9911796707
TMI Blog2012 (8) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 for the A.Y. 1999-2000), when the source for the said investment is properly explained. Therefore, the learned CIT(A) ought to have deleted all the three additions made aggregating to Rs. 1,18,68,000/-. c. The learned CIT(A) erred in confirming estimation of profit at 8% on difference in work-in-progress arrived at Rs. 7,87,263/-. d. The learned CIT(A) erred in confirming the estimation of income on work-in-progress for the assessment year 1998-99 at Rs. 2,33,064/-. e. The learned CIT(A) erred in confirming the addition of remuneration of Rs. 6 lakhs received from M/s. Image Chit Funds Pvt. Ltd., as the undisclosed income of the appellant. 3. The Revenue raised the following grounds: a. On the facts and circumstances of the case, the Ld. CIT(A) was not correct in allowing further relief to the assessee from profit in work-inprogress for assessment year 1997-98, when the same had been already allowed in the computation of block period income. b. On the facts and circumstances of the case, the Ld. CIT(A) was not correct in allowing the adjustment of loss of Rs. 6,96,461/- and deleting the addition of profit on work-in-progress of Rs. 2,14,218/- for the A.Y. 1998-99 when the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipt Amount (Rs.) Whether cash/ cheque Date Person to whom the receipt was issued 1 K. Anjaneyulu & Bros. 1,00,000 Cash Sri C.V. Rao 2 K. Anjaneyulu & Bros. 10,00,000 Cash 09.01.97 Sri C.V. Rao 3 K. Anjaneyulu & Bros. 14,00,000 Cash 29.01.97 Sri C.V. Rao 4 K. Anjaneyulu & Bros. 14,00,000 Cash 30.01.91 Sri C.V. Rao 5 K. Anjaneyulu & Bros. 10,00,000 Cash 03.02.97 Sri C.V. Rao 6 K. Anjaneyulu & Bros. 1,00,000 Cash 07.02.97 Sri C.V. Rao 7 K. Anjaneyulu & Bros. 15,00,000 Cash 19.02.97 Sri C.V. Rao 8 K. Anjaneyulu & Bros. 6,00,000 Cash 03.06.97 Sri C.V. Rao 9 K. Anjaneyulu & Bros. 4,00,000 Cash 29.07.97 Sri C.V. Rao 10 K. Anjaneyulu & Bros. 10,00,000 Cash 02.08.97 Sri C.V. Rao 11 K. Anjaneyulu & Bros. 1,00,000 Cash 19.08.91 Sri C.V. Rao 12 K. Anjaneyulu & Bros. 15,00,000 Cash 03.04.98 Sri C.V. Rao 13 K. Anjaneyulu & Bros. 2,00,000 Cash 08.04.98 Sri C.V. Rao 14 K. Anjaneyulu & Bros. 29,000 Cheque 09.04.98 Sri C.V. Rao 15 K. Anjaneyulu & Bros. 29,000 Cheque 09.04.98 Sri C.V. Rao 16 K. Anjaneyulu & Bros. 19,000 Cheque 09.04.98 Sri C.V. Rao 17 K. Anjaneyulu & Bros. 59,000 Cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cheque 09.04.98 Image Agro Farms (P) Ltd. 49 K. Anjaneyulu & Bros. 59,000 Cheque 09.04.98 Image Agro Farms (P) Ltd. 50 K. Anjaneyulu & Bros. 48,845 Cheque 09.04.98 Sri K. Dhanunjaya Rao 51 K. Anjaneyulu & Bros. 48,845 Cheque 09.04.98 Sri K. Dhanunjaya Rao 52 K. Anjaneyulu & Bros. 48,845 Cheque 09.04.98 Sri K. Dhanunjaya Rao 53 K. Anjaneyulu & Bros. 48,845 Cheque 09.04.98 Sri K. Dhanunjaya Rao 54 K. Anjaneyulu & Bros. 48,375 Cheque 09.04.98 Usha Tours & Travels Pvt. Ltd. 1,23,67,755 6. A sworn statement was recorded from Mr. C.V. Rao on 23.9.1999 wherein a question was asked about these receipts which is as follows: "Q2) Please refer to the sheet Nos. from 21 to 49 of Annexure ICF/A1/3 and sheet Nos. 212 to 216 of the same annexure relating to the purchase of 3.00 acres of land in Sy. Nos. 71 & 82 in Madhapur Village, Serilingampally Mandal, R.R. District. In your sworn deposition given on 13.8.1999, you have confirmed the payment of Rs. 1,18,68,000 to Sri K. Anjaneyulu, Sri K. Indrasena, Sri K. Manikyam and Smt. K. Lingamma. Sri K. Anjaneyulu in his sworn deposition given on 22.9.1999, has con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcentage of work-inprogress over flat advances received (%) [(3)/(2)x100] Advance given for land purchase (Rs.) (1) (2) (3) (4) (5) 1992-93 - 3929578 - 1993-94 1735000 2256050 130 - 1994-95 3404811 2382488 70 - 1995-96 7828748 4503635 50 - 1996-97 16361446 9840788 60 3300000 1997-98 11788800 2680233 23 2100000 1998-99 11040050 6313074 57 4268000 1999-00 9687800 7070530 73 - 2000-01 6699822 6280093 94 - 2001-02 34755578 17828824 51 - Total 103302055 63085293 61 11. The AR further submitted that the assessee was constructing residential complex by name Usha Enclave, and he had received flat advances from prospective buyers and out of the advances received he has paid on money for purchase of lands alleged to be undisclosed. He had filed a cash flow statement wherein he had explained the sources and how he generated the sources for on money paid for purchase of land. 12. On the other hand the DR submitted that the assessee is not able to prove that he had spent only so much of money on the project of Usha Enclave, that in the three years the work in progress of the project was grossly undervalued to explain t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,68,000 as undisclosed income. 