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TMI Blog2013 (6) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... t disclosed to the department and no returns were filed. The Assessing Officer also initiated proceedings in the some cases of the Members of the AOP individually and the AOP by issuing notices under S.148 of the Act. The ITO Ward-I, Siddipeet, vide his order dated 31.12.2008 finalised the proceedings in the case of two members making additions towards unexplained investments in the payments made to the sellers of property, whereas in the hands of the firm, the Assessing Officer completed the assessment vide order dated 30.12.2009, accepting the commission received by the AOP and making additions on account of certain calculation mistakes. 4. The Commissioner has initiated proceedings under S.263 on the reason that the Assessing Officer did not conduct enquiries on many issues listed in para 2.3 of the impugned order, and after giving show cause notice and obtaining the objections of the assessee, relying on various principles of case- law, set aside the assessments for both the assessment years with a direction to the Assessing Officer that the assessments be done afresh by causing proper enquiry into the aspects stated by him. These orders of the Commissioner of Income-tax passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. On a query from the Bench, whether the assessee had explained the source of funds for the payments made to the said owner as per the receipts found during the survey proceedings, he referred to the explanations given before the Assessing Officer and also the affidavits filed in the case of four people to submit that the assessee obtained sale advances out of development charges, and these were advanced to the land owner, and this explanation was already placed on record, and the Commissioner cannot come to a conclusion that there were no enquiries and in any event, for improper enquiry or inadequate enquiry, proceedings under S.263 cannot be invoked. He relied on the following case-laws- (a) Ashoke Kumar Parasramka V/s. ACIT(65 ITD 1)-Kol. (b) CIT V/s. Sunbeam Auto Ltd. (2009) 227 CTR (Del)133 (c) Balram Manmani V/s. ACIT (2006) 7 SOT (Luc-Trb) (d) Leisure Wear Exports Ltd. V/s. ITO(2007)13 SOT 184(Del-Trib) (e) CIT V/s. Budhilal Hiralal Rana (2002) 125 Taxmann 455 (Guj.) (f) Pawan Kumar V.s Assessing Officer (2007)106 TTJ 494(Jodhpur) (g) Jai Commercial Co. ltd. V/s. JCIT(2001) 76 ITD 65 (Del) 7. The learned Departmental Representative on the other hand, reiterated the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther, some receipts issued by the land owners for receipt of amounts as per the above agreement for Rs.1.16 lakhs were noticed and shown to you. Please explain the transaction ? A. We have purchased land from Smt.Nazeerunnisa Begum and others as per agreement of sale and the payments are made as per the agreement. These payments are made after realizing money from the customers on sale of plots. 6. Do you mean to say that Rs.1 crore 16 lakhs paid by you and four other mentioned in the agreement of sale was paid out of the amounts received on sale of plots. If yes, please give the details form whom you have received money on sale of plots? A. The land of 20 ac. & 30 guntas purchased by us was converted into plots numbering to 301 plots and the pots were sold. The development costs, marketing and selling was done by us as the land has already been purchased by us. I am producing sale deed copies in support of sale of plots and receipt of money. Since I have not maintained any books of account, we are not in a position to produce any evidence except sale deeds. 7. As per the sale deeds produced the amounts received on sale of plots are as under:- 03.5.04 : 18,06,800 12.5.04 : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidual assessment, issued show- cause letter issued to Shri Yella Goud, dated 18.12.2008, placed in the paper- book at pages 57 and 58, wherein he has asked for the sources of the funds and also mentions that the plots were sold at Rs.550 to Rs.750 per sq.yard, on the basis of information obtained in survey. The relevant portion of the said show- cause letter is as under- "As seen from one of the impounded materials found on survey it is learnt that the house plots were sold at Rs.550/- top Rs.750/- per square yard while you have admitted sale price at Rs.100/- or Rs.110 per square yard only. You are requested to furnish file your comments on this issue." As seen from the assessments completed in the cases of these two members of the AOP, since the assessee has not explained the investments, and as the assessment was getting time barred on 31.12.2008, the Assessing Officer treated 1/5th share of unaccounted investment and giving credit for the monies received through development charges, made additions for 2004-05 and 2005- 06 to the extent of Rs.6,40,000 and Rs.4,47,000 in the respective assessment years of the above two members, viz. Shri Yella Goud and Shri Raji Reddy. We were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry does not result in initiation of proceedings under S.263 of the Act. 13. In order to examine this contention, we have gone through the paper-book and the sequence of events and we are convinced that the Assessing Officer has not made any enquiry with reference to many of the issues. First of all, what we noticed is that statement of one of the members of the AOP, extracted above, viz. of Shri G.Raji Reddy, clearly indicates that they have purchased the property and sold the same. What the survey also found out is sale agreement alongwith the receipts towards consideration on sale of the property. It is to be noted that there are no receipts impounded or found pertaining to development charges. So, the aspect as to how the development charges were received and passed on were not at all enquired by the Assessing Officer, as the receipt pertained only to the sale of lands acknowledged by the owners. This part of the enquiry was not made at all by the Assessing Officer. 14. As seen from the orders of the Assessing Officer passed in the hands of the two members of AOP, the Assessing Officer clearly stated that the assessee has not given any information and in the ex-parte order und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. As noticed, there is variation in the statements within a period of six months from the day of survey to the date of second statement. The so-called case by Shri Bikshapathi claiming to be owner of 1.30 acres out of 20 acres was stated to be the reason for not purchasing the land. But it can be seen from the IA No.4 of 2004 in OS No.2 of 2004, that this petition was filed subsequent to the sale agreement and the said Shri Biskhapathi was stated to be owner of land by way of registered sale deed dated 16.10.2003, which indicates that the said petition was filed after the agreement with the AOP. The case was also finalised by dismissing the petition of Shri Bikshapathi, vide orders of the Hon'ble Senior Civil Judge, Siddipet dated 5.2.2004. Subsequently to that date the assessee went on paying monies to owners, as can be seen from the details stated above only towards the land and not as development charges. Even the plots were ultimately registered by the owners, though there is no enquiry worth its merit about the nature of development charges etc. during the course of assessment proceedings. Absence of cash receipts for development charges by the owners also gives rise to a d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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