TMI Blog2010 (6) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... partnership firm engaged in the business of builders and developers. The assessee purchased plot of land and constructed a residential building in the name and style of Saibaba Enclave on Plot no. A, building no.3, S V Road. Goregaon, Mumbai. The construction work was given to Labour Contractor and the material was supplied by the assessee. . The assessee filed its return of income for the assessm ent year 2006-07 on 31.10.2006 declaring total income at Rs.73,46,120/-. The assessee declared net profit on the basis of work completed during the year. The return of income accompanied by Audit Report u/s 44AB, Balance Sheet, Profit and Loss Account, statement of total income, TDS certificate, challans etc. During the course of assessment proceedings the AO asked the assessee to explain the source of income which has been offered to tax and number of flats sold during the year and the area of each such flats. The assessee vide its communication dated 17.12.2008 explained that the assessee is engaged in the business of Builders and Developers and constructed a residential building on Plot no. A, building no.3, S V Road. Goregaon, Mumbai. The assessee also explained that the profit was d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year an also part of the list of flats in the loose sheets page 8 of the impounded documents. The CIT(A), accordingly, confirmed the addition to the extent of Rs.3,74,81,000/- and deleted the remaining addition in respect of flats as far as the rates of flats are concerned. The CIT(A) has also confirmed the addition towards brokerage as estimate at the rate of Rs.30,000/- per flat and the car parking charges at the rate of Rs.1,00,000/- for 21 flats. The CIT(A)'s order is based mainly on the impounded document at page 8 of the loose sheets which contains the details of 31 flats out of which only 21 flats were part of the flats sold during the year relevant to the assessment year under consideration. In this way, the CIT(A) has took the rate as mentioned in the impounded documents at page 8 of loose sheets, whereas the AO estimated the rate per sq.ft.at Rs.4500/-. But the CIT(A) made enhanced assessment on the basis of the area of the flats in respect of 21 flats because, the AO di d not dispute the area of the flats sold and disclosed by the assessee. Whereas the CIT(A) made the addition as per the area mentioned in the documents no.8 of the impounded document. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mponent of Rs.2300/- per sq.ft. in the total sale price estimated of Rs.4500/- per. Sq.ft. Whereas the statements given by Shri Anthony Fernandes and Shri Kamlesh Yadav states different rates. Thus, there is no basis for estimating the sale price of the flat at Rs.4500/- which is not supported either by docum ents impounded or by the statement which are full of contradiction. He has referred the statement of Shri Anthony Fernandes recorded on 10.03.2006 and answer to the question no.8 as well as question no.23 and stated that while replying question no.8, the average rate per sq.ft. allegedly stated as Rs.3800/- per sq.ft in respect of flats which were already sol d and the current booking were at the rate of about Rs.4500/- per sq.ft. for the remaining consisting about 25 per cent. He has further pointed out, the answer to the question no.23 that the flats were sold at the rate of Rs.3525 per sq.ft., as stated in the said statement. Thus, the learned AR has submitted that when the statement itself is full of contradiction the same cannot be relied upon and the creditability of the statement is also doubtful. Similarly, he has pointed out the various contradictions in the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no.8, whereas the terrace of 280 st.ft stated to have been sold @ Rs.3575 per sq.ft and flat also stated to have been sold at the same rate and submitted that the details recorded in the said loose sheet no.8 itself shows that the same are not correct and how the rate of open terrace and flat can be same. He has relied upon the decision of the Hon'ble Kerala High Court in the case of Paul Mathews and Sons V/s CIT reported in 263 ITR 101 and the decision of the Hoh. Madras High Court in the case of CIT V/s S Khandar Khan Chand reported in 300 ITR 157 and submitted that the statem ent recorded during the course of survey under the provisions of section 133A has no evidentiary value in the absence of material or record to prove and corroborate the contends of the statem ent. Therefore, no addition can be made solely on the basis of the statement recorded during the survey proceedings. He has also relied upon the following decisions : . i) Kailashchand V/s ITO (29 SOT 63(Jodh) ii) Ravindrakum ar V/s DCIT (33 SOT 251) (Delhi) iii) CIT V/saulikkumar K Shah (307 ITR 137) iv) Embee Cl earing and Shipping Services Pvt ltd V/s ACIT (12 SOT 227 (Mum Tribunal v) Addl.CIT V/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he record that Shri Anthony Fernandes and his assistant Shri Kamlesh Yadav were doing their business from the premises of the assessee. We find that the documents impounded during the survey i n the shape of loose sheets were also admittedly prepared by the assistant of Shri Anthony Fernandes, Real Estate Agent. 11.1 The AO has made the addition by adopting the estimated rate of sale price of the flat at the rate of Rs.4500/- per sq.ft. which is not born out from an y of the impounded documents. Therefore, the said rate of Rs.4500/- as estimated by the AO is purely based on the statements of Shri Anthony Fernandes and Shri Kamlesh Yadav is not sustainable particularly when these two persons in their own statements have stated while answering the question no.8 that the rate of flats sold is Rs.3800 per sq.ft. and the current booking was stated at around Rs.4500/ - per sq. ft.. As far as the assessed incom e for the assessment year under consideration is concerned, the same is assessed only with respect to the flats sold during the year and not for the booking of the flats undertaken by the assessee. 12. Even otherwise as per the statements of Shri Anthony Fernandes and Shri Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and corroborates the statements of Shri Anthony Fernandes recorded during the survey on 2.3.2006. Therefore, the confirmation of addition by the CIT(A) to the extent of rates mentioned in document no.8 is just and proper. Hence, we uphold the order of the CIT(A) to that extent. 15. Since, there is no documentary evidence with respect to the sale of car parking area except the document no.15 of the impounded documents with respect to flat no.C-38, wherein also Rs,.50,000/- are mentioned against car parking. Therefore, there is no basis for making addition of Rs.1,00,000/- for each flat f or car parking. The AO had not made any inquiry or verification to examine the facts regarding the rate of sale, area, on money payment of brokerage charges and car parking charges from an y of the available sources including the buyers of flats as none of the buyers of the flats was examined by the department to verify the involvement of on-money payment and other charges as alleged by the revenue. Even the understatement of area is not examined by the AO at any stage of proceedings. Therefore, it cannot be presumed that all the flats were sold by the assessee through the Real Estate Agent and i ..... 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