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2016 (11) TMI 1365 - ITAT DELHI

2016 (11) TMI 1365 - ITAT DELHI - TMI - Addition of undisclosed income - cash against the sale of property - Held that:- We find that assessee has sold property no. ES95, Block R & T Nirvana Country, South City -II, Gurgaon during FY 2008-09 for ₹ 60 lacs. It has not made any sales during the FY 2007-08 and that all the payment against sale of this property has been received through cheques and that no other amount has been received by the assessee in cash against the sales consideration o .....

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any payment received or paid in cash on these details. Therefore, the allegation made by AO that a cash payment of ₹ 97 lacs has been made received against this property & out of which ₹ 15 lacs has been paid reed during the financial year 2007-08 is based on mere conjecture & surmises. That the chart does not reveal any such transaction dates/amount pertaining to any year. This is simply a dumb document. There is no other material on record other than this loose paper to corroborate .....

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on has not been extended by the statute to be presumed to be the income of the assessee. - Decided in favour of assessee. - I.T.A. Nos. 377 & 378/DEL/2012 - Dated:- 29-11-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER For The Assessee : Sh. Anil Kumar Gupta, CA For The Department : S h. I.P.S. Bindra, CIT(DR) ORDER PER H.S. SIDHU : JM The Assessee has filed 02 appeals against the separate impugned Orders of Ld. CIT(A)-III, New Delhi pertaining to assessment years 2 .....

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of the assessee as Unaccounted income from or receipt during the year under consideration on sale of property ES 095 Nirvana Country South City-II, Gurgaon. 2) The Learned CIT (Appeals) has grossly erred in law and on the facts of the case in appreciating that there is no corroborating evidence of the figure of ₹ 15 lacs mentioned on the loose paper vis a vis other documents. 3) The Ld CIT (Appeals) has grossly erred in law and on the facts of the case in applying Sec. 292C of the Income .....

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he Learned CIT ( Appeals) has grossly erred in law and on the facts of the case in confirming the addition of ₹ 82 lacs in the hands of the assessee as Unaccounted income from or receipt during the year under consideration on sale of property ES 095 Nirvana Country South City-II, Gurgaon. 2) The Learned CIT (Appeals) has grossly erred in law and on the facts of the case in appreciating that there is no corroborating evidence of the figure of ₹ 82 lacs mentioned on the loose paper vis .....

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is prayed that the appellant appeal be allowed. ITA NO. 377/DEL/2012 (2008-09) - HABITAT ROYALE PROJECTS PVT. LTD. 4. The brief facts of the case are that a search and seizure u/s. 132 of the Income Tax Act, 1961 (hereinafter called as Act) was carried out on 6.11.2008 in Nimitaya group of cases / companies in which there is sub group that is Khinda Group. A search warrant was issued and executed in the name of the assessee company also. In view of the same, notice u/s. 153A was issued on 8.7.20 .....

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78,00,000/- on account of unaccounted investment in DLF properties and ₹ 15 lacs on account of sale of company at E-95 vide his order dated 31.12.2010. 5. Aggrieved by the aforesaid order of the Assessing Officer dated 31.12.2010, assessee filed an appeal before the Ld. First Appellate Authority, who vide impugned Order dated 29.11.2011 has partly allowed the appeal of the Assessee and confirmed the addition 15 lacs on account of unaccounted income or receipt during the year under consider .....

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ted that there is no corroborating evidence of the figure of ₹ 15 lacs mentioned on the loose paper vis a vis other documents. He further stated that Ld. CIT (Appeals) has also erred in applying Sec. 292C of the Income Tax Act, 1961 merely because some papers were found from the premises of the assessee while ignoring vital facts and contentions and even when assessee has successfully rebutted the presumption. In support of his above said contentions, he stated that the case of the assesse .....

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Savitri Devi vs. ACIT (2012) 148 TTJ 157, ITAT Hyderabad Benches. - Hon ble A.P. High Court in the case of K Lakshmi Savitri Devi (Supra) in ITA No. 563 of 2011 has upheld the order of the Tribunal. - CBI vs. VC Shukla (1998) 3 SCC 410) - CIT vs. PV Kalyansundaram (294 ITR 49) - CIT vs. Girish Chaudhary (2008) 296 ITR 619 (Delhi) - Delhi High Court. - ACIT vs. Sharad Chaudhary (2014) 165 TTJ 0145) (Delhi) - Sunita Dhadda vs. DCIT (2012) 71 DTR 0033 Jaipur 7.1 On the other hand, Ld. CIT(DR) relie .....

