cheques component of sale consideration of plots B4, B6, B7 B8 as detailed on page 61 of A-1. An amount of ₹ 26,50,000/- on account of cash expenses has been further subtracted from this amount to get a profit of ₹ 1,12,88,000/-which has been divided equally between Sh Navneet Jhamb and Sh Manmohan Singh. 4.7 An examination of page 57 of A-1 shows a final revised profit statement prepared as new calculation‟. The first column calculates total profit of ₹ 1,21,66,760/- with a profit of ₹ 60,83,380/- in the hands of Navneet Jhamb and Manmohan Singh. The amount of ₹ 1,21,66,760/-has been taken from page 61 of A-l and is n account of profit details of 12 plots sold upto 31.10.01 The second column calculates total profit of ₹ 66,40,601/- with a profit of ₹ 33,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B-8 Total 32876800 11030001 10923399 10923399 4.9.1 During the course of assessment proceedings for the assessment year 2003-04, the assessee was asked to furnish various details including 'explanation/details in respect of documents seized/impounded from the residence of the assessee, residence of Shri S.D.Kathuria, business premises of M/s Reliance Estate Agency during search/survey on 04.08.2005. Vide questionnaire dated 11.05.2007, note sheet entries dated 13.09.2007, 20.09.2007, 26.09.2007, 05.10.2007. No complete details/explanation in respect of above documents were filed. The assessee has filed part reply vide letter dated 13.09.2007, 20.09.2007 12.10.2007. The assessee was again asked to furnish complete details/explanation in respect of documents seized/ impounded during the search/survey operation on 04.08.2005. He was further asked to give reasons as to why the transactions recorded on the above seized/impounded documents should not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alculation of alleged profit in the notice. Moreover, over and above the cost price, the EDC charges of ₹ 1,10,30,00/- have also been paid in connection with the above project as mentioned by your good self only in the notice and based upon the information gathered from MCF Faridabad regarding EDC charges paid to them in connection with this project. Your goodself would appreciate that the tentative profit has been worked out at different stages and different sheets by the clients but in actual there is hardly any alleged profit left after taking into account the cost price of ₹ 3,24,48,040/- and EDC of ₹ 1,10,30,001/- and further expenses as mentioned at Page 61 of 373400/-. It again shows that all the figures on these pages are were calculations of tentative/estimates/projections of profit and expenditure incurred at different stages relating to the project by the client. The only payment shown on these pages as made to Navneet Jhamb at Page 61 mentioned is of ₹ 2,07,760/- upto a particular stage and which in any case is covered within the total amount of commission received. In view of the above your goodself will appreciate that to attr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is obvious that the assessee in his individual capacity along with Sh Manmohan Singh sold 16 plots in Jharsentli and made profits on the sale of the aforementioned plots after TML Investments Ltd backed out of the transaction with M/s Indo American Electricals Ltd. The cash profits arising out of sale of the said plots were not reflected in the books of account or the return of the assessee for the relevant years. This is clear from an examination of the following evidence: (a) It is clear from the above that the calculations detailed on page 61 of A-l pertain to sale of plots A-l to A-8 and B-l to B-8 subdivided on the land belonging to M/s Indo American Electricals Ltd. These calculations show the cheque amounts and cash amounts received on account of the sale of plot. For instance plot A-l was sold to one GL Verma for a sum of ₹ 13,31,000/- out of which 4,95,000/- is the cheques amount shown in the registered deed and 8,36,000/- is the cash amount received and not reflected as income of the assessee in his books of account or his return for the relevant year. The total sale price of the plots has been calculated at ₹ 4,58,91,800/- from which the cost of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld 16 plots in Jharsentli and made profits on the sale of the aforementioned plots after TML Investments Ltd backed out of the transaction with M/s Indo American Electricals Ltd. The cash profits arising oik pf sale of the said plots were not reflected in the books of account or the returfi of the assessee for the relevant year. As regards the contention of the assessee that the EDC charges of ₹ 1,10,30,000/- paid over and above the cost price in connection with the above project has not been considered for calculating the alleged profit is not correct. It has been gathered from MCF that total payment received from IAEL for release of land was ₹ 1,10,30,000/-. Hence the considering of EDC charges of 1,10,30,000/- in the hands of the assessee does not arise. In view of above facts the contention of the assessee is not acceptable. Since, the document clearly shows that the transaction has taken place and the assessee has earned total profit of ₹ 1,09,23,399/- out of which profit of ₹ 6,97,834/- pertains to assessment year ^0di-u^ on' sale. Hence the profit of ₹ 6,97,834/- pertaining to assessment 2u01-uz is added to the assessee‟s taxable incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 1,21,66,760/-. The lower portion of this document would show again some tentative profit but this time a new figure of ₹ 66,40,601/-. Page 58 of Annexure A-l would show that again it is unauthenticated, does not bear the name or the signature of the asses see and is not even in the handwriting of the assessee. It is equally important to submit that these documents were found by the search team as the loose documents and were not even part of any books or any pad or any diary which prove that these depict any real transactions or profit as alleged by Ld. AO and thereafter added in the hands of the appellant. Page 59 of Annexure A-l again is unauthenticated, unsigned document and does not bear even the name of the assessee. It also refers to the word tentative profit . Page 60 of document No. A-l is unauthenticated and unsigned loose document and is not in the handwriting of the assessee. The name of the assessee appears on this page but a figure of ₹ 2,07,760/- is mentioned there against but it cannot lead to Ld. A.O. for making the impugned addition of this much of amount or for reaching to the conclusion as reached by Ld. A.O. