9911796707
TMI Blog1999 (5) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... . H.S. Grewal vide agreement dated 10-6-1989. The document marked as page No. 34 of the bunch of loose sheets marked as HS-8 seized from the possession of Mr. H.S Grewal (save the complete details of the payment made by Mr. H.S. Grewal and his wife Mrs. D. Grewal against the purchase of said flat to M/s. D.N. Kamani (HUF). According to the Assessing Officer Mr. H.S. Grewal and his wife paid Rs. 5,25,000 by cheque and additional amount of Rs. 3,35,000 in cash, but the records of M/s. D.N. Kamani (HUF) did not disclose that part of sale proceeds received in cash. The Assessing Officer, therefore, required the assessee to furnish return of income for the block period tinder section 158BD and various other information relating to construction and sale of those flats. The assessee M/s. D.N. Kamani (HUF) filed the return of income for the block period covering 1-4-1985 to 8-12-1995 on 30-11-1996 and also information and details of construction and sale of those flats, such as area of construction, cost of construction, period of construction names and addresses of the buyers, sale price, date of transfer, date of giving possession to buyers, etc. In course of hearing copy of the said sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ually for purchase of flats by Mr. H.S. Grewal in Dharamchand Mansion at 4-IC Road, Bistupur, Jamshedpur. About the words mentioned 'Cash paid in full amount' and various transactions during the some of months the Assessing Officer found that actual figure shown as 3.35 lakhs was meant for 3.35 lakhs and the words 'paid full' projected that the entire consideration amount of the flat was paid in full. The Assessing Officer observed that during the course of hearing in the case of Mr. H.S. Grewal he admitted that '3.35' stood for Rs. 3.35 lakhs. So according to the Assessing Officer on the basis of seized document page 34 of HS-8 it was evident that Mr. and Mrs. Grewal actually paid Rs. 3.35 lakhs and Rs. 5,25,750, but against that disclosed sale proceeds was only Rs. 5,20,750. He noted that in fact the consideration amount for flat received by cheque and received by cash payment consisted of in the ratio of 60%: 40%. The Assessing Officer noted that in the business of real estate there was practice of referring the properties after taking on money and since both the sellers and buyers were benefited through such transactions the real things were not disclosed. The Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 7,18,730 1992-93 3,32,417 ----------- 45,53,134 ----------- Aggrieved, the assessee has now come up in appeal before the Tribunal. 3. Shri S.B. Gododia, the ld. AR of the assessee attached on the impugned assessment order completed under section 143(3)/158BD of the Act on various counts. He said that while completing the assessment the DCIT neither appreciated the facts of the case properly nor the special provisions contained in Chapter XIV of the Act. He said that no books of account or any incriminating documents was found from the possession of the assessee. Admittedly, therefore, the authenticity of the document for the purpose of assessment under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 flats. The ld. AR of the assessee further said that the Assessing Officer by way of circumstantial evidence considered the matter that Jamshedpur was a beautiful city and Dharamchand Mansion at 4-IC Road, Bistupur, Jamshedpur situated in the heart of the city of Jamshedpur near famous regal ground which was best commercial and residential area of Jamshedpur and as such the sale price received by the assessee and disclosed in the books of account could not be the true and at par with the prevailing sale price during the period it was sold. The ld. AR of the assessee said that such observation mere on presumption and without any basis could not have legs to stand in the eye of law. There was no comparable case to show that if the others sold flats on a higher price than what was disclosed. The ld. AR of the assessee said that the cost of construction shown by the assessee was Rs. 175 per sq. ft. and the sale price of the flats was @ Rs. 295 per sq. ft. He said that the Assessing Officer himself in the assessment order at page 8 recorded that nothing was found during the course of search and seizure operation on the basis of which the cost of construction of project Dharamchand Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee denied to have taken on money in cash. Mr. H.S. Grewal from whose possession the impugned loose sheet page 34 of HS-8 was said to have been recovered also denied to have paid any on money in cash. The Assessing Officer also inquired the matter from Mrs. Varsha Gandhi, one of the purchaser. The letters of DCIT, Jamshedpur and of Mrs. Varsha Gandhi could be seen at pp. 3 and 25 of the paper book respectively. Mrs. Varsha