TMI Blog2017 (4) TMI 1450X X X X Extracts X X X X X X X X Extracts X X X X ..... ht of the fact that Revenue could not point out any error in the actual registered document dated 12.03.2008 entered into by the assessee-firm for the impugned land at Kalol - Appeal of the assessee is allowed and that of the Revenue is dismissed. Addition on account of unaccounted interest payment - HELD THAT:- The alleged interest amount of ₹ 25,18,250/- only finds it place in diaries, but there is no actual payment on record. Assessee-firm had made a total disclosure of ₹ 163 lacs towards unaccounted income which, inter alia, includes ₹ 23 lacs shown in the return of income of Mr. Bhagwanbhai K. Ajara which is contended to have covered the alleged notional income also. CIT(A) was justified in deleting the impugned addition by observing that the diary contained the transactions of on-money of the project and the amount advanced to the assessee-firm was actually its own money and there cannot be any reason to charge interest on its own funds. More so ever, Mr. Bhagwanbhai K. Ajara had already offered a sum of ₹ 23 lacs for AY 2010-11, which will cover up the entire interest paid, if any, by the appellant and not recorded in the books of accounts. We, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land was made by USCKP and not by assessee. We further find force in the contention of the assessee that the theory of equal contribution by each of the five persons mentioned by Shri Vikas Patel is also not acceptable since the profit on the said land deal has been offered in USCKP, wherein there are six partners. It is not possible to believe that five persons would invest in a land in the individual capacity but the profit on such land deal would be shared by six persons. We are, therefore, of the view that in the given facts and circumstances of the case and on the basis of seized records, investment in Samarpan Scheme was made by USCKP from the funds received from its members and therefore, the impugned addition is uncalled for in the assessee s hands. In the result, no interference is called for in the order of ld. CIT(A) who has rightly deleted the impugned addition - T(SS)A No. 440, 436/Ahd/2012, 194, 195/Ahd/2013, ITA No. 1370, 1373, 1375, 1376/Ahd/2013 2008-09, 2010-11 - - - Dated:- 12-4-2017 - Shri S.S. Godara And Shri Manish Borad, JJ. Revenue by: Shri Krishna Morari, CIT-DR Assessee(s) by: Shri Tushar Hemani, AR ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed dated 13.3.2008 of this land showed price of only 1,70,00,000 and on the basis of MOU he concluded that unaccounted / onmoney on purchase of land was paid to the tune of ₹ 5,27,50,000 (₹ 6,97,50,000 - ₹ 1,70,00,000) and added the same u/s. 69. The Assessing Officer has also mentioned on page 2 of the order that during search in the statement dated 5.3.2010 recorded u/s. 132(4) Shri Vikas R. Patel (partner) admitted that ₹ 51,00,000 was paid as unaccounted payment by Uma Shakti Corporation Kalol Project for land transaction. 4. On the basis of these observations, ld. Assessing Officer was of the view that on the basis of impugned document, i.e., MOU, as discussed above, it is established that total payment of ₹ 6,97,50,000/- was made for the acquisition of the land at Survey No. 1001/1B and 1000 at Kalol for the project of the assessee-firm and accordingly addition of ₹ 5,27,50,000/- was made after deducting ₹ 1,70,00,000/- being the value of land shown in regular books of accounts. Accordingly, income was assessed at ₹ 5,23,40,065/-. 5. Aggrieved, assessee went in appeal before the ld. CIT(A) against the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. AR that huge on-money was earned (as discovered during search through seized document - A/3 (page 32 to 35) on the residential and commercial complex titled 'Umiya Tirth Ville' constructed by the appellant on the impugned Kalol land. In the facts of the case common sense says that such land would not have been purchased just on the value mentioned in the registered deed, when it is an open secret that purchase and sale of land and buildings do not happen without on-money or unaccounted cash payments, which never appear in the registered documents. No clues / proofs are left by those involved so actual price of such deals slips away uncaught / untaxed. This is also a fact that the partner admitted on 5.3.2009 during search