TMI Blog2011 (8) TMI 1231X X X X Extracts X X X X X X X X Extracts X X X X ..... ced below:- 1. The CIT(A) has erred in law and on facts in deleting the addition of ₹ 31,63,962/- (A.Y. 99-00 ₹ 9,98,846/-, A.Y. 2000-01 - ₹ 16,79,519/-, A.Y. 2001-02 ₹ 2,08,156/-, A.Y. 2002-03 ₹ 42,476/-, A.Y. 2003-04 ₹ 42,467/- and A.Y. 2004-05 ₹ 2,02,498/-) made by the A.O. on account of on money receipt on sale of plots. 2. The CIT(A) has erred in law and on facts in directing the A.O. to take on-money @ ₹ 100/- per Sq. Yard as against @ ₹ 575/- per Sq. Yard as recorded in seized material. 3. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O. 4. It is, therefore, prayed that the order of the CIT(A) be set aside and that of the A.O. be restored to the above extent. 2.1. Facts involved are similar in all the appeals and for the sake of brevity, the facts as narrated in lead A.Y. 1998-99 vide an order u/s.143(3) r.w.s. 153A dated 24/03/2006, in short, were that a search u/s.132 was carried out at the business premises and at the residential premises. It has also been noted by the AO that one of the partner s residence was also searched on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o him they were not supported by an evidence. 2.3. After the discussion of certain legal aspects the AO has referred certain instances of sale of plots which were alleged to have been sold on higher price, but in the books lesser sale price was recorded. Facts related to those instances were mentioned by the AO in para-12.a in the assessment order, reproduced below:- 12. a. The statement recorded was on oath and the legal consequences were made aware before recording the statement U/s.132(4). It cannot be said to be sweet will of the Authorized Officer. As it is duly signed by him, the statement cannot be said to be one sided. As discussed in the next paras, it was noticed that in the seized note book inventorised as BF-1, on page No.65, the details of plot No.128 is written. In this page the sales price of the plot mentioned at ₹ 575/- as against the assessee has shown the sales value of ₹ 50,000/- @ 200/- per sq. meter in its books of accounts. The sales of the plot shown in A.Y. 1999-2000. On page No.8 of the said note book, the details of plot No.15 is recorded. The sales price as per the note book is ₹ 550/- sq. yard as against ₹ 400/- recorded i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 66 131 2003-04 550 to 669 107 212 213 625/- 2004-05 353 to 671 133 264 AND 265 701/- 2.5. By applying the estimated rate of sale for respective years on all the plots sold the AO has year-wise made the addition as follows:- A.Y. Sales shown Sq.yards Estimated sales rate Estimated sales consideration Sales consideration shown in the books of accounts Difference 1998-99 13193.93 575 7,586,510 3,103,175 4,483,335 1999-2000 4150.44 574 2,465,361 1,051,471 1,413,890 2000-01 5889.53 594 3,498,381 1,229,639 2,268,742 2001-02 1761.50 594 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer has estimated and adjusted the sale price of the land on year to year basis. Under the law, this action of the assessing officer is not justified. It is well settled that in case of assessments which are being framed pursuant to the search and seizure action, the additions, shall have to be worked out based on the seized documents and there is no scope for any estimation or guess work. Under the circumstances, the best indicator of calculating the on-money receipt shall be the concurrent and spontaneous statements of the partners recorded at the time of the search. I therefore hold that the appellant has received on-money at the rate of ₹ 100 per Sqr yard on all the transactions of sale and accordingly, the assessing officer is directed to recalculate the on money receipt based on the sales shown by the appellant in its regular books of accounts. Assessing officer is directed to sustain the addition of on-money at the rate of ₹ 100 per square yard of land sold by the appellant for all the years under consideration and addition on account of on-money in excess of ₹ 100 per square yard is directed to be deleted. Therefore, the 2nd ground of appeal raised by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ph No.9 as follows:- 9. A statement has it s value in the eyes of law if it is corroborated by connected evidence. As far as the statements being recorded under the Act are concerned, there are two situations i.e. sometimes statements is recorded u/s.133A of the Act at the time of survey. The courts have clearly held that there is no evidentiary value in respect of a statement u/s.133A unless it is supported by some material. Second situation is that the Act has empowered the Revenue to record the statement during the course of search and statement is recorded u/s.132(4) of the I.T. Act. Because u/s132(4) of the Act, as assessee is examined on oath, therefore, such a statement has always been treated as an evidence as held by the H ble Court. For reference, case laws are Abhi Developers [2007]12 SOT 444 (Ahd.), TDI Marketing Pvt.Ltd. [2009]28 SOT 215 (Del) and Paul Mathews Sons [2003]263 ITR 101 (Ker.). Even it has been held by the H ble jurisdictional High Court in the case of Kailashben Manharlal Chokshi reported at 174 Taxmann 466 (Guj.) that merely on the basis of a statement recorded u/s. 132(4), no addition can be made until some corroborative evidence was found in supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces which were found recorded therein i.e. in the said Note-Book. We have noticed that the AO was aware about those specific sale instances of the plots; relevant paragraph from the assessment order has already been extracted above. Those specific sale instances where the amount of onmoney has also been categorically noted , should be made the basis of addition. In respect of rest of the notings, there was no mention by the AO that the assessee has received on-money . Hence, following the above judgement of the Respected Coordinate Bench, we can conclude that no addition of on-money was warranted in respect of all the plots. We are also not with the view taken by the ld.CIT(A) to adopt a uniform rate of ₹ 100/- of on-money on all the plots. We hereby hold that since the Revenue Department is in possession of the impugned diary wherein certain sale instances were found recorded in respect of specific amount of on-money alleged to have been charged by the assessee on sale of those plots, therefore, the AO should have made the addition only in respect of those sales instances and not to extrapolate the said amount of on-money merely on presumption on all the plots. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cating upon the ground challenging the action of AO in initiating penalty under section 271(1)(c) of the Act without recording mandatory satisfaction as contemplated under the Act. 8.1. While deciding the appeals of the Revenue, we have taken a view that in search and seizure cases when the Revenue is in possession of seized documents, then he should confine to those notings only. An extrapolation is possible if the seized document itself suggest that there was a recurrence of the receipt of on-money or the assessee has in the normal course has earned unaccounted income in a systematic and a regular manner and that fact had emerged out of the seized material, then the extrapolation is justifiable, otherwise not. In the light of the above legal proposition, we therefore hold that the ld.CIT(A) had gone wrong in directing the AO to apply a uniform rate of ₹ 100/- per sq.yrd. as onmoney alleged to have been received on all the sales transaction. In the absence of some specific evidence such an observation can be said to be merely on presumption or supposition. We hereby reverse the said finding of the ld.CIT(A) and direct the AO to compute the addition of on-money in re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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