TMI Blog2011 (8) TMI 1301X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO has disallowed the expenses to the extent of ₹ 50.00 lacs on the same basis as per his findings given for the assessment year 2008-09. 2.4 Before the ld. CIT(A), the assessee has made the same submissions which have been made during the course of appellate proceedings for the assessment year 2008-09. Such submissions have been reproduced in the appellate order for the assessment year 2008-09. The ld. CIT(A) restricted the disallowance to the extent of 15% of the expenses claimed. In assessment year 2008-09 also, the ld. CIT(A) has confirmed the disallowance of 15% of the expenses. 2.5 Before us, the ld. AR has submitted that in case the addition of ₹ 50.00 lacs as made by the AO is considered then gross profit rate will be to the extent of 43.35%. The assessee has shown the profit of 10.68% of the turnover . 2.6 We have heard both the parties. The issue before us is similar to the issue decided as decided in the case of the assessee for the assessment year 2008-09 and 2007-08. Following our finding for the assessment year 2008- 09 and 2007-08, we feel that it will be fair and reasonable to apply the gross profit rate of 12% as against 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 Rupesh Tambi Plot No 109 to 111 Bal Vihar 1015000 28/10/2005 (PB page 27) 1015000 2 Sumitra Tambi Plot No 117 to 119 Bal Vihar 1180000 17/09/2005 (PB page 25) 1180000 3 Jagdish Tambi Plot No 120 to 122 Bal Vihar 1130000 19/08/2005 (PB page 24) 1130000 The Ld AO rejected the explanation of the assessee without pinpointing which incoming (receipts) is bogus or overstated or which outgoing (Payments) are understated. The cash balance can be created either by overstatement of receipts or understatement of outgoings. The cash book is nothing but recording of the entries of receipt and payment in chronological order. The cash payments against the above plots are duly recorded in the cash book produced before the AO, therefore, the investment cannot be treated as unexplained investment. 2) In Rajendra Kumar Kedia V/s. DCIT (JP) report in 22 TW Page 506, the ITAT, Jaipur Bench has he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submission of ld. A.R and have perused the material on record. The cash payment of ₹ 33 lakhs over and above the cheque payment of ₹ 30 lakhs for purchase of plot no.120, 121 and 122 in Bal Vihar Colony is undisputed. The A.O. has rejected the explanation of these cash payments being explained from flow statement, the appellant has not brought on record any evidence indicating accretion of cash for enabling cash payment. The cash flow statement so furnished before the A.O wide quite sketchy and without supporting details. Accordingly argument of the appellant in this regard is rejected and payment so made is held to be unaccounted. Therefore the addition is confirmed. However, the other request/argument of the appellant that the availability of the cash with appellant has already increased on account of various additions by increasing the income or making the disallowance out of expenditure, and accordingly telescoping may be given, will be considered subsequently in the present order. 4.5 During the course of proceedings before us, ld. AR has filed the following submissions. On careful study of the Ex A-9 (page no. 10 on the basis of which addition had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) Again it is a settled Law that in absence of any specific defect or deficiency, the books so prepared on the basis of bank statements and other documentary evidences could not be brushed aside summarily as done by the Authorities Below. (Kindly refer to the judicial citation in the case of Shri Rajinder Kedia and others as relied upon by the honorable Members of ITAT, Jaipur Bench, Jaipur). 4.6 Before us, the ld. DR filed the copy of page 10 of Annexure A-9. Our attention was drawn towards page 10 of Annexure A-9 which is written on the letter head of Shri Jagdish Prasad Tambi. From this paper, the ld. DR stated that the assessee has made the cash payment for purchase of the plots. It was therefore, submitted that the ld. CIT(A) was justified in confirming the addition of ₹ 33.00 lacs. 4.7 We have heard both the parties. Page 10 of Annexure A-9 shows the payments of ₹ 15.00 lacs through three cheques dated 30-08-05 and it shows the payment of ₹ 13.00 lacs in case the plots mentioned are 118, 119 and 120. At page 8 of the assessment order, the AO has referred to cash payments in respect of plot no. 120, 121 and 122. The total payments in respect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducted from 11, 66,500/- Balance calculated at 491000/-; this balance added