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2015 (6) TMI 282 - ITAT AHMEDABAD

2015 (6) TMI 282 - ITAT AHMEDABAD - TMI - Suppression of unaccounted on-money income - CIT(A) deleted the addition - Held that:- The assessee sold the flats in various projects at the same rate in A.Ys. 2005-06, 2006-07 and 2007-08. The Revenue has accepted the sale rates of flats in all the years, except sale of 30 flats sold through Shri Atul P. Malde in the year under consideration. It cannot be believed that the assessee sold 30 flats at double the rate then the sale rate of same flats to ot .....

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led by the Revenue - Decided in favour of assessee. - IT(SS)A No. 493/Ahd/2011 & CO No.206/Ahd/2011 - Dated:- 22-5-2015 - SHRI G.D. AGRAWAL AND SHRI S. S. GODARA, JJ. For the Appellant : Shri O.P. Vaishnav, CIT-DR For the Respondent : Shri S.D. Chheda, AR ORDER PER G.D. AGRAWAL, VICE PRESIDENT: This is an appeal filed by the Revenue and the Cross-Objection filed by the assessee, both against the order of the Commissioner of Income Tax (Appeals)-II, Ahmedabad dated 23.05.2011, pertaining to Asses .....

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A) has erred in law and on facts in relying on irrelevant materials, theoretical premises, surmises and conjectures regarding the on money receipts and commission payments made by the assessee concern. 4. The Ld. CIT(A) has erred in law and on facts in law in making erroneous interpretation of relevant facts and improperly rejecting admissible evidence. 3. The facts of the case are that search and seizure operation u/s 132 of the Income-tax Act, 1961 was carried out at the residential and busine .....

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ce of Shri Bharat Malde, Director of the assessee-company, following details of the flat sold and commission paid to Shri Atul Premji Malde was found:- Atul P. Malde - Details of commission received - A/c Year 2005-06 Project Name No. of Flats sold Sales value Brokerage* Om Keval, Sai Keval, Shree Keval, SWubh Keval 30 flats 2,42,24,700 4,84,610 4. From the above details of commission paid, the Assessing Officer noticed that the commission has been paid at ₹ 4,84,610/- while the sale value .....

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lso the submissions of the A.R. and I am totally in agreement with the learned A.R. that the addition of ₹ 2,42,24,700/- has been made simply on the reverse working of sale of flats on the basis of commission paid to Shri Atul P. Malde. The commission payment as per Annexure-1 comes to 2% of the sale value out of which 1% commission is paid to the sub brokers which is also a part of Annexure-1 on page 2 to 4. In the assessment order for A.Y.2007-08, the commission payment was 1% of the sal .....

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group, there is not a single question on rate of sales of flat in any of the projects in which the flats have been sold through Shri Atul P. Malde. The pocket diary impounded from the office premises of the assessee does not contain any details of 'on money collection on the projects developed and sold by the assessee company through Shri Atul P.Malde. No defect or mistake in the books is pointed out by the Assessing Officer and the books of accounts have not been rejected for applying the .....

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ecord, it is held that the Assessing Officer has made addition of "on money" for ₹ 2,42,24,700/- without any evidence found in search proceedings or collected during post search enquiries or during assessment proceedings, on any of the flats sold through Shri Atul P.Malde. Even no statement was recorded on sale value of any of the flats. It is therefore, held that the addition of ₹ 2,42,24,700/- was unjustified and without any basis, hence the same is deleted. 5. The Revenu .....

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tement of receipt of commission 1% even in respect of those 30 flats, the details of which were found from the computer of Shri Bharat Malde. He also clarified that if there is more than one brokers, he has to share the commission from his 1% of commission. The ld. Departmental Representative submitted that the CIT(A) accepted the assessee s contention that the commission was paid at 2% which was contrary to the statement on oath of Shri Atul P. Malde. He, therefore, submitted that the order of .....

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is the commission which was actually retained by him. He also referred to the computation of income and assessment order of Shri Atul P. Malde for Assessment Year 2006-07 which was completed u/s 143(3) before the search. He pointed out that the search in the assessee s group was conducted on 24.09.2008 while Shri Atul P. Malde filed his return of income for computation of income, Shri Atul P. Malde has clearly shown that out of the brokerage received at ₹ 4,84,610/-, the brokerage paid by .....

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the statement of Shri Bharat Malde dated 24.12.2008 in which Shri Bharat Malde has clarified that the commission paid to Shri Atul P. Malde was 2% and out of which he passed on 1% to other sub-brokers. Therefore, what he stated is the net commission. It was also submitted by the ld. Counsel that the statement of Shri Atul P. Malde was recorded behind the back of the assessee and the assessee specifically requested during the course of assessment proceedings to allow opportunity to cross-examine .....

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f the CIT(A) is perfectly justified and the same should be sustained. 8. We have carefully considered the arguments of both the sides and perused the material placed before us. After considering the facts of the case and arguments of both the sides, we do not find any justification to interfere with the order of the CIT(A). The additions have been made solely on the basis of statement of Shri Atul P. Malde in which he has stated to have received the commission at the rate of 1%. However, his sta .....

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affidavit of Shri Atul P. Malde, the Department did not re-examine Shri Atul P. Malde. The Revenue also did not examine from any of the buyers of the flats the rate at which they have purchased the flats. Admittedly, the statement of Shri Atul P. Malde was recorded behind the back of the assessee and within a period of 4 days, such statement was retracted by him by furnishing the affidavit. The assessee, during the assessment proceedings, specifically made a request to allow opportunity to cross .....

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ed by him and the brokerage paid to subbrokers. These facts also affirmed the explanation of Shri Bharat Malde that the commission paid to Shri Atul P. Malde was about 2% out of which 1% was passed on by Shri Atul P. Malde to other brokers. The CIT(A) at page No.4 of his order has given the comparative rate for sale of flat in preceding and subsequent year. For ready reference the same is reproduced below:- Rate/Project A.Y. 2005-06 A.Y. 2006-07 A.Y. 2007-08 Om Kewal (Res.) - 500 Sai Kewal (Res. .....

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e of same flats to others in the preceding year, current year and subsequent year. 9. In view of the totality of the above facts, in our opinion, the CIT(A) was fully justified in deleting the above addition made by the Assessing Officer on the basis of the statement of Shri Atul P. Malde which was recorded behind the back of the assessee and moreover, which was retracted by himself within 4 days from the date of giving of his statement. We, therefore, uphold the order of the CIT(A) and dismiss .....

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