Gandhi denied to have paid any on money in cash. She clarified that she was summoned earlier also when the regular assessment of M/s. D.N. Kamani (HUF) was being made and her statement under section 131 was recorded. The AR of the assessee said that no material, whatsoever, was gathered by the Assessing Officer from the buyers to show that if they paid any on money. The ld. AR of the assessee further submitted that in this case the assessment was made under section 143(3)/158BD of the Act. The special provisions have been introduced by way of Chapter XIV of the IT Act. The ld. AR of the assessee relied on the decision of the Tribunal, Bombay Bench in the case of ITO v. W.D. Estate (P.) Ltd. [1993] 45 ITD 473 wherein also the assessments have been made on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame as were found recorded in the document seized and marked page 34 HS-8. She pointed out that the said document contained at the 'top' payment for flats' and in the bottom 'D. Mansion' which stood naturally for Dharamchand Mansion. In the course of argument, she drew our attention to the words 'Cash-paid full amount' and other words 'paid full' against the total 3.35 which naturally stood for Rs. 3.35 lakhs. She said that from the very look of the paper it would be apparent that the upper part of document related to payments by cheque and latter part by cash. She further said that Rs. 3.35 lakhs as mentioned in the document was accepted by Mrs. H.S. Grewal. She reiterated that the document was a clinching evidence from which it was evident that Mr. and Mrs. Grewal paid Rs. 5.25 lakhs through cheque and Rs. 3.35 lakhs through cash towards the price of the flat. She said that the payment by cash consisted of 40% of the total sale price of Rs. 8.60 lakhs. The ld. DR of the Revenue further said that the Assessing Officer was right in considering the matter on the preponderance of probabilities and circumstantial evidences. Seller and buyer were mutually benefited and as such they did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments and other corroborative evidences but now before us the prime question to be considered is whether on the basis of page 34 of HS-8 the action of the Assessing Officer is to be approved or not. Since page 34 of HS-8 has been seized from the possession of residential premises of H.S. Grewal naturally the question of its authenticity comes for question. No doubt page 34 of HS-8 has been seized from the residential premises of Mr. H.S. Grewal and there being no evidence that if that document is in handwriting of the karta of the assessee or any of its members or any of the employees of the assessee or prepared at the dictate or order of the assessee, but at the same time the said document is so complete and full of information that it is difficult to disbelieved the genuinenes of the document and contents thereof. The impugned documents has to be considered in full and not in part or by picking up one or two entries contained therein. At the, top of the impugned document the words 'payment for flat' and in the bottom the words 'D. Mansion' are written. Naturally the payment relates to flat of Dharamchand Mansion situated at 4-IC Road, Bistupur, Jamshedpur. The said document cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered view, we reiterate, genuineness of the document page 34 of HS-8 seized from the residential premises of Mr. Grewal, in view of the facts and circumstances of the case, cannot be disbelieved. From this document it is established manifestly that the assessee has received on money of Rs. 3.35 lacs from Mr. Grewal and this can very well be said to be the undisclosed income of the assessee as contemplated under section 158(1)(b) of the Act which is liable to be taxed in view of the provisions contained in Chapter XIV of the Act. However, we do not approve the action of the Assessing Officer for making addition of the remaining amount of Rs. 42,18,134 (Rs. 45,53,134 - 3,35,000 = Rs. 42,18,134) under section 143(3)/158BD of the Act which has manifestly been done mere on guess work and presumption. It is to be noted that the Assessing Officer has found out that the assessee has received full sale price of flats of Rs. 8.60 lacs from Mr. Grewal which consisted of 5.25 lacs by cheque which has been disclosed in the books of account and the remaining amount of Rs. 3.35 lacs which was on money received by cash. The payment of amount by cheque and cash comprises a ratio of 60:40 respective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... romotion on the basis of seized register. It is to be noted that the Revenue has no evidence in appeal record to prove that other buyers of the flats have also paid on money and that too 40% of the undisclosed sale price. It is to be noted that the Assessing Officer in the course of assessment proceedings examined those buyers and no material could have been gathered about the