that he paid cash of ₹ 51,00,000 which is the same cash which is mentioned as last line in the terms and conditions on the seized paper (page 64 of A/2. The line states (Aaj roj ₹ 51,00,000/- Rupees Fifty One Lacs) that ₹ 51,00,000 shall be paid as on the day of the MOU. And in the MOU (page 69 of A/2) (please refer to Annexure-1 of this order) the same payment of ₹ 51,00,000 in cash is mentioned. The MOU cannot be dismissed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s shown by Dipak Prajapati to Vikas R. Patel to figure out as to whether Vikas Patel is interested in purchasing such land. Thereafter, Vikas Patel inquired with Brijesh Patel about land prices prevailing in Kalol to which Brijesh Patel replied as follows: Land in question was agricultural land and there were problems in conversion of such land in NA land (Non-agricultural land); Prices quoted were very high. In view of the above, Vikas Patel discarded the proposal of Dipak Prajapati. Somewhere in January 2008, Vikas Patel was approached by his friend Bhagwanbhai Ajara with a partnership proposal for a flat scheme at Kalol since he had acquired some piece of land at Kalol, had paid ₹ 40 lac as token by cheque to original land owners as is evident from his bank statement and was to pay balance sum of ₹ 130 lac. He also stated that there were some problems in conversion of such land but he assured that he will get such issues sorted out based on his experience in land matters. Co-incidentally, such proposal was w.r.t. the land in question itself in respect of which proposal by Dipak Prajapati was rejected by Vikas Patel. V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- paid by the assessee over and above the cost shown in the books at ₹ 1,70,00,000/-. 11. We have heard the rival contentions and perused the record placed before us. The issue raised by both the parties relates to a Memorandum of Understanding (MoU) which was pertaining to a purchase of land of 15,500 sq. yards at Kalol @ ₹ 4,500/- per sq. yard. This alleged document was seized in the course of search conducted in the case of Umiya Group on 04.03.2010. This document, in which matter was typed in the form of Memorandum of Understanding (MoU) between assessee-firm through its partner Dipak Prajapati and the land owner for the purchase of land bearing Survey No. 1001/1B and 1000 at Kalol admeasuring 15,500 sq. yards agreeing to purchase at ₹ 4,500/- per sq. yard. Ld. Assessing Officer, during the course of assessment proceedings, observed that there is a purchase of alleged land admeasuring 15,500 sq. yards at the cost of ₹ 1,70,00,000/- in the regular books of accounts. Ld. Assessing Officer was convinced that the alleged purchase of land was actually purchased at ₹ 6,97,50,000/- which he calculated by applying the rate of ₹ 4, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustained if the alleged seized papers are rough work and there is no clear indication as to how they will lead as a basis for the alleged addition. The Co-ordinate Bench in the case of Manav Infrastructure P. Ltd (supra) has observed as follows:- 7. We have duly considered rival contentions and gone through the record carefully. Section 132(4A) contemplates that where any books of accounts, other documents, money, bullion, jewellery or other valuable article or thing is found in the possession or control of any person in course of a search, it can be assumed that such books of accounts other documents etc. belongs to such person, contents in the books of accounts or documents are true. No doubt such an evidence is an admissible evidence, but not a conclusive one. Presumption of belonging and its genuineness are rebuttable one. Hon ble High Court in the case of Dharmendrasingh R. Waghela (supra) has also propounded that though section 132(4A) of the Act uses expression may presume , meaning thereby that such presumption is rebuttable one. In the present appeal, we have been called upon to construe and interprets these pages and arrive at a conclusion whether any trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Out of this ₹ 3n crores, ₹ 2 crores has been offered for taxation in this year. We have been informed that rest of ₹ 1 crore were offered in individual hands. We have tried our best to persuade both the ld.representatives to show some nexus or reasonable conclusion from all the figures mentioned in