to 21,00,000 and total figure mentioned 25,91,000. From the above entries it cannot be visualized that the assessee has received 2170000+1494000= 3664000/- as advance. If so than 1494500 cannot be deducted from 2170000/- but it should be added to 2170000/-. There is nothing on document to visualize that the assessee has received advance of ₹ 3664000/-. Further the ld AO has held that the assessee has received advance against 5 plots of Ganesh Nagar. The assessee has no stock of 5 plots in Ganesh Nagar. The assessee has two plots in Ganesh Nagar Extension as opening stock, which were carried to next year as closing stock. The assessee purchased one plot and shop in Ganesh Nagar which was sold during the year. Therefore, no addition can be made only on the basis of deaf and dumb document. Reliance is placed on following decisions:- (a) Jayantilal Patel Vs. ACIT and others/ Dr Balbir Singh Tomar Vs ACIT others (Rajasthan High Court) 233 ITR 588. / 244 ITR 500 (Departmental appeal in DB) Hon ble Rajasthan High Court observed that addition on the basis of noting on a piece of paper cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 75,500/- and against it word extra is mentioned. In view of it I agree with the argument of the A.R that ₹ 21,70,000/- + ₹ 14,94,000/- = ₹ 36,64,000/- can only be the amount of advance, as stated by A.O. (Or for that matter not even ₹ 36,64,500/- ). However, on careful perusal of the page, it is seen that on right hand side, another set of entries are also mentioned. On conjoint reading of these entries, it is seen that ₹ 21,70,000/- + ₹ 21,00,000/- is received for receivable against the Ganesh Nagar Plot. ₹ 14,94,500/- are the outgoings for expenditure and ₹ 11,66,500/- is amount incurred on works making the total out going amount of ₹ 26,61,000/-. Thus there is profit of ₹ 16,09,000/- on sale of Ganesh Nagar Plot. This sale of Ganesh Nagar Plot is different from the sale of Ganesh Nagar Plot and the shop reflected in the books of accounts as in those cases construction work has not been done, whereas this paper reflect the Ganesh Nagar plot sold after construction. Hence, the amount of ₹ 16,09,000/- is held to be unaccounted profit of Ganesh Nagar Plot and the addition so made by the A.O. of ₹ 36,64,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d conjectures. (iii) Again the ld.CIT (A) had opined that such working related to plots of Ganesh Nagar. Such findings of the ld. CIT (A) are also baseless. The CIT (A) had proceeded to conclude this fact on the basis of the findings of ld. AO without appreciating the fact as to how Ex.A-1(page no.1) could be co-related with Ex.A-15 (page no.25). In absence of any material on record, relating these exhibits with each other was illogical and unreasonable and does not hold good. (iv) Here it would also be worth-mentioning that at the time of search operations, the appellant was confronted with regard to this Exhibit specifically and categorically. In the deposition vide reply to questions no . 26 to 28 the appellant had informed point blank that these were rough working only relating to plot no.117, Ganesh Nagar which conveyed no meaning at all. Further it was informed that except this plot, he owned no other plot in Ganesh Nagar. The relevant extract from his statement are reproduced here-under for ready reference: In view of above facts, it is an established fact that the appellant did not own so many plots in Ganesh Nagar so the question of receiving ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded to the income of the assessee. 6.3 Before the ld. CIT(A), it was submitted that the assessee has incurred loss in shares of ₹ 18,190 in delivery transactions and loss of ₹ 3,46,339/- in derivatives transactions. According to the ld. CIT(A), the assessee has not been able to prove either before the AO or before the ld. CIT(A) that profit on sale of shares reflected in the seized paper is already accounted or included in the recorded transactions. The ld. CIT(A) therefore, confirmed the addition. 6.4 Before us, the ld. AR has submitted that all the shares trading have been carried out through D-MAT account. The sales and purchases of the shares as recorded in such sheets were part of the share trading as carried out by the assessee during the year for which detailed P L A/c was furnished showing therein net loss of ₹ 3,46,339/-. 