receipt of on money by the assessee by those buyers. By way of instance, in the course of his argument, the ld. AR of the assessee drew our attention towards page 23 to page 26 of the paper book through which the Assessing Officer had inquired the matter from Mrs. Varsha Gandhi. It is to be noted that the Tribunal, Bombay Bench in the case of W.D. Estate (P.) Ltd. in somewhat identical situation deleted the addition made on account of allegedly receiving of on money by the assessee in doing real estate transaction. In that case it so chanced that there was a search and seizure and file and table diary pertaining to one of the employees was found in which sales and sale amounts of some real estate were shown. That file and diary also disclosed the receipt of on money. The ld. CIT(A) confirmed the addition, bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that nothing was found during the course of search and seizure operation on the basis of which the cost of construction of the project at Dharamchand Mansion can be doubted. He has further observed that the cost of the project as disclosed in the account was found reasonable. It is to be further noted that the assessee got the valuation of the building done by the Registered Valuer at Rs. 68.75 lakhs. Even the TISCO did the same at Rs. 60,29,760. (See Registered Valuer letter dated 8-3-1993 and TISCO's letter dated Jan. '93). So if the Assessing Officer's presumption is given to effect the sale price will be fantastically high which cannot be conceived of. In fact, from the regular assessment order for the assessment year 1992-93 it is to be seen from page 7 of that assessment order that the assessee disclosed the average net profit at 29.7% during the assessment years comprising the assessment years in which the project is completed. The Assessing Officer has simply presumed that the sale price of the flat disclosed by the assessee is not correct, but this presumption of his own is not based on any sound and circumstantial evidence or any material. So when we set all the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plete details of the payments made by H.S. Grewal and his wife, Mrs. D. Grewal against the purchase of the said flat to M/s. D.N. Kamani (HUF). According to the seized documents (page 34 of HS-8) they had paid Rs. 3.35 lakhs in cash besides Rs. 5.25 lakhs paid by cheques. The amount paid in cash was on money and was not shown by the assessee in the sale proceeds. 7. The assessee denied before the Assessing Officer to have taken any on money. It submitted that the addition could not be made on the basis of the papers seized from the third party. No books of account or any document had been seized from the possession of the assessee in course of the search to indicate receipt of any on money. 8. The Assessing Officer was not satisfied with the submissions and contentions of the assessee. He observed that page 34 of the seized document marked HS-8 clearly indicated payments of on money for the flat. There were mention of Dharamchand Mansion, mention of the words payments for the flat in cash, mention of details of cheques which tallied with those disclosed by the assessee in its books of account. But the payment of on money in cash was not disclosed by the assessee. After detailed d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks of account or any incriminating documents were found from the possession of the assessee. The authencity of the documents seized from the possession of H.S. Grewal could not be relied upon for the purposes of assessment under section 143(3)/158BD. 12. The ld. counsel submitted in course of hearing before this Tribunal that the details mentioned in the seized documents did not clearly show that the payments in cash were for the flat in question. There was no primary and direct evidence that the assessee had received the additional money of Rs. 3.25 lakhs in cash. 13. The ld. counsel further submitted that the Assessing Officer had added Rs. 45,53,134 as on money received in cash from the sale of the 16 flats, merely on presumption. He contended that there could be no addition on presumption that the assessee must have received on money in cash at 40% from sale of all the flats. He added that after the addition the profit margin on the sale of the flats would become fantastic. He stated that the assessee had shown reasonable profit which ought to have been accepted. He contended that the sale price of Rs. 400 per sq. foot after the addition for on money would be excessive in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the assessee. Therefore, if the assessee had taken on money in cash from him, there was no reason to hold that it would not have received on money in cash from other buyers of other flats. 