these papers. By any scientific means they did not goad adjudicating authority to arrive at a conclusion that unaccounted profits have noticed in these papers. The ld.CIT(A) has appreciated these papers and arrived at a conclusion that these are rough work without any clear indication as to what the said numbers really lead to or relates to. On an analysis of complete material including statement of director recorded under section 132(4) and the explanation of the assessee extracted (supra) during the course of assessment proceedings, we are of the view that the ld.CIT(A) has appreciated the facts in right perspective way, and department is unable to goad us to arrive at any other logical conclusion. Therefore, we do not find any merit in this appeal of the Revenue. It is dismissed. 15. We further observe that Hon ble jurisdictional High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l in possession of the Revenue to corroborate that the said paper had any connection with the accounted or unaccounted business activity of the assessee. From the side of the Revenue even no such attempt was ever made to make an enquiry from those parties whose names were printed on the said paper. Because of these reasons, ld. AR Mr. Mukund Bakshi has emphasized that the said document was nothing but a bald document. For this legal proposition, case laws cited are:- 1 ACIT vs. Satyapal Vasan 295 ITR (AT) 352 [ITAT Jabalpur] 2 CIT vs. Girish Chaudhary (2008) 296 ITR 619 (Mad.) 3 CIT vs. S.M. Aggarwal (2007) 293 ITR 43 (Del.) 4 Jaya S. Shetty vs. ACIT (1999) 69 ITD 336 (Mum) 5 Bansal Strips P. Ltd. vs. ACIT (2006) 99 ITD 177 (Del.) 18. From these decisions, it transpires that if an addition is to be made on the basis of a seized document, then it must be supported by some identification having any nexus with the unaccounted business activity of the assessee. The nature of transaction should reflect some direct or indirect connection with the accounted or unaccounted activity of the assessee. If a document is silent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N. Prajapati; and the major capital has come from Shri Bhagvanbhai K. Aajra. On viewing the alleged document, we find that the unsigned MOU is dated 31.10.2007 which is almost 4 months before the incorporation of the assessee-firm. The alleged MOU also do not fulfill the basic requirement of the valid contract which needs to a written or expressed agreement between two parties to provide a product or service and for a valid contract there has to be an intention to create legal relation, offer, acceptance, consideration and capacity to fulfill the contract. However, the alleged MOU, which is unsigned and undated, do not stand for as a valid contract and the same is not enforceable by law. 17. It seems that ld. Assessing Officer has stretched a link emanating from the seized material and has formed up a complete story along with taking a basis of impugned land which was purchased in the later part of the year and applying the conditions embedded in the alleged MOU on to the impugned land purchase transactions thereby calculating the purchase consideration of the land in question at ₹ 6,97,50,000/- as against ₹ 1,70,00, 000/- shown in the books. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod to that of MoU stamp date nor can it be taken as corroborative evidence to make addition and also in the light of the fact that Revenue could not point out any error in the actual registered document dated 12.03.2008 entered into by the assessee-firm for the impugned land at Kalol. 19. In the result, appeal of the assessee is allowed and that of the Revenue is dismissed. ITA Nos. 1370 1376/Ahd/2013 Cross appeals by Revenue and Assessee respectively for AY 2010-11-Assessee: Uma Shakti Corporation Kalol Project 20. Now, we take up cross appeals for AY 2010-11 in the case of Uma Shakti Corporation Kalol Project vide ITA Nos. 1370 1376/Ahd/2013. In the Revenue s appeal, two issues have been raised against the order of ld. CIT(A); firstly, regarding the deletion of addition of ₹ 22,18,250/- made on account of unaccounted interest payment and secondly, relating to the deletion of addition of ₹ 3,81,07,860/- out of total addition of ₹ 4,35,39,800/-. 