TMI Blog2014 (6) TMI 999X X X X Extracts X X X X X X X X Extracts X X X X ..... d transactions was not unwarranted. This reasoned finding of CIT(A) needs no interference from our side. We uphold the same. Unrecorded amount paid in respect of land at Gate No.150A, B, C - Held that:- The stand of the assessee has been that the registered purchase deed was not yet entered into. The Assessing Officer has not disputed/rebutted this contention of the assessee in the supplementary remand report dated 11.06.2010. In view of the above facts, the contention of the Assessing Officer that the assessee has not recorded cash payments of ₹ 42,20,574/- in the books of accounts was rightly rejected by the CIT(A). This reasoned finding of CIT(A) needs no interference from our side. Addition on account of alleged unrecorded cash receipts - Held that:- It was not the case of the Assessing Officer that the amount received was over and above the consideration stated in the said agreement. Therefore even if for the sake of argument it is accepted that the amount was actually received by the assessee, the same could not be taxed in the hands of the assessee, as the same is in the nature of advance and the possession of the land is not given to the proposed purchaser and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of the above, the Assessing Officer was not justified in holding that the assessee has earned undisclosed profit of ₹ 6,70,819/- and ₹ 2,68,583/- in A.Ys. 2008-09 and 2007- 08 respectively. This reasoned finding of CIT(A) needs no interference from our side. - ITA Nos.1194 to 1200/PN/2010 And ITA Nos.1315 & 1316/PN/2010 - - - Dated:- 30-6-2014 - SHRI SHAILENDRA KUMAR YADAV AND SHRI R.K. PANDA, JJ. Assessee by : Shri Nikhil Pathak Department by : Smt. M.S. Verma, CIT ORDER Shailendra Kumar Yadav, J.M: Seven appeals filed by the Revenue and two appeals filed by the assessee pertain to the same assessee arising from a consolidated order of CIT(A)-I, Nashik. For the sake of convenience, they are being disposed of by this common order. 2. In ITA No.1194/PN/2010 for A.Y. 2002-03, the Revenue has filed the appeal on the following grounds. 1. The order of the learned CIT(A) is erroneous on ground of law as well as on points of fact. 2. On the facts and in the circumstances of the case, the learned CIT(A) erred in deleting the additions towards on money receipts. 3. Any other ground that may be urged at the time of hearing. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,28,774 1,30,00,000 (Unrecorded cash receipts) 6,70,819 (Profit on extra work) 3,10,60,313 4. Let us deal with this on-money issue pertaining to all the years under consideration. The issue before us is with regard to additions on account of alleged on-money estimated and taxed by the Assessing Officer at 50% of the sales for each year. As stated above, this issue pertains to A.Ys. 2002-03 to 2008-09. The details of the said addition of on-money are as under: Asst.Year Sales On-money estimated by A.O. Less (-) onmoney offered by G.KJadhav Addition of onmoney 02-03 3,27,17,314 1,63,58,657 - 1,63,58,657 03-04 1,78,94,241 89,47,120 - 89,47,120 04-05 86,13,800 43,06,900 - 43,06,900 05-06 1,37,63,322 68,81,661 - 68,81,661 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 137/B 6,00,000 15,00,000 250% 2008-09 4 A-l/14 Sale of plot No.339 1950 sq. mtrs. 10,53,500 12,09,900 115% 5 A-l/1/6 7 PlotNo.1858 to 1862 sale to Nitishbhai Runwal 1,65,000 2,04,500 124% 6 A-l/1/6 7 3 plots sale to Sanjay Kale 99,000 1,97,826 200% 2008-09 7 A- 1/2/1 5 Sale of 10 plots to Solanki 2,10,000 5,94,000 282% 2008-09 8 A-l/2/15 Sale of 4 plots to Solanki 84,000 2,24,000 266% 2008-09 9 A-l/8/85 Sale of plot No.2 1052.50 sq.mtrs. 2,10,000 3,31,540 158% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment an addition of ₹ 1,63,58,657/- was made to the returned income on account of on-money receipts. During the course of search proceedings evidence was found that the assessee has received onmoney in respect of sale purchase of land entered into by the assessee company. It has been pointed out in the assessment order that in respect of 11 transactions there was substantial on-money ranging 52% to 250%. Shri G. K. Jadhav Managing Director of assessee company has agreed in the statement recorded on oath that 15% to 20% of the total consideration has been received in cash as on-money. Further, the assessee company has offered to tax on money amounting to 57,82,000/- for the transaction into A.Y.2008-09. Considering the fact, the Assessing Officer has reasonably estimated on-money @ 50%. Against the above assessment order assessee went in appeal before the concerned ClT(A), who observed that the addition cannot be made merely on the basis of estimation and therefore deleted the addition by observing that the addition cannot be made in the earlier years on the basis of facts of the prevailing year in the later year. Accordingly, the addition was deleted by CIT(A). In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions were in respect of purchase of plot. We find that these transactions mainly relates to A.Y. 2008-09. On the basis of these transactions, the Assessing Officer held that the assessee must have earned income in the form of on-money to the extent of 50% of recorded sales during F.Y. 2001-02 to 2007-08 relevant to A.Y. 2002-03 to 2008-09. The Assessing Officer s presumption that the assessee must have earned on-money income in respect of all the transactions was found to be on the basis of the alleged admission of on-money receipt by the assessee. The Assessing Officer has stated in the assessment order that during the course of search G.K.Jadhav has stated on oath that 15% to 20% of the total consideration has been received in cash as on-money. The stand of the assessee has been that the question asked to Shri G.K.Jadhav in this regard was specific and the reply given by Shri G.K.Jadhav to the said question was also specific. The on-money admitted was in respect of specific plots and specific land in specified Gat numbers and not in respect of all the plots and lands sold. On perusal of Question No.3 and reply to the same recorded in statement u/s.132(4) of the Act, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decisions of ITAT, Pune, in the case of Samrat Beer Bar Vs. ACIT 75 ITD 9 (Pune) (T.M.), wherein it has been laid down that in the absence of any other evidence, Assessing Officer is not empowered to estimate the suppression of sales for a larger period on the basis of the diary found in search showing suppression of sales for a particular period. 