18. From the above facts it is manifest that the addition for the undisclosed sale price, i.e., on money in respect of other 15 flats was not made on guess work or on presumption, rather the addition was made on the basis of the seized documents showing payments of on money in respect of the similar flat in the same building sold to H.S. Grewal. This was a reliable and concrete evidence of the fact that the assessee must have received undisclosed sale price from buyers of other flats. The case of H.S. Grewal was a comparable case for the similar addition. It would be wrong to hold that while addition made for undisclosed receipt of on money on sale of one flat was justified but there could be no similar addition for sale of other flats of the same building and the same project. 19. It will be too much to insist for similar documents of payment of on money by all the buyers of flats as was seized from Grewal. The seized document held by my ld. Brother as the concrete proof of payments of on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determine the total sale price on the basis of the per sq. ft. sale rate discovered on the basis of the seized documents. The Assessing Officer should also make adjustments for the floor on which each flat was located, timing of the sale agreements, any extra work, etc. 22. It is seen that because the Assessing Officer had a closed mind to determine the total sale price on the basis of 40% on money, he did not discuss the complete details like the total constructed area, floor, extra works, timing of the sale, etc. of each flat. On the other hand the assessee was concentrating on its contention that there was no payment of on money and the seized document was not concrete evidence of payment of on money. It, therefore, did not furnish the details, explanations and evidences regarding other flats. I am of the view that to determine the amount of sale price of other flats it is necessary that complete details were obtained and examined before applying the per sq. ft. sale rates on the basis of the seized documents. 23. Now the question is whether the addition for the on money from sale of other flats could be made under section 158B. I am of the view that the case was covered by s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. This has been made clear by the provisions of sections 158BB, 158BH & 158BC. Thus, the addition which should have been made in assessment under section 143(3)/147 could be made in the block assessment as well. The first proviso to section 158BC says that notice under section 148 is not required for the block assessment. Certainly on the basis of the seized documents the Assessing Officer could have issued notice under section 148 for the concerned years to bring to tax the undisclosed sale proceeds of other flats if there had been no provision for the block assessment. Thus, the entire Chapter XIV-B has to be given a logical, just and fair interpretation and not in a manner which denies the revenue what it could have got under other provisions of the Act. Chapter XIV-B was introduced not to curtail powers under other provisions like 147, but to make stringent provisions to curb tax evasion. It is clearly a case of concealment of income which was detected as a result of the search and seizure operation under section 132 of the Income-tax Act. The block assessment had to be completed covering the block period of 10 assessment years as provided in section 158B(a). In view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmined the total sale price after giving sufficient reasonable opportunity to the assessee in the matter. I would, therefore, consider it imperative to send the matter of addition of Rs. 42,18,134 relating to the undisclosed sale price of other 15 flats to the Assessing Officer for redetermination after complying with the above directions. REFERENCE FOR 3RD MEMBER CASE UNDER SECTION 255(4) OF THE INCOME-TAX ACT, 1961, IN THE ABOVE MATTER Sikander Khan, Accountant Member As we differ in our view in the above case, we request the Hon'ble President to kindly refer the matter to the 3rd Member on the following point: "Whether, on the facts and in the circumstances of the case, the addition of Rs. 42,18,134 on account of on money for the sale of other 15 flats should be deleted or it should be set aside to the Assessing Officer for redetermination on the basis of per square foot sale price of the flat sold to H.S. Grewal after adjustment for extra works, floor, period of sale, etc.?" REFERENCE FOR 3RD MEMBER CASE UNDER SECTION 255(4) OF THE INCOME-TAX ACT, 1961, IN THE ABOVE MATTER Jordan Kachchap, Judicial Member As we differ in our views in the above case, we request the Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Date of exe- Asst. Year Disclosed sale, No. cution of sale consi- agreement of deration sale ----------------------------------------------------------------------------------------------- 1 &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-91 5,21,500 9. Mr. V. Gandhi 30-01-1990 1990-91 3,60,500 10. Mr. K. Gandhi 30-01-1990 1990-91 5,21,500 11. Mr. K. Gandhi 30-01-1990 1990-91 3,65,500 12. Mrs. A. Gandhi 30-01-1990 1990-91 3,65,500 13. Mrs. M.R. Varshnoi 27-02-1991 1991-92 3,76,000 14. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chq. 149410 Dt. 27-07-90 Rs. 47,500 ------------ Rs. 2,97,500 &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion at Rs. 47,18,500. The Assessing Officer confronted the assessee with such facts and made known his intention to compute the undisclosed income on account of "on money" received on sale of sixteen flats at Rs. 47,18,500 based on the said document seized. The assessee HUF in reply submitted that the said document has no connection with the assessee regarding the remark "cash paid full amount" and it does not say anything regarding the payment to whom and for what purpose. It was contended that the presumption made that all the entries in the said document relate to the sale of flats is not correct. It was rather claimed that the document did not relate to the purchase of the said flat. Moreover, the Assessing Officer had examined certain buyers during the course of regular assessment proceedings and he did not find any excess sale proceeds received. Further, during the course of search no unexplained investment was found. Neither any documentary evidence was recovered reflecting the acceptance of "on money". Moreover, the Assessing Officer has referred to prevailing practice of charging such "on money". Such presumption is based on hearsay and is not correct. The assessee furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived the sale rate worked out to about Rs. 400 per sq. ft. Dharamchand Mansion is situated in the heart of city of Jamshedpur and is the best commercial and residential area. The assessee HUF has shown the sale of flats of Rs. 225 per sq. ft. He also noted that the cost of construction shown at about Rs. 175 per sq. ft. has been found to be reasonable by the Department. With these observations the Assessing Officer computed the undisclosed income on account of "on money" received on sale of 15 flats at Rs. 45,53,134 spread over various years as per the details below: Assessment year Undisclosed income --------------- ------------------ 1987-88 3,34,839 1988-89 9,06,735 1989-90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He has however dissented from the finding given by the learned J.M. on deletion of the remaining addition of Rs. 42,18,134 made on account of undisclosed sale price of other fifteen flats on the basis of the seized document and the reasoning given in support is as under: (a) That the learned J.M. has already held in the proposed order that the seized document manifestly established the receipt of "on" money of Rs. 3.35 lacs from Shri Grewal and the same was undisclosed income of the assessee as contemplated under section 158B(b) of the Income-tax Act. The other fifteen flats were part of the same building and the same project. They were a so similar in quality and construction. It is also admitted that Shri H.S. Grewal was close business associate of the assessee HUF. The assessee had taken "on" money from Shri Grewal. There is no reason to hold that it would not receive "on" money from other buyers. (b) That the document seized from Shri Grewal is a reliable and concrete evidence to the effect that the assessee must have received undisclosed sale price from other flat buyers and it was too much to insist for similar documentary evidence about the payment of "on" money from othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it could have got under other provisions of the Act. It is thus clearly a case of concealment of income detected as a result of search and seizure under section 132 of the Income-tax Act. (g) That one of the grounds taken for deleting the addition of Rs. 42,18,134 in the proposed order is that there would be fantastic profit after making such addition. According to the learned A.M. the profit margin differ from case to case and transaction to transaction depending upon various factors. Moreover, the price of land where the building was located must be very high. The land was acquired at low price but its market value of the time of sale of flat was high. Thus the profit of land was also embodied in the profit of sale of flats. If the assessee had sold land only it would have made fantastic profit. Since the land was used for developing and constructing the flats, the profit of land merged with the profit on sale of flats Combined profit would therefore naturally be much higher. 