21. As regards deletion of addition of ₹ 25,18,250/- on account of unaccounted interest payment, brief facts are that during the course of search in the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record placed before us. The issue raised by the Revenue in this ground relates to deletion of addition of ₹ 25,18,250/- relating to unaccounted interest payment. We notice that in the search conducted in Umiya Group of cases on 04.03.2010 under Section 132 of the Act, various documents were seized. It also included two diaries seized from the premises of partner Mr. Bhagwanbhai K. Ajara, marked as Annexure-A/1 and Annexure A/2. It contained details of various transactions of funds received and paid from assessee-firm. It is not disputed by Revenue that Mr. Bhagwanbhai K. Ajara was entering the details of onmoney transactions received from members of the Kalol Project. However, Mr. Bhagwanbhai K. Ajara was entering the names of fictitious persons just to create a picture in the diary that funds have been borrowed from outside parties and are being given to the assessee-firm for project expenditure. The alleged interest amount of ₹ 25,18,250/- only finds it place in diaries, but there is no actual payment on record. We further observe that assessee-firm had made a total disclosure of ₹ 163 lacs towards unaccounted income which, inter alia, includes ₹ 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income but only the profit element embedded therein can be subject to tax. However, ld. CIT(A) has applied the net profit rate of 30% completely ignoring the fact that assessee s average gross profit rate is just 10.97% and net profit rate is also around 9.66%; whereas, income offered of ₹ 109 lacs has been calculated by applying 20% net profit rate on unaccounted turnover. Ld. Counsel further submitted that ld. CIT(A) has merely made a guess work of applying 30% by just relying on the finding of the Income-Tax Settlement Commission, Mumbai Bench in the case of M/s. Silver Springs M/s. Rushabh Vatika. The ld. Counsel further requested that as the alleged unaccounted turnover is not disputed, the income offered by the assessee at the rate of 20% should be accepted and no further addition should be made In support of his contention, ld. Counsel placed reliance on the following judgments:- i) CIT vs. Resident Industries, 258 ITR 654 (Guj.), ii) CIT vs. Balchand Ajit Kumar, (2003) 263 ITR 610 (MP), iii) Man Mohan Sadani vs. CIT, (2008) 304 ITR 52 (MP), iv) Kishor Mohanlal Telwala vs. ACIT, (1999) 64 TTR 543 (Ahd) 31. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15% Construction of commercial complex. Reference by the Department against the order of ITAT rejected. 2. CIT v. Abhishek Corporation (2000) 158 CTR (Guj) 374 - Gujarat High Court rejected the reference of the Department and upheld the decision of ITAT, Ahmedabad. 1.31% NP % is not comparable as The assessee was doing supervision of construction work. 3. M/s. R. K. Corporation v. ACIT (ITA No. 4940/Ahd/1996) Order 08/02/99 20% The disclosure made by the assessee worked out to 20% of 'on money ' receipt. 4. Kishore Mohan Telwala v.ACIT (1999) 63 TTJ (Ahd.) 651 - Order dated 2/9/98 8% Residential project taken over from Naresh Agarwal who took up the work of organizing and building activity of Hare Krishna Apt. 5 DCIT v. S.P. Ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seized from the residence of the assessee. 4. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O. IT(SS)A No.195/Ahd/2013 : AY-2009-10 : Assessee s appeal 1. The ld. Commissioner of Income Tax (Appeals) has erred in law and on fact in confirming addition of ₹ 1,94,500/- on alleged ground of earning of interest income, which is offered by the firm in the overall disclosure of ₹ 163 lac, more precisely, as part of ₹ 23 lac. Such addition amounts to double addition in the hands of firm as well as partner. It is therefore prayed that addition so made may kindly be deleted. 2. The ld. Commissioner of Income Tax (Appeals) has erred in law and on fact in confirming the addition of ₹ 19,45,000/- on alleged ground of unexplained investment to earn interest income of ₹ 1,94,500/-, whereas, the funds are sourced from extra collection from members of Uma Shakti Corporation Kalol Project i.e. firm. Such addition amounts to double addition in the hands of firm as well as partner. It is therefore prayed that addition so made may kindly be deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined addition of ₹ 1,94,500/- and Revenue against deletion of addition of ₹ 3,92,780/-. 