6.5 We have heard both the parties. We are not having the benefit of the details of the trading account of shares or copy of the D-MAT account. We have not been made available page no. 2 and 3 of Annexure A-1. Subclause (d) of proviso to Section 43(5) has been inserted by Finance Act 2005 w.e.f. 1-04-2006 and according to this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... house. In this case, the assessee sold the plot unfinished house. The flooring, plaster, doors windows and paint work was not done by the assessee. Further, the Ld AO failed to appreciate that the word Sold is mentioned against only one plot. Therefore, addition on account of suppressed sale in respect of the plot no 65 66 Ram Nagar was made on surmises and conjectures. c) A-386, Tara Nagar alleged sale for ₹ 18,00,000/- as against declared sales at ₹ 8,50,000/- (i) The Ld AO took the figure of declared sale consideration ₹ 8,00,000/- in respect of A-386 Tara Nagar whereas this plot was sold to three parties namely as under:- (i) Rishab Gupta 850000.00 (ii) Pappu Singh 900000.00 (iii) Surendra Sharma 900000.00 Total sale consideration received 26,50,000 (PB page 14 18) This shows that only rough estimated figure is mentioned on the impugned seized document. The actual sale consideration of the plot was 26,50,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the assessee sold only 155.55 SY to Shri Om Prakash Bumb. The total cost of the plot was 884780/- for 350 SY land. The assessee apportioned the cost of land ₹ 393221/- for 155.55 SY land against this sale. Therefore, the land costing to ₹ 4,91,559/- was in stock of the assessee. Further figure 11 denotes the estimated value of the completely finished constructed house. The assessee sold part of the land with construction 900 Sq ft area. Therefore, no addition on account of suppressed sale can be made. Other legal submissions are taken on similar lines as taken in appeal for A.Y 2005-06. 7.4 The ld. CIT(A) after considering the submissions upheld the addition of ₹ 59.50 lacs after observing as under:- 8.3 I have considered the argument of the A.R and have perused the assessment order and relevant record. The issue of addition on account of suppressed sale as evident from page 23 and 25 of Ann.A-25 has been discussed in detail in A.Y 2005-06 in appeal no. 570/09-10 in order dated 29.12.2010. As already discussed in detail in the appeal order for A.Y 2005-06 in appeal no. 570/09-10 in the case of appellant himself, the subject paper namely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the declared sale of ₹ 8 lakhs each and argument of the A.R is rejected. iv) Coming to plot no. 207, Shyampuri, this entry is mentioned on 4th written line on page 25 of Ann. A-25, which is as below:- Sold Shyampuri 207 = 35 In view of the clear cut narration, A.O is justified in taking the sale value of ₹ 35 lakh against declared sale at ₹ 25 lakh. 8.4 In totality, entire addition of ₹ 59,50,000/- so made by the A.O on account of suppressed/ unaccounted sale consideration is hereby sustained. 7.5 Before us, the ld. AR has filed the following submissions in respect of different specific properties. (i) 66, Shri Ram Nagar; ₹ 12,00,000/- On careful study of the jottings on these papers, your honors would note that there is no specific mention of any such property known as 66, Shri Ram Nagar in such jottings. In absence of specific mention of plot No.66, no adverse inference could be drawn on the basis of such general mention of Shri Ram Nagar with pre-fix digit of 64 and suffix digit of 50. Apparently the digits mentioned on the prefix and suffix of the Scheme conveyed no meaning at all. It is not understood as to how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a tactical mistake by taking only one part of the said plot into account to work-out the suppressed sales of ₹ 16,00,000/- and ignored the sale of second part. Thus the amount of suppressed sale as taken by AO is on wrong working. Now it is for consideration as to whether, a plot purchased for ₹ 3,00,000/- about one years back could fetch the price of ₹ 21 lac as taken by the AO. Obviously, the figures as taken by the AO are incorrect and without any basis on the face of such documented evidences. (iii) A-386,Taranagar; ₹ 9,50,000/- On careful study of the jottings on these papers, your honors would note that there is no specific mention of any such property known as A-386,Taranagar in such jottings. In absence of any specific mention of the property, no adverse inference could be drawn. Further it would be noted that there is mention of Taranagar: with the digits of 18x4. In this regard, it may be pointed out that appellant did now own 4 plots in Taranagar Scheme. Thus the digits as mentioned against such scheme are apparently incorrect. In fact the said plot was purchased in August, 2004 for ₹ 4,00,000/- and was sub- divided in three par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on the computerized sheets of F.Y. 2006 2007 when the property under consideration was sold long back. Thus the jotting regarding this plot