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during the FY 2007-08 and that all the payment against sale of this property has been received through cheques and that no other amount has been received by the assessee in cash against the sales consideration of this property. The details mentioned on the right side of page 4 of Annexure A-I of party G- 3 are seem to be some rough working and it is not clear from the details whether these are for purchase /sale/investment in the property ES -95. It also seems that these are some wrongly mention .....

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cture & surmises. That the chart does not reveal any such transaction dates/amount pertaining to any year. This is simply a dumb document. There is no other material on record other than this loose paper to corroborate the stand of the department. We find that since assessee has not received paid any amount in cash against the sale of the above property, no unexplained and unaccounted income from unaccounted sources can be attached to the assessee with respect to above transaction. Therefore .....

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of Vatika Landbase Pvt. Ltd. - 383 IT 320 (ITA No. 670/2014 dated 26.2.2016)- Delhi High Court has adjudicated as under:- In the present appeal, the Revenue urged the following questions: "1. Whether on the facts a d circumstances of the case, the Income Tax Appellate Tribunal was correct in Law in deleting the addition of ₹ 25,40,36,454 out of the total addition of ₹ 31,01,09,834 made by the AO on account of undisclosed receipt (from sale of space flats in Vatika Triangle? 2. W .....

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ade by the AO on account of accommodation entries taken by the Assessee? 4. Whether on the facts and circumstances of the case, the order of the ITAT is not perverse as it has failed to consider that in this case, the AO made the addition on the basis of the relevant searched material gathered from the Assessee during the course of the search proceedings?" 29. However, by an order dated 20th May 2015 the only question that was framed for consideration by the ITAT was as under: "Did the .....

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ument recovered from the file in the computer of Mr. Awasthi, forms the basis of the addition made by the AO, which was further reduced by the CIT (A). This was in the form of a computer print out of three sheets which were unsigned and undated. The first sheet was titled 'Cash- in-flow detail for the revenue', the next was titled 'Revenue details' and the third was titled 'Vatika Triangle, Guargaon.' The notes to the documents are indicative of their being projections. N .....

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not necessarily mean that they were sold at the rates indicated therein is definitely a plausible view to take. 41. Considering that the document was recovered from the computer of Mr. Sunil Awasthi, he ought to have been summoned to explain the rates of sale shown therein for the flats on different floors. In fact, the Assessee did make a request for his cross-examination. The other possibility was to examine the purchasers of the flats as they would have confirmed the price paid by them and h .....

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have been relied upon as a substantive piece of evidence to determine the actual rates at which the flats were sold. Further as pointed out in Commissioner of Income Tax v. D.K. Gupta (supra) merely because there are notings of figures on slips of paper, it did not mean that those transactions actually took place. Likewise in Commissioner of Income Girish Chaudhary (supra), the Court termed a loose sheet containing some notings of figures as a 'dumb document' since there was no material .....

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The burden shifted to the Revenue to show, on the basis of some reliable and tangible material, how rate at which the flats on the second and third floors of VT was higher than that dictated in the sales register or the sale deeds themselves. 47. In the circumstances, the Court is of the view that the ITAT was justified in coming to the conclusion that the addition of ₹ 5,60,73,380 made by the CIT (A) was not sustainable in law. 48. For the aforementioned reasons, the question framed by t .....

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o such person. Undisputedly, such presumption is rebuttable. It is not disputed that the Assessee had clearly denied having any dealing with M/s Smridhi Sponge Limited and had also filed an affidavit to that effect. The ITAT found, as a matter of fact, that the Assessee on its part had made the necessary enquiries and also provided final accounts of M/s Smridhi Sponge Limited; confirmation from the Director of M/s Smridhi Sponge Limited; details of the bank accounts; final accounts; Director&quo .....

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and in any event the same cannot be held to be perverse by any stretch. 8.3 In the case of P. Koteshwara Rao order dated 12.8.2016 of the ITAT, Visakhapatnam (ITA No. 251 & 252Vizag/2012 (Ayrs. 2007-08 & 2008-09), the ITAT has observed as under:- 11. The only issue that came up for our consideration is whether on facts and circumstances of the case, the seized documents indicate exchange of on money between the parties. Admittedly, in the assessee's case there was no search. The seiz .....

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e. The assessee right from the beginning stated that he had not received any on money from M/s. M.V.V. Builders towards sale of site. Besides, loose sheets found in the premises of M/s. M.V.V. Builders, the A.O. does not have any other document to show that the assessee has received on money from the purchaser. The A.O. has not made out any attempt to find out some reliable cogent material evidence on record to support his findings or to corroborate the statement of the purchaser. The assessee d .....

