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2019 (10) TMI 632 - AT - Income TaxUnexplained cash - addition u/s 68 or 69A - HELD THAT:- The assessee has produced a summarised statement of the cash book before us. On going through the cash book, it is found that the assessee has recorded certain amounts with dates mentioning the name of the persons from whom cash was received. The assessee’s case is that he received cash from prospective buyers of land and thereafter negotiated with the prospective sellers with a view to earn commission income. In addition to that, there are certain transactions of cash received which did not bear any name. Such transactions will have to be presumed as done by the assessee for his own purpose. Once the assessee has purchased and sold certain pieces of land for outside customers, it is only the profit element in such transactions which can be charged to tax. If certain amount of cash is received from buyers which is then handed over to sellers, it is not the amount of receipt which can be added to the assessee’s total income but only the profit element embedded in the transaction. In so far as the assessee’s own transactions are concerned, apart from profit element, there will be certain capital investment also going into the purchase of said pieces of land, which would also require addition. Total income for the years under consideration to be added on the basis of the unrecorded cash receipts found during the course of search is in three parts, viz., the first, being, the maximum cash balance of ₹ 28,71,458/- and ₹ 5,64,910/- for the years in appeal; the second, being, the part of profit element of ₹ 55,06,787/- on sale of plots amounting to ₹ 8.09 crore as relating to the two years under consideration, in addition to ₹ 1,52,969/- for the A.Y.2008-09 being extra profit sustained in the first appeal; and the third, being, profit of ₹ 14.07 lakh on remaining amounts of entries at Rs. ₹ 2.07 crore in the ratio of receipts of ₹ 2.08 crore and ₹ 7.95 crore for the A.Ys. 2007-08 and 2008-09 respectively. We, therefore, set-aside the impugned orders and remit the matter to the file of AO for examining and ensuring that these three elements are duly taxed in the total income of the assessee for the years under consideration. To the extent these three elements have been fully or partly offered by the assessee or sustained in the first appeals, suitable reductions should be made.
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