9911796707
TMI Blog2013 (6) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... ker, on 14-02-2007 certain documents numbered from 1 to 42 in loose paper Bundle No.2 were seized. Since certain documents belonging to the assessee were seized from the searched person, therefore, the Assessing Officer initiated proceedings u/s.153C of the Income Tax Act. In response to notice u/s.153C on 10-10-2008 the assessee filed his return of income on 10-11-2008 declaring total loss of Rs.5,20,420/-. 3. During the course of assessment proceedings the Assessing Officer noted that the seized papers relate to the transfer of land at Survey No. 208/1/1, Lohegaon, Pune and transfer of certain rights of construction termed as covenant rights upon the said land. The land consisted of a number of plots owned by various members of Lohegaon Co-op. Housing Society. The covenant rights were owned by Sri Suresh M. Talera and his sister-in-law Smt. Sumandevi C. Talera. The purchaser of the plots and the covenant rights is M/s. Lunkad Realty through its partner Sri Kantialal Lunkad. The assessee was a facilitator in the sale and purchase of some of the plots for which he was to receive commission from M/s. Lunkad Realty. The payments to the assessee Sri Atul Bhagat has been made from A.Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard cannot be termed to be of no value in the relevant years. Therefore, the payments made to the assessee in the relevant years are indicative of the value paid for the services already rendered in the concerned year. Hence, the Assessing Officer was of the opinion that the payments made from time to time can only be termed as the assessee's income from commission in the relevant years. 5. Rejecting the explanation given by the assessee the Assessing Officer held that representation in the accounts is only one of the form whereas in substance the amounts received by the assessee are nothing but income. He accordingly made addition to the income of the assessee on account of undisclosed commission, the details of which are as under : Assessment Year Amount 2001-02 Rs.1,00,000/- 2002-03 Rs.2,40,000/- 2004-05 Rs.20,00,000/- 2005-06 Rs.23,10,000/- 2007-08 Rs.25,00,000/- TOTAL Rs.71,50,000/- 6. The assessee did not challenge the addition made by the Assessing Officer. Thereafter the Assessing Officer initiated penalty proceedings u/s.271(1)(c) of the Income Tax Act. The assessee reiterated the same submissions as made during assessment proceedings and submitted that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which read as under :- "On the facts and the circumstances of the case and in law the assessment order passed u/s.143(3) r.w.s.153C of the I.T. Act is illegal and is bad in law as the Assessing Officer of the searched person (Shri Chandrakant Kankaria) handed over the documents found in the premises of the said Shri Chandrakant Kankaria which are neither in the handwriting of the appellant nor the same belong to the appellant. For assuming jurisdiction u/s.153C of the I.T. Act money, bullion, jewellery or other valuable article or thing or books of accounts or documents seized etc. should belong to the person who was not searched. As the documents found and seized do not belong to the appellant the assessment framed u/s.143(3) r.w.s. 153C is bad in law. Since the assessment is bad in law consequently the levy of penalty u/s.271(1)(c) is illegal and bad in law. The appellant hereby request your Honour to kindly quash the penalty order and obliged" 10. After hearing both the sides the additional ground raised by the assessee being a legal one is admitted for adjudication in view of the decision of Hon'ble Supreme Court in the case of National Thermal Power Corporation reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000/- from Lunkad Housing, Rs.43,10,0000/- from Lunkad Developers and Rs.25 lakhs from Lunkad Realty shown by the assessee under the head "Loans and Advances - Current Liabilities" as per Annexure-D. Referring to Page 18 of the Paper Book he drew the attention of the Bench to the amount of Rs.20 lakhs received by the assessee from Lunkad Developers on 19-02-2004 which has been shown as interest free. Referring to page 9 of the paper Book the Ld. Counsel for the assessee drew the attention of the Bench to the details of Bank Accounts of Mr. Atul Bhagat which includes the S.B. Account No.11259 maintained with Bank of India, Wanowrie Branch, Pune. He submitted that the entire amount received by the assessee on account of advance received for land transactions have been deposited in the said bank and the entire amount has been received by cheque. He submitted that since the formalities for transfer of the entire area was not completed, therefore, the assessee had shown the same as advance. 15. Referring to the decision of the Hon'ble Bombay High Court in the case of Metal Rolling Works Ltd. Vs. CIT reported in 339 ITR 373 he submitted that when the assessee has shown the amount recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as commission from A.Y. 2001- 02 to 2007-08, the details of which are given at Para 5 of this order. There is also no dispute to the fact that the above amounts have been received by cheque and deposited in the Savings Account maintained with Bank of India Wanowrie Branch, Pune. There is also no dispute to the fact that the assessee has not offered to tax the commission income in the respective assessment years and shown the entire amount in the balance sheet under the head "Loans and Advances-Current Liabilities". It is the case of the Revenue that the assessee, by not offering the commission received in respective assessment years to tax, has concealed the particulars of income and furnished inaccurate particulars and therefore penalty u/s.271(1)(c) of the Income Tax Act is leviable. It is the case of the assessee that since the transfer of all the plots are yet to be completed, therefore, the assessee has treated the amount received under the head 'Commission" as advance and the same will be offered to tax in the year when all the plots are transferred and therefore no penalty is leviable. 18.1 We find from the details furnished by the assessee at Paper Book Page Nos.62 and 63 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r deal & formation & transfer of plots from SMT+CMT". 18.4 Since the assessee was due to receive commission on the basis of sale of plots and since 7 plots have been sold during the F.Y. 2006-07 relevant to A.Y. 2007-08, therefore, the assessee was supposed to offer commission income on account of sale of the above plots. Therefore, by not offering the commission income on account of sale of the above plots during A.Y. 2007-08 there is concealment of particulars of income and penalty is leviable on account of commission relatable to sale of the above plots. The argument of the Ld. Counsel for the assessee that the same shall be shown once all the plots are transferred is not a valid explanation. On a pointed query by the Bench, the Ld. Counsel for the assessee submitted that till today the amount is being shown as advance and has not been declared as income. In our opinion, the assessee cannot shift the year of taxability of the commission income after the sale of the particular property by explaining that the same shall be offered to tax once all the plots are transferred. If the above proposition of the assessee is accepted then in that case an assessee can indefinitely shift hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