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ncial years relevant to assessment year 2007-08 and 2008-09 which is almost one year after sale is completed. We further noticed that total consideration has been paid through proper banking channel. It was not a case of A.O. that the value shown in the sale deed is not real value of the property, because the value declared in the sale deed is the market value of the property, fixed by the state government authorities for determining stamp duty purpose. Further, there is no evidence with the A.O .....

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gainst the assessee, but failed to note that admission of other parties cannot be considered as conclusive evidence against the assessee, unless there is a corroborative evidence on record, because the maker of statement can bind himself, but how he bind others from his statement without there being any further evidence on record. 12. In the present case on hand. except loose sheet found in the premises of M/s. M V V Builders and admission made by the third party in their assessment proceedings. .....

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ties. 13 …….. merely harping upon loose sheet and third party statement, which cannot be considered as conclusive evidence against the assessee to bring on money to tax as undisclosed income. The A.O. is required to bring further evidence on record to show that actual money is exchanged between the parties, but literally failed to do so. The AO did not conduct any independent enquiry relating to value of the property, instead merely relied upon statement given by the purchase of th .....

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above, we are of the view that the A.O. is not correct in coming to the conclusion that on money exchanged between the parties based on a loose sheet found in the premises of a third party and also statement given by a third person. To sustain the addition, the A.O. should have taken an independent enquiry about the value of the property and ascertain whether any under valuation is done, if so what is the correct value of the property. Further, the A.O. failed to bring any evidence to support hi .....

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y the assessee in ITA Nos. 251 &252IVizag/2012 are allowed. 8.4 In the case of K.V Lakshmi Savitri Devi vs. ACIT (2012) 148 TTJ 157, ITAT Hyderabad Benches has held as under:- "Admittedly there was no search action in the case of the assessee. It is a loose slip containing certain entries recording the payment which was found at the premises of CRK. It does not contain either date of payment or name of the person who has made the payment. According to the Department, CRK denotes C Radha .....

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e completing the assessment in the case of the seller. There is no evidence other than the seized material marked as 'A/CRK104' where relevant entries are made at ₹ 1,65,00,000. The seized material was not found at the premises of the assessee and there is no corroborative material to suggest that the assessee has actually paid ₹ 1.65 crores towards purchase consideration of the property, The assessee and her brother categorically denied the payment of any money over and abov .....

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no presumption in law that the assessee has actually paid ₹ 1651akhs towards purchase of the property. The undisclosed income in this case is to be computed by the AO on the basis of the available material on record. It should not be based on conjectures and surmises. As of now, the material considered by the AO for making the addition of ₹ 1 crore is seized material marked a 'A/CRK104' and the statement of 5. This loose sheet found at the premises of CRK is not enough mater .....

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between the parties is actually ₹ 165lakhs. The assessee as well as her brother stated in their respective statements that the consideration passed between the parties is only ₹ 65lakhs. In spite of this the AO proceeded to conclude that the seized material is conclusively reflecting the payment of consideration at ₹ 165lakhs. The Department herein is required to establish the nexus of the seized material to the assessee. As stated earlier there is no date and name of the asses .....

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e and the source from which ii is paid and/or any details of bank account from where the cash was withdrawn. Without any of these details, the Department has taken a view that the assessee has paid Ps. 1651akhs for purchase of the property. The Department cannot draw inference on the basis of suspicion, conjectures and surmises. Suspicion, however strong cannot take place of material in support of the finding from the AO. The AO should act in a judicial manner, proceed with judicial spirit and c .....

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y the evidence on record and the evidence on record is not sufficient to support the Revenue's action. In a block assessment undisclosed income has to be determined or the .basis of the material and evidence detected in the course of the search action. The circumstances surrounding the case are not strong enough to justify the addition made by the Department. The burden of proving the actual consideration in the purchase of property is on the Revenue. Considering the entire facts of the case .....

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pheld the order of the Tribunal. "We are of the view that the Tribunal has rightly held that the registered document dt. 21.8.2006 under which the respondent purchased the above property showed that only ₹ 65. 00 lakhs was paid to the vendor by the respondent: that there was no evidence to show that the respondent had paid Rs.l. 00 crore in cash also to the vendor; that no presumption of such payment of ₹ 1.00 crore in cash can be drawn on the basis of an entry found in a diary .....

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