35. Brief facts related to this ground are that a search was conducted on 04.03.2010 at Umiya Group, including assessee s premises, during which, two diaries marked as Annexure-A/1 and Annexure A/2 were seized. As per which, it was alleged that assessee has earned unaccounted interest income of ₹ 5,87,250/- which included interest from M/s. Uma Shakti Corporation Kalol Project (in short USCKP ) at ₹ 3,92,750/- and interest from others at ₹ 1,94,500/-. 36. While adjudicating this issue, ld. CIT(A) partly allowed assessee s appeal by deleting the addition of ₹ 3,92,780/- by observing as follows:- 6. I have gone through the assessment order and submission of the A.R. of the appellant carefully. It is seen that the Assessing Officer is correct in saying that the interest income of ₹ 5,87,250/- if it pertains to A.Y.2009-10 has to be taxed in A.Y.2010-11. However, the Assessing Officer has not considered the submissions of the appellant that the entire source of money advanced was from the project carried out by this group. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of ₹ 5,87,250/- as computed by the Assessing Officer a sum of ₹ 3,92,780/- was not chargeable as interest income of the appellant. In view of the above, the addition made by the Assessing Officer is reduced from ₹ 5,87,250/-to ₹ 1,94,500/-. 37. Aggrieved, both Revenue and assessee are in appeal before us. 38. Ld. Counsel for the assessee submitted that ld. CIT(A) has rightly deleted the addition of ₹ 3,92,780/- by taking the basis of ld. CIT(A) s order in the case of Uma Shakti Corporation Kalol Project (USCKP), wherein it was held that ld. Assessing Officer has wrongly added a sum of ₹ 3,92,750/- as undisclosed interest payment and once the interest payment has been held to be incorrect, there cannot be a corresponding income to the assessee. As far as balance interest of ₹ 1,94,500/- is concerned, ld. Counsel submitted that USCKP Group has made a disclosure of ₹ 163 lacs under Section 132(4) of the Act, of which income from notings in assessee s diary book was worked out at ₹ 23 lacs, which certainly will take care of alleged interest income of ₹ 1,94,500/- and therefore, no sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of assessment proceedings, ld. Assessing Officer found from Annexure A/1 and Annexure A/2 seized during the search that there was inflow and outflow of funds in the name of various persons which appeared to have been recorded by the assessee in his personal capacity with respect to business of financing and these transactions could not be correlated with extra collection from the members of USCKP as submitted by the assessee. Ld. Assessing Officer accordingly worked out the peak of seized diaries at ₹ 66,36,750/- for AY 2009-10 and ₹ 1,68,34,250/- for AY 2010-11. In appeal before the ld.CIT(A), assessee partly succeeded as ld. CIT(A) held that the entire peak cannot be added since substantial money of such peak belongs to USCKP, however, partly confirmed the addition at ₹ 19,45,000/- for AY 200910 by calculating it as principal amount on which assessee had earned interest of ₹ 1,94,500/- @ 10%, and as regards to AY 2010-11, ld. CIT(A) confirmed addition of ₹ 25,75,000/- for unaccounted investment in Ognaj Land by observing as follows:- AY 2009-10 8. I have gone through the assessment order and submission of the A.R. of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... names of fictitious person to show that he had borrowed money from elsewhere and then would advance the same to the firm and charge interest on the same. This is the reason why the notings in the diary do not tally with the details of persons to whom flats have been sold. In view of the above, it is clear that substantial part of the noting in diary would relate to the on-money collected on behalf of the firm Umashakti Corporation Kalol Project from sale of flats of the project. However, it also cannot be denied that the appellant had obtained other unexplained cash credits also because the interest income of the appellant during the A.Y.2009-10 was ₹ 5,87,250/- which has been recorded in the diary seized. Out of this amount only ₹ 3,92,750/- pertains to interest charged from the firm Umashakti Corporation Kalol Project. Thus, an amount of ₹ 1,94,500/- is interest charged from others. For earning this amount of interest the appellant would requires to invest 10 times this amount because the rate of interest is generally 10% to 12% and also sometime is invariably lost between collecting on debt and advancing the money so received to another person. 