4.1 The learned A.M. has further observed that the Assessing Officer had a closed mind in determining the total sale price on the basis of 40% "on money". He, however, has not discussed the complete detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see about the contents of the said document as the same was not recovered from the premises of the assessee HUF and in support, he placed reliance on Rama Trading v. First ITO [1988] 25 ITD 599 (Pat.) (TM). The assessee has also not admitted having received the said cash amount of Rs. 3.35 lacs from Shri Grewal. Moreover, though the residence of karta of HUF was also searched along with others, but no incriminating material relating to the construction and sale of the said flats was found. The learned counsel, therefore, pleaded that the addition made of Rs. 3.35 lacs based on such document is neither justified nor valid. 5.1 As regards the addition made of Rs. 42,18,134 relating to the other fifteen flats sold, the learned counsel has submitted that for determination of undisclosed income, there is no scope for presumption, surmises and conjectures. The Assessing Officer cannot presume undisclosed income for assessment purposes under the special provisions of Chapter XIV-B. Under this Chapter only undisclosed income found as a result of search and seizure can be taxed. The scheme of Chapter XIV-B does not give powers to the Assessing Officer to draw presumption in regard to the u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... constructed was made by the Assessing Officer and during the course of regular assessment proceedings the purchasers of flats were examined on oath under section 131 and assessment was completed after making detailed scrutiny. The said assessment order is still subsisting which has neither been reopened nor cancelled by the CIT. The Assessing Officer also found the profit shown from the flat sold as reasonable. Having done so addition could be made under Chapter XIV-B only on the basis of presumption. 5.5 The learned counsel has further contended that the Assessing Officer had not reexamined the flat owners under 131 in the block assessment proceedings nor any opportunity was given to the assessee to cross-examine them. The presumption of the Assessing Officer that fifteen flat owners must have paid "on money" is not sustainable in law. In support the learned counsel has placed reliance on the Tribunal's decision in the case of Ravish Kumar Kapadia v. Asstt. CIT[ ] 149 TTJ (Ahd.) 13 wherein it has been held that examination of all flat owners by the Assessing Officer is essential to ascertain the payment of "on money" made by them and an opportunity to cross-examine the flat owne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has further placed reliance on ITO v. Smt. Harbans Kaur [1993] 45 ITD 470 (Delhi), Miss Lata Mangeshkar's case and submitted that the undisclosed income computed of Rs. 42,18,134 in respect of fifteen flats is neither valid nor justified in the absence of any material evidence found as a result of search or investigation and the learned J.M. for the detailed reasons given in his order was justified in deleting the same. 6. The learned D.R. Smt. Anita Sinha on the other hand placed heavy reliance on the order of the Assessing Officer as well as the order of the learned A.M. She has further submitted that the said document seized from the residence of Shri H.S. Grewal give complete details of payments made by him to the assessee HUF through cheque as well as in cash. He evidently paid to the assessee HUF Rs. 5,20,750 through cheque and Rs. 3,35,000 in cash. The seized document proves beyond doubt that the assessee HUF received cash payment as "on money" over and above the apparent sale consideration from the flat buyers and it is based on such document that the Assessing Officer has computed the undisclosed income on account of "on money" from the flat buyers. She further submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 1992-93. The Assessing Officer noted that the assessee maintained books of account relating to the construction and sale of flats. He also scrutinised the entries made in the books of account. Entries in the books of account were co-related with the entries in the bank pass book both on credit and debit side. The receipt was evidenced by the credit side entries in the pass book on account of the flats sold to various parties and such receipts were found to be through account payee cheques. The flats were sold as per the agreement reduced in writing on properly stamped papers. According to the Assessing Officer, majority of the purchasers were duly summoned under section 131 of the IT Act on different dates and solemn confirmation of the individual purchasers were duly recorded. Entries in the books of account were co-related with the entries on the credit side of the bank pass book and the same were further cross-checked for reference to the investigative process under section 131 of the IT Act. The Assessing Officer found no discrepancy relating to the receipts shown on account of sale of flats. The Assessing Officer also noted that entries on the debit side were also v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of search. The Assessing Officer based on the said document seized from the residence