4.6 We find in the case of CIT v. Chetan Das Lachman Das [211 Taxman 61 (Delhi) (H.C.)] wherein there was a search on the assessee and certain evidences were found which indicated that the assessee was suppressing its income. On the basis of the evidences found, the Assessing Officer estimated sales for the 6 years. The said addition was deleted by the Tribunal on the ground that no evidence was found in the course of search. Hon'ble Delhi High Court held that the decision of Tribunal that no seized material was found was not correct since evidences were clearly found indicating suppression of income. Accordingly, Hon'ble Delhi High Court held that the CIT(A) had noted in his order that one of the partners of the assessee firm had admitted the practice of suppressing income. Further, in the said case, the issue that evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r all the years including the years for which no evidence was found. On the basis of the above facts, Assessing Officer estimated undisclosed income for the block period. The matter went up to High Court and the Hon ble High Court held that as the evidence was found for certain years and considering the acceptance of the partner that similar practice was followed in the earlier years, the estimation of income made by the Assessing Officer was correct. In the case before us, the facts are not identical as there was no acceptance by the assessee or its directors that such practice was followed in the earlier years as well. Accordingly, the ratio of Rajnik Co. is not applicable to the facts of the present case. We further find in the case of Khopade Kisanrao Manikrao v. Asst. CIT [74 ITD 25 (Pune)(TM)], wherein the learned Departmental Representative has relied upon the said decision of ITAT, Third Member of Pune Bench. In the said case, the evidence was found that the assessee had taken on-money on sale of plots. The evidence was found for all the years falling within the block period. Thus the issue arose that on the basis of evidence found for sale of certain plots, can the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Assessing Officer estimated higher income for the pre Nov, 1993 period. ITAT deleted the addition made by the Assessing Officer and sustained the income declared by the assessee for the pre Nov, 1993 period. The issue before Hon'ble Bombay High Court was whether such deletion of addition made by the Assessing Officer was justified. Hon'ble High Court held that the Tribunal was justified in deleting the addition made because the income does not remain constant over the years. Moreover, evidence of one year cannot be used for other year as held by the ITAT, Pune A Bench in the case of DCIT, Central Circle 1 (2), Pune Vs. Venkateshwara Hatcheries Pvt. Ltd. in ITA Nos.746 747/PN/2012 another. Accordingly, the facts of the said case are not identical and not applicable to the facts of the present case. 4.8 The principles of natural justice require that no one should be punished on the basis of presumption. The addition has been made on presumption that if the assessee was suppressing the sale and expenses for subsequent year, he must have suppressed sales and expenses for earlier year also. Such addition could not be confirmed as the same was not supported by cogent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of transaction Nos. 4 to 8, the CIT(A) observed that the transactions relate to the A.Y.2008-2009. The total on-money in respect of the said transactions pointed out by the Assessing Officer is ₹ 24,30,226/-. These transactions mainly relate to the plots in Hindustan Nagar Project. Total transactions in respect of sale of plots in A.Y.2008-2009 in Hindustan Nagar project in specific Gat numbers stated by the assessee in statement u/s. 132(4) of the Act, upto the date of search and seizure action u/s.132 of the Act as per audited ledger accounts are ₹ 1,65,71,925/-. The Assessing Officer has pointed-out that the tabular chart of on-money specifically in respect of plots sold for ₹ 16,11,500/-. Therefore, the on-money receipts of remaining plots sold for recorded consideration of ₹ 1,49,60,425/- was to be taxed in the hands of the assessee. The assessee has agreed in his statement recorded u/s.132(4) that it has received 15% to 20% on-money in respect of plots in specific Gat numbers of land. Hence on the basis of statement u/s.132(4) of the Act, the on-money receipt at 17.50% [i.e. average of 15% and 20%] of ₹ 1,49,60,425/- works out to ₹ 26,18,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentary remand report dated 11.06.2010. The assessee has not disputed the total consideration stated in the seized material. The contention of the Assessing Officer that the assessee has received on-money and has not shown the same in the books of accounts was not accepted as the actual receipt of on-money was not mentioned in the seized papers. The transaction was in