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it at that stage and does not want to join issue with A.O. on that score as of now with the prayer for liberty to raise contentions later on when used against the appellant. Ld. A.O. has mentioned in para 4.4. at page 7 of the assessment order that for instance plot A-l was sold to one Mr. G.L. Verma for a sum of ₹ 13,31,000/- out of which ₹ 4,95,000/- is the cheque amount shown in the registered deed and ₹ 8,36,000/- is the cash amount received and was not reflected in the income of the assessee in his books of accounts or in his return. It is submitted in reply to this adverse observation that when the seller was M/s Indo American Electrical Ltd. and the purchaser was Mr. G.L. Verma, where was the occasion for the assessee to show any profit or loss arising on this purchase / sale transactions in his return of income even if the allegation of cash made by Ld. A.O. is accepted for the sake of academic interest? Ld. A.O. mentions in para 4.4 himself that the gross profit in respect of these plots was ₹ 1,34,43,760/- but Ld. A.O. when it comes to the taxing in the hands of the assessee, calculated the alleged profit at ₹ 2,18,46,799/- at pag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how arbitrary could Ld. A.O. become when he ignores even the apparent figures appearing on the seized documents just to make addition. In fact, all these loose documents have come in to existence in detailed and exhaustive submissions have already been made in other years and in the cases of the firm namely Reliance Estate Agency and thus no credence can be lent to these documents for the purpose of making addition as done by Ld. AO unfortunately. Thus the addition made by Ld. A.O. by presuming without any material so many things cannot be approved. 5.2 In this case written submissions of the AR were sent to AO for his report. AO submitted his report vide his common letter No. ACIT/CC-I/FBD/08-09/1079 dated 28-01-2009 for AYs 2000- 01 to 2006-07 copy of which is enclosed with this order. 5.3 Copy of above report was given to the assessee for his rejoinder. Assessee made his submissions for AYs 2000-01 to 2006-07 vide common letter dated 21-8-2009 copy of the same is enclosed with this order. 5.4 I have considered the submissions of the AR. In this case during the course of search operation certain documents as per annexure A-l and A-2 were seized from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to IAEL at village Jharsentli. As per these documents substantial part of total consideration has been accepted in cash which is not reflected in the registered deeds. Only the amount disclosed as cheques has been shown. The details of cash and cheque amount received on the sale of plot has been given on page 61 of A-l seized from residence of Sh. Navneet Jhamb and the same has been noted by the AO in table 4 page 6 and 7 of asstt order. As noted in the assessment order the sale price of the plots has been calculated at ₹ 4,58,91,800/- from which the cost of project of ₹ 3,24,48,040/- (including cost of land of ₹ 2 crores) has been deducted to calculate the gross profit of ₹ 1,34,43,760/-. On the basis of above and also on the basis of entries made on page 55 of annexure A-2, page 57 of A-l and after considering the submissions of the assessee AO concluded that the assessee has earned total profit of ₹ 1,09,23,399/- out of which profit on sale of plots of ₹ 23,37,343/- pertains to asstt year 2002-03 the year under consideration and accordingly made the addition of above amount. Assessee however has contended that page No. 56 of A-l does &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents were found and impounded. As per documents found and seized as has been discussed in this order above and also in the asstt order assessee has sold 16 industrial plots on which consideration in cash over and above the cheque amount has also been received. While the cheque amounts are as per sale deed, cash consideration has not been reflected in the accounts. The total sale price of plots has been calculated at ₹ 4,58,91,800/- from which the total cost of project of ₹ 3,24,48,040/- (including cost of land of ₹ 2 crores) has been deducted to arrive at gross profit of ₹ 1,34,43,760/-. The principal amount of amount of ₹ 12,77,760/- from Lalani has further been deducted to get a net profit of ₹ 1,21,66,760/-. This, profit has been further shared by Sh. Manmohan Singh and Sh. Nanveent Jhamb in 50:50 ratio. The interest burden has been shared in the ratio of 25:75. As noted in the asstt order the cheque amounts detailed on page 61 of A-l exactly matches the amount as per registered deeds. The calculation of cheques and cash amounts received on plots have also been made on page 55 of annexure A-2. The front side of page 55 is a hand written ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our with the assessee's above contention that these are tentative profits only. Similarly contention of the assessee that he was partner in M/s Reliance Estate Agency a firm acting as commission agent only in respect of purchase and sale of property and not as an owner of property and therefore profit cannot accrue to him is not acceptable. There is no bar on Real Estate Commission Agent to purchase and sale the properties on profit basis. In other words a real estate commission agent is free to earn commission on the purchase and sale of property and can also venture into purchase and sale of property on profit basis. Assessee has not controverted with evidence the fact of earning profit noted in the above documents and therefore it cannot be accepted that assessee has not entered into purchase and sale of above plots with the profit motive. In any case the fact of the matter is that the documents clearly reveal earning of profit by the