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2016 (10) TMI 553 - ITAT PUNEOn-money received - document seized during survey - Held that:- A document was seized during the course of survey from the premises of the assessee, the assessee has not been able to explain the reason for executing such documents. The document seized (letter of intent) is on the joint letter head of the assessee and Sanand Properties Pvt. Ltd. The letter of intent specifically mentions the description of shop, area and the per sq. ft. rate. Admittedly, the assessee has entered into sale agreement with Mrs. Usha Majummdar and Ms. Punam Majummdar in respect of same Shop No. 129 which has been mentioned in the letter of intent. However, in the sale agreement the rate of shop has been stated to be much lower than what has been stated in the letter of intent. Thus, the document seized cannot be termed as dumb document. An inevitable conclusion that can be drawn from the seized document and the sale agreement is that the difference between the rate mentioned in those two documents is the ‘on-money’ that has been received by the assessee. Therefore, the difference between the rate stated in the letter of intent and the sale agreement is the undisclosed income which has to be added in the income returned by the assessee. In so far as contention of the assessee that addition to the extent of net profit should be made, as the entire on-money received cannot be the profit of the assessee, we do not intent to agree with this contention. The assessee has disclosed the entire expenditure in its books of account. The assessee has not been able to show the additional expenditure which has been incurred but not disclosed in the books. The on-money received by the assessee in respect of Shop No. 129 is the pure profit of the assessee with no corresponding expenditure. Therefore, we reject the contention of the assessee to consider only the profit element as the undisclosed income of the assessee. The addition in respect of on-money received in respect of Shop No. 129 i.e. the shop in respect of which the document was seize during survey is upheld. Whereas, in the absence of any material to show that on-money was received in respect of other shops sold or booked during the financial year 2006-07, the addition on account of on-money is not sustainable. The principle of extrapolation of ‘on-money’ on the other shops sold/booked during the period relevant to assessment year under appeal is rejected in the absence of any material on record.- Decided partly in favour of assessee.
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