progress and not yet completed. In view of the above facts, the contention of the Assessing Officer about receipt of on-money and taxability of the same was rightly rejected by the CIT(A). Again, this reasoned finding of CIT(A) needs no interference from our side. We uphold the same. 4.12 As regards the transaction at Sr.No.2 in the assessment order, the Assessing Officer has claimed that in respect of sale of land at Gat No.150A, B, C, the assessee has paid recorded amount of ₹ 59,30,152/- and has paid unrecorded amount of ₹ 42,20,574/-. In this regard the assessee filed detailed submissions before CIT(A) vide its letter dated 30.03.2010. The contentions in the said submissions of the assessee were supported by audited / unaudited balance sheets as at 31.03.2008 of Shri G.K.Jadhav and other concerns of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted the order of CIT(A) on the issue. After going through the rival submissions and material on record, we find that there is nothing on record to suggest that the assessee is the owner of plot mentioned at serial No.9 of tabular chart. We find force in the argument of learned Authorized Representative that the assessee cannot sale a plot which is not owned by him, so any addition pertained to the transactions of same is not justified. Accordingly, this addition is not justified and the same is directed to be deleted. Accordingly, the assessee s appeal for A.Y. 2005-06 is allowed as discussed above. 5. The next issue raised in Revenue's appeal for A.Y. 2008-09 is with regard to addition on account of alleged unrecorded cash receipts of ₹ 1,30,00,000/-. Shri G.K.Jadhav has entered into an agreement with Shri R.K.Patole and Shri Prakash Lotan Bagul, who were mediators / commission agents for proposed sale of land at Gat No.150A, B, C and Gat No.144 145 of Village Talegaon (Vani) admeasuring 53 Hectors and 28.5R for a consideration of ₹ 2,07,81,150/-. The Assessing Officer has alleged in respect of this transaction that the assessee has received ₹ 1.30 cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, the learned Authorized Representative has supported the order of CIT(A), whereby he has deleted the addition. 5.2 After going through the rival submissions and material on record, we find that the stand of the assessee has been that the statement on oath of Shri R.K.Patole and Shri P.L.Bagul were recorded by the Investigation Wing on 12.02.2008 and 13.02.2008 wherein both the persons have denied the payment of ₹ 1.30 crores to the assessee. Secondly, the receipts of ₹ 1.30 crores were found with Shri G.K.Jadhav and not with the persons by whom the alleged payments has been claimed to be made. It is not in dispute that the receipts in original in question were found with Shri G.K.Jadhav and actually on receiving the said amount the receipts would have been handed over to Shri R.K.Patole and Shri P.L.Bagul and would not have been found with Shri G.K.Jadhav, if the version of the Assessing Officer is correct. Thirdly, Shri G.K.Jadhav in his statement dated 08.02.2008 recorded u/s. 132(4) of the Act, stated that the amount of ₹ 1.30 crores was not actually received and the said two persons were only mediators and in order to show their investments in the proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition on account of profit of extra work of ₹ 6,70,819/- and ₹ 2,68,583/- in A.Y. 2008-09 and 2007-08 respectively. The Assessing Officer has arrived at amounts of extra work in respect of F.Y. 2007-08 and 2006-07 to the extent of ₹ 67,08,190/- and ₹ 26,85,832/- respectively as per page 30 to 40 and page Nos.1 to 55 of the diaries seized at Annexure A-6 and A-4 respectively. The Assessing Officer has held that the work carried out by the assessee was out of the books and hence has estimated net profit in respect of the said work at 10% of the alleged receipts stated above and taxed ₹ 6,70,819/- in A.Y. 2008-09 and the alleged profit for A.Y. 2007-08 worked out by the Assessing Officer at ₹ 2,68,583/-, however, the same was telescoped against the addition towards unexplained repayment of loan amounting to ₹ 5,55,33,575/-. 6.1 The matter was carried before first appellate authority, wherein the various contentions were raised on behalf of assessee as detailed in para 7.1.1 of order of CIT(A). The CIT(A) called for remand report in this regard as detailed in para 7.1.2 of his order and the CIT(A) having considered the same, has deleted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rk of temple was only estimate for extra work which was not carried-out by the assessee. From the above facts, the CIT(A) concluded that the Assessing Officer incorrectly worked-out the amounts of extra work by considering amounts of estimates in respect of 12 persons and also amount of actual work done in respect of the said 12 persons. The Assessing Officer has also not considered that the 7 persons including the work for temple was not carried-out by the assessee and only estimate was workedout by the Engineer. 6.3 As regards the difference between actual work done as noted in the seized diaries ₹ 38,26,284/- and receipts recorded in the books of accounts ₹ 35,30,680/-, the stand of the assessee has been that the customers have actually paid ₹ 35,30,680/- in respect of the extra work. The stand of the assessee was found to be correct by the CIT(A) and he held that the actual amount received on account of extra work is in fact recorded in the books of accounts of the assessee company. In view of the above, the Assessing Officer was not justified in holding that the assessee has earned undisclosed profit of ₹ 6,70,819/- and ₹ 2,68,583/- in A.Ys. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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