9911796707
TMI Blog2014 (6) TMI 999X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. In A.Y. 2007-08, the Revenue has raised some additional issue as well. 3. The assessee is a Private Limited Company engaged in the business of trading in lands and construction of housing projects. A search and seizure action u/s.132 of the Act was conducted on Jadhav-Shah Group of cases on 08.02.2008. During the course of search and seizure action, the Director of the assessee company Shri G.K.Jadhav has offered to tax additional income in his hands for the A.Y.2008-2009 in the statement recorded u/s. 132(4) of the Act as under: " a) On money in respect of plots at Hindustan Nagar at Gat Nos.136, 135, 1399, 1536 & 1131 to 1141 Rs.25,00,000 b) On money in respect of plots at Hindustan Nagar (received in F.Y.2006-2007) Rs.12,00,000 c) On money in respect of plots at Wakas Neral Rs. 9,00,000 d) On money in respect of land at Anthrat Rs.11,82,000 Rs.57,82,000 3.1 The Assessing Officer has assessed the income of the assessee by making various additions to the income returned, details of which are as under: Asst.Year Income returned after adjustments Addition of on money at 50% of sale Other Additions Assessed income 02-03 - 1,17,62,965 1,63,58,65 - 45,95 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cash element/ unrecorded amounts i.e.on-money % of onmoney with recorded amount A.Y. 1 A-l/20, 21, 32,33,34 Sale of land G.No.86 and 76 Kokangaon 53,50,000 43,79,000 81.85% 2007-08, 2008-09 2 A-2/41/129 Sale of land G.No.150A, B, C. In fact the transaction is purchase transaction and not sale transaction 59,30,152 42,20,574 71.17% 3 A-2/2/23 to 42 Purchase of Plot 1090.45 sq.mtrs. at S.N0.135A, B, 136, 137 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% 18/6/2004 2005-06 10 Sale of plots to A.P.Karmokar (Admitted in statement) 11,83,000 11,83,000 100% 2008-09 11 Sale of 39 plot (Admitted in statement) 23,00,000 12,00,000 52% 2008-09 &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 this regard, the learned Departmental Representative submitted that the decision of CIT(A) is not acceptable because the evidence gathered in respect of 11 transactions pertains to A.Y. 2007-08, 2008-09, same could be extrapolated for previous year. Moreover, in the statement recorded during the lime of search, Shri G.K. Jadhav was clearly referring to sale of plots in which a particular project talked of "On-money" ranging between 15% to 20%. The CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransactions 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 contention of the assessee was found to be correct by CIT(A). For the sake convenience, the same is reproduced hereunder: "Q.No.3: During the course of search the document were seized at your office premises. As per the said documents it is seen that you have sold plots at Hindustan Nagar at Post Odha and Pimpri (Sayyad). As per the said documents it is seen that you have earned on-money on sale of plots. Please give the clarification. Ans. Details of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain 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 of one year cannot be utilised for another year was not raised. Accordingly, considering the above facts, the estimation of income made by the Assessing Officer was accepted. Considering the above facts, the said decision is not applicable to the facts of the present case. In the said case also, the assessee had accepted carrying out such practice and accordingly, Hon'ble High Court confirmed the action of the Assessing Officer. It is important to be noted that ITAT had deleted the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot 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 Assessing Officer estimate the income in respect of other plots for which no evidence was found. The Third Member held that the evidence was found that the assessee was taking the on-money for sale of plots for the various years of the block period and hence, the Assessing Officer could estimate the on money in respect of sale of other plots even though the evidence was not found. Hence against the distinguishing factor, the evidence was found for all the years and not some of the years and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence 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 material and evidence. The above decisions were referred to in respect of block assessment under Chapter XIV-B of the Act. The ratio laid down in these cases is applicable to the case of the assessee. In view of above facts and circumstances and also in view of the ratio as relied on by the assessee, the CIT(A) observed that the Assessing Officer was not justified in estimating on-money income in respect of all transactions of sale of plots, land and bungalows during F.Ys 2001-02 to 2007-08 relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... audited ledger accounts are Rs. 1,65,71,925/-. The Assessing Officer has pointed-out that the tabular chart of on-money specifically in respect of plots sold for Rs. 16,11,500/-. Therefore, the on-money receipts of remaining plots sold for recorded consideration of Rs. 