15. During the course of search the assessee clearly said that he has paid on money for purchase of land, and agreed to offer the on money as his undisclosed income at Rs. 1,18,68,000 subject to verification of his source of income. The assessee has filed his block return declaring undisclosed income of Rs. 25,0,3,539/- and explained the sources for investments in purchase of property. 16. Admittedly the assessee has filed cash flow statement at the time of assessment for the period 1.4.1996 to 3.8.1999. According to the cash flow statement he has enough sources for making the on money payment, except to the extent of Rs. 32 lacs for which he has admitted undisclosed income and filed the block return. The assessee has explained the sources for making payment of the onmoney for purchase of land. It is the fact that the assessee admitted the on money paid for purchase of land and also stated in the sworn statement that he has paid the on money out of flat advance collected for Usha Encalve. He also admitted that he will disclose the undisclosed income subject to verification of sources. While filing the return he had explained the sources and filed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd. The assessing officer has conducted series of investigation and probed the assessee, which proves that the advances are genuine. The assessing Officer justified his addition purely on guess work stating that the assessee has no chance of diverting advances for purchase of property and he would have used all the money for construction of building itself. It is not able to prove that the work in progress declared by the assessee with the support of valuation report from registered valuer is not correct. It is only on the basis of hypothetical assumptions and the additions are purely on guess work and without any material evidences. The revenue does not prove the work in progress declared by the assessee is not correct. Unless it proves the work in progress declared by the assessee is not correct and the surplus money generated by the assessee from Usha Enclave is used for investment in other undisclosed assets, it cannot disown the sources used for investments in on-money paid for purchase of land. 19. In view of the above, we are of the opinion that the assessee has enough sources for making impugned on-money payment and the assessee has proved the sources by filing cash flow s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the return of income was already ended the assessing officer was right in principle in computing the profit at 8% of the work in progress for the A.Y. 1998-99 and included in the block period. However, the assessee has already considered sum of Rs. 2,33,064/- profit form work in progress and set off the same from other losses and returned net loss of Rs. 6,96,461/- a separate addition of Rs. 2,14,418/- is not justified. Accordingly we upheld the order of CIT(A) for the A.Y. 1998-99 and 1999-2000 too in this matter and confirm the order of CIT(A). Accordingly this ground of the assessee as well as the revenue is dismissed. 26. Ground No. 5 by the assessee is with regard to addition of Rs. 6,00,000/- remuneration. 27. In the assessment order, the Assessing Officer has also assessed the following remuneration received by the assessee from various concerns: S. No. A.Y. Amount (Rs.) 1. 1997-98 3,00,000 2. 1998-99 3,00,000 3. 1999-00 6,00,000 Total 12,00,000 28. We have heard both the parties and perused the material on record. The Cit(A) has deleted the addition of Rs. 6,00,000/- for the detailed reasons given in his order at para 6.3 at page No. 16, as follo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
