TMI Blog2019 (1) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... servation of the CIT(A) that no material was found during the course of search also is not acceptable, since, both the parties have agreed the payment and receipt of unaccounted money and the assessee has explained the application of unaccounted money towards the source for investment made to various other properties as observed from the recitals of the penalty order. Hence, we hold that this is a clear case of concealment of income which attracts penalty u/s 271(1)(c) and we have no hesitation to uphold the order of the AO. AO has levied the penalty on concealment of income of ₹ 1,61,71,166/- which was the addition enhanced by the Ld. CIT(A) in its appellate order. Since the Tribunal has adopted the correct method for appropriation of on money towards the sale of vacant land at ₹ 27. 15 lakhs, we uphold the imposition of penalty on the concealed income of ₹ 27. 15 lakhs against the levy of penalty on concealed income of ₹ 1. 61 lakhs. Accordingly we set aside the order of the Ld. CIT(A) and confirm the penalty to the extent of addition of ₹ 27. 15 lakhs and direct the AO to revise the penalty. - Decided partly in favour of revenue. - I.T.A.No.388 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment was recorded from Shri P. Sankara Rao on 21. 12. 2006 and the assessee agreed the same as additional income. In this case, 20 acres of agricultural land located at Medchal was sold by Shri P. Sankara Rao @Rs. 15 lakhs per acre and 1930 sq. yds of vacant land located at Kanur, Vijayawada was also sold for a sum ₹ 1. 07 crores by way of two different sale deeds dated 07. 03. 2007. The assessee recorded only the registered sale consideration both for purchase and sale of the land in its books of accounts. Subsequently, the assessee retracted from the admission of additional income and the acceptance of on-money of ₹ 1. 78 crores was admitted in the statement recorded on his own on 21. 12. 2006. The AO completed the assessment holding that the assessee had received on-money and apportioned the on-money component of ₹ 1,56,11,475/- towards sale of vacant site at Kanur in the hands of Shubhadarsi Estates and the sum of ₹ 21,88,525/- in the hands of Peddu Sankaraa Rao towards sale of agricultural land. 3. On appeal, the Ld. CIT(A) enhanced the on-money component in the hands of the assessee firm to ₹ 1,61,71,166/- and reduced the on-money component in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bifurcation is not available in the seized documents. The Assessing Officer could not provide any scientific method of division and the Hon ble Tribunal while deciding the issue stated that even the percentage attributable to the impugned asset may be zero. Therefore, the-learned AR mentioned that it is a mere imagination of receipt of on-money and an estimation of the same for the purpose of assessment in the case of the appellant. I find, there is no concealment of income and the concealment of income is not established and the penalty is accordingly cancelled. 6. Aggrieved by the order of the Ld. CIT(A), the revenue is in appeal before this Tribunal. During the appeal hearing, the Ld. DR vehemently argued that in this case, there is clear concealment of income. The Ld. DR further submitted that the addition made by the AO was enhanced by the Ld. CIT(A) and partly confirmed by the Hon ble ITAT. The purchaser of the vacant land Shri Saibabu, Managing director of Jayadarshini Housing (P) Ltd. has confirmed the payment of money of ₹ 1. 78 crores which was accepted by the assessee in his statement recorded u/s 131 on 21. 12. 2006. Subsequently also, the assessee has conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. 22 Crones (Rs. 15 Iakhs + ₹ 1. 07 rores). Relevant extract of statement dated 21-12-2006 reproduced below where assessee admitted additional consideration proves this point clearly. Q. No. 5: What is the business connection between Subhadarsi Estates, Yourself and Jayadashiini Housing Pvt. , Ltd; Hyderabad? Ans: In the year, 2003, myself has purchased around Ac. 20 of Agri. Land at Ravalcole Village, Medchal Mandal, Rangareddy dist. Later, in the year 2004, the same was sold to Sri Gorla SaiBabu of Jayadarsini Housing (P) Ltd. , Hyderabad (JDHPL). Further, in the year 2004-05, 1930 Sq. Yds. of vacant land situated at Kanuru Village was also transferred to Jayadarsini Housing (P) Ltd, and this transaction was reflected In the books of account. However, the transaction regarding the purchase of safe of land at Ravulacole Village was not reflected in the books of account. Q. No. 6 : It is seen from the statement of Sri SaiBabu, the Mg, Director of JDHPL, he has paid around 1. 78 croresin excess of the registered value of the above said transactions towards sale consideration. Do you agree and have you received this amount? Ans: Yes, I do confirm that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Q. No. 6. 7. 2. After 15 days of gap another statement was recorded from P. Sankara Rao, wherein he confirmed the receipt of on money amounting to ₹ 1. 78 crores and admitted the same as additional income which is evidenced from the from penalty proceedings. We reproduce hereunder para No. 11 of the penalty order of the AO which reads as under : 11. In fact after gap of 15 days, another sworn statement of Sri P. Sankara Rao was recorded on 5. 1. 2007 in which he again confirmed that he received ₹ 1. 78 Crores as additional consideration. Relevant extract of statement of Sri P. Sankara Rao dt 5. 1. 2007 is reproduced as under: Q. No5; Do you want to say anything else? During the course of search proceedings conducted in my case as well as in the group cases, several receipts worth of ₹ 2. 3 crores was found and seized from the residential premises of Sri C V B S N Prasad (Bandar Prasad). I have already stated that the firm Subhadarsi Estates and the company Subhadarsi Housing Pvt. , Ltd. , intended to do real estate business in the year 2001-02 to 2002-03 for which, I have introduced the capital in the form of these receipts. Since, we co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen Sri P. Sankara Rao has paid ₹ 4 lakhs for 1000 Sq. Yds. , you have stated that for purchase of Ac. 20. 00 of land for a consideration of ₹ 15 lakhs was paid by the company. It is not relevantly matching. Please explain? Ans : Sir, I want to correct my earlier replies. In the year 2004-05 there were two transactions took place between me i. e. Jayadarsini Housing Pvt Ltd. , and Sri P Sankara Rao i. e. purchase of agricultural land belonging to Sri P Sankara Rao of M/s Subhacfarsi Estates situated at Hyderabad, Ravalkole Village(Ac. 20. 00) and a site situated at Kanuru Village admeasuring 1920 Sq. Yds. Both the properties were purchased by Javadarsini Housing Pvt. , Ltd, over all consideration of R5. 3 crores was negotiated together. However the Ac. 20. 00 of land was registered for a consideration of ₹ 15 lakhs and the Kanuru site was registered for ₹ 1. 07 crores. However, the exact bifurcation was not decided. The balance payment was made by me in cash only. Q. No. 12; Please once again- go through the above replies given by you and confirm the same? Ans: Yes, I once again confirm that my above reply is true. The total consideration f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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