assessee along with Sh. Manmohan Singh and that itself is a substantive piece of evidence to disregard AR's specious contention that he was not earning any profit because he is partner in a firm M/s Reliance Estate Agency which is doing onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee on sale of those plots along with the seller of the property. Referring to those decisions relied in case of buyers by the AR; she submitted that documents were not found from their residence but assessee‟s premises. Assessee has failed to explain the contents of the documents correctly. The Sale of plots is evidenced by the sale deeds. The decisions were based on reliance on another decision and further same has been referred to by the ld AR in other additions also in the hands of the assessee. She submitted that in view of the overwhelming evidences found during the course of search, which could not be rebutted by the assessee with any strong contrary evidences, there is no reason to deviate from the orders of the lower authorities. 23. We have carefully considered the rival contentions as well as perused the orders of the lower authorities. Facts relating on the issue is during the course of search at residence of assessee on 04/08/2005, certain documents were found and seized. It was found that there was a plot of land belonging to M/s Indo American Electricals Limited whose managing director is Mr. Man Mohan Singh. This plot of land was decided to be so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as sold and balance 4 plots were sold later on. Further the assessee has also borrowed jointly sum from somebody on interest and interest cost thereon as been reduced from the profit. With respect to the sale of 12 plots, the assessee has complete details about the name who bought the plot of land, the documented sale price etc. These facts are not disputed. Therefore based on all these facts, it cannot be said that the papers are merely an estimate or projection. 25. The second contention of the assessee is that assessee is merely a broker and whatever profit arises would squarely falls on the shoulders of the owner of the property and not on the broker. On the similar facts and circumstances in the case of the assessee for different years, we have already dealt with this argument. For the similar reasons we also reject this contention of the assessee. Furthermore we are of the opinion that documents shows emphatically and clearly that in the whole project the assessee was also partner along with the managing director of the company sold plot. These facts were not denied by the assessee further assessee did not produce on its own the managing director of the seller company befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. AO should have granted deduction of the same amount in the consideration paid by them by cheque however same should not have been added the cash receipt. In fact, he granted a sum of ₹ 1985000/- as deduction from the gross profit. To this extent the Ld. assessing officer is directed to reduce the overall profit of ₹ 2, 18, 46, 799/ and proportionate profit of the assessee. 28. With respect to the deduction of certain expenditure out of the profit of the profit, it is submitted that in page No. 62, there is a mention of some compensation of ₹ 5.5 Lacs and it is the cost of the project that should have been granted as deduction. We have carefully considered this contention of the assessee. Assessee has failed to explain to whom the compensation has been paid and for what reasons. It was also not shown to us that for what reasons the compensation was payable. However, the above amount is mentioned in the seized documents and it is mentioned where the other expenditures are mentioned. The documents found during the course of search are required to be believed completely. When some additions are made based on those papers, there is no reason that information c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining requisite approval as per law and without complying with the other mandatory conditions envisaged under the Act and has erred in not computing the alleged income in terms of the provisions of section 153 A. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making an addition of ₹ 2337343/- as undisclosed income allegedly being profit on sale of plots merely on the basis of surmises and conjectures and without any evidence or basis. 4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the assessment in violation of principles of natural justice in as much as passing the impugned order by recording incorrect facts and findings and without providing opportunity of cross examination and without confronting the entire adverse material used against the assessee and without providing adequate opportunity of hearing. 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not granting the benefit of telescoping whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Act, 1961. 32. The issues involved in the appeal of the assessee for AY 2002-03 and 2003-04 are identical to ground No. 3 in the appeal of the assessee for AY 2001-02. These grounds are also against the addition sustained by the ld First Appellate Authority based on the same documents seized during the course of search. There is no change in the facts and circumstances of the case for these years. The arguments of both the parties were same as made for AY 2001-02. 33. On careful appreciation of the facts and based on the seized documents we have upheld the addition made by the ld AO in the hands of the assessee for Ay 2001-02. For the similar reasons we uphold the additions in the hands of the assessee in these two respective assessment years. However with respect to the quantum of addition we have directed the ld AO to reduce the sales consideration by ₹ 19,85,000/- and to grant deduction of compensation expenses of ₹ 5.50 lakhs after verification. Therefore with similar direction, we party allow ground no. 3 of the appeal of assessee for AY 2002-03 and AY 2003-04. 34. No other grounds of both these appeal are pressed and hence they are dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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