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ACIT Central Circle-2 (3) , Pune Versus M/s. Darode Jog Builders Pvt. Ltd.

2015 (11) TMI 437 - ITAT PUNE

Addition on receipt of on-money - CIT(A) deleted the addition on the ground that there was no such admission by any of the directors regarding receipt of on-money. He had offered an amount of ₹ 1.91 crores only to cover up any omission, deficiencies and to maintain harmony with department - whether no documentary evidence was found during the course of search or post search enquiry evidencing receipt of on-money by the assessee company - Held that:- From the copy of the assessment order we .....

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course of search or post search enquiries that the assessee has received any on-money on account of sale of flat No.A-202 and since neither the statement of the owners of flat No.A-202 was provided to the assessee nor the request of the assessee to cross examine the owners of flat No.A-202 was provided despite repeated request during the assessment proceedings and since the entire addition is based on presumptions and surmises, therefore, we do not find any infirmity in the order of the Ld.CIT(A .....

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Suhas P. Bora heeraj Jain ORDER Per R. K. Panda, AM This appeal filed by the Revenue is directed against the order dated 26-09-2013 of the CIT(A) Central, Pune relating to Assessment Year 2009-10. 2. Facts of the case, in brief, are that the assessee is a company engaged in the business of builders and promoters. A search and seizure action u/s.132 of the I.T. Act was conducted in the case of the assessee on 28-04-09. During the search action, certain papers were found and seized. Page No.27 of .....

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tions of the assessee company was recorded. Relevant part of the said statement, which has been reproduced by the Ld. AO in Para 4 of the assessment order, reads as under : Q.10. I am showing you the costing sheet of A-302 in the name of A.K. Singh retrieved from the laptop in your possession, as per this sheet the cost of Flat is ₹ 1,15,64,400/- whereas the value as per the sale agreement is ₹ 78,83,200/- thus there is difference of ₹ 36,81,200/-. Please explain your state for .....

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0 lakhs. Please explain the difference. Ans. As regard A-1103 it might be the agreement for 2 flats. As regards the other differences I agree that these are differences in the agreement value and the actual cost as per the working sheet. However I do not know as to how the differences are accounted for since I am not aware of the accounting and I only look after the customer care. Q.12 During the course of Investigation it has been accepted by the owners of Flat No.A-202 that they have paid an a .....

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of Rajmani Shiley Singh is same in format as the sheets retrieved from my laptop. However I do not know as to how the differences between the costing as per this sheets and the agreement value is accounted for. Q.13 As shown to you earlier there are substantial differences in the per sq. ft. rates of flats sold during a particular period From the differences found between the actual cost and the agreement value, it transpires that the lower per sq. ft. rates represent that such Flats have actual .....

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ronted with these costing sheets and the statement of Miss. Chaitrali S. Karkare Shri Sudhir Darode has admitted to disclose the amount of ₹ 1,91,00,000/- as additional income over and above the regular income for A.Y. 2010-11. The relevant extract of his statement is reproduced as under : "Q.24. I am showing you statement of Miss. Chaitrali Shrikant Karkare recorded on oath at the site office of your Blossom Boulevard Project on 29/04/2009. From this site office, certain incriminatin .....

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ound ₹ 2,40,31,000/- is being reflected in the regular books of accounts. Ans. After verification of the relevant records and going through the statement of Miss Chaitrali Karkare, I submit that as a matter of principle we do not accept any on money as alleged. Further no additional amount over and above the agreement amount has been received by us from Mr. Rajmani Singh or Mrs Shilpi R Singh or any other person on behalf of them in respect of sale of flat No A-202 of Blossom Boulevard. Ho .....

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eceived an amount of ₹ 2.41 crores. He therefore asked the assessee to explain as to why the balance amount of ₹ 50 lakhs should not be added as income of the assessee. 6. It was explained by the assessee that there is no incriminating evidence found during the course of search from the premises of the assessee that assessee had charged any on-money in respect of the sale transaction with Ms. Shilpi Rajesh Singh. Therefore, the assessee requested the AO to provide the evidence, if an .....

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t satisfied with the explanation given by the assessee. He noted that Shri Sudhir Darode in his statement has stated that after verification of the relevant records and going through the statement of Ms. Chaitrali Shrikant Karkare, as a matter of principle they do not accept any on-money as alleged. However, the Director has offered an amount of ₹ 1.91 crores as additional income for A.Y. 2010-11. Further, the assessee has not given the declaration case by case and the assessee has given t .....

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sis of presumptions and surmises. There is no evidence or incriminating material found during the course of search on the basis of which the AO made the addition. Although the AO during the course of assessment proceedings stated that Ms. Chaitrali Shrikant Karkare had admitted for such on-money, however, the AO has not provided any evidence in support of his inference that the assessee company has received any on-money. Neither any incriminating material nor anything or books of account or docu .....

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ey can be made in the hands of the assessee without any evidence or material. Various decisions were also cited before the Ld.CIT(A) to the proposition that no addition can be made in the hands of the assessee. 9. Based on the arguments advanced by the assessee the Ld.CIT(A) deleted the addition by observing as under : 7.6 I have given careful consideration to all the facts before me and to the arguments and contentions presented by the appellant. Having perused the contents of the assessment or .....