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 Rs. 1,49,60,425/- works out to Rs. 26,18,074/-. The total on-money which was required to be taxed was therefore Rs. 50,48,300/- (i.e. Rs. 24,30,226 + Rs. 26,18,074). The assessee has offered to tax Rs. 25,00,000/- in respect of these transactions relating to plots in Hindustan Nagar project in return of income filed for A.Y.2008-2009. The resultant addition on this count was Rs. 25,48,300/-. Thus, the Assessing Officer was directed to make addition accordingly. As already pointed-out in earlier paragraph that the assessee has offered to tax an amount of on-money of Rs. 12,00,000/- in A.Y.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 Rs. 59,30,152/- and has paid unrecorded amount of Rs. 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 the Jadhav Group filed on the record of the Assessing Officer. On perusal of the above facts and submission, the contention of the Assessing Officer that the assessee has not recorded payment of Rs. 42,20,574/- in respect of purchase of the land at Gat No.150A, B and C was found incorrect by the CIT(A). He noticed that the assessee has recorded total consideration of Rs. 93,99,353/- in the books of accounts of various concerns of Shri G.K.Jadhav out of total consideration of Rs. 1,15,76,186/- as per sathekhats and also as per the seized papers. The balance payment as mentioned in the seize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ext issue raised in Revenue's appeal for A.Y. 2008-09 is with regard to addition on account of alleged unrecorded cash receipts of Rs. 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 Rs. 2,07,81,150/-. The Assessing Officer has alleged in respect of this transaction that the assessee has received Rs. 1.30 crores in cash as per Clause 3 Page 4 of the agreement and as per which 50% amount was to be paid within 15 days from the date of agreement. In support of this addition, the contentions raised by the Assessing Officer are as under: "i. There was an agreement dated 26.10.2007 between Shri G.K.Jadhav and Shri R.K.Patole and Shri P.L.Bagul for proposed sale of land for consideration of Rs. 2,07,81,150/-. As per Clause 3 Page 4 of the agreement, 50% amount is to be paid within 15 days from the date of agreement. The purchasers have therefore paid Rs. 7.81 lacs on the date of agreement by cheque and Rs. 1.30 crores within 54 days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re 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 Rs. 1.30 crores was not actually received and the said two persons were only mediators and in order to show their investments in the property so that they could show the said receipts to the proposed purchasers for finalizing the deal at higher rate, the said receipts were prepared. The alleged receipts of Rs. 30,00,000/- and Rs. 1,00,00,000/- were dated 26.10.2007 and 19.12.2007 respectively. The alleged receipt of the amount was only 51 days prior to search action and no such cash was found in search or no investment of the said cash was found in search and seizure action on 08.02.2008. The assessee has claimed that the Assessing Officer has not taken any action u/s.153C of the Act against the said two persons in respect of alleged undisclosed payment of Rs. 1.30 crores. The Assessing Officer has held that the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Rs. 2,68,583/-, however, the same was telescoped against the addition towards unexplained repayment of loan amounting to Rs. 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 the addition in question. The same has been opposed before us on behalf of revenue, inter alia, the learned Departmental Representative has submitted that during the course of search action, it was seen from Annexure A-4 page 1 to 55 and Annexure A-6, page No.30 to 40 wherein noting in respect of extra construction work were found. Considering the fact, the Assessing Officer has reasonably estimated profit @ 10% of gross receipts for A.Y. 2008-09 and similarly for A.Y. 2007-08. The CIT(A) erred in accepting the assessee's explanation that actual amount received on account of extra work was in fact recorded in the books of accounts of assessee company. The order of CIT(A) is not justified for the reason that without profit nobody ..... X X X X Extracts X X X X X X X X Extracts X X X X
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