8.3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant had shown interest income to the extent of ₹ 5,87,250/- out of which ₹ 3,92,750/- was from the firm where the appellant was a partner. The CIT(A) has held that in A.Y.2009-10 the amount of ₹ 3,92,750/- was not unrecorded expenses of the firm Umashakti Corporation Kalol Project because the firm's own on-money had been utilised in granting loans to the firm itself by the appellant. 9.2 In view of the above, it becomes clear that the appellant was receiving onmoney from the project of the firm Umashakti Corporation Kalol Project and was not recording it properly in the diary as received on account of on-money of the project. The appellant was putting names of fictitious person to show that he had borrowed money from elsewhere and then would advance the same to the firm and charge interest on the same. This is the reason why the notings in the diary do not tally with the details of persons to whom fiats have been sold. In view of the above, it is clear that substantial part of the noting in diary would relate to the on-money collected on behalf of the firm Umashakti Corporation Kalol Project from sale of flats of the project. However, it also canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.6 In view of the above on the basis of the unaccounted entries noted in the diary belonging to the appellant, the appellant had made Unaccounted investment in land at Survey No. 1195 Ognaj of ₹ 25,75,000/-. 9.7 Thus, the addition made by the Assessing Officer on account of peak working is reduced from ₹ 1,68,34,250/- to ₹ 25,75,000/-. 42. Aggrieved, both Revenue and assessee are in appeal before the Tribunal. 43. Ld. Counsel, at the outset, submitted that the impugned peak is part of unaccounted turnover of ₹ 5,44,39,800/- declared by USCKP and profit element embedded therein has already been offered to tax by USCKP; therefore, no separate addition is warranted for as the same shall result into double taxation of the said sum which is not permissible under the law. As regards the addition confirmed by ld. CIT(A) at ₹ 19,45,000/- is concerned, he submitted that it was mere guess work by hypothetically applying 10% rate on the interest income of ₹ 1,94,500/-. 44. As regards the addition sustained at ₹ 25,75,000/- by ld. CIT(A) for AY 2010-11 is concerned, it was submitted that ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t income of the assessee by observing that it was part of the total disclosure of ₹ 23,00,000/- made by the assessee on the basis of his diaries. As we have already deleted the alleged interest of ₹ 1,94,500/-, there remains no reason to sustain the addition of ₹ 19,45,000/- made by ld. CIT(A) by taking a deemed interest rate of 10%. So far as the remaining amount of peak addition is concerned, we agree with the view taken by the ld CIT(A) that in the seized diaries the transactions entered into were related to on-money received from various members who have invested in the USCKP project. We also agree with the view of the ld. CIT(A) that as substantial part of the noting in the diaries relates to on-money calculated on behalf of USCKP project for sale of flat and the undisclosed income involved in this unaccounted transactions have already been offered to tax by USCKP project in its disclosure of ₹ 1.63 crores which includes ₹ 23 lacs calculated from the transactions of seized diaries held by the assessee. We are, therefore, of the view that for AY 2009-10, ld. Assessing Officer erred in making an addition of ₹ 66,35,750/- by working out toge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s well supported by the seized material and we accept the contentions that the alleged sum of ₹ 25 lacs was received as a profit on cancellation of banakhat by the assessee in the capacity of a middleman. We also notice that assessee had already made disclosure of ₹ 23 lacs for both the years on account of transactions appearing in the seized diaries and the profit from the transactions of the Ognaj land forms part of the total disclosure of ₹ 23 lacs and we find no reason for a separate addition of ₹ 25,75,000/- sustained by the ld. CIT(A). We accordingly dismiss ground No.2 of Revenue s appeal for AY 2010-11 and allow Ground Nos. 1 2 of assessee s appeal for AY 2010-11. 