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differences between the costing as per the sheets and the agreement value as she was not related to the accounting part ; that the rates are ultimately finalized by the directors themselves and therefore they only will be in a position to answer the query with regard to the alleged on money. ii. That in Q. No. 12 of the statement of the aforementioned employee, Ms. Karkare, it was stated by the officer that the owners of Flat No A-202 had admitted that they had paid an amount of ₹ 50,00,0 .....

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Mr. Darode, it is mentioned that Ms. Karkare, had admitted that in respect of Flat Nos. A-302, A- 202, C- 803 A-1103, A-803, an aggregate on-money of around ₹ 2,40,31,000/- had been received However, upon perusal of the extracts from the statements of Ms. Karkare reproduced by the AO in Para 04, no such admission is found. In fact, as pointed out in Sl. No. 1 above, she has categorically denied any knowledge of rates charged and accounting thereof by the appellant company . . . . . . . . .....

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e capitalised" Nowhere has the admitted receipt of on money by the appellant company. v. There is no independent discussion in the assessment order either of the statements of the owners admitting payment of on money or of the allege incriminating evidence establishing such payments. 7.7 Thus, upon careful perusal of the Impugned assessment order I find that the factual basis for making any addition other than the addition of ₹ 1.91 crore voluntarily admitted by Mr. Darode "to co .....

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alleged on money There is also nothing to indicate that any opportunity of cross examination of the owners whose statements are said to have been recorded and who are stated to have admitted payment of on money was ever given to the appellant although the appellant had repeatedly requested before the Ld. AO that copies of the documents/evidence on the basis of which the addition was being proposed should be given to them. 7.8 After careful consideration of all the facts brought out in the prece .....

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addition is to be made the same should be only to the extent of net profit and not of the gross receipt; that personal hearing may be granted, and that other relief as deemed fit may be granted. Under Ground No. 4, permission to add/alter/amend/modify/rectify/delete withdraw any grounds of appeal and to raise additional grounds of appeal if necessary, has been sought. 8.1 Under Ground No 2, I have already decided the substantive issue under contention in the appellant's favour. Further, no .....

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uch order of the CIT(A) the Revenue is in appeal before us with the following grounds : 1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the addition of ₹ 50,00,000/- done on account of on-money receipts pertaining to flat No. A-202, in Shriniwas Blossom Boulevard project ignoring the fact that documents indicating receipt of on-money was found during search and there was a rate difference in this case w.r.t. other comparable sales in the sam .....

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itted that the AO has relied on the statement of one of the employees wherein the said employee has categorically stated that she does not look after the accounts and only looks after the customer care. The AO had not given the statement of the purchaser of flat No.A-202 owner to the respondent company. The Director in his statement recorded u/s.132(4) has clearly mentioned that the company as a matter of principle does not accept any on-money and it was stated that the additional income was dec .....

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icators of the market price. The entire sale proceeds have been recorded in the books of account and the sale value is fully evidenced and vouched and also verified by the auditors. He submitted that while selling the flats the assessee has to lower the rate than the rate quoted due to various factors such as locational factor, liquidity factor and the choice of the flat or the unit and also depend upon individual customers. He submitted that whenever the assessee has charged higher rate the sam .....

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isions cited before us. We find during the course of search in the business premises of the assessee on 28-04-2009 certain papers were seized. As per page 27 of Bundle No.1 seized from the premises at Blossom Boulevard certain details were mentioned therein recording cost of flats. A comparison of the calculation of cost of flats shows that the value as recorded in the agreement showed a difference of ₹ 8,64,000/- for flat No.C-803, ₹ 36,81,200/- for flat No.A-302 and ₹ 57,50,0 .....

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i Rajamani Shilpy Singh is same in format as the sheets retrieved from her Laptop. However, she had stated that she does not know how the difference between the cost as per these sheets and the agreement value is accounted for. She had stated that she is not looking after the accounts part and it is only the directors who negotiate the rates etc. Rejecting the explanation given by the assessee and noting that the total on-money received by the assessee is ₹ 2.41 crores whereas the assessee .....

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eceipt of on-money by the assessee company. 16. We do not find any infirmity in the order of the Ld.CIT(A). From the various details furnished by the assessee we find the assessee was asking the AO from the very beginning to provide any evidence that has been in possession of the department to show that the assessee has received any such on-money. Neither the statement of the owners of flat No.A-202 namely Rajmani Shilpy Singh was provided to the assessee company nor the request of the assessee .....

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is prepared by one of the Officers of Income Tax Department while conducting the search, but through oversight is included in the document seized along with the other documents seized during the course of search. It is submitted before your Honour that the notings are in respect of the flats at the Blossom Boulevard and we have already made a declaration u/s.132(4) amounting to ₹ 1.91 crores in respect of Blossom Boulevard Project which takes care of this difference. 17. We find Ms. Chaitr .....

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A-202 Shipli Rajmani Singh 50.00 lakhs A-302 A.K. Singh/Vimal Mundada 36.81 lakhs A-1103 Yayati Pingle 57.50 lakhs A-803 Vishnu Bhimraj 66.00 lakhs A-102 Vinay Joshi 30.00 lakhs Ans : In this regard I have to state that, I have already given clarification with regard to above query in my statement recorded on 29/04/2009 at the site office premise of M/s. Shriniwas Blossom Boulevard, Koregaon Park, Pune and I have to further clarified that as stated earlier the rates are ultimately finalized by t .....

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