does not hold good being irrelevant and immaterial. (vi) 122,Bal Vihar : ₹ 3,00,000/-: Again there is no specific mention of this property on the said sheets. In absence of specific mention of this property i.e. 122 no adverse inference is called for. There is mention of the word Bal Vihar Colony at one place on sheet of 2006 with the following narration 11x4.which conveyed no meaning at all as the appellant did never own 4 plots in the said Nagar.. The AO had related this jotting to plot no. 122 to work out the suppression of sales without any basis and reason. In fact plot No. 122 in the said Colony was subdivided in two parts. One part measuring 155.55 sq yards out of total area of 350 sq. yards was sold by the appellant for ₹ 8,00,000/- during the year and the remaining part of 194.45 sq. yards is lying in the closing stocks. However, the ld. AO had over-looked the fact of sub-division and made addition of ₹ 3 lac taking the part sale of the plot as sale of the full plot measuring 350 sq. yards. Thus working of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aga. The properties have been sold through registered sale deed. The onus was heavily on the revenue to establish that the assessee has received the consideration in excess of the consideration shown in the sale deed. The assessee has given an explanation that the word 21 is mentioned for the sale of finished house while the assessee has not sold the finished house . Once the assessee has given an explanation then it was the duty of the AO to have examined it. The AO should have collected the evidence for making the addition. Hence, the addition on account of difference in sale consideration to the extent of ₹ 28.00 lacs in respect of these plots is deleted. 7.9 The next property is A-386, Tara Nagar. Again on page 25 of Annexure A-25, the noting is as under:- Tara Nagar 26 x 2 The word sold is also not mentioned. At page 25 of Annexure A-25, following noting is also there. sold Tara Nagar 18 x 4 The assessee has given the explanation that the plot purchased in Tara Nagar was subdivided in three parts and these three plots were sold for ₹ 26.50 lacs. The AO has adopted the sale consideration at ₹ 18.00 lacs as against consideration of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Bal Vihar below the computer sheet which contains the entry in the handwriting. Thus there is no evidence of addition made by the AO in respect of the properties at Bal Vihar. We therefore, hold that the ld. CIT(A) was not justified in confirming the addition of ₹ 59.50 lacs. 8.1 The seventh ground of appeal of the assessee is that the ld. CIT(A) has erred in confirming the addition of ₹ 4,27,400/- out of addition of ₹ 69.17 lacs made by the AO on account of unexplained cash credit from various persons by applying the provisions of Section 68 of the Act. 8.2 The revenue in Ground No. 4 is also aggrieved against deletion of addition of ₹ 92,14, 242/- out of addition of ₹ 96,41,642/-. 8.3 The AO has made the addition of ₹ 69,17,400/- u/s 68 of the Act. 8.4 Before the ld. CIT(A), the assessee has filed additional evidence. After considering the additional evidence the ld. CIT(A) has reduced the addition to ₹ 4,27 400/-. Hence the ld. CIT(A) has rightly reduced the addition on the basis of additional evidences. 8.5 We have heard both the parties. The facts in this case are similar to the facts as considered by us while decidin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me from Taxies. 11.3 The AO noticed that the assessee has shown gross receipts of ₹ 22,40,323/- and claimed taxi running expenses at ₹ 18,93,048/-. The net income was assessed at ₹ 3,47,275/-. The AO disallowed 1/3rd of the expenses and has not allowed depreciation on taxies. 11.4 We have heard both the parties. During the previous year relevant to the assessment year under consideration, the assessee was having 04 taxies for entire year. Other four taxies have remained with the assessee during previous year for the number of days varying from 05 to 243 days. Looking to the number of taxies plied during whole of the year and the number of taxies which have been plied for part of the year, we feel that it will be fair and reasonable to estimate the income from tours and travels to the extent of ₹ 1.00 lac after allowing depreciation. Accordingly the AO will consider the income from tours and travels at ₹ 1.00 lac after allowing Department. 12.1 The revenue in Ground No. 3 is aggrieved against reducing the addition of taxi expenses and allowing depreciation. 12.2 The allowing of depreciation is decided against the revenue while disallowance o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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