50. Now we take up Ground No.3 of Revenue s appeal for AY 2009-10 and Ground No.3 for AY 2010-11 challenging the CIT(A) s order deleting the addition of ₹ 15,00,000/- and ₹ 26,20,000/- in AY 2009-10 and 2010-11 being the amount received during the year from Nicol land transactions recorded in the diaries seized from the residence of the assessee. 51. Ld. Authorized Representative supported the order of the ld. CIT(A) and ld. Departmental Representat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the diary alone to make the entire addition. The transaction in Nicol land spreads over 2 assessment years ie A.Y. 2009-10 and A.Y.2010-11. Part of the consideration is received in A.Y. 2009-10 and part of the consideration is received in A.Y.201011. The AO has not appreciated the fact that the diary does not only contain the details of money received by him but also has fictitious entries-and also has the details of on-money collected from sale of flats of Uma Shakti Kalol Project. The AO also has not found any sale deed or purchase deed to establish the fact that the entire money received by the appellant in respect of Nicol land belonged to the appellant. The AO has also not attached any importance to the word Dalali which means brokerage mentioned against these entries. The appellant if he is a broker would receive the consideration on behalf of the sellers and then pass on the consideration to them and earn a commission. The AO has not even found that the appellant was owner of the land. If the appellant was not the owner of the land then he could never keep the sale proceeds with himself. He would only be entitled to brokerage. He would then retain a part of the sale proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorities that the investment was made out of funds received from members of USCKP and not by the assessee. In fact, profit of ₹ 31,00,000/- on account of land deal in the Samarpan Scheme has also been declared in the hands of USCKP in AY 2010-11 which has been accepted by Revenue Authorities. Certainly, when profit on such land deal has been taxed in USCKP s hands, then the Assessing Officer should have believed the fact that investment in such land was made by USCKP and not by assessee. We further find force in the contention of the assessee that the theory of equal contribution by each of the five persons mentioned by Shri Vikas Patel is also not acceptable since the profit on the said land deal has been offered in USCKP, wherein there are six partners. It is not possible to believe that five persons would invest in a land in the individual capacity but the profit on such land deal would be shared by six persons. We are, therefore, of the view that in the given facts and circumstances of the case and on the basis of seized records, investment in Samarpan Scheme was made by USCKP from the funds received from its members and therefore, the impugned addition is uncal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit in the hands of the firm where there were six partners. This is to say that if five persons had contributed towards cost of lands then there would have been no reason for them to share the profit from the transactions with the sixth person i.e. Shri Kamalbhai Jayantibhai Patel who had not contributed any capital. It is also to be noted that the profit sharing ratio of all the partners in the firm is not equal. If the five persons had contributed ₹ 9,00,000/- each then there would be no occasion to not share the profits from the transaction equally. Thus, it is clear that only the funds of the firm M/s. Uma Shakti Corporation were utilised for the purchase of land titled as Samarpan Project which was later sold to Shri Krishna Corporation. The reason to share the profit between all the six partners of the firm would only arise if the funds have been contributed from the unaccounted collection of M/s. Uma Shakti Corporation, Kalol i.e. the firm where there are six partners. It is a fact that the firm M/s. Uma Shakti Corporation had collected on money from the Kalol Project which was kept with Shri Bhagwanbhai K. Ajara and only Shri Bhagwanbhai K. Ajara was keeping track ..... X X X X Extracts X X X X X X X X Extracts X X X X
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