of Shri H.S. Grewal initiated proceedings in the case of the assessee HUF under section 158BD of the IT Act. 7.7 As per the said document, the assessee received payment through cheque from Shri Grewal of Rs. 5,20,750 as per the details of payments recorded therein. The entries made in the said document of Rs. 5,20,750 are verifiable from the books of account of the assessee HUF. Further, Shri Grewal also paid Rs. 22,000 through cheque of the assessee HUF for generator and the payment received on this account has not been denied by the assessee HUF. In between the entries of payments through cheque of Rs. 5,20,750 and payment for generator of Rs. 22,000 through cheque there are entrie in the said document as per details given of cash payment of 3.35. Shri Grewal in the statement recorded confirmed that 3.35 figure is in lacs. When first set and last set of entries through cheques are verifiable from the books of the assessee HUF, the cash payment entries have to be taken as correct, the same being part of the same document. This document has thus been considered and found to be genuine. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned D.R. It is thus evident from the records that there is no evidence gathered by the Assessing Officer as a result of search or through investigation direction or indirectly to establish that the said fifteen flat buyers paid "on money" at 40% of the total consideration or the assessee HUF received such "on money" from the said fifteen flat buyers. 7.9. In Sunder Agencies' case it has been held by the Tribunal that it is beyond power of the Assessing Officer to review assessments already completed unless some direct evidence come to the knowledge of the Department as a result of search which indicates clearly factum of undisclosed income. In the present case the only evidence found as a result of search was with regard to cash payment of Rs. 3.35 lacs made by Shri H.S. Grewal to the assessee HUF over and above the apparent consideration paid at Rs. 5,20,750 through cheque and the undisclosed income computed based on this evidence has been sustained but so far as other fifteen flats are concerned there is no material evidence found during search proving receipt of "on money" from the buyers. Moreover, in the assessment completed u/s 143(3) for the assessment year 1992-93 the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 93 has accepted the books of account maintained as correct. However, the document seized from Shri H.S. Grewal did indicate that the assessee received Rs. 3.35 lacs in cash as "on money" on sale of flat to him and this amount was not accounted for in the books of account. It could, therefore, be said that so far as the said amount of Rs. 3.35 lacs is concerned the books of account maintained were not correct and complete and the Assessing Officer could resort to assessment of income by estimate invoking the provisions of section 145 of the Income-tax Act but such an action could only be taken at the most while completing the regular assessment. Admittedly the present proceedings involved are block assessment proceedings under Chapter XIV-B of the IT Act and not the regular assessment proceedings. It is also mentioned here that Chapter XIV-B is a code in itself providing for special procedure for assessment of search cases and as per sub-section (2) of section 158BB, in computing undisclosed income for the block period provisions of sections 68, 69, 69A, 69B and 69C may be applied but nowhere it is provided in this Chapter that provisions of section 145 would be applicable in comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch conducted at the premises of the karta of the HUF also did not reveal the fact of "on money" received if any from the said fifteen flat buyers. Further, the document seized from Shri Grewal no doubt raised the presumption that the assessee HUF might have similarly received "on money" from the other flat buyers but the presumption howsoever strong may be, cannot take the place of evidence or is no substitute of evidence. This should have however prompted the Assessing Officer to make deep and proper enquiry/investigation but as is evident from above, the investigation/enquiry made by the Assessing Officer from the other fifteen flat buyers has not produced any result in the direction of proving that the assessee HUF received any "on money" from other flat buyers also. In this view of the matter no action could be taken under section 147 to make any addition to the income declared on account of the fifteen flats sold. 7.13 According to the Assessing Officer, the assessee HUF sold flat to Shri Grewal for a total consideration of Rs. 8.60 lacs as per the seized document and the per square feet sale rate on this basis comes to Rs